A Giant Falls

I understand your sentiments, though I don't share them. I've owned two GM products -- a Chevy Monza and a Chevy Vega -- and they were both POSs.

But I think the situation's even more dire than you wrote. After the bankruptcy, with the government (Bat Ears Obambi) essentially owning GM (and Chrysler), you KNOW their main product lines are going to be "green" road-gnat cars that no one's going to want to buy.

What's going to be the natural upshot of that? Within a short period, right back into BK, and the next time that'll lead to complete oblivion.

After all this, I don't think even the Amurcan public will countenance throwing any more money into these turkey companies.

Your essay is prescient of my next posting, coming up in a day or two.

But I take a different tack.

But they were like leeches on a host. They sucked GM's blood until it died.
I'm sure the rank and file would have been ready to make large concessions and keep their jobs. But that didn't happen. It was never brought up in any meaningful way.
I wonder what the Union Bosses will be doing while the rank and file tries out their new positions flipping burgers ad McD's? Bet THEY won't be flipping burgers.
Nor do I understand the thinking of GM execs. Or Ford or Chrysler. They HAD to know giving into wage and benefits demands beyond the profit line would spell disaster. Would it not have been better to shut the gates on striking workers for however long it takes than to pay out more in wages and benefits than they could possibly realize in profits? The auto industry has ALWAYS paid good wages. When Henry Ford started out with his assembly line he paid an astounding $5.00 per day. Unheard of. Then came the unions who convinced these well paid workers they could get more. And they did. Right up until the time they bankrupted the industry.

I appreciate the comments, and here's what I have to say:

Brian, I know how dire the situation is going to be and for the exact reasons you state. With the government having a 60% stake...60%!!!...and being on this green push, and having mandated the new cafe standards we know what kinds of cars we're going to see. Cars that no one wants to drive, and that are going to be too expensive for the regular car buyer to afford. Heck, they've already announced that another $30 billion will be dumped into the company as it emerges from bankruptcy. As for the current cars, they make some really good ones and almost always have, except during parts of the late 70s and early 80s, when you guessed it, the government mandated CAFE standards, gas prices went up, and the companies had to build to standards the government wanted. When left alone GM makes good cars, but those days are O-V-E-R as of now.

Buck, you're right about the UAW...especially the leadership. There is a reason that Toyota and others build their cars in the Southeast and they are still going pretty well. The Japanese companies pay great wages and good benefits and the workers are happy to be there. And all of that without a bloodsucking, highly politicized union taxing both the workers and the company. Think about it, the UAW is so intransigent and so powerful that it was able to prevent GM from importing some of it's small cars made in foreign plants to help keep the company relevant while it tries to reorganize, instead forcing them to spend money they don't have to reconfigure current plants to produce those very cars. The UAW claims it was about 'protecting the workers', but it was all just a powerplay to flex their government built muscles.

Certain aspects of Japanese industry should be looked at a little closer by american industry.
When I was stationed in Japan in the '50's and '60's I mingled with the locals and learned some interesting facts about Japanese unions and industry.
First thing, when you are hired by a Japanese industry such as Nissan or Mitsubishi, you are expected to remain with them for life. The companies furnish you with living quarters at an affordable cost, provide a company commissary and outside activities. That is how most of the average guys afford the high cost of Tokyo. Oh, yeah, almost everybody has an expense account. I went Tokyo barhopping with a guy who was a janitor at one of the large companies and he insisted on picking up the tabs because he had an expense account. When Japanese unions call a strike, they strike for ONE day then go back to work.Perhaps if GM or US Steel had that program they would be better off today.

Good post,Flag,although I have a slightly different take on it. There is so much blame being tossed,rightfully so,for the most part,at the UAW,but one small point that seems to escape most. IF any of the economic advisors at this company had taken an objective view as to what these contracts were going to REALLY cost this company over the long term,management could have enacted a strategy of "We cannot afford this. Strike me". NO ONE held a gun to GM's head to sign a deal that was going to kill them.A LOT of this could have been avoided.Flag,I made a DAMN good living for 15 years delivering new GM vehicles from the various assembly plants to dealers over the years,of which I am grateful,and another 15 years hauling test and marketing units.But seeing all this stuff pile up,it is not sustainable in a good market,let alone the one we find ourselves in.I do hate to see this come,but had the management of this company not had such short-sightedness,AND stayed away from the hand of government,this would not have happened.Just my take,nothing more. A sad day,to be sure.

Buck, that was some interesting info on how the Japanese did things, and I wasn't even aware they had unions there; I guess it's just strange not seeing unions behave the way they do in the US. But I did know that Japanese companies tried to hire people basically for life and made the workers feel they had a real stake in the success of the companies they work for. That attitude is totally different from what we have here, where jobs are seen as stepping stones to the next position, and where management often treats workers simply as expensive, expendable assets. Maybe a better more cooperative relationship between the management and the workers could have kept the auto industry strong here, instead of the always contentious relationships we have always known.

clyde, I see where you're coming from here and in some ways I agree. Yet I have to disagree that GM management bears most of the brunt of the blame, especially that which involves the UAW. Since the UAW has such power and influence in Washington, any hint of a strike was met with screeching in the halls of Congress, so that the automakers were caught up in serious crossfire. The Congress and media were poised to strike at them if they put up much a fight against the UAW, so it made it easier to just knuckle under...especially in the boom times. But you are totally correct in pointing out that the heads of the automakers were shortsighted, and never seemed to think there would be a time when they weren't dominant in the industry. Some foresight would have gone a long way towards keeping them healthy...witness the way Ford planned ahead and are still strong, profitabale, and independent!

Yep,Flag,what Ford has done is just shy of miraculous. We sold our GM stake,and bought Ford with it. Already realised $2 per share gain. Should Ford even THINK about going to the gov't,those shares will be GONE faster than s#!t through a goose.

was a used '75 Camaro. I still miss it.

clyde, the beauty of what Ford did is their foresight here. They started getting rid of unprofitable lines and streamlining years ago, and they made the tough decisions to keep themselves off the dole. They should be commended for keeping a good head on their shoulders and making sure they are able to be independent.

Wuls, like I said the first new car I bought was a Cavalier...and I miss it too. It got great mileage, had enough room, and enough get-up to keep me happy. But my favorite was the Grand Am, 1994 GT edition. I drove that sucker till she wore out...and I still have her. I'm going to put a new tranny and motor in it, get her painted, and put her back in the game! That was a quality car!

You are right. I said the same thing. If GM managers had told the unions to go ahead and tstrike, shut the gates and waited until the strike funds ran out they would still be in business. Of course the otherbig two would have to close their gates in ...what do the unions call it? oh, yeah, in "sympathy" which would dry up the strike fund income...

was to make the Mustang more Mustang like. Instant sales.

They also make some seriously good trucks, and the Lincoln line is still one of the best 'affordable' luxury lines out there. They were smart enough to stick with the money makers and let the market dictate what they produce; witness the success of the Focus, both the regular and hybrid versions.

And introducing the 'throwback' Mustang was a great idea. I liked the the Mustang in the late 80s, especially around 86-89 BOSS models, because they were muscle cars. But the ones after that lost the look and the feel a Mustang is supposed to have, and the reintoduction of the older looking model was brilliant!

But even the 90's models weren't as bad as the little hatchack looking things they tried to pass off in the early to mid 1980's! Those were hideous contraptions!

Because here's the future of the car industry, courtesy of Pelosi Motors: http://iowahawk.typepad.com/iowahawk/2009/06/i-tried-to-wa rn-you.html