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

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

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

[FriendlyPrimate]

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.

Re:Both GM and Chrysler were handle poorly

[larry bagina]

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.

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:Perhaps, but another reason

[Nimey]

Horseshit. Why do the birthers, etc. always refer to him as Barack Hussein, but average people do not? The answer is perfectly obvious.