Why I don't want to be in the car business

[Apolojedi (Daniel Eaton)]

Congratulations, if you are an American, you now own Government Motors. We have people that either lied to us about the facts or couldn't see the inevitable coming when it came to a failed car maker, micro-managing our entire economy. That should give you chills. What really scared me though was the comments about how our "investment" was going to be returned. I'm all for getting "our money" back, but the government has already shown that they will spend countless billions to make sure GM continues to exist. How far will they go to make sure we get some/all of this back? If that is really their goal, and "no one wants to be in the car business" and we want to "get out of this as soon as possible", why doesn't the government immediately sell the percentage we own in stocks or bonds as soon as the "New GM" gets set up? As long as we have a "hands-off" investment (and have you ever known a politician NOT to exercise influence in something they control?), how far will we go with taxes, tariffs, and so forth to make sure they succeed? And just how "hands off" are we going to be when we already are demanding a new makeup of the board of directors?

We seem to have a "save them at all costs" mentality. But what if you are Ford Motors? Think you will get fair competition? How will you know an IRS audit isn't motivated by something else? And what about the union factor? Not only do they get a voting block as far as ownership goes, but they also get a voice politically. If you get a conservative candidate wanting to "get out" versus a liberal "save this particular job no matter what the cost", aren't the unions getting two bites at the apple when it comes to control of their "boss"? Is that fair? And at what point do we put profitability of the company as a whole over all these union jobs/votes that we are buying saving? If it is cheaper to produce X part or Y model in another country (say Canada, who also has a stake in the company), are we going to do what is best for the company and its investors, or kiss the feet of big labor again? Something tells me the latter. They've already been given priority over investors, so we know it's a blue collar vote over an "evil rich investor" scenario. So we will never get out of the car business because this thing will always need out "help" in order to stay competitive and alive. It's a new working welfare class.

Nobody is forced (yet) to buy their next automobile from GM. These spun-off brands, Ford, Honda, Toyota, and so forth are still open for business. When people start turning in those directions because the future of GM maintenance and parts is more questionable, what will the government do to make sure that these unions continue to get preferred treatment? Will I get a tax break for purchasing a "company car" in the company I now control? Should I? Part of me wants something for my stake in the company, but to do so totally eliminates any pretense of a free market. It's a quagmire. And as much as the liberals loved harping on Bush for not having an "exit strategy" for some war or another, and as much as they want to blame him for the economy months after he left office, it is a false dichotomy to suggest that since the other Administration was wrong, that our current one and their plan (or rather checkbook in leu of a plan) is a great idea. If Bush caused this, doing a lot more of what he did isn't the solution to fixing it. I heard somewhere that each of the jobs that this has saved has cost the US taxpayer over $400,000.00. When is enough enough? Why can't/doesn't Congress say X amount of money is the most we are going to authorize for the government to purchase stock in failed companies? At what point does the lightbulb go off and the whiz-kid czars in DC that have the President's ear figure out that they now need to also "invest" in profitable companies to offset the investments in the failing ones?

I hate slippery slope arguments. They are illogical. But this is a train wreck coming. The government has never "fixed" anything they've done in the economy. We correct in these economic cycles in spite of their meddling. But they are no longer meddling. They're now controlling. It is no longer the economy struggling against the regulations of the government. The government is now on both sides. They have a name for that. Anywhere else, it's recognized as socialism. We even call it that and point to its flaws in other countries. But we have now become the very enemy we have fought. And it will work no better here than it did in all those other failed countries. And it will come as no surprise. Invest in failed companies and what can you expect?

Besides the impact on our economy that this whole pig in a poke is costing us, we also have to think of the massive international implications. We've totally lost any kind of moral authority or justification to tell some socialist country to look at us to see how well free enterprise works. We're just bigger now, not different. Our protestations to the contrary are the matter of jokes by them. Just look at what happened today when Tim Geitner told the Chinese students at that university that their investment in America was sound. They laughed! But even more troubling is when another country wants to follow our example with us. What happens when China tells us, the US, that they own so much of our debt that they want a changing in the makeup of our "board" and put us over the proverbial barrel and dictate to us what we have to do in order to get their continued bailouts? Do you honestly think that a President that has already fired CEO's and dictated line items in corporate budgets is going to have a leg to stand on? Just how fluent is your Mandarin?

[Derek Gilbert]

It's even worse than you think. Apparently President Obama's most influential adviser on restructuring the automotive industry is a 31-year-old kid who's never actually worked in the real world.

[Apolojedi (Daniel Eaton)]

Nothing quite like a young in-experienced president getting on-the-job training by a guy still in college.

[DennisS]

I like the idea of competition - and not bailout. The idea of competing against the remaining car manufacturers is crazy. It's not at all fair to Ford.

I worked at UPS for years, and one of the biggest complaints they had was that the US Post Office would subsidize the cost of parcel delivery with what they charged for first class postage. The Post Office could not deliver packages for what they were charging. It was unfair competition. I've been watching as first class postage goes up, and bulk mail costs go down or stay the same. Why is there a book rate that is so much less than a smaller and lighter (non-book) package going the same place?

Ford is likely to have a rather slow and painful dying process as they try to compete with government subsidized electric cars. And none of this really helps.

If GM were sold off to competitors, it is quite possible that some jobs would return to Michigan - rather than the 15% (and rising) unemployment in S. Michigan. Skilled jobs could go to the locations where the competitors are - it's a shifting which would be painful for some communities.

But this shift would not be worse than what is going on in rural America. I don't see an effort to save the thousands of communities who have lost their only grocery store in the past few years. The grain elevators keep merging in order to survive, becoming large regional businesses, straying rather far from the purpose for which they were established.

I'm happy to have our secretary, but sad for them that their generation was unable to maintain the farming life, and had to sell everything in an auction and take jobs that pay hourly.

Anyway, it's an insult that Brian has been put in charge of the automotive industry. I can see how it is thought that this safety net is necessary. Sometimes it is necessary to stay out of the way, rather than to catch a falling one. In this case, it's possible that the one falling is too big, and the distance too high, such that catching the falling one will break our backs.

[Michael Ballai]

I spent over seven years in a corporate fleet leasing management company. The complexity of the automotive business is mind boggling. The stupidity of government on top of that has always been beyond comprehension. Having the feds run GM leaves me with only one thought: buy a bicycle.

[Apolojedi (Daniel Eaton)]

I think GM just got too big to react quick enough to consumer demands. So it was taken over by something even larger with an even slower track record and no experience in that area. Makes no sense at all. If this truly wasn't a power grab and the government really doesn't want to run the industry, then they should take the government owned shares and send them to the taxpayers - say at the same ratio as the tax contribution from last year.