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Last Sunday I posted, my last post, about "Bailout the Automotive Industry?  GM?" and why I thought the USA governmnet should buy 51% of the GM stock and put a green Board of Directors in place.  Our local paper ran an editorial by Dan Neil of the Los Angeles Times that supported that same solution for GM.  

While Neil did not have the same reflection on the history of GM’s fight to distroy urban public rail transportation and killing the electric car that I have, but he comes to the same conclusion... nationalize GM.

Here’s a plan: Buy GM


LITTLE ROCK — At the moment, D.C. and Detroit are brooding on two equally unpleasant choices: Watch the American automakers auger in and take hundreds of thousands of jobs with them, or bail out these failed and incorrigible companies whose management so richly deserves whatever hell (flying coach?) awaits them.

Tops on the critics’ list of grievances is Detroit’s failure to anticipate the inevitable. Why didn’t these companies sufficiently invest in next-generation technology-fuel-efficient small cars, high-mileage hybrids, plug-ins and all-electric vehicles-that could help wean the U.S. off foreign oil and take the automobile out of the climate-change equation? As the auto executives again bring their begging bowl to Congress, a consensus is forming: No bailout unless Detroit buildsgreener cars.

From my perch, as someone who drives all of the Big Three’s North American product offerings, I think a lot of the anger is reflexive and misplaced. Detroit makes some amazing cars, and anyone who thinks otherwise should hold a Corvette ZR1 to his head and pull the trigger. The Ford F-150 pickup I drove last week flat-out humbles rivals from Toyota or Nissan. Considering that the domestic carmakers are shouldering titanic "legacy" costs-it’s estimated that $2,000 in health care, pension and employee post-retirement benefits are baked into the price of every UAW-built vehicle-just being competitive in any segment is a signal achievement.

Nonetheless, the question remains: What to do about the domestic automakers? My modest proposal: Nationalize GM...

there is more:

This article was ran by the LA Times on December 2nd:

Nationalize GM
The federal government should buy GM. We can run it, then sell it at a profit once it recovers.
By Dan Neil
December 2, 2008

Originally posted to PeaceVet on Sun Dec 07, 2008 at 08:19 AM PST.


Who should the USA do about the Big 3?

12%7 votes
0%0 votes
14%8 votes
50%29 votes
22%13 votes

| 57 votes | Vote | Results

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Comment Preferences

  •  Use the $15 billion bridge loan (3+ / 0-)
    Recommended by:
    LordMike, chrome327, PrescottPatriot

    To kick the can down the road into the next administration.  Then we can get serious about solutions.

  •  bail em out or buy em out (2+ / 0-)
    Recommended by:
    oldnavigator, NY brit expat

    I really don't see why we would/should throw 15 billion down the rathole.  I'm with M.Moore, the market cap for GM is 3 billion.  If the government (which is US) buys this company, then the government (WE) should get to make some choices.  First, dump the top rank of execs (after removing golden parachutes), form a product group consisting of forward thinking (green) types, and get on with it. If we have the money to line the stinking pockets of wall street (who got us into this) then we have the money to do something actually productive, like ensuring core jobs.

    Remember, each core manufacturing job creates three other supplier jobs and 3 or 4 associated service/logistics jobs.  

    •  Bail *and* buy (1+ / 0-)
      Recommended by:
      NY brit expat

      If you only buy, it still goes bankrupt.  In my view, you either do both or neither.  Either we decide our nation wants to invest in GM and we both give them money and buy them, or we decide that we don't want to invest in GM and we give them neither.  Doing one but not the other makes no sense to me.

      And yes, the board of GM simply has to go.  Change the board, and then Wagoner and Lutz will be given the boot and we'll end up with some people who are actually competent (and don't think global warming is "a crock of sh*t") in charge.

  •  Hold on my friends. (4+ / 0-)

    GM is ready to make a last minute comeback selling " Up Armored SUV's " for the families that might still want to visit our national parks now that Bush and the NRA have decided that everyone is encouraged to bring a loaded weapon in case of a squirrel uprising.

  •  Already Bankrupt (2+ / 0-)
    Recommended by:
    Losty, NY brit expat

    GM died a long time ago.  Only now,  the stench from the rotting corpse is now disturbing us.  It matters little whether the government provides a "bridge" loan, offers a bailout or takes over, the Federal government will be assuming the liabilities for the failed policies of the firm one way or the other.

    Personally, I think the Federal government should just nationalize GM and get it over with.  Pay the shareholders nothing, tell the bondholders they're going to take a massive haircut, tell the unions that the contracts will be rewritten, and just drop the executives, recent executives and board members into jail for fraud about all of those financial reports they issued for the last twenty years.  Everybody will be hurt by the incompetence shown in this industry for the last forty years, and we might as well get over it.

    "Love the Truth, defend the Truth, speak the Truth, and hear the Truth" - Jan Hus, d.1415 CE

    by PrahaPartizan on Sun Dec 07, 2008 at 09:56:09 AM PST

    •  "pay the shareholders nothing"? (0+ / 0-)

      You're asking the federal government to declare outright war on capitalism rather than pay 1.5 billion dollars?  Seems silly to me.  Just buy the company; it's worthless right now.

      •  Why is this an outright attack on capitalism? (0+ / 0-)

        We should not use taxpayers money (or create money) to be given to shareholders; that is absurd. Money needs to be put in the hands of those who will spend it (the middle and working class).

        Nationalise the big three, invest in research and development for more environmentally friendly cars, this will increase employment. Also make funds available to purchase cars (though increased loans for auto purchase and incentives) and hence increase demand by putting these funds in the hands of middle and working class people. Once there is some increase in effective demand, increased investment in research and development and green car production (leading to more employment in the industry), create additional (positive or negative) incentives to buy green or more environmentally friendly cars. Once the industry has been salvaged, it can be privatised if desired or kept as a government concern.

      •  wouldn't the shareholders out (1+ / 0-)
        Recommended by:

        as well if the gov't did nothing?  Then what is the big deal if they nationalize it and the shareholders get nothing?  I am not concerned with the investor class (one that I am in) as much as I am concerned with the workers and a means of production for this country.  

        Nationalize them, get rid of the mgmt, make better cars, and utilize/retool some of the man. infrastructure to build high speed rail as a part of a PW program.  

        as an aside I don't really care about the gov't declaring an all out war on capitalism either.  at least not how it has been practiced over since the industrial revolution.  have at it.  there were many that were not able to fully participate in said capitalism and amass the wealth of generations.  I am not against capitalism in theory at all.  It is just that in the US a privileged class has grown out of our unfair history.

        •  Outright declaring war on capitalism... (0+ / 0-)

          ... would cost the country trillions.  Don't be bullheaded; the company is virtually free right now.  Nobody is going to get rich off the buyout of half the stock of a company who's total valuation is 2.6 billion.  Most of that which is held by 401ks, not private investors.

          What you're advocating is like stealing a piece of candy right in front of a police officer.  Just pay the five cents for the candy.  It doesn't matter if you don't like the shopkeeper; you're not proving anything to anyone by going to jail for candy.  It's the same situation here.

  •  I agree, corporatism isn't capitalism. (0+ / 0-)

    "as an aside I don't really care about the gov't declaring an all out war on capitalism either.  at least not how it has been practiced over since the industrial revolution. "

    Doonesbury hit it on the nose with the comic strip on October 9, 2008 when he took the Wall Street lobbyist to task for "socializing risk, and privatizing profits" with the bailout.    

    What we have had with corporate executives and management recently and back at the turn of the 1800-1900s with the "robber barons" is not Capitalism as Adam Smith defined it in the Wealth of Nations, published ironically in 1776.  The USA Constitution is a political document, not an economic document.  The term capitalism does not appear in it, and there is nothing inherent that the USA should go over-board on the "free market."  All nations have mixed economies anyway, so let's nationalize GM, and maybe all of the Big 3.


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