White House tells GM boss to step down

[Savonarola]

Cadillacs, especially, are associated with kitsch Americana in my imagination.

That is only because you have never seen a Dodge Desoto:



Accept no substitutes for kitscy Americana; it's the Desoto or nothing.

[Zanza]

All three have multiple brands too. Not as many as GM though which might support the argument that GM needs to shed some of its brands.

Toyota has Lexus, Scion and Daihatsu. Ford has Lincoln, Mercury, Volvo and used to have Jaguar and Land Rover.

Volkswagen has passenger cars marqued as Volkswagen, Audi, Skoda, SEAT, Bentley, Lamborghini and Bugatti. The latter three of those don't need economies of scale as their customers just fork over a couple dozen grands more and don't care. Sales for the other are about 4 million VWs, about 1 million Audis, about 600k Skodas and about 400k SEATs. However, Volkswagen has a platform strategy which means that essentially a VW Golf = VW Jetta = Audi A3 = Skoda Octavia = SEAT Leon = Audi TT. On that platform alone, they sell about 2 million cars per year. That's huge economies of scale.

Are there any even any one marque car makers? Renault-Nissan and Peugeot-Citroen obviously not, Honda has Acura, Daimler has Mercedes-Benz, smart and Maybach, BMW has Rolls-Royce and Mini, Fiat has Lancia, Alfa Romeo, Ferrari. Hyundai and Kia perhaps? Mitsubishi?

[Neil]

I don't really expect Opel to be successful in the long run. They produce for the mass market (low margins) and don't have economies of scale like Volkswagen. And their market share and volume at least in Germany (and I assume elsewhere in Europe) has been constantly shrinking.

Stronach was talking about selling cars in Russia, claiming it'll be an up and coming market, and selling and producing Opels in North America.  Neither of which sounds terribly reasonable.

I've seen a shitload of Opels back there, in fact they were probably the most common of the foreign makes there.  What's wrong with selling them in Russia?

The inherent criminality of the Russian people.

[Admiral Yi]

What it unfortunately reminds me of is shortly after the Iraq invasion the stories of people taking major administrative positions in Iraq who were just out of school and whose major qualifications were a connection with a group like the Heritage Foundation.

In the original Washington Post article the only "major administrative position" actually specified was that held by the guy in charge of reforming the Iraqi stock exchange.  Which is hardly a major administrative position.

[Sheilbh]

That's because with our politicians, appearances are by far the most important thing.  If you're ugly, forget it (unless you're Nancy Pelosi, for some reason )

I don't know.  It seems to be the case in this country too.  Increasingly senior aides (ie. non-civil servants) are in their late 20s, early 30s and these are people who run the government's press office, policy positions and so on.  I think it's because whereas the civil service is a career being an aide is, generally, a first rung on the ladder, unless you're at the very top (Emanuel, Axelrod and the like). 

Plus our leaders have got younger.  It would be weird if Tony Blair, in his forties arrived with a cadre of 50-something aides.  They're of a different political generation.  In that context what use, in New Labour, would a bunch of people who worked with Callaghan and Foot be?

Though I think there's something in the fact that politics is still showbiz for ugly people. 

I'm not sure of the reasons.  It's not necessarily a problem, especially in a system like you have in the US with a weaker civil service than we have.  I actually think our MPs are under-staffed and the government needs more special advisors.

[garbon]

That's because with our politicians, appearances are by far the most important thing.  If you're ugly, forget it

You must be joking.

[Savonarola]

Hummer's tentative buyer revealed:

GM says it has a buyer for Hummer
By TIM HIGGINS • FREE PRESS BUSINESS WRITER • June 2, 2009


NEW YORK – General Motors has lined up a China machinery company as the buyer for Hummer, marking the first entry into the U.S. auto market by a Chinese company.



A person briefed the on the matter confirmed that GM has a tentative agreement to sell Hummer to Sichuan Tengzhong Heavy Industrial Machinery Co. of China.


The sale is expected to close by the end of September, and requires regulatory approval. GM did not identify the buyer or the selling price.


Selling off the off-road brand is part of GM's restructuring plan. The company is refocusing itself on four key U.S. brands. It also hopes to sell off Saab and spin off Saturn. Pontiac is being phased out.


GM today also said it had 16 interested parties in acquiring its Saturn brand. The company has said it has three interested parties in its Saab brand.


The announcement comes on the heels of GM filing for bankruptcy reorganization, a process the company hopes will allow it to quickly spin off its good parts into a new GM and leave behind bad parts in the bankruptcy process.


As part of the Hummer deal, GM has agreed to provide contract manufacturing and business services for a transitional period. It will continue building the H3 SUV at its Shreveport assembly plant through at least 2010.


"Hummer is a strong brand," Troy Clarke, GM North America president, said in a statement. "I'm confident that Hummer will thrive globally under its new ownership.

And for GM, this sale continues to accelerate the reinvention of GM into a leaner, more focused, and more cost-competitive automaker."


GM said the deal is expected to save 3,000 U.S. manufacturing, engineering and dealership jobs.


The buyer is expected to "aggressively fund future Hummer product programs," the company added.


Citi was GM's financial adviser on the deal.

[Zanza]

Ed, is that your car?

[alfred russel]

Hummer's tentative buyer revealed:

Isreal has to be pissed that China is getting American military technology without buying it from them.

[Ed Anger]

Ed, is that your car?

No. 

That is one of those pussy versions anyways.

[Savonarola]

Monday, June 8, 2009
George Will
Have we got an auto deal for you

"I," said the president, who is inordinately fond of the first-person singular pronoun, "want to disabuse people of this notion that somehow we enjoy meddling in the private sector." He said that in March, when the government already owned 80 percent of AIG, Fannie Mae and Freddie Mac. "When a difficult decision has to be made on matters like where to open a new plant or what type of new car to make, the new GM, not the United States government, will make that decision."

But the government is GM's largest shareholder, customer, tax collector, regulator, partner in determining employees' compensation, protector of dealers and pension guarantor. GM's other large owner, the United Auto Workers, is increasingly a government dependent.

Yet, Steve Rattner and Ron Bloom, two of the president's fixers of Detroit, recently wrote in USA Today that government "will play no role" in running GM. They were not under oath.

"What we are not doing -- what I have no interest in doing -- is running GM," says the president who, when not firing GM's CEO, purging its board of directors and picking new members, is designing new products (imposing fuel economy requirements that will control size, weight, passenger capacity and safety).

Washington mandates that Detroit must build cars for which there is much less demand than Washington demands that there be. Then Washington tries to manufacture demand with a $7,500 tax credit for purchasers of the electric Chevrolet Volt, supposedly GM's salvation. So, GM is to be saved by a product people will not buy without a cash incentive larger than the income tax paid by 83.4 percent of America's families.

It is reasonable to assume that GM will become profitable -- if you make unreasonable assumptions about annual vehicle sales and GM's share of the market. Besides, the government that runs Amtrak (which has lost $23 billion, in today's dollars, just since 1990) vows to make GM efficient.

But one reason Amtrak runs on red ink is that legislators treat it as their toy train set, preventing it from cutting egregiously unprofitable routes. Will Congress passively accept auto plant-closing decisions? Rattner says Washington's demure vow is: "No plant decisions, no dealer decisions, no color-of-the-car decisions."

Rattner is one-third right. Last week, under the headline "Senators Blast Automakers Over Dealer Closings," the Washington Post reported, "Because the federal government is slated to own most of General Motors and 8 percent of Chrysler, some of the senators said they have a responsibility, as major shareholders do, to review company decisions."

The pressure to politicize the economy is spreading. John Sweeney, head of the AFL-CIO, and Gerald McEntee, head of the American Federation of State, County and Municipal Employees -- which is government organized as an interest group to lobby itself -- have demanded the resignation of two directors of Citigroup. Their premise is that businesses receiving direct government subventions should conform to the wishes of the president's allies.

GM is adopting new ways to lose money: Responsive to its UAW masters, GM is moving from China to America the production of some components of one Chevrolet model. Says UAW President Ron Gettelfinger, "It should be built here if it's going to be sold here." That principle, now successfully asserted, means economic autarky -- the end of international trade, and of prosperity.

The government's $50 billion -- so far -- acquisition of the shadow of GM will injure, with unfair financial advantages, the surprisingly healthy U.S. auto company, Ford. Of course, the government does not intend that injury, any more than it intended to cause protests in Mexico over the high price of corn tortillas, a result of Washington's mandate that Americans burn corn (ethanol) in their cars.

Washington's "rescue" of GM began because GM is "too big to fail," and bankruptcy is (well, was) "unthinkable." Big? GM's market capitalization, $375.8 million on Wednesday, is about the size of California Pizza Kitchen's ($340 million) -- is it too big to fail? -- and one-eleventh that of Harley-Davidson ($4.3 billion). Fail? If GM has not already failed, New Coke was a success.

The administration is determined to prop up GM as a jobs program for the UAW and Midwestern states rich in electoral votes. This frenzy will intensify as the administration's decisions deepen the debacle.

[DontSayBanana]

Comparing the railroads, which are even partially exempt from antitrust legislation, and the automakers is not a good comparison.

Also, Ford is a "surprisingly healthy" company? Hardly. Land Rover and Jaguar were sold at near fire sale prices to Tata Motors, and when asked about whether they would need the bailout money, they didn't claim to be able to sustain current numbers, simply that they didn't need money as immediately as GM or Chrysler. Another thing to consider is that while Ford's sub-brands were limited, it's got arms of partnership all over the place.
EDIT: Parse this as you will, I was replying to Sav, and I'm getting kind of pissed off at the way the forum software is fucking up my quotes for me.

[saskganesh]

George Will is a weird writer.

[Savonarola]

Comparing the railroads, which are even partially exempt from antitrust legislation, and the automakers is not a good comparison.

Also, Ford is a "surprisingly healthy" company? Hardly. Land Rover and Jaguar were sold at near fire sale prices to Tata Motors, and when asked about whether they would need the bailout money, they didn't claim to be able to sustain current numbers, simply that they didn't need money as immediately as GM or Chrysler. Another thing to consider is that while Ford's sub-brands were limited, it's got arms of partnership all over the place.[/s]

The point that Will was making is that giving GM and Chrysler money puts Ford at a comparative disadvantage; not that Ford is doing well.  I think this detracts from Will's main point; if the government's management of the auto companies is so egregious then Ford should have an advantage over the domestic competitors.

[Berkut]

if the government's management of the auto companies is so egregious then Ford should have an advantage over the domestic competitors.

Not true at all, unfortunately,since the feds have external advantages that can (and will) both harm Ford even while they completely screw up running GM and Chrysler. They can pour money into bribing people to buy GM cars, which will not help GM in the long run (since it does not adress the core problem) while at the same time screwing over Ford in the short run.

It is a lose-lose-lose situation, which makes it perfect for the government.

Go go Obamateur!