BY SAM SLOM – Two weeks ago, amid great fanfare, General Motors (aka, “Government Motors”) emerged from bankruptcy. Well, kind of. President Obama was ecstatic as he declared the government bailout and control of the company, a great success. He added plaudits for Chrysler too. The New York Stock Exchange was all aglow as the new GM stock offering surpassed $30 per share after skidding to $1 years ago.
Great American success story? I think not.
Let me first disclose that my loyalties run deep. There is of course my legendary consumption of Pepsi, not Coke; Hershey’s, not Nestle’s; Mac not any PC.
Then there’s GM. From the time I was a little tyke (no reference to the Elephant shot and killed in Honolulu by the same name) I was a loyal GM guy. Couldn’t stand Ford specifically. Loved GM and believed their old slogan, “What’s Good for GM is Good for America.”
Owned two Chevies, a Chevette, Vega, Citation, Pontiac LeMans, rented only GM cars—did slip once with a Mazda RX7— and have had three Saturns in our family most recently.
I was concerned decades ago, and expressed myself to the corporation, that GM design was dull and being copied over and over in X cars, K cars, and other models with a disregard for what the public wanted and saw at auto shows.
The Corvair was very innovative and ahead of its time, but GM decided to cave to Ralph Nader, even though the Corvair had a growing customer loyalty. I was also getting perturbed with GM because the firm was too easily rolling over to ever excessive United Auto Worker union demands, and padding the cost of its cars by thousands of dollars simply to pay for outrageous union salaries, health plans, retirement and other benefits that clearly could not be sustained.
I still rooted for GM as their percentage of share continued to decline. They would come back, the American way, with grit and creativity, I thought.
Then came the financial crisis. The first thing GM did was take it out on their loyal dealers by elimination of hundreds of them. Then they abandoned time honored product and division names (Oldsmobile, Pontiac, Hummer and Saturn). Next, GM gave loyal customers a hard time getting parts, warranty approval, and reassurance.
But GM unabashedly, actively, and aggressively courted the Federal ObamaGovernment—and money from the taxpayers— in exchange for control by a government that despises the American automobile, the freedom it used to represent, and the people who believe in choice of transportation modes. GM had no shame. Chrysler too. This is a lot different from the previous Chrysler bailout which did not include any government control.
The subsidized “cash for clunkers” government subsidy masked the problems of management for a while. Then came the so-called stimulus. And full on bailout.
GM became Obama Motors, joining a growing and frightening list of businesses and industries including banking, insurance and investments controlled and regulated by the Government. Where was that fabled American independence? Gone..
. The Government at one point gave out money in exchange for nearly a 2/3 ownership of GM. More money was given to help GM pay additional bills and escape bankruptcy. The revenue stream was not improved by new car sales alone. It still is dependent on taxpayer support and contrary to what is said, did not “pay back” the taxpayers with its own money.
So here we are. The Government still owns and controls about 1/3 of GM. The Government, not the auto manufacturer, tells us what we will get. GM responds. The new GM tv commercials say, “we all fall down.” Yes, that’s true. But those of us wsho truly believe in a free market and competition, don’t ask or accept government intervention. Ford didn’t do it.
For me, that’s the end. I can no longer support a company that gives up its work ethic, and my freedom of choice, for government authoritarianism.
Hooray for the Volt and the Cruze, but these models are tainted by government control. And even more subsidies to buy this electric car. Interesting that Motor Trend selected the Volt “Car of the Year” before even one was sold. Are they also compelled to be cheerleaders for this government? Am I making a bigger deal of this than is warranted? You be the judge
I never thought I would say this, but my next car will be a Ford. Why? Simple. Unlike GM and Chrysler, Ford, faced with the same challenges and problems, refused the government handout that came with a fist. They provided dramatic new models and features. They did it the old fashioned American way and made meaningful and honest profits. People respond to that.
So, bye, bye, Miss American Pie—GM drove the Chevy to the levy and may find it dry.