GM Failure



This is happening/has happened already Ed. The real problem is that the plans being proposed won't work, They don't go far enough to convince the American people to get behind them and that is what it is really going to take. The example - step by step - that the Big Three needs to follow has been written in history. All of these guys are familiar with that example and if they aren't they should be.
Had Rick Waggoner stood up and told Chris Dodd that if Congress would provide the financing GM had delivered it's last gas only vehicle, he would have stunned the room and then gotten a standing ovation AND the money, as much as was required, from the assembled. GM could be out taking orders for a vehicle to be named later this very day and Congress could agree to have the Treasury Dept. securitize those orders to provide the cash back to GM. It would be a self licking ice cream cone.
The examples of BK'd automakers that bit the dust won't wash either. This is a very viable possibility today because none of the examples cited represented the end of home grown auto manufacturing in the US. It also ignores the Chrysler turn around. People bought K Cars by the thousands at a time when both GM, Ford, and the media were braying publicly about orphaned vehicles built and sold by a company that wouldn't survive. Lee Iaccoca sold the press and public. The rest is now history.
See if your wife doesn't think these guys don't remind her a little of "small ball" Palin. Especially Gettlefinger. Where in hell did they find that ignorant bumpkin? I wouldn't buy a car, new OR used, from that cracker.
JC
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On Fri, 5 Dec 2008 00:10:32 -0800, "John R. Carroll"

Let's point out another governmental fault:
At one time there was a plan to build the Super Conducting Super Collider (SCSC) in Texas. This basic research into particle physics is the missing part in eventually changing the world over to nuclear fusion power (NOT fission...which we already have).
The funding for the SCSC was cancelled after some Senate dumbfuck asked one of the physicists on the team requesting funding for the project, "Will this help us find God?"
No shit.
The physicist didn't know how to answer and the funding got cancelled.
We now have a consortium at CERN building the Large Hadron Collider (it's done...they're working out some kinks). Apparently all the research data will be shared amongst the international consortium members.
So instead of being the sole world leader in the field of power creation through nuclear fusion, the US will be an "also ran" and all because the lawyer classes that end up in the Senate are scientifically RETARDED!!!
So much for the product lead in electric vehicle technology in Detroit also. If there had been a major push to fusion, they would have been completely on board with it and once again the Big Three would be on TOP of the market.
So is the US government made of of a completely blind collection of coke head pedophiles that pontificate that they are important people? Hell yes it is. If you've ever had any dealing with Federal officials, you can spot a stupid incompetent asshole everywhere you look. They have totally departed from reality. Dave
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<snip>

The one I want to know about is Wagoner. Jeez, for a guy with such impressive credentials, he sounds to me like a tier-two PR man. I was appalled listening to him.
I guess he's better at running a company. Or he was...
-- Ed Huntress
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face=Arial size=2>...<BR>&gt; <BR>&gt; &lt;snip&gt;<BR>&gt; <BR>&gt;&gt;<BR>&gt;&gt; The examples of BK'd automakers that bit the dust won't wash either. This <BR>&gt;&gt; is a very viable possibility today because none of the examples cited <BR>&gt;&gt; represented the end of home grown auto manufacturing in the US. It also <BR>&gt;&gt; ignores the Chrysler turn around.<BR>&gt;&gt; People bought K Cars by the thousands at a time when both GM, Ford, and <BR>&gt;&gt; the media were braying publicly about orphaned vehicles built and sold by <BR>&gt;&gt; a company that wouldn't survive. Lee Iaccoca sold the press and public. <BR>&gt;&gt; The rest is now history.<BR>&gt;&gt;<BR>&gt;&gt; See if your wife doesn't think these guys don't remind her a little of <BR>&gt;&gt; "small ball" Palin. Especially Gettlefinger. Where in hell did they find <BR>&gt;&gt; that ignorant bumpkin? I wouldn't buy a car, new OR used, from that <BR>&gt;&gt; cracker.<BR>&gt; <BR>&gt; The one I want to know about is Wagoner. Jeez, for a guy with such <BR>&gt; impressive credentials, he sounds to me like a tier-two PR man. I was <BR>&gt; appalled listening to him.<BR>&gt; <BR>&gt; I guess he's better at running a company. Or he was...</FONT></DIV> <DIV><FONT face=Arial size=2></FONT>&nbsp;</DIV> <DIV><FONT face=Arial size=2>Do you know Taleb's "The Black Swan" and the story of the turkey Ed?</FONT></DIV> <DIV><FONT face=Arial size=2><BR>Every day for one thousand days a butcher feeds a turkey. The turkey steadily and predictable continues to get fatter and fatter.</FONT></DIV> <DIV><FONT face=Arial size=2>Every day conveys with increasing confidence to the turkey, the turkeys economic department, risk management department, and the turkey ratings analysts that the butcher LOVES turkeys. Every metric supports that conclusion.</FONT></DIV> <DIV><FONT face=Arial size=2>On the day when the turkey, the turkeys economic department, risk management department, and the turkey ratings analysts confidence is at its <STRONG><EM><U>maximum</U></EM></STRONG>, they all get a big surprise. It's no surprise to you or I but since all of the turkey metrics indicated that the butcher LOVES turkeys, it's a surprise to the others and an example of the propensity of unexpected events - "Black Swans" - to intervene on decision making based exclusively on metrics.</FONT></DIV> <DIV><FONT face=Arial size=2></FONT>&nbsp;</DIV> <DIV><FONT face=Arial size=2>Rick Waggoner is the turkey. Ben Bernanke is the turkey. In fact,&nbsp;the worlds bankers are the turkey.</FONT></DIV> <DIV><FONT face=Arial size=2>They were all fooled by the illusion of stability. Every one.</FONT></DIV> <DIV><FONT face=Arial size=2>Read Bernanke's paper that describes what he called "the Great Moderation".</FONT></DIV> <DIV><FONT face=Arial size=2>He is exactly the turkey.</FONT></DIV> <DIV><FONT face=Arial size=2></FONT>&nbsp;</DIV> <DIV>&nbsp;</DIV> <DIV><FONT face=Arial size=2>JC</FONT></DIV></BODY></HTML>
------=
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21:19:41 -0800, John R. Carroll, jcarroll@ubu wrote:

"D"
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Ed Huntress wrote:

People will still be buying cars they will just be the ones still being made. ?? fired workers. Just how many of them were "working"? :-) ...lew...
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The important question is how many of them were bringing home a paycheck. The nice thing about someone else being overpaid is that they spend the money into the same economy the rest of us swim in. It becomes a bad thing when they make so much money that they invest it overseas to avoid taxes and high wages.
-- Ed Huntress
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No, when the over aid buy second homes in my neck of the woods and drive up my property values and taxes they hurt the locals. Then there is their attitude. Sadly they retire where I live and then get to vote in our elections. ARGH!
Wes
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wrote:

You got there first, eh? Look over your shoulder. There may be some Indians who would disagree. <g>
-- Ed Huntress
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Well if the 1836 Treaty of Washingon court case is ruled on the side of the tribes, they will have their hand in my pocket. I might have to pay them to take water out of my well.
When the Indians had arrows not a problem, when they got guns, still not a problem, now they have casino's and lawyers. That is a problem ;)
Wes
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wrote:

We found the solution in NJ. We chased them all the way to Oklahoma (Lenee Lenape tribe). Now there are only 50 of them left, and they're smart enough not to want NJ back.
-- Ed Huntress
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Right - they got the protection of the black bear law into effect - eh ?!
Now there are more black bear per square mile than ever before and are running people crazy.
Martin :-)
Ed Huntress wrote:

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I don't think it was the Lenapes who wanted to protect the black bear.
The bear hunting battle has gone back and forth here for 30 years. Hunting bears was shut down here on procedural grounds (fish & game procedures weren't being followed in setting seasons and so on), but the state senate introduced a bill a month ago to normalize it and to reinstate bear hunts.
Whether it will pass is anybody's guess.
-- Ed Huntress
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Good luck. Martin
Ed Huntress wrote:

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wrote:

The cost will be the same either way George. I'm snipping the rest of your post but not disrespectfully. Putting a few billion dollars into the big three as a stop gap might make this Chrismas season and the period between administrations a bit more tolerable but given the ongoing wave of retrenchment in the other sectors of the economy, one boogie man will just be replaced by another, and immediately.
What the world must do is find a way to deleverage the financial system more effectively than what is happening at present. Every time the DOW makes a run, hedge funds, banks and investment banks sell inventory until the gain is cancelled out and the sell off stops.This is happening way to slowly and without any intelligence. Not only are markets not self regulating - they are completely stupid.
We must also rig the system, if you will, to insure that the cycle of privatizing gain and publicly funded losses is permanently broken to the extent possible. Banks absolutely have got to get out of the risk business beyond a certain very low level. Investment banks and Hedge funds must be seperated from banks and the attendant reserves and cash flows. Let them take the risks as private or publicly traded entities but with the full understanding that they will bear every bit of the risk. The public sector won't, under any circumstances, step in and clean up the mess of a big loss.
We have been on this hobby horse in a big way since Reagan and it has got to come to a halt. Sooner, in this instance, is better.
Furthermore, people have to go back to making their money based on what they do, not the debt or equity positions they can manipulate for financial gain or speculative increases in the value of property. Doctors must return to the practice of medecine, Dentists to dentistry and teachers to teaching <G>
I've said it before and will repeat again that had Reagan allowed the S&L crisis settle itself with a huge prat fall we wouldn't be where we are today. You seem to be suggesting that we repeat that mistake and in the face of the obvious result didn't work.
It's time to move forward to Capitalism 2.0. V1 is as dead as a door nail.
JC
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On Sat, 6 Dec 2008 12:06:37 -0800, "Hawke"

--------------- Lots of lip service was paid to "the stock holders," but that's is all they got. [other than the shaft]
Look at what the IPOs for all this paper were and look at the current prices,espically the banks and brokerages. The stockholders have taken a haircut down to their toenails.
[e.g. GM stock currently $3.75-4.55] http://money.cnn.com/quote/quote.html?symb=GM&source=story_quote_link ------------- <snip> But after GM shares dropped earlier this week to ==>a 50-year low,<== Smith and other local retirees are concerned about the company's future --and their nest eggs.
Shares on Monday hit $9.92, tying their lowest point since Sept. 13, 1954, according to the Center for Research in Security Prices at the University of Chicago. The price is adjusted for splits and other changes. <snip> --------------- for complete article click on http://www.mlive.com/flintjournal/business/index.ssf/2008/07/alltimelow_stock_prices_for_gm.html
Repeated efforts have been made to limit executive compensation to something rational, and to impose other reforms, but these have always been defeated by the boards, generally appointed by the CEO. Nothing short of time in the federal pen has worked. http://www.networkworld.com/news/2008/120508-ebbers.html
Corporate governance is now totally out of control. Lord Acton was correct when he observed "power corrupts and absolute power corrupts absolutely." Unfortunately for the officers and directors of these corporations, the world is far larger than the boardroom and corner office, and their absolute power was a hallucination, as they are now discovering. The downside is that they are taking the rest of us along for the ride as they go over the cliff.
The underlying reason for the absolute refusal of Detroit management to even consider a bankruptcy filing is that *ALL* contracts are then subject to court review and abrogation, including executive employment contracts w/golden parachute provisions and "perks." It is highly likely these will be among the first contracts nullified by the court, to be followed immediately by "pink slips" for all the board members and senior executives, and quite possibly "claw back" of their "performance" bonuses and stock option profits for prior years.
Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).
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this
we
http://www.mlive.com/flintjournal/business/index.ssf/2008/07/alltimelow_stock_prices_for_gm.html
Back in the 1920s the big companies all had what they called interlocking directorates. Basically, this was just an old white boys network of bigwigs that were members of many boards of directors. Everybody was on the boards of everybody else's companies. It was a real nice deal for those in on it. Today we have basically the same sort of thing. Nobody on any of these boards of directors ever says anything is too much for the management. Why would they? That is why they are on the board, to help the managers and to make money for themselves. It's just more of the same old boys network we saw in the past. It just makes you wonder if things are ever going to be fixed. By now we know exactly what the greedy capitalist pigs do when you give them the change to do it. So the question is whether the new administration is going to reign them in like FDR did or will they just go along with them like they have in the past. With the two parties acting as a duopoly that rubber stamps the decisions of the corporations it's no wonder why we are in this mess. I for one will be very disappointed if the Obama administration goes along with this corruption like everyone else has since 1980.
Hawke
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On Sun, 7 Dec 2008 22:53:09 -0800, "Hawke"

While the "Brave new world order" "crystalized" under the neocons, this was just the end result of a long process. Don't forget that it was "Slick Willie," with much help from Bobbie Dole, that rammed NAFTA through.

This all depends on your point of view, your expectations of corporations and your definations. We have more billionares than ever before.

Problem here is that much of the financial "profit" reported was cobwebs and moonbeams, and in many cases was generated by the canibilization of the manufacturing sector. When judged by net taxable income [in many cases zero], the results were *MUCH* less impressive. Either there was tax fraud on a massive scale, gross book cooking, or both.

Needing to do somthing [fast] and doing it are two very different things, as the country is about to discover.
Even in the countries with high rates of manufacturing growth, it has taken *AT LEAST* a generation to develop their infrastructure [e.g. roads, power plants], vendor networks, supporting/secondary firms, and an educated/trained workforce.
In many cases in the US, the buildings, equipment and machinery used for manufacturing no longer exist, having been exported or sold for scrap, the infrastructure, again roads and power, have been allowed to deteriorate, the vendors and secondary supporting firms no longer exist, and the educated/trained workforce has either found other jobs [mainly in the service sector/retail sales] or retired/died.
Perhaps the single most critical item, the orgazational memory and informal methodology that are the basis of all successful manufacturing has been destroyed, if not by bankruptcy/liquidation, then by an endless series of reorganizations, reengineerings, right sizings, downsizings, etc.
A close second it the total lack of trust and confidence by the [potential] workforce in American management. The employees, or their parents, have seen what management promises are worth, even in the form of written contracts, as their pensions, 401ks, retiree health benefits, etc. disappeared and their jobs were eliminated.
While market forces may in fact be liquidating some obsolete economic sectors and their companies, in far too many cases, the process is being accelerated. exacerbated and exploited by sociopathic individuals who already possess more money than they and their children can ever spend.
FWIW -- having driven "manufacturing" into the ground, plundering of corporations, including looting their pension plans, continues and has moved on to other areas such as the media. For one example see ----------- Tribune Considering Filing for Bankruptcy Protection, WSJ Says
By Jennifer Sondag and Sarah Rabil
Dec. 8 (Bloomberg) -- Tribune Co., the newspaper publisher and broadcaster taken private by billionaire Sam Zell last year, is considering filing for bankruptcy protection, according to the Wall Street Journal. <snip> Tribune continued talks with lenders to restructure its debt in recent days, the Journal said. The Chicago-based company, saddled with $11.8 billion in debt from the $8.3 billion buyout of the company last December, has been cutting jobs and selling assets including Long Islands Newsday to reduce its obligations. <snip> ------------- for complete article see http://www.bloomberg.com/apps/news?pid 601087&sid=akiceI_0gQxM&refer=home
An ESOP [employee stock ownership plan] was the trojan horse used in this particular case ------------- <snip> When the Tribune Company was purchased by Samuel Zell by utlizing an ESOP, one question was how long would it take before the litigation began. Today, that question was answered when a group of current and former employees filed suit in the U.S. District Court for the Central District of California. A copy of the complaint is available here. http://online.wsj.com/public/resources/documents/zell.pdf
The complaint is not a good read from a pension geek standpoint. In 115 pages, the complaint failed to tell a clear ERISA-related story typical of defined benefit plans which are converted to ESOPs which then lead to litigation. I am hopeful that the forthcoming motions to dismiss or motions for summary judgment will provide more details about the frozen Tribune Company Employees Pension Plan which was merged into the Times Mirror Pension Plan which had an ESOP then merged into the Times Mirror Savings Plan, and at some point these plans became the Tribune ESOP.
A quick check of the filed Form 5500s reveal that these are not small plans. For example, the Tribune Company Employee Stock Ownership Plan for 2003 had over 11,000 participants and beneficiaries, and total assets of over $800 million. The Tribune Company Master Retirement Savings Trust had over $2.2 billion in assets for the 2006 plan year listed on Schedule H of Form 5500. A really interesting part of this litigation to watch will be the ultimate attorneys fees awarded when this litigation ends. <snip> -------------- for complete article see http://www.uslaw.com/library/Benefits_&_ERISA_Law/Employees_File_Lawsuit_Tribune_ESOP.php?item#7943
Unka' George [George McDuffee] ------------------------------------------- He that will not apply new remedies, must expect new evils: for Time is the greatest innovator: and if Time, of course, alter things to the worse, and wisdom and counsel shall not alter them to the better, what shall be the end?
Francis Bacon (1561-1626), English philosopher, essayist, statesman. Essays, "Of Innovations" (1597-1625).
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On Mon, 08 Dec 2008 10:07:16 -0600, the infamous F. George McDuffee

Question: How does some entity which is $3.5 BILLION in debt borrow an extra $8.3B for a merger?!?
--snippage--

That's enough to make a mortician puke, and they don't puke easily.
-- At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. --Bertel Shmitt on kencan7 blogspot
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On Mon, 08 Dec 2008 12:52:58 -0800, Larry Jaques

Remember those banks that were lending money to people based on distorted views of the way the world should work?? The whole Private Equity Company (buy someone with a loan and then make _them_ pay it off) thing is not far short of fraud.

Isn't the retirement trust fund inviolate? If not, you need some legislation fast!
Mark Rand RTFM
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