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Where Are You Joe DiMaggio?

Posted by henryinct 6b (My Page) on
Sat, May 30, 09 at 22:42

On Monday one of the greatest American icons General Motors files for Ch. 11 bankruptcy. Since the 20's GM has been the largest auto company in the world, owned more than 50 percent of the American market and was the most recognizable and admired of companies. Until the past few years of course. For 80 years GM was a symbol of America and the sad truth still is. For you see the thing no one wants to say out loud is GM has been for many years no longer able to make products of high enough quality to compete in the market. If we all did our due dilligence when car shopping we would all be driving Hondas and Toyotas.

Now GM is going to be kept alive by the government because it is believed that the economy could not stand the shock of the complete dissolution of GM. Of course this is based on the supposition that the new lean GM will be able to compete and survive and that this is not just putting off the inevitable. They have to at least pretend to believe this because after all they are spending tens if not hundreds of billions of dollars that belong to you and me.

There is not anything we can do about this but I wish at least there could be a lesson learned but I doubt if that is even the case. GM failed for the same reason our country is failing. Everyone involved took as much as they could for themselves until there was nothing left. Labor took and took, management failed spectacularly in their stewardship of the company and even Wall St. and the shareholders who will have lost everything didn't bother to look into what they were investing in. I still remember the ridiculous reasons used to justify buying GM stock. To me stockholders and bondholders all deserve to lose everything because that is the way the system is supposed to work. I would let GM disappear altogether except that would also hurt a lot of innocent people and might plunge us into a depression.

So I guess President Obama is doing the right thing. It's a sad day for America but it is nothing new really.

Follow-Up Postings:

RE: Where Are You Joe DiMaggio?

Henry, don't you think if they'd been allowed to go bankrupt the way other companies go bankrupt, that maybe some rich entity would have picked them up - minus the unions - and started them back up in some form? They would have paid good wages but not sky-high union rates with pay for doing nothing, and people would have jobs, and hopefully they would make quality American cars. Like Saturn - why did Saturn go Chapter 7? I just don't see how this plan is going to work. The UAW is going to suck the new GM dry like it did the old GM. It's true if you take a risk there's always the risk that you'll lose, but I think legally the bondholders were entitled to a bigger share than they got. It just seems to me the game was rigged, and Obama twisted arms, and the people are getting the dirty end of the stick. If my boss (a real estate broker) goes under (and it's a miracle she hasn't already), will anyone even know? Is anyone doing anything to fix the housing market? I drive a 2000 Honda CRV, and DH has a 2001 Dodge Dakota. No GM cars in our future.

I don't like the way we're going. I think this country is in real trouble on many levels. In no way am I being argumentative - just some thoughts and questions.


RE: Where Are You Joe DiMaggio?

Sherry, Jim Cramer on CNBC thinks that the GM bailout is just an employment stimulous program, a way to keep people employed. It is no worse than any other artificial government program and it could help save the US auto industry but I doubt it. The bondholders did get a bad deal but they deserved it for being dumb enough to lend money to a bankrupt hopeless outfit like GM. If it just went Ch.7 how much do you think they would have got after all the lawyers' fees? The UAW is saving face but it is dead. It is the end of an era for organized labor as well as GM.

RE: Where Are You Joe DiMaggio?

You're right, Henry, but regular people would be on unemployment right now, making half pay not full pay like the the UAW. They bought it with all those political contributions from union dues. Those pension funds should have dumped GM a long time ago. Unbelievable situation. Ya gotta give Ford credit for not taking our money.


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