GM: America's Favorite Abusive Husband
Man, it's sweet to be a corporation like GM in America.
Only in this country would a corporation's executives have the nerve to close factories and relocate them to Mexico to exploit cheap labor, systematically work to suppress public mass transit and fuel-efficient vehicles, shelter its revenues from taxation in multiple offshore havens, and still crawl to the government weeping and crying when it needs money.
Not only that, but the government will hand GM another bailout check with taxpayer money without asking for anything in return, effectively socializing the investment's risk whilst privatizing the profit...again.
And if there is no profit -- if GM continues to bleed money because it failed to come up with a compelling business model for the new millennium -- the taxpayers are simply out of luck. That likelihood is summarized in a one-sentence mid-story throwaway in the New York Times: "Whether that investment will ever be recovered is still an open question." Oh, okay. No big deal. At least another enormous investment into a corporation that appears to be hemorrhaging from every orifice will protect American jobs...right?
The company will also have to shed 21,000 union workers and close 12 to 20 factories, steps that most analysts thought could never be pushed through by a Democratic president allied with organized labor.
He hits me because he loves me. I don't listen. He's just trying to teach me a lesson. These abusive steps could maybe have been called reactionary, or defensive, had GM not been shipping jobs to Mexico since 1935, and continues to develop plans to build more cars overseas in the midst of these bailouts. GM's plan always focuses on the bottom line i.e. whatever saves the corporation the most money whilst maximizing profits for a very small circle of people. Their last priorities are job security and unions.
Forty percent of the company's 6,000 dealers will close, the workers' union will be forced to finance half of its $20 billion health care fund with stock of uncertain value in the restructured G.M., and bondholders, including many retirees, will be forced to take stock worth 10 cents for every dollar they lent the company.
At what point will Americans stop lying about how they got their black eyes and start blaming these giant corporations?
Corporations like GM get to throw out their union contracts when they file for bankruptcy, effectively providing them with significantly more protection than the average American receives while filing for bankruptcy. If an abusive corporation tries to skip town without paying your pension, the Pension Benefit Guarantee Corp. (PBGC), foots the bill. The PBGC was established by Congress in 1974 to insure corporate pensions, but only covers employees up to $45,000 a year (most workers receive far less). According to the Communication Workers of America union website, "[s]o many corporations have rushed into bankruptcy that now the PBGC is running its own deficit of $23.3 billion."
According to the Times, Lawrence Summers explains that President Obama had to decide between "a laissez-faire, uncontrolled bankruptcy, which would have had an enormous cost," or a "controlled process," in which the goal was to make sure that the auto companies not only restructured, but were not overburdened with debt. Overburdened with debt? Isn't that the definition of bankruptcy? The government doesn't rush in to save Sally when she files for bankruptcy. A trustee seizes Sally's assets and divides them between her creditors unless Sally committed fraud (like hiding her money in tax havens). Then she's in real trouble. Why do corporations get special treatment that isn't afforded to average Americans?
If the American people weren't already keenly aware that the idea of a free market doesn't really exist, this latest statement from Summers should really persuade them. The whole concept of Milton Friedman's unregulated Capitalism rests on the idea that laissez-faire economics is the only fair way to let good businesses thrive and bad businesses fail. Government interference in the form of bailout and the restructuring of monopolies is "bad for business." Suddenly, laissez-faire is blasé. It's last year, so over.
Lawrence is essentially arguing for Corporate Socialism. We need strong regulation (but only during the bailout process)! We need to share the wealth (but only with taxpayer money and only if corporations benefit)!
What an awesome deal! If only taxpayers got the same offer.
Cross-posted from Allison Kilkenny's blog. Also available on Facebook and Twitter.
Follow Allison Kilkenny on Twitter: www.twitter.com/allisonkilkenny
GM to reorganize in government-led bankruptcy - Yahoo! News
Loading comments…
Want to reply to a comment? Hint: Click "Reply" at the bottom of the comment; after being approved your comment will appear directly underneath the comment you replied to
Interestingly enough, NPR ran a piece this morning about how GM, commonly known in many areas as "Generous Motors" because of the huge amount of charitable giving it did, can no longer support many of the arts, the community activities, the charities, that it once did. Perhaps you people might consider these kinds of activities when you excoriate big business.
So why would a company that keeps falling deeper and deeper in debt for at least 40 straight quarters even consider donating a single buck? Have they lost their minds?
I think we know the answer to that.
:-)
this was a long wait. The fat lady finally sang. General Motors (GM) is gone at last. Don’t look at the share price, which now trades in pennies, down from $90. Look at the labor force, which has shrunk from 360,000 to 39,000 on its way to 18,000. I sat at Ralph Nader’s knee (because there were no chairs) 40 years ago, who wore his unfashionable trademark white shirt and pencil thin tie. He was fresh from the runaway success of his book Unsafe at Any Speed, which castigated GM for its Corvair, which had the unfortunate tendency to explode when hit from behind. Even then he was predicting the demise of GM. Companies that recklessly kill off their customers and produce inferior products at high prices can’t last, he said. Fuel efficiency and the environment came later. Many people considered him a communist then, for bashing GM was considered unpatriotic by most and treasonable by some. No doubt J. Edgar Hoover’s FBI was following his every move. I think that Obama should now make Nader a director of GM, along with that other GM hater, Michael Moore.
www.madhed
The big corporations bought the governments of the U.S. What gave anyone the idea that they weren't going to use this to their advantage. Wages have gone nowhere in 40 years, labor laws are a joke and antitrust rules don't exist.
How much welfare goes to property and income tax breaks to big corporations? The average American and small business gets no break on property taxes and income taxes. The latest bankruptcy act changes were designed to make it easier for corporations to discharge debt in bankruptcy and harder for individuals to do the same in bankruptcy.
The only anti-trust action I can remember in the last decade is that of the merger of Whole Foods and Wild Oats. Meanwhile Wal-Mart continues their anti-trust tactics without any questions asked.
It's all corporate welfare for the wealthy and big corporations and cold hard capitalism for everyone else.
how about microsoft
That was filed over 10 years ago. What did the courts do? Absolutely nothing.
Microsoft has followed the Standard Oil/John D. Rockefeller school of monopolies. They decide they want in on an area and they offer to buy the competitors with Microsoft stock. if the competitors won't sell, they cut the price and eventually drive them out of business. Then they jack the price up on their software. How much has the price of Microsoft Office gone up since Word Perfect and Lotus are no longer competitors. It's no wonder that competitors like Linux have to be free software in order to compete.
Obama's kowtowing to corporations and Wall Street is truly disturbing from a man who came from the working class and vowed to help workers in the lower and middle classes.
"GM's plan always focuses on the bottom line i.e. whatever saves the corporation the most money whilst maximizing profits for a very small circle of people. Their last priorities are job security and unions."
Freshman business major?
""He hits me because he loves me. I don't listen. He's just trying to teach me a lesson."
That has to be the most accurate description to date I have read yet about teh actions of people like Ms. Kilkenney. After spending months baying for FM and Chrysler's blood for its sins of the past, Ms. Kilkenney and her ilk now get to hit the remaining employees "because tehy love them" and force them out of a job because "they didn't listen."
Nice going. During teh Bush days, I thought nothing could get worse than the right wing fringe. But hypocrisy and self-destruction has been elevated to an art form by our fringe.
You are seeing Darwinism at work... a species develops the maximum of specialization (like the biggest, brightest plumage in birds) just before it goes extinct.
Or so one can hope...
Fabulously written ... The people are bombarded daily by these very corporations and their ads ... and these companies have become a part of their subliminal DNA. Together with these corporate controlled media ... everything coming at them is status quo ... and eventually acceptable. What has been designed is an apathetic society. Write more blogs, get coverage from any place possible so more and more hear the truth about what is happening. I would like to say healthcare would be the rallying cry that would bring us, we the people, together in unison demanding the same care our elected officials have. If its good enough for them, its good enough for us. That good enough is a medicare form of healthcare - perhaps a hybrid ... John Conyers has had his bill HR 676 before the House for some time now, but the debate keeps playing on words and their meanings in order to confuse the apathetic. We should be demanding ownership rights to Citibank by now ... but we sit by as they take our tax dollars and screw us on the other side with unregulated interest rates on credit cards, etc. Keep writing more articles like this. Exposure goes a long way.
The financial system and the domestic auto makers possessed unsustainable business models and the mis-regulated capital markets along with too big too fail risk needed a government tire iron to help fix them for the good of the country. These businesses by themselves can never do the hard work to fix their failed models.
The Health Care Industry (ex practicing physicians, nurses and patients) is a systemic risk where greed within the industry has more than taken over. Plus there is awful management. Sound familiar? Just like General Motors, Chrysler, Fanny, Freddie and AIG.
Health Care is by far the biggest issue. The UAW did not trust that the government to be able to solve that issue any time soon empirically by quality and cost, so the government specifically funded UAW Health Costs separately from the rest of us via massive cash infusions, paid for by US.
Forming an FDIC like regulator with special authority across all Health Care, to weed out low value, fraudulent, paper pushing, and patient bankrupting players like the insurance companies.
Where else do we pay twice the cost (a phenomenal and growing 17% of GDP) for mediocre coverage? America. We buy Cadillac Health Care and all we get are clunkers, if we get anything at all.
Where else will the private sector bankrupt patients, then once completely picked over, and devastated, hand over those patients to government Medicaid once they are destitute.
We allow this to happen in America. For Shame. Criminal.
Why have we heard almost nothing in the standard press about GM and Chrysler dumping the pensions on us. They have, since 1984 or so, been refuseing to fund the pensions and now we get to. Time the government made pension funds plan for a rainy day so that small business owners like myself who will never get to retire until we die, have to pay for some big business's deadbeat fund. This has made responsible companies take-over targets thus forcing companies to underfund. This entire mess goes back to the Raygun addministr
The government handed the world and its riches to corporations like these. They gave them all the profits and transfered all blame and accountability for losses to the workers and the people.
That is a step not easily taken back. Because whereas You can take everything a man owns who works for his living - produces what makes up the value the richest people on earth take so frely still - You can not easily take back what these people took by fraud, corruption, even murder if necessary.
The money is gone. And they won´t give it back without a fight. - A fight that people WITH a conscience and even a whiff of decency will not start. And they know that. They count on it. The money is gone to tax paradises and will only be used if the profit will make that move worthwhile. - Meaning that even more money will be lost to those who do the work AND pay their taxes.
Obama has to look ahead. And not just ahead to when next time voters may not give him their vote. But ahead to what in the long run will decide who will hold the power and who will be the ones doing the work. Today these two groups are not even remotely connected.
Sometimes I wonder who it would be the founding fathers would take up arms against if they lived today. The people or the ones taking from the people and destryoing anyone who
"He hits me because he loves me. I don't listen. He's just trying to teach me a lesson. These abusive steps could maybe have been called reactionary, or defensive, had GM not been shipping jobs to Mexico since 1935, and continues to develop plans to build more cars overseas in the midst of these bailouts. GM's plan always focuses on the bottom line i.e. whatever saves the corporation the most money whilst maximizing profits for a very small circle of people. Their last priorities are job security and unions."
Oh, please.
I think you've got your analogies mixed up, for the lazy union workers comprise a significant portion of the incessant greed that pervades the auto industry.
In fact, the proper analogy is that if we are to consider GM as the "abusive husband" than the UAW by default deserves to be branded the abusive husband's spoiled ba.sta.rd children who reap incessant rewards for doing nothing in return.
In fact let's consider the recent unemployment of such 21,000 as an uncharacteristic exercise in discipline, whereby these lazy good-for-nothings will finally learn the ropes of actually being able to EARN their pay by performing tasks in actual proportion to their salaries.
lol!!! funny
"In fact let's consider the recent unemployment of such 21,000 as an uncharacteristic exercise in discipline, whereby these lazy good-for-nothings will finally learn the ropes of actually being able to EARN their pay by performing tasks in actual proportion to their salaries."
So are you referring to bankers or union workers?
Wages have been stagnant all over the place, and you are chiding these people for making a decent living by working in a car factory? I'm guessing you have undisclosed vested interests in doing away with unions. I mean, tasks in proportion to their salaries? Where have you been? Why don't you pick on sports players or movie stars or bank CEO's rather than the blue collar workers who have managed to eke out a decent living while making actually useful items? It's a factory for gods sake, it's not a cake walk.
One of the best posts ive seen lately. Thank you for pointing out our cult of CEO and banker worship and our disdain for the middle class. Only in America would we let GM, AIG, etc. keep all their profits while we pay for all their losses. The rest of the universe must be shaking their heads muttering something like "natural selection".
PEOPLE-ALL IS WELL THE DJIA JUMPED 230 POINTS TODAY! DUH!
UAW contracts-worthless Big Banker contracts- sacred
Great analogy...
You must be logged in to comment. Log in or connect with
