Cash4Clunkers -the real story..

[Carl Beck]

GM needs to die among a few other parasitic corporations.

While in general we agree - - Let me give you a somewhat different perspective on that sentence. I have no interest in defending the extremely poor management of both the Corporation nor the Unions involved - just the image of what GM really has been to America.

I suggest that GM is not a "parasitic corporation" at all. Rather GM was the goose that laid the Golden Eggs for hundreds of thousands of people, and did so for more than eight decades. The ripple effect or multiplier effect of GM's Capital Investments and Payrolls on our GDP since the 1920's has never been calculated - - but I believe that if it were it would amount to Zillions of dollars.Yes way past Trillions

No - GM is not a "parasitic corporation". GM is a once noble Host that has been bled dry, made anemic and which now requires serious surgery and lots of medication if we hope to save it. I agree that it is questionable that we should spend

In sworn testimony before the U.S. Congress {keep in mind that the Fed's love prosecuting witnesses for perjury and the punishments are sever} the President of the United Auto Workers reminded the Committee that while the cost of labor per vehicle at GM/Ford averaged 11% of the vehicle - the cost of Government was 18%.

That 18% cost included Local City and County Property Taxes, State Property and Intangible Taxes, Utility Taxes, State Workmen's Compensation Taxes as well as Federal Income and Social Security Taxes. It also included the government mandates such as EPA, OSHA and Equal Employment Opportunity Acts.

That 18% did NOT include all the direct and hidden taxes on every item purchased from suppliers and their workers, nor every tax imposed on the Transporters nor New Car Dealerships.

In a creditable study done five years earlier (he didn't say who did the study, or if he did I missed it) - it was stated that if there were no government taxes and no government imposed mandates on an automobile in the U.S. - the cost to the end consumer would be 48% of the MSRP today.

If you really want to know how the Golden Goose was killed in the US - and why it is flourishing in places like China, Mexico, India, South America etc - - - Don't be blinded by the propaganda related to the "cost of labor" or "greedy management" - Major Corporations go where the total costs of operation are the lowest, it isn't the "cheap labor" we hear so much about - it's the cost of maintaining a greatly bloated Government, and never ending entitlements used to buy elections here.

Like I said - there is no question that Decades of Bad Management and Corrupt Labor Unions played their part - - but actually a very small part by comparison. What is both sad and unexpected is the fact that major corporation from around the world get a better deal in a Communist Country, than they get in a Democratic one. {at least until that country gains its own internal growth engine}

FWIW,

Carl B.

Edited August 2, 2009 by Carl Beck

[DaveBonds]

I understand that the United States government has imposed a large sum of money due at each sale that GM (and all other auto manufacturers here in the US, including Nissan and Toyota) make. And I understand how that equates in higher prices to us as end users.

While I'm not a fan of a large sum of taxes that our government instates (that's another conversation), I will say this;

Simply eliminating the tax that stipulates a 51% price spike in large production and assembly plant product sales isn't a fair assessment. Legitimately, I think the taxation is high, but we can't just eliminate it all. Comparing corporate sales with/ without taxes is simply unrealistic.

GM isn't a noble company. They bought out the mass transit rail systems in major cities (such as Los Angeles, Chicago and Denver) to dismantle them in elimination of competition for further auto sales. Their layoffs in Flint, Michigan caused more than half of the city to board up it's windows and among other revolts, such as the formation of the United Auto Workers, it even merited prior employees into mental institutions.

GM now has more retired employees/ union members on payroll than they have workers in their assembly plantations. The average unionized worker for GM makes $75 per hour. The average for Toyota makes $40 per hour.

Nobody is going to convince me that they are or ever were a careful company. Their new advertising campaign says that their once was a time when having eight car companies under the same parent company made sense, but now it doesn't. It never made sense.

Chrysler gets out of bankruptcy by being bought out by Fiat, one of the worlds largest car companies and one of the only with a surplus large enough to lay such a stake. GM responds to their bankruptcy and debt to us by selling themselves to... the new GM?

This is just a gigantic marketting schematic and nothing more. All the federal budgetting that set a number on assets going to auto makers was just simply devided up into this bill, to make it look like they were doing the public a favor by giving the auto makers more of our borrowed money.

And let's not forget that these cars are being crushed. Not sold, salvaged or even donated to the people who still live in FEMA trailors in NewOrleans who can't afford any car for their family. They crush them all.

I'm sorry, but this bill was not very well planned or even thought out completely before being stamped into action. This was totally reactive and not proactive in the slightest.

Edited August 6, 2009 by DaveBonds

[jmortensen]

Simply eliminating the tax that stipulates a 51% price spike in large production and assembly plant product sales isn't a fair assessment. Legitimately, I think the taxation is high, but we can't just eliminate it all. Comparing corporate sales with/ without taxes is simply unrealistic.

How about eliminating just enough to make it profitable to run your factory in the US. The dumbass politicians are spending more money than they take in through taxation, and they erroneously assume that raising taxes will increase revenues. Especially in today's global environment, if the taxes get prohibitive it's easy to move somewhere where the taxes are more reasonable. If the corporate tax rates were lowered there would be more factories in the US. We're still the main consumer, and it does cost $$$ to ship all of this crap to the US so that we can buy it. There IS an incentive to have factories in the US, the disincentive is the cost to do business here.

GM isn't a noble company. They bought out the mass transit rail systems in major cities (such as Los Angeles, Chicago and Denver) to dismantle them in elimination of competition for further auto sales.

Sounds noble to me! Take a look at ANY public mass transit system in the country and you will find that it is not self-sustaining. Instead the costs are borne on the backs of the "evil car owner" through gasoline and registration taxes. The best possible outcome for any public transit system would be to scrap it and use the scrap materials money to help pay down some of the debt that that transit system is responsible for. If it were a good business model, I expect that you'd see private mass transit all over the place, but you don't. Turns out you can't buy land, build bridges, lay track, buy railcars, run them and pay for the maintenance for $2 per fare.

Their layoffs in Flint, Michigan caused more than half of the city to board up it's windows and among other revolts, such as the formation of the United Auto Workers, it even merited prior employees into mental institutions.

So you're saying that a company SHOULDN'T lay off employees? Ever? Or just when YOU decide that it would be better if they didn't? Just trying to understand here, because I would say that a corporation has the right to layoff whomever they please whenever they please, and that a "good" corporation would do that whenever it is necessary to keep the business going. That is what business is all about after all. Not keeping employees working, but surviving and hopefully making money. Sounds to me like you've fallen victim to Michael Moore and his film Roger & Me. The more you look into Moore, the more you'll realize he is full of $^!#.

GM now has more retired employees/ union members on payroll than they have workers in their assembly plantations. The average unionized worker for GM makes $75 per hour. The average for Toyota makes $40 per hour.

Mixed emotions here. On the one hand, GM was held by the short and curlies by the UAW. On the other, they AGREED to cut their own legs out from under them. Kinda like the federal government is doing to all of us right now. Short term gain at long term expense.

I've seen the assholes in the Machinist Union at Boeing do the same thing. Economy is in the crapper so these ****heads go on strike (and the terms of their contract were pretty damn generous already). Boeing later has to lay off employees and they bitch and moan about the financial hardship which they helped cause.

Carl, if you don't think that unions are at all to blame, I would suggest that you just consider the time and effort needed to negotiate the agreements and then to implement them and fulfill the obligations. They are just as much of a bureaucratic nightmare as dealing with the govt taxes is; it's not just PAYING the taxes, it's trying to figure them out. Check out the original 1941 Ford/UAW agreement next to the 2007 version: http://mjperry.blogspot.com/2009/01/uaw-ford-master-contracts-2007-vs-1941.html

Nobody is going to convince me that they are or ever were a careful company. Their new advertising campaign says that their once was a time when having eight car companies under the same parent company made sense, but now it doesn't. It never made sense.

Sure it did. They didn't start with 4 companies making the same product with a different badge on it. They started as separate entities that made separate products. As time went on they merged the products and platforms to cut costs. I would agree that they should have dropped the names, but I think for a long time the idea was that you had people, especially old people, who had developed brand loyalty and wanted a PONTIAC, not an Olds or a Buick that was the same damn car, but a PONTIAC. As time went on that strategy made less and less sense.

Chrysler gets out of bankruptcy by being bought out by Fiat, one of the worlds largest car companies and one of the only with a surplus large enough to lay such a stake. GM responds to their bankruptcy and debt to us by selling themselves to... the new GM?

Unprecedented and I personally believe illegal to screw the corporate bondholders in favor of the government and the UAW.

This is just a gigantic marketting schematic and nothing more. All the federal budgetting that set a number on assets going to auto makers was just simply devided up into this bill, to make it look like they were doing the public a favor by giving the auto makers more of our borrowed money.

And let's not forget that these cars are being crushed. Not sold, salvaged or even donated to the people who still live in FEMA trailors in NewOrleans who can't afford any car for their family. They crush them all.

I'm sorry, but this bill was not very well planned or even thought out completely before being stamped into action. This was totally reactive and not proactive in the slightest.

Agreed in full here. This is a big load of crap that won't have but a temporary effect on business. The thing that I can't stand is that people think that it's a great idea to "save" money with govt programs like this, completely ignoring that they will have to pay for it later.

Edited August 6, 2009 by jmortensen