General Motors Can Redeem Itself

Today the United States and the world witnessed one of the biggest bankruptcies of our time by a company that was supposed to be impermeable. General Motors has been around a hundred and one years, but today it could no longer sustain itself without going the route of Chapter 11. Rest assured, this is not the end of GM, it isn't like the Oldsmobile brand that has completely disappeared. The company has already spent money on a great PR extravaganza that promises a reinvention.

They say as much to the press:

"The General Motors board of directors authorized the filing of a Chapter 11 case with regret that this path proved necessary despite the best efforts of so many," GM Chairman Kent Kresa said in a written statement. "Today marks a new beginning for General Motors. ... The board is confident that this New GM can operate successfully in the intensely competitive U.S. market and around the world."

As it reorganizes, the fallen icon of American industry will rely on $30 billion of additional financial assistance from the Treasury Department and $9.5 billion from Canada. That's on top of about $20 billion in taxpayer money GM already has received in the form of low-interest loans.

"Our agreement with the U.S. Treasury and the governments of Canada and Ontario will create a leaner, quicker more customer and completely product-focused company, one that's more cost competitive and has a competitive balance sheet," CEO Fritz Henderson said at a news conference in New York. "This new GM will be built from the strongest parts of our business, including our best brands and products."

Of course, it didn't have to come to this. GM could have shed their arrogance decades ago to keep up with other car companies around the world. Yet they only cared about the bottom line and quick short term profits that ultimately led them to the the Chapter 11 filing that they so deserved. Now they'll have to lay off more than 21,000 workers on top of the thousands already gone and in the deal with the government, shrink the size of the company. Obama said that'll he'll let the day to day stuff be handled by GM but that might not be the best way to go. Instead, listen to someone that has filmed, covered and lived the life that GM bestowed upon Michigan. Make the company do the things that our country and world need, not just to let the executives claim to make changes on a spiffy commercial and through press releases. That change can happen now, and at this monumental (and bankrupt) time it should come quicker than ever.

GM Makes The Case For Real Government Oversight

Congressional pressure to make the CEO of GM take a car instead of his corporate jet was a nice jesture, but obviously it had no effect on the real operations of the company. The attitude behind the jet is still there, and it can be seen when the auto giant takes a billion dollars of that taxpayer bailout and sends it down to Brazil so that they can grow their business down there.

From The Latin American Herald Tribune:

SAO PAULO -- General Motors plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker.

According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government and will be used to "complete the renovation of the line of products up to 2012."[...]

For Ardila, the injection in Brazil's automobile sector of 8 billion reais ($3.51 billion) recently announced by the federal and state governments of Sao Paulo "has already begun to revive sales," which fell by 12% in October.

It is great to see Brazil's investment in GM so that business comes back in their country, but in these dire times, American bailout money should be focused right here at home. The problem is that these multi-national companies take advantage of national governments around the world, whether it be for giveaways or low-cost labor. If only nation-states got together to combat these companies....oh yeah, I know, that sounds like a pipe dream. However, the money given by the Bush White House to GM via TARP should be revamped by the Obama Administration, so that we can start to get some sort of handle on these corporate behemoths.

Could There Be An Electric Car Competition In America?

For years American car companies went at each other to see who could build the biggest and meanest SUVs. Now with the climate crisis on everyone's minds and an industry on the brink of collapse, this is the best time to change and retool the auto factories of America. Plenty of others have already and now it is our turn. The automakers may have killed the electric car before, but now it is back with avengeance.

From CNN Money:

While General Motors is moving ahead with its Volt electric midsized car, Chrysler says it already has plans in place, not just for electric cars, but also for minivans and even off-road vehicles.

Chrysler's strategy hinges on keeping it cheap. The carmaker will dispense with flashy designs in exchange for low cost and flexibility. And it plans to pile on more electric-powered models quickly once the program launches in 2010.

"We aren't a one-electric-vehicle company," Lou Rhodes, Chrysler's vice president for advanced vehicle engineering, told CNNMoney in an exclusive interview.

That is great news to hear. Watching the electric car market come into its own will be the day I celebrate though. Talking about a new future for American cars is exciting for now, but really, this should have been happening decades ago. I hope Chrysler and the rest of them are really serious about changing the way they do business, because our planet can't take too much more of our recklessness.

This Is Why GM Is Failing

With idiots like these at the helm of one of the largest companies in the country, no wonder they are begging for billions. Obviously schmucks like Bob Lutz have no idea what Americans want in a car....or else they'd at least be able to sell a few these days.

GM Gives A Taste Of Green Jobs In America

For far too long our automotive industry has been woefully behind the rest of the world when it comes to innovation and ways of dealing with climate change. It isn't that we aren't capable of it but more aptly that no one has stepped up to fund the large-scale projects that will propel us into the 21st century, whether that be private industry or the government. Finally, the old stalwart GM is starting to see the error of their ways and is not only talking about alternative energy but building the facilities right here at home to make it happen.

From CBS News:

(AP) General Motors Corp. said Thursday it will build a new factory in Flint to make four-cylinder engines for the Chevrolet Volt rechargeable electric car and other models.

GM Chairman and Chief Executive Rick Wagoner said the new plant will build a 1.4-liter four-cylinder engine that will extend the range of the Volt, and a turbocharged version that will power the Chevrolet Cruze, a new compact car to be built in Lordstown, Ohio.

"This will be one of the places. You will be one of the teams that help GM lead into our second century," Wagoner told workers and government officials gathered for the announcement.

Production at the new $370 million plant will begin in 2010, and both cars are slated to go on sale in the same year.

This is excellent news out of Michigan. For far too long we have lost jobs in this area and across the country because our leadership has failed to foster an environment that creates 21st century jobs. We cannot merely subsist on a retail economy by itself. America was made great by manufacturing and now it is being torn apart by greedy financiers that hedge their bets on housing market bubbles that were bound to burst, made worse only because the government is deliberating on how much of the taxpayer's money should pay for Wall Street's losses.

Last night before the debate a few friends of mine were talking about the economy and what to do with money put away in bonds and mutual funds. My answer for them is the same I tell everyone who is looking for solid investments with a long-term gain. Go green! Put your money in companies that are building wind and solar plants. Rechargeable cars, geo-thermal energy, anything that helps reduce our carbon pollution is a win.

The value of this budding industry is nothing compared to what it will be once we force ourselves off of oil, both foreign and domestic. Fossil fuel giants like ExxonMobil and Shell are blocking green efforts today, but slowly we are turning the tide. Down the road (no pun intended) we will be driving zero-emission vehicles and powering our houses without a coal power plant at the beginning of the transmission line. Getting in on this today is a smart move, for one's savings and the planet as a whole.

A Small But Sweet Victory For The Environment

Despite the crazies out there that still try to deny what is happening to our planet, most people can see what is going on and are starting (albeit slowly) to catch on that we all need to do something to stem the tide of climate change. Although we really need strong governmental and international action to make things happen on a large scale, the consumer can help out as well. With gas prices climbing at an exponential rate, people are doing that when it comes to what they drive. When they do that, we see things like this.

From ThinkProgress:

Today, General Motors announced that it will be closing four truck and SUV plants in North America and may discontinue its Hummer line, citing the slumping sales of large vehicles brought on by high oil prices. Sales of the Hummer were down 61 percent last month, and May was also the first month in which cars outsold the Ford F-series truck since 1992. In place of the Hummer, GM CEO Rick Wagoner announced that the GM board has approved production of a new small automobile and a new electric car. As CBS reported, Wagoner “said the change in the U.S. market to smaller vehicles likely is permanent.”

It is a shame that GM didn't catch on sooner, but marketing the "American Dream" of gas guzzling was supposedly the thing to do for far too long. American car makers have a long way to go in matching the demands of a market that doesn't want to buy too many $4 gallons of gas. Still, it is a promising start to see the icons of that sub-culture fall.

UAW Strike Spurred GM Into Quick Action

Apparently General Motors didn't think Ron Gettelfinger would actually pull the trigger and send tens of thousands of auto workers off the production line and into picket lines. Well they guessed wrong, and the decision sent ripples through the North American auto world. Less than two days later, GM came back and started talking about issues they refused to acknowledge before the deadline. Although the UAW made concessions, GM ultimately caved to their demands concerning job security.

From The Detroit Free Press:

UAW President Ron Gettelfinger announced the agreement at a 4 a.m. news conference at the union's national headquarters in Detroit.

He said the agreement included a historic plan to shift oversight of retiree health-care benefits to the UAW, removing more than $50 billion in long-term obligations from GM's books.

The company had sought such a plan, called a voluntary employee beneficiary association, or VEBA, to help lower its fixed costs and make it more competitive with rivals such as Toyota Motor Corp., which does not have such so-called legacy costs. The costs are said to add more than $1,000 to the cost of each vehicle made by domestic companies.

It wasn't known how much money GM would put into the VEBA up front, but Gettelfinger said projections showed that it would be solvent for at least 80 years.

Other details included $3,000 dollar signing bonuses for employees, a two-tier wage system for new employees based on whether they work directly with vehicles and no wage increases at the moment. The big item in the news is the voluntary employee beneficiary association that will defer costs from GM to the UAW, something both sides finally agreed on. GM has a right to be cost-efficient, but first the security of its employees had to be ensured.

Employees and employers are happy this is over, but most importantly, it showed that a strike still wields the power it had commanded years ago.

Edwards Understands The UAW Strike

The UAW strike is getting big headlines because, well, 73,000 people do not go on strike collectively every day. The Presidential candidates, especially the Democratic ones are saying and definitely not doing much except for one. Both John and Elizabeth Edwards are endorsing the UAW's efforts, not just with words, but actions.

From John Edwards' Blog:

John Edwards will walk the UAW Picket Line tomorrow with members of U.A.W. Local 774 in their picket of GM's Powertrain plant in Buffalo.

Elizabeth quoted the labor motto, "Injury to one of us is injury to all of us." She stated that, "When people have to come to the streets in order to provide for job security, to make sure that when they retire they'll have the health benefits they deserve, that's an injury to all of us. And all of us ought to be indicating our support."

Yesterday, Edwards issued a statement of strong support for the striking UAW Members:

Edwards Statement In Support Of Striking UAW Members

I offer my strong support to the striking auto workers and look forward to a fair and speedy settlement that will improve the lives of these hard-working UAW members. And I call on General Motors to do what is right and realize that it has a responsibility to negotiate fairly and move quickly to settle a contract that respects the health, safety and economic security of the auto workers and their families. I also salute the courage of the auto workers to go on strike. Their fight for fair wages, safe workplaces, affordable health care and a secure retirement helps raise standards for workers all across America.

"Sadly, the issues on the bargaining table between General Motors and the United Auto Workers are not unique to Detroit - they represent the larger failures of Washington and public policies that have weakened unions and the middle class. The truth is now, more than ever, it's time for America to go in a new direction and start doing much more to strengthen America's unions and protect the rights of working Americans."

His strong words are being backed by equally strong actions. I have yet to see Hillary or Obama walk a picket line. This is more than just some photo-op, its about changing the status quo in our country today. John's presence tomorrow and Elizabeth's walk already sends a message to corporate America that the middle class deserves better than to be pushed around like commodities that can be bought and sold depending on which worker is cheaper to maintain. Getting business done is important, but people must be put first.

73,000 Hit The Picket Lines

Nearly forty years has passed since the last time GM workers have walked off the job and striked against the American automaker behemoth. Since then 327,000 workers have been let go as General Motors has moved much of its operations overseas, going for reduced costs over the American worker. The Michigan economy is now at the center of what sociologists deemed the "rust belt." So now in 2007, what will this strike accomplish for a diminished union? Everyone seems to have an opinion, both on the internets and in print. Some bash the union, others see this as a looming problem and also as a non-issue for suppliers. How does one tell?

It is true that the union's strength has weakened considerably in the past few decades. Yes, it can be very ugly for UAW members while GM gets pinched somewhat. But lets take a step back here. What is the strike all about? According to UAW head Ron Gettelfinger, its everything that we hold dear for the middle class.

From USA Today:

After negotiating nine days past the expiration of its last four-year contract with GM, the UAW set the strike deadline and told workers to wait to hear from their local leaders. UAW President Ron Gettelfinger began feeling a strike was looming as early as last Thursday, he said in a press conference, when GM stopped bargaining on most issues. Both sides worked through the night Sunday into Monday, but Gettelfinger said GM refused to move its position on all but one issue.

"The company walked right up to the deadline like they really didn't care," he said.

He said job security is his priority, and he stressed that the talks did not break down over a proposed trust to deal with retiree health care, which GM wants to create so it can move about $5.1 billion in costs off its books.

"This is very serious, but there's not a single person here who wanted this to result in a strike," he said. "There comes a time when you have to draw the line. We were pushed into a strike."

That is the problem here. GM (and other multi-national corporations) simply do not care about American workers. In our ever-increasingly competitive world, corporations are trying to reduce costs at the workers' expense. The attitude is that if they don't like it, we'll move somewhere cheaper. Is that what America is about?

Hardly. Those that went on strike starting in the late 1800s were Americans who helped set up the lifestyles we have now. Back then there was no leisure time because everyone was working in sweatshop conditions. Advances in technology along with the securing of benefits from strikes and the increased power of collective unions built the middle class.

Of course, we all know where President Bush will mark his territory on this issue. He cares about those who have given to his campaigns and the Republican party. That goes for the rest of them in the GOP. On an individual level some might be sympathetic to these workers, but many have been blinded by the culture of corporate greed.

Why does that matter? It matters because it is up to our elected officials to set policy that helps all Americans, not just their campaign contributors. Job security is a gold-standard in Japan and they manage to keep costs down. Health care is provided in most industrialized countries so that cuts costs to the employer. (something that would help both worker and employer). In our country we let the "free market" decide who gets health insurance while others make sure their citizens are taken care of.

So ultimately, this is a matter of whether we want to take care of workers or.....the status quo.