Government ownership of GM doesn’t benefit anyone
The government has a plan for General Motors. The government will continue to give GM money, which will benefit GM and its suppliers. Adding money to the economy will benefit the economy.However, as part of the plan, the government will wind up owning about 50% of the company. This ownership does not benefit GM, its suppliers, its employees, its shareholders, its creditors, taxpayers or the economy. The economic value of government ownership is not just zero. It is a strong negative. GM loses because its leaders will have to contend with business-ignorant, government bureaucrats, when making decisions. Suppliers too, will need to deal with arbitrary, politically-inspired rules, that will impact efficiency and creativity. Employees will pay for government ownership through a reduction in salaries and benefits. Shareholders will pay through a dilution of share ownership. Creditors will pay by being cheated out of the money due to them. Taxpayers will not receive any part of the stock; only the government will own it. The economy as a whole will receive no advantage from government ownership. There is, in fact, not one good reason for the federal government to own GM stock, and myriad reasons not to. The mere fact that government bureaucrats want this harmful ownership of GM stock demonstrates the government’s lack of economic and business sense. Rodger Malcolm Mitchell |
Well Baby Boob, I would say that all these ridiculous environmental regulations are the worst things responsible among many other things. There is no doubt that management made some absolutely stupid concessions to workers to providing unbelievable retirement benefits was eventually going to bite them in the ass. I would also say that GM did a terrible job advertising their own products.
However, Obama motors is not the answer. I want someone to point out to me where Obama has his MBA. There is a 31 year old kid now running the show, although most already know that Obama is. Now the deal is to produce cars that no one wants. Sounds like a winner to me..NOT! Also, lets close the dealerships who sells the cars and put tons of people out of work? Sounds like a winner to me….NOT!
This is one of the most ignorant business decisions I have ever seen. Then again, when an administration spends our grandchildren’s money, I guess you can say that government screws up again.
By the way, use my name correctly and I will use yours correctly.
superdave…where was your concern about your “grandkids” money when Bush gave all those tax cuts to the rich with BORROWED money from the Chinese? How about the disastrous war in Iraq…financed “off-the-books” with borowed money?How about the “socialized” medicare drug benefit financed with borrowed money? Selective memory or GOPERS talking points? Btw-ive got some “WE LOST” buttons..be glad to send you one.
“I would say that all these ridiculous environmental regulations are the worst things responsible among many other things. ”
Wrong-o, Dave-o! Toyota is kicking some car-sellin’ butt and for awhile, they couldn’t keep the Prius on the shelves. Believe it or not, patriotic Americans care about air quality and want to drive a car that reflects it. Had GM provided those in greater quantity, they might’ve survived. Not that it was the only thing that drove GM down. But it didn’t help.
Second, if you really cared about your grandkids, you’d care about the air they breath. How do we get better air? “Ridiculous environmental regulations.” You’re grandchildren will thank me.
Dave who is not super
You want to someone to point out where Obama got his MBA. You ask this as if that is one of the keys to GM. Yet look at all the MBA holders that ran GM over the last 20 years. See how those MBA’s ran the company into the ground. See how those MBA’s ran the company into bankruptcy. You depend on a MBA way to much. But then what the hey all those MBA were successful business men until they ruined a company that few thought could be ruined. But it is clear you would rather base your choice of who to head the company on standards that ruined the company, nothing but more of the old and failed from you.
my id,
Environmental regulations had very little to do with the success of Prius. They couldn’t keep Prius on the shelf last year because gas was over $4:00 a gallon.
Oh boy. Soon, we will all be driving cracker boxes made by “Messiah Motors”. Highway deaths will be on the increase.
Cars we can expect:
The Messiah Camaro
The Messiah Vet
The Messiah mini Ram
The Messiah Charger
The Messiah Yugo wanna be
All models guaranteed to crumple up in a 30 mph wind.
Bob,
“So short of liquidation would not the short term debt be paid prior to the secured debt?”
No, secured debt holders are always first. That’s why I am so puzzled/peeved into what really happened. As far as Obama saying he doesn’t want to run the car industry, what???????? Sounds like he is actually enjoying doing that very thing.That’s why I hope Ford can honestly and fairly compete with ObamaMotor, errr GM and Chrysler. Let’s not forget the political makeup of the dealerships’s that were closed.
http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Furor-grows-over-partisan-car-dealer-closings-46261447.html
http://www.americanthinker.com/blog/2009/05/did_chrysler_play_politics_wit.html
budb…
I agree that secured are first, but they are first in context. If you are secured and the debt does not mature for 10 years and there is no liquidation then you are not entitled to your debt for 10 years. While at the same time the short term debt is 45 days and it is unsecured then they get paid within the 45 days.
I know that some of the long term debt holders were objecting to the offers of settlement, a minority but they still had the right to object. Did they object to the terms as well has to who gets paid first? I heard no objections being raised there, just the terms of the amount of compensation, i.e. perhaps they were only going to get 30% of what they were owed and they thought they should get 40%. So if you find something on them objecting to who got paid first I would like to read it.
Bob,
What I mean by scured debt gets paid first is the actuall terms of settlement, meaning their piece is settled first. Anyways, I just feel this is a bad deal for all involved but I hope it all works out. Time will tell.
As an electrical contractor I will benefit from the government plan to help GM.
In the past, I have contracted work at the GM plant which will maintain my employment base and sustain good jobs with good wages and healthcare benefits. Republicans were gung-ho with bailing-out Goldman Sachs and AIG to help their CEO get their bonuses and Lear jets….God forbid we try to help working men and women continue to make their house payments.
Let GM fail and we pay thousands of UAW members, and other who work for suppliers, get unemployment, welfare, food stamps, and medicare.
Sounds like a good plan ditto-heads.
Where was your tea party last October.
Please pass the Grey Poupon. Hank Paulson is laughing.
The Republicans created this economic mess and now they blame Obama for trying to get us out of the worse depression since 1929.
The best they can do is yell “Socialism”.
Tell that to George Bush and Hank Paulson.