GM, At Least Temporarily, Emerges From Bankruptcy
GM is apparently emerging from bankruptcy. It will have the same (though fewer) managers, employees, and assembly plants. It will have the same product designers, marketers, strategists, and planners. It will have roughly the same organization systems, the same culture, and the same history. Though it was able to shed some plants and employees, it will have most of the same stifling work rules on the shop floor. It did, however, manage to shed a lot of interest payments to creditors who entrusted their money to GM in return for claims on GM assets, only to be given the shaft by the Obama administration,
The main difference in the new GM is that it will have an ownership group whose primary concerns are NOT the financial success of the company. The UAW will be primarily concerned with keeping union members employed and happy and not shifting any manufacturing to lower-cost venues. The US Government will be primarily concerned with making sure the UAW is happy and promoting a number of its own goals, like "sustainable" plants and smaller cars, irrespective of whether these goals make business sense. It will be a company more concerned with whether plants have recycling programs and workers with American passports rather than cost or quality. Both the UAW and the US government can pursue such non-business goals secure in the knowledge that financial success is virtually irrelevant, as the US taxpayer can be counted on to make up any shortfalls.
Evil Red Scandi:
...and the world continues to increase its resemblance to that described in Atlas Shrugged.
Will the last capitalists out please shut off the lights?
July 10, 2009, 9:42 amIan Random:
I just hope the government can let go eventually.
July 10, 2009, 9:57 amJames H:
I noticed in one of the news releases that the new GM will not be publicly traded. This means they don't have to release quarterly financial results, I believe. So now we might not be able to see just how badly the company bleeds the red ink until the congress is asked to provide additional funding. Even then, I would bet that it would be very stealthily buried in other bills with obscure descriptions. Continuing on the theme of the blog post, it will be interesting to see what happens to build quality and the overall competitiveness of the features and design of the car in the future.
July 10, 2009, 10:50 amCharlie Bratten:
Without a popular high mileage car like the Prius, Carolla, or Civic, To offset the Cadillacs and Bruicks, CAFE has already doomed the new GM.
July 10, 2009, 11:35 amLoneSnark:
As a government agency, I suspect GM will be excused from such restrictions that are placed upon private businesses. Afterall, GM is now one of us, certainly they can be trusted just like any other bureaucrats.
July 10, 2009, 12:06 pmsethstorm:
GM, At Least Temporarily, Emerges From Bankruptcy
They have good chances as long as they overcome stubborn Galtists who want to be part of a problem. That is, unless they get to forcefeed their "solution".
I'd like to see them at least exempted from about every environmental regulation given their ability to do well with affordable large cars. At least it would tell the folks from Japan and Korea to make affordable muscle, something they have never done.
July 10, 2009, 12:19 pmDr. T:
"They have good chances..."
Ha, ha, ha! Surely you jest. GM had no chance under its moribund management and pampered union workers and retirees. The only significant thing that's changed is that a 31-year-old Obama employee with zero business experience will tell the managers what vehicles to make, how to make them, and how to sell them. Yep, that will go well.
July 10, 2009, 5:14 pmMatthew Brown:
And we already saw one of the results of this, in which GM Daewoo in South Korea was pushed out as the provider of small Chevys at union and government insistence that a new GM small car must be built in the US with union labor. This happened before the bankruptcy, but the bankruptcy itself is mere formality; the rules were already in place before then.
I own a 5-year old GM Daewoo product (Chevy Aveo); far from a perfect car (it manages to be both underpowered and yet not all that fuel efficient) but solidly built and reliable. It reminds me very much of Toyota quality circa the turn of the millenium; in fact, the instrument panel is identical to the Toyota of that vintage I drove beforehand. The comparison with US-built cheap GM products is like night and day.
It's notable that the kind of auto enthusiast site crowded with fans of the American auto industry loves to talk about how awful the Aveo is, yet they're notably quiet about similar, but US-sourced, and worse products. It being not a American, union-built product makes it fair game, I guess.
July 11, 2009, 3:24 amsethstorm:
I own a 5-year old GM Daewoo product (Chevy Aveo); far from a perfect car (it manages to be both underpowered and yet not all that fuel efficient) but solidly built and reliable. It reminds me very much of Toyota quality circa the turn of the millenium; in fact, the instrument panel is identical to the Toyota of that vintage I drove beforehand. The comparison with US-built cheap GM products is like night and day.
The Detroit way is to maximize for space and power per dollar first, then fuel efficiency. With the faults and all, I have no issue w/ GM products that aren't captive imports or non-GM engineering. At least I know my car wasn't a "copy and detune" job like Korea does regularly.
That said, I've gone through 2 90's era Buicks and now drive an 8 year old, 6-cylinder Oldsmobile Aurora. It is definitely not environmentally friendly or small. The parts that do fail are not Oldsmobile specific, unless you want to count the car-specific Northstar/Short North variant engine blocks. Other than that, I've had no problem requesting parts for it. So far, it's a good example of what will happen when Pontiac goes under with the bankrupt GM divisions.
Asking Detroit to build a small car is like asking Korea to build something that isn't an underpowered copy off of some other brand or asking Japan to build anything resembling Detroit brands in size and performance per dollar. Either way, something gets screwed up in the process.
July 12, 2009, 10:10 pmHa, ha, ha! Surely you jest. GM had no chance under its moribund management and pampered union workers and retirees. The only significant thing that’s changed is that a 31-year-old Obama employee with zero business experience will tell the managers what vehicles to make, how to make them, and how to sell them. Yep, that will go well.
No, I don't. Eventually, they're going to have to go back to affordable performance and start cranking out what Detroit does best - larger cars. As for the union workers, there wouldn't be such a motive to bring them back if PATCO's demise wasn't outright vengeance on all unions.