They’re in Chapter 11, they’ve been hemorrhaging billions for years, they haven’t made a dime selling passenger cars for decades, and yet GM still doesn’t have a restructuring plan:
The truth: GM’s management still doesn’t have the slightest idea how to right the sinking ship—sorry, raise the Titanic. Henderson point blank refused to specify a deadline for a return to profitability. No goals. No timelines. Nada. If I didn’t know better, I’d think Rick Wagoner’s hand-picked clone/successor was trying to give this GM Death Watch series closure, in that “here we are at the beginning again” way. But no; there is no plan.
Does anyone believe we’re done shoveling tax dollars into the GM bonfire? Does anyone believe that President Obama won’t ride roughshod over management?* Does anyone believe that the White House will ever let go?
I sure don’t.
*Although how Obama could do worse than present management is a mystery. However, I have no doubt it will be solved, and shortly.
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16 Comments
1. Brother J:” However, I have no doubt it will be solved, and shortly.”
And so it has been. They’ve appointed some 31 year old called Brian Deese to manage the resturcturing. He appears to have not quite graduated form Yale Law School,has never set foot in an automotive plant and in fact appears to have no business experience of any kind. If we were in “Atlas Shrugged” (and it’s not clear that we aren’t), this guy would be the character known as the wet nurse.
Jun 2, 2009 - 9:44 am 2. Brother J:“Restructuring,” “restructuring,” “restructuring.” Maybe if I practice typing it more I won’t botch it. Damn.
Jun 2, 2009 - 9:48 am 3. Veeshir:Of course they don’t have a plan, they haven’t yet been told which plan they like.
Jun 2, 2009 - 9:50 am 4. Frank Martin:“Plans? Plans!!! We dont need no steekin plans!”
“Restructuring” involves making and executing decisions where people lose their jobs, factories close or are made vastly more efficient through automation, layer upon layer of management is sent packing to teach at some unfortunate midwestern graduate schools, UAW labor contracts are brought into reality and unprofitable car lines are halted( see encyclopedia under “deadwood: removal of”). while all remaining effort is expended on profitable growth oriented parts of the business.
My question is “How does adding a layer of political patronage and favortism help a company make these decisions?”
Here’s a quick answer – It doesn’t.
Jun 2, 2009 - 10:07 am 5. Brad:I wonder how profitability ever returns when no one in their right mind would buy a Government Motors car.
Jun 2, 2009 - 10:23 am 6. BrotherJ:Brad, when the Government Motors cars fail to sell, my bet is that said government will impose a tax on 1.)imported cars and 2.) cars produced by non-union labor. It’s to “level the playing field” you know.
Jun 2, 2009 - 10:44 am 7. rbj:Well Brian Deese did stay at a Holiday Inn last night. Plus he had a poster of a racing car on his bedroom wall while growing up.
This whole auto thing is not going to end well.
Jun 2, 2009 - 10:53 am 8. Veeshir:rbj, oh crap. You mean it wasn’t a Holiday Inn Express?
You’re right, this won’t end well.
Jun 2, 2009 - 10:58 am 9. rbj:But it will be funny, so we have that going for us.
Veeshir, yes, that’s what it was. A Holiday Inn Express.
Jun 2, 2009 - 1:04 pm 10. Tcobb:Its going to be an odd balancing act. On the one hand, “progressives” hate the idea of most everyone being able to afford their own personal transportation. This is what allowed suburbia to grow and expand. Any jurisdiction that was subject to “enlightened” social engineering schemes found that many of their would be lab rats moved out. “White Flight” out of the big urban areas was only possible due to the affordability of the automobile. People could keep their jobs in the city but reside outside of their infernal clutches. And then a lot of the employers moved out to where their employees were. Woe unto the social scientists who were trying to provide Utopia here on earth. The ungrateful lab rats kept escaping.
On the other hand, they can’t let those precious UAW jobs go away, so what is to be done? My own suspicion is that they will enact policies that make car ownership more and more expensive, but that Government Motors will shift more of their production toward mass transit vehicles which states and cities will be pressured/required to buy. After all, since the common people can’t afford to buy cars anymore, it will be the Government’s obligation to make sure that there is an adequate public transportation infrastructure everywhere in America.
Jun 2, 2009 - 2:53 pm 11. McGehee:Barf.
It’s simple: Obamotors will pay all those UAW guys to build cheap bicycles so we can get from our high-rise subsidized apartment blocks to our agricultural or industrial commune jobs.
Those pictures you used to see of the streets of Beijing choked with people on bikes, all dressed like Chairman Mao? That’s us in a few years.
Jun 2, 2009 - 3:11 pm 12. jon:I don’t know where you meet “progressives”, Tcobb. Almost all of the ones I know own cars just like pretty much everyone else. What progressives seem to value is choices in transportation to alleviate the number of cars on the road, while the conservative approach seems to be that more roads are needed for more cars. Clearly, both sides in that comparison have lots of holes in their planning, mostly in the world of financing. Public transportation is expensive and looks like subsidizing of the poor, which isn’t very popular. It also can’t fit in with much of the spread-out geography of the Western US. Likewise, there’s just no way to build enough roads for all the cars since most people want to get to the same places at the same times. And again, it’s just too damn expensive to build roads and buy rights-of-way in areas where lots of people want to get.
In a contest between pie-in-the-sky public transportation and expensive roadbuilding plans, the winner is nobody since people generally don’t want to buy much of anything except more complaints about others. The Onion said it best with a headline where a survey said “98% of Americans Approve of Public Transportation for Others”. I doubt the Onion story went into the financing of that plan, but it’s quite obvious where it wouldn’t come from.
Jun 2, 2009 - 8:37 pm 13. jon:I don’t know where you meet “progressives”, Tcobb. Almost all of the ones I know own cars just like pretty much everyone else. What progressives seem to value is choices in transportation to alleviate the number of cars on the road, while the conservative approach seems to be that more roads are needed for more cars. Clearly, both sides in that comparison have lots of holes in their planning, mostly in the world of financing. Public transportation is expensive and looks like subsidizing of the poor, which isn’t very popular. It also can’t fit in with much of the spread-out geography of the Western US. Likewise, there’s just no way to build enough roads for all the cars since most people want to get to the same places at the same times. And again, it’s just too damn expensive to build roads and buy rights-of-way in areas where lots of people want to get.
In a contest between pie-in-the-sky public transportation and expensive roadbuilding plans, the winner is nobody since people generally don’t want to buy much of anything except more complaints about others. The Onion said it best with a headline where a survey said “98% of Americans Approve of Public Transportation for Others”. I doubt the Onion story went into the financing of that plan, but it’s quite obvious where it wouldn’t come from.
Jun 2, 2009 - 8:37 pm 14. jon:(Sorry about the post-e-doble.)
Jun 2, 2009 - 8:38 pm 15. Brad:BrotherJ, you’re probably right. I hadn’t approached the issue with enough cynicism. Thanks for setting me straight!
Jun 3, 2009 - 12:10 pm 16. BrotherJ:Brad, I think I’m probably cynical about the issue because I re-read Atlas Shrugged recently. The government is trying to play “whack-a-mole” with the Law of Unintended Consequences. Every unintended result of their interference in the market begets another round of interference trying to correct the latest problem they’ve caused in an ever-accelerating downward spiral. It never occurs to them that they caused the problem or to back off and let things find their own equilibrium.
Jun 3, 2009 - 3:20 pmSorry, comments for this entry are closed at this time.