Does anyone edit Jerry Flint’s columns? And yes that’s a trick question. If I were the editor in question, I would sit in awe of any curmudgeon brave enough to argue that GM deserves an extra long root in the federal taxpayers’ trough by admonishing readers that “we should remember Percy Bysshe Shelley’s poem.” Ozymandias? That particular poem is about hubris and inevitably of death and decay. And yet our man Flint’s uses the work to suggest that U.S. taxpayers should bail out General Motors because we don’t want a great empire to, uh, decay and die. Here’s the deal: we owe them. “I have a long memory,” Flint opines, synapses firing like mad. “I remember World War II, when the president of GM– his name was William Knudsen– headed the successful effort to build our great war production machine. GM helped save America then.” That would be the same GM that aided and abetted the Nazi war machine. “I remember the great GM pay, pensions, health care and dividends that made life good for millions of Americans.” And the union corruption, intransigence and feather-bedding that made GM a sitting duck for transplant attack. But wait ’til you hear what Flint has to say about GM’s current management. You’re not going to want to miss this. Right after the break.
And we’re back. Thanks for joining us. Before the break, we were examing Jerry Flint’s florid argument for a GM bailout. Not only does the Forbes’ scribe think Americans owe GM another shot, but he’s also come to bury– and praise– the company’s leadership. “If there is a great weakness at GM, it is management. For too many years GM’s financially oriented managers ignored or mishandled the car business. I call it arrogance matched by ignorance. On the other hand, these executives were not thieves. They did not enrich themselves like the leaders of the financial service companies that the government is so eager to rescue. GM’s managers just did not understand why Americans love their cars.” Hello? CEO Rick Wagoner $15.5m annual salary? As Bryon once famously remarked, “for real?”
Wall Street Greed: Financial companies that make mortgages and auto loans are turned into financial companies that make risky/overleveraged/predatory mortgages and auto loans.
Detroit Greed: An auto manufacturer (GM) that makes cars is turned into a financial company that makes risky/overleveraged/predatory mortgages and auto loans.
And since Flint had to bring the War into it thank you for reminding people that GM did not only help build the war machine at home, but also on the other side of the Atlantic with its subsidiary Opel.
I know I’ve linked to this speech before, but it seems appropriate. It’s a speech Jerry Flint gave a few years ago to GM’s Proving Ground Engineers and Technicians. He wasn’t not holding any punches then.
Flint Speech
Nice cheesecake!
OK… the pics are baffling me now. Characters from Coronation Street? Something about the film Cassandra Crossing? I don’t get the connections.
Since we’re bailing out the fuckers at AIG, et al, why not help an industry that actually makes something that’s been providing good incomes for Americans for 100 years? Part of me actually hopes that our Domestic auto industry ceases to exist, hundreds of thousands of people line up for unemployment, and we rely on foreign masters to provide us all of our durable goods. Then, when no one in America can afford broadband service to read this website and it ceases to exist, I can chuckle and say “I told you so.”
Overdramatizing? Maybe. I suppose, in the end, we’re all doomed regardless. When Comrade Obama is elected Prez, all of our wealth will be redistributed to the ACORN types, collective farms started, and huge banners depicting Marx, Lenin, Stalin, Mao and Obama will adorn Washington.
In this scenario, GM will be nationalized as a matter of policy…so what the hell?? Let’s do it!!!
Raskolnikov, that’s crime and punishment indeed…
But nationalization does not have to mean communism. Yeah, I know, you live in a capitalist nation, but hear me out.
What sounds like the best solution from a taxpayers point of view?:
1. Give Detroit 25 billion dollars on the taxpayers expense, without changing anything fundamental. Management still intact, Wagoner still in reign, and money down the drain.
2. Nationalize GM, sack Wagoner, get out with the old people and in with some new people, invest about a hundred billion dollars of the taxpayers money, see the company flourish, the stock price ricing, and then selli the company on the open market, and the taxpayers can harvest their investment.
One alternative means a handout from taxpayers to private pockets, i.e embezzlement. The other alternative is actually an investment, the government invest the taxpayers money, money the taxpayers eventually will get back. As a taxpayer, which alternative do You choose?
Yeah I remember a few things too, Mr Flint.
I remember my very first car was a Camaro and I remember what a rust magnet it was and how it drove like a truck.
My wife remembers her Cavalier and what a pile of dog vomit it was.
And I remember how at one point the Chevy service guy told her it was a piece of junk and it wouldn’t last another 6 months.
And I remember how abysmal the service was at numerous GM dealerships and how it took 5 visits to various dealers to figure out there was an electrical short that kept burning out her brake & signal lights.
And I remember how the power windows would go down but not up and how the car would stall if you turned the a/c on.
But more importantly I remember the smile I still get driving my Acura 6 years after I bought it or the smile my wife gets from her new Honda. And how friendly and accommodating the service at both our dealerships are.
In 5-7 years when we’re still enjoying our respective cars I’ll laugh remembering all the auto industry people that were baffled at the demise of General Motors.
Blame the French and the other Euros for the AIG bailout. Treasury was going to let AIG go down like Lehman when the French etal. realized that AIG was critical in insuring the European banks and begged the US to save AIG to avoid an even bigger meltdown among Euro banks.
And we can blame much of AIG’s failure on Eliot Spitzer. As AG, he blackmailed AIG into dumping their founder and replacing him with a Spitzer supporter who was both politically connected and incompetent. So AIG, like Fannie Mae and Freddie Mac, is another fine example of how politicians should never run a business.
It pains me to say this, as Flint is roughly the same age that my father would be today if he was still alive, but Flint’s day has long come and gone. In the space of a half-generation (hell, not even 10 years!), the market, the media, and the manufacturers have changed exponentially. As has been stated on TTAC multiple times, Detroit (well, finally maybe not Ford) is stuck in the long-ago machine, thinking it’s 1983 and there’s hay to be made.
It’s sad, really. Those days are gone.
I’m 72 but a gym rat, and guys like Jerry Flint and that drooler at Automotive News, John Teahan or whatever his name is, make me look like a kid with a permanent stiffie. Reading about the car world through them is like reading a medical opinion of John McCain from a 90-year-old doctor.
What was I saying? I forgot.
Oh, yeah, Jerry Flint. Is he still alive?
Lens,
Except if AIG were to go down Goldman would take 20 bil hit and who is the treasury chief? It just happens to be the former Goldman thief-in-charge making the call to save AIG with the current Goldman thief by his side.
Raskolnikov,
Are you suggesting that communists would be a lot worse in running Detroit that Detroit has been in the last 40 years? Is it possible to run a business worse? You take one the richest business ever created in the history of mankind and you ruin in the space 15 years? I doubt this ‘accomplishment’ will ever be beaten by communists or anybody else. In fact I would invest in GM today if I heard that the red Chinese were taking over GM.
ra_pro-there would be two big differences with the communists:
1. GM would have always made bad cars.
2. There would be no good choices on the market.
Chuckle.
Bunter
Ingvar:
“2. …invest about a hundred billion dollars of the taxpayers money, see the company flourish, the stock price ricing, and then sell the company on the open market, and the taxpayers can harvest their investment.”
I agree with you in principle, but the rub is your part about selling on the open market for the taxpayers (us) to harvest their investment. Problem is at that point the company will be owned by the government, and even if they wanted to sell on the open market, meaning they would be giving up control of their fiefdom, an iffy proposition at best, the money collected will be in the hands of government. Do you really think they will give it back to the taxpayers? I think not. This government can not even pass a tax cut that is permanent and won’t expire, while all the tax increases are very permanent and have to be overturned. Their appetite for money is only exceeded by their appetite for power.
Wow, reading that linked article about GM’s collusion with the Nazis (through Opel) really opened my eyes.
Seems to be a textbook definition of fascism; and the world is heading towards even more, with the “consolidation” of failed giants, bailing out said giants, then cutting them loose on the unsuspecting masses in the name of “capitalism”.
For all of the people that bitch about taxes being flushed down the toilet of bureaucracy, it seems to pale in the face of how damned crooked our sacred “corporate culture” truly is.
The GM story shows that in the modern world, greed is the greatest sin of all, and can lead to the suffering and death of countless innocents.
I (for one) welcome our corporate welfare masters, and I promise to keep supplying them with my hard-earned money, and never question their ethics, as what is good for business is good for America…
Windswords:
Fifteen years ago, in the early 90’s economic meltdown, there was a similar case in Sweden, where I come from. Sweden is of course, capitalist, but at the time run by the social-democrats, with a sort of middle way between the extreme ends of the spectrum.
Anyway, a privately owned bank went down with 10 billion dollars in the red. The state expropriated the company, as that bank held at least 60% market share in house loans, most people with houses in Sweden was thus affected. The state did that to protect the investments of its people. The state made a loan to the bank to cover up the losses, invested more money to get it back on its feet, the bank eventually paid back the 10 billion dollar loan in ten years time, with interest, and then the state put the bank on the open market.
And that is how it should be done. If private companies fail and need the helping hand of the state, with money in magnitudes bigger than what the company is worth, then the company has lost its right of self-government over itself. You broke it and You want us to pay? Sure, but then We bought it… If taxpayers pay, then taxpayers own…
“Characters from Coronation Street?”
Thanks, Yank, I thought it was just me. It’s embarassing to think I actually remembered her name.
To yankinwaoz,
The Greek character Cassandra was blessed with the gift of prophecy, but it was a trick because she was also cursed with her prophesies being unintelligible. When she tried to warn of impending doom, she was seen as a stark raving lunatic, spewing nonsensical gibberish. Being a tragedy, it didn’t work out well for her.
Is TTAC going to be reviewing Betty’s hot pot in the future?
BostonTeaParty :
Nope. Travel snacks? Maybe…
Can GM be saved even with a bailout? The British tried to save British Leyland but it was beyond saving. Are we throwing good money after bad? Would it make more sense to let one of the little three go, rather than try to save them all? Chrysler has the least debt and might be the easiest to save. Would it be more cost effective to provide incentives for foreign companies to add engineering centers to the US? Would it make more sense to back winners rather than losers? The largest problem at GM is their corporate culture. Is the only way to kill their bean counter management to let GM die?
On the other hand, GM has some good product now. Should we let them die when they finally start getting product right?
No easy answers here, but it looks like President Obama will turn the cash tap on for Detroit. It may or may not work.