Amazon.com Widgets

« A Larry King Interview | Main | The Worst Person - Only in Utah »

Nationalize GM

The way Dan Neil describes it, the government having a controlling interest in a major car company makes sense. A role that doesn't involve micro-managing it, but rather one that sets an overall direction. One that gets away from striving for near-term profits at the expense of long term success. What do you think?





 

Comments

"One that gets away from striving for near-term profits at the expense of long term success. What do you think?"

If this is really what GM has been doing wrong (and I don't think it's far removed from the truth), then your government shouldn't do a damn thing. The very threat of bankruptcy itself will coax the Big Three in to rethinking their business practices.

In the meantime, I'm sure they have a lot of assets to sell. (I know of a few Asian and European car companies that would be more than happy to buy up a bunch of factories that are already tooled to produce cars. You know, like all of them.)

Giving then a stack of cash is NOT going to give them an incentive to change anything. It simply tells them that no matter what they do, Ye Olde Fed will have cash for them, ready to bail them out.

It's not the worst idea, but then again it's also intrusting an already proven incompetent government with yet one more responsibility...What could go wrong? I think what Mr. Neil said is right, the devil's in the details. If they can come up with some sort of plan for government ownership that would be transparent and honest towards our countries' needs, then sure, why not? We are already suffering from the worst aspects of Socialism, we may as well get the good aspects of it as well. :P

I apologize for posting a link to my site but I've written a short essay that addresses this very question. In brief I don't think it's the best idea ever but it should definitely be on the table.

Regards, Super J.

Shouldn't the public interest inform how any large sum of public money is going to be spent? Seems obvious to me.

I hope we can break out of the anti-government, free-market BS conventional wisdom that's driven our policies for decades.

This is a good read:

http://www.tomdispatch.com/post/175008

Where do we get these auto executives in America? I'll bet you a $100 that if you look in this guy's top desk drawer you will find a copy of Jugs magazine and a flyer for a strip bar with a happy hour buffet. No wonder American cars are almost tragically unhip. And whose idea was the Hummer? It's like a group of 12 year old boys are in charge of planning for GM.

I don't know about the government taking over the car industry, but we could certainly make these companies more in touch with the needs of the nation. And let's face it, a room of chimps could have done a better job at the helm than this lot. Mr. 1970s executive featured here has probably fought the government tooth and nail over every environmental and safety regulation. Why? Because he's one of those free-market libertarians who hates the government and hates welfare recipients. If we do bail them out we should make the whole management team stand in front of the TV cameras to admit that they are all welfare queens. They should also stop blaming labor for their woes and admit that they are shitty businessmen. Their CEO salaries should also reflect their worth. How about minimum wage? It would be great to see these guys and the Wall Street pricks try to live on minimum.

Chris Matthews is still a douce bag. He should have to play old tapes of him cheerleading for the Iraq war.

Funny but a little too true...

Did you see this one with Bob Lutz?

Why not let the big three go belly up and then use the $18+billion to restructure and retrain workers in the auto and associated industries into public transportation and green industries? There are plenty of cars without those from the big 3. These 3 companies are simply creating a glut of poorly made, fuel inefficient vehicles.

user-pic

Hmmh, the business world seems to have a lack of leadership, at least leadership that looks past next week and their bonus checks. So trusting the leadership that bought and paid for the rules that have got us into this mess seems a poorer choice than hoping the next group in Washington can direct (not manage) the business world (or at least American's part of it) in a direction that is better for the country and the people of the country than the 2% at the top doesn't seem like too big of risk for me.

I do feel that we now have a prejudice against American cars. Cars produced on one line but badged for different brands were judged better with a Japanese badge. One company did a test of cars playing games with the brands. The "American" brands were judged poorer.

My own spell of Japanese car ownership made me swear to never own another one. I've got a Jag with over 210,000 miles before it needed a head gasket and a Range Rover with 265,000 miles and still going strong. Both from the Ford era of both companies.

I'd guess that part of the problem isn't GM or Ford but the perception that people have of their products. Ford and GM would not have produced some of their cars and trucks if they were not making money with them.

Makes me think back to the '50s when some of the car companies offered seat belts as an option...such a waste of time they quit offering them. Kind of shows what the public thought of safety in the '50s! So should you curse the companies for not offering or demanding people buy what is "good" for them rather than what is making money at that moment?

I'd rather help blue collar union jobs than bankers on Wall Street any day. However I do feel that if a company takes our money they should have upper management working on the GS scale and no bonus games. Don't like it...they can find the door and their retirement and or golden parachute should make the rank and file's exit bonus.

The Market cap of GM is $3 billion (!). Why should the US government loan GM $18 billion without buying controlling interest in the company at the same time. They don't have to micromanage the company, but they could put better management than this guy in charge. If the the $18 billion does turn out to be enough to turn the company around, then the US taxpayer will win when the company is in good enough to take "public" again.

Special thanks to Tim for pointing out the obvious: GM is worth about 1/5th of the loan they are seeking.

Forget nationalizing, forget controlling interest- would you loan $1m for a house worth $200k?

This is the mentality that got us here to begin with.

Special thanks to Tim for pointing out the obvious: GM is worth about 1/6th of the loan they are seeking.

Forget nationalizing, forget controlling interest- would you loan $1.2m for a house worth $200k?

This is the mentality that got us here to begin with.

Sorry for the double-post. I almost caught my mistake in time. How about an edit feature?

I don't understand what's so bad about letting them go into bankruptcy. That's what bankruptcy is for - restructuring. No doubt it would suck to be a bond holder, or a retiree, but it looks pretty bad for them anyway. The stockholders have already taken their medicine. How many airlines have gone into bankruptcy and are still around?

about letting them go into bankruptcy.

Key to both our economy and our international strenth is our production capacity. Letting them just go away would make so many folks unemployed and be a pretty fatal wound to our industrial production. And "reorganization" would likely end in failure and a simple sell off of their functioning brands

BTW I said Nationalize first. I think we should do the oil industry too. Use ones profit to refit the other.

user-pic

If the Big Three go belly up, your production capacity won't be hampered. The factories will still be there, and so will the workers. The factories will be bought by companies that can afford to run them, maybe some will be retooled.

The workers in question have skill in car manafacturing, and will not stay unemployed for long, as their skills will be in demand.

As for "reorganization probably ending in failure", this is unsupported by history. Bankruptcy, and the following reorg, are THE method that is used to reshuffle resources to their most effective configuration.

They been closen factories in this country for 50 years. Have you noticed someone buying them up?

The workers in question have skill in car manafacturing, and will not stay unemployed for long, as their skills will be in demand.
This is the part that seemed a little too optimistic to me. "...for long" - I think that might be long enough to go deeply into debt, lose their house, prevent their children from attending college - or worse...if ever.

From what I've seen, companies like to hire back as few skilled laborers (at the very least, keep them on as part-timers so they don't have to pay benefits) and will hire as many young, unskilled as possible that they can give specifc, limited training to and pay lower wages to. In cases like that, when you lose your job, your role is gone.

I admire the optimism, though.

Let me 2nd Red's sentiment. To blithely state that "The factories will be bought by companies that can afford to run them..." is amazingly naïve. What country do you live in? Surely not in the USA, where manufacturing employment has been falling for about 60 years, and the fruits of big productivity gains have been flowing exclusively the top 10% of earners for almost all the past 35 years.

Come to think of it, fuck cars and their production. This isn't really a good time to be cautious so let's throw the car baby out with the GM bathwater. I like the idea of investing heavily in mass transit infrastructure. Over the not-so-long run I think America will come out ahead.

This isn't some crazy pipe dream. Spain is practicaly falling over itself to advance their highspeed network of rail around the contry (AVE, alta-velocidad). And don't tell me the distances are too great in America because at 300kph these trains rival flying when you factor in trips to the airport and delays. I think the East and West coast corridors are feasable for train development if we would stop subsidizing the automobile to such an absurd degree.

This isn't really a good time to be cautious so let's throw the car baby out with the GM bathwater.

This is what Micheal Moore suggested on Olbermann, only he says to do it, you nationalize GM make some factories produce Hybrids and some start manufacturing trains

Dan Neil makes a good point with ConRail, but I'm pretty fed up with the "Big 3." Let the government implement programs to support the hard working stiffs are getting stiffed by their white collar superiors. The gas tax idea has been a long time coming (Chirac...), and it can be used to support the workers and to explore energy options other than fossil fuels.

Throw out the execs with the bathwater. They'll still be able to swim.

Navigation

Support this site

Google Ads


Powered by Movable Type Pro

Copyright © 2002-2017 Norman Jenson

Contact


Commenting Policy

note: non-authenticated comments are moderated, you can avoid the delay by registering.

Random Quotation

Individual Archives

Monthly Archives