Moral relativism is inherently childish, as demonstrated by my eleven-year-old. “You don’t make Lola take her plate into the kitchen.” Any assertion that her sister’s age removes her from the obligation meets with a derisive snort. In fact, Sasha reckons she’s a victim of a cruel, capricious system. “It’s not fair!” she cries, storming off—until I threaten to yank her poker chip pay. Then, grudgingly, she does what needs doing. All of which reminds me of GM’s PR “narrative.” As their sales dip by half, they cry “Everyone’s sales numbers are a disaster! You can’t blame US for this mess.” And then they walk off and we clean up (i.e., pay for) their mess.
GM’s bondholders and union leaders “get it.” They know that GM lives in a world where actions don’t have consequences. No matter what The General does or doesn’t do, no matter what they build or don’t build, kindly Uncle Sam will keeping throwing them chips.
And who do you think scoops up those plastic pieces at the so-called bargaining table? Why the bondholders and union leaders, of course. When it comes to securing “their” stake, General Motors and its camp followers have learned that whining speaks louder than action.
“These are obviously unsustainable levels which are causing almost every major auto manufacturer across the world to look for government aid,” GM’s chief sales analyst Michael DiGiovanni said during a post-February sales numbers conference call.
See! Nobody else has to file bankruptcy! You want us to go C11? I hate you! I wish you were never born!
Plug your ears for a second and think about that. General Motors has just publicly admitted that they’re no longer a viable business. And no wonder.
When GM first suckled from the federal teat, their loan request was based on grabbing their “usual” share of an estimated seasonally adjusted annual sales rate (SAAR) of 11m vehicles. February’s SAAR clocked in at 9.8m. Oh, did you mean retail sales? That’s 7.5m. Nissan’s CEO figures SAAR will drop to 8.5m.
Bottom line: GM is too big to survive in such a small market, never mind the weakness of their products.
You could make a case that the precipitous sales drop was due to the unforeseeable collapse of the credit market. You could argue there was “no way” GM could have predicted these terrible times (although I won’t be joining you in that belief). But clearly, indisputably, GM should have known the way the winds were blowing back in December.
So how come GMNA’s Best and Brightest’s “worst case scenario” wasn’t even close to reality? Either GM management was woefully ignorant of their own business, or they were lying to Congress to minimize their [initial] call on the public purse.
After ten years charting this company’s course, watching as the crew plowed it straight into a killer iceberg (that a faltering economy has now revealed in all its terrible glory), I’d have to say GM’s misinformation was based on willful ignorance. And cowardice.
These are tough times. Times that try a man’s soul. What GM needs, what we all need, is true grit.
True grit refers to the character of a person who can look at their perilous situation without flinching, then devise a realistic plan to deal with it. Sometimes, the odds are insurmountable; even the best possible plan is doomed to failure. And then a person with real character does what has to be done; whatever they can do. No matter what the personal cost.
It’s no coincidence that The Alamo is one of John Wayne’s best-loved movies. It’s no coincidence that GM is bankrupt, without anything like a coherent plan to file for C11, reinvent itself and save what can be saved.
And here’s the missing puzzle piece: the aforementioned willingness to make a personal sacrifice.
Last year, at The New York Auto Show, I asked GM Car Czar Bob Lutz if his pension was bankruptcy-proof. I was really asking if he was personally committed to saving GM. Lutz’ derisive prevarication, followed by his recent retirement, answers that question once and for all.
In fact, GM’s management team are like a bunch of eleven-year-olds, willing to do most anything, blame anyone, to avoid accountability for the mess they’ve created. By the same token, they refuse to take responsibility for cleaning it up.
Unfortunately, it’s is no longer their problem. It’s ours. BUT, contrary to growing sentiment, it’s not our job to let management walk; take control and clean the god damn table ourselves.
GM is not our child. We can’t afford to feed it and take care of our own family. Nor should we let GM’s parents avoid responsibility for their own progeny. We’ve served them a hot meal. We’ve done more than our fair share. It’s time to show GM the door. Anything less is simply enabling and encouraging bad behavior.
True grit is also someone, anyone, in Washington who can do anything realistic to this situation. Which means saying no. They have already paid out huge amounts of taxpayer money, the spending of which is unsupervised by the courts and therefore lost for sure. Stop that feed.
If we can finally get this mess on some supervised path, maybe buyers will think there’s a future to GM (even if there isn’t) and be willing to buy again. Oddly, the argument by personal agenda seekers against prepackaged AND funded CH11 is that people wouldn’t buy from such a Company. Look over the past months’ sales and hear this – “you can fool us once….
GM’s corporate attitude is akin to their attitude on profits:
Capitalist on the way up, socialist on the way down.
I remember a few months ago GM posted a small (and I mean, “Verne Troyer” small) gain in sales and Mark LaNeve was with the press saying how the “myth of the import car is being smashed”. Next month, GM posted market share decline, Mr LaNeve declined to comment.
Likewise, here. “Everybody else is hurting, it’s not our fault!”. But what if, GM were the only one posting sales gains, what do you think would be the likely reaction?
A) Well, given the economic climate, this is good news! We’ll work on keeping this figure sustainable and take each month at a time. We’ve been quite lucky to have such loyal customers.
or
B) These sales figures show how GM is developing and making quality products which beat the imports hands down. This shows how GM is a viable business and the government should back us all the way!
(Hint: read my Mark LaNeve story)
Now compare this attitude with Toyota and Nissan.
Nissan missed a sales target, did they cry foul and make excuses? No, Carlos Ghosn said simply “you had a target, you missed it, forget about your bonuses!”. Back to work they went working on next quarter’s sales figures.
Toyota forecasts it’ll make its first loss since 1950. Did they whine about how “everybody else was hurting”? No, they rearranged management and worked on an action plan.
GM are filled with excuses when things go wrong but are quick to react when something goes right.
It makes me wonder whether GM’s management style is based around the flip of a coin*….?
To be fair, GM do have a point in that other carmakers are angling for government help, so what makes them different from Detroit? Now, it’s all well and good saying “Well, Toyota will pay them back.”, but how do we know GM won’t pay the government back (it can happen). We can’t base judgements on a company on the things they MAY do.
* = Coin supplied by Uncle Sam.
Unfortunately, we have now a culture where some 28% of the population voted in a mirror image of what they are; adultalescants.
Whining, snivelling, grovelling, self-centered – in other words, what all humanity is before being corrected, rebuked, trained and taught – civility.
i.e. growing up.
We’re ruled by spoiled brats in grown-up bodies, because a small majority of like-minded people (out of the 50% of the population who bother to vote) placed them in that position.
GM is merely a microcosm of what ails the United States.
Essentially, that unfortunately sums it all up.
Just like GM being propped up by the “gummint” (i.e. we the people being extorted out of future earnings for generations to come by menaces by our own government against us), the “gummint” itself is essentially extorting IT’S money providers to keep on sending more more more. I’m talking about Japan, China, India…
But just like GM’s gig is going to be up one day, so too will the US’s.
Austrian economics essentially says that paper money will devolve to it’s true value.
Zero.
We need to get back to basics as a people, a government and as corporations.
Grow up. Be responsible for our own actions. Stop lying to one another about the value of something that is valueless, whether it be the dollars in our wallets, the 401k’s, the stock market futures, the value of GM or GE, the value of properties (that’s happening now), or the value of a 6 year degree in stupidities which in a real civilization would never be taught as realistic subjects – and which truly qualify the Masters Degree recipients for jobs – at McDonalds. “Would you like fries with that?”
Our nation is first spiritually bankrupt, which leads to morally bankrupt, which leads to fiscally bankrupt. In fact, the world is, too.
It can be fixed, just in the same manner that a spoiled brat who’s had his or her way for years can get a comeuppance and learn, grow (up) and become a productive citizen.
GM is the canary in the coal mine. They did not create this economic meltdown although their operation reflects the mentallity prevelant in the country. Spending money we didn’t have is the root of the problem. The people and the country lived beyond it’s means and ran up the credit cards. It is beyond foolish that the government thinks the solution is more spending.
GM is merely a microcosm of what ails the United States.
That is it in a nutshell.
Though my politics are slightly left of his I can’t help but agree with bluecon.The day of reckoning has come.Ever wonder that every bail out news story has a video of a printing press churning out cash.Is this symbolic?
The top management at GM live in a bubble.Its an attitude,or a culture that permeates down to about three levels above the hourly ranks.They just don’t get it.As Mr Farago puts it,there is no accountability…none…zilch.
To be fair some of my former brethren didn’t get it either.They do now.Almost half a million UAW/CAW members in the 80s,now less than 100k.
At the dealer level the salesmen and the mechanics get it.A few dealers are starting to figure it out.The reason us low levels figured it out is because the accountability wasn’t a matter of choice.
Less buyers, meant less cars,means less jobs.Its not hard to figure out.
The top management at GM can’t possibly be that stupid.I wonder if there is not an agenda here.I sometimes think that GM is waiting to get pushed into chapter 11.For reasons way beyond my thinking.
The GM bankruptcy canary was singing in 2005.
Sending money into an insolvent structural problem like GM/Chrysler is achieving nothing. Outside of Ch11, there is no mechanism for restructure. The UAW won’t play, nor will the bond holders and management have proved they are clueless well before any further economic pressure.
The way I see it:
Chrysler is Terri Schiavo, GM is a roulette wheel, and Ford is recovering from a bad case of the flu.
Mikey
The top management at GM can’t possibly be that stupid.
you’d have a better idea than the rest of us.
Anyone else see the similarities between GM and Octo-mom Nadya Suleman? Both are non-performing parents who crapped-out eight futureless children fully expecting the taxpayer to cover the bill.
Nadya doesn’t think that foodstamps are a form of welfare. GM is convinced that they are merely taking government “loans”.
I could go on.
Where’s Marion Robert Morrison When You Need Him?
Oh he’s out there all right, poised to right all that’s wrong in this miserable world. Don’t worry. He’ll fix GM, too. Only now his middle name is Hussein.
I’m wondering if this is one of the articles that some new TTAC posters are upset about, saying it’s negative.
If so, let me quote Menno: “Grow up.”
RF: “Where’s Marion Robert Morrison When You Need Him?”
Found him –
http://www.ocair.com/terminal/jwstatue.htm
The other problem is a problem that bedevils a lot of companies. The concept of ‘sunk costs’. If you haven’t heard the refrain already you will…’We’ve already spent $X, if we let them go bankrupt now, that money is wasted!’ when in fact letting them go bankrupt simply limits your losses. The money handed out is already ‘gone’. Government’s in particular are adept at not grasping sunk costs.
Nick, the reason that governments in particular are not adept at grasping the idea of sunk costs, are simply this.
Government are made up of nothing BUT sunk costs.
Think about that for a minute.
Robert: I don’t want to quibble, but in the DW above you wrote:
“February’s SAAR clocked in at 9.8m.”
Today’s NYTimes wrap-up of the February sales data says the SAAR was 9.1 million.
GM is not our child. We can’t afford to feed it and take care of our own family.
Brilliant, RF; apt analogies of kids and dishes also.
Have been reading each installment of GMDW since 2006. This series would make a best-selling business case study… just print the headline, article, and at the end of each GMDW print GM’s share price and market share for that month. Follow it all the way down the rabbit hole…
And for good measure, include “Lutz-isms” or the first para of the pressrel on sales. Would be a staple for B-schools for decades to come.
RF-Yup.
Bunter
Menno: +1
Blucon: +1
William C. Montgomery: You’re kidding, right?
Menno— 100% right on.