Category Archives: General Motors

>Yet Another Reason I Don’t Feel Sorry For GM

>I’m sorry, Detroit. I do feel sorry for you. But I don’t feel sorry for General Motors.

I’ve complained about the short-sightedness of General Motors before. The way they scared the unions into backing their campaign against raising CAFE standards was sheer idiocy, for one thing. When they kept manufacturing gas-slurping SUVs when all signals pointed to a shift in market trends, I threw my hands up. It was just suicide.

But yesterday I ran across this tidbit:

General Motors established its pension in the “treaty of Detroit,” the five-year contract that it signed with the United Automobile Workers in 1950 that also provided health insurance and other benefits for the company’s workers. Walter Reuther, the union’s captain, would have preferred that the government provide pensions and health care to all citizens. He urged the automakers to “go down to Washington and fight with us” for federal benefits.

But the automakers wanted no part of socialized care. They seemed not to notice, as a union expert wrote, that if Washington didn’t provide social insurance it would be “sought from employers across the collective bargaining table.”

Oh, yet another dumb move, General Motors! So that’s why we don’t have socialized medicine here. Thanks a lot, assholes!

But it gets worse:

General Motors got into the dubious habit of steadily increasing worker benefits. In 1961, G.M. was able to get away with a skimpy 2.5 percent increase in wages by also guaranteeing a 12 percent rise in pensions. Such promises significantly burdened the company’s future. As workers lived longer, the cost of fulfilling pension commitments rose. And health care costs exploded.

Putting these things off to the future is such a Republican way of doing things; anyone wonder how we’re going to pay for the Iraq War? Well, look in the eyes of your grandchildren (or imagine them if you don’t have any yet). And then apologize, profusely, for saddling them with this debt.

You know, these things always come back to bite you in the ass, as GM found out too late:

In the ’90s, the consequences of maintaining a corporate welfare state became too obvious to ignore. In that decade, General Motors poured tens of billions of dollars into its pension fund — an irretrievable loss of opportunity. What else might G.M. have accomplished with that money? It could have designed new cars or researched alternative fuels. Or it could have acquired half of Toyota — a company that the stock market now values at close to $150 billion.

Well, thank God that didn’t happen. GM in its wisdom would have killed the Prius.

What’s good for General Motors hasn’t been good for America. And it’s just a small piece of a much larger problem, a mindset of irresponsibility that puts off to the future things we’re too chickenshit to resolve today. “I’ll worry about it tomorrow” didn’t work for Scarlett O’Hara and it won’t work for us. It really makes me wonder what problems this country is going to face when our own $3 trillion war bill comes due.

What a phenomenal waste.

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Filed under General Motors, healthcare, socialized medicine

>Sign Of The Times

>Will GM kill its Hummer line?

Today, General Motors announced that it will be closing four truck and SUV plants in North America and may discontinue its Hummer line, citing the slumping sales of large vehicles brought on by high oil prices. Sales of the Hummer were down 61 percent last month, and May was also the first month in which cars outsold the Ford F-series truck since 1992. In place of the Hummer, GM CEO Rick Wagoner announced that the GM board has approved production of a new small automobile and a new electric car. As CBS reported, Wagoner “said the change in the U.S. market to smaller vehicles likely is permanent.”

No one could have anticipated this!

Two of the plants that GM is closing are foreign: one in Canada and one in Mexico. Production of the new automobiles will be U.S.-based, in a plant to open in Ohio in 2010. As long as GM lives up to its promises, this looks like good news all around.

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Filed under gas prices, General Motors

>More Tax Breaks To Big Business

>Shocker of the week! Our corporate-friendly government is preparing to hand out $40 million in tax breaks to “downtrodden” Ford and General Motors .

Awwww. Those poor “downtrodden” auto manufacturers! They’re so oppressed! And beleaguered! Whah!

Ford and GM both have shuttered their American plants, putting Americans out of work while opening factories in Mexico to take advantage of the cheap labor of a developing country. It’s not just factories and assembly plants that have moved overseas: in 2006 GM outsourced $15 billion in IT work to India.

Remember when all of those laid-off assembly-line workers were supposed to be “retrained” to work in new, “high-tech” industries? How’s that working out for everybody?

As if that’s not a kick in the gut, these companies continued to ignore obvious market and economic trends in the U.S., producing gas-guzzling trucks and SUVs that no one wants to buy. Check out this story from April 2006 about GM’s new $650 million assembly plant in Mexico. It was supposed to be okay because it’s to build small “subcompact” cars that no U.S. customer would want:

Even with gasoline prices averaging $2.50 a gallon, there’s little demand in the United States for such subcompact cars as the Chevrolet Aveo, said Catherine Madden, a senior analyst with Global Insight.

Gas prices would have to rise to $4 a gallon and remain there for a year to spur demand for subcompacts, Madden said.

“There’s not a lot of indication that Gen Y is going to jump into the subcompact segment,” Madden said.

GM sold 68,000 Chevrolet Aveos in the United States last year. Demand is much stronger for compact and subcompacts in Mexico and South America.

Yes, that’s the brilliant thinking that has Toyota in a dead heat with GM to be the world’s top automaker. Meanwhile, Honda and Nissan had sales increases this quarter, while Ford and GM continue to tank.

Way to go, Ford and GM. And we’re supposed to bail out these clowns with $40 million in tax breaks this year? Whatever happened to the “free hand of the market”?

We’re long past the days when the old adage ”What’s good for the country is good for General Motors, and vice versa” rings true. Because these companies no longer care about what’s good for the country (if they ever did). They care only about what’s good for their bottom line, and right now that happens to be good for Mexico and India–not so good for America.

When will we stop rewarding these corporate giants whose business policies do not benefit American workers?

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Filed under corporations, Ford, General Motors, outsourcing, taxes