GM's 'Time Is Very Short'

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21

Agapilot,

Good for you! Sounds like there is good opportunity ahead for you so you will do quite well in the near term. In turn this becomes a real benefit for your clients. This is good example how how value can be created even when times are tough and provides an alternative to farming. There will be many other skills needed like these in the local communities we are helping/intending to prepare since we don’t just need food. I’ve been also thinking about bio-diesel plants as an integrated part of a farming community (oil seeds are grown, some oil returns to the farmer and the excess is where the value is created for the community, and even the waste can be used for livestock). Another idea is people that use their skills to provide energy efficiency in homes.

Mike makes a good point that over the medium term we are going to have some significant issues from Peak Oil so you may want to consider how this could affect you. Electric cars are part of the solution and while we can see the current and near term demand building it will take a lot of investment to get this industry rolling. Fortunately since the large car manufacturers abandoned the scene a few years ago (See the movie "Who Killed The Electric Car" as mentioned by Davos) there are some prospects that have made several years of progress (Tesla and ZENN cars and Aptera are three examples). This gives some hope in the long term but leaves a painful transition in the medium term.

Lessening our dependence on fossil fuels in a big way is part of the solution to the problems ahead.

Well done Mike in having been able to give up your car. Can you share with us what alternative transportation methods you are using?

All the best,

James

 

22

If cars were dinosaurs, we’d have plenty of fossil fuels from their decaying scraps >_>

LOL…! You do realise that oil comes from marine animals and not dinosaurs…

Mike.

23

[quote=James705ca][quote=agapilot]
Mike makes a good point that over the medium term we are going to have some significant issues from Peak Oil so you may want to consider how this could affect you. Electric cars are part of the solution and while we can see the current and near term demand building it will take a lot of investment to get this industry rolling. Fortunately since the large car manufacturers abandoned the scene a few years ago (See the movie "Who Killed The Electric Car" as mentioned by Davos) there are some prospects that have made several years of progress (Tesla and ZENN cars and Aptera are three examples). This gives some hope in the long term but leaves a painful transition in the medium term.

Lessening our dependence on fossil fuels in a big way is part of the solution to the problems ahead.

Well done Mike in having been able to give up your car. Can you share with us what alternative transportation methods you are using?

All the best,

James

 

[/quote][/quote]

Sorry James, but electric car fleets will never happen… it’s all to do with limits to growth, there are simply NOT the resources to make all the batteries needed to keep the billion cars running around on the planet right now.

Sure, you could build SOME, but only because with fossil fuels you can do anything. Even build electric cars. It takes 90 to 200 barrels of oil to build a car (depending on whether it’s a Prius or a Hummer). The roads are paved with oil too.

My solutions? I stay home! Oh and I own a carbon fiber road bike that I can do 40 miles on a stretch, even at my age (56)

Mike.

24

sbarbour

I do, however, have serious problems with rescuing the company
called GM. My preference would be to destroy GM confiscate its
factories, and capitalize two to three new car companies to replace GM.

Confiscate factories and essentially give them to other companies? Oh what the hell. America has gone from a Constitutional Repubical to a Banana Republic anyway. I’m always struck by the vicarious desires of so many to rule the world at gunpoint. I picked one example, but it’s so common.

As a side note, our would-be dictator fails to notice that the confiscated factories would still remain idle because demand for cars has dropped everywhere. The companies on the receiving end would be saddled with white elephants if they were stupid enough to accept the gift. Then we’d have a couple more bankrupt auto companies.

GM should be allowed to fail. Companies of any kind may wish to bid for the properties at auction if they think it is in their interest. That’s how it’s done in a Constitutional Republic.

25

[quote]
Confiscate factories and essentially give them to other companies? [/quote]

hewittr, what do you think bankruptcy does?

This is just a formation of a new company, operating on completely free market principles (the Government is an investor), using the resources of a company that failed.

Our governmental system has nothing to do with free market dynamics. It never has, and it never will. This wouldn’t even be the first time we’ve done something like this.

To be frank, hewittr, do you even know where companies came from?

[quote]As a side note, our would-be dictator fails to notice that the
confiscated factories would still remain idle because demand for cars
has dropped everywhere.[/quote]

There’s lots of ways they could be put to use. Cars need not be the only thing. Besides, these resources would be idle anyway, hewittr. Either that or hawked for a dime over sea, or scrapped to save (or recover) a few pennies.

Thats why you create new companies from thin air, hewittr. Issue solved.

At which point, you’d replace them again. As many times as it takes. The goal is merely to make sure the government keeps recovering its seed money in the long run, and maybe makes a moderate profit. Once some enterprising individual starts making head way, the government retracts itself.

Hell, its easy enough to write the laws so that government has no choice but to retract itself – and still get its money back. That way not even you need fear persistent socialism.

[quote]
GM should be allowed to fail. [/quote]

Agreed. I in essence said that already. I merely declared that there are strong and strategic reasons to preserve the manufacturing capability. Waste not, want not.

And with what money shall they bid, hewittr? Even in good times most of this stuff would end up obliterated or sold for dimes over sea. How do you think the US lost all its manufacturing capacity?

Someday hewittr, you’ll realize that being a Constitutional Republic has absolutely nothing to do with the underlying economic system.

–

Steve

26

[quote=Damnthematrix
All the best,

James ]

Sorry James, but electric car fleets will never happen… it’s all to do with limits to growth, there are simply NOT the resources to make all the batteries needed to keep the billion cars running around on the planet right now.

Sure, you could build SOME, but only because with fossil fuels you can do anything. Even build electric cars. It takes 90 to 200 barrels of oil to build a car (depending on whether it’s a Prius or a Hummer). The roads are paved with oil too.

[/quote]

Thanks Mike,

The book Natural Capitalism didn’t pick up on this fact - perhaps because they weren’t conscious of peak oil at the time when the book was written (2000). However they did pick up that "hypercars" as they called them weren’t the solution anyways because no one can move around when there are another billion cars in front of your front bumper. Their focus then turned to how to eliminate the hypercars - which involved rethinking mass transit ala Curitiba, Brazil - and which required a completely different political thought from a non-political but entirely capable person.

Peak oil doesn’t mean the end of oil. But it sure does mean an accelerated pace of change in a completely new direction. I’m hopeful of that future direction. Since I’m still an optimist I’m probably just not as well informed as you are!

By the way, I don’t think that our current problems are because we’ve run into limits to growth yet. I think we’ve run into a mathematical problem in the monetary system that is causing deflation of the money supply and the monetary system doesn’t work well in reverse. I suppose you could argue that this is a limit to growth but I’m not referring to a physical limit to growth. I believe that we have a structural problem in the economy (housing bubble) that isn’t being fixed to any great extent and that the relationship between income/assets vs. interest/debt is way out of wack (credit crisis) [and I’m seriously downplaying the extent of the problem here].

I do wish I had your five year head start!

All the best,

James

27

I honestly don’t think there’s such a thing as too big to fail despite our government’s protestations.
The whole auto industry is screwed and a lot of people are going to lose their jobs - that’s the bottom line. It matters little whether those losses come from 1 company or many.
Also, US cars apparently suck - the consumer has spoken - either that or GM doesn’t know how to run it’s business. Show me the logic of propping up a company that either provides a product that is not sought after or is incompetent.
Actually it’s not really that simple. The root cause is that people were fooled into buying more cars than they could actually afford - thus GM was mislead into expanding inappropriately. How? Government "stimulation." The same kind of crap that’s being implemented right now to keep the game going. The Fed lowered interest rates to absurd levels that it felt were "correct" and, next thing you know, banks are dying to lend to anyone with a pulse. New financial lending entities are popping up right and left to do the same.
The root cause is the Fed.

28

as gm goes so goes the nation …oh my god i am really getting concerned now.

obama and the democratic congress will spray as much money as they can to keep gm a zombie.

as a multinational corporation having had it’s fingers in the affairs of other countries to the detriment of the populace i just see it as karma. it is the only immutable law in the universe.

as for professor barbour’s contention about keeping gm around for national security in case of war it is laughable on the face of it , on the backside of it and just about anyway you look at it.

first gm has no loyalty to the concept we euphemistically call the ol us of a.

second we can get the stuff we need from china cheaper and much faster.

third is a little example of the creative, futuristic thinking of the lack of braintrust at ol gm.

in the 80’s gm developed rare earth magnets. a very significant breakthrough. they are usd in all kinds of nifty things like missile guidance systems, computers etc… gm wanted in on the ground floor in china to sell it’s vehicles there. so a little quid pro quo. deng xioa peng’s daughter was dispatched to acquire the technology. gm gave away the technology which is fairly crucial to our national defense for a new market.

80% of the rare earth for the magnets comes from china.

oh maybe some one thinks we might go to war with china. forget it. they already own us and they really would not want to damage any of their assets. they are a lot smarter than we are. they just bought us with our own money.

29

Yea I will, when they are at like 2-3 cents. Thats a dead cat 3-4 bagger for sure.

 

 

 

 

 

 

30

I say, let GM and Ford BURN-

 

Nothing but a bunch of greedy capitalists running these companies, capitalizing on the greed of America, selling absurd cars that consume beyond imagination. Foreign auto manufacturers did what they always do. Smaller, more affordable and better economy cars. GM and FORD just followed Americans greed for bigger and better, and dropped the ball totally. You can watch the foreign car manufacturers. If they are in trouble, the trouble for GM and FORD is 100 times worse, mark my words.

 

 

 

 

 

 

31

[quote=James705ca][quote=Damnthematrix
By the way, I don’t think that our current problems are because we’ve run into limits to growth yet. I think we’ve run into a mathematical problem in the monetary system that is causing deflation of the money supply and the monetary system doesn’t work well in reverse. I suppose you could argue that this is a limit to growth but I’m not referring to a physical limit to growth. I believe that we have a structural problem in the economy (housing bubble) that isn’t being fixed to any great extent and that the relationship between income/assets vs. interest/debt is way out of wack (credit crisis) [and I’m seriously downplaying the extent of the problem here].

I do wish I had your five year head start!

All the best,

James

[/quote][/quote]

James, James, James… it works like this:

Debt has grown exponentially to such an extreme that it is now measured in hundreds of trillions. With me? To pay this debt back we need more exponential growth to generate more wealth (debt, really…) to pay the old debt… the ultimate vicious circle.

Trouble is, you can’t have exponential economic growth unless you have exponential growth in ever cheaper, ever denser energy sources. Oil, and gas.

Party’s over.

Mike.

32

A war with China will never happen as long as America is the largest consumer of Chinese goods. Do you know when I started getting concerned? Let’s all hop in thewayback machine to the mid 80’s, when we still made our TV sets here, and Japan really was starting to come on. Within 5 years no more TV’s were made here. Why? We invent it, they manufacture it better. Well, maybe not better as in better product. Cheaper and faster would be a good description. Although Japan electronics quality is very good. But wait, another company is coming into view, glorious China!

Back to the present. Everybody is all up in the air about GM and Ford, and this has been going on for decades. In fact, GM and Ford should have gone away a long time ago.

Let’s move thewayback machine forward about 15 years, shall we? Oh my! Boeing is gone! No cars are made here at all! No manufacturing whatsoever, except for small, useless components we need locally. China is making all our cars and Jets! China is making EVERYTHING!

What ware we making? Nothing now. We just service the world, kind of like a big Disneyworld for all the other countries. Oh, and we make entertainment, a valued commodity in 2024. In fact, we are all entertainers for the world. We need to service all those tourists who come to visit the shell of what we were. We need to flip the burgers and open the Caviar for our Chinese tourists. Make the beds up in the hotels for our India tourists. Clean the houses of our European guests. THAT is what we will be. A giant service nation for other countries, like a nation of uneducated, dumbed down court jesters dancing around for the rest of the worlds entertainment and the remaining American uber rich.

What is actually made in America? You tell me? Hallmark cards, some stereo equipment, Monster cables, toys, soap, household cleaning chemicals, beauty products. Think about this the next time you visit WalMart or Target.

Do I blame the American consumer? well no I don’t because It’s impossible not to buy cheaply made goods in your price range, considering they are all you can afford on a tight budget. The biggest part of the consumer base in America is the poor, and its all they can afford. Most American’s are pushed into a box and have few choices.

Just wait until we see $4000 Chinese cars in America sold at the new car showrooms in Walmart and Target, and then watch in amazement as the Japanese and Korean manufacturers get squeezed hard and put out of business, ghosts just like GM and Ford. Memories of the past.
The only thing Chinese or foreign goods do is load up our landfills quicker, because the acceleration of these cheap disposable goods increases dramatically.

When I was a kid, a TV was forever. We had one for like 9 years. Now you buy a new one every 2 years if not less. Same way with computers, music players, stereos, cell phones and many other items. Most consumer items are going the way of use and dispose, kinda like a cheap hairdryer. Cars will be in this position as well, it’s only a matter of time.

I will be a bit nervous getting on a Chinese made aircraft knowing they can’t make milk right. Wow, a typical Boeing aircraft has well over 5 million parts. That’s a lot of chances for failure. Ni Hao, you are now free to roam the cabin.

I hope the drinks are not too expensive, because I am going to get hammered into a semi coma on alcohol and Xanax in the airport before I get on the Chinese made jet for the first time.

 

 

 

 

 

 

 

 

 

 

 

33

Srbarbour

what do you think bankruptcy does?

When a company goes out of business, it auctions its assets to the highest bidders and the procedes are returned to the owners. By this means, the assets will go where they are the most useful and the owners at least get a chance to cut their losses.

This is just a formation of a new company, operating on completely free market principles (the Government is an investor), using the resources of a company that failed.

Not so! Governments do not invest; investing is a voluntary action. Rather, governments consume what they confiscate at the expense of taxpayers. There is nothing free about robbing Peter to pay Paul or keeping the booty to spend as they see fit.

Our governmental system has nothing to do with free market dynamics. It never has, and it never will. This wouldn’t even be the first time we’ve done something like this.

On the contrary. There is no free market anywhere in the world. Government interferes in the process in more was than I can count. Right off the top, government consumes more than what the private market can produce, which is why it is so hopelessly in debt.

To be frank, hewittr, do you even know where companies came from?

All companies come from the right to contract where investors pool their money into a single organization. Government is not a business. It operates with the same scruples as a crime syndicate.

At which point, you’d replace them again. As many times as it takes.

In the private market, losses are limited to employees and investors. Govrnments subsidize failing businessess from taxpayers. You are mirroring the Soviet mentality. They built factories that made things nobody wanted.

And with what money shall they bid, hewittr? Even in good times most of this stuff would end up obliterated or sold for dimes over sea. How do you think the US lost all its manufacturing capacity?

The problem is not for lack of money. The problem is a matter of price. If there are no bidders, so be it. The US drove manufacturing out of this country through excessive regulation and by creating a market the placed consumption over production.

Someday hewittr, you’ll realize that being a Constitutional Republic has absolutely nothing to do with the underlying economic system.

Wrong again. A Constitutional Republic protects property rights and the right to contract. Without those two basic rights, no investor is going to be foolish to risk his personal wealth. That’s where nationalization comes in. Which is why I say that under the Bush Regime, America crossed the Rubicon into a Banana Republic. If you think this economy is bad now, you ain’t see nothing yet. Every action government takes to restore the economy will have worse consequences. It happened in the 30s and it’s going to happen again because the wrong lessons were drawn from Roosevelt’s and Hoover’s fiasco.

34

Interesting conversation. I especially enjoy the discussion about the economy vs. the government and the roles of both. I don’t mean for this to seem like I am picking on specifics, but only utilizing some statements to make a point.

"A Constitutional Republic protects property rights and the right to contract. Without those two basic rights, no investor is going to be foolish to risk his personal wealth." - I am not making a statement against these rights, but there is no specific limit to what should or should not be included in this governmental system. The constitutional limiting of government power over people is a defining trait, but again not restricted to specific safeguards. You are indicating that the governmental system sets that laws/rules for society and therefore the economy. The existence of government for defense and protection of property rights is setting rules and in this context, would it not be appropriate for limited governmental rules as to set the standard for "free markets." Basic local barter markets will develop under any political system, however, it is the existence of the larger societal structure of governance that enables "free markets" to develop and exist. If this is not so, then government can be abolished.

Further, the constitution also establishes citizen/civil rights; this in itself effects free markets! If the free market is so perfect, and all that is needed is protection of property rights and the right to contract, then why establish and protect the basic rights of individuals…oh yeah, because the market does not do this!

I mentioned that the constitutionally limited power of government over individuals is the main defining trait of this system of governance. Wealth begets power, especially wealth accumulated over generations. SO, the protection of personal property, and therefore personal wealth, will necessarily lead to polarized wealth disparities, which undermines the very bedrock of an egalitarian democracy. THIS IS THE INHERENT CONTRADICTION, SOME WOULD SAY PROBLEM, OF COMBINING DEMOCRACY WITH CAPITALISM!

35

AJ

Let me say this in the beginnig. There is no such thing as a perfect free market or any other kind of market in the real world. The concept of a free market is a deductive logical tool. It assumes that individuals are the best judge of their needs and wants, that if left alone to buy and sell voluntarily, the market will utilize limited resources to the maximum efficiency for all. When government interfers with those decisions, it thwarts the goals of individuals causing misallocation of resources. Those misallocations can’t be seen until they build up to the point of breakdown.

Governments cannot create wealth, but they can nurture the production of wealth. The ideal government would stay out of market decisions and act to protect person, liberty and property, and arbitrate contract disputes. The mortal problem is that this country and every other country in the world are the worst violaters of life, liberty and property. No country can become wealthy when citizen steals from citizen, whether privately or through government.

The ultimate goal of a viable market is to serve consumers, not business. The paradox is that business is afraid of consumers and consumers are afraid of business. So we are faced with demand for government interference from both sides. Business fear of consumers is well deserved. Consumers have no loyalty, they are whimsical and hard to predict. Government protection makes consumers more predictable by limiting their choices. Consumer fear of business is not well founded. Unfortunately they are more afraid of business than government when it should be the other way around.

I mentioned that the constitutionally limited power of government over individuals is the main defining trait of this system of governance. Wealth begets power, especially wealth accumulated over generations. SO, the protection of personal property, and therefore personal wealth, will necessarily lead to polarized wealth disparities, which undermines the very bedrock of an egalitarian democracy. THIS IS THE INHERENT CONTRADICTION, SOME WOULD SAY PROBLEM, OF COMBINING DEMOCRACY WITH CAPITALISM!

There are two ways to become wealthy: either by honestly serving the wants of consumers or by stealing. There are two ways to steal: legally and illegally. The contradiction is that voters base their votes on what the candidate can steal for them. But they don’t stop to realize that a government that steals for them, also steals from them. The wealthy may be smaller in numbers, but their wealth more than makes up for it. And that is why my friend, this government has never been more powerful, the wealthy are wealthier and the poor are poorer. Democray is a false ideal.

36

start a salvage yard parts will be hard to come by

37

the first poster brought up an interesting point.

 

these corps have become to large and what is a proper way to regulate such large behemoths in a free market economy?

 

i’m an absolute believer in a free market but there must be restrictions imposed because a true free market is financial darwinism meets macchiavalli.

 

problem with our free market model now is that the regulators are outnumbered and being outsmarted. to answer your question, it is my belief that a corp may be allowed to grow as infinite as they can possibly grow under a certain condition, a percentage of profits is reapportioned to pay for a seperate regulatory body that governs that institution. as a company grows so does the watchful eye on operations. the banks of late have been able to expand immensely without supervision and had the capital to pay off regulators, they outnumbered and outpowered regulators.

 

the one shortfall of my theory is the greed of regulators, a possible solution is to rotate regulators frequently, that way no one becomes cozy.

38
i'm an absolute believer in a free market but there must be restrictions imposed because a true free market is financial darwinism meets macchiavalli.

Oh please! That’s a contradiction in terms. Darwin rules no matter what you do; it’s a fundamental law of nature.

the one shortfall of my theory is the greed of regulators, a possible solution is to rotate regulators frequently, that way no one becomes cozy.

It’s fatal flaw because the regulators are part of the problem and beholden to the corporations they regulate. Heads of regulatory bodies are appointed, so the job is rotated. The only solution is to get over your unfounded fears of a free market and be on the side of separating commerce from state in the same church and state are separated. It’s not a panacea, but it’s an improvement. Think of how it would undercut government’s power to screw up your life.

39

OMG! I want to add to this post, but I need time to stop laughing and settle down!
You are the true orator - Krogoth in 2012! (wear the outfit in your icon - the peeps will love it!) I’d like to nominate myself for VP, I could use a job that pays well doing nothing.
Bob

40

The reality is that the government will never let American icons like GM and Ford fall into non-existence without intervention. You could argue that other iconic corporations have fallen, the best examples of which are in the airline industry. BUT, they are service industries, not manufacturing industries. Anybody with a car can run a taxi service. What’s important to realize however is that we the taxpayers will fork over the new bailout to the car companies, afterwards they will fail anyway in one form or another. This too is the fate of some in the banking industry. Had the government let the issue go on its own, some would fall, only to be scooped up at bargain basement rates by the strongest and savviest. But then, the banks wouldn’t have had the opportunity to soak up a cool $700bn in bonus cash on the way to the end. I believe this same fate awaits the auto industry.
Some here have said it would be wrong to blame the workers themselves. I strongly disagree! The American workforce is a greedy and entitlement-based group of babies. Looking back to the rise in power of the labor unions showed us just how much greed and corruption existed in the industry, and rather than seek reform and strengthen the systems future, they became worse than the monster they had condemned.
If government had been held accountable for the way it ran itself, and done its job way back when, we would not be having any of these conversations right now.
Bob