The ax has fallen on GM chief Rick Wagoner’s neck. With one swing, President Obama put an end to Wagoner’s reign at the helm of the struggling auto giant. GM had asked the government for another bailout amounting to a further $16 billion in loans. Instead, the Obama administration pledged only to fund GM’s operations for another 60 days while it develops a sweeping restructuring plan.
Obama’s team also took aim at Chrysler, pushing it toward a merger, and threatened bankruptcy for both Detroit giants.
What do you think? Is it about time the government took forceful action or do the moves smack of socialism? And why go after the automakers but leave the management at failing banks in place?
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The so-called logic of the socialist comments defies belief. The company is not a person, it is a legal entity owned by thousands if not millions of people. If you think the company is making so-called outrageous profits then go buy some shares in it and you can share that profit. As for making a so-called decent living, you make FIVE times at the UAW what your job is REALLY worth in the open marketplace. From another perspective, your monopoly on an input cost, labor, is actually ripping off the company, and me the shareholder, as well as the consumer. Worse, the socialist imposition of seniority at the UAW prohibits hard working, smart employees from getting ahead — which goes completely against the core values of our society. As noted in another post — Wake up America!!
- Posted by RE BelliousECONOMICS 101. We can have a Demand Economy or a Command Economy. A demand economy is driven by millions of consumers relentlessly searching out the best value. A command economy is driven by bureaucrats deciding whats good-for-you…. as in the old Soviet Union. Instead of giving Billions to companies, unions and executives which perpetuates failure and incompetence which it also did in the old USSR — give every taxpayer a $10,000 check to stimulate the economy. FACT - Germany recently decided to give each person which traded in a 9+ year old car a $5,000 government credit, and sales March 09 jumped 40% over last year. Workers had jobs, factories made profits, and the environment improved! At the same time we gave away $50-60 Billion and sales DROPPED 40%. Workers are on the streets, factories are closed and the environment is terrible. That is the EXACT difference between demand and command (socialist) economies. Smarten up America!!!
- Posted by Ima TuristThe BANKS and AUTO companies should be left to there own demise! If members of the government (Barney Frank) were not getting there pockets filled by the banks then there would not be a double standard. The short term pain is worth getting to the other side and getting the country on the right track again. No more double standards for industry. Bush and Obama have the banks on there hands and share in the banking blunder.
- Posted by Joe WaldenThe inability of a huge automotive company such as GM to support itself in a downturn is a failure of “Capitalism”. Wasteful spending and Predatory Capitalism have “made this Country Great” according to many, so why do Anericans never have any money . Perhaps we are victims of our Glorious System but Government intervention to help the Company survive or Its conditional offer of financial aid in the first place is not the hallmark of Socialism . This is what Capitalism does.
- Posted by DavidLafayette: How can you post these two comments together with a straight face?
“Nobody “coerced” the banks or other credit institutions to undertake procedures that bypassed normal controls for credit-worthiness of mortgagor prospects.”
and then
“If the Dems did encourage loans to lower income families, then how is that bad?”
The way the dems “encouraged” these banks was to threaten to shut them down if they didn’t lend to subprime borrowers. Yet another stunning success of the Clinton administration.
- Posted by Matt…ever heard of Social Security, Medicare, Unemployment, and (gasp!) Income Taxes?
-Will
Oh yeah, those have all been massive successes for the US. Try again.
- Posted by MattOne of the main goals of socialism has always been first and foremost to provide jobs.
- Posted by IanAny large company has three main objectives. Providing a service, providing jobs and creating profits.
In a socialist environment, providing good jobs with good pay and conditions for the working men is equally as important as the service that company provides, with profits taking last place.
Unfortunately if this is not managed correctly what can happen is although the company is providing the service, and the good jobs, it is not creating enough profits to stay afloat, this can happen when the company has too many workers, or the wages are too high or a combination of both. This problem can often be seen as a direct result of unions having too much control.
The unions will push wages up, and push the workforce numbers up.
If a good balance is achieved what you end up with is a large company providing millions of workers with good jobs and a salary that they can all rely on every month to raise their families, make their house payments, make their car payments etc, while the company itself provides its services while making little or no profit.
My point is, anyone that doesn’t realise, General Motors already is and has been for many many years, socialism incarnate, is blind. What Obama is doing by trying to save General Motors does not smack of socialism, General Motors IS socialism.
Take a better look! GM is the number one selling car in China, they have plants all over the world. Their Mexico labor cannot be more then a dollar an hour, yet the cars and trucks made there cost from thiry thousand to fourty. They are not making money? This is the biggest scam ever pulled off. They are going to get out from under all of their pension plans and health care and the Government is helping them do it. Enough is enough America. You have finally brought the auto workers down to poverty level instead of bringing the rest up to a living wage. Welcome to the third world. We have finally arrived!!
- Posted by JennyFor Americans: The constitution is meant to keep the governments in check. Our fore-fathers already went through these things and made a list of rules to keep us out of these entanglements. It is too bad more people do not see the validity there and follow the rules set fourth in the constitution. It is not that difficult.
- Posted by jasonThis isn’t socialism folks. That would require the deliberation of a duly elected body. These decisions are being made by the executive branch of government. That, according to our last statesman as President George Washington, is despotism.
- Posted by Anubis“I, for one, welcome our new socialist leaders”
- Posted by allisonI think most people saw this coming a long time ago.
We are still waiting for the bankers to get fired for losing more money in one year then GM has generated in 100 years.
UAW is killing this industry. But it’s also a strong Democratic voting engine. Who will win? Will the Democrats save the industry or save their votes?
I don’t see what all the fuss is about! I tip my hat to the government for taking a BIG stance on this issue. Time to get GM back on there feet so they can continue making the trucks which made this country so great.
- Posted by Big JimWindfall: “First of all, at the bottom of this so-called crisis are the high-default rate, sub-prime, affirmative action loans that Democrats encouraged and even coerced banks into making.”
Tendentious blather, the whole comment.
Nobody “coerced” the banks or other credit institutions to undertake procedures that bypassed normal controls for credit-worthiness of mortgagor prospects. This fed the securitization by Investment Bankers that monetized the loans, returned handsome profits for the bankers, and sold the Toxic Waste to the world. The Dems are responsibly for that fraud, as well? Bollocks.
The monetization of mortgages was done under the banks own prerogative.
If the Dems did encourage loans to lower income families, then how is that bad? We can’t all live in Palm Springs, Fla., you know. Or, maybe you just don’t know. Yep, that’s more likely.
- Posted by LafayetteThose who claim that the Fibpotus isn’t to blame for the $10 trillion dollars in losses (and counting) in the U. S. equities markets are walking around blind without a cane.
First of all, at the bottom of this so-called crisis are the high-default rate, sub-prime, affirmative action loans that Democrats encouraged and even coerced banks into making. The Fibpotus was right in the middle of that debacle having both coached ACORN and their allies on how to disrupt and intimidate bankers and having himself filed suit against Citicorp on behalf of ACORN alleging discriminatory lending practices as well as using the rules of the Senate to stonewall Republican-led efforts to clean up and reform Fannie Mae and Freddie Mac.
Second, despite numerous problems in the financial system, the stock market didn’t crash until it became obvious that the next president of the United States would be a socialist.
Check your dates. From 6 May 2008 (when the Fibpotus took the permanent lead in delegates for the Democratic presidential nomination) to 20 November 2008, the market lost 42 percent of its value. The markets have added to those losses as the Fibpotus has advanced his Marxist agenda with the passage of the Trillon-Dollar Wealth Redistribution and Political Payoff Act and the Aid For Irresponsible Real Estate Speculators Act.
Now, those deep in the ether will say, the market was down before Urkelama took office. Which begs the question: Do these Kool-Aid drinkers really believe that investors woke up on 21 January 2009 and said, “Wow, is it true? We have a new president? I had no idea! You mean we had an election? I had no idea! Well, let me see what this might mean for the economy and my investments going forward.”
As any seventh-grader should know, markets are forward looking. Most of the impact of having a narcissistic Marxist with childhood abandonment issues who had never accomplished anything outside of the never-never land of academia and politics as leader of the Free World became factored in as soon as it became obvious that Urkelama was going to win the election.
Based on results, specifically, the loss of $10 trillion dollars (and counting) of equity in the U.S. stock market which has occurred in direct response to first the prospect and then the reality of a Marxist occupant of the White House, the Fibpotus is already, far and away, the worst president in U.S. history.
Congratulations Jimmy Carter, you’re now off the hook!
“I call upon all responsible, productive people to work hard and sacrifice so that we can redistribute their incomes to those who will never be able to find a decent job because they refuse to buy into bourgeois middle class values like staying in school or learning a trade or finding a husband before starting a family but are, nevertheless, the Ones We Have Been Waiting For because they will get on a bus and go vote for me whenever and wherever I need to send them.”
His Most Beloved and Exalted Excellency Benito Hussein Urkelama, the Fibpotus
- Posted by WindfallI find it funny how people think taking over GM is socialist, yeah maybe it is BUT so is giving them tax payer money to keep them afloat. Socializing risk while privatizing gains is what we were doing before at least we have a say in how GM is being run which up until now has been a nose dive into the ground.
- Posted by JonasSad to say that, “many had seen this coming”, when I was working in the automotive industry more than a decade ago.
I remebered reading in BusinessWeek back in the late ’90s, that GM was “fat in the middle”, and burning so much cash so quickly, a company that had a sales revenue more than 5 times smaller would have gone bankrupt in a few years.
So, was it a surprise that GM manged to survive for a decade since?
It begs the question - Why could Toyota & Honda flourish in US, while GM struggles?
What’s the Direct & Indirect labour cost in GM? Overheads? Would it be outlandish to say it’s a few times more than Toyota’s or Honda’s in US.
It’s sad to see some of my friends who are still in the automotive industry (especially those working for US companies) to suffer such a fate.
- Posted by Peter LohWagoner is a ’sacrificial lamb.’ Well, he won’t need to apply for unemployment, so it’s not that bad for the man personally. Probably his ego suffers. ‘Too big to fail’ seems to be one of the major issues at stake. Also, the pride in cars made in USA. In the current global crisis, whatever govt does or does not do, it can be easily regarded as wrong. That’s what got Geithner into trouble only a few days ago.
- Posted by IndependentVoiceDONT blame GM, Ford or Chrysler because they got to where they are BECAUSE OF THE POLITICIANS. The UAW could form a monopoly on labor in the industry and pick off the individual companies at negotiation time one by one. However, BY LAW the companies could not form an employers alliance to balance the power given the UAW. As a result wages and benefits were driven sky high, with labor built on seniority instead of skill. The companies were doomed to fail because of this unbalance. Thats why the GM stock in YOUR retirement portfolio is worth NOTHING. The companies couldnt defend themselves, let alone compete.
- Posted by Ima CarrThis is bad, bad, bad news for us… Obama is just the face. The face in front of the financial elite who are looking to achieve (and have been planning for decades) a “New World Order”. Global government. Global economy. And who thinks erasing the borders to create the “North American Union” is a good idea? An “Amero” for Gods sake? The Federal Reserve Bank is to blame. A private bank that loans money to OUR United States Government at INTEREST. They control inflation. They control the value of our dollar. They control the interest rates. We are reliving what our predecessors went through with the Central Bank in the early 1900’s. J.P. Morgan sent this country in a panic that subsequently let to the Federal Reserve Act. I hope we all as Americans can come together and take our country back- out of corrupt hands.
- Posted by kimUAW members for the big 3 make too much with the best health care to be able to sustain, plain and simple. Let’s please not socialize this, but restructure constitutionally. I see Capitalism being questioned every day, please watch this video of Milton Friedman and quote it to the Leftists that detest it: http://barackosmodernlife.tumblr.com/
- Posted by Mike