Tag: gm

Socialism Take 2: The Auto Industry Bailout

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As if the $700 Billion bailout for the mortgage industry wasn’t enough, now the reality of an auto industry bailout is possibly taking fruition.  Yesterday marked the day of mockery, as the CEOs of the big three (GM, Ford and Chrysler) decided to fly in their private jets into DC to meet with Congress in order to beg for a handout.

Obviously, seeing that these arrogant CEOs did use their very expensive and costly private jets to get to this meeting, the members of Congress laughed in their faces.

When asked who would NOT return home, using their private jets, neither of the CEOs raised their hand.  When asked if the CEOs had a plan for the bailout, they neglected to provide one.  When asked how much money they would need, they didn’t have an answer.

Does this sound like a well thought out plan to you?  These people are CEOs (Chief Executive Officers) of three of the largest corporations in America, responsible for hundreds of thousands of employees, leading to even more jobs from third party companies, such as distributors/dealerships/retail stores.  I’m not sure why these guys were hired/elected into their positions, but they’re obviously NOT acting responsibly and they’re NOT fulfilling their obligation to their stock holders, employees and partners.  In my opinion, they really need to go, regardless of the outcome of this whole ordeal.

These companies do NOT need a bailout from the government.  When have we actually seen a bailout/handout work?  The $700B bailout didn’t do anything.  People are still in the same financial situation they were, before.  The stock market is crumbling and the DOW is now below 8,000 points (about 7,500 at the end of the day, today). A bailout will not give these companies what they need and will inevitably lead to more problems in the future, where these CEOs will clearly depend on the generosity of the government and their socialistic tendencies. Responsibility is lost.

I do find, however, that if the government didn’t have such stringent regulations on car production, the companies would at least be able to produce whatever they want, and that which actually sells. We could attribute these companies’ failings to the government, directly… just another case of them getting involved and destroying yet another industry. Other car companies, like Toyota, Honda and Hundai do not have these regulations, and thus… can produce more of what sells, rather than a percentage of what doesn’t. This is no excuse, of course, for the horrible leadership of the top three’s CEOs.

I can think of a number of ways these companies can get themselves out of their current funk:

1. File Chapter 11 Bankruptcy. Yes, no one really wants to do this, but this can save them in the long haul. They can restructure their overall business plan, budget, etc.

2. Replace the CEOs that have obviously driven these companies into the ground. Replace them with new blood, that sees and leads outside of the box.

3. Sell the subsidiary companies, or renegotiate contracts. This will sever the many companies that GM, Ford and Chrysler have purchased throughout the years and allow them to compete in the market and will probably lead to innovation. This will lower costs for the big three, maybe make them some money. Employees will be spread out, lessening the burden on the three, as well.

4. Kill failed projects. End the manufacturing of unnecessary parts and cars that do not sell. Limit the amount of cars they produce and possibly hit niche markets.

5. Renegotiate terms with the labor union, bringing down wages of CEOs, top execs AND those in the union.

It’s surprising that the employees at these big three are earning top salaries in their profession, when their companies are failing. They earn, on average, $77 per hour, compared to about $45 per hour at various other non-American car companies. Why should this be the case?

Oh, and sell the private jets. That can save the companies hundreds of thousands (maybe millions depending on how often they’re used, and where they fly them to) per year.

The auto industry needs to get real and search for their own resolution.

Are our Expectations of an Obama Presidency Taking Fruition?

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To put it bluntly… “Oh boy.” It’s only been one week after the election has been over, and we’ve had one zinger after the other:

First, President Medvedev of Russia announced that he was going to try to have his presidential term extended by two years, giving him six, and the following President two terms of six years each. What’s expected to happen, is that Medvedev, the puppet of Vladimir Putin, will finish his term, allowing Putin to take his place. He would then have 12 years of Russian rule, which I expect would be influenced, heavily, by Putin’s KGB experience and love for Soviet Russia.

Second and at the same time, it had been realized by the United States, that Russia was deploying missiles near Poland. Medvedev claims that this is because he doesn’t trust the United State’s Missile Defense System in Europe, which would serve to protect Americans and it’s European allies from terrorists and those that would do them harm. They’re so paranoid to think that we have an ulterior motive in building a system in Europe to oppose them in some way.

These two instances occurred the day following Obama’s election, as reported by Fox News. Hrmmm, do they possibly think that Obama is a push over? They’re not even accounting for Bush’s remaining days as President, thinking of him as a non-factor. It seems that the Russians, and many other governments, feel that this is an opportune moment to make or design a strategy to move in their favor. I’ve feared for the past several months, since their invasion of Georgia, that Russia would try to move and implement a new unification of several states, under Russian rule. Possibly a return to the Soviet Russia, but maybe even a new Soviet Union? I suppose we’ll see what happens in the coming year or so.

The third event that occurred, and closer to home, is the sudden drop in the stock market. On November 5 (yep, a day after his election, again), as reported by Reuters the DOW dropped by nearly 500 points, marking the largest drop after a Presidential election EVER. Amazing, no? How’s that for Capitalism having faith in its’ newly elected President? I think that the majority of business people in this country realize that this guy is going to wipe out large/small companies with astronomical taxes and an enormous spending budget, which will create one of the largest deficits this country has ever seen.

This sudden drop of 500 points was followed by another drop of 400 points on the following day, November 6. That’s a drop of 900 points in two days, which occurred after a steady increase preceding election day. Yet again, more faith in our President-to-be. Something amiss here, isn’t it? Do you think somebody knows something we don’t? No… we all know it… about 17million Americans know it. The other half is drinking Kool-Aid and sticking their thumbs up their butts. Welcome to the new America, ladies and gentleman. Life vests and flotation devices are not available on this flight, so good luck and see ya’ in Hell! You can see the DJIA Greatest Daily Point Losses in this PDF. These two days are ranked #7 & #9 (Point Losses) and #6 & #7 (% Losses). Enjoy the misery that is to be!

Ok, so that’s an assault on two sides of the Barack Obama Presidency… but what else could possibly be at stake here? Well, how about this?

The fourth thing to consider, is that Obama has basically sworn to keep his promises to America… and by that, I mean he plans to spend like a maniac, while taxing the crap out of us. In just one week, he’s decided to go along with Nancy Pelosi’s proposal of a second stimulus package for consumers, to again… stimulate the economy. Like it worked before? I think not. Oh, but not only this, there’s more awesome news! It seems that Obama intends to bail out the Automotive industry, as well, since they’re a foundation of our economy… right?

Now, correct me if I’m wrong… but since when is a foundation of our economy a car company that can’t sell any cars? GM has dug themselves a nice hole to crawl out of, but the problem is… they don’t want to crawl out. They want to be carried out. Who do they want to carry them out? Oh, you know… the tax payers, of course! And who wants to allow that to happen? Well, Mr. Obama.. of course!

So, that’s two big spending bills in a row that the Obamanater would like to pass, bringing the tally to what? Well, we already dished out $25 Billion to the “big three” automakers in September. This new GM bailout would cost a measly $50 Billion and the stimulus package would cost anywhere between $60-$100 Billion, bringing the max potential cost of the new packages to $150 Billion, while already spending $700 Billion for the first bailout. Amazing, is it not?! I thought Obama was going to lower taxes for 95% of the country? Is that still going to happen? If so, is he going to tax small/big business 60-70%? Seems the only feasible thing to do, if he plans on balancing the federal budget. Just sayin’.

The fifth thing to happen is a trivial obstacle to most… but perhaps a problem of trust to some. In his first tet-a-tet with the sitting President Bush, Barack Obama talked about policies and current events. In an un-Presidential move, he actually leaked information (though, false) from the private and thought to be classified, meeting to the press. The result was an angry Bush and a new opinion of the worthiness of Obama. Is he truly acting like a “Chicago thug,” as President Clinton had claimed? I’d say so… it seems the only thing that Obama can keep a lid on, is anything damning to his personal reputation. Anything that comes out into the open seems to be beneficial or seemingly beneficial to him. As can be seen from his campaign and this recent event, he’s a liar… as Bush has made perfectly clear, when claiming the information leaked was false.

How can we take this President-elect serious? How can anyone trust him? I just don’t get it….

The sixth issue to come about is the cockiness of Iran. Apparently they felt it necessary to strut their political and military muscle along the border of Iraq, by testing missiles. Iran made it clear that their missiles could hit targets 1,200 miles away, and though used for defense, they could be used against opponents, such as Israel or America, in the case that one or the other attacks them. That being said, they claimed that they would attack American bases, even if Israel attacked them, of their own accord. Interesting…

What’s the relevance of this situation? Besides an increasingly militaristic Iran who wants to wipe the Israelis off the face of the planet? In a previous blog post of mine, I outlined the various countries/dictators/terrorist groups that supported Obama. Mahmoud Ahmadinejad is one such person, and I see this as an act that shows he’s not afraid of a reaction from Obama. I believe he thinks that if he decided to attack Israel, we’d stand idly by, to allow Israel to fend for itself. Is this the message that Obama is getting across? If not, then why do these groups/countries/terrorists support him? I don’t get it.

The seventh issue is merely being planned and talked about… which is the closing down of Guantanamo Bay Prison and transporting the hundreds of war criminals/felons that are located there into the United States. Call me crazy, but that just irks me to no end. Not only this, but Obama wants to pretty much recreate the criminal system that these war criminals undergo… Who the hell does this guy think he is? He’s going to undermine every President preceding him and he’s going to change the criminal system for war, he’s going to tear down Capitalism, he’s going to negotiate and sit down with terrorists/dictators… I just don’t understand how it’s gotten to this point. Why in the world did you people elect this guy?

There’s more… in JUST ONE WEEK… but it’s getting late. I shall leave you with the thoughts on this page. Think about them… think about why Obama is President… think about what the next four years are going to be like and what you can do about it now. Oh, don’t worry… there’s much more to come. I assure you.