I put this up only because you need to understand the kind of thinking that brought this company down is still in place. And you need to hear why I and others believe the Feds will be in charge of GM forever.
Here is the Vice Chair of a company that turned to American taxpayers for help because of poor planning and free spending. From generous pensions to unreal work rules (like the infamous job bank), GM management would cave with alarming regularity. Like a 21st century yuppie parent, it just could not say no. So with Neil Cavuto last night Mr Lutz now says GM will be just fine, now that that it doesn’t have any of the debt that it freely incurred in a free market system.
I am sure every person and every business in America could probably make the same claim if the government paid off all debt and guaranteed every obligation. The real question then becomes, if Mr Lutz can now run a profitable “government” company … how long before it becomes a profitable private company. Well let’s see, its debt to the American taxpayer is somewhere around $50 billion dollars. How long do you think before they are out of government control? Judge Napolitano, I think, nails it.
And then there is this to consider. Two of the owners, the US Government and the UAW will no doubt continue to pressure the company to provide generous benefits. It is inevitable. How long, once the company becomes profitable, before it becomes unprofitable? It is not an unfair question. Not at all.
GM was one of the richest contributors to Barack Obama’s campaign, and to ensure its viability the White House has upped the federal commitment to $50 billion, gutted bankruptcy law and shredded contracts with secured bondholders. It has placed our largest automaker in the hands of Big Labor and Big Government interests, entities whose political priorities clash with the economic priorities necessary to make GM profitable.
and then this …
So while the White House promises a quick federal withdrawal from GM, its demands that the automaker produce untested cars with union labor suggest there’s no light at the end of that tunnel.
Generally I am pleased when I nail a topic on the radio show … tonight I am not so happy.
Editor’s update: Yes … I confess … I borrowed the for-ev-ah line from one of my favorite movies … but you have to guess which one. Hey, if you can’t have fun on a blog … what fun is that?