GM wants some G-men to play the heavies

You may recall that "CNW Marketing Research" that GM got to say a Hummer was more green than a Prius.

Kind of sad to see them used again. Maybe GM needs to pay for a name change.

We Three Motown Kings
(We Three Kings)
WilliamBanzai7

We three monarchs of Motown are
Here to save our dumb automotive arse.
No more petrol fountain, huge SUV mountain,
Following the Washington bailout star.

Bailout star of wonder, don't say good night,
O Star save us from our greedy idiotic plight,
Balance sheet's are bleeding, losses still proceeding,
Save us from what deep down we know is right.

Born as kings of the gas guzzling domain,
Fool's gold we bring please crown us again,
Lemon Kings forever, ceasing never
Over all American drivers to reign.

O Bailout star of wonder, don't say good night,
Star save us from our greedy idiotic plight,
Balance sheet's are bleeding, losses still proceeding,
Save us from what deep down we know is right.

Frankenstein's bailout plan have I.
Drove to DC in a hybrid all night.
Prayer and praising will send our stock raising,
Our ship is one big pie in the sky.

Bailout star of wonder, don't say good night,
O Star save us from our greedy idiotic plight,
Balance sheet's are bleeding, still proceeding,
Save us from what deep down we know is right.

Plug in mine: it'll run on a dime
Breath fresh air, low emissions and zoom time.
Borrowing, redesigning, union undermining,
Sealed in the stone-cold SUV tomb.

Bailout star of wonder, don't say good night,
O Star save us from our greedy idiotic plight,
Balance sheet's are bleeding, losses still proceeding,
Save us from what deep down we know is right.

Glorious now behold Motown will once again rise,
Bailout largesse and taxpayer sacrifice.
Alleluia, alleluia!
Clunking sounds heard all through the earth and skies.

Bailout star of wonder, don't say good night,
O Star save us from our greedy idiotic plight,
Balance sheet's are bleeding, still proceeding,
Save us from what deep down we know is right.

Wait. Pontiac is still a brand? Holy Batman that's nuts. Of course, I've always been a bit confused about why the exact same car with a different sticker/figurine on the hood deserves to be called its own brand, but still... Pontiac is actually alive right now? Wow.
-
Also, if I may, a shorter version of the document would read: "Dear Federal Govt. We suck and are unable to fix things, make hard decisions or get that mean 'ol union off our backs. Plus them awful shareholders keep yelling about something called "profitability" Please handle with oversight board. Thanx - GM."
-
Actually, now that I think about it a bit more, the Big 3 should really ask the Feds to just stabilize gas prices and limit speculation on the gas futures market. The crazy price swings of the last four years and resulting shifts in consumer appetites have made it literally impossible to plan future models and market trends with any degree of accuracy.

Is it just me, or does anyone else find the incompetence and cluelessness of the Detroit Three management shocking? I have read that Fritz Henderson, the GM COO, has publicly said that there is no Plan B is a bailout doesn't occur. That statement alone would be enough to get anyone in a real management position fired immediately. I might be inclined to support a bailout, but these clowns have to be run out of town first.

Is it just me, or does anyone else find the incompetence and cluelessness of the Detroit Three management shocking? I have read that Fritz Henderson, the GM COO, has publicly said that there is no Plan B is a bailout doesn't occur. That statement alone would be enough to get anyone in a real management position fired immediately

there is no "Plan B" to save the company because the company is slated to run out of cash in a month -- thanks to the massive rise in gas prices in the spring followed by the financial market mess, sales are disasterously low that GM is running through its cash reserves far more quickly than it could have been "reasonably" expected to -- in other words, Plan "B" doesn't exist because there is insufficient time to implement one.

GM is on the edge of extinction because of forces beyond its control -- and is far more deserving of a government bailout that Paulson's golfing buddies at Goldman Sachs, Morgan Stanley, etc....

@Paul - You're not taking into account the billions they lost in the years before 2008. Even if I were to agree with your explanation, it's difficult to argue that circumstances were beyond their control from 1998 to 2007, when car sales were at their highest levels ever. I fault this management (Waggoner became CEO in 2000; at Ford it's really Bill Ford's failure) for years of incompetence, even though ample evidence existed to demonstrate to them that this time of reckoning would come sooner or later.

@Paul,
.
I'm inclined to agree with Cumrdugeon here. The time to save, reinvest and modernize is when the getting is good. And if you find that you are losing billions even after seeing cars sales at their highest levels....well, alarm bells, BIG BELLS should be going off!!
.
@Justin,
.
I still don't understand why no one on Capital Hill is willing to talk about the Auto Bubble!! http://money.cnn.com/2008/11/30/news/companies/auto_bubble/index.htm/2008/11/30/news/companies/auto_bubble/index.htm The bubble is the real reason why they can't sell any more cars just like home builders (some who are still in denial- Not Just a river in Egypt anymore!) can't sell homes. The economic laws regarding supply and demand will not be muted!
.
@all defenders of a bailout,
.
I was with you, but this sector needs a fundamental overhaul. It must be driven by the car companies and not by a government which has inadvertently steered the domestic companies into a ditch. Jack Nerad makes an interesting case that GM May Not Survive a Bailout.
See here: http://www.cnn.com/2008/POLITICS/12/02/nerad.auto/index.html
.
Further, as I said yesterday, we are going to end up employing people to build cars that will depreciate (even at employee pricing) the moment they are assembled because of oversupply. The real travesty here is the money that is being spent to prop up the industry to keep producing will only hasten the demise of the $300 billion industry and 3 million workers. Bailout money should only be given as an act of restructure where entire product lines, dealerships, and distribution lines are paid to move along and engage in more productive assistance to the economy.

@Bryan - I read the Nerad op-ed, and I'm a bit suspicious of the argument that Federal regulation has led the domestic auto industry down the garden path, and the government is therefore obliged to help it. Every industry operates under a legal and regulatory umbrella, much of which can easily be called arbitrary. Successful companies figure out how to compete on the playing field they happen to occupy. The Detroit Three has had decades to figure out how to compete under the regulatory structure, and has utterly failed. I despair that the previous decades of complacency has resulted in a distinct lack of that particular skill.

Ithink the broader perspective is to consider that Automotive is just the latest in a series of major legacy industries that has required complete restructuring through bankruptcy. Look at all the heavy industries of the baby boomer generation: Steel, Airlines, Manufacturing (especially capital goods), Rail, and now Automotive,

Each of these industries built their labor relationships on a social compact of the 40's and 50's that was based heavily on the paradigm that people would go to work for "the Company" for their career. They would dedicate themselves to one employer, and then be rewarded through retirement. Each of these major industries settled into a oligopoly, with a few very large players. Barriers to entry were high based on the fixed costs of creating capacity in each industry. They all operated in a relatively closed market of the US consumer or other US industrial customers.

Then, one by one, new technologies or new international producers created competition for these industries. For Steel, it was the advent of the mini-mills with a new technology combined with the import of cars that included steel molded by someone in another country. For Airlines, it was a combination of deregulation and aircraft leasing, which dramatically lowered the cost of entry into the industry. For Rail, the development of the interstate highway system spawned over-the-road trucking that delivered in a fraction of the time required by rail. For Manufacturing, the same product could be built and shipped across an ocean for less money with a labor pool that did not have a pension benefit combined with a relative lack of environmental regulation.

Each of these industries either folded up or completely restructured. A major portion of the restructuring of the balance sheet includes unloading the retirement plans onto the Pension Benefit Guarantee Corporation. The social compact upon which the entire paradigm was built is no longer relavant to today's workforce.

The Federal Government, interestingly, actually figured this one out a long time ago. By creating portable 401(K) accounts, individuals could establish their own retirement plan and bring it along from employer to employer. Not to say this has worked out particularly well for everyone (re: Enron), but the fundamentals are appropriate. The Federal Government also shifted to this model for Federal employees in 1983 based on legislation written years earlier.

At the same time, life expectancy and consumer demand for health services have skyrocketed beyond any and all expectations of the actuaries who defined the future costs of those pension plans.

And so, we have companies and unions who have not made the changes required to operate in the current labor market. Either the big three re-write their finances as the rest of these industries have done or they will fail. The question really is, do we, as a country, want to fund their operations for a period of time while we require them to clean up their balance sheets and get their labor and pension costs in line with today's paradigm? Or, do we want to absorb the costs of unemployment, PBGC failure, and lost economic activity?

I'm not convinced the management teams of the UAW are prepared to accept that their model is about to pass the way of the dinosaur. They are the last hold-outs, and it's time they accept the fundamental and structural changes that have impacted every American industry. It will be interesting to see if the Democrats on Capitol Hill are prepared to take that step as well.

@Justin
.
Thanks. I didn't realize they had talked about that as I just watched the news clips on the financial networks. They really aren't do a very good job of conveying the information.
.
@Curmudgeon
.
I agree. I cited Nerad merely as support for the proposition that the supply-demand fundamentals are so out of whack as to limit the effectiveness of any bail-out to effectively become a handout. I agree with him on the effects of government regulations, but like you, I don't agree that it obligates government to help somebody.

O BAILOUT TREE
(O Christmas Tree)
WilliamBanzai7

O Bailout Tree, O Bailout Tree!
Those Wall Street thieves are vermin!
O Bailout Tree, O Bailout Tree!
They should all be thrown into the trash bin!

Not only is there subprime slime,
In Detroit they think its Miller time.
O Bailout Tree, O Bailout Tree!
Capitalist thieves playing tin violins!

O AIG, O AIG,
The mother of all bailout sieves!
O AIG, O AIG,
Its good to be a systemic titanic!

And every time the Bailout tree,
Brings to us all more gloom than glee.
O Bailout Tree, O Bailout Tree,
Much management malfeasance doth thou bring to me!

O Bailout Tree, O Bailout Tree,
Moral hazard's candle shines out brightly!
O Bailout Tree, Those Bailout Thieves,
Their motto is "Why not me?"!

The dough we've blown is a fiscal fright,
The dough that's thrown without oversight.
O Bailout Tree, O Bailout Tree,
You're a black hole yet undetermined!

‘Twas The Night Before Bail-Outs

‘Twas the night before bail-outs, and all through the nation

Not a business was stirring, not large corporations

Their requests had been sent to Congress with care

In hopes that Pelosi, or Reid, would give them a share

The CEO's had their hopes set on the Fed

And visions of bonuses danced in their heads

I was at home, full of hope and wonder

At the thought of big companies not going under.

Then out on the street there arose such a clatter,

I looked out the window to see what was the matter.

On the street was a hay wagon, making its way

Not the usual wagon, filled with bales of hay.

No, this one, (and I know this sounds funny),

Was filled instead with bales full of money.

With a very old driver, so morose and deadpan,

That I knew in a flash it was Alan Greenspan

There was a small note, stuck to each cash bale

With the name of a company too big to fail.

His wagon was drawn by eight sleek mega-bucks

And he shouted their names as he whipped their buttocks

“Now Paulson, Bernanke, Now Rubin and Volcker

On Krugman, On Samuelson, Kudlow and Cramer,

To the next company's holiday retreat!

So I can deposit a bale at the revelers' feet"

And so the wagon continued on,

Until the last bail-out bales were gone.

Greenspan then to his team gave a whistle,

And away they all flew like the down of a thistle.

And as they flew way up into the sky,

Alan cried, “I must see Ayn Rand one more time ‘fore I die.”

And I heard him exclaim as they flew into the night

"Happy bail-outs to all, and to none, oversight!"