Viability of GM (Government Motors)


#1

It looks like GM will soon be owned by the UAW(17.5%) and the rest by the government. There is no precedent of this anywhere, I believe, other than Renault and Volkswagen, but they did not have Union ownership. What are the chances this will succeed in a very tough world market?


#2

My answers to these type of questions are usually short (I tend to concentrate on one idea when maybe a broader view is required). Can the mind-set of “this is how we have always done it” be broken? It seems that design,engineering, and management techniques just keep getting passed on from employee to employee. Does GM have inovative thinkers within the company? any idea if these thinkers can get their ideas out there?


#3

I have mixed feelings. The market should determine the ultimate fate of ANY corp. But, many of GM competitors have had at one time or another, govt. support from the countries of their origin.

The new model for corp. success as far as recent economists that I have heard, say that the decisions made by companies should have more input from the workers who have a more personal investment in the long term security of the company and not outside financial investors. Investors are out for short term profit and the CEO’s they hire reflect this mentality.

So would direct representatives of the workers through the UAW better look after the security of a company ? I feel there is a compelling argument for this model given the decisions made by the "outsider investment models " of the past.

No one argues that it’s not a good thing for China to control the purse strings of so much of our financial security lending more control to their influence. Why would this be any different. At least the UAW and our Administration are theoretically, more under our control come election time.

So, I’m not afraid of “big govt./ UAW take over” as long as that govt. is not China or other which is where private financial investment would tend to go w/o it.


#4

There is precedent in other countrys.
And we go there to those other countrys to pontificate about the benefits of capitalism over state-owned industry.

Go figure.


#5

My T-Shirt Now Says “GM-Government Motors” On The Front And “Obamunism” On The Back.

Thanks for making my day. From Generous Motors to Government Motors. That is so funny, it brought tears to my eyes. 1984 George Orwell’s New Speak.

Are you serious with your question? 82.5% government owned? United States Of America? The chance of this “succeeding”? Less than zero. The union helped GM lose to the competition and the government can’t run anything right, even by confiscating money and spending it like it’s their’s to spend and then printing more and more and spending all that, too!

And here I thought this was obvious to everybody.

CSA


#6

I posed a rhetorical question, since with a hands-off, go for the long term, approach, giving management and labor a free hand to do the best job, it might have a chance.

The state of Saxony used to own Volkswagen, but did not meddle in the daily operation, or demand quarterly dividends. And the union was quite cooperative for many years to put Germany back on its feet, so the company succeeded.


#7

News: The feds just authorized 7.5 Billion of our tax dollars to GMAC (Cerebus Finance, or whatever they are) to provide money to loan to sell cars.

So, if the feds take 7.5 billion from our pockets and give it to GM to loan back to us (+ interest) to buy their cars, will this stimulate the economy?


#8

Stimulus = Redistribution Of Wealth = Socialism.

Like many other Americans:
I earn money & pay taxes, local state, federal
I have no credit cards
I have no mortgage
I have no debt
I have broken no laws

I don’t believe my lifestyle contributed to the recession. I am putting into the stimulus, but getting nothing back. My teenager saw an ad for 114 stimulus money summer-jobs for “teens” ages 16 through 24 in our little community. A school partnered with a Community College and got $477,984 in American Recovery & Investment Acts Funds to place youth at community work sites in 2 counties, including ours. He called and was asked several questions and qualified until he was asked if his family household income exceeded $22,000. Why should it matter? He’s trying to pay for his education, just like his parents did. He was told to foget it.

“Eligible” “kids” can also get assistance with transportation, day care, work clothing, and safety equipment. What ??? What the hell would a “teen” looking for a summer job need day care for? And work clothing? That’s the only kind of clothing the eligible kid should have!

Am I a good American? I think so. A good socialist? Not so much. I can’t even explain this to my child without explaining the injustices of our current government and how our once great country is going the way of the U.S.S.R.

CSA


#9

new bumper sticker trend approaching:
Don’t blame me, I voted for McCain


#10

It could be worse. Imagine if you were a civics teacher trying to explain this…


#11

The UAW will have to get real about wages and benefits now to assure the continued viability of GM. I submit that there are those of us in the US and also your home country Docnick, who want them to succeed and will buy their products; we just did.


#12

In a few days, GM will declare bankruptcy. Their stock will drop to $0.00 and be de-listed from the NYSE. Since the stock is worth nothing, “ownership” in the company means nothing. All the UAW and Uncle Sam get is debt. Bond holders will get $0.04 cents on the dollar if they are lucky.

Our Nation is drowning in DEBT. Corporations and the Government have been cooking the books for years. The chickens are coming home to roost and the real pain hasn’t even started yet…

If bromides like “Don’t blame me, I voted for McCain” make you feel better, fine, but you are just displaying your ignorance concerning the situation we are in…


#13

News flash. Stop going by legendary cultural myth and try some hard nosed economic history. The federal government of the U.S. (along with its tax payers) has been neck deep in piling money into “private” enterprise since the beginning - and that goes double or more for things having to do with transportation.

“Private enterprise” is the biggest myth going.

So “Socialism/Schmocialism” / “Obamunism” my foot. We have had socialism for a very long time - it has been socialism for the rich. The ridiculous B.S. about Obama and “redistribution” and “socialism” is so absurd I can’t even stand it anymore. All it does is ignore the fact that the last administration was also big on dumping GIGANTIC sums of taxpayer money into economic activity - its just that that money was dumped into very large corporations. Why “normal folk” would complain that some state activity shifts to instead dump the money at “normal folk” themselves is thoroughly beyond me.

(I suppose that was more a general reply to the replies rather than to Docnick’s initial question - here’s one point - the initial post implies that somehow the state & UAW should be expected to screw it all up. Well its already all screwed up).


#14

cigroller; I posed the question of viability since this is a unique situation, and the economic conditions are really bad out there. Too much manufacturing capacity worldwide, and a depressed economy. Even Honda and Toyota are suffering.

If the re-sized GM and born-again UAW really focus on the right things; product, quality, service, I think they could succeed. I don’t pre-suppose they will screw it up, but the government needs a hands-off approach so that management can do its thing.

This is different from the Lockheed near-bankruptcy in the 60s, where the US government helped them out. Cars are consumer products and the competition is truly international.

Having owned 6 GM cars in the past, the last one a 1988, I wish them well. Their products have improved immensely in the last 5 years.


#15

I think most people want them to suceed, since it’s the largest integrated enterprise in the world. The new trimsize GM with a humbled union may just succeed in pulling this off. GM products have much improved over the last few years, unlike Chrysler’s.

In Asia, Latin America, Australia and Russia, GM is doing relatively well, and they may be bigger in China than anywhere else in the future.


#16

Whoever owns it must use most of the existing management team or it is guaranteed to fail. Not necessarily the executives, but even many or even most of them are crucial. People who know how to get things done within the organization are more important than ever. The UAW and government oversight team can’t engineer, market, pay the bills, or many of the other things that management does. They may be capable, but haven’t learned the skills required. Additional inefficiencies will sink any company already in trouble.


#17

Indeed, most of my diatribe was aimed at some of the responses more than the initial question. But I will say that the initial question still contains the assumption that labor and govt are bad for business. Here’s why I say so - the major shareholders in all major corps are not individual investors. They are other large organizations (other corporations including banks & mutual funds, pension funds, etc.) None of these have a “hands off approach” (and we’ll leave aside for now why anyone should trust management instead). So the question still implies a “special” category if the large and powerful organizational stockholders who try to control corporations happen to be labor or the state. I don’t really make distinctions - large organizations, public or private or whatever, create enormous problems commensurate with their size.

The stomping of the dreams of the early republic is not and has not been the sole province of “big government.” In fact, big business came first - and it was big business that bred big government and big labor (all the while making sure to get help from taxpayer dollars to do it).


#18

I guess you are calling for strong and enlightened LEADERSHIP, such as Carlos Ghosn provided at Renault, and Lee Iacocca gave Chrysler in the 80s. I believe there is enough talent within the GM organization to succeed, but they need a strong focus that marshalls all the capabilities of the entire workforce, Toyota-style.


#19

Am I a good American? I think so. A good socialist? Not so much. I can’t even explain this to my child without explaining the injustices of our current government and how our once great country is going the way of the U.S.S.R.

Let’s see…did the govt. force the auto industry to take the funds ?
They came begging to save their butts, and the use of our tax dollars has to be secured. The alternative is foreign investors supply the funds along with foreign control.

Some of you just won’t be happy till we go back to practicing drop and cover, hiding our kids under the school desks getting ready for the big red scare again.
Let’s just be afraid of everyone…especially people we actually vote for to serve us in govt. jobs. Without our own govt. intervention, the alternative is continual foreign capital finding it’s way into our business sector…just what you guys fear most. I guess it’s easier to be afraid then to support your own elected government. It’s less work and a lot easier to let Shaun and Rush tell you who to be afraid of…


#20

It looks like private enterprise is alive and well!! This weekend we will witness the birth of a NEW car company. Magna International has succeeded in buying the European division of GM, Opel, which includes the Vauxhall division in England and a large manufacturing plant in Belgium. This plant made the Saturn Astra, known in Europe as the Opel Astra.

Magna already has over 100 car parts manufacturing facilites worldwide, and assembles Chrysler minivans and Jeeps in Austria. They are also going to supply the motors and batteries for Ford’s new electric car!

All Magna plants are non-union, and the president, Frank Stronach, a German-born entrepreneur wants to keep it that way. That probably persuaded Angela Merkel, the German president to pass over Fiat. GM also did not want their German subsidiary bought by Fiat, which by now owns Chrysler.

More history will be made when Melinda Stronach, Frank’s daughter, takes the reigns in a year or so. This could be the first car company run by a woman who is also a major shareholder.