Obama fires GM CEO!!!!

[a_unique_person]

You understand, of course, that there is a large overlap between the two?

You win! He's a fascist and a socialist. Better tell Hannity now, he'll be dying to put that as a headline.

 

[Meadmaker]

2) Even if GM, Ford, and Chrysler all go out of business, Americans will still need just as many cars as they do today. But instead of buying a Chevy, built in Canada, they'll buy a Toyota, built in Alabama.

If that were to happen suddenly, you would be wrong. It simply wouldn't happen. People who believe this don't understand the automotive supplier network.

I work for an automotive supplier. We sell parts to Ford, GM, Chrysler, Toyota, Honda, BMW, Mercedes. As far as I know, we sell parts to every single producer of cars in the world.

There are somewhere near 3,000 parts that go on a car. You need all 3,000 or the car doesn't get built.

If GM and Chrysler ceased operations, and that was a real possibility a few months ago, we would have ceased operations as well. We simply weren't structured to remain in business without them. Ford, Honda, Toyota, etc, would have continued to buy our parts, but we wouldn't have been able to pay the bills without GM and Chrysler. We would have gone not just bankrupt, but we would have been without cash, and that means we would have turned out the lights. That means Ford and BMW don't get parts. That means they don't build cars. Every auto plant in the country would have shut down, regardless of the location of the corporate headquarters. Just imagine the ripple effects of that.

I would hope that in the three months since then, the "new domestics" as we call them (that means Japanese owned plants that operate in the US) would have lined up alternative means of acquiring parts, and our execs, I hope, would have created new plans and rearranged the finances to stay in business even with major customer collapse. I would hope that GM and many of the suppliers would have taken steps to secure the possibility of continuing operations in the event of bankruptcy, so that the nightmare scenario I described above wouldn't happen. (I know, for example, that our company has done some major cost cutting, which is why I'm writing this at 10:00 on a weekday. I still have a job, but with reduced salary and hours.)

As I said earlier, I don't know what to do right now, but I would just say don't be too quick to criticize Bush and Obama for at least their initial plans to keep the automakers operating. I'm not a fan of government bailouts, but had GM and Chrysler been allowed to run out of cash, things would have been very, very, bad for the economy in this country.

Meanwhile, I'm glad to see Wagoner out. GM was run for the benefit of the executives. Not the workers, not the shareholders. The executives. He, and a lot of the rest of them, should be thrown out en masse.

In fact, this is speculation, but I think if you look at 2007's 37 billion dollar loss, you could come up with a good reason for some of them to get a golden parachute right into a jail cell, but that's for another post some time.

 

[joobz]

I somehow don't see a federal takeover of the US auto industry as being a fix.

neither do I. I'm glad that's not what's being done.

In any case, if you think the US auto industry is having problems now, wait until you see what it looks like 25 years from now when China and India are sending us millions of inexpensive little cars, just the way Toyota and Datsun and Honda did 50 years ago.

Can't argue that.

 

[Ziggurat]

No, they accepted a promise of a good pension instead of wage that reflected the profitability of GM at that time.

They did a lot more than that. They also hobbled GM (and Ford, and Chrysler) with cumbersome contracts that raised operating costs considerably.

The managers at that time just made a deal that they wouldn't have to deal with, but future managers would.

Which is why I feel no sympathy for them, and don't really mind the CEO getting the boot. I'm not blaming the unions because I think the managers aren't at fault, I'm blaming them because the unions are also at fault.

 

[Brainster]

Well, apparently that was just a test to see if GM would do Obama's bidding; they're still not getting the dough, just enough to last for 60 days:

President Barack Obama on Monday will reject requests for almost $22 billion in new taxpayer bailout money for General Motors Corp. and Chrysler, saying the car makers have failed to take steps to ensure their viability.

The government sought the departure of GM chief Rick Wagoner and said the company needed to be widely restructured if it had any hope of survival. It said it would provide the company with 60 days operating capital to give it time to undertake reforms.

Of course, what Obama defines as viable is providing the kinds of cars Americans don't want to drive:

It said the company is too dependent on its truck and SUV business and had only a 3 percent share of the small-car market, even though that segment makes up 21 percent of car sales overall. Noting that Chrysler's strength is in trucks, SUVs and mini-vans, all vehicles with relatively low fuel efficiency, the government said it was unlikely Chrysler would be able to meet new government standards for fuel consumption.

GM, too, was criticized for being dependent on the sale of trucks and SUVs for its revenue.

 

[Ziggurat]

Of course, what Obama defines as viable is providing the kinds of cars Americans don't want to drive:

It said the company is too dependent on its truck and SUV business and had only a 3 percent share of the small-car market, even though that segment makes up 21 percent of car sales overall. Noting that Chrysler's strength is in trucks, SUVs and mini-vans, all vehicles with relatively low fuel efficiency, the government said it was unlikely Chrysler would be able to meet new government standards for fuel consumption.

I'm not sure your quote supports your contention. Is the growth in the small-car market a result of increased demand, or a result of government fuel standards? The quote suggests that it may be the latter. If it is the latter, then the problem isn't that people don't want trucks, it's that the government punishes manufacturers for specializing in them. I don't think that's Chrysler's only problem, but it appears to be an important one, probably more important than a lack of demand.

 

[Beerina]

If GM expects to recieve any kind of assistance largess from the government to survive for free, those deemed by the government to be an obstacle to the recovery the posturing and preening of elected officials need to go.

What's your problem?

Fixed it for you.

Once the government turned on the spigot to the tune of many hundreds of billions late in Bush's turn, the shifting of corporations to appear in more trouble than ever was inevitable. That it involves unloading financial obligations to unions, and much of the unions themselves, while getting free cash, and under a former union-friendly partly like the Democrats, is pure genius.

So argue on the surface world of political facade if you enjoy that. Me, I'll stick to reality.

 

[Kthulhut Fhtagn]

Because it's Obama doing it?

I resent your insinuation. I would have complained if Bush had done it (and I was put off by his bail-out plan), and in fact I was. I think the government needs to maintain a respectful distance from things like this.

 

[Shalamar]

I'm not entirely sure I like where all of this is going, but I'm playing a wait and see scenario.

In a way, I hope that the big three DO recover, and for purely seflish reasons: I can not drive the vast majority of cars. I can not drive compact cars. I need leg room, and I need head room. If I need a car, I don't even bother looking at honda, toyota, or any of the standard 'import' companies.

I'm 6'6" for FSM's sake. Give me a frakking full sized car with lots of leg room, and head room. Mileage be damned!

 

[Kthulhut Fhtagn]

This move was a symbolic gesture for Obama to show he was going to play hardball with the automakers. Why not do the same with the financial institutions that have really screwed up the economy?

The short answer is that Obama is in bed with the union. The slightly longer answer would be to point out that the Obama adminstration wanted the GM CEO to lean on the bond and share holders who refused to make concessions until the union did (who is also refusing to make concessions).

 

[Gangularis]

You keep running with that meme - that business somehow tries to run the country.

Yeah.. it's called lobbyists and former CEOs running the country.. you know.. big oil, halliburton.. ect.. the guys that have a huge stake in Iraq, in particular.

I'm reminded today that the governors of Louisiana, South Carolina, and Alaska are refusing federal stimulus money because they don't like the strings attached.

Given what we see with GM today, does anyone think they are being foolish?

Foolish? Yes.. mainly because it's more likely a political stunt on their part. Are you suggesting Obama is going to ask governors to step down if they accept the money?

 

[Drysdale]

AIG has a new CEO. Lehman Bros. CEO is out of a job. I can't tell you what happened to Bear Sterns, Indy Mac, Wachovia, etc. CEOs when their companies were taken over, but I doubt they were promoted.

Didn't one of Fannie Mae and Freddie Mac's big wigs take a position in Obama's cabinet?

 

[Kthulhut Fhtagn]

Yeah.. it's called lobbyists and former CEOs running the country.. you know.. big oil, halliburton.. ect.. the guys that have a huge stake in Iraq, in particular.

There should be some sort of variant of Godwin's Law for people who insist on claiming we fought Iraq for oil and in the namesake of Big Business and his Father The Almighty Dollar, blessings and peace be upon their names.

 

[JihadJane]

I somehow don't see a federal takeover of the US auto industry as being a fix.

In any case, if you think the US auto industry is having problems now, wait until you see what it looks like 25 years from now when China and India are sending us millions of inexpensive little cars, just the way Toyota and Datsun and Honda did 50 years ago.

What makes you assume that people will be driving around in millions of cars 25 years from now?

There should be some sort of variant of Godwin's Law for people who insist on claiming we fought Iraq for oil and in the namesake of Big Business and his Father The Almighty Dollar, blessings and peace be upon their names.

We could call it Smedley Butler's Law.

 

[Kthulhut Fhtagn]

What makes you assume that people will be driving around in millions of cars 25 years from now?

There's a hell of a market for transportation?

We could call it Smedley Butler's Law.

Anti-interventionism is fine with me. I just don't want people supporting it with factually innacurate viewpoints.

 

[gdnp]

Didn't one of Fannie Mae and Freddie Mac's big wigs take a position in Obama's cabinet?

The McCain campaign tried to link Franklin Raines and Jim Johnson, former Fanny heads, to Obama but neither has a cabinet post, or AFAIK any other post in the Obama administration.

 

[pipelineaudio]

In a way, I hope that the big three DO recover, and for purely seflish reasons: I can not drive the vast majority of cars. I can not drive compact cars. I need leg room, and I need head room. If I need a car, I don't even bother looking at honda, toyota, or any of the standard 'import' companies.

For me I hope they don't kill Jeep. Advances have come far for other companies in recent years, but for my lifestyle, the build quality, ease of maintanence, availability of parts and low price of spares means I'm usually in a Wrangler

I've towed out nearly every "4x4" on the market, but not once a wrangler yet (though my wrangler was towed out of the quicksand by another wrangler)

It would be nice seeing specialty cars and markets, akin to how much the kit car industry has expanded lately

 

[Cicero]

Why would the head of UAW need to step down? Have they failed, in some significant way, to be a union leader? Did they ask for a large chunk of bail out money in order to prevent their collapse as an organization, due to their own failures?

Ron Gettelfinger should be fired for his master plan to end secret ballots so unions can publicly ask workers to sign a card in favor of unionizing. At least this fool is going to retire this year.

 

[Gangularis]

There should be some sort of variant of Godwin's Law for people who insist on claiming we fought Iraq for oil and in the namesake of Big Business and his Father The Almighty Dollar, blessings and peace be upon their names.

Except that wouldn't make much sense considering I made an assertion, that actually has stakes in reality, not an absurd analogy.. go figure. Perhaps you have a far more keen understanding of the true motivations for the war in Iraq. You really think the oil/coal/ military industrial complex had no influence in Bush's administration? Really??

There's a hell of a market for transportation?
.

There's a hell of a market for oil and war, too.

 

[Cicero]

For me I hope they don't kill Jeep. Advances have come far for other companies in recent years, but for my lifestyle, the build quality, ease of maintanence, availability of parts and low price of spares means I'm usually in a Wrangler

I've towed out nearly every "4x4" on the market, but not once a wrangler yet (though my wrangler was towed out of the quicksand by another wrangler)

It would be nice seeing specialty cars and markets, akin to how much the kit car industry has expanded lately

Jeep hasn't made a true Jeep since 1983.