Government Motors is born!

[Harry P.]

I just read an interesting little item in the paper. Looks like the "New" GM wants to sell cars on ebay!!!

GM CEO Fritz Henderson said the company is working on an "innovative new partnership" with eBay Inc. to let consumers in California bid on vehicles or choose a "Buy it Now" option to purchase the car at a set price. Dealers would still distribute the cars.

How about that? Buy a new car from ebay instead of a dealership. Now that is a new way of doing things!

[Tommy Kortman]

You can't blame the Democrats for GM's mess. They were in trouble back when that "other president" was running the country into the ground.

You mean the Clintons? Absolutely!!

[Blue coyote]

While I'm a Ford guy, and probably always will be, I find it ironic that VW has been mentioned as having a good product...You DO know that VW is a State-run auto manufacturer, right?

[LDO]

I can't wait to see a political forum on this board, so we don't have to read this on a modeling forum.

[Art Anderson]

While I'm a Ford guy, and probably always will be, I find it ironic that VW has been mentioned as having a good product...You DO know that VW is a State-run auto manufacturer, right?

Last I read, Volkswagen is a publicly traded corporation, but with limits as to how large a portion of the outstanding shares can be owned by any one individual investor.

The notion that VW is a state-owned company, I think, stems from how Volkswagen came to be, back in the late 1930's. Volkswagen (which translates exactly to "Peoples' Car" started up, under the auspices of the Hitler Regime, with a combination of government money, and the deposits of hundreds of thousands of ordinary Germans who wanted to buy this new car. However, before barely any civilian cars were produced, the invasion of Poland on September 1, 1939 by Hitler's Wehrmacht meant the end of civilian car production in Germany, save for a few high end Mercedes, Horch etc. cars built for the Nazi hierarchy. VW built primarily Kubelwagens (and a quantity of Schwimvagens--the amphibious version of the Kubelwagen--along with a number of Beetles for the duration, until bombing and the eventual British occupation of Wolfsburg in 1945.

The British Army officer administering military goverment in Wolfsburg and the surrounding area put VW's workers back on the job, clearing away the debris of war, to build some VW Beetles for use as staff cars for the British Army of Occupation. Within months, VW was producing staff cars for the entire British Army, their production having been seen as a form of reparations for damage done to the UK during the Blitz, with civilian sales in Occupied West Germany beginning sometime in 1948 or 1949. As de-nazification proceeded in the first couple of years following the German surrender lead to fledgling German civilian authority, ultimately the government of West Germany, it was ultimately decided that given the public funds having been spent to start the company, coupled with hundreds of thousands of deposits for new cars having been made prior to hostilities, all that had to be honored. Eventually though, government ownership passed into private hands, with the constraints I mentioned above, and VW became pretty much just like any other corporation in Germany today. The only difference is, of course, that VW, unlike Daimler-Benz, Porsche, or BMW, isn't likely to ever be taken over by any other company, due to the bylaws of the company, which were set, I believe, by the former West German Parliament decades ago.

It would be interesting to know, however, if the civilian deposits for new, 1939 VW Beetles that were put down by persons ultimately living in the postwar DDR (Deutshe Demokratishe Republik--German Democratic Republic) formed out of the Soviet Zone of Occupation were ever honored, once Germany was reunited after the fall of the Berlin Wall and the end of Soviet Army occupation of East Germany.

Art

[Art Anderson]

I just read an interesting little item in the paper. Looks like the "New" GM wants to sell cars on ebay!!!

GM CEO Fritz Henderson said the company is working on an "innovative new partnership" with eBay Inc. to let consumers in California bid on vehicles or choose a "Buy it Now" option to purchase the car at a set price. Dealers would still distribute the cars.

How about that? Buy a new car from ebay instead of a dealership. Now that is a new way of doing things!

What's all that new about that? New car dealers have been selling cars via the internet for perhaps 15 years now, even eBay.

Art

[Chillyb1]

But I decided that my money will go to support a company that's doing it the right way. I believe in capitalism and free markets... not in bailouts and charity programs for big business.

I've never really understood this impulse among my fellow Americans to become such enthusiastic cheerleaders for the abstract concept of capitalism and so-called free markets. I've noticed particularly virulent strains of this in first-generation immigrants from eastern Europe, but there are plenty of the native-born who don the same garb and pom-poms. The kinds of dystopian visions conjured up that purport to portend the future of GM and its products seem to me to be just silly. Oh no, tiny little boxes on wheels or Obamamobiles. Nooooo! Milton Friedman, we beseech thee, please save us!

Why so wedded to this supposed "right way"? If a company makes quality cars and people buy them, isn't that more important than what percentage is nominally owned by the state? It was private-sector mismanagement that caused problems for GM and Chrylser and I don't see any reason that the same private-sector corporate leadership should be any more able to dig them out of trouble whether the companies are entirely privately owned or partially state owned. What's more, it wasn't just mismanagement in the automotive sector that brought low these manufacturers, but astonishing corporate malfeasance in the financial-markets sector. The wholly integrated economic system necessarily requires harmonious operation across sectors if any and all are to prosper.

And, not to burst any bubbles, but free markets are a myth (also there is no Santa Claus, Easter Bunny, or Tooth Fairy, Virginia). I once was interviewed for a part-time teaching position in social sciences at a community college and during the interview we got somehow to talking about Thomas Friedman, with his Lexuses and olive trees and a flat earth. I don't think much of this Friedman either whose writings are over-simplistic, grossly detached from reality, and amount to nothing more than pro-capitalist propaganda. The interviewer at one point finally declared, "I like free markets!" As though he'd know one if it bit his tongue. It is an abstraction used as a metaphor to describe the exchange of goods and services on whatever scale one wishes to view, not a real thing that can be apprehended in concrete detail.

Of course, we are free to support with our hard-earned dollars those companies that conform to our ideological proclivities whether or not they make quality products. As Blue Coyote pointed out, VW is a state-owned enterprise and they seem to be able to thrive in international competition. Another example is Renault, which for at least forty years was entirely state-owned and was during that period one of the worlds most successful automotive companies (if not here in the USA).

In other words, this is all much ado about nothing.

[Harry P.]

The "abstract concepts" of capitalism and free markets is what our economy is based on. Just like our GNP is measured in another abstract concept... "dollars." Let's face it, all economic systems can be described as "abstract concepts"... there is no inherent value in a dollar bill, the value it has is the value we and the rest of the world believe that it has. Indeed, a very "abstract" concept!

[Harry P.]

What's all that new about that? New car dealers have been selling cars via the internet for perhaps 15 years now, even eBay.

Art

I guess the "new" part would be GM selling their new cars directly to the consumer via ebay.

[Blue coyote]

I can't wait to see a political forum on this board, so we don't have to read this on a modeling forum.

Sorry I forced you to hit the link to a thread you were unable to determine the subject matter of by simply reading the title before you left-clicked on it...

[Harry P.]

Why so wedded to this supposed "right way"? If a company makes quality cars and people buy them, isn't that more important than what percentage is nominally owned by the state?

Everyone has an opinion... mine is that I prefer the government to stay out of the business sector as much as possible. I agree that things like the EPA, OSHA, etc. are valid and useful arms of government, but I don't believe the government ought to be directly running companies. When Washington can force the resignation of a Rick Wagoner, no matter how inept he may have been or not, that to me is a bit too much government control over the private sector. I prefer a market where businesses thrive or die as a result of marketplace demands and competition, not controlled and/or operated by the government.

Obviuosly, state-run enterprises can and do work... personally I just prefer the government to stick to it's job, and let the marketplace do its thing without direct control by Washington.

[Rob Hall]

You mean the Clintons? Absolutely!!

No, I think that was a reference to Dubya, possibly the worst President in US history.

Edited July 11, 2009 by Rob Hall

[Art Anderson]

It's just sad to see what's become of the American Auto industry. Go back to the late '50's, early '60's and GM was on top of the world. No one could touch them as far as design and name recognition. Problem was, they thought they WERE too big to fail and sat on their hands while the Europeans and more recently the Asians were eating their lunch.

What did they do to respond? Build more soulless, pointless, poor quality cars. Now they'll pay the price.

I guess I'm an old gearhead at heart............I don't like how a lot of cars are engineered today. Must EVERYTHING be front wheel drive??

It has its place with small cars, but I absolutely hate the goofy proportions it gives to larger cars. Dashboard to front axle distances are all the same, windshield angles all the same, rooflines all the same-------everything same, same, same.

I agree with fordsixty------they should have just failed and let someone else pick up the pieces.................about 20 years ago.

One of the real problems with the American approach to capitalism, certainly in the years since Theodore Roosevelt (the legendary "Trust Buster" is that companies were allowed to become so large, so dominant, that their potential failure would have a massive impact on whole regions, indeed the entire US. We all saw this in the banking meltdown of last fall.

I still vividly remember the demise of Studebaker, and their closing in South Bend in December 1963 in South Bend. While living at a distance of 110 miles from South Bend, I saw the effects, some of them very personal to my family, as several relatives were directly affected by that. Through the 1950's, South Bend Indiana industry was dominated by two very large (for the community at least) industries: Studebaker Corporation and Oliver Chilled Plow Company. Oliver sold out to Allis Chalmers, after producing everything from farm implements (chilled iron plows were their start, they ultimately built hundreds of thousands of high-end farm tractors in a complex just west of the Studebaker factories), and they just disappeared over a period of about 5 years. Studebaker, after struggling for years as the largest of the independent automakers, finally threw in the towel in December 1963, leaving thousands of workers, most of them in their mid-50's to near retirement, with no job, no prospects of a job, even no pensions (Pension plans back then were owned by the employer, no ERISA or Pension Guarrantee Corporation was there to protect them, pick up the pieces!). Where the rest of the US was basking in the renewed prosperity of the early 1960's, South Bend was basically in a depression. Numerous small suppliers to Studebaker were hurt, some to the point of simply going out of business altogether.

While much is made of Michigan due to Detroit, and the assembly plants there, does anyone out there realize that it was/is Indiana that has the highest percentage of any state of its population dependent on auto industry jobs? Ever hear of Muncie, Anderson (once the home of GM Guidelamp), or Kokomo (no, there is no beach in Kokomo, regardless of what the Beach Boys sang about!)? Even Indianapolis? Cities such as Logansport, Frankfort, Warsaw; towns like Albion, Monticello, Delphi, Howe, Connersville, Columbus, and others all had major factories supplying Detroit, some still do. At last count, nearly a quarter million Hoosiers produce, or did until layoff, parts for the Big Three. What about them?

Also, what about the industrial base in this country, in time of war? Oh I know, war is either obsolete, or will be resolved in short order by flinging a few nukes back and forth, but really now, is either of those concepts what may happen?

By the 1960's, GM had achieved what Franklin Roosevelt feared--one company producing the majority of automobiles in the US (Roosevelt is alleged to have told the execs at GM that in his postwar years, he would see to it that GM, and other mega-companies would be broken up, to prevent their monopolizing, even dominating, the industries in which they operated, but we all know what happened--Roosevelt died in April 1945, and with him, the last vestige of serious trust-busting, IMO).

In the Johnson Administration, a thinly veiled threat to break up General Motors into smaller, competing companies lead GM to meld their car makes into one, General Motors Assembly Division (GMAD), the various divisions suddenly becoming mere marketing organizations, which had the effect of making it nearly impossible for anyone to split off, say, Chevrolet from the rest of them. Decades of inbreeding of management types had its effects as well, of course. If it didn't originate at GM, it wasn't to be considered. We all want guarranteed employment (you, me, and the other guy too!), but the UAW (arguably the 4th member of the Big Four Automakers!) carried things to an extreme.

Come 2008-2009, and GM, due as much to "Sweetheart Deals" made for geopolitical aims by succeeding administrations in Washington as it was from their getting ripe and rotting (Ray Kroc, founder and long time CEO of McDonalds spoke of "When you are green, you are growing, when you're ripe, you rot!"). Presidents, from Nixon to Ford, to Carter, to Reagan, to Bush I to Clinton, to Bush II, and likely even Obama have chosen to open the import doors to countries, based on either their friendship with the US, or their potential for such, with little regard for reciprocation of any kind. A $750 stimulus check from Washington is as likely to get spent at Walmart as anyplace else, and whose economy (beyond that of Bentonville Arkansas) is that likely to stimulate? I leave you all to answer that one, and it ain't West Undershirt here in the US folks. Oh yeah, for years there were protections: For years, as an example, the Japanese carmakers were prohibited from shipping completed Toyota or Isuzy pickups to the US--so how did they counter that? Simple, they shipped pickup cab-chassis to the US West Coast, and simply set up factories to stamp out, weld up pickup boxes in California etc. End run. Japanese cars imported into the US were as bad or worse than 1970's domestic cars, but at least Honda and Toyota were embarrassed enough to fix them when customers complained, and that points out a key shortcoming of the Big Three--"it ain't old till it's sold", and "you bought it, you deal with it" corporate attitudes prevailed in Detroit for decades, and to an extent, zone management of the Big Three still operates that way, even though times have changed.

But still, it is the ordinary "man on the street" that has been affected by all this. Only time will tell if the incredible intervention in the US auto industry will be successful. IF the politicians keep their fat fingers out of things, get some real courage to not answer the phone calls from outraged dealers, will this all succeed. And, it is gonna take the serious dedication of auto execs of the Big Three to not just acknowlege the mistakes of the past, but also to make certain that they are not repeated ever again to turn the corner, and that includes Ford along with the new GM and the new Chrysler. I see this time as their last chance, period!

Art

[cosmiccadillac]

You can't blame the Democrats for GM's mess. They were in trouble back when that "other president" was running the country into the ground.

I didn't blame them for GM's mess, I blame them (Obama administration) for using OUR money to BAIL OUT a FAILING company. BIG difference.

[cosmiccadillac]

Agreed...it's going to take years to clean up the disaster the Repubs left behind.

It will take GENERATIONS to clean up the disaster the Democrats are CREATING right now.

[cosmiccadillac]

Of course, we are free to support with our hard-earned dollars those companies that conform to our ideological proclivities whether or not they make quality products.

In other words, this is all much ado about nothing.

WE ARE NOT FREE. Am I going to be able to bow out of the ridiculous taxes that are going to pay for this giant BAND-AID?! No, because your "utopian" beaurocrats are going to keep voting on new laws/bills without even understanding what they ACTUALLY SAY. One Democrat was recently interviewed and asked about this very topic. He laughed, saying something to the effect that it would be ridiculous to read the bill, stating that fewer would get voted into law. Imagine that, people reading and understanding what a bill FULLY means, and deciding that its TOTALLY BACKWARDS and doesn't promote progress. What a concept.

DEFINE NOTHING.

[Art Anderson]

I didn't blame them for GM's mess, I blame them (Obama administration) for using OUR money to BAIL OUT a FAILING company. BIG difference.

I can understand your feelings, but have you considered that ancient bit of advice that goes like this (my paraphrasing):

"Give a man a fish, you feed him for a day. Teach him (give him the means) to catch fish, and you feed him for a lifetime". Isn't that really what has happened here anyway?

And, BTW, when last I read, what GM and Chrysler have gotten from the government are not handouts, but loans, and by definition, a loan is expected to be repaid, with interest. If this all is successful, and I will bet that it will be, then the government (and by definition, those of us who are taxpayers) will get that money back, with interest. On balance, I see this as having all manner of potential for a win-win situation, not some nebulous government giveaway.

Art

[Harry P.]

...what GM and Chrysler have gotten from the government are not handouts, but loans, and by definition, a loan is expected to be repaid, with interest. If this all is successful, and I will bet that it will be, then the government (and by definition, those of us who are taxpayers) will get that money back, with interest...

Let's assume, just for argument's sake, that both GM and Chrysler do pay back every cent, with interest. (A highly unlikely scenario, but for the sake of argument we'll assume it could happen... )

Now what do you suppose will happen to that money? Will we taxpayers all get a check from Washington along with a thank-you card for floating GM and Chrysler the loans?

Or will the government take that money (our money) and create yet another worthless, money-sucking black hole federal Department of Something or Other and quickly throw that money into it?

My bet is the latter...

[LDO]

Let's assume, just for argument's sake, that both GM and Chrysler do pay back every cent, with interest. (A highly unlikely scenario, but for the sake of argument we'll assume it could happen... )

Now what do you suppose will happen to that money? Will we taxpayers all get a check from Washington along with a thank-you card for floating GM and Chrysler the loans?

Or will the government take that money (our money) and create yet another worthless, money-sucking black hole federal Department of Something or Other and quickly throw that money into it?

My bet is the latter...

When will I get my money back from the Iraq war? I don't like the way that money was spent. The loans to GM and Chrysler didn't cost any lives or send anyone home without arms and legs. It ###### sure didn't "protect" us from someone who was never a threat.

[Rob Hall]

When will I get my money back from the Iraq war? I don't like the way that money was spent. The loans to GM and Chrysler didn't cost any lives or send anyone home without arms and legs. It ###### sure didn't "protect" us from someone who was never a threat.

Exactly... the billions wasted by the corrupt 'conservatives' over the last 8 years disgusts me. At least the current administration is trying to keep American jobs and invest in America w/ the stimulus plan, etc.

[Harry P.]

At least the current administration is trying to keep American jobs and invest in America w/ the stimulus plan, etc.

How do you invest money that you don't have?

Oh, that's right. You run up the deficit higher than it's ever been in history.

Higher, in fact, than all the previous deficits under all the previous administrations... combined!

[fordsixty]

When will I get my money back from the Iraq war? I don't like the way that money was spent. The loans to GM and Chrysler didn't cost any lives or send anyone home without arms and legs. It ###### sure didn't "protect" us from someone who was never a threat.

huh?

the loans to GM and chrysler, if they ever get paid back, will produce a profit. since the government is using my present and future money, i should see that profit in my bank account.

now here is my problem. since i now have an investment in GM and chrysler, that means i am forced to purchase a product from these new government controlled businesses in order ensure their success. ford and the other auto manufactures be damned. over my dead body. i have already bought a new ford and will buy another when the time comes.

typical government intervention. those that cannot pay, produce or perform are given all kinds of help and advantages from the treasury. those that play by the rules are told to suck it up and suffer.

"Were we directed from Washington when to sow and when to reap, we should soon want bread." --Thomas Jefferson

Edited July 12, 2009 by fordsixty

[Chillyb1]

Last I read, Volkswagen is a publicly traded corporation, but with limits as to how large a portion of the outstanding shares can be owned by any one individual investor.

The notion that VW is a state-owned company, I think, stems from how Volkswagen came to be, back in the late 1930's.

Eventually though, government ownership passed into private hands, with the constraints I mentioned above, and VW became pretty much just like any other corporation in Germany today.

It would be interesting to know, however, if the civilian deposits for new, 1939 VW Beetles that were put down by persons ultimately living in the postwar DDR (Deutshe Demokratishe Republik--German Democratic Republic) formed out of the Soviet Zone of Occupation were ever honored, once Germany was reunited after the fall of the Berlin Wall and the end of Soviet Army occupation of East Germany.

Art

Just as a historical note of clarification, the notion that VW is state owned is based on the fact that it was entirely state owned until 1960, when 60% of it was privatized and the remaining 40% was split 50/50 between the federal government in Bonn and the state government of Lower Saxony, which conditions of ownership obtain to this day.

The case of savings deposit accounts for new Volkswagens was settled in 1961. Some 330,000 people had started accounts and they received either cash or credit toward purchase of a Volkswagen. This settlement included citizens of the Bundesrepublik as well as the DDR.

[Willy Survive]

How do you invest money that you don't have?

Oh, that's right. You run up the deficit higher than it's ever been in history.

Higher, in fact, than all the previous deficits under all the previous administrations... combined!

Yes but the deficit has been breaking records for about the past 5 to 6 years. When the Obama administration entered office what did they really have to work with? Certainly not the surplus that Clinton left behind. There had already been hundreds of billions of dollars of bailouts handed out. Yes, handed out, not loaned. An unjustifialbe war in the middle east that is a money vacuum for the U.S. taxpayers. So basically what I'm saying Harry is if I hand you my debit card with -$200 in it, how can I get mad when it's in your possesion and the overdraft fees kicked in and now its -$236? Wasn't your fault was it? Absolutely not. Seems like a good analogy of what the current administration has gotten stuck with.

So I'm sorry if automobiles seem trivial to me when every day young men and women are killed and mamed for a war with no reason. Send the troops back home we'll save a lot of money that way too.

[Foxer]

If I had my choice, I would have invested in Nissan.