Report cites “utter incompetence” : As Recalls Mount, Was It Worth Bailing Out the ‘Old GM’ ?

[MJ]

Report cites “utter incompetence” : As Recalls Mount, Was It Worth Bailing Out the ‘Old GM’?
By Nick Sorrentino on July 28, 2014

No it was not. There are a few union members who made out like bandits and a few more senior managers who got to keep their very generous pensions. It was worth it for the president because he was able to sway Michigan and Ohio by convincing people the auto bailout was for them. But for the rest of us, the world would be better off if GM had died in 2009.

One thing no one talks about is that GM, long before the recession, was sometimes called “a healthcare and pension company which just happened to also make cars.” It was a basket case going way back. The financial press for years fretted about how GM was going to solve its pension problem. Then the recession happened and the there was a collosal excuse to absolve GM of its obligations, courtesy of the taxpayer. It was a ruse. A scam. Management knew it. Senior union leaders knew it. The Obama administration knew it. Wall Street knew it. And the taxpayer was taken for a ride.

Don’t tell me about how many jobs the bailout saved. That’s a cop out which helps people feel better about supporting a jack of the American people. Those jobs likely would have just moved south to non-union states. (Which was the real fear.) Cadillac would have lived. Corvette and GM trucks would probably survived too. The rest of the GM lineup was (and sadly to a large degree still is) trash and should have been tossed onto the same scrap heap that Saturn, Hummer, Saab, Oldsmobile, and Pontiac were tossed onto.

GM was and is dysfunctional. It was and in many ways still is a disaster (as the below article points out.) But it was and is so big that it was able to leverage political connections to take from the American taxpayer. Just like the big banks. Shoot it basically was one of the big banks.

It is not a question of whether GM should have been bailed out. It should never have been. The auto bailout, along with TARP and the ongoing bailouts are pure crony capitalism. They were to be frank, theft. There is no “populist” reason for the bailout. The bailout was not for the good of the economy. The economy as a whole would be better off without GM, which in many ways now represents economic “dead wood” just waiting to catch fire in the next economic blaze. No, the question is whether both GM management and GM union leadership should have been tried together or separately for crimes against the American taxpayer.

(From Real Clear Markets)

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In June, General Motors (GM) issued a 325-page internal report addressing how for 11 years the company ignored an ignition switch problem linked to at least 13 deaths and now nearly 6 million automobile recalls. The report identified a GM committee culture that “did not elevate the issue to … superiors” and the company structure encouraged GM managers “to hold more meetings and refer the matter to additional groups or committees.” Furthermore, the report noted that some GM employees informed investigators that they did not take any notes during these safety meetings. Why not? Because they did not believe that GM attorneys wanted them to – all part of “an urban myth that was followed, an instruction (‘the no notes direction’) passed from GM employee to GM employee over the years.”

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Mary Barra, GM’s recently appointed chief executive officer (CEO), further described a company cultural phenomenon known as the “GM nod” when everyone nods in agreement to a proposed plan of action, but then leaves the room with no intention of follow-through.” Another GM employee described the ritualistic “GM salute”, “a crossing of the arms and pointing toward others, indicating that the responsibility belongs to someone else, not me.” The report further noted that, as early as 2011, outside counsel warned GM’s in-house counsel that the company needed to act on this deadly safety issue. Maryann Keller, an auto industry analyst and author of two books on GM, argues that the report’s findings “show utter incompetence that is bred by people working in silos and not having the accountability to fix problems.”

Click here for the article.


http://www.againstcronycapitalism.org/2014/07/utter-incompetence-as-recalls-mount-was-it-worth-bailing-out-the-old-gm/

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