EX GM Exec Lutz: Feds Told GM To Drop Pontiac Or No Bailout

[Russo]

Originally Posted by trademaster

If all the stars aligned we may not have dipped into depression by letting GM fail. It is possible, but in my opinion you don't bet the house on a pair of twos. The bailout was a short-term solution to a long-term problem, but that's better than no solution at all.

excuse me, how many other big companies failed over the last six years? GM got bailed out simply because of the union voting block..

Three things contributed to the fall:

Unions
Government
Mismanagement

by the government instituting "non-right to work" laws, they crippled the ability for GM to hire cheaper labor that would keep them competitive against other manufacturers.. the unions ate GM from the inside out by their strong arm tactics (as they do with any host they leech off of).. finally, the mismanagement of GM through union contract negotiating as well as the failure to manufacture a product that people wanted to buy.. it's quiet easy to see why they failed and I'm shocked that most people who work in the private industry doesn't see this..

[Mr. Wyndham]

Do we have to keep rehashing the past....?

[motorhead]

Originally Posted by Mr. Wyndham

Do we have to keep rehashing the past....?

That's how we keep from repeating it.

Not sure that this pertains here, but it sounds good.

[Mr. Wyndham]

Originally Posted by motorhead

That's how we keep from repeating it.

Not sure that this pertains here, but it sounds good.

It does sound good...and certainly not disagreeing. ...I guess I just can't find the patience for sideline "what-ifs"...

[shine2013]

Shame there was no Trans AM based on this platform. The one that was made for some movie a few years ago looked awesome.

[Russo]

Originally Posted by Mr. Wyndham

It does sound good...and certainly not disagreeing. ...I guess I just can't find the patience for sideline "what-ifs"...

you knew what would happen the moment someone created the thread... quit acting surprised

[The_Blur]

I hate threads like these. I really do. It sounds like a whistleblower trying to out a scandal.

Here's the scandal: some people still don't think it was a good idea to save GM.

GM was jacked up. Chrysler was dying. If they fell, so would millions of jobs. The economy was already crushed. Did saving these two companies save the economy? No. I still couldn't get a decent job until I joined the service. This isn't a political forum, and we aren't going to discuss all that.

Let's look at it through a different lens. GM survived. American cars still exist on a large scale. Muscle cars, specifically the Camaro and Corvette, continue to burn rubber and crush imported competition.

Was Pontiac an unfair sacrifice? In my opinion, I think we could have saved them, but the sacrifices would have been very great. GM attempted to close much of its dealer network, but dealers rallied and pressure kept that from happening on the grand scale GM planned.

In any case, Pontiac had to go back then. It's gone now. If it came back, that would be great.

Somehow, I don't feel like this thread solves anything. Did I mention that I hate these threads?

[mickss]

Originally Posted by Russo

excuse me, how many other big companies failed over the last six years? GM got bailed out simply because of the union voting block..

Three things contributed to the fall:

Unions
Government
Mismanagement

by the government instituting "non-right to work" laws, they crippled the ability for GM to hire cheaper labor that would keep them competitive against other manufacturers.. the unions ate GM from the inside out by their strong arm tactics (as they do with any host they leech off of).. finally, the mismanagement of GM through union contract negotiating as well as the failure to manufacture a product that people wanted to buy.. it's quiet easy to see why they failed and I'm shocked that most people who work in the private industry doesn't see this..

Really? It was the unions? I suggest you read the following article from April 2005 and tell me where this person has it wrong. (Allan Sloan is an American journalist who is senior editor at large at Fortune magazine.)
http://www.washingtonpost.com/wp-dyn...2005Apr18.html

[SEVEN-OH JOE]

Originally Posted by Mr. Wyndham

Do we have to keep rehashing the past....?

Apparently.

One connect - the - dots moment not often seen in these sorts of discussions is this:

1) What did GM pay to get OUT of their deal with FIAT?

2) What did FIAT initially pay to take over Chrysler?

Yeah, Sergio had money left in his pocket to take over Ma Mopar. Bought a whole slew of Black sweaters, no doubt.

Hmmmm.

[Russo]

Originally Posted by mickss

Really? It was the unions? I suggest you read the following article from April 2005 and tell me where this person has it wrong. (Allan Sloan is an American journalist who is senior editor at large at Fortune magazine.)
http://www.washingtonpost.com/wp-dyn...2005Apr18.html

you just explained my point even further.. I also included two other reasons for GM's bankruptcy.. perhaps you blacked out when you read the word "unions"...

to further on the link you provided.. municipalities often get into trouble with big pension plans too.. you can use several examples throughout America and you will find that all grossly valued pension plans are negotiated between public unions and politicians.. both of which do not pay for those pension plans (and often have plans of their own)... the taxpayer, yet again, is there to bail out the management of crony capitalism..

[Slapshot]

The unions played a huge roll no matter how you slice it. Post above hit the nail on the head.

[mickss]

Originally Posted by Russo

you just explained my point even further.. I also included two other reasons for GM's bankruptcy.. perhaps you blacked out when you read the word "unions"...

to further on the link you provided.. municipalities often get into trouble with big pension plans too.. you can use several examples throughout America and you will find that all grossly valued pension plans are negotiated between public unions and politicians.. both of which do not pay for those pension plans (and often have plans of their own)... the taxpayer, yet again, is there to bail out the management of crony capitalism..

No I didn`t "black out" that article explained how GM chose to pass off those cost of health care/retirement on their corporate balance sheet.

[trademaster]

Originally Posted by Russo

excuse me, how many other big companies failed over the last six years? GM got bailed out simply because of the union voting block..

Six years? If you consider the companies that failed immediately before GM you should understand why GM was saved. Look what the collapse of Salomon and Lehman did to the financial services industry. Look how that shock impacted the global economy. GM filed for bankruptcy June 1, 2009, a time when the financial services industry was in shambles as a result of the aforementioned collapses and nobody could afford to, or were willing to, privately fund their bankruptcy. I know, I was a senior consultant in the organizational planning division of consulting services at Goldman from 2004-2010. You don't seem to understand what would have happened to GM if they had not found funding. The liquidation of GM would have brought down numerous suppliers leaving competitors on the hook to find new ones. In the automotive industry it generally takes at least six months to change suppliers. The entire industry needed GM to maintain continuing operations, so a large cash injection was necessary. The market environment at the time is the most critical factor.

You do understand that one of the fundamental responsibilities of the Federal Reserve is to act as a lender of last resort under conditions in which demand for liquidity cannot be met by private industry, right? The Fed intervened to prevent a liquidity crunch that could have led to total collapse and saving the auto industry was critical.

Originally Posted by Russo

Three things contributed to the fall:

Unions
Government
Mismanagement

by the government instituting "non-right to work" laws, they crippled the ability for GM to hire cheaper labor that would keep them competitive against other manufacturers.. the unions ate GM from the inside out by their strong arm tactics (as they do with any host they leech off of).. finally, the mismanagement of GM through union contract negotiating as well as the failure to manufacture a product that people wanted to buy.. it's quiet easy to see why they failed and I'm shocked that most people who work in the private industry doesn't see this..

Though I feel you put too much emphasis on unions and too little on brand architecture, I don't disagree with much of what you say here. What's your point? You were wrong about management remaining entirely the same, it didn't. Industry-related legislation has changed and continues to in an effort to bolster the industry against recession. What does any of your post suggest in regard to the need or lack of need for the bail out?

[Russo]

Originally Posted by trademaster

You do understand that one of the fundamental responsibilities of the Federal Reserve is to act as a lender of last resort under conditions in which demand for liquidity cannot be met by private industry, right? The Fed intervened to prevent a liquidity crunch that could have led to total collapse and saving the auto industry was critical.



Though I feel you put too much emphasis on unions and too little on brand architecture, I don't disagree with much of what you say here. What's your point? You were wrong about management remaining entirely the same, it didn't. Industry-related legislation has changed and continues to in an effort to bolster the industry against recession. What does any of your post suggest in regard to the need or lack of need for the bail out?

what the Federal Reserve does is keep interest rates artificially low.. don't give them credit for preventing a collapse, the collapse hasn't happened yet.. the Fed is only prolonging it with added damage.. the Federal Reserve is like a drug dealer, and the American people, businesses, and government are like the drug addicts.. the more cheap credit the Fed provides, the more inflation we have and the bigger the market bubbles get (housing in 2008 is a perfect example).. nobody wants the cure because that means we have to go through detox.. but eventually, the debt based consumption of an economy will come to an end.. not to turn the thread political, but Woodrow Wilson is the worst president we had... The Federal Reserve Act and 16th amendment are destroying this country.. if you want to know more about how bad the Fed is youtube Peter Schiff..


if unions are not the problem, then why do they always strike when they don't get what they want? you can look at the auto, teacher, postal, rail way, etc unions.. they all promote their agenda over what the market calls for against the private industry... it's why in the postal service, they can pay someone $90,000 a year to put paper into metal containers..