GM Means General Malaise
Kurt Brouwer June 2nd, 2009
Back in the 1970s, I worked in a business that was next door to a very high-end automotive shop in which they built racing motors for cars and boats. One of the guys I enjoyed most, Paul Smith, was a former drag racing champion who rode a bicycle to work as did I. He rode an old classic one speed and I rode a Schwinn Super Sport. When I was ready to get a car, I bought a sweet ‘57 Chevy station wagon from one of Smith’s co-workers. Smith owned a bunch of classic Chevys and Corvettes, one of which was the Corvette used in the parade scene in the movie Animal House.
I couldn’t resist posting this photo of a ‘58 Corvette again, both because it is beautiful and because it looks very similar to the one in Animal House. Too bad General Motors no longer has the sense of style and adventure and risk-taking embodied in the release of the Corvette line of cars.
Source: Wikipedia Commons / GNU
My car-loving buddy used to come up with funny interpretations of what the letters FORD stood for. One was ‘fix or repair daily’ and other one was ‘found on road dead’ and, well, the last one is not repeatable in a family blog. As you can imagine, he didn’t like FORD products.
Today, we are all coining phrases about GM — GM means ‘government motors’ or GM means ‘general malaise’ or GM means ‘gone Mondays’ or … you get the message. The folks at FORD must be having the last laugh about now as they are doing OK without all the government largess and interference.
From the Zero Hedge blog, we get this roundup on General Malaise:
GM is set to announce the sale of Hummer for $100-$200 million at some point today, marking the most anyone paid for one of those since Eliot Spitzer. As Zero Hedge reported, based on GM’s optimistic cash burn projections, this will plug the hole…from 10-15 hours of operation. Regardless, the 3,000 jobs saved by the sale of the too big to fail gas guzzler will be very happy.
…Lastly, the U.S. taxpayer will be providing up to $115,000 in incentive and severance payments for tenured GM workers, according to the Kansas City Star.
GM is offering $20,000 cash and a $25,000 car voucher to production workers who decide to retire with their benefits.
For skilled-trades workers, the cash portion of the retirement package is $45,000 with the same car voucher.
For those not eligible to retire, GM also is offering more cash to walk away and sever all ties with the company, along with the $25,000 car voucher.
Employees with less than 10 years could get $45,000. Those with at least 10 years but less than 20 are being offered $80,000. For those with 20 years or more, it’s $115,000…
This last point is interesting. As I have written before, I’m not opposed to helping out the employees, but I believe it should be done instead of propping the company up with many billions of public money. Earlier, I posted this:
There are already signs that competitors and others are interested in some of GM’s assets. For example, the well-known former racer and automotive entrepreneur Roger Penske has expressed interest in GM’s Saturn line of cars. GM’s Opel line of vehicles has a couple of suitors. And, I’m sure some car company would want some of the other lines such as Chevy Silverado trucks.
So, let’s consider an alternative to Government Motors. How about we let GM go into an expedited bankruptcy without a government bailout and without cramming down the bondholders? We also allow competitors to bid on various GM divisions.
Once the dust settles, if any employee groups are left without work, we just buy them a $250,000 annuity. The result would almost certainly be cheaper for taxpayers and better for employees and the economy…
Now, it appears we are getting in deeper and deeper with public money with no plan for an exit strategy. I wonder who will be the first to call this a quagmire?
See also:
Rasmussen: Americans say let GM fail
- Business , Economy , Geopolitics , Money , debt
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