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."

Comments

Sweet

[smchris]

As radio announcer Thom Hartmann says, corporations want to privatize the profit and dump the liabilities on the commons. That's the ticket.

What do you want them to do?

[Brian Gordon]

They have no money to pay for it. Even if the government didn't excuse the debt, it wouldn't ever be paid.

Re:Both GM and Chrysler were handle poorly

[Anonymous Coward]

No, no, and no.

GM and Chrysler should have been left to die. Period. They're businesses sucked and so did they're products.

The only thing the government bailouts did was keep these bloated poorly run companies alive for a few more years - at the taxpayer's expense. In the meantime, the execs and union members have a few more years of being over paid - at the taxpayer's expense. A few years from now, they'll be back exactly where they were a few months ago and we'll be a few hundred billion dollars poorer.

Here is a Reason Why the Free Market Works Best

[reporter]

If General Motors (GM) were allowed to enter bankruptcy without a government bailout, then GM would likely have been purchased in whole, or in parts, by a European or Japanese auto company. The purchaser would have assumed all of GM's liabilities. Of course, the sale price would have been set to reflect the costs of these liabilities.

However, because Americans allowed Washington (and Barack Hussein Obama) to effectively nationalize GM, Americans received the worst of all worlds. Washington poured billions of dollars into the company, and that money comes from future taxpayers. GM retains its rotten management although some talking heads at the very top of the pyramid were replaced: that management misread the market and failed to steer research and development toward highly efficiently small cars when gas prices were skyrocketing. Unions with their gold-plated medical insurance (now paid by the government) retain a stranglehold on the company, now literally owning part of GM.

Worst of all, we discover that the "new" GM will not be paying the costs of cleaning up the environmental pollution that the "old" GM caused.

We could have avoided all these problems if either Toyota or Renault had purchased the relevant bits of GM. Why do Americans "fear" working for a Japanese or French boss so much they are willing to nationalize a car company?

Re:Here is a Reason Why the Free Market Works Best

[cdrguru]

If GM had escaped from its union contracts through a bankruptcy, it would have started a trend of other severly underwater employers using the same tactic to escape their union responsibilities. No Democrat administration could possibly allow the end of union featherbedding and union gold-plated benefits. Hence the bailout, with the assurance that the unions would continue to receive their benefits.

There was no other way it was going to happen without a Reaganesque union-busting administration at the helm. Obama is going to give us unions whether we want them or not through the fair choice act, so how could he destroy them?

Re:Here is a Reason Why the Free Market Works Best

[bzipitidoo]

You sound disparaging of unions. Businesses are always pulling crap. They'll take everything we let them take. They're always looking for an angle, always trying to game the system. They feel they must, to stay competitive. If we let them, they would lower wages to nothing, pay in "company credit" good only at the highly profitable, highly marked up company store, lobby for bad laws that are entirely too favorable to them, and use our police, paid for by our taxes, to enforce those laws. Unions arose in defense against this sort of abuse. The workers saw that the corporations got their way through organized might that no individual could hope to match. They had to organize. For their part, many businesses are secretly glad of restraints that work. They're often unwise but not completely stupid, they know there are destructive forms of competition. It's a comfort to know they don't have to engage in some of that sort of competition because their competitors can't do it either. Some of their protesting is for form. A pity the free market extremists don't see that.

Businesses are like professional athletes who are so committed they'll do anything they can to win. Taking performance enhancing drugs would be the least of it. How about busting a competitor's knees? Bribing or threatening the officials, or the competition? Sabotaging facilities, or the competitors? Pretty easy to win if the competition's transportation couldn't get them to the game, or they all came down with the flu. Then there's changing the rules of the game. Suppose a team got a dubious rule passed that coincidentally bars most of an opposing team's players from playing, while disqualifying almost none of their own? Then later on rails against those same rules as examples of government red tape and interference, when they themselves were the ones who put those rules there? It's easier to bully governments into making changes if they've first been made to look stupid and incompetent. We have to have good rules and enforcement, unless you'd prefer chaos and seeing all the best athletes dead of stress, steroid abuse, and the myriad other hazards of the profession before age 30?

This dumping of polluted sites is classic. Mining operations pull that one all the time. They get to estimate how much pollution their operation will cause, because they wrote the laws on that. Naturally they underestimate as much as they can. For a few years they mine the material and rake in the profits. They shelter those profits, and then declare bankruptcy and leave us to clean up the massive mess they made. Of course the mess is ten times more expensive to clean up than they estimated, and because they planned to declare bankruptcy all along, they did nothing to mitigate the mess when it would have been cheaper.

Re:Here is a Reason Why the Free Market Works Best

[QuoteMstr]

Barack Hussein

Thanks for letting me know when I could stop reading your post.

Re:Here is a Reason Why the Free Market Works Best

[Daniel Dvorkin]

so is he ashamed of his name again?

[sigh] Is John Sidney McCain III ashamed of his full name? If not, why didn't he use it in his campaign literature?

This wide-eyed, fake-innocent "but it's just his name" bullshit is really childish. You know perfectly well that the only reason to say "Barack Hussein Obama" in a regular political conversation is to make him sound more foreign, more menacing, more eeevil. Look, you don't like the guy, you don't like his policies, fine. There's plenty to criticize on that basis. But the Birther / Secret Muslim / Not One Of Us rhetoric accomplishes nothing except reveal much of the opposition to Obama as racist, religionist, xenophobic craziness.

Re:Both GM and Chrysler were handle poorly

[ravenshrike]

Horseshit. The unions were much more complicit in the downfall of GM and Chrysler than the last few crops of CEO's at either company. Moreover, given the stock holdings that the union was given at GM, anything bad that happens to that company is now completely their fault. The fact that they sold most of it is absolutely no excuse.

Is this surprising?

[tji]

They declared bankruptcy.. the company failed and went into bankruptcy protection in an attempt to salvage something.

Their shareholders (owners) lost billions of dollars, and the GM of old is no more.

Yes, it's important to recognize the responsibilities of old-GM that are not being addressed now that they are gone. But, this should not be surprising, and it's not that unusual either.

unusual not

[confused one]

While the bankrupcy itself was unusual, it's not unusual at all for corporations to receive relief on environmental cleanup and associated fines during bankruptcy. State and Federal governments ends up with the tab for the cleanup.

Re:Both GM and Chrysler were handle poorly

[YayaY]

It's funny how companies talk about free-market and ask the government not to regulate their market when the economy is good. But then when the economy goes bad, they put their tails between theirs legs and they ask for government help.

This is no longer a free-market A government owned car compagny? It feels like communism.

Re:Both GM and Chrysler were handle poorly

[smaddox]

Welcome to the real world. No one likes the government, unless of course the government is giving them a free lunch.

Obama has taken trickle down to the wrong level

[Shivetya]

Wall Street, instead of having to wait for Reagan's tax breaks to make money found a new comer who accelerated the plan buy just paying them the money upfront.

GM and Chrysler were bailed out for Wall Street and the Unions. Though don't confuse Unions with the rank and file, I am talking about the leadership who decides where the money is spent and offer muscle to intimidate anyone the administration doesn't like (see AFL-CIO's new leader who thinks murder and violence are fine if you can get away with it - or pay it off).

GM had the ultimate sweet heart deal of the two rescues. Not only did they get out of cleaning up all their pollution they also got a tax bump by keeping the tax write offs from bad GM to prop up new GM. Hence companies which play by the book and make sensible deals like Ford get doubly screwed.

Send Washington a message, avoid GM and Chrysler products. We are being run over by the goons in Washington and since our vote counts for very little the next year the only fight we have left is our pocketbooks

Re:Both GM and Chrysler were handle poorly

[tkrotchko]

Yes, in business, it's cruel to be kind in so many ways.

If they would have been left to normal bankruptcy, GM could have done the right thing, dropped it's union contracts, reshaped it dealers, etc.

Instead, the bankruptcy was railroaded through as quickly as possible to have the smallest impact on the unions. Ironically, this will be worse for the workers in the long run and worse for GM. Definitely worse for taxpayers as we're fleeced to shut down these companies rather than let nature take it's course.

What we're doing is the equivalent of feeding an injured deer in the winter. The deer still isn't going to survive and you wasted a lot of good food that could be used to feed more viable animals.

Re:Both GM and Chrysler were handle poorly

[MightyMartian]

Actually, what's been accomplished is worse than that. What US and Canadian taxpayers have done is essentially underwrite the inevitable move of manufacturing vehicles by Chrysler and GM to China and Mexico. I guarantee you, in ten years they won't be running any plants in the US. There will probably be more Japanese cars being made here than American cars.

Add it to Superfund

[bryan1945]

Or whatever it's called.The US people are now completely crispy fried when it comes to our debt. At this point I just laugh and cry a little every time I hear about a new 'program' or 'bill' or 'solution' that comes out of the administration's or Congress's mouth.

Re:Both GM and Chrysler were handle poorly

[CRiMSON]

And keep the 10's of thousands of people employeed in an already shitty economy. It's not so much about keeping GM alive, as keeping people in a job.

Look at the bigger picture before you sound off...

Re:Both GM and Chrysler were handle poorly

[fatray]

The money that the government used to save those "10's of thousands" of jobs didn't just magically appear. It was sucked out of the private-sector economy. Therefore, that money will not be spent on other goods and services, so other people lose their jobs. The jobs saved are easily identifiable and politically connected, while the compensating jobs lost are not. The vast majority of the jobs saved will probably be lost in a few years, so the net is a huge loss.

Re:Both GM and Chrysler were handle poorly

[sumdumass]

Really? Please show those numbers BACKED UP by real accountants and real numbers (not something pulled out of the air on Faux News).

I'm not sure what is wrong with your Google finger but this information is nothing new and has been a topic of discusion around the entire ordeal since well before the bailouts.

Perhaps the problem is that you are not watching Fox news because you shouldn't be that clueless over something that fucking well known. My guess is your probably not paying attention at all and only like bashing Fox news because you are an idiot who thinks it's fashionable when others do it. That's fine and all but your being pointed out.

Just a bit ago, It was argued by the federal gov. that GM and Chrysler unions had to lower their average pay from 36 to 34 which is the same pay as Toyota, Honda, etc had (IIRC, the average length of time by the employees was disregarded; GM and Chrysler had on average a much higher cumulative time).

Yep, I was right, you are not paying attention at all. Total costs of employmment is not average wages. You are arguing the shirt is green instead of red when your not even looking at the same shirt. By the way, how long ago is a bit? Is it a pinch ago, is it 01 ago, a teaspoon ago, Oh well, it's a mystery I guess.

As to the 78/hour figure, I believe that includes such things as retirement and medical health pay for retirees. OTH, other nations such as Germany and France have socialized medicine where a tax is placed on the good, but it does not count against the employee.

No, it didn't include already retired people. That's a separate fund and part of another accounting snafu. But it does cover wages, insurance, retirement contributions and so on for the current employees. So yes, while it is more then an average wage (which I never said differently), it is not counting people who no longer work with GM. And yes, Toyota or any other car company can be put in the exact same situation if their unions get the kind of control they had over GM.

Re:Both GM and Chrysler were handle poorly

[OeLeWaPpErKe]

That's the broken windows fallacy. Government spending just cannot replace private sector spending, not even when they look equal on paper. Private sector spending is a feedback mechanism. Good decisions get rewarded, bad decisions punished. This means bad decisions get punished before they derail the economy to the point people die.

Government spending has no such feedback mechanism. There is no specific reason that is *has* to go wrong, but there is no reason for the government to do the right thing either. In theory government could do the same as the private sector, nothing forces the government into bad decisions.

But given the number of possible decisions, it seems unlikely to be able to choose good ones without feedback. And that's just what happens : government spending always goes wrong, for the very same reason entropy always increases. There is no good ("certain") reason shards never jump up from the floor to reform the glass you dropped of the table, and there is no good reason government spending cannot be right.

In practice however, government spending always goes awry. Not that you'll ever get democrats to accept that.

The real solution is to make certain that people have votes, and the real world has a veto. In congress the same situation as in the real world. The gold standard seems a good step in the right direction

Re:Both GM and Chrysler were handle poorly

[ahabswhale]

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.

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.

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.

Re:Both GM and Chrysler were handle poorly

[Ifni]

Very good points. I'm not too keen on government taking over healthcare, but my one consolation is that it has to get worse before it gets better. The private industry has failed, and though much of that failure is due to unmitigated greed, much of it is also due to problematic regulation and entrenched practice.

The system is broken from top to bottom. There are a limited number of slots available for new medical students even though there is a shortage of doctors, and many good candidates get turned away (conversely, many bad candidates are accepted in years when there are more spots than good candidates). Once accepted, school is exorbitantly expensive, incurring massive debt to the students (this is a serious problem with the educational system, which is a whole other argument). Once students begin practicing (first as interns, then as residents) they work ridiculous hours, forcing sub-optimal performance in life or death situations, which leads to excessive mistakes. Mix with a sue happy populace and medical insurance costs force prices for healthcare to skyrocket. Now, very few people can afford proper medical care without insurance, and the insurance companies cheat the doctors and the patients as well as the businesses that pay a significant portion of the insurance costs. From what I have seen, it costs more per person to be covered under a business healthcare plan than it costs to buy an individual plan, but because the employer shares the burden, it costs the EMPLOYEE less, while the insurance company enjoys a larger margin.

So, much of the change needs to start with the educational system and the AMA, which no private industry can seriously expect to force. Then, changes I can't even begin to fathom need to take place in the legal system in regards to malpractice and also in terms of acceptable hours for medical professionals.

But, I digress, this is a discussion about the botched bailout of the auto industry where our elected leaders ignored the screaming of their constituents (except in Detroit) and spent over a trillion dollars of taxpayer money to line the pockets of the fat cats that paid for their elections. I don't know about you, but I am voting every single one of those fuckers out next election. Any one of them who didn't vote "no" gets a "no" vote from me to make up for their missing one - abstaining is equivalent to a "yes" vote as far as I'm concerned. And the same goes for the bank bailouts. There is no such thing as "too big to fail" - governments do it all the time, and life goes on. If a government can fail without it being the end of the world, a business certainly can.