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Old 03-31-2009, 01:33 AM   #21
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I'll probably get flamed for this one...but the devil's advocate in me came out.
The headline could just as easily be written...
"GM CEO performance forces US Govt to use taxpayers' money to prevent massive unemployment of American w*rkers"
Go ahead and throw the rotten tomatoes.
I actually wish the GM Board of Directors had performed this action. But since they didn't, somebody had to be the bad guy.
No... I will not flame you... I do not believe in doing that like certain others feel the need to here. This is a place to exchange ideas and maybe learn something in the process.

I think your post poses an important question of who is really working for whom? I remember listening tonight to an man on the news that works in a factory that makes bolts. The man has done that job there for 20+ years and knows nothing else. Obviouly he fears for his job, and I can understand that. But that would beg the question.... why did this man not choose to learn how to do anything else in that 20 years. From my own frame of reference (sorry it's the only one I have), I would be terrified to let my skills atrophe to the point that if I lost my job I would be unemployable anywhere else.

I think a GM bankruptcy will be horrible for the country... but I think a bailout will be far worse. I do not think if GM goes bankrupt that there will suddenly be millions unemplyed tomorrow. I think it is far more likely that another auto maker would come in and buy them at fire sale type prices. Some may have to be let go.... but I would think many could continue on there.. if not at the same salary they have now.

This is compared to the current deal where the govt is giving them more money to make some sort of change that no one is really even sure what they are doing, if it will work, etc... etc...

I may be completely wrong.... but I have not heard a compelling argument about how what Obama is doing is not just deferring this problem down another 10 years or so into the future.
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Old 03-31-2009, 01:36 AM   #22
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Great comment just now by Stuart Varney on Fox News. "If they (the government)can fire the CEO of the company, why can't or shouldn't they fire the president of the UAW. The union hasn't given any ground on legacy cost such as health care". Good point. Management took a hit--why shouldn't the union.
Where is Obama's support base? Unions, or mamagement of manufacturing industries?

The unions know they have a Daddy in DC. If he lets them down, he is a short-timer.

Ha
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Old 03-31-2009, 09:26 AM   #23
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Where is Obama's support base? Unions, or mamagement of manufacturing industries?

The unions know they have a Daddy in DC. If he lets them down, he is a short-timer.

Ha
I'll agree that union support was a big deal in Michigan and Ohio, two important states. But, it's interesting to note that Obama only got 59% of the union-member votes (compared to 51% of non-union). If you remember that only 12% of the voters were union members, and less than 2% were manufacturing union members, the raw numbers were pretty small.

United States presidential election, 2008 - Wikipedia, the free encyclopedia
Table 3. Union affiliation of employed wage and salary workers by occupation and industry

I think this as much about "supporting the sector" as about "supporting the union". Obama is thinking about all the people who work for suppliers and secondary jobs - they aren't union, and may even resent the unions, but their jobs are dependent on the auto industry.
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Old 03-31-2009, 09:54 AM   #24
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Ford is sitting pretty, no doubt. When the govt makes Chrysler and GM make all sorts of green cars at premium prices that noone wants to buy, Ford can make more "normal" vehicles and make a killing. Plus, this helps Hyundai, Nissan, Honda, and Toyota. For every VOLT sold, There will be several thousand Accords or Camrys sold......
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Old 03-31-2009, 10:05 AM   #25
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I'll agree that union support was a big deal in Michigan and Ohio, two important states. But, it's interesting to note that Obama only got 59% of the union-member votes (compared to 51% of non-union). If you remember that only 12% of the voters were union members, and less than 2% were manufacturing union members, the raw numbers were pretty small.
I think the campaign money from organized labor was far more important than the number of raw votes from their members. Particulalry in the days before President Obama's grass-roots fundraising took off, the union support enabled him to win some vital first battles and gain critical mass. I doubt that he has forgotten this. I think he also knows that he won't be able to count on that same degree of grassroots fervor/love/excitement 3 years from now--the bloom will be off the rose, and we'll be back to machine style politics. He'll need solid support from groups that he has supported--mutual back-scratching. If anything, it will be his opponents running an insurgent campaign.

So, again, why would the government force the resignation of GM's CEO immediately before the bankruptcy proceedings begin?
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Old 03-31-2009, 01:38 PM   #26
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If the government's going to start telling business how to run, then how about this one?

IBM files for patent on offshoring jobs - recordonline.com - The Times Herald Record

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As IBM was firing thousands of American workers last week, the U.S. Patent and Trademark Office published Big Blue's application to copyright a computerized system that calculates how to offshore jobs while maximizing government tax breaks.


Update: IBM withdraws its application, calling it an error.

They said the application was in "error" and they withdrew it. Was it an error, or did they have to perform damage control after something they didn't want the public to know got leaked out?
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Old 03-31-2009, 01:42 PM   #27
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They said the application was in "error" and they withdrew it. Was it an error, or did they have to perform damage control after something they didn't want the public to know got leaked out?
How could it be an error? The monkies were all typing away at their keyboards and lo and behold out came a patent application, and then one of those darn monkies submitted it?

Ha
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Old 03-31-2009, 01:52 PM   #28
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How could it be an error? The monkies were all typing away at their keyboards and lo and behold out came a patent application, and then one of those darn monkies submitted it?
Yeah, I know -- I was being facetious. Bottom line, I think, is that they were hoping to do this quietly and had to perform damage control when the press got it.
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Old 03-31-2009, 01:53 PM   #29
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I live in Iowa, so I think of the "early days" of the campaign as being here and NH. My recollection is that union members were more for Edwards than either Clinton or Obama. Here's one story: Obama-labor relationship tense in Iowa - Ben Smith - Politico.com
I'll agree that in the next election, he's going to want the whole Dem coalition.

Why fire Waggoner now? My guess is that
(1) he said "bankruptcy is not an option" too many times,
(2) he couldn't negotiate a deal between the union and the bondholders that had them both giving up enough to make the company work, and
(3) he was a symbol of entrenched management that "doesn't get it", that Obama couldn't risk after the AIG bonus fiasco.

If I'm Obama, I'm thinking that it's time to start talking about how much the bondholders are going to give up. I noticed that they got mentioned for the first time yesterday.
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Old 03-31-2009, 01:55 PM   #30
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If I'm Obama, I'm thinking that it's time to start talking about how much the bondholders are going to give up. I noticed that they got mentioned for the first time yesterday.
I'm sensing that the bondholders want the union to give, and the union wants the bondholders to give, and that if I'm Obama, I try to get them locked into a room to work out a "GM viability" deal requiring both of them to share sacrifice to avoid a bankruptcy which (except for a few speculative bondholders) almost none of them want.

On one hand, I suspect Obama doesn't want to cross the unions because they were such a strong show of support for him in the election, but on the other hand this could be an "only Nixon could go to China" moment.
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Old 03-31-2009, 05:48 PM   #31
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I'm willing to wait & see how the GM / Chrysler thing works out before casting stones. Folks here might remember that it was the Republican President and Treasury that essentially bailed out GM & Chrysler. Now we have to live with that decision . . . Comrades.

For what it's worth, most of what is being said by the administration is constructive. They're essentially working through a restructuring of the auto's liabilities either in bankruptcy or out. The Union's feet is being held to the fire by bondholders, who ultimately have veto power over whether a deal gets cut or we go to bankruptcy court. Ultimately I think this ends up as a pre-packaged bankruptcy just to use the court's power to compel compliance.

Certainly there is the risk of ongoing political meddling in the Auto industry, which would be bad. But if they can pull off a pre-pack this year that would likely be a stunningly positive development versus a messy and disruptive chapter 11 (7?) that would drag on for several years.

Lets just hope the subsidies end when the "restructuring" is done.
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Old 03-31-2009, 06:45 PM   #32
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Lets just hope the subsidies end when the "restructuring" is done.
Unlikely, in my opinion. The subsidies and taxpayer-funded "incentives" will be baked into the mix. There's no way the government is just going to stand back and let the players/courts do their thing. Nope, those legislators and Exec Branch automotive experts will be in there up to their elbows. For example, how likely is it than the bankruptcy will result in more GM production being moved overseas (where it is actually profitable) if the government is involved? What carrots/sticks will be provided to assure a "proper" outcome? ("Sure, have your employees vote. But decertification of the unions will make it very hard to get any more aid to you guys. Also, the new GM must still pay prevailing union wage wherever it operates if any GM branches/subsidiaries want to do business with the government").
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Old 03-31-2009, 06:49 PM   #33
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Originally Posted by freebird5825 View Post
I'll probably get flamed for this one...but the devil's advocate in me came out.
The headline could just as easily be written...
"GM CEO performance forces US Govt to use taxpayers' money to prevent massive unemployment of American w*rkers"
Go ahead and throw the rotten tomatoes.
I actually wish the GM Board of Directors had performed this action. But since they didn't, somebody had to be the bad guy.
Not only that - when we get those SOB's into bankruptcy - then the court takes the heat when debt gets written down, pension and health benefits get savaged and other yucky things take place.

Us shareholders(if only via mutual funds) and we voters can fein innocence.

And if yer a dang foreigner who owns American mutual funds/stock - you're guilty also.

Ok - have I left anybody out?



heh heh heh - so do I keep my Chevy cause it will a valuable antique someday - or what? Soap by any other name is still fun.
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Old 03-31-2009, 07:20 PM   #34
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Sounds like GM and Ford are following Hyundai's lead in offering "layoff protection" for people who buy a car in the next few weeks, offering to make payments for a few months for those terminated without cause.

Time will tell whether this is a marketing boondoggle or a stroke of genius.
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Old 03-31-2009, 08:21 PM   #35
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Unlikely, in my opinion.
Mine too.

But I'm at least willing to wait to see it happen before I criticize it.

In the meantime it appears to me that the Administration is being tougher and more thoughtful in its approach with GM & Chrysler than anyone had any reason to believe possible. It looks likely that GM will end up in bankruptcy and Chrysler will either get merged with a foreign manufacturer or end up in bankruptcy too. Who would have put money on those outcomes on November 4?
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Old 04-01-2009, 08:57 AM   #36
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Such melodrama...

This morn on Squawk, both Wilbur Ross and Mike Jackson, two gents who probably know a bit more about the auto bidness than most or all of us, seemed to be supportive of firing Wagoner, and thought his replacement was a good choice. Granted, both gents have skin in the game, but it's refreshing to see folks like Buffett, Ross, Welch, etc. talk in a business-like fashion about how these issues should be addressed, rather than throwing an idealogical tantrum...
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Old 04-01-2009, 09:44 AM   #37
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Wagoner has said the biggest mistake he ever made as chief executive was killing the EV1, GM's revolutionary electric car...

I wonder if things would be any different now had they hadn't done that.
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Old 04-01-2009, 10:31 AM   #38
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In my mind that was a sypmtom of a bigger problem. That being the attitude towards short term gain over long term health of the company.
If the only thing change was that they continued to develope the EV1, without changing the more fundamental issues, no, I don't think it would have changed anything (except I would be a proud owner of an EV3 ).
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Old 04-01-2009, 06:23 PM   #39
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Such melodrama...

This morn on Squawk, both Wilbur Ross and Mike Jackson, two gents who probably know a bit more about the auto bidness than most or all of us, seemed to be supportive of firing Wagoner, and thought his replacement was a good choice. Granted, both gents have skin in the game, but it's refreshing to see folks like Buffett, Ross, Welch, etc. talk in a business-like fashion about how these issues should be addressed, rather than throwing an idealogical tantrum...
Yup. When Wagoner took over GM's stock traded at $70. His company continued to lose money even when global automobile sales hit record levels. The fact he wasn't shown the door earlier is a testament to our broken corporate governance.

Besides, the stories coming out overnight said that Wagoner was pushed out because he was resisting bankruptcy at all costs. Today the Administration said the 60 day "grace period" was firm because they weren't going to use taxpayer dollars to repay a June bond maturity.

You'd think the folks who've been advocating a GM bankruptcy all along would be cheering these developments. Instead they are crying foul. I guess it just shows that they'd rather twist their principals than support anything this Administration is doing. Sad really.
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Old 04-01-2009, 07:39 PM   #40
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You'd think the folks who've been advocating a GM bankruptcy all along would be cheering these developments. Instead they are crying foul. I guess it just shows that they'd rather twist their principals than support anything this Administration is doing. Sad really.
If I may be so bold as to speak for the anonymous bunch at which you are casting aspersions: I don't think many are gleeful about a GM bankruptcy. But, given the state of the company and the mess that has been created by all parties (government, the union, government, GM management, and the government), bankruptcy is likely the only way out. As you yourself pointed out, it was President Bush (and Congress) who started this bailout, so I don't know why those critical of the bailout would necessarily be seen as criticizing our present President (at least on this account). I'm hoping the President's admirer's will maintain their objectivity and not see every criticism of policy as a criticism of their guy. It would have been better to be at this stage (the threshold of the bankruptcy process) several months ago. The sooner this is over, the sooner the company and its employees can move on. Uncertainty is bad for business and investment. Bankruptcy brings certainty, the never ending saga of government handouts/reprieves/challenges/public castigations/political posturing does not. The violation of "principal" that is troubling centers on who approached Wagoner for his resignation (should have been the folks he works for, not a government functionary) and the likely reason this was done--to pave the way for a giveway to certain entities now in political favor. That's the part that is "very sad."
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