GM's 'Time Is Very Short'

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41

OK Bob,

 

Sorry but I need to disagree with you. Our outgoing, weak hearted, physcopath of a VP for the last 8 years has done everything from pushing a false war against IRAQ, refusing to disclose information to the public, having a lesbian daughter and being against gayness in America to shooting hunting buddies. That’s sounds pretty damn exciting to me.

 

If you want to be my VP, you better be colorful and powerful, because to tell you the truth, it’s seems to have become quite a more visible and strong position over the last 2 terms. Cheney is a grand puppet-master.

 

 

 

 

 

 

 

 

 

42

Hewitt,

For the most part, on particulars, we agree. I know what markets are, however, "free markets" are ideological viewpoints, which you indicate to some degree. We tend to deviate on these philosophical/ideological frameworks. Free market ideologies make very specific arguments and can be valuable as an abstracted model, but these are still based upon philosophical viewpoints of how humans SHOULD act and how governance SHOULD be structured. Once reality deviates from these assumptions, then the model breaks down, therefore the abstracted SHOULD happen becomes a moot point in the real world.

"The ideal government would stay out of market decisions and act to protect person, liberty and property, and arbitrate contract disputes."

Why would this be necessary for government structures? Why could market mechanisms deal with this? Private protection firms, hired body guards, and private arbitrators. Because it is recognized that this would create entrenched power structures without any real protections. The basic notion that there needs to be some governance idicates the intrinsic flaws of free marketism. SO, as a market proponent, I recognize there are inherent flaws of markets that affect societal sturctures and therefore support the need for basic rules to be set so that fellow citizens and human beings are not alienated and oppressed by the system itself. These rules need to flexible and dynamic, constantly being evaluated and negotiated by an ACTIVE citizenry, which needs at least basic public civic education. There are resources that should be owned by the citizens of a nation and therefore have equitable allocation, since they are mandatory for survival and for a well-functioning system. What these resources (human and physical) are is the debatable issues.

"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."

This is paragraph is based upon a very specific ideological viewpoint of representative government and not sure what point you are trying to make except convolute the agrument for free marketism. SO, since democracy is a false ideal in this framework, you admit that free marketism cannot coexist with democratic ideals? …because it is the free market framework from which you are arguing. In the end, you argue in absolutes as if the is no other plausible perspective aside from your idelogical framework. This is the true fallacy. The only route to wisdom is to be aware of and acknowledge your own ignorance. I tend to ascribe to this theme of the philosophical views of Socrates.

43

I think that GM’s gas guzzling products have put them too far out of touch with their own customers. Ego-buying sales campaigns have now come full-circle to bite them. Only now they come to the public trough for handouts for a poor business model. Why is it that we should pony up money for them? Why is Japan one of the only car makers to see a few years ahead, in which we have all seen rising fuel costs, and yet bigger and bigger gas hogs out of Michigan? I say no, let them fall. Let them fall for their own greed, and not paying attention to the very market they are supposed to be serving.
Can we please get a high-quality fuel-efficient simple car - that is reliable? No, we do not need a V-12 ton and half piece of crap truck, that is classified as a car, for your bottom-line! We, the consumer, need a nice efficient reliable car, that happens to seat four. Why is that so hard to do?

44

AJ

You keep forcing your misconceptions on a way of thinking you do not understand.

Free market ideologies make very specific arguments and can be valuable as an abstracted model, but these are still based upon philosophical viewpoints of how humans SHOULD act and how governance SHOULD be structured.

Every human on this planet acts according to their perceived self interests. It’s a fundamental law of nature. The best anyone can do is estimate what people will do with different degrees of certainty; the more familiar we are with people, the more predictable they are. Anyone who goes on the presumption of how people should behave is asking for trouble.

This is why government is ill suited to the task of managing an economy. It is here where you find the ideologues who have no inhibitions about forcing people to behave the way they should behave. By the very fact that they have to use force is proof that they have no idea what they are doing. Markets are extremely complex, too complex to be managed by force with any competence.

Because it is recognized that this would create entrenched power structures without any real protections. The basic notion that there needs to be some governance idicates the intrinsic flaws of free marketism.

So who protects us from government? This market crash is a direct result of government intervention - countefeiting, embezzlement, check-kiting, pyramiding and more. Under the doctrine of Sovereign Immunity, they can’t be held criminally negligent for their actions.

SO, as a market proponent, I recognize there are inherent flaws of markets that affect societal sturctures and therefore support the need for basic rules to be set so that fellow citizens and human beings are not alienated and oppressed by the system itself.

A market is whatever people make it. There are prudent was to manage money and reckless ways to manage money. In Austrian Theory, one learns the time-tested ways of properly managing money. I don’t think Chris has an Austrian background, yet his research is based on prudent accounting methods.

SO, since democracy is a false ideal in this framework, you admit that free marketism cannot coexist with democratic ideals? …

It can, provided the voters don’t vote for government freebies. It was that way early in the history of this country. I think it was Toqueville who likened democracy to mob rule. I think democracy is workable in small territories. What keeps small democracies in check is the practically of its residents moving.

In the end, you argue in absolutes as if the is no other plausible perspective aside from your idelogical framework. This is the true fallacy.

What absolutes? To hear you, it’s impossible to know how markets work and how they fail. That’s your problem, not mine. I’ll be laughing all the way to the bank.

The only route to wisdom is to be aware of and acknowledge your own ignorance. I tend to ascribe to this theme of the philosophical views of Socrates.

Socrates’ inquistions for famous for proving to his subjects that they don’t know what they think they know. I still get the sense that you haven’t the foggiest idea how markets work. Our current system of government is massively corrupt, criminal, wasteful, vicious, incompetent and delusional, I shouldn’t have to explain it. But here you are tying to justify it.

 

45

No. 1 automaker posts huge loss - says it has made case to Washington for
rescue.

NEW YORK (CNNMoney.com) – General Motors shook an already embattled
auto industry Friday as it reported a huge quarterly loss that was much
worse than expected and warned it is in danger of running out of cash
in the coming months.GM, the nation’s largest automaker,
reported it lost $4.2 billion, or $7.35 a share, excluding special
items. That’s up from the loss $1.6 billion or $2.86 a share it
reported a year earlier and was far worse than the forecast of analysts
surveyed by earnings tracker Thomson Reuters, which had forecast a loss
of $3.70 a share.

But the most shocking news came in its
statements about its cash position. GM said it had burned through $6.9
billion during the quarter and warned that it "will approach the
minimum amount necessary to operate its business" during the current
quarter. In addition, the company said that in the first half
of next year its "estimated liquidity will fall significantly short" of
what it needs to continue operating. It said the only thing that would
save it would be a significant improvement in economic and automotive
industry conditions, help from the federal government, better access to
capital markets or some combination of those options.The report
was by far the most grim assessment by a company that has insisted it
is not considering filing for bankruptcy court protection. While the
release did not mention the threat of bankruptcy, the outlook appeared
to raise the possibility of such a dramatic step.

Dave Cole,chairman of Michigan think-tank the Center for Automotive Research,
said the chances that GM would be forced to file for bankruptcy were
high unless Congress takes almost immediate action to bail out the
industry."This is not something that can go on and be dealt with
in the next year, it needs to be dealt with in the next few weeks,"
said Cole. "When your cash is gone, you’re gone."

http://money.cnn.com/2008/11/07/news/companies/gm/?postversion=2008110712

46

Are you purposely pretending to be narrow sighted when reading my posts?

"I still get the sense that you haven’t the foggiest idea how markets work. Our current system of government is massively corrupt, criminal, wasteful, vicious, incompetent and delusional, I shouldn’t have to explain it. But here you are tying to justify it."

It seems that you cannot believe how someone cannot see what is so obvious to yourself, so you feel the need to insist that I don’t understand your knowledge, that I must be ignorant to your vast knowledge of everything. You love to say that I don’t have the "foggiest", but saying it does not make it true or further make your own statements more valid. I never try and justify any current conditions, I am commenting on your statements which are explicitly ideological and you continue to argue a totally different point than what I am making. As I have told you many times, we agree on many specifics outside of ideological frameworks, including the current political economic conditions.

"It is here where you find the ideologues who have no inhibitions about forcing people to behave the way they should behave. By the very fact that they have to use force is proof that they have no idea what they are doing. Markets are extremely complex, too complex to be managed by force with any competence."

I don’t disagree with some of your overarching point here, but markets to complex to manage? I assume that your statement includes non-force management judging by your stated ideological framework? Lets compare a direct metaphor. Markets are just human behavior, just like cultural society. So could we just not say, "society is extremely complex, too complex to be managed by force with any competence." In this example, why have any civil or criminal law? Why have any absolutes [general agreements by society as to what is acceptable]? Since markets are human behavior, they conform, adjust, and adapt to their given cultural, political and physical environment. Markets can and will exist in any given situation since it is human beings and their behavior and interactions that ARE the market. Stop trying to project your ideological viewpoint as being the universal "understanding" of markets.

[My exerpt] SO, since democracy is a false ideal in this framework, you admit that free marketism cannot coexist with democratic ideals? …

[Your excerpt] "It can, provided the voters don’t vote for government freebies. It was that way early in the history of this country. I think it was Toqueville who likened democracy to mob rule."

Sorry, your caveat just proved my point. Democracy and capitalism are different types of systems and if they are to coexist, compromises must be made because of human behavior and the nature of the systems with clash. By the way, how was it in early in the history of this country? People have always voted for self-interest…if there was just one way it was, then we would not have different philosophical viewpoints represented by parties or even have the need for elections. Why do you insist on blowing up your own arguments?

"Every human on this planet acts according to their perceived self interests. It’s a fundamental law of nature."

Really? Explain this to all the sociologists, psychiatrists, and social psychiatritsts (just the major disciplines dealing with these issues). It is amazing how in one sentence you have elimiated the need for and made obsolete all the actual scientific research conducted in understanding human behavior. This is my central point, that you argue from a specific ideological viewpoint that is NOT universal. What you seem to breifly describe is Ayn Rand’s psuedo-philosophical/psychological model of human behavior call Objectivism, which is, therefore, the basis for her free market ideology. This framework has many specific and validated critiques that has prevented it as an accepted model of human behavior. All frameworks for understanding, or models, that contain assumptions about human behavior, even if it assumes you cannot predict behavior, thereby allowing for various outcomes in the model itself.

"So who protects us from government? This market crash is a direct result of government intervention - countefeiting, embezzlement, check-kiting, pyramiding and more. Under the doctrine of Sovereign Immunity, they can’t be held criminally negligent for their actions."

We are [should be] protected by our constitution and our political ACTIVENESS! If you don’t like the representation, then get the F involved at the local level by infiltrating parties and being politically active. Lack of civic involvement is the real curse that has contributed to the current condition; people have failed to understand that the government IS US as long as we choose to be active in its maintenance.

I agree with the rest of the statement, however it is the current conditions use as a strawman to demostrate the need for "free marketism" that I have a problem with. Just because the system is corrupted and rigged, does not preclude this from occurring in a "free market" society. This is argument is a logical fallacy.

 

47

Aj

You’re boring me! I’ve got better things to do then read your screeds, much less respond to them.

48

Hewitt,

I assume you meant "screed" in the best possible connotation. I thought I attempted to bridge divides while displaying some of your errors; maybe I missed that target here. I have developed an ethical responsibility is not to let unfounded ideological statements on important topics like we have here to be taken as absolute fact. I don’t care if you don’t understand this or cannot handle these straight forward challenges to your statements. Have fun undertaking your other, better things. I will leave you with a statement I failed to address in my earlier response.

"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."

There are some underlying interesting arguments, but "consumer fear of business is not well founded"? Really? This statement is idiotic. What are coporate lawyers for? What do settlements cover up? Remember, we are talking about the real world where profit motive is king, and required by law for public corporations, not a world of ideal free marketism. I know…"this is not a free market and government regulation is the cause of every ill in our system." Absolute free market ideals that promote individualism for the maximization of profit is in its essence sociopathic and possibly phychopathic behavior patterns that commodify ALL resources and strives to externalize costs while not drawing attention. This is an observable, deductive model that has plenty of holes, but can be very useful in understanding economic behavior.

49

For those extolling the virtues of an absolute free market, I will point out the obvious. Probably the freest market in the world today is the credit default swap market. Absolutely unregulated and run by the masters of the universe. The result? The greatest financial collapse in the history of the world. How’s that working for us?

50
  • If the BIG 3 go belly up and the supporting manufacturing capacity is also adversely affected or destroyed how will this country be able to produce the machinery and weapons of war when we need them?
  • Will we be able to produce the parts to build the machines that win the battles?

Miko

51

Miko, Neither GM, Ford nor Chrysler make tanks. Other companies do. GM makes the Humvee and CUCV for the Army. (I don’t know about the other services.) The Big 3 don’t make much of anything for the military.

52

[quote]Miko, Neither GM, Ford nor Chrysler make tanks. Other companies do. GM
makes the Humvee and CUCV for the Army. (I don’t know about the other
services.) The Big 3 don’t make much of anything for the military.[/quote]

Publius, brush up on your World War II history. Much of manufacturing capacity can easily be turned to a wide variety of alternative production activities. Building tanks, or airplanes is possible and building only components of these weapons could be accomplished almost instantly. So having GM’s manufacturing plants would be very convient if major wars were spawned by this whole mess.

However, it is the non-war uses that interest me more. GM’s plants could for instance, be used to help make the generators and other components of wind power sources. They can also help build the various construction equipment that we would need for massive infrastructure, or ramping up tar-sand oil production in a peak oil event. Likewise, they are well suited for revamping our fleet of required vehicles to run on ethanol – farm production especially – to render us less vulnerable to a sudden shut off.

And that’s merely off the top of my head.

I’d hate however, to preserve GM in its present form in any of these deals. At bare minimum: Debt holders, share holders, and CEOs should bite the bullet. Some unions might need broken up as well, and some jobs lost – though for political reasons this part is highly unlikely to happen…

Some of these plants might be better sold off to different, and more successful companies in these respective areas, perhaps with some government loans to grease the wheels of the transition.

–

Steve

53

Not exactly true. The auto industry shares many key suppliers and much R&D with the military contractors. W/O GM, Ford or Chrysler all three healthier than they are at present, designing armament and producing it affordably will be impossible. Better to know your friend than your enemy.

Of course all three have been mismanaged by poseurs and sycophants for years. These gentlemen, greedy, autocratic imbeciles who reward themselves with millions for their failures, have been backed by Directors who are mostly happy if they have E&O insurance.

Maybe new management should be part of any "bridge loans" granted. But with our present and future governance that might be too much to expect. Look at what happens when the Administration, convinced some action without thought and discussion is absolutely needed to maintain financial integrity of the free world, rewards AIG with a massive cash injection, only to be repaid by the recipients who have continued to abuse that trust with pricey spa and seminar visits, what hope do we have?

54

From the NY Times, November 13, 2008
http://www.nytimes.com/2008/11/13/business/economy/13bankruptcy.html?
em
G.M.'s Troubles Stir Question of Bankruptcy vs. a Bailout
By MICHELINE MAYNARD
DETROIT — Momentum is building in Washington for a rescue package for
the auto industry to head off a possible bankruptcy filing by General
Motors, which is rapidly running low on cash.
But not everyone agrees that a Chapter 11 filing by G.M. would be the
disaster that many fear. Some experts note that while bankruptcy
would be painful, it may be preferable to a government bailout that
may only delay, at considerable cost, the wrenching but necessary
steps G.M. needs to take to become a stronger, leaner company.
Although G.M.'s labor contracts would be at risk of termination in a
bankruptcy, setting up a potential confrontation with its unions, the
company says its pension obligations are largely financed for its
479,000 retirees and their spouses.
Shareholders have already lost much of the equity that would
disappear in a bankruptcy case. Shares of G.M. rose 16 cents
Wednesday, to $3.08, but they have fallen 90.5 percent over the last
12 months, amid sharply lower auto sales and fears about G.M.'s
future.
And as companies in industries like airlines, steel and retailing
have shown, bankruptcy can offer a fresh start with a more
competitive cost structure to preserve a future for the workers who
remain.
"Just let market forces play out," said Matthew J. Slaughter,
associate dean at the Tuck School of Business at Dartmouth. "And if
G.M. or one of the other companies files for bankruptcy, support the
workers and the communities that would affected by a bankruptcy
filing."
William Ackman, a prominent activist investor who runs Pershing
Square Capital, said Tuesday that G.M. should consider
bankruptcy. "The way to solve that problem is not to lend more money
to G.M.," he said in an interview with Charlie Rose on PBS.
Instead, G.M. should submit a prepackaged bankruptcy, laying out
steps it plans to enact once in Chapter 11 protection, said Mr.
Ackman, who is not a major holder of G.M. shares.
"I’d rather the government’s money be used to train people for other
jobs," Mr. Ackman said. "The bankruptcy word scares people. It’s
simply a system."
Not surprisingly, Rick Wagoner, G.M.‘s chief executive, disagrees. He
told investors last week that "the consequences of bankruptcy would
be dire and extend far beyond" the company. G.M. will "take every
action we possibly can to avoid it," he added.
The company also may be forced to take drastic actions as a condition
of receiving any federal bailout package. It may include stiff
requirements that G.M. and other automakers restructure and meet
financial goals before they can get access to federal financing.
Lawmakers may also demand a change in management.
Such demands "may have the same end as a restructuring," but avoid
the taint of an actual bankruptcy filing, said Susan R. Helper, a
professor of regional economic development at Case Western Reserve
University.
Even though a bankruptcy might help create a stronger company in the
long run, consumers could easily see it as a sign that the cars they
bought might not retain their value, and seek other options when
shopping for a new car. (By contrast, travelers tend to have fewer
concerns about flying on airlines operating in bankruptcy because
their commitment ends with the flight.)
A car is "a major investment for a lot of families and the assurance
that it will perform for a set period of time is part of the
bargain," said Christie L. Nordhielm, an associate professor of
marketing at the University of Michigan.
To help ease consumers’ fears, G.M. could put money in escrow to
reimburse its 6,468 dealers for any repairs to address problems
covered by warranties. Airlines have taken such steps in the past to
guarantee the value of tickets for future flights.
A study of 6,000 consumers last summer by CNW Marketing found that 80
percent of them said they would switch companies if G.M. or Ford
filed for bankruptcy protection in the United States, suggesting that
only G.M. loyalists would stand by the automaker.
A bankruptcy filing by a single Detroit car company could cost the
economy $175 billion in the first year of the legal case in lost
employee income and tax revenue, the Center for Automotive Research
estimated this week. Given the complexity, a G.M. bankruptcy case
could last three years or more.
A bankruptcy at G.M., with $111 billion in assets, would rank as one
of the biggest bankruptcies ever, but would still be dwarfed by the
case filed by Lehman Brothers in September.
There are parallels between the Lehman bankruptcy and G.M.‘s
situation. In each case, the government was faced with deciding
whether it was worth favoring one entity over its competitors as it
worried about the impact on the broader economy of a potential
collapse.
Certainly workers in other industries who have lost their jobs may
feel the government should extend more help to them, too.
"Why should the government treat G.M., Ford and Chrysler workers any
differently?" said Professor Slaughter.
But the United Automobile Workers union, which has joined the
automakers to push for a bailout, might find grounds for a strike if
a bankrupt G.M. asked a court to throw out its labor contracts.
A bankruptcy also could jeopardize the fate of a health care fund
created in 2007 that was supposed to shift a $100 billion burden off
the companies’ backs. The U.A.W. recently agreed to let G.M. delay
payments to the fund.
Professor Helper, of Case Western Reserve, said the social cost to
communities in Michigan, Ohio and other states where its 55 plants
and other operations are located could be devastating, if G.M. were
to liquidate or significantly cut its work force.
"Even if they go bankrupt in a year, it is better than going bankrupt
now," given the state of the national economy, she said. "From a
social point of view, even if G.M. is not providing a return on
investment, it is still providing a lot of good jobs."
Mary M. Chapman contributed reporting.