With owning nearly 3/4 of General Motors (it's OK to call it Government Motors since technically that is what it is) the US Government (using the American tax revenue as working capital) first told rival Chrysler to change its CEO, then told both GM and Chyrsler that they would need to seriously pare back the number of dealerships, and now says it has no interest in running GM. Mighty interesting way of showing this lack of interest.
Everyone is talking about green cars, hybrid cars, fuel efficient cars, this kind of car and that - and making unsubstantiated claims that this will solve the problems that have precipitated today's action.
From my vantage point, the problem with American auto makers is that their product is too expensive, doesn't hold its value, and doesn't appeal to the consumer. It doesn't sound like any of this is slated to change under the new GM so not sure why a turnaround is foreseen.
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They won't need to make money any more. The new owner will continue to take taxpayers money to subsidize the losses. Since supposedly "we the taxpayers" are owners of G.M., will approximately 1/2 of their political donations go to each major party, or do you think almost all of the reelection contributions will go to the party that's sending our $ to their unions?
Jon,
I think you know the answer to that one. BTW, as majority shareholders, when do we get our company cars? :)
Steve
Steve, I just can't see GM being able to do what is necessary to become successful. And now that the government is in charge it can only get worse. I like to buy American, but I won't hold my breath waiting for an attractive product to come out of the new GM.
Steve , when Can I expect my new car as part of the "pay your taxes and get a government owned automaker car plan" I would like something is Bright Red to Match the "in the red" bailout program.
John,
The new GM is going to get old real quick and then we'll be doing this all over again. :)
Steve
Steve,
I was thinking of something in white to remind us that we don't have a "ghost" of a chance - or a snowball's either. :)
Steve
Steve, I,ll bet Toyota , Hunda , Hundai,etc are celebrating.
Hugh,
Maybe just a little although not that much has really changed - GM hasn't been selling many cars anyway. :)
Steve
Hi Steve
Let see the unions own part of the new GM so what's there interest? GM profits or there union contracts? The government will own about 70% of the new GM; will they run it like Amtrak, the postal service, Fanny Mae, Freddy Mac, Medicare, social security. The foreign automakers have to be dancing in the street. As Obama said they will not be involved in the running of GM on a daily basis, but Obama will pick the board members and make major decision. This is a bad nightmare.
Good luck and success.
Lou Ludwig
Steve - we aren't the majority shareholders, we are the majority debt holders now. We just tossed in another $30 billion.
Lou,
And how do you pick someone to run a business when you have no business experience yourself? Hmmm. :)
Steve
Mike,
Quite true - and we're not done. Maybe the majority stakeholders would be a better term. :)
Steve
Too expensive is correct. My first truck in 1981 was $7000. The cheapest I can find one now would be about $20,000. What do you think the notes per month would be on this price?
John,
I remember when prices even much lower than your truck. :)
Steve
OK, I said this in another post, my husband gets his checks from Ford so everyone please buy a Ford. There is only one US Car company smart enough to stay out of government hands and they also have some pretty good cars and trucks.
Kathy,
I've always been partial to GM trucks, but that's probably a thing of the past. You make a good case. :)
Steve
Steve: The situation is ironic. Why would anyone think the new GM will succeed? GM will not be controllled by government and union appointees. At a time when GM should be using bankruptcy to shed its bloated cost structure, it is now controlled by the two entities least likely to do what needs to be done - the auto unions and the pro-union administration. I think President Coolidge said it well when he said "When government enters the field of business with great resources, it has a tendency to extravagance and inefficiency, but, having the power to crush all competitors, likewise closes the door of opportunity and results in monpoly." Expect higher costs... and less choices.
Ryan,
Agreed for the GM-Chrysler products. Fords announced a 10% increase in production. If the other auto companies selling in America were smart, they would take the Walmart approach to aggressively cutting costs and dropping prices (and no unions) and obliterate Government Motors. :)
Steve
Steve, Pretty soon the only big cars in America will be the limos that congress will be riding in...
Paul,
You may have a very astute point there. :)
Steve
Steve, consumer demand is what should drive the auto makers, and what will drive them once again. When we reject what they have previously offered, and ask for smaller more efficient cars, they will comply. They have received their wakeup call. GM admitted dumping their electric vehicle was a big mistake, a mistake I assume was made at the behest of big oil. Hopefully they have seen the error of their ways and will go back to the drawing board. BTW you can buy an electric car in this country that goes 40 mph and 40 miles on a charge, for under 8k.
Terry,
I don't know that the electric car is what people are waiting for - some are. If it was the car that would save the automaker, it would seem that it already would have hit the streets. I don't know how GM is going to survive without their pickups and vans. This is a break for Ford. :)
Steve
Unfortunately there are too many car makers out there now. The poorly performing ones need to fail and go away. I feel bad for all the people and industries that depend on the jobs, but the writing is on the wall. Times have changed. People don't want so many of these cars. The government simply needs to let capitalism work. Survival of the fittest.
Rob,
Go back to the 1950s and see how many car companies there were. That's why they called it the "Big 3" - because there were more than 3 of them. You're right. :)
Steve
Steve, great post! I used to be a GM fan, I have owned several GM cars and pickups, but they lost me several years ago, when the product became unreliable. I don't believe that the government has any business being in the car business or any business for that matter!
Tony and Darcy.
How's that go - you can't fight city hall? I think this was an unspoken part of the campaign and planned all along. :)
Steve
I will buy Ford cars and Ford stock. I am betting on real business leaders.
In addition they have released some interesting photo's.
Ford Releases Torture PhotosFriday, May 15th, 2009
Ford Motor Company thumbs its nose at the current administration by releasing images that show it torturing vehicles with water cannons and shopping carts. (more...)
Steve,
I read an article once that claimed if the auto industry had evolved like the computer industry, the average car would cost $800 and would get 400 miles to the gallon. They chose not to.
Alice,
Fantastic responses. Thanks. Love the photos - thanks for the links. :)
Steve