Showing posts with label General Motors. Show all posts
Showing posts with label General Motors. Show all posts

01 June 2009

Michael Moore : Goodbye, GM

General Motors' Bob Lutz ("Global Warming is a crock of shit") and Gary Cowger with obsolete product.

Goodbye, GM
It is with sad irony that the company which invented 'planned obsolescence' -- the decision to build cars that would fall apart after a few years so that the customer would then have to buy a new one -- has now made itself obsolete.
By Michael Moore / The Rag Blog / June 1, 2009

I write this on the morning of the end of the once-mighty General Motors. By high noon, the President of the United States will have made it official: General Motors, as we know it, has been totaled.

As I sit here in GM's birthplace, Flint, Michigan, I am surrounded by friends and family who are filled with anxiety about what will happen to them and to the town. Forty percent of the homes and businesses in the city have been abandoned. Imagine what it would be like if you lived in a city where almost every other house is empty. What would be your state of mind?

It is with sad irony that the company which invented "planned obsolescence" -- the decision to build cars that would fall apart after a few years so that the customer would then have to buy a new one -- has now made itself obsolete. It refused to build automobiles that the public wanted, cars that got great gas mileage, were as safe as they could be, and were exceedingly comfortable to drive. Oh -- and that wouldn't start falling apart after two years.

GM stubbornly fought environmental and safety regulations. Its executives arrogantly ignored the "inferior" Japanese and German cars, cars which would become the gold standard for automobile buyers. And it was hell-bent on punishing its unionized workforce, lopping off thousands of workers for no good reason other than to "improve" the short-term bottom line of the corporation.

Beginning in the 1980s, when GM was posting record profits, it moved countless jobs to Mexico and elsewhere, thus destroying the lives of tens of thousands of hard-working Americans. The glaring stupidity of this policy was that, when they eliminated the income of so many middle class families, who did they think was going to be able to afford to buy their cars? History will record this blunder in the same way it now writes about the French building the Maginot Line or how the Romans cluelessly poisoned their own water system with lethal lead in its pipes.

So here we are at the deathbed of General Motors. The company's body not yet cold, and I find myself filled with -- dare I say it -- joy. It is not the joy of revenge against a corporation that ruined my hometown and brought misery, divorce, alcoholism, homelessness, physical and mental debilitation, and drug addiction to the people I grew up with. Nor do I, obviously, claim any joy in knowing that 21,000 more GM workers will be told that they, too, are without a job.

But you and I and the rest of America now own a car company! I know, I know -- who on earth wants to run a car company? Who among us wants $50 billion of our tax dollars thrown down the rat hole of still trying to save GM? Let's be clear about this: The only way to save GM is to kill GM. Saving our precious industrial infrastructure, though, is another matter and must be a top priority.

If we allow the shutting down and tearing down of our auto plants, we will sorely wish we still had them when we realize that those factories could have built the alternative energy systems we now desperately need. And when we realize that the best way to transport ourselves is on light rail and bullet trains and cleaner buses, how will we do this if we've allowed our industrial capacity and its skilled workforce to disappear?

Thus, as GM is "reorganized" by the federal government and the bankruptcy court, here is the plan I am asking President Obama to implement for the good of the workers, the GM communities, and the nation as a whole. Twenty years ago when I made "Roger & Me," I tried to warn people about what was ahead for General Motors. Had the power structure and the punditocracy listened, maybe much of this could have been avoided. Based on my track record, I request an honest and sincere consideration of the following suggestions:

1. Just as President Roosevelt did after the attack on Pearl Harbor, the President must tell the nation that we are at war and we must immediately convert our auto factories to factories that build mass transit vehicles and alternative energy devices. Within months in Flint in 1942, GM halted all car production and immediately used the assembly lines to build planes, tanks and machine guns. The conversion took no time at all. Everyone pitched in. The fascists were defeated.

We are now in a different kind of war -- a war that we have conducted against the ecosystem and has been conducted by our very own corporate leaders. This current war has two fronts. One is headquartered in Detroit. The products built in the factories of GM, Ford and Chrysler are some of the greatest weapons of mass destruction responsible for global warming and the melting of our polar icecaps. The things we call "cars" may have been fun to drive, but they are like a million daggers into the heart of Mother Nature. To continue to build them would only lead to the ruin of our species and much of the planet.

The other front in this war is being waged by the oil companies against you and me. They are committed to fleecing us whenever they can, and they have been reckless stewards of the finite amount of oil that is located under the surface of the earth. They know they are sucking it bone dry. And like the lumber tycoons of the early 20th century who didn't give a damn about future generations as they tore down every forest they could get their hands on, these oil barons are not telling the public what they know to be true -- that there are only a few more decades of useable oil on this planet. And as the end days of oil approach us, get ready for some very desperate people willing to kill and be killed just to get their hands on a gallon can of gasoline.

President Obama, now that he has taken control of GM, needs to convert the factories to new and needed uses immediately.

2. Don't put another $30 billion into the coffers of GM to build cars. Instead, use that money to keep the current workforce -- and most of those who have been laid off -- employed so that they can build the new modes of 21st century transportation. Let them start the conversion work now.

3. Announce that we will have bullet trains criss-crossing this country in the next five years. Japan is celebrating the 45th anniversary of its first bullet train this year. Now they have dozens of them. Average speed: 165 mph. Average time a train is late: under 30 seconds. They have had these high speed trains for nearly five decades -- and we don't even have one! The fact that the technology already exists for us to go from New York to L.A. in 17 hours by train, and that we haven't used it, is criminal. Let's hire the unemployed to build the new high speed lines all over the country. Chicago to Detroit in less than two hours. Miami to DC in under 7 hours. Denver to Dallas in five and a half. This can be done and done now.

4. Initiate a program to put light rail mass transit lines in all our large and medium-sized cities. Build those trains in the GM factories. And hire local people everywhere to install and run this system.

5. For people in rural areas not served by the train lines, have the GM plants produce energy efficient clean buses.

6. For the time being, have some factories build hybrid or all-electric cars (and batteries). It will take a few years for people to get used to the new ways to transport ourselves, so if we're going to have automobiles, let's have kinder, gentler ones. We can be building these next month (do not believe anyone who tells you it will take years to retool the factories -- that simply isn't true).

7. Transform some of the empty GM factories to facilities that build windmills, solar panels and other means of alternate forms of energy. We need tens of millions of solar panels right now. And there is an eager and skilled workforce who can build them.

8. Provide tax incentives for those who travel by hybrid car or bus or train. Also, credits for those who convert their home to alternative energy.

9. To help pay for this, impose a two-dollar tax on every gallon of gasoline. This will get people to switch to more energy saving cars or to use the new rail lines and rail cars the former autoworkers have built for them.

Well, that's a start. Please, please, please don't save GM so that a smaller version of it will simply do nothing more than build Chevys or Cadillacs. This is not a long-term solution. Don't throw bad money into a company whose tailpipe is malfunctioning, causing a strange odor to fill the car.

100 years ago this year, the founders of General Motors convinced the world to give up their horses and saddles and buggy whips to try a new form of transportation. Now it is time for us to say goodbye to the internal combustion engine. It seemed to serve us well for so long. We enjoyed the car hops at the A&W. We made out in the front -- and the back -- seat. We watched movies on large outdoor screens, went to the races at NASCAR tracks across the country, and saw the Pacific Ocean for the first time through the window down Hwy. 1. And now it's over. It's a new day and a new century. The President -- and the UAW -- must seize this moment and create a big batch of lemonade from this very sour and sad lemon.

Yesterday, the last surviving person from the Titanic disaster passed away. She escaped certain death that night and went on to live another 97 years.

So can we survive our own Titanic in all the Flint Michigans of this country. 60% of GM is ours. I think we can do a better job.

Yours,

Michael Moore

The Rag Blog

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08 December 2008

Here's a Plan : Nationalize General Motors


'The United States government should buy 51% of the GM stock and put a green Board of Directors in place.'
By Terry J. DuBose
/ The Rag Blog / December 8, 2008

See ‘Here’s a plan: Buy GM’ and ‘Nationalize GM’ by Dan Neil, Below.
Last Sunday I posted on DailyKos (and said to the Hippies of the Square Table), “Bailout the Automotive Industry? GM?” and added why I thought the United States government should buy 51% of the GM stock and put a green Board of Directors in place. Our local paper ran an editorial by Dan Neil of the Los Angeles Times that supported that same solution for GM.

He did not have the same reflection on the history of GM’s fight to destroy urban public rail transportation and killing the electric car that I have, but he comes to the same conclusion… nationalize GM.
Here’s a plan: Buy GM
By Dan Neil / December 7, 2008

LITTLE ROCK — At the moment, D.C. and Detroit are brooding on two equally unpleasant choices: Watch the American automakers auger in and take hundreds of thousands of jobs with them, or bail out these failed and incorrigible companies whose management so richly deserves whatever hell (flying coach?) awaits them.

Tops on the critics’ list of grievances is Detroit’s failure to anticipate the inevitable. Why didn’t these companies sufficiently invest in next-generation technology-fuel-efficient small cars, high-mileage hybrids, plug-ins and all-electric vehicles-that could help wean the U.S. off foreign oil and take the automobile out of the climate-change equation? As the auto executives again bring their begging bowl to Congress, a consensus is forming: No bailout unless Detroit buildsgreener cars.

From my perch, as someone who drives all of the Big Three’s North American product offerings, I think a lot of the anger is reflexive and misplaced. Detroit makes some amazing cars, and anyone who thinks otherwise should hold a Corvette ZR1 to his head and pull the trigger. The Ford F-150 pickup I drove last week flat-out humbles rivals from Toyota or Nissan. Considering that the domestic carmakers are shouldering titanic “legacy” costs -- it’s estimated that $2,000 in health care, pension and employee post-retirement benefits are baked into the price of every UAW-built vehicle -- just being competitive in any segment is a signal achievement.

Nonetheless, the question remains: What to do about the domestic automakers? My modest proposal: Nationalize GM...

Source / Los Angeles Times / Arkansas Online
The LA Times ran this editorial December 2nd.
Nationalize GM...
The federal government should buy GM. We can run it, then sell it at a profit once it recovers
.

By Dan Neil / December 2, 2008

At the moment, D.C. and Detroit are brooding on a Morton's Fork: Watch the American automakers auger in and take hundreds of thousands of jobs with them, or bail out these failed and incorrigible companies whose management so richly deserves whatever hell (flying coach?) awaits them.

Tops on the critics' list of grievances is Detroit's failure to anticipate the inevitable. Why didn't these companies sufficiently invest in next-generation technology -- fuel-efficient small cars, high-mileage hybrids, plug-ins and all-electric vehicles -- that could help wean the U.S. off foreign oil and take the automobile out of the climate-change equation? As the auto executives again bring their begging bowl to Congress, a consensus is forming: No bailout unless Detroit builds greener cars.

From my perch, as someone who drives all of the Big Three's North American product offerings, I think a lot of the anger is reflexive and misplaced. Detroit makes some amazing cars, and anyone who thinks otherwise should hold a Corvette ZR1 to his head and pull the trigger. The Ford F-150 pickup I drove last week flat-out humbles rivals from Toyota or Nissan. Considering that the domestic carmakers are shouldering titanic "legacy" costs -- it's estimated that $2,000 in healthcare, pension and employee post-retirement benefits are baked into the price of every UAW-built vehicle -- just being competitive in any segment is a signal achievement.

Nonetheless, the question remains: What to do about the domestic automakers? My modest proposal: Nationalize GM.

To be clear, I mean that the federal government should buy GM; forget rathole loans or nonvoting equity shares. The company's stockholder value has been essentially wiped out. The company's enterprise value -- the lock, stock and forklift price -- is about $32 billion; its total debt is $45 billion. Let's make GM an offer.

If you feel the gall of free-market ideology rising, consider that the measures being bruited about as preconditions for a bailout -- firing GM's top management; forcing a bankruptcy-like renegotiation of contracts with the UAW, suppliers and dealers (it has too many); and creating a czar of product development to force the building of green cars -- are nationalization in all but name. I say embrace it. GM-USA.

Here are the benefits of nationalization:

GM's fundamental problem is that it's too big -- and expecting it to fix itself in exchange for a $10-billion to $15-billion loan (its share of the vaunted $25-billion bailout) or magically right-size in Chapter 11 is foolhardy. It would take too long, cost too much and bankruptcy, should it come, would send customers running for the hills. Time is of the essence. Congress, writing a GM law and using federal power to abrogate contracts, could achieve at least some of these goals at a stroke.

GM is full of talent and potential. The company spent $8.1 billion on research and development last year, second only to Toyota. Of all the carmakers, GM is closest to commercializing a full-size, four-door, plug-in electric vehicle, the Volt, due in the fourth quarter of 2010. The Volt should travel about 40 miles in all-electric mode before requiring the services of its onboard, gas-powered generator. Many owners could go weeks before they used any gasoline. This is precisely the sort of car that environmental and energy security advocates have been clamoring for.

GM's business is growing in other parts of the world; it's only the North American operations that are killing the company. This is a corporation that had $181 billion in revenue and sold 9.4 million vehicles in 2007. To put it another way: GM, though distressed, looks like a good investment. Also, the federal government can sell the company -- at a profit -- once it's righted and sailing forward again.

GM is competing with companies that are quasi-national now. If you consider the advantages the government of Japan has bestowed on Toyota, Nissan and Honda -- in terms of healthcare and retirement benefits for its employees -- the unevenness of the field is clear. The same goes for most European companies, and the rising rivals in China will enjoy similar state-subsidized advantages.

The government can afford long-term planning. Many of GM's strategic missteps -- such as betting large on trucks and SUVs and not investing early in hybrid technology -- were the result of willful shortsightedness at the board level, responding to a financial market in which shareholders look for the quick return. Putting Uncle Sam in charge would fundamentally enlarge the return-on-investment horizon.

We need government-sized automotive help anyway. This country should be putting millions of plug-in hybrid and electric vehicles on the road. As far as I can tell, without big subsidies, there is no way in the near term to build these vehicles and make a reasonable profit, due to the stubbornly high cost of advanced batteries. Besides, if GM were owned by the government, it wouldn't spend time and money litigating and lobbying against clean-air and safety rules

Why not pick up Ford and Chrysler too? If Chrysler goes south, it's too small to drag down the rest of the domestic auto industry. Ford, which has been pursuing its "Way Forward" cost-cutting plan for more than two years, will probably survive the moment without government assistance, though it's going to be close.

To be sure, the yard marks of democratic capitalism have moved under us in recent months. Last week, the feds announced that the government would take a $20-billion stake in Citigroup and guarantee hundreds of billions in risky assets, a move that would have seemed pure socialism had we not lived through the last few months. Have we not in effect nationalized the mortgage-loan industry?

I say, let's avoid the euphemisms and have the courage of our supercharged Keynesian convictions. By nationalizing GM, we can aim the company's astonishing resources at one of the biggest public-policy problems we have: oil. Restructured and refocused, GM could build green vehicles by the millions in a few years and still have the capacity to build gasoline- and diesel-powered pickups (which we'll still need) ... and maybe even some Corvettes on the side.

[Dan Neil is the automotive critic for the Los Angeles Times.]

Source / Los Angeles Times
Also see If GM Fails, Then What? by Tom Petruno and John O'Dell / Los Angeles Times / April 23, 2006

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25 November 2008

Cauldron Bubble : Witch's Mix of Socialism and Capitalism


'Our goal is to grow the commons and regulate capitalism, not abolish it.'
By David P. Hamilton / The Rag Blog / November 25, 2008

From Friedman to Fidel, all agree.

No one seriously argues against some form of mixed economy, some combination of public/private sectors. Hence, the traditional argument between socialism and capitalism, framed as the conflict of opposites in which only one can survive, is arcane and obscuring.

Our goal is to grow the commons and regulate capitalism, not abolish it. Single payer universal health care would move the line between public and private considerably in favor of the commons. Another way to move the line would be partial government ownership of major elements of the economy, a common feature of European socialist government policy.

General Motors could be bought at this moment for under $10 billion. So what sense does it make to loan them $20 billion to stay afloat with just a few strings attached? The government should just buy controlling interest in it and convert its factories to the production of high speed trains, electric cars, wind turbines and other environmental products. Failing corporations could be bailed out of bankruptcy only by selling large chunks of their voting stock cheap to the government and having true representatives of the public and unions on their boards of directors.

In any period of revolutionary change, the most important factors are the objective conditions. The Russian Revolution happened as poorly equipped and badly led Russian armies where being massacred by invading Germans, their highly stratified economy was collapsing and the Tzar was being advised by a mad cleric. The subjective factors, e.g., the Bolshevik Party, were just those able to successfully surf the wave.

We are currently in the early stages of the most cataclysmic and punishing changes in the objective conditions that we have experienced in our lifetimes. The American model of laissez faire capitalism is belly up and the world financial system is in serious crisis. The environmental crisis is probably even worse as the climate necessary to sustain human life is rapidly deteriorating.

Obama’s administration is, therefore, likely to be much more “socialist” than you would expect, growing the commons, because that’s their only logical choice given the objective conditions. For example, how can an American auto company, which is required to contribute to its employee’s health care insurance costs, possibly for life ($1500 per car at Chrysler), compete with an auto company in a country that has government funded universal health care? Hence, we have to have government funded universal health care in order to have a competitive auto industry.

As Mike Davis points out in his article, “Note to Obama: 'Futurama' Has to Wait Its Turn,” posted on The Rag Blog on Nov. 22, “Of the larger rich, industrial countries, only the United States has yet to build a single mile of what constitutes the new global standard of transportation,” high speed rail. That too, has to be done. And the only checkbook in town big enough to do it is the government.

So have high expectations and keep demanding real change. But Obama meeting those demands will be more a function of his responding to drastic conditions in order that we might mutually survive.

The Rag Blog

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24 November 2008

Bailout : Idiots in Detroit Can't Even Get an Electric Car Right

Electric Edsel? GM unveils the Volt.

'At this point, since the Democrats in Congress and the White House are congenitally incapable of imagining a state-owned or partially state-owned enterprise, it would be better to just let GM go under.'
By Dave Lindorff / November 24, 2008

It’s a safe bet that within the next several months, Congress will vote to bail out General Motors. It will be a colossal boondoggle involving, probably, upwards of $50 billion when it’s through, and it will fail in the end.

The reason is before our eyes. This bloated megacorporation is being run by idiots.

For years, as it became evident to everyone that oil prices were going to soar because demand has been exceeding both production and supply and will continue to do so, it has been obvious that to succeed, a car company had to offer well-made cars that could demonstrate high gas mileage. GM, perhaps more than any other company, ignored that reality and has been paying the price, watching its share of the car market wither.

Now the company, worth about what Starbucks used to be worth, its stock now down to where it was in the depths of the Great Depression, has bet the farm on a new car, the Volt, which it promises will, two years from now, be able to go all of 40 miles purely on electric power. It will have a motor too, and not a small one, but rather one the size of what you get in a typical conventional Honda Civic—1.4 ltr. That motor wouldn’t drive the car; rather it would keep charging the Volt’s huge lithium-ion battery so the car could keep going for a few hundred miles.

Wow.

The management wizards at GM obviously don’t do much driving. If they did, and found themselves in typical commuter traffic, they’d see that maybe 90% of the cars, or more, have only one person in them. Occasionally, they’d see a passenger. On a typical 45-minute trip from the burbs into Philadelphia at rush hour, I can count the number of cars I see with three or more people in them on my fingers.

So why is GM making the Volt as a full-sized four or five-passenger car? That’s not where the market for an electric car is. What is needed is a two-seater little car.

Because GM is trying to make an electric family car, they’ve made something so big that, if they are lucky, they’ll be able to get it to 40 miles on electric drive only, but at a cost in excess of $40,000 and perhaps much higher, which will put it out of almost everyone’s reach. The car is destined to be a bust.

And yet, because President-elect Obama will want to win Michigan next election, and because Congressional Democrats don’t want to be seen as ignoring the fate of GM’s workers, GM will be bailed out and the Volt will be funded right through to its introduction and subsequent disaster in the market.

I’m not opposed to the idea of government support of industry, but that support has to involve government input or even control over decision-making.

Maybe GM wouldn’t make much profit on a little electric commuter car, but a little two-seater electric commuter car would have a huge impact on reducing the output of hydrocarbons into the atmosphere, particularly if efforts were made to increase solar and wind-generated electricity. A small electric commuter car would also massively reduce the amount of oil the US imports, making a major contribution to reducing the nation’s trade deficit. Those are results that justify a bailout.

Making an overpriced electric family car is not.

At this point, since the Democrats in Congress and the White House are congenitally incapable of imagining a state-owned or partially state-owned enterprise, it would be better to just let GM go under, and maybe Ford too, if it comes to that (another stupid company). The pieces could be sold off, and allowed to sink and swim on their own. Maybe one of those smaller, more entrepreneurial fragments would see the wisdom of developing what the public really needs.

The truth is that the entrepreneurs over at Tesla, a star-up in California, have already made that car—a high-performance two-seater commuter car that can go 200 miles on a charge and that doesn’t need an auxiliary engine. Their problem is that small size and too little capital have forced them to pimp it up into a high-priced luxury show-off item for rich people costing $100,000. If they were to team up with a GM spin-off—say Saturn—they could make a stripped-down version of that baby and crank out 100,000 of them to start at a price ordinary people could afford.

Meanwhile, regarding those poor autoworkers, they have a legitimate complaint. While Republicans like to blame the auto industry’s problems on them, saying they have demanded too much pay, and too much in healthcare benefits, it’s not their fault that GM and Ford executives have been stupid and greedy and short-sighted (besides, the high wages and benefits that the United Auto Workers won over decades of bitter struggle helped to set standards that raised the wages of all workers across the nation). But let’s do the math. There are about 125,000 unionized hourly workers at the two companies. For a lousy $8.7 billion, every one of those people could receive a $70,000 buyout from Congress. Double that if you want to give them two years to adjust and find new work at an electric car plant or something else. That would cost $17 billion, or less than half of what the doomed bailout of GM is going to end up costing.

And of course, with the rest of us suffering from the massive mismanagement of the nation’s economy by its corporate leaders and their puppets in Washington, there’s no reason why our tax dollars should be subsidizing those particular workers tat that high a level. After all, companies are failing and will be failing all over the place, without such largesse. Besides, if the bailout goes ahead, all it will do is delay the time these workers will be out on the street anyhow.

The point is, however, there are more cost-effective ways to help out workers in failing businesses than to have the government simply subsidize the continued operation of enterprises that have been destroyed by management. In truth, all the talk in congress and in the Obama camp about rescuing jobs is just a cover for bailouts that are really aimed at rescuing managers and investors, not workers.

[Dave Lindorff is a Philadelphia-based journalist and columnist. His latest book is “The Case for Impeachment” (St. Martin’s Press, 2006 and now available in paperback edition.) His work is available at www.thiscantbehappening.net. ]

Source / counterpunch

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