Look I don't have time to go thru and shoow you how there were so many more options at each point, that could have been taken. You sound like a smart guy basically, so let me give you a simple analogy of how GM acould have been dissolved, without all the scary consequences you've heard and repeated.
Let's consider GM to be a local restaurant chain in your area. They have 6 restaurants, which we could represent as the 6 brands GM had then. So the 6 restaurants are losing money month after month. The bank is concerned and so is the government. The owner of the restaurant has asked for extra loans and bailouts. The bank and government say "No - here's the deal. You die slowly, or you declare bankruptcy and liquidate immediately. We will provide you with whatever administrative and red-tape cutting help you need this weekend. On Mon. morning your 6 restaurants will have been sold to the highest bidder, even if it's $1,000 per restaurant. On Mon. morning the new owner will be operating your restaurants." The new owners show up on Mon. morning and say to the staff - "here's the deal, you used to have a union making great wages, we had too much management, and everyone did a so-so job. It's a New Deal today, you can stay and try out the new system, or we'll replace whomever leaves, there are plenty of unemployed cooks and waiters in the economy. Some of you will be let go because the economy doesn't need so many meals."
The government (rightly or wrongly) has shown that it can throw the rule-book out the window in the last few years. So it was not beyond the realm to do the same thing with these manufacturing companies as the feds diod when a Wall Street firm or bank failed. The books on 1 company were closed 1 day, and the operations transferred within a weekend to some new owner. Throwing the rule-book-out as the Federal government did, basically negates your whole scenario of needing to shutting down the whole auto industry.
So let's stop repeating the fallacy that GM can't fail, only GM execs know how to run GM (fail), and GM needs to outlast the reign of the Roman Empire, as the uSA can not exist without the holy symbol of GM on top of their building.
Wife is ordering a 2011 Taurus today to replace her 07 grand prix! The Taurus may not be the best sedan in the world, but it's the best option of the cars available to her.
i hope the gp will last another 4-6 weeks. the power steering pump sounds like it could fail at any moment.
I think the problem is that GM is much more complicated and expensive than your example, but even more importantly, I really don't think there was a viable and interested buyer available at the time. A cheap price isn't always a good deal (think potential liabilities, UAW and large cash flow outlays). The government transfer of GM companies was actually a new and old GM, and the mess of the old GM will be around for quite awhile unfortunately.
I believe as Hyundai, VW, etc. are now setting up plants in the US, and other transplants are expanding (e.g. Toyota and Nissan in Mississippi), a car company bailout will probably not be necessary in the future because the added capacity will likely tend to negate the effects of potentially large increases in imports, and supply and demand equilibrium. This expansion should also broaden the vendor base and lessen the impact of large layoffs down the road. Personally, I wasn't as upset at the GM bailout because at the time I still feel it was in the overall best interests of the country given the parameters, not because I have concerns about company history or failure.
There were two government bailout decisions I still don't understand. 1) AIG - perhaps Goldman Sachs impacts and potential international complications and 2) leaving Lehman out - perhaps they were the most flagrantly egregious?
> US and 0.3 X of company capacity (approximate market share of GM+C) goes away, then the market still wants that 0.3X of total vehicles, so they buy those from the other makes!
But at that time everyone was tightening and not spending in preparation for the depression. Lending was not happening because banks were holding onto the money they had because they were over leveraged.
The suppliers don't have the kind of margins to lose a fraction of their business.
That's a different problem. What you are saying is that overall sales ("X") went way down. That was going to hurt the suppliers *regardless* of whether GM or C was around. What I'm saying is that if a company or two fails, the demand for vehicles does not change and the other makes make up the difference, whatever X is that year. So we can't treat (as an example) a failure of GM (with 20% of market share) like 20% of the suppliers business would go away completely. It would not.
What I'm saying is that if a company or two fails, the demand for vehicles does not change and the other makes make up the difference, whatever X is that year. So we can't treat (as an example) a failure of GM (with 20% of market share) like 20% of the suppliers business would go away completely. It would not.
Economics isn't always so efficient when there are large barriers to entry like high initial investment costs so common in manufacturing. Also, it can be a bit dangerous isolating business percentage impacts from a prime failure when the vendor has multiple customers. For example, plants operate to an annual volume number, when 20% of the business goes away quickly, fixed costs don't generally drop an identical 20%. The impact is also affected by the vendor's financial leverage situation. I think this is the concern Mullally was expressing when discussing with Jim Cramer the other night why Ford supported the bailout of competitor's even though it could make them stronger competitors down the line. Remember, at the time Ford had neither the capacity or financial resources to quickly gobble up lost GM sales. They also didn't have the financial wherewithal to bail out impacted shared vendors. Unfortunately, cash flow is probably one of the most misunderstood, yet key variables in corporate finance.
I don't know of many companies that can take a 30% or greater sudden hit to revenues and not have to do some quick restructuring, including big layoffs. The "0.3" theory being discussed in the blogs seems to consider the matter a linear math exercise, but I don't believe that is valid since it doesn't adequately consider the fixed cost aspect. If revenues drop by 30% (and probably more in the US focused vendor base) all costs don't just suddenly fall that quickly or proportionately.
But berri, the revenues and sales DID drop by 30%. Again, whether the revenues of the entire industry dropped by that much is INDEPENDENT of whether one or two automakers went belly up. The sales level X for a year is going to stay the same whether there are 20 automakers or 18 automakers. The lost sales of the missing two automakers would have just been absorbed by the others.
Economics isn't always so efficient when there are large barriers to entry like high initial investment costs so common in manufacturing. Also, it can be a bit dangerous isolating business percentage impacts from a prime failure when the vendor has multiple customers. For example, plants operate to an annual volume number, when 20% of the business goes away quickly, fixed costs don't generally drop an identical 20%. The impact is also affected by the vendor's financial leverage situation. I think this is the concern Mullally was expressing when discussing with Jim Cramer the other night why Ford supported the bailout of competitor's even though it could make them stronger competitors down the line. Remember, at the time Ford had neither the capacity or financial resources to quickly gobble up lost GM sales.
You're probably correct in that Ford was fragile enough that even a short term disruption could have put them over the edge as well. So they will pay for it in the long run.
I do understand, and can even sympathize, with the reasons for the auto bailouts. The difficulty would have been the chaos that resulted from the transitions if GM and C had failed completely. But over a bit of time the market would have adjusted. And in the long run, the creative destruction would have been beneficial, like pruning the weakest branches from a tree helps the tree to be healthier.
I think the problem is that GM is much more complicated and expensive than your example, Merrill Lynch with all its intricate assets was absorbed/taken over in a short weekend the help of the federal government.
I really don't think there was a viable and interested buyer available at the time. I would have been at the auction, and if an absolute auction and no one showed up I would have bought the assets.
A cheap price isn't always a good deal (think potential liabilities, UAW and large cash flow outlays). In a liquidation and auction those are the old GM's liabilities, not the new buyer's. The people who show up for work Mon. morning are applying for new jobs, at new wages. Any agreements they had were with GM. Anyone that GM owed or promised $ to, could go after the GM that existed the week before.
There were two government bailout decisions I still don't understand
I don't know enough about that to comment on that. But I do know that the big banks and brokerage firms that survived, are now even bigger individually than in 2008! And they really haven't changed their business. Maybe you saw Tim Geithner's warning the other day that this collapse can happen again, and probably will! even worse! The banks and Wall Street are too big to fail having called the government's bluff, and failure of reform. If GM is too big to fail what stops them (or Ford and Chrysler) from taking excessive risk and excessive pay, and then going back for the next bailout!
It's like playing Monopoly, where if you get a bad roll of the dice and land on someone's hotels on Boardwalk, you insist you need a reroll, or you're going to smash the board. Do you give in, or the others tell them "walk away, you've lost and are not going to bully us"?
The difficulty would have been the chaos that resulted from the transitions if GM and C had failed completely.
No!! GM and C are corporations/investors; a corporate entity of people who put $ in. GM and C are not the tools and factories and designs. The federal government can use emergency powers just like in 2008, and make GM and C go away this weekend. Cease to exist! That does not mean that the workers can not work at the same plants, making the same vehicles, with a new corporate or government logo on those vehicles on Mon. The federal government could also force (by various means) the sale of those assets to some other corporation. GM and C or any other corporation could be dissolved this weekend. Do some research as to what a corporation is.
I worked at a corporation during the 1st Gulf War. It made parts for Patriot missiles. We got a letter from the DOD that said if our corporation could not meet their needs for whatever reason, they (the DOD) would have people there to run the corporation if needed. Basically seize operations.
As we just saw with the banks and Wall Street firms the federal governemnt certainly has the power (whether it's sending the SEC, IRS, EPA, FDA, or OSHA out) to convince any corporation to do as it wills. GM and C could have been shutdown 1 day and replaced with some other running management with new rules the next day. Creditors may or may not have gotten paid. Pension rules and any government guarantees could be changed. Such is the power that we have given our government. I'm not making this up; read about the similar events in 2008-09, during the financial crisis.
Normally the government does not just seize operations of a company (banking excepted). If GM had gone totally under, I'm sure it would have taken months for the valuable assets to be procured and restarted by a new entity. And of course many would have been out of work during that time. That's what I mean by the transition being difficult.
The new entity would have been downsized substantially from the old GM. But the sales of Fords, Hondas, Toyotas, etc. would have risen to take up the lost sales of GM vehicles.
Arguably the end of that scenario would be better than the way it actually occurred. The best of GM would have survived. Management would have changed MORE than it has in today's situation. And likely the UAW contracts and commitments would be totally gone. There would be no more $35/hr floorsweepers if the union was gone. The new "GM" (whatever it was a part of, or named) would have been MORE competitive than today's GM.
The government, by bailing GM (I'm using GM as an example, same is true for Chrysler), limited short term pain at long term expense. The alternate situation which was not taken was more short-term pain with more long term competitiveness.
I don't know Tiong, maybe we're talking about the 30% number from different perspectives. I agree that most firms can absorb a loss like that if it unfolds over time. But a sudden, unexpected 30% drop is a different story and at least initially, the different types of cost don't move in the same ratio. Even variable costs will have a lag because you can't instantly layoff the people and stop paying them. Inventory can't just be sold at what it was bought for either. Fixed costs take much longer to unwind. I think the particular problem at GM was the economic timing and the factors of Ford being in trouble financially and the transplants not having enough capacity to pick it all up. Imports would have to initially been used to make up volume and that wouldn't give the domestic vendors "make up" volume. If the vendor concerns weren't real, I don't think the transplants would have so actively supported bailing GM out, rather it would have just been half-hearted, politically correct rhetoric. Reduced domestic vendor base would drive up their parts costs due to several factors such as reduced competition with higher per unit fixed cost problems, unexpected foreign import sourcing, and new vendor inefficiencies and start up. I agree though that over time the matters would sort out and find their new equilibrium, but that wouldn't happen quickly. Ask someone in purchasing about new vendor issues and plant ramifications. I don't think the impact of GM folding at that particular point in time would have had a pretty ending for our economy. Today is different because the economy is improving and there is new transplant capacity out there like Hyundai and soon VW plants, as well as expanding Toyota and Nissan capacity. Philosophically, I wasn't nuts about bailouts, but pragmatically I understood some of them at the point in time they happened. That's probably why Bush and Paulson didn't fight it.
Banks and brokerages may be intellectually complex organizations, but it is far simpler to transfer a business like that compared to a huge industrial company. While the Merrill Lynch shotgun wedding happened quickly, there are still tons of litigation and clean up at Bank of America from it. As for liquidations and new buyers, its unfortunately not as simple and clean legally as you may think, and the longer the new buyer is in place the trickier it can get in areas like past labor or environmental matters.
Personally, I don't care for government bailouts or direct involvement in private corporate matters and decisions. However, as I stated earlier, it was a combination of timing and impact that led to it for GM, and I don't think the same decision would be required in today's economic environment.
Berri, I think we might be talking apples and oranges.
Let's use real sample numbers here. If Auto sales are 15m/yr and GM+C have 30% of that, it's 4.5m. If GM and C go belly up, then their ability to provide 4.5m vehicles/yr goes away (ignoring that they might be bought, resurrected, etc.). But the market need is for 15M vehicles/yr, so if the supply drops 30%, the competitors are going to see increase sales to make up the difference. I don't see why the *market* need for 15m/yr would go down just because two manufacturers disappear. In most cases, the other makers had excess capacity and sometimes excess inventory anyway, so they would welcome the increased business. But some other posters were saying that a 30% drop in demand is tough on suppliers who run at the margins. The fact that the *entire market* dropped more than 30% (something like from 15m/yr >> 10m/yr). And that happened due to the economic meltdown. This was independent of whether any manufacturer was ready to go belly up.
The reality is that the market demand for vehicles dropped 15m >> 10m, and the two most fragile automakers were ready to fail. If they had gone completely under, there was already capacity in the other makers to make up the difference immediately! They had been selling at a much higher level only a year earlier.
I worked at a corporation during the 1st Gulf War. It made parts for Patriot missiles. We got a letter from the DOD that said if our corporation could not meet their needs for whatever reason, they (the DOD) would have people there to run the corporation if needed. Basically seize operations.
You've got to be careful here because I believe DOD contracts contain language giving the government potentially greater leverage and power than in most other uniform commercial code transactions. We have a conservative Supreme Court right now and I think it would truly have to be an extraordinary national emergency and exigency to support an unwanted takeover of a private corporation. Remember, GM and the auto industry weren't fighting the bailout situation.
The reality is that the market demand for vehicles dropped 15m >> 10m, and the two most fragile automakers were ready to fail. If they had gone completely under, there was already capacity in the other makers to make up the difference immediately! They had been selling at a much higher level only a year earlie
OK, now I'm following your logic. There were a few flies in the ointment though. Delphi and Visteon were in BK along with a number of smaller vendors. It takes money to ramp up and Ford didn't have it until later after putting up essentially the whole company as collateral (and probably still wouldn't have had enough for that big of an undertaking - and the banks weren't lending and bondholders weren't buying). Remember that ramping up isn't just overtime labor, you have to buy materials up front and spend more on dies and stampings, etc. before you get to collect the revenue. The transplants weren't hit as hard and didn't have near as much excess capacity as Ford. Then there were the various economic and psychological fears (frightened consumers tend to freeze up their wallets, particularly on major purchases) about the impact a GM shutdown would have on the US at that point in time. As I said, today I don't think GM shutting down would be quite as traumatic, although it still might have a bit more impact than some posters think. But back at that point in time I think I'm still going with the positions then of both administrations, Mullaly and the transplants. I actually give Bush and Obama credit for making a tough, unpopular decision based on national needs and interests over electoral votes.
Delphi and Visteon were in BK along with a number of smaller vendors.
This is why I said the transition would have been painful. But I have faith in the markets - if there is unmet business demand for products (especially in a dire economic situation), it's amazing what can happen quickly. People would FLOCK to that business need and it would be met in short order.
I actually give Bush and Obama credit for making a tough, unpopular decision based on national needs and interests over electoral votes.
Agreed. They had very tough situations and thank goodness they both stepped up and made those decisions. Even if I don't agree with all of them, I appreciate that they did the job.
Well, I will disagree. The vendors need to restructure to support the winners. Looser suppliers need to stop making the parts that are inferior and support the winning model.
Too extreme in the time-frame you say? I doubt the 80% of auto manufacturers are hardly going to let it's supply base fail because 20% of the manufacturing base disappears. That is to say NO investors pick up GM and C for pennies on the dollar. Save me the political crying, please. You loose, you loose. Period. You pick yourself up, learn and start over.
All conjecture, as the water has already flowed under the bridge. They would have had to take over the supply base. Better the industry absorbs the problem and the Government support the families that need to be supported until the industry recovers on it's own.
Great parts = great vehicles. Toyota knows this big time (GM played the game to the Death!). Supplier quality is a prerequisite to procurement contracts. Garbage in = Garbage out.
Let's see: 200,000 global workers @ GM divided by $19 Billion dollars(loss by US Gov't bailout) = $95,000 per worker. I'd say while not perfect, a nice support to move to the one of the New Auto Industry manufacturers. And that is for GM only, my friends. There are better ways to move to a better industry than what we have just witnessed. :surprise:
I agree. Because this government and some industries such as autos have been too late to the continuous change model, the only decision is what has transpired. It's the turning the Battleship thing.
But don't tell me there was not a second way that would result in a far better result had the bitter pill been swallowed. Painfull but cleansing.
Our Government is the next "Industry" that will fail. Mark These Words.
Take your medicine or die. It's too late to think back at "What could have been?".
>I actually give Bush and Obama credit for making a tough, unpopular decision based on national needs and interests over electoral votes.
That's right on point. A GM bankruptcy and protracted shutdown even if a reformation could have been effected would have panicked the general populace. As it was people were taking money out of banks.
>This is why I said the transition would have been painful.
I already posted that it's a waste of time to argue over the C-11 go/no-go decision.
Just don't tell me that GM is now all of a sudden miraculously cured of all it's ills.
They are forced to make good products now and that is good. There was a better way but that is history. We take what we get or we chose a different product. Simple. I truly wish them luck as I drive a replica of what was.
I understand the argument that others would ahve jumped in to fill the void but what would have likely happened is that a bunch of "temporary" solutions would have involved more importing and pretty much the end of the American car industry. We can't afford that. I didn't like the bailout but I think it was the right thing to do.
2015 Mazda 6 Grand Touring, 2014 Mazda 3 Sport Hatchback, 1999 Mazda Miata 2004 Toyota Camry LE, 1999.
Fifth, I am fully behind the bailout of GM and would've put my entire fortune toward the resurection of this great American manufacturer if I had the means, even if it meant I doomed myself to living my remaining years eating ramen noodles and swilling Old Milwaukee.
Seriously? If so, you just proved P.T. Barnum's theory. You seem like a decent guy, but your devotion to GM is just unhealthy.
> "temporary" solutions would have involved more importing and pretty much the end of the American car industry.
I thought about posting that thinking in a post but I didn't want some of the posters on the other forum to think I was anti foreign car.
I still believe the slowdown evoked by a true bankruptcy would have scared even more people and hurt the economy even more. The further slowdown in buying and tightening of money lending for suppliers to try to continue without the purchasing by GM/C would have dragged us into the actual depression that was used to scare us into accepting TARP and the stimulus pork bill.
Since not all foreign cars are built here, that would have meant even more importing. And more parts may have been imported to build the ones that are assembled here instead of being able to buy them from true US suppliers.
Since not all foreign cars are built here, that would have meant even more importing. And more parts may have been imported to build the ones that are assembled here instead of being able to buy them from true US suppliers.
But since a lot of GM cars are not built here either, that would have meant LESS importing, too! :P
They would have had to take over the supply base. Better the industry absorbs the problem and the Government support the families that need to be supported until the industry recovers on it's own.
Realistically, had the transplants taken over the parts industry and D3 died, don't you think consumer prices would have risen to cover the expenditures? Companies don't print money. Someone has to ultimately pay.
As for the vendors, you either build what the prime wants or lose business volume.
I may well be wrong, but I get the impression you don't really care if manufacturing goes away in America. Do you really want to be that reliant on foreign industry? Losing manufacturing not only drives down American wages, but it can easily put the nation into a dependency pickle for goods when other countries corner the market or politically disagree.
You've got to be careful here because I believe DOD contracts contain language giving the government potentially greater leverage and power than in most other uniform commercial code transactions.
And my point is the government can write new laws and regulations tomorrow. We have several precedents of unbridled use of federal government powers in the last decade now don't we?
We have a conservative Supreme Court right now and I think it would truly have to be an extraordinary national emergency and exigency to support an unwanted takeover of a private corporation.
A case has to be brought before the Supreme Court before they can act. By the time they get a case and act on it, it is months at a minimum. By that time whatever the Executive and Legislative branches have done is hard to reverse. And the fact is that in the last decade the Supreme Court could have found the other 2 parts of the government to be overstepping their powers many times. Nothing will be done about the Big Banks getting bailed out, and the Smaller Banks getting shutdown. The system protects the Big corporations and Big Union, while the little guy pays the bills. And the Big Corp, and Big Union have you bamboozled with a flimsy economic-story that they'll drag everyone down with them. Doesn't that mean that if there's no consequences for their actions, that they can take as much risk (or raid the company's tills) as they want?
I hate bailouts and such. I'm just saying that the Feds DO have and HAVE used that power to save/close/or switch ownership of private companies. They have the power to make you buy health insurance, they can legislate Medicaid away tomorrow or make it so expensive you're not really getting anything, and they can basically eliminate Social Security from your future. Or they can simply print so much $ to cut your savings in half.
Remember, GM and the auto industry weren't fighting the bailout situation.
Sure - I remember the Big 3 jetted down to DC in the Fall of 2008 wanting bailout funds or grants or whatever FREE-$ they could get. But Wagonner certainly was fighting bankruptcy, and didn't want a Bailout that changed control. He thought the Old GM was doing fine other than the drop in sales.
I believe though that GM is contemplating how they are going to institute profit-sharing with its employees and UAW though. I guess it's too bad that the feds didn't think (or didn't want to think?) on using any future GM profits to repay the bailout $. I think any loan-shark with an 8th-grade education could have figured that out.
And now that GM doesn't own a majority of the stock, guess what - they'll claim they can't control what the GM Board of Directors does with their profits!
I do not want manufacturing to go away...just the manufactures which are run so inefficiently, particularly the "Too Big To Fail" entities. Those "inefficiencies" drive up the cost of products. That includes all institutions. You know why they ultimately fail. In autos, you also know Toyota is bitten quite hard and will loose additional market share. But they did not fail...yet.
In your assumption, the government would have had to subsidize the winners had GM and C been laid to rest. That includes the USA-based foreign manufacturers, ford and what I would have called "USA" the new entity combining the ashes of the failure organizations. (Just bringing back the old GM name is short sighted, at best. Where is the new reality and the cultural battle cry to succeed? I do like the frankness of the new CEO. That is a huge plus afaic.)
United States Automobile. New name, new designs new strategy.
Manufacturing stays in this country only if innovation, profit sharing and no unions become the norm. The "Old GM Way" is toast. Need to get used to a lot of small manufacturers that are highly efficient, innovative and can put out new product designs in a tight time frame...not 3 years. Witness Malibu.
I remember the piers in Dec 2008 - Feb 2009 jammed with imported vehicles that were not moving.
Considering the huge inventory glut at the time, I still believe mothballing GM and C and building an entirely new auto company from the ashes would have been achievable.
I think the dealer network would have been the spider's web but it was anyway.
May be true on a micro basis, but probably not nearly as large as initially feared. Unfortunately, the current political environment likely precludes holding the new stock long enough to make out completely.
However, I believe the decision was more likely a macro marginal analysis one similar to corporate decisions. If unemployment was going to go up 5 or so percentage points, the increased unemployment and welfare costs coupled with the decreased tax revenues were going to require a greater expenditure than the bailout required.
Whoa Kernick, I don't think we've seen, nor are we going to see massive government intervention or takeovers. The public wouldn't stand for it and rightfully so. Ultimately, Americans have the power of the ballot. Actually, we're probably not all that far apart in some of our thinking. I agree that small business is more important, yet slighted. I also am not a fan of government bailouts and intervention, but on an exception basis sometimes things have to be done for the greater good of the country. Most governments around the globe do support and sometimes partner with their businesses though in order to improve its global competitiveness. As for Waggoner, sure he wanted a loan to avoid the BK stigma. That would have been a poor government decision, and he then had to wake up and get real.
As for Waggoner, sure he wanted a loan to avoid the BK stigma. That would have been a poor government decision, and he then had to wake up and get real.
I do not want manufacturing to go away...just the manufactures which are run so inefficiently
Over time I think efficiencies have a big impact on company success, stock price, etc. Unfortunately, a US manufacturer can be the most efficient in the business and yet still come out behind developing nations with extremely low pay. Please don't respond telling me then slash the pay because that isn't realistic. Then all workers including white collar will soon see their pay plummet, same for pensioners and social security recipients. Sounds easy and good, right? Except its called deflation and has very ugly economic consequences to a nation and its economy and industries. See how its been working out for Japan. Try successfully running a company when every time you purchase assets and inventory the price falls lower than you just paid.
No, do not slash pay. I said run efficiently. Please don't tell me GM was the most efficient manufacturer. Efficiency is not only in making product but the core competencies in all facets of the organization, for which GM was most inefficient leading to ultimate failure. Perhaps there are manufacturers who run the most efficient and fail for other reasons. But not in GM's case.
Corporations need to support their staff in good times and in bad which will ignite huge loyalty leading to shared success. That ain't happening in most corporate cultures but it does exist. Those companies remain strong and grow well. Some industries survive and some fail but new ones are created through innovation
We need to build manufacturers that lead the world. It's not all about cheap labor beating us. We used to lead in innovation. We let others catch up.
My wife can drive her Buick LaCrosse rather aggressively. It's all about the driver.
The driver is important, but I think I could take on any driver in the world on the track with an Audi R8 if the competition is forced to drive the Cruze or Buick Cruze rebadge.
'18 Porsche Macan Turbo, '16 Audi TTS, Wife's '19 VW Tiguan SEL 4-Motion
So the headlights GM buys suddenly go away, but Ford and Honda and Toyota buy more! So after some adjustment, it is nearly a zero sum game, except that the companies who could continue to sell profitably what the customers wanted would have been rewarded.
EXACTLY! Not only is GM and Chrysler going out of business truly not affecting the economy in any negative way (short, medium, or long term), but it would have been a GREAT thing for America if we had just let them fail as they deserved to. It would have been more positive for America and we wouldn't still be in such a depresssion/recession still if we'd of just taken the hit at the time it should have been taken. Other companies would have picked up the lost tax revenue and income from GM and Chrysler by having greater sales to make up the difference.
'18 Porsche Macan Turbo, '16 Audi TTS, Wife's '19 VW Tiguan SEL 4-Motion
I agree with tlong, this theory is way overblown, to the point of fear mongering. By the way I am not singling you out for this, and I don't believe it is your intentions.
Agreed 100% that talk of cascading consequences from having let GM or Chrysler fail is 100% fear mongering (even if unintended due to believing politicians or the media).
IT is fear mongering, pure and simple, nothing but fear-mongering when you hear talk of "too big to fail." It's all nonsense and based on illogical arguments that make no sense whatsoever under logical scrutiny.
'18 Porsche Macan Turbo, '16 Audi TTS, Wife's '19 VW Tiguan SEL 4-Motion
I always thought that the easiest way to deal with the image thing would have been to make everything "GM". New logo and no brands at all.
ie - It's just a "CTS" - no Cadillac. No Chevrolet or Buick, either. Consolidate it all into 15 -20 vehicles and there you go. The problem is that the people running the company are thinking like lawyers and about IP and all of that crap instead of realizing that to remake your image, you need to UN-make it first and throw away the old one.
They are too concerned with "brand loyalty" and idiotic 1960s era nonsense to realize that today nobody has any. They now shop for cars like they shop for laptops. What's the best bang for the buck and what has the look, feel, and options that I like.
1: Consolidate the lines back into one company. 2: Possibly change the name and logo as well even if it's slightly. (I'd change the "General" to something else) In any case it needs to be *M - with no "G".(too easy to use the "Government Motors" slam) 3: Get rid of all of the franchises and "brands". Make it operate like a whole new company. Just moving to one dealership per city this way would save enormous costs.
When the customer walks in the showroom, it's huge and has exactly one of every car, truck, and SUV in it. But there is no new inventory on the lot. It's handled a lot like how BMW does with its Mini brand. You order it and wait a few weeks. You can customize every aspect as well, so if you want a CTS with wood trim on the steering wheel only(and not the whole "luxury package" , it's simply a click box away.
Overhead and infrastructure goes down, you never have unsold cars at the end of the month, and people get build-to-order cars again like they did in the 50s and 60s.(or close enough)
One can only hope that the next time they fail, someone will get it right. What we have now is a joke that screams "business as usual - we learned nothing".
Just because Bush and Obama both helped the bailouts happen, doesn't mean there was any consensus.
2nd, someone will ALWAYS want the business at the RIGHT PRICE. I'd of bought GM for $0.01, maybe go up to a nickel. It might not be the price GM shareholders would like, but too bad so sad.
'18 Porsche Macan Turbo, '16 Audi TTS, Wife's '19 VW Tiguan SEL 4-Motion
The real problem with not letting businesses and real estate owners fail is that normally it would allow for prices to drop and allow the next generation to enter the marketplace for a reasonable price. What we'll have instead is an entire generation of people who can't afford anything and so when the older generation finally passes away, the power will transfer to those who do have money.
This means foreign businesses. The U.K.'s auto industry is a perfect example of this. In an attempt to "save" it in the 70s and 80s, most of it ended up owned by anyone BUT citizens of the U.K.
In the past I have posted similar thoughts that if GM was allowed to fail "totally" they could have been free of a few albatrosses around their necks - especially the way they still sell cars. In the year 2010, dealers are not needed. GM could have area sales and services that they directly run. They could have a few mjodels that if you want to buy a ar today, then yes they have one. But most of their sales would be customers ordering their vehicles exactly as they want them with the right options and colors.
I think today many dealers lose sales by not having the right colors on the lot, or by having models with thousands of $ of options on them that people don't want.
GM could have gone to a modern company with low inventory, no middle-men, and probably have done away with the UAW; IF they had dissolved and reformed the corporation.
What we have now is a GM that is very similar to the old GM, and I don't see why that is going to succeed any better than what just failed.
Comments
No A/C or trans issues? 40K is too early to tell. I have 43K on my '08 Cobalt in 2 1/2 years.
Let's consider GM to be a local restaurant chain in your area. They have 6 restaurants, which we could represent as the 6 brands GM had then. So the 6 restaurants are losing money month after month. The bank is concerned and so is the government. The owner of the restaurant has asked for extra loans and bailouts. The bank and government say "No - here's the deal. You die slowly, or you declare bankruptcy and liquidate immediately. We will provide you with whatever administrative and red-tape cutting help you need this weekend. On Mon. morning your 6 restaurants will have been sold to the highest bidder, even if it's $1,000 per restaurant. On Mon. morning the new owner will be operating your restaurants." The new owners show up on Mon. morning and say to the staff - "here's the deal, you used to have a union making great wages, we had too much management, and everyone did a so-so job. It's a New Deal today, you can stay and try out the new system, or we'll replace whomever leaves, there are plenty of unemployed cooks and waiters in the economy. Some of you will be let go because the economy doesn't need so many meals."
The government (rightly or wrongly) has shown that it can throw the rule-book out the window in the last few years. So it was not beyond the realm to do the same thing with these manufacturing companies as the feds diod when a Wall Street firm or bank failed. The books on 1 company were closed 1 day, and the operations transferred within a weekend to some new owner. Throwing the rule-book-out as the Federal government did, basically negates your whole scenario of needing to shutting down the whole auto industry.
So let's stop repeating the fallacy that GM can't fail, only GM execs know how to run GM (fail), and GM needs to outlast the reign of the Roman Empire, as the uSA can not exist without the holy symbol of GM on top of their building.
i hope the gp will last another 4-6 weeks. the power steering pump sounds like it could fail at any moment.
The Taurus should be a major upgrade. Congrats.
The T-shirt with this logo can be purchased here.
Regards,
OW
I believe as Hyundai, VW, etc. are now setting up plants in the US, and other transplants are expanding (e.g. Toyota and Nissan in Mississippi), a car company bailout will probably not be necessary in the future because the added capacity will likely tend to negate the effects of potentially large increases in imports, and supply and demand equilibrium. This expansion should also broaden the vendor base and lessen the impact of large layoffs down the road. Personally, I wasn't as upset at the GM bailout because at the time I still feel it was in the overall best interests of the country given the parameters, not because I have concerns about company history or failure.
There were two government bailout decisions I still don't understand. 1) AIG - perhaps Goldman Sachs impacts and potential international complications and 2) leaving Lehman out - perhaps they were the most flagrantly egregious?
But at that time everyone was tightening and not spending in preparation for the depression. Lending was not happening because banks were holding onto the money they had because they were over leveraged.
The suppliers don't have the kind of margins to lose a fraction of their business.
That's a different problem. What you are saying is that overall sales ("X") went way down. That was going to hurt the suppliers *regardless* of whether GM or C was around. What I'm saying is that if a company or two fails, the demand for vehicles does not change and the other makes make up the difference, whatever X is that year. So we can't treat (as an example) a failure of GM (with 20% of market share) like 20% of the suppliers business would go away completely. It would not.
Economics isn't always so efficient when there are large barriers to entry like high initial investment costs so common in manufacturing. Also, it can be a bit dangerous isolating business percentage impacts from a prime failure when the vendor has multiple customers. For example, plants operate to an annual volume number, when 20% of the business goes away quickly, fixed costs don't generally drop an identical 20%. The impact is also affected by the vendor's financial leverage situation. I think this is the concern Mullally was expressing when discussing with Jim Cramer the other night why Ford supported the bailout of competitor's even though it could make them stronger competitors down the line. Remember, at the time Ford had neither the capacity or financial resources to quickly gobble up lost GM sales. They also didn't have the financial wherewithal to bail out impacted shared vendors. Unfortunately, cash flow is probably one of the most misunderstood, yet key variables in corporate finance.
But berri, the revenues and sales DID drop by 30%. Again, whether the revenues of the entire industry dropped by that much is INDEPENDENT of whether one or two automakers went belly up. The sales level X for a year is going to stay the same whether there are 20 automakers or 18 automakers. The lost sales of the missing two automakers would have just been absorbed by the others.
You're probably correct in that Ford was fragile enough that even a short term disruption could have put them over the edge as well. So they will pay for it in the long run.
I do understand, and can even sympathize, with the reasons for the auto bailouts. The difficulty would have been the chaos that resulted from the transitions if GM and C had failed completely. But over a bit of time the market would have adjusted. And in the long run, the creative destruction would have been beneficial, like pruning the weakest branches from a tree helps the tree to be healthier.
Merrill Lynch with all its intricate assets was absorbed/taken over in a short weekend the help of the federal government.
I really don't think there was a viable and interested buyer available at the time.
I would have been at the auction, and if an absolute auction and no one showed up I would have bought the assets.
A cheap price isn't always a good deal (think potential liabilities, UAW and large cash flow outlays).
In a liquidation and auction those are the old GM's liabilities, not the new buyer's. The people who show up for work Mon. morning are applying for new jobs, at new wages. Any agreements they had were with GM. Anyone that GM owed or promised $ to, could go after the GM that existed the week before.
There were two government bailout decisions I still don't understand
I don't know enough about that to comment on that. But I do know that the big banks and brokerage firms that survived, are now even bigger individually than in 2008! And they really haven't changed their business. Maybe you saw Tim Geithner's warning the other day that this collapse can happen again, and probably will! even worse! The banks and Wall Street are too big to fail having called the government's bluff, and failure of reform. If GM is too big to fail what stops them (or Ford and Chrysler) from taking excessive risk and excessive pay, and then going back for the next bailout!
It's like playing Monopoly, where if you get a bad roll of the dice and land on someone's hotels on Boardwalk, you insist you need a reroll, or you're going to smash the board. Do you give in, or the others tell them "walk away, you've lost and are not going to bully us"?
Same with Wachovia.
No!! GM and C are corporations/investors; a corporate entity of people who put $ in. GM and C are not the tools and factories and designs. The federal government can use emergency powers just like in 2008, and make GM and C go away this weekend. Cease to exist! That does not mean that the workers can not work at the same plants, making the same vehicles, with a new corporate or government logo on those vehicles on Mon. The federal government could also force (by various means) the sale of those assets to some other corporation. GM and C or any other corporation could be dissolved this weekend. Do some research as to what a corporation is.
I worked at a corporation during the 1st Gulf War. It made parts for Patriot missiles. We got a letter from the DOD that said if our corporation could not meet their needs for whatever reason, they (the DOD) would have people there to run the corporation if needed. Basically seize operations.
As we just saw with the banks and Wall Street firms the federal governemnt certainly has the power (whether it's sending the SEC, IRS, EPA, FDA, or OSHA out) to convince any corporation to do as it wills. GM and C could have been shutdown 1 day and replaced with some other running management with new rules the next day. Creditors may or may not have gotten paid. Pension rules and any government guarantees could be changed. Such is the power that we have given our government. I'm not making this up; read about the similar events in 2008-09, during the financial crisis.
The new entity would have been downsized substantially from the old GM. But the sales of Fords, Hondas, Toyotas, etc. would have risen to take up the lost sales of GM vehicles.
Arguably the end of that scenario would be better than the way it actually occurred. The best of GM would have survived. Management would have changed MORE than it has in today's situation. And likely the UAW contracts and commitments would be totally gone. There would be no more $35/hr floorsweepers if the union was gone. The new "GM" (whatever it was a part of, or named) would have been MORE competitive than today's GM.
The government, by bailing GM (I'm using GM as an example, same is true for Chrysler), limited short term pain at long term expense. The alternate situation which was not taken was more short-term pain with more long term competitiveness.
Personally, I don't care for government bailouts or direct involvement in private corporate matters and decisions. However, as I stated earlier, it was a combination of timing and impact that led to it for GM, and I don't think the same decision would be required in today's economic environment.
Let's use real sample numbers here.
If Auto sales are 15m/yr and GM+C have 30% of that, it's 4.5m.
If GM and C go belly up, then their ability to provide 4.5m vehicles/yr goes away (ignoring that they might be bought, resurrected, etc.).
But the market need is for 15M vehicles/yr, so if the supply drops 30%, the competitors are going to see increase sales to make up the difference. I don't see why the *market* need for 15m/yr would go down just because two manufacturers disappear. In most cases, the other makers had excess capacity and sometimes excess inventory anyway, so they would welcome the increased business.
But some other posters were saying that a 30% drop in demand is tough on suppliers who run at the margins.
The fact that the *entire market* dropped more than 30% (something like from 15m/yr >> 10m/yr). And that happened due to the economic meltdown. This was independent of whether any manufacturer was ready to go belly up.
The reality is that the market demand for vehicles dropped 15m >> 10m, and the two most fragile automakers were ready to fail. If they had gone completely under, there was already capacity in the other makers to make up the difference immediately! They had been selling at a much higher level only a year earlier.
You've got to be careful here because I believe DOD contracts contain language giving the government potentially greater leverage and power than in most other uniform commercial code transactions. We have a conservative Supreme Court right now and I think it would truly have to be an extraordinary national emergency and exigency to support an unwanted takeover of a private corporation. Remember, GM and the auto industry weren't fighting the bailout situation.
OK, now I'm following your logic. There were a few flies in the ointment though. Delphi and Visteon were in BK along with a number of smaller vendors. It takes money to ramp up and Ford didn't have it until later after putting up essentially the whole company as collateral (and probably still wouldn't have had enough for that big of an undertaking - and the banks weren't lending and bondholders weren't buying). Remember that ramping up isn't just overtime labor, you have to buy materials up front and spend more on dies and stampings, etc. before you get to collect the revenue. The transplants weren't hit as hard and didn't have near as much excess capacity as Ford. Then there were the various economic and psychological fears (frightened consumers tend to freeze up their wallets, particularly on major purchases) about the impact a GM shutdown would have on the US at that point in time. As I said, today I don't think GM shutting down would be quite as traumatic, although it still might have a bit more impact than some posters think. But back at that point in time I think I'm still going with the positions then of both administrations, Mullaly and the transplants. I actually give Bush and Obama credit for making a tough, unpopular decision based on national needs and interests over electoral votes.
This is why I said the transition would have been painful. But I have faith in the markets - if there is unmet business demand for products (especially in a dire economic situation), it's amazing what can happen quickly. People would FLOCK to that business need and it would be met in short order.
I actually give Bush and Obama credit for making a tough, unpopular decision based on national needs and interests over electoral votes.
Agreed. They had very tough situations and thank goodness they both stepped up and made those decisions. Even if I don't agree with all of them, I appreciate that they did the job.
Too extreme in the time-frame you say? I doubt the 80% of auto manufacturers are hardly going to let it's supply base fail because 20% of the manufacturing base disappears. That is to say NO investors pick up GM and C for pennies on the dollar. Save me the political crying, please. You loose, you loose. Period. You pick yourself up, learn and start over.
All conjecture, as the water has already flowed under the bridge. They would have had to take over the supply base. Better the industry absorbs the problem and the Government support the families that need to be supported until the industry recovers on it's own.
Great parts = great vehicles. Toyota knows this big time (GM played the game to the Death!). Supplier quality is a prerequisite to procurement contracts. Garbage in = Garbage out.
Let's see: 200,000 global workers @ GM divided by $19 Billion dollars(loss by US Gov't bailout) = $95,000 per worker. I'd say while not perfect, a nice support to move to the one of the New Auto Industry manufacturers. And that is for GM only, my friends. There are better ways to move to a better industry than what we have just witnessed. :surprise:
Regards,
OW
But don't tell me there was not a second way that would result in a far better result had the bitter pill been swallowed. Painfull but cleansing.
Our Government is the next "Industry" that will fail. Mark These Words.
Take your medicine or die. It's too late to think back at "What could have been?".
Regards,
OW
That's right on point. A GM bankruptcy and protracted shutdown even if a reformation could have been effected would have panicked the general populace. As it was people were taking money out of banks.
>This is why I said the transition would have been painful.
That is an understatement!
2014 Malibu 2LT, 2015 Cruze 2LT,
Just don't tell me that GM is now all of a sudden miraculously cured of all it's ills.
They are forced to make good products now and that is good. There was a better way but that is history. We take what we get or we chose a different product. Simple. I truly wish them luck as I drive a replica of what was.
Regards,
OW
I understand the argument that others would ahve jumped in to fill the void but what would have likely happened is that a bunch of "temporary" solutions would have involved more importing and pretty much the end of the American car industry. We can't afford that. I didn't like the bailout but I think it was the right thing to do.
Fifth, I am fully behind the bailout of GM and would've put my entire fortune toward the resurection of this great American manufacturer if I had the means, even if it meant I doomed myself to living my remaining years eating ramen noodles and swilling Old Milwaukee.
Seriously? If so, you just proved P.T. Barnum's theory. You seem like a decent guy, but your devotion to GM is just unhealthy.
I thought about posting that thinking in a post but I didn't want some of the posters on the other forum to think I was anti foreign car.
I still believe the slowdown evoked by a true bankruptcy would have scared even more people and hurt the economy even more. The further slowdown in buying and tightening of money lending for suppliers to try to continue without the purchasing by GM/C would have dragged us into the actual depression that was used to scare us into accepting TARP and the stimulus pork bill.
Since not all foreign cars are built here, that would have meant even more importing. And more parts may have been imported to build the ones that are assembled here instead of being able to buy them from true US suppliers.
2014 Malibu 2LT, 2015 Cruze 2LT,
But since a lot of GM cars are not built here either, that would have meant LESS importing, too! :P
Realistically, had the transplants taken over the parts industry and D3 died, don't you think consumer prices would have risen to cover the expenditures? Companies don't print money. Someone has to ultimately pay.
As for the vendors, you either build what the prime wants or lose business volume.
I may well be wrong, but I get the impression you don't really care if manufacturing goes away in America. Do you really want to be that reliant on foreign industry? Losing manufacturing not only drives down American wages, but it can easily put the nation into a dependency pickle for goods when other countries corner the market or politically disagree.
http://online.wsj.com/article/SB10001424052748704803604576078501503246420.html?m- - od=googlenews_wsj
And my point is the government can write new laws and regulations tomorrow. We have several precedents of unbridled use of federal government powers in the last decade now don't we?
We have a conservative Supreme Court right now and I think it would truly have to be an extraordinary national emergency and exigency to support an unwanted takeover of a private corporation.
A case has to be brought before the Supreme Court before they can act. By the time they get a case and act on it, it is months at a minimum. By that time whatever the Executive and Legislative branches have done is hard to reverse. And the fact is that in the last decade the Supreme Court could have found the other 2 parts of the government to be overstepping their powers many times. Nothing will be done about the Big Banks getting bailed out, and the Smaller Banks getting shutdown. The system protects the Big corporations and Big Union, while the little guy pays the bills. And the Big Corp, and Big Union have you bamboozled with a flimsy economic-story that they'll drag everyone down with them. Doesn't that mean that if there's no consequences for their actions, that they can take as much risk (or raid the company's tills) as they want?
I hate bailouts and such. I'm just saying that the Feds DO have and HAVE used that power to save/close/or switch ownership of private companies. They have the power to make you buy health insurance, they can legislate Medicaid away tomorrow or make it so expensive you're not really getting anything, and they can basically eliminate Social Security from your future. Or they can simply print so much $ to cut your savings in half.
Remember, GM and the auto industry weren't fighting the bailout situation.
Sure - I remember the Big 3 jetted down to DC in the Fall of 2008 wanting bailout funds or grants or whatever FREE-$ they could get. But Wagonner certainly was fighting bankruptcy, and didn't want a Bailout that changed control. He thought the Old GM was doing fine other than the drop in sales.
And now that GM doesn't own a majority of the stock, guess what - they'll claim they can't control what the GM Board of Directors does with their profits!
In your assumption, the government would have had to subsidize the winners had GM and C been laid to rest. That includes the USA-based foreign manufacturers, ford and what I would have called "USA" the new entity combining the ashes of the failure organizations. (Just bringing back the old GM name is short sighted, at best. Where is the new reality and the cultural battle cry to succeed? I do like the frankness of the new CEO. That is a huge plus afaic.)
United States Automobile. New name, new designs new strategy.
Manufacturing stays in this country only if innovation, profit sharing and no unions become the norm. The "Old GM Way" is toast. Need to get used to a lot of small manufacturers that are highly efficient, innovative and can put out new product designs in a tight time frame...not 3 years. Witness Malibu.
Regards,
OW
Considering the huge inventory glut at the time, I still believe mothballing GM and C and building an entirely new auto company from the ashes would have been achievable.
I think the dealer network would have been the spider's web but it was anyway.
Regards,
OW
Doesn't seem to fit GM too well, considering how many cars they sell internationally.
May be true on a micro basis, but probably not nearly as large as initially feared. Unfortunately, the current political environment likely precludes holding the new stock long enough to make out completely.
However, I believe the decision was more likely a macro marginal analysis one similar to corporate decisions. If unemployment was going to go up 5 or so percentage points, the increased unemployment and welfare costs coupled with the decreased tax revenues were going to require a greater expenditure than the bailout required.
He had to get fired!
Over time I think efficiencies have a big impact on company success, stock price, etc. Unfortunately, a US manufacturer can be the most efficient in the business and yet still come out behind developing nations with extremely low pay. Please don't respond telling me then slash the pay because that isn't realistic. Then all workers including white collar will soon see their pay plummet, same for pensioners and social security recipients. Sounds easy and good, right? Except its called deflation and has very ugly economic consequences to a nation and its economy and industries. See how its been working out for Japan. Try successfully running a company when every time you purchase assets and inventory the price falls lower than you just paid.
Corporations need to support their staff in good times and in bad which will ignite huge loyalty leading to shared success. That ain't happening in most corporate cultures but it does exist. Those companies remain strong and grow well. Some industries survive and some fail but new ones are created through innovation
We need to build manufacturers that lead the world. It's not all about cheap labor beating us. We used to lead in innovation. We let others catch up.
Regards,
OW
Industry is fine, but who says it has to be GM or Chrysler's name on that auto industry? Why can't it be Plekto motors?
Anything but GM and Chrysler.
The driver is important, but I think I could take on any driver in the world on the track with an Audi R8 if the competition is forced to drive the Cruze or Buick Cruze rebadge.
EXACTLY!
Not only is GM and Chrysler going out of business truly not affecting the economy in any negative way (short, medium, or long term), but it would have been a GREAT thing for America if we had just let them fail as they deserved to. It would have been more positive for America and we wouldn't still be in such a depresssion/recession still if we'd of just taken the hit at the time it should have been taken. Other companies would have picked up the lost tax revenue and income from GM and Chrysler by having greater sales to make up the difference.
Agreed 100% that talk of cascading consequences from having let GM or Chrysler fail is 100% fear mongering (even if unintended due to believing politicians or the media).
IT is fear mongering, pure and simple, nothing but fear-mongering when you hear talk of "too big to fail." It's all nonsense and based on illogical arguments that make no sense whatsoever under logical scrutiny.
I always thought that the easiest way to deal with the image thing would have been to make everything "GM". New logo and no brands at all.
ie - It's just a "CTS" - no Cadillac. No Chevrolet or Buick, either. Consolidate it all into 15 -20 vehicles and there you go. The problem is that the people running the company are thinking like lawyers and about IP and all of that crap instead of realizing that to remake your image, you need to UN-make it first and throw away the old one.
They are too concerned with "brand loyalty" and idiotic 1960s era nonsense to realize that today nobody has any. They now shop for cars like they shop for laptops. What's the best bang for the buck and what has the look, feel, and options that I like.
1: Consolidate the lines back into one company.
2: Possibly change the name and logo as well even if it's slightly. (I'd change the "General" to something else) In any case it needs to be *M - with no "G".(too easy to use the "Government Motors" slam)
3: Get rid of all of the franchises and "brands". Make it operate like a whole new company. Just moving to one dealership per city this way would save enormous costs.
When the customer walks in the showroom, it's huge and has exactly one of every car, truck, and SUV in it. But there is no new inventory on the lot. It's handled a lot like how BMW does with its Mini brand. You order it and wait a few weeks. You can customize every aspect as well, so if you want a CTS with wood trim on the steering wheel only(and not the whole "luxury package" , it's simply a click box away.
Overhead and infrastructure goes down, you never have unsold cars at the end of the month, and people get build-to-order cars again like they did in the 50s and 60s.(or close enough)
One can only hope that the next time they fail, someone will get it right. What we have now is a joke that screams "business as usual - we learned nothing".
Just because Bush and Obama both helped the bailouts happen, doesn't mean there was any consensus.
2nd, someone will ALWAYS want the business at the RIGHT PRICE. I'd of bought GM for $0.01, maybe go up to a nickel. It might not be the price GM shareholders would like, but too bad so sad.
This means foreign businesses. The U.K.'s auto industry is a perfect example of this. In an attempt to "save" it in the 70s and 80s, most of it ended up owned by anyone BUT citizens of the U.K.
I think today many dealers lose sales by not having the right colors on the lot, or by having models with thousands of $ of options on them that people don't want.
GM could have gone to a modern company with low inventory, no middle-men, and probably have done away with the UAW; IF they had dissolved and reformed the corporation.
What we have now is a GM that is very similar to the old GM, and I don't see why that is going to succeed any better than what just failed.
Looks like the dealer lobby is especially strong in Maine