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GM Gets To Dump Its Polluted Sites
ParticleGirl writes with this excerpt from the Detroit Free Press:
"GM's unusual, government-engineered bankruptcy allowed the Detroit automaker to emerge as a new company — and to shed billions in liabilities, including claims that governments had against GM for polluting. Environmental liabilities estimated at $530 million were left with the old GM, which has only $1.2 billion to wind down. Administrative fees and other claims will soak up that money, and state and local officials told the Free Press they fear the cleanups will be shortchanged. ... The New York Attorney General's Office, seeking to protect environmental claims for cleanup at Massena and other sites, argued that federal and state regulatory requirements should not be eliminated by a bankruptcy sale. ... But [US Bankruptcy Judge Robert Gerber] ruled otherwise."
is paved with good intentions. Notice to government officials and their supporters: QUIT TRYING TO FIX STUFF, YOU ONLY MAKE IT WORSE.
Women are like electronics: you don't know how damaged they are until you try to turn them on.
It's even worse. Ford (or more accurately, CEO Alan Mulally) saw the impending doom and got ahold of as much cash and lines of credit as they could and were able to avoid bankruptcy. Car companies (especially GM!) don't make money by selling cars so much as they do by financing car sales. GMAC was also the recipient of multiple rounds of government financing and has FDIC backing and access to below-market government financing. In order to increase GM sales, GMAC lowered their standards (sound familiar?) and offers 0% loans. Meanwhile, Ford Motor Credit needs to borrow money on the open market at rates of 10% or so.
If you look at Edmund's analysis of the CARS program, Ford has 4 of the top 10 (including the higher margin F150 and escape SUV). The official government figures, however, are broken out so that high milage (and mostly foreign) cars look more popular.
Do you even lift?
These aren't the 'roids you're looking for.
Normally, when a company goes into bankruptcy, the assets are liquidated and the bondholders/etc get to split the cash. Sure there might not be much left to spread around, but its part of the process.
That didn't happen here, and i say it wasn't a true bankruptcy. Nor was Chryslers, with their assets being given to a foreign entity...
---- Booth was a patriot ----
Unions are abysmal to. I'm going to buck a trend and go with an Airline analogy. Remember a few years ago when Delta went bankrupt. Its pilot's union had managed to finagle wages something like 3x the industry standard and absurd benefits. One of the first things Delta did in bankruptcy was to re-negotiate all those union contracts. It worked out pretty well, Delta returned to profitability in ~2 years if I remember correctly.
Unions are a necessary evil. They are needed to ensure that workers aren't run roughshod over. However, in cases where the Union gains too much power and uses it unwisely, they can destroy companies. Afterall, the purpose of unions is almost in direct opposition to the profitability of the company. Delta was my first example, they were almost certainly a contributing factor in the car companies downfall. Is there a reason that autoworkers should have their healthcare covered for the rest of the lives by a company funded health program? I can't think of a reason.
It doesn't really matter though, the unions have been rewarded with an automaker to do with as they please for their troubles, and its too late for any of us to do anything about it.
Why do Fords US cars suck so much? A friend of mine owns the new Ford Fiesta which I think looks stunning and she tells me shes getting 50 MPG in a car thats quite happy to get to 70+ MPH. The Ford Mondeo is a very nice car which gets good mileage and the Ford Focus usually manages anything between 30-60 MPG depending on the engine. I'll admit I can't stand the look of the new Ka but again its a car design to commute inside towns. The 2 Litre Focus TDI (with all the mod cons) is probably the most fun car I've every driven, not as capable as a Audi A4/A3 or a Mercedes C class but alot of fun. While I chucked that car around corners and gunned it off traffic lights I still got 55MPG. It should be noted any Focus below 1.8 litre can't pull the skin off of a rice pudding.
Its the same with GM, Vauxhall/Opel have some very well engineered and fuel efficent cars sure the Corsa/Brianna are probably to small for America. But the Astra and Vectra are both cars big enough to fit 5 grown men, have high safety ratings and get good mileage.
I understand American cars all have to be 20ft long for some reason but why don't Ford/GM sell their european cars in the US. They get great mileage pretty much all have 5 star NCap ratings (very safe), you can usually get all the Mod cons from GPS to Air Con. There wasn't any need for GM to sell itself to Fiat for engine technology when Vauxhall/Opel already had good engine technology.
I used to be a full-fledged Libertarian who believed the mantra that all regulation is bad. But unfettered capitalism is not the panacea you think it is. Unregulated capitalism is like a race car without brakes. It can go really fast, but is prone to horrific crashes. And unregulated capitalism essentially means NO middle class. If you want to see what unregulated capitalism looks like, look at what it was like in the United States at the turn of the 20th century (or look at China today). You had two classes of people...the haves and have-nots. The lower class had to work 14-16 hours a day, 6 days a week, for slave wages, with no job security (you get hurt, you get fired). Don't like working like a slave? Tough luck! It was good for the economy though. Sick people didn't live long enough to be much of a drain on the economy. The so-called "socialist" policies put in place during the 1930's resulted in the expansion of the middle class in the 40's and 50's. Otherwise, you'd likely still be working in a sweatshop right now. Of course too much regulation is bad for the economy. But no regulation at all leads to hell-on-earth working conditions for most, and all wealth concentrated in a very small population. Therefore, the best choice is some limited regulation and intervention by the government when absolutely necessary.
Ford is weird like that. They make some wonderful cars for the EU market, and then utterly fail to bring them to the US. This happened with the Ford Focus a few years back, where the Euro Focus was being hailed as an amazing car, while in the US they flat out refused to import the platform, citing the "expenses" of bringing over the car. Meanwhile Mazda took the exact same platform and produced the smash hit Mazda 3 & 5. Only recently was it announced that the 2010 US versions of the Focus would use their international platform as an "experiment" that might actually convince them to do what they should have done years ago.
Also, to add insult to injury Ford has never considered releasing the Focus RS in north america, the best they've ever done is the SVT which was soundly crushed virtually every other sporty compact on the market.
As far as Opel/Vauxhall cars go, you can buy some of them in North America but not too many. The Opel Astra is simply the Saturn Astra, which is a great little car. The Opel GT has been doing quite well as the Saturn Sky and Pontiac Solstice too, though personally after driving one I must say I was not impressed. The Vectra (now Insignia) isn't itself sold in NA but the platform itself is hugely popular, being shared with the Chevy Malibu, Pontiac G6, and Saab 9-3.
Oh and one last point, GM isn't selling itself to Fiat, Chrysler is.
Wow, your post is so fucking wrong it's amazing. You're one of these guys who thinks that capitalism has some kind of magic fucking pixie dust that makes everything wonderful. Guess what, it doesn't. The system is gamed in every fucking way imaginable to make sure the playing fields are anything but level and that the so called "invisble hand" does nothing but stroke very specific benefactors.
And guess who gamed the wall street system. What gets blamed for the mess according to everyone. Oh wait ... "regulations". The government in other words. Of course the fix for "wrong", "too much", "ill-conceived", ... regulations is ... more regulations. You know, because this set of congresscritters is so much less self-involved and so much more flexible and smart than the last batch.
What do I hear ? Nancy Pelosi not exactly Maria Theresa ? Not exactly Einstein either ? Well ... what could possibly go wrong ?
Obviously those more regulations are done in the same way as last time : without knowing their effects beforehand ... by people who refuse to change tactics when proven wrong ...
Any 2-year-old can tell you what the new regulations will do : new loopholes. New loopholes will lead to new bubbles, which are actually positive feedback mechanisms (like writing out more bad loans has been designed to be such a loophole : you get to write money in the books twice, and if you lose it the government pays it back to you. Every kid can figure out how to create money that way : just loan to every I-need-a-new-520-inch-tv unemployed non-english-speaker in New York. Of course what that will do to the economy in a few years ... is very clear indeed). New bubbles will lead to ... more regulations.
This principle of constant government interference is somehow more stable than not gaming the system.
As for your "Good decisions get rewarded, bad decisions punished" crapola, are you fucking kidding me? The fucking dickwads on Wall Street are already circle jerking the shit out of themselves with bonuses while millions more lose their jobs, retirement, and houses. So please spare me the broken windows fallacy bullshit. Power corrupts and warps anything it touches including your god, Capitalism.
I have a God, thank you very much, and it's not capitalism. I do not seek to replace him either.
Again the only reason those "wall street dickwads" can pay for those bonuses in the first place is government interference. Without such they'd have been out of a job.
So I fail to see why capitalism, which would have blocked these bonuses if allowed to run it's course, instead of the government (a little bit Bush, a lot Obama), who really paid for it, out of our pocket.
FYI...I'm actually a capitalist but I'm realistic about what it is and isn't. Adam Smith was definitely on to the right idea but he didn't get it quite right. Friedman took Smith's ideas and made them far far worse.
You know who took (I agree ... mostly) right ideas and screwed them up beyond recognition ? Keynes.
He invented merely a whole new form of socialism that deceived just about everyone, and made good-sounding capitalist arguments in favor of it. They look good, they sound good, and they're flat out wrong.