Monday, June 1, 2009

Grab the vaseline, this one could be painful.

Most of the news media has been all a twitter over General Motors filing for bankruptcy today with only the crash at sea of an Air France flight to break the endless monotony of what amounts to idle speculation and political posturing. High paid talking heads spent the day speculating while the iconic corporate corpse grew cold whether the reorganization would succeed with GM rising like Lazarus or failing and being tossed into the dust bin of history. The specifics over how GM will be organized have the federal government owning a 60% stake in the company and sinking another 30 billion into the company after already receiving 20 billion since the end of last year.

Some might be surprised but this post is not about how that company needs to be saved although that is how I feel. But first, before I get to the main point my position is that after weighing the various options open to President Obama and the nation General Motors must pull its head out its ass and work very hard to get back on its feet. Blame abounds in all corners for its failure but currently GM employs 173,000 people with far more working in business that either directly support its operations like parts manufactures or indirectly in such things as simple as food vendors and landscapers. I speak of the food vendors and landscapers from my own experience working at a company that when the telecom bubble popped in the early 2000's canceled contracts with such companies resulting in them either laying most of their employees off or going out of business completely.

It might be easy for those working in other parts of the country to consign General Motors to oblivion with them employed in comfy jobs in other, safer industries. This overlooks the ripple affect as more jobs disappear in what is already called the "Rust Belt" that has been plagued with jobs disappearing for years all for the benefit of the global economy and American consumerism resulting in crashing local economies and causing untold hardship. Sorry, but personally speaking Tom Friedman be damned I don't care that the world is becoming flatter we can't all flip hamburgers at McDonald's and Wal-Mart will not be able to hire the entire nation to stock shelves no matter how big their stores get. Then again to the bean counters and financial wizards, which got us in this mess, its all about the bottom line. Which finally brings me to my main point.

On the way home from a very busy day at work I tuned into the NPR station for the calm and rational way they announce the events that had gone on earlier. The show on the radio at that moment was PRI's "The World" which is a hash of interviews, news, and culture from around the world.

The lead story was, of course, about GM. At first I was surprised to hear that due to the agreement some GM manufacturing jobs would for the first time in at least 30 years be brought back to the United States. This brought in a guy named Donald Grimes who is a senior research specialist (business analyst) for the University of Michigan who isn't jumping for joy over the prospect. He says in the radio report that bringing back jobs here to America isn't necessarily the best thing for a new GM, that the jobs should go where they would be "most efficient" and where the company can produce in the "lowest cost environment" be that here in the States or Mexico or China.

Come on children, I know I'm ranting but stay with me because it gets better.

At least Congressman Dennis Kucinich told the New York Times that it was unacceptable for American taxpayers to subsidizes the exportation of their own jobs.

Okay. grab your tube of Vaseline or your favorite flavor of Joy Jelly because here it comes.

After the end of that segment, at about the 5:40 mark, another segment starts that states GM is doing all fine and dandy over in China making cars for all those newly prosperous Chinese employed with all those jobs that Ross Perot thought would be sucked down south of the Rio Grande. Especially disconcerting was the revelation to me that GM has long since entered a partnership with the city of Shanghai operating a car manufacturing plant over there. The city of Shanghi owns 50% of that joint venture and according to "The World" China correspondent, Mary K Magistad, there has been talk in the Chinese media that the Shanghai plant could soon be exporting GM cars to the United States. Hear that people, we cough up 50 billion for GM with a good chance that after all that the company we saved will thank us by selling us cars made in China. Feel the love!

Listen for yourself at PRI's "The World" website.


Distributorcap said...

you just know this "managed bankruptcy" of GM is going to come back and haunt us. or (conspiracy theory here) - just a way to suck up to our CHinese financial benefactors - the ones that have basically been funding the US recovery.

it is not the global economy and cheap jobs overseas that has destroyed this country (or about to destroy it ) - it plain old fashioned greed. GM should be publicaly annoucing its key execs and "new" board of directors will all work for $1 a year until GM gets back on its feet -

GM is only one (very big) scar that is the remnant of American ingenuity and hard-work. The big elephant in the room is that the people controlling corporate america (which controls a big chunk of the direct jobs and a HUGE chunk of the indirect jobs, like you mention) are fat and lazy slobs that truly are more concerned with their gated homes than building a product to be proud of.

we (especially GM) have long ago stopped "making things" that have the mark of excellence - we are just excellent at making sure we have control over the paper world - and now that is even gone.

what amazes is that even those who are suffering from the collapse of the economy refuse to see that going back to the old corporate model is now in their own best interest.

my prediction - GM is gone within 2 years and its assets are divided up among other car companies. you can inject $50 billion into the company, you cannot change the culture even for a plug nickel.

Dusty said...

I am just heartbroken over this whole friggin mess.

Because of the jobs being lost..nothing more. Fuck GM for not planning better is my thought but then..that affects the workers through no fault of their own.

I own a pontiac..which is now a dead line of vehicles. I also have an extended service contract on it through GM. I always purchased American cars, even though I knew they were not all made here in Amerika. I owned one foreign car..a vw whole life.

My next car will be anything BUT American. Toyota builds cars here right? Why not buy their vehicles and protect our jobs?

The Zombieslayer said...

Absolutely unreal. But not surprising.

Being in Tech, I saw this first hand. I got to train the Indians who replaced me. Fun, huh? And the Director was upset when I said "no." Imagine.

Beach Bum said...

DCap: You wrote: plain old fashioned greed...

Yeah, I agree.

we (especially GM) have long ago stopped "making things" that have the mark of excellence - we are just excellent at making sure we have control over the paper world - and now that is even gone.

Now that really hits home. Every since I married my attorney wife I have been outright stunned at the comments her and her fellow lawyers make about "managing perceptions" in the law, that facts and truth were at best inconvenient issues that had little relevance in helping the client.

But I can't fault just attorneys, I've heard middle management types speak about how that was what the upper echelon guys and gals in the big offices passed down to them. In all we seem to be a country just treading water keeping the status quo in effect and those who benefit most by it.

Dusty: Get this, we recently bought a new car because my old Corolla was on its last legs. I wanted to at least by American in that the new car would be a Chevrolet or Ford to try and help out American workers. However a couple of funny things happened along the way.

One, I found out that for some reason I never got an answer for many insurance companies charge a higher rate for GM cars. I personally asked an agent why this was the case and she could not give me a real answer. The best she could give was that maybe it was "because GM cars are more expensive to repair." As opposed to Hondas or Toyotas? I'm no expert but last I had to look both were expensive as Hell to fix items on.

Next we looked at the Ford Focus which I figured would fit me just right with gas mileage. We wheeled and dealed with a few local dealerships and none would move enough on the price or extras. So my wife contacted a car buyer for us who would be able to look at a far wider selection of dealerships. He reported back the same thing saying that even though several incentives were being afforded by Ford none seemed to actually want to do the paperwork to get a deal going, or in simpler terms they just didn't want to sell a car.

Long story short we ended up buying another Corolla with that dealer bending over backwards to be nice and give us far more than we wanted.

Slayer: You know I use to be all for free trade buying all that Tom Friedman crap about the world becoming flatter with American strength being our ability to innovate and develop new industries. Simply put I don't anymore.
Even the green tech for alternate energy being pushed by President Obama, something I support, has some of the windmill turbines and solar panels being made in CHINA. One of the purposes of that initiative was how it was going to develop new jobs here in America.

The idea of free trade was fine but these billionaires for whom this country seems to be controlled by free trade is at best just a way for them to squeeze a few more dollars of profit. At worst its creeping economic colonization and later geo-political domination by the new superpower, China.

Randal Graves said...

The best thing long, long-term for the planet will be the continued breakdown of the American empire. Too bad our empire will be replaced with the Chinese one. And hell, they even ban large segments of the internets. How will those tired GM workers in Shanghai while away the evening hours without online porn?

MadMike said...

I knew about the China connection and I knew GM's position in relation to it. Personally I did not support a bailout of any kind. While I have great sympathy for the workers I do not have sympathy for the greedy unions that contributed to putting America's largest auto maker where it is today. The unions broke the back of the company and destroyed its operational core. When one is being paid over $50 per hour for putting lug nuts on wheels there is a problem somewhere.

Keshi said...

o tell me abt it BB we r tasting the same shit over here in AUS! My boss and I had to train the new Indian company that took over our contract with a certain major customer after 10frikkin years. It HURT.

**with a good chance that after all that the company we saved will thank us by selling us cars made in China

I so know what u mean!


Malicious Intent said...

I know all to well the pain that this is causing us. I live 15 min away from a GM plant that has been on this earth longer than me.

Growing up as a kid my girlfriend across the street, her father worked there. I remember many times the workers going on strike and them having to eat a lot of hot dogs and baked beans during those tough times.

Then things settled, working conditions got better, strikes almost never took place anymore. Almost everyone knows someone who works at GM. There are tons of businesses around the plant such as sub shops (sandwich shops for those not from the Philly area) a huge Walmart next door, barber shops, the union hall, groceries stores, the name it, it's in the immediate area.

Not to mention, all these folks. Where are they gonna go? Get work? The majority of the work in this state now is corporate. Kinda hard to go from the line to the office.

It is not going to be pretty here...and yeah...I guess we buy toyota or mazada now....I think they are actually made here now. Who knows what to actually buy anymore. Crap, this is even impacting NASCAR....ok this is getting personal now!

Beach Bum said...

Randal: What worries me is that I heard a very reliable report about a movie made in China a few years ago set in the 19th century that had one of the characters speaking about that while the Western powers were then taking advantage of a weak China time and events would someday reverse those roles.

Unless we are very careful that may yet come true.

MadMike: I completely agree that Unions overplayed their hands hurting both the company and the country. But one of the things that switched me over to the liberal side of the political spectrum was how the upper management types and "investors" began feeling they carried all the weight of American progress with the government working, almost exclusively, to protect them at the expense of the workers.

If imported GM cars are our reward for billions in bailout I would rather see the company go down in flames with all our cars coming straight from Chinese companies, might as well cut out the slimy middleman.

Keshi: You know its strange, I wish no one ill but the idea that people in a country a good portion across the planet can do a job far cheaper than a local company seems surreal to me.

Malicious Intent: My uncles worked at a steel mill in my hometown for years that was unionized and had many strikes over its years of operation along with many shut downs and change of owners. It, along with a huge paper mill were the major employers of the town that kept the local economy going. Now the steel mill is closing permanently but the one glimmer of hope is that now my hometown is far more developed and has a huge tourist industry. Of course those jobs mostly pay minimum wage and have no benefits.

I'm not sure how badly my hometown will be impacted because the steel mill is closing but I have major misgivings about how the separation of classes is going with the rich getting richer and buying up all the coastal land and the poor is getting poorer and leaving for inland jobs where the cost of living and taxes is less.

Keshi said...

I find it hard to comprehend too. Besides what could be better for a country's economy than employing it's own!


Anonymous said...

Great post....Absolutely unreal. But not surprising......
Best price for the best Entertainment