John Snow was the U.S. Treasury Secretary under President George W. Bush, from 2003 to 2006. Snow is now drawing a paycheck– the size of which dwarfs all but GM CEO Rick Wagoner’s imagination– for shaking-down Uncle Sam on behalf of Cerberus’ Chrysler play. As you’d expect, Snow is wasting no time in pursuit of your tax money. “Cerberus Capital Management LP Chairman John Snow said Wednesday that president-elect Barack Obama and his treasury secretary need a bipartisan plan to counter the worst economic downturn in about 50 years. ‘What we need is to make sure that a vital industry like autos… which is such a big part of the overall economy, doesn’t lead us into a deeper and harsher downturn,’ Snow said in an interview on the CNBC cable channel. ‘The collapse of the auto industry at this time would be devastating for a new president.'” Note: president. Not American workers. And I’d like to take this opportunity to remind TTAC’s Best and Brightest that Cerberus claims income of over $100b per year from its various businesses. OK, right. Where were we? Changing the subject slightly, how about GM’s “welcome” to the new prez?
GM, in a statement issued Wednesday, said it welcomes Obama’s pledge to support the domestic auto industry and efforts to develop new technology. “This support comes at an especially critical time as our industry confronts one of the most difficult economic periods in our nation’s history, caused by the global financial crisis,” the statement said. “This support will enable a competitive U.S. industry to contribute significantly to our nation’s economic revival.” So where is this competitive U.S. industry then? Let’s ask Honda, shall we? [thanks to polishdon for the link]
How do “leaders” such as Snow sleep at night? If you’ve spent your life building a business, working hard, making prudent decisions, employing others, etc. you should be rewarded and held in esteem. If, however, the “value” you add to a business is wrecking companies and individual workers livlihoods while enriching yourself due to professional relationships, you are a parasite! You, Mr. Snow, are a parasite!
When the Swedish ship building business went bust in the 1970’s it was because the Koreans and Japanese could build as good ships as us for less money. The USA car business has some cost issues with labour etc, but fundamentally it’s down to product and under investment in developing the products consumers want.
Many friends of mine tell me that the entire USA suffers from underinvestment – especially in infrastructure. And since many of the USA citizens doesn’t trust the politicians to handle their tax money, taxes can’t be set at a higher rate and therefore nothing can be done?
Except perhaps using the tax money to give to a dying car industry… I’m no Obama worshiper like many other in Sweden, but some things really need to “change”. Since both Volvo Cars and Saab Automobil is USA owned we too are set to suffer from under investment and bad management at those companies.
@Voice of Sweden, perhaps you can see things clearer from afar. We do have issues with automotive industry (to say the least), but those are the same companies which can build quite attractive automobiles in Europe.
I attribute current, and perhaps last, agonies of the business not on under-funding of infrastructure, but inept management. That is very true of our country. And it is permeates all levels of our economy and society.
Our banks were run by morons who came into banking from politics and our politicians who are recycled morons from banks. We just freely elected a former college instructor with 2 years of senate experience to run the country – and it was a better choice.
We are in trouble, but under capitalization is not our problem. During last century oil sheiks financed our economy (and owned good chunk of it) in this century it is probably Chinese and Russians in addition to Saudis and Emirates.
It is also true that we don’t trust our government: can you blame us? Look whom we elect every 4 years!
Voice of Sweden: “And since many of the USA citizens doesn’t trust the politicians to handle their tax money, taxes can’t be set at a higher rate and therefore nothing can be done?”
Politicians are attempting to buy votes with tax reductions. Minnesotans just approved – by about 60/40, a new tax to improve quality of life issues. The voters WILL pay; politicians just have to explain clearly what’s needed and why. They must have a vision.
TexN, you are making an erroneous assumption about these “leaders”. You, like most of us, assume that they have a conscience.
They have none and that is why they have no trouble sleeping at night.
@Robert and TTAC: thanks for keeping us updated on the latest locust state of affairs.
@TexN: very accurate description.
TexN : How do “leaders” such as Snow sleep at night?
On beds filled with thousand dollar bills with nightly meals of sushi and filet mignon in their stomachs?
Oh, you probably meant that as a rhetorical question.
How do “leaders” such as Snow sleep at night?
They’re ‘wired’ that way. They’re all around; Snow is just more prominent at present. To them, it’s ‘get all you can’, and there’re no ethics involved. For more about this guy, google -john snow csx-. And of course when the peons ask for a livable wage, it’s all about letting the market decide. I saw a snippet of his testimony before congress a few days ago. Waving his jeweled hands around, talking in his low well modulated voice to crooks on the other side of the fine wood who were so serious about guarding the public interest.
But what percentage of the incumbents bit the dust last night? So we must be satisfied or at least not yet ready to take to the streets. Now of course it’ll all be the fault of the ‘libs’.
How do “leaders” such as Snow sleep at night?
On a pile of money between two high-priced call girls?
Its really simple. Every deal is considered “self liquidating” — in other words, none of the bounty and spoils that Cerberus makes from its other investments will be used to prop up a failing one. Not ever.
Knowing that — if the feds don’t ante up, Chrysler is toast…
(and Snow probably lifted a glass to the Porsche honchos who pulled off the VW stock coup)
KixStart> Interesting to hear about Minnesota. Though not that surpring when you look at the demographics, lots of people from “tax loving low fraud” countries: (Wikipedia): Over 75% of Minnesota’s residents are of Western European descent, with the largest reported ancestries being German (38%), Norwegian (17%), … , and Swedish (10%).[
Again I would like to reiterate that I (like the most of you) would love to see the USA automakers doing great.
But that involves the art that is as difficult as it sounds simple “built the cars people wants” – spiceing up that with some OK marketing and branding.
I can promise you that I’m as sad as you about for example Saab. Seeing GM cram the last dollars out of that brand with marketing like “born from the jets” is “teardriving”. And have you even seen a spy photo of the car that will replace the 1997 9-5?
Perhaps Sweden wasn’t ment to have 2 car brands, but I really hope we find a solution for Volvo Cars.
The tax that Mn. approved for water quality, the arts, ect,was about 3/10 of one percent increase in sales tax.
To the B&B,
Thanks for the responses and the laughs! Now where did I put that bottle of Crown…….
Tex
Voice of Sweden, why don’t the Swedes buy back Volvo and Saab? Seriously, wouldn’t genuine Swedish-built vehicles have more appeal and as a result be profitable? As far as I know, Sweden does well in all other kinds of manufacturing. And Sweden is a very affluent country; raising the capital to buy back the brands should be no problem. Or is employment so high that there’s no pressure to “create more jobs?”
The reason for saying “new president” is that is who the new president cares about the most. His re-election campagin began last night; it just won’t be as open for a few more years. He cares about the workers only in so much that they advance his power. Snow was just reminding him that a collapsed auto industry won’t be good for his image and re-election hopes.
p.s. I am in no way defending the bail-out or Snow.
50merc :
November 5th, 2008 at 4:17 pm
Voice of Sweden, why don’t the Swedes buy back Volvo and Saab? Seriously, wouldn’t genuine Swedish-built vehicles have more appeal and as a result be profitable? As far as I know, Sweden does well in all other kinds of manufacturing. And Sweden is a very affluent country; raising the capital to buy back the brands should be no problem. Or is employment so high that there’s no pressure to “create more jobs?”
There were some tries in the 1980’s to combine Volvo and Saab – when P G Gyllenhammar ran Volvo. But it resulted in nothing, some said is was because of the then hard FWD vs RWD battles.
Later P G G tried to combine Renault and Volvo, something he lost his job trying. Though later AB Volvo (that is the company including everything but the cars) bought the Renault truck division.
Although Sweden is rather affluent as you say (at 10th place for GDP per capita PPP, USA at 4th place, according to WB) and the money to buy the companies could be collected by the government or a group of private investors, the question the morning after the deal goes through will be “so now what”? Toyota has proved how big you have to be to have success, and size alone haven’t helped GM and Ford. So even if you combined the size of Volvo Cars and Saab Automobil the resulting company would be too small, not have the Economy of Scale needed.
This last factor was why AB Volvo and the Wallenberg family sold their car divisions to Ford and GM in the first place. But I belive this factor will save at least Volvo. Because Daimler and BMW are too small as they are, so I belive one of them will end upp buying Volvo. They will need to increase volume – and since both Daimler and BMW are so tight competitors for the exact same market they can’t join hands – more than in some development programs.
The job market has been great until say August this year. So unemployment is low at the moment, but is set to increase. The left parties in opposition are trying to score some points in saying “something has to be done”. But the responsible ministers have coldly pointed at that cash infusion into Saab and Volvo in reality is giving GM and Ford money, and that is highly likely to be real waste of money (we leave that to you, taxpayers in the USA :-). And since as I discussed earlier, “Swedish Leyland” is out of the question because of economies of scale, there isn’t much the government can do. Perhaps what they sould do is fly down to Munich or Stuttgart and promise to pour a lot of money into co sponsored development programs if they buy Volvo (or Saab). That could make sense.
In contrast to Volvo Cars and Saab Automobil, their old sister companies (Scania and AB Volvo) building big trucks and busses are true world class companies doing great. (With great I mean as good as the economy allows, just like even Toyota gets hit by the economy.)
Add to this Saab AB building fighter jets, Bombardier Trains (former Adtranz, former ASEA) and Hägglund military vehicles (AKA BAE Systems AB) there still will be 5 large and world class vehicle companies in a country with the population of the US state of Georgia (9 million).
That said, every job lost will be a sad thing. And who knows what might happen when the current government will do “anything” to ge reelected in fall/autumn 2010.
But as I said I really hope that Dailmer or BMW buys Volvo Cars and that the people at Saab Automobil will find employment at Volvo. Perhaps Saab will be so cheap to buy that they (Daimler or BMW) can buy it, ditch the brand, and keep the people and facilities in Trollhättan. Like Audi has a satellite in Neckarsulm (former NSU) connected to Audi HQ in Ingolstadt.
“We” must learn from Toyota et al. Using the best management principles, logistics, and a totally dedicated workforce working hard it’s possible to “rule the world”. Remember that Toyota et al. learned from people like Peter Ferdinand Drucker, now it’s our turn to learn and exceed what they do.
Japan learned it from Deming.
It’s funny to read his stuff that is forty years old where he blasts companies for inflating current numbers by cutting R&D. It’s deja vu all over again!
That GM statement is interesting; -all except the “Caused by…” part. :P
Re: Volvo-Saab.
Couldn’t Ingvar Kamprad just go ahead and buy both of them with the spare change he has rolling around in his pockets?
willman :
Re: Volvo-Saab.
Couldn’t Ingvar Kamprad just go ahead and buy both of them with the spare change he has rolling around in his pockets?
If he wanted, he could. But because of the bad tax regmise in Sweden back in the 1980’s (now it’s much better) Ingvar Kamprad now “lives” and pays tax in Switzerland, though spending much time in Sweden, and the entire IKEA konglomerat is owned by a foundation in the Netherlands.
As I said it is much better in Sweden now, but Obama could see this as a warning what happens if you try to “punish the rich”.