So, GM's toe-dip into web 2.0 yielded its first on-line chat in its "virtual media forum." The General's Web Slingers tapped GM Director Vehicle Emissions Issues Bob Babik for its inaugural e-chin wag. In case you thought GMNext was all about the glasnost, please note the word "media" in the title. As far as we can tell, only three (non-TTAC) members of the press were allowed to put questions to Mr. Babik. And either the transcript has been heavily edited or it was the world's shortest live chat. And yet there's still a gem or, uh, well there's a gem. “The key is offering technology at a cost-effective level so that the consumer values it and makes that choice," Babik e-opines. "This is why in the early years of a certain technology, GM supports government incentives when the technology may be more costly to help consumers make that choice.” Did any of GM's pet journos explore this issue? What kind of financial support was he talking about? For what? To whom? How much? If the journos did what journos are supposed to do, GM ain't sayin'. And there you have it: proof (if proof were needed) that GMNext is the same old you-know-what in a new wrapper.
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Why shouldn’t GM casually ask for help from the government? When the US steel industry was dying, the government imposed tariffs on imported steel to give US steel a chance. Tariffs which under WTO rules were illegal. But whilst goading the WTO is dangerous, losing loads of votes from the steel industry is utter suicide!
Likewise, GM, has give the US a lot in terms of taxes, jobs and industry, so some help to bail them out would probably be prudent. Also, GM are building great cars (CTS and CTS-V) so there’s plenty of life in GM. Their quality and reliability is on par with the Japanese and South Koreans, so there’s very little reason to not buy a GM car.
GM are turning a corner and we should be there….
KatiePuckrik:
Speaking as a free marketeer (I’ve still got the mouse ears), why enable them? And iF you’re going to, why enable the same people who got them into this mess in the first place?
If TTAC can’t make a profit, should I be able to suck on the federal tit? If I employed 100k people, would it be any different? Should it be any different?
And then there’s the issue of forcing people to buy products they don’t want for their own good– which GM Car Czar Maximum Bob Lutz has been eviscerating since ever.
Not MY tax money, thanks.
Katie,
After owning GMs since the 70’s, I’d actually come to the opposite conclusion (“quality and reliability is on par with the Japanese”.) and moved ahead to Toyota. Lots of GM parts got a lot thinner, broke more easily, and the plastic content was best described in another forum as “coming from the Fisher-Price parts bin”. Proprietary tools were required (not just a GM issue) to fix the simplest thing. Reliability relating to inherent design flaws were and still are offloaded onto the con$umer. Sorry GM, I’m not buying into it any more.
But Mr Farago,
Using tax payer money to bail out companies, has been standard practice for the US government, like I pointed out with the US steel industry (which drew the ire of the WTO) and Chrysler.
The difference with GM is that they are viable. On paper they engineer better cars than Toyota. It’s just that pesky perception gap which prevents people buying GM cars.
KatiePuckrik : Although I'm well aware that you're baiting me in your usual ironic way, the general principle is this: I don't want my tax dollars used as investment capital to pro-up a failing business. I don't care how "close" they are to a turnaround. I don't trust the federal government to make those sorts of determinations/ IMO, it's not their job to do so. I realize that all sorts of counter-arguments and exceptions are possible, but let me say this: if GM fails, Chapter 11 protections are all the government subsidies they need. Or deserve.
Actually, Mr Farago, (And you’re not going to believe me!)
I thought I’d have a go at playing advocate for the big 2.801 and you know what? You can’t defend the indefensible!
Fact is, Detroit had the resources, brand loyalty and market share to survive and spunked it all away!
How do you defend that?
Mind you, my point about the US steel industry stands. It does seem unfair that they got a lifeline and GM will get somewhere near jack-sh*t!
Our Fed Gov’t bails out companies quite often and quite randomly (think S&L). It all depends on the political climate (getting votes for terms) or whether the company / industry is key (and many other facets). I, however, agree with bailing out the steel industry (the whole industry was almost liquidated and sent abroad) b/c if we’d lose that key item our country would be subject to foreign steel and if they cut off our supply we’d face a major shock or weaken our own ability to defend our selves (couldn’t rely on our WW2 strategy of mass production in that sense).
As for why the US does it…so does almost every other country. In Europe farms are highly subsidized in order to compete with the US, China subsidizes it’s high tech industry in order to force it to grow, Japan has all sorts of measures to increase their competitiveness across the board.
I’m tired of the government bailing out these irrisponsible companies time and time again. I have to pay for my mistake financial and otherwise, yet these rich corperations don’t. And they keep coming back for more of our tax dollars. Don’t get me wrong I see the need to help companies that have been proactive yet the demise is create by factors far out of their control or foreign issues but these imbicils that keep driving the woriing class into the ground then go running to Uncle Sam to keep their fat checks flowing while not being held accountable for their poor leadership and management.
GM especially doesn’t deserve to steel more of our money from the transaction end or our tax dollars for the umpteenth time. This sickens me.
If it is a free market GM should be able to borrow money in Japan at their artificially low prime rate of less than one percent. When do the tax breaks for buying a Hybrid run out?
Katie it sounds like you enjoy being taxed to death to keep the wealthy from any hardship. I will gladly let you pay my taxes so you can prop up GM and watch them “save the day.” But be ready for them to disappoint you can come asking for more claiming some other excuse, but never be accountable for their own mismanagement.
Redbarchetta,
you clearly missed my last post (look again).
But with regards to saving GM with tax dollars, I don’t think it’s such a crazy idea. If GM collapses, thousands of jobs will go causing HUGE pressure on the welfare system and some of these people may not be able to get another job.
But yet, when “President” Bush pumps TRILLIONS into a phony war in Iraq, people are fine with that?
When MG collapsed, I would have rather the money used by Tony Bliar (that spelling mistake wasn’t a mistake) to fund that ridiculous war, was used to help MG. Naturally, incompentent management would be sacked and competenent people put in place. But if we really knew how much governments waste our money, a bail out for a company which provides jobs to thousands of people, would seem like a drop in the ocean.
I can only speak for the UK government, but here’s one example of how the UK government waste UK taxpayers money:
In 2007, the UK government spent £7 MILLION on a campaign telling civil servants to “keep their desks tidy”!
Sorry Katie I guess I missed your irony, thought you were serious about bailing out these losers.
I’m all for eliminating this government waste, but that doesn’t happen when you enable it. The free market works when you don’t have government constantly manipulating it. And their is no guarantee that people wont be able to find jobs, they may end up having a more fruitful future once release from the shackles of GM. We may see an even better come out of the ashes of GM’s crash, one that we can all be proud of. Plus it is their responsibilty to be planning for the future, not mine to constantly bail them out. I could loss my job tomorrow or the owners decide to close up shop and retire in Jamaica. I’m not going to crying to the government to support me and my family, I’ll find a new job and work harder at it like I have done several times before. Why is it that our society doesn’t think they should be responsible for themselves. What has happened to self reliance for the individual and companies.
I’m not going to get into a debate over the war I agree money has been hugely wasted again by an enabled inefficient government. But the need was there WMD or not. How quickly people forget about the almost half million people within his own country Saddam killed. It’s so easy for the wealthy nations to just turn their eye to human suffering if it doesnt effect us. Maybe people should open their history books and look at the parallels between Saddam and Hitler. And how everyone ignored what was going on because it wasnt effecting them and what did that get us in the end, 60 million dead and worldwide economic distress.
Rebarchetta,
You’re absolutely right, this isn’t the forum to discuss war (maybe starting one?), but I’m sorry I don’t buy the “we had to go, WMD or not”. Because if that was the case, then I look forward, to the UK and the United States, overthrowing Robert Mugabe in Zimbabwe or one of the many other African dictators?
I’m all for it as long as Halliburton is not there. Those African dictators need to be eliminated.
You definitely won’t find Halliburton in Zimbabwe. There’s no oil there!