Filed Friday, June 5. 2009
Now that the government is a major owner in GM, what would you like to see changed there? I said in Dec. 2008 that they should have let the market take its course and let GM go into bankruptcy back then. I wrote:
Nothing is going to change once the automakers get their bailout of billions of dollars. Once they get it, will that change the buying habits of the populace? Is it going to change your buying habits? Bailouts don’t create customers. They guarantee the status quo to those that should be making drastic changes. Taxpayers pumped more money into it to let it gasp a couple more months. In that time, great strides were made to come to some type of agreed-upon deal for its survival. It really didn’t come out well. The company is still shutting down plants. Those who thought they were immune to getting laid off are now trying to figure out how they’re going to get anywhere near the pay and benefits they got at GM. Many people will still lose jobs. Other union organizations that have used the automobile industry to base their salary and benefits demands on better see what’s happening. The “gold standard” of the private sector has become fool’s gold. Salary and benefits have gotten way out of hand. Deep cuts and layoffs have become common because the company can no longer deliver on what was promised. Do You Have Your New Car on Order? How many people are honestly going to go out and buy a GM car to support this renaissance? For that matter, how many people are going to go out and buy any new car to boost the economy? The economy is still wavering. The key element that’s missing to build a stronger economy is jobs. Without solid jobs that pay a decent wage, big-ticket items aren’t being purchased. Those who thought the consumer is going to buy our way out of this recession (or depression if you’re one who has lost a job) are completely wrong. Stimulus jobs? Those are all short-term jobs in more or less one-shot projects. What happens after the road is paved or the bridge is put up? Some analysts are starting to raise these questions as others still believe the stimulus will help turn around the automobile industry and everyone will start buying cars again. While car markets are stagnant, there are some interesting developments since GM declared bankruptcy. A Chinese company named Sichuan Tengzhong Heavy Industrial Machinery Co. is planning to buy Hummer. This might become a company to watch as China gets a direct foothold into the American car market as well as an established name within the international market. As for GM, it was also mentioned that they are trying to spin off Saturn and Saab. Would you go out and buy one right now? Transparent Urban Factories GM didn’t run an efficient company. When the comparisons are made, they made twice as many cars as Chrysler yet had four times as many employees. If any new plants were built in the United States today, they would look very different and employ a lot less people. The Volkswagen plant in Dresden, Germany is very different. It looks more like a modern art museum than it does a factory. You have to watch the video on it to get a full appreciation on what could be built in an urban setting. They began building Volkswagen Phaetons there and also build Bentley Continental Flying Spurs that share the same body frame. The Bentleys outsell the Phaetons even though they are double the price. Not many people want a $90,000 Volkswagen, but many more want a Bentley for $180,000. Go figure. Could GM build a factory like this in Chicago or Milwaukee? If I saw this being built in an urban setting and quality cars being manufactured, I would gain more faith in GM’s future and the residual benefits promised by the stimulus package. Carlinism: No matter what mileage you get, buying a used car that has already been built saves more energy than buying a new one. More energy is spent building the car rather than driving it. Not modified
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