Can GM (Government Motors) Survive?
It will take more than taxpayer money to save the car giant.
A funny thing happened the other day in my cozy little enclave of California’s Marin County, where a registered Republican is as rare as a three-toed sloth. Our local Bank of Marin announced that it wanted to give back its TARP money. Apparently the well-heeled bank wasn’t troubled, had adequate assets, and really didn’t need a bailout.
But since Treasury was running amuck tossing bags of newly printed money at banks of all description, the Bank of Marin reasoned that it shouldn’t be left out. Then its management discovered the strings attached. If you’ve ever borrowed money from a relative, you know what a bad idea it is. And good old Sam appears to be the uncle from hell as a creditor.
Unfortunately, GM and Chrysler didn’t have the luxury of politely declining our largess. At this point, unless a miracle occurs and either one (most likely GM) can repay its loan, the result will look a lot like any other state-run automotive enterprise — think former Eastern Block cars. Of course, in our free market, we won’t have to buy the vehicles that Barack and company built. That’s a nice theory, but don’t bet your Lehman Brothers shares on it, since protectionism is regaining stature with our current crop of legislators.
Recently, the administration’s automotive team descended on Detroit for some fact checking. I haven’t discovered yet how they traveled to Motown. I’m pretty sure they didn’t drive, since these folks are busy and important and can hardly waste their collective time in traffic. For that matter, with the hassle of airlines and TSA, a commercial flight seems like an unreasonable burden. Perhaps the speaker of the house lent them her government plane. That Boing 757 should be large enough to fit the automotive team, even in executive configuration. But if it’s not available, we taxpayers have provided a whole gaggle of executive aircraft standing by for government junkets.
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Brian Douglas has driven everything with wheels during his career in the automotive technical, marketing, and journalism professions. He is currently a contributing expert for KGO Radio, WHEELS editor for the San Francisco, Washington, DC, and Baltimore Examiner newspapers, automotive features writer for the Minneapolis/St. Paul Times Tribune, and automotive editor for Gentry and Ranch & Coast magazines.
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21 Comments
1. Dave:I am rather fond of my 2007 Chrysler Hemi with that 5.7 liter engine.
It gets 17 in the city and 25 on the highway. Not bad.
Its predecessor, the Chrysler 340 of 30 years ago got 3 and 8. So we sure ain’t doing bad in the conservation department.
But don’t tell the do-gooders that. It would take at least 23 privately chartered Airbus 340s
Mar 28, 2009 - 12:35 am 2. EgregiousCharles:to sooth their jangled nerves if they ever learned we don’t care about their opinions.
I was always a GM buyer but since the bailouts will not buy GM or Chrysler. Since Ford refused, they are still on the potential buying list. I mentioned this to a friend at work and he said his dad said the exact same thing. I wonder if there are a lot of us?
Mar 28, 2009 - 5:50 am 3. Stephen:@EgregiousCharles
More than you imagine, I suspect. I have family ties to GM going way back. Decided last year not to be very wary of the product of GM or Chrysler as long as they remain under the thumb of the government.
Mar 28, 2009 - 8:21 am 4. Bilgeman:Mr. Douglas:
“You’ll notice that Mr. Rattner didn’t include GM and Chrysler customers as stakeholders. Perhaps that’s because the current customer, the one supplying GM and Chrysler money, is the Federal Treasury.”
And what does Treasury drive?
Gee, I’d LOVE to buy a new Chevy or GMC SUV,(I’ve never cared for Chryslers), but with taxes on the increase, credit on the decrease, and jobs being lost…
Mar 28, 2009 - 8:38 am 5. Bilgeman:Hmmm.
That got me thinking about what Obamerica is going to look like.
I’ll be subsidizing banks that won’t loan to me, auto companies that make cars I can’t afford, newspapers I don’t read, radio shows I don’t listen to, houses I don’t own, unions I don’t belong to, colleges I’ve never attended, and foreigners who want to kill me.
What a great country, huh?
Mar 28, 2009 - 8:43 am 6. Duane Phinney:Can GM survive?: That’s an easy one to answer, there is no way they can survive. Congress will not drop or modify the new (CAFE) standards. The technology is just not in place yet. The administration wants GM to build just small green vehicle’s, problem is the price, $8 to $10 thousand more. Plus no one wants them. If GM could not pay the $60 billion debt they owe in the good times, how in the world can they pay it now.
Mar 28, 2009 - 12:42 pm 7. njcommuter:But where is the problem? It’s not GM. It’s not Chrysler. It’s the way that the government sanctioned the unions whose retirees are bleeding the company dry. It’s the way that they have to meet multiple emissions standards in different parts of the country.
In fairness, I do blame GM for some things. I blame them for building cars that have a remote shutoff switch, and remote tracking mechanisms. GM, America, and Apple Pie should not mean Big Brother tracking you and threatening to shut your car off by remote control.
I hope that GM survives, but I won’t buy a GM product so long as there is another vehicle available without this unwarranted intrusion. To those who want it for law enforcement, I suggest that they register their house keys with the police, sign authorization for entry without warrant, and have a police-controlled stun belt permanently implanted.
Mar 28, 2009 - 1:14 pm 8. Anita Hope:GM has made one error after another, but take a look at the changes they have made. This period of disaster to all of us has been a giant “Earth Quake” in our lives
Mar 28, 2009 - 1:16 pm 9. Marc Malone:but we are Americans and survival is our “Back Bone”. Start looking at the new cars coming off the line and you, like I, will see vast improvments and better value for our dollars. A good example is the new Pontiac G3, it beats most imports in it’s size and the cost is great. We must stop going and judging the past and be open to
take a new attitude towards GM and give them a period of trust again. Take a look at how many foreign card makers have opened up plants in the US because our
workers are determined to put out well constructed automobiles. With the Unions starting to realize they must adjust or go down, we can use our power to help
rebuild one of our most important industries.
GM’s coming sign: “Will Work for Food.”
Mar 28, 2009 - 1:50 pm 10. Northern Light:It’s a funny thing, in Canada Ford said they didn’t want a bailout, they just wanted the government to encourage consumers to buy Fords.
Ford is the company that made cars that explode and rust themselves to pieces in a few years.
I’d suggest that if North American car companies wanted to sell more cars they would spend more time on the “North American cars really suck” problem.
#1 Dave, those numbers you mentioned are pretty pathetic. Then again, I don’t drive. It’s cheap and good for the environment.
Mar 28, 2009 - 2:35 pm 11. jensad:Can GM (Government Motors) Survive? NO
jensad
Mar 28, 2009 - 2:40 pm 12. D Foster:GM and Chrysler have become wards of the U.S. Government, and UAW partners, Ford Motor is having Dick Gephardt join their board of Directors, another UAW supporter. I see the U.S.A. Auto, GM, Chrysler and Ford nothing less than dead as international auto companies. They will just be making cars designed by Congress and Enviromentilist. Both anti business units.
Mar 28, 2009 - 4:01 pm 13. Joe Bison:Will never buy another car from these mismanaged companies.
Acura, BMW or Mercedes all make automobile’s in America, will buy one of these next.
The only way GM will survive is by downsizing
and building cars people want. They and the
UAW/CAW brought this down on themselves by
signing contracts that in the long term were
non-viable.
Also GM turned off a lot of loyal buyers by
building crap cars. In recent times for
one example the V6 plastic gaskets. Everyone
suffered blown head gaskets. A lot of problems
must have become apparent to GM early on,yet
the problems persisted across multiple model
years turning buyers off their product.
Many buyers, especially ones in the group of
Asians, will not touch domestic cars. The only
exceptions are where there is no Honda or
Toyota anywhere near the domestics price range
or there is really special deals in the range
that the domestic can not be making any money
off it.
Also potential buyers are worried about their
new car warranties if GM or Chrysler go under.
The role of government can’t be ignored either.
As soon as they began mandating CAFE standards
that favored foreign makers the domestics
began going downhill. This was the Community
Investment Act of the auto industry.
By the way I own 2 GM trucks so I know the
Mar 28, 2009 - 5:39 pm 14. Gozer the Carpathian:problems they have. However, I have the
facility to work on them myself. If I had
to rely on GM dealers or private garages
I would not own one.
Honestly my family has been a GM family for at least 40 years. I currently own a ‘06 Chevy Colorado and I enjoy it, but my wife owns a Mazada 3 and since we bought it we’ve been honestly looking at Mazada for our future vehicles. While they don’t make trucks I don’t see why I wouldn’t want to continue with their products vs. GM in the forseable future.
Mar 28, 2009 - 10:30 pm 15. Will:I have been a GM buyer for 29 years and hate to see them fail,but as a conservative using common sense,the only way for GM is bankruptcy. It seems Ford is the only real American company.
Mar 30, 2009 - 11:13 am 16. McRib:They will divide GM into two parts – Good GM and Bad GM. The new names will be Barrack Motors and General Motors. The cars will resemble the acronyms.
Mar 30, 2009 - 6:59 pm 17. James:For those conservative few, who repeatedly bash Obama I have to ask. Where was your conservatism when Bush killed 4000 young men and women for nothing but a lie, Iraq had nothing to do with 9/11. I spent two years in Iraq, and I can say unequivocally…we didnt need to go there. You know if GM had abandoned these self-destructive policies they wouldnt be asking for government welfare. The GM stockholders should have asked for the CEO’s head on a platter last year when they started failing. They knew they were in dire straits well before Obama became president. But media big mouths like Rush and Schnitt find fault with EVERYTHING Obama will do, but yet werent convincing enough to sway the vote to keep him from being elected. If I remember right, GM and Chrysler approached the Government for help, it wasnt the government stepping in “rescuing” them. I stopped buying “American” cars long time ago. Does anyone remember when GM started moving it productions to Mexico or are we so short memoried. Thats when they stopped being the “heartbeat of america” as they’re adds said a long time ago. I say screw them. Its about time that they restructure, kick the UAW and ALL unions out of the door and get back to business.
Mar 31, 2009 - 5:20 am 18. JFM:For those conservative few, who repeatedly bash Obama I have to ask. Where was your conservatism when Bush killed 4000 young men and women for nothing but a lie
Well you are lying. Because Bush pointed at WMDs as one of _many_ reasons to invade Irak. His purpose was to introduce democracy inb thge Middle East believeing it would defuse Arab agressivity against rest of world (IMHO he was very naive here: as long as Islam stands this agressivity will remain). And _none_ of the people who opposed him told the WMDs were a lie. All_ belived them to be real. Be it for Hans Blick, for Annan, for Chirak, for Putin or for… yourself. They believed them to be real and were all too happy to allow Saddam get nukes as long as it pissed America and allowed them to sell 1 dollar goods for ten dollars with the oil for food scam. Thgat is the truth and all your lies will not change it even if according to gobbelsian doctrine you repeat it ten thoussand times.
Aldo don’t try to make us believe you care about soldiers lives. You don’t. In fact you hate and despise them, just like your likes hated them during Vietnam and called them baby killers all while Vietcong and Khmer Rouge perpetrated their atrocities. Also I still remember the sorrow in your circles the day Saddam was captured. All you cared was that it would help Bush. And you feared, you downright feared that his capture would decrease violence in Irak. That was what people were saying in left wing blogs.
Note: Germany wasn’t behind Pearl Harbor and wouldn’t have decalred war to the United States without Roosevelt’s continuous provocations in the preceding months (like US Navy ships attacking U Boots). Are you laying American dead in Europe at his feet?
Mar 31, 2009 - 8:43 am 19. Don Rhudy:While we are at it, Vichy France wasn’t involved in the attack on Pearl Harbor and wasn’t at war with the United States. Are you laying the dead in “Torch” to Roosevelt’s feet.
I was always a GM buyer until 1980, when my Chevy Diesel truck blew up and I had to sue GM to make it right. My best GM product was a 1968 302ci Camaro, the little racer. I was thinking about the upcoming Camaro, but now that the government is dictating things to GM, I’ll never buy GM again. Not only that, but I won’t do business with anyone who takes government money or votes Democrat.
Mar 31, 2009 - 8:57 am 20. Oldguy:Phase one: takeover of bailed out auto companies and stopping the making of suv’s and light trucks.
Mar 31, 2009 - 9:14 am 21. Pops in Vienna:Phase two: union card check for foreign auto transplants in the U.S..
This last could cause large problems with foreign governments and could set off a trade war and censorship in international courts(including our own).
Back when I lived in America I owned both a GM and a Chrysler automobile. Both cars were poorly made and were constantly in the shop. I want to forget the numerous battles I had with the dealerships about warranty issues. I stopped buying US cars and started buying Japanese. Since that time I never had any problems. In fact, one Toyota had over 400,000 miles on it.
My friends, that’s why GM and Chrysler are failing. They make crap cars. Obama and his minions can’t change that. The only way Obama can kill off the Japanese competition is to legislate so many regulations that it will make it impossible for them to manufacture for a US market.
They might call GM and Chrysler by another name but as long as Obama is president they’ll have to keep the union employees “employed” or risk losing the rust belt vote in the next election.
Mar 31, 2009 - 10:48 am