About which (Investor's Business Daily -- "Meet the New Boss"):A president of the United States orders the chief executive officer of General Motors to resign. The same president is further ordering Chrysler to merge with Fiat, the Italian firm specializing in flimsy cardboard boxes on wheels.
This new reality should send a chill down the spines of all Americans. The federal government has begun to run U.S. companies.
President Obama said Monday, "my team will be working closely with GM to produce a better business plan."
To that confident assertion he added these stern sentiments:
"They must ask themselves: Have they consolidated enough unprofitable brands? Have they cleaned up their balance sheets, or are they still saddled with so much debt that they can't make future investments? Above all, have they created a credible model for how not only to survive, but to succeed in this competitive global market?"
Who is in a better position to know the answers to these questions? Rick Wagoner, the GM CEO for nine years and former GM chief financial officer who has been with the automaker since the late 1970s, even running one of its foreign affiliates in Brazil, and who holds a Harvard Business School MBA?
Or President Obama, a former community activist from the south side of Chicago with a great rhetorical gift?
The president answered that question this week by ordering Wagoner's firing.
Who'd a thunk it? I knew things weren't going to be good under an Obama administration but I really didn't think it would be this bad. And to add insult to injury... The One has the incredible chutzpah to chide GM about their balance sheet and debt... after submitting a budget to Congress that guarantees the largest deficits in our history. Just how we... the United States... are going to finance this debt remains to be seen, but let's not go down that road. Let's think about other things, such as going to the DMV (or some other to-be-announced Fed agency) to file a warranty claim on your GM car. Yeah. THAT will be fun, dontcha think?
―:☺:―
In other news... You know how I'm always going on about the wind here on The High Plains of New Mexico? Aside from being a real pain in the a$$ as far as comfort goes, the high winds can have real negative effects. Case in point (from the Portales News-Tribune.):
After wind knocked down a transmission line serving parts of Portales on Monday, 3,136 customers were without power for as long as almost 2 1/2 hours, Xcel Energy spokesmen said.
Spokesman Troy Foos said the power went off in stages, but the longest time before it was restored was two hours and 20 minutes. Spokesman Wes Reeves said power was back by about 5 p.m.
“We’ve had some wind issues across the whole system today,” Reeves said.
The wind caused several outages at once in the Portales and the Texas Panhandle, he said.
Strings the size of a ship's ropes attached to the "bailout" funds... and not just in the automotive industry. My first incredulous thought as I read some things yesterday - including states caving on accepting funds that have strings - was that we have moved from a democracy to a dictatorship.
ReplyDeleteThe upside is that it is all on the admin - they are taking over and succeed or fail, it will be their doing.
When the automotive group first asked for funds, I thought "let them fail" and then I thought that might be worse for everyone overall, but now I'm back to thinking it would be better to allow the failures and let things right themselves "naturally". Re-regulation has never worked.
Ugh!
Well, hope things in Portales are less windy and more powerful today :) - And hope you are on the mend!
As I read through the link above, I was thinking, "How could anyone in government ask those questions about balancing a budget, making cuts, etc. knowing that they themselves cannot run things any better?" It so reeks of Socialism that I find myself gasping.
ReplyDeleteThere isn't a profit-oriented private-sector entity anywhere on the planet that would loan GM a dime right now.
ReplyDeleteThis is straight-up charity at this point, and the government demanding changes in management from GM drives that point home forcefully.
My preferred solution is to let failed businesses fail and let the chips fall where they may - in the long run it will be less painful.
Since we aren't going to do that, we're in Golden Rule territory - he who has the gold, makes the rules. This is just the beginning; there will be more like this.
Buck, I especially like this line: " my team will be working closely with GM to produce a better business plan. " what "Business Plan" has BO ever written? What successful business does he have running? I don't get it why the many "Captains" of Industry that have been so viciously degraded by this administration don't stand up to him/them. All those Bankers that were in the White House last week, all the Wall Street guys and the list goes on and on. But not one of them has the Balls to stand up and tell them to pack sand.
ReplyDeleteWhat BO and his many Bot's say does have consequences, the smear they have perpetrated on the General Aviation is a classic example. They have savaged anyone who (except Princess Pelosi) had the sense or financial ability to use a private Jet to do their business. This savagery has caused a complete contraction of the GA segment, Cessna, Reytheon (Piper brand), Adams, Gulfstream and many others are laying off people because aircraft are being parked. Orders are being canceled and upgrades are being curtailed. The overall impact is the loss of tens of thousands of jobs (including my own). All because of wealth envy.
Class warfare writ large by this countries Chief Executive. And no one to blame except ourselves.
BT: Jimmy T sends.
Just leaves a really bad taste in my mouth. The automakers, healthcare. What's next? Agriculture (more than it is already)? These are SUCH scary times. Maybe our country NEEDS to go thru this, like a child needs to touch a hot stove in order not to do it again. I just hate to be the guinea pig.
ReplyDeleteHow 'bout that wind? LOL! The girls and I had gone to Clovis and times on hwy 70 actually scared me. Walmart was still up and running when I was there, but I got to the eye dr. for Shelby and was surprised to see Dr. Brooks just sitting in his waiting room reading a magazine. All the stoplights (all 5 of them! LOL!) were down, too. Luckily no outage out here at Floyd.
I said this before, back when people (who shall remain nameless) were supporting the initial bailouts: bankruptcy was inevitable, and it would be better to do it before throwing billions of tax dollars down the drain.
ReplyDeleteNow it looks like our "investment" is going to be lost - does anyone believe that the taxpayer is going to be at the front of the creditor line?
Obama is a Socilaist/Marxist, hardcore, there can be no doubt any longer(not that I ever had any)....I am hoping the Euros will keep King Barry and Queen Michelle Antoinette Obama in Europe this week, they make a better match over there than they do in America.
ReplyDeleteAs far as the cars...I don't plan on buying anytime soon, but from now on, I'm buying Ford, just because it's management was smart enough to tell Washington and Barack "No Thanks"
Yeah, Jenny, maybe we do need to fail. But, we haven't even had a full quarter of this guy much less a full term. We'll be so browbeaten by the next election cycle that we won't be able to drag ourselves physically to the polls. If there still ARE polls.
ReplyDeleteWe have yet, as a nation, to witness this degree of government intrusion into private enterprise. And the Young President hasn't even rolled up his sleeves to begin eviscerating our healthcare system; the energy juggernaut is just reaching the starting gate. Lord help us when he turns gets around to screwing around with education.
I can't walk from room to room in my own house without looking over my shoulder. I need a mission.
Ain't wind grand? There you go -- build a windmill!
Yup, indeed, welcome to socialism.
ReplyDeleteSomeday, the leaders of this country will actually try capitalism and find out what a wonderful system it is. Yeah, they say we've tried it, but we haven't. You have to let the down times be down times without the government butting in. It's tough, but that's how that system works.
Oh, well.
All those Bankers that were in the White House last week, all the Wall Street guys and the list goes on and on. But not one of them has the Balls to stand up and tell them to pack sand.
ReplyDeleteReal hard to do that with your hand out.
This is a slippery slope...once it starts, where does it end?
ReplyDeleteBusiness thrive and fail all the time. Hundreds of once large companies no longer exist today. If a company cannot keep itself afloat, then let it fail. Odds are good that GM is going to collapse, regardless of how much money we throw at them.
Now it just means that, as a few others pointed out, the American taxpayers "investment" in GM is just more money gone.
I read an article today, asking why the president of the UAW isn't being told to resign, also. Good question, although I'm sure most of us can divine the answer.
Re: Barry. That is the grub!! If you rely on the Government to bail your but out of a jam, you loose the "free" part of the free market. Enough of this kind of business operations and we might as well make room for the Hammer and Sickle on Old Glory.
ReplyDeleteBT: Jimmy T sends.
I advocated for the "bridge loans" to GM and Chrysler in several posts this past Fall (here, in particular). The reason I did so was primarily because I remember how successful the 1979 Chrysler bail-out was. I realize we're talking apples and oranges here. There's a significant difference between the 1979 loan GUARANTEES and 2008/2009's money disbursed directly from the treasury.
ReplyDeleteAnother reason I advocated for the bridge loans was because of the melt-down in the credit markets and GM's inability to secure financing from other sources. The banks basically weren't lending... at all... to anyone.
I was probably wrong, in retrospect. I only say this because of the way things have turned out, which is to say the Obama administration's inability to resist further meddling in the industry. Chapter 11 reorganization, as painful and distasteful as it would have been, might have been the more prudent thing to do. We may still see GM undergo a "structured" bankruptcy process... I most certainly wouldn't bet against such an occurrence. This whole mess is a REAL can o' worms and there appears to be NO "good" way out.
"Interesting times," indeed.
THE BILLION DOLLAR QUESTIONS!!!
ReplyDelete"Who is in a better position to know the answers to these questions? Rick Wagoner, the GM CEO for nine years and former GM chief financial officer who has been with the automaker since the late 1970s, even running one of its foreign affiliates in Brazil, and who holds a Harvard Business School MBA?
Or President Obama, a former community activist from the south side of Chicago with a great rhetorical gift?"
My next prediction: the Obama-style bankruptcy will see the taxpayer put on the hook for funding the entire pension package in perpetuity. The very same pension burden that has rendered the corporations unprofitable in the first place. It is for this reason that a true bankruptcy was not allowed to happen in the first place.
ReplyDeleteWant an indicator of why I think this will happen? Five words: Gettelfinger still has his job.
The taxpayer will pay the pensions and with that burden removed, Obama can design his Homer Simpson-easque dream car to force upon the unwilling masses. Rebates on the Barackmobile? No, try taxpayer subsidies. Also watch for punitive tariffs on imports.
Don't get your blood pressure up over this because gov't run health care is next.