General Motors Zombie Watch 19: You Get What You Don?t Pay For

General Motors Zombie Watch 19: You Get What You Don?t Pay For http://preview.tinyurl.com/yj5b4hv
OK, so, GM is a nationalized automaker. I know, I know: nationalization
is for third world dictators. But there it is. Thanks to outgoing president George Bush, the feds used $50 billion from the Troubled Asset Relief Fund to bail out General Motors, in exchange for majority ownership. So no matter what W?s political successor says about his administration?s ?hands off? non-management of Government Motors, he who owns the gold makes the rules. And when it comes to running a federal-funded organization, Uncle Sam plays by different rules than, say, any private enterprise extent. The bottom line is that there is no bottom line. Amtrak, the U.S. Postal Service, Medicaid?they?re all run at a tremendous, ongoing loss. Which means there?s zero sense of accountability. Which means they will never, ever be able to fully and fairly compete with privately held corporations. Why should GM by any different? Answer: it isn?t.
The truth of GM?s status was revealed the moment the then-head of the Presidential Task Force on Automobiles, Steve Rattner, fired failed GM CEO Rick Wagoner. If anyone on planet earth deserved summary dismissal, Wagoner was it. But as so often happens in life, an important principle was sacrificed on the altar of pragmatism or ?political reality.? Yes, Wagoner needed to go. But the feds had no business running GM. Period. And even if you can get past that?which you shouldn?t?it?s not a good idea for elected officials and their appointed minions to decide who should be the head of a commercial enterprise. That?s like asking a serial killer to raise an an abandoned baby; no matter how good the intentions of all concerned, it?s going to end badly.
Yesterday, the aforementioned Mr. Rattner gave us a glimpse into GM prior to the automaker?s nationalization. For those of us who?d been following GM?s descent into bankruptcy, Rattner?s descriptions of executive incompetence and arrogance came as no surprise. Powerpoint mania and an elevator straight from the penthouse to the parking lot? Who knew? The real story here: the timing of Rattner?s so-called revelations. They arrived in the mainstream media the day before the staff of the federal government?s unelected ?Pay Czar? let it be known that Kenneth J. Feinberg was going to cut the pay packets for GM?s top 25 earners, by some fifty percent. Connect the dots: crap managers, cut compensation. Fair enough?
Not, not at all. The problem is that the pay cuts only make sense if you accept the idea that it?s OK for the federal government to run a car company. Yes, I?m repeating myself. But it bears repeating: private enterprise and government represent fundamentally incompatible ideologies. The former requires financial accountability. The latter political. In the former case, a company must attract, retain and manage people capable of selling goods or services for more than it costs to produce them. In the latter case, politicians must convince people to vote for them. Put another way, politicians promise. Companies deliver. Or, in GM?s case, not.
Reducing executive compensation at GM will score political points, allowing Obama?s army to claim that its sticking it to the fat cats (that helped fund both his presidential campaign and the democratic party but don?t get me started). But limiting pay to $500k per suit per year (plus ?shares? in a future entirely theoretical IPO) will do nothing for GM?s ability to repay its government ?investment.? Or prevent further federal payments. Or forestall Chapter 7. Indeed, it will hasten the end of the end.
Limiting pay guarantees that GM will continue doing the same thing that?s brought it to this parlous state of affairs in the first place: hire from within. Make no mistake: GM ?boasts? the mother of all inbred corporate cultures. The fact that it?s still led by lifer Fritz Henderson tells you all you need to know on that score. And speaking of scoring . . . Given the ongoing chaos at RenCen and the inviolable rules of supply and demand, GM can?t attract top turnaround talent from outside its shallow genetic pool unless it pays top dollar. In fact, GM would have to pay ABOVE the odds to hire anyone capable of keeping the artist formerly known as the world?s largest automaker from total self-immolation.
But that won?t happen. Can?t happen. Because commercial prudence and political acceptability are two different things. Which is why companies are not run as democracies and governments are not based on the profit motive (obviously). The wider point is also well worth making. The Pay Czar?s interference in GM?s management sets a dangerous if not entirely unexpected precedent. Although Feinberg?s pay and compensation mandates only apply to companies who?ve suckled on the federal teat, who ?get what they deserve,? his rulings are a warning shot across the bow of executive suites across the country: a public proclamation of how much money is ?enough? for the management class.
Thanks to America?s movement towards Bailout Nation, class warfare is breaking-out all over. In that sense, GM?s failure can?t come soon enough. Yes, I said it: I want GM to fail. I didn?t start from this perspective. I didn?t want to have this perspective. But I?m a proud American. This country was founded on the belief that government is the single greatest threat to an individual?s life, liberty and pursuit of happiness. The sooner GM?s ?temporary? takeover collapses, the sooner we will realize that the Nanny State is not for us. It is, in fact, against us.
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gm or anyone else for that matter, does not need to pay top dollar to attract talent- they paid top dollar and got talent that designed crap; and they paid top dollar and got management that was even worse. when you pay top dollar, you get only the one who is interested in the dollar; but when you pay a fair wage/ salary you will get the guy who is in it for the love. besides, there are far too many management types slowing down the creativity and there are far too few engineering jobs that there will be vacanncies not filled by good people.
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gm or anyone else for that matter, does not need to pay top dollar to attract talent- they paid top dollar and got talent that designed crap; and they paid top dollar and got management that was even worse. when you pay top dollar, you get only the one who is interested in the dollar; but when you pay a fair wage/ salary you will get the guy who is in it for the love. besides, there are far too many management types slowing down the creativity and there are far too few engineering jobs that there will be vacanncies not filled by good people. ********* Respectfully, a lot of top management is lousy. I dont believe that GM's engineers designed crap because they were crappy engineers.
I would guess the crap resulted from constraints crappy managment put on the engineers, and on "so-so" parts that were used to build the vehicles...The "so-so" parts were also probably part of the managerial master plan.
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But, but, but how do you explain why GM has out sold every other manufacture for at least fifty years, including even today? They must be building what the US customer wants, or they would not still be number one in the US.
wrote in message news:2796771e-7358-

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most people aka the masses fail to think clearly for themselves, just look at the numbers of people who got suckered into trying cigarettes (for absolutely no good reason, pursuaded by advertising) and got addicted, subsequently losing money and health as a result. Just because 30 helens agree does not mean they are right.
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You said "most people aka the masses fail to think clearly for themselves," does that explain why the Camry is the number one selling car in the US? LOL
wrote in message news:2796771e-7358-

most people aka the masses fail to think clearly for themselves, just look at the numbers of people who got suckered into trying cigarettes (for absolutely no good reason, pursuaded by advertising) and got addicted, subsequently losing money and health as a result. Just because 30 helens agree does not mean they are right.
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Mike Hunter wrote:

a PowerGlide" that I know of.
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"Quality and value"?????
Compared to what?
Even CM (I Bet they hate admitting this) is stating concerns over the lack of quality on Toyotas these days.
A Chevy Malibu is a much better choice these days.
Looks better.
Better gas milage.
More reliable.
Really not surprising to those who do their homework.
Even the (discontined) Grand Prix is a better car as far as gas milage, interior room, or factory recalls are concerned.

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wrote in message news:2796771e-7358-

try this article http://www.freep.com/article/20091027/BUSINESS01/91027056/1002/NEWS01/Chevrolet-prices-showing-new-signs-of-strength-for-American-brand
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But what he said, in reply to my reminding him that GM is still number one in sales, was "most people aka the masses fail to think clearly for themselves," that would include Camry buyers since it is the number one selling car, dummy.
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Does anyone remember "Planned Obselescance" ? Championed by GM in the 50's and the 60's.
If you bought a new car ( warranty 3 months or 3000 miles ) You were looking at a trade before 35000 miles.
It was common that you'd need; New brakes, new shocks, new muffler, new battery. Without rustproofing, holes would start to appear in doors, fenders, etc.....
I don't think it was a matter of poor components... but rather a choice of poor components in the corporate plan.
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Most cars of that time didnt last long. BUT that was not a consequence of the times.. Technology existed to do better, but they did what they thought was "good enough" for the market. A fatal philosophy.
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That may be your opinion but can you tell us what color is the sky in your world?

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Mike Hunter wrote:

Ah, you're wishing for the good 'ole Powerglide days :-)
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no, it means that right and wrong are absolutes, not democratic principals. Most of the folks living at jonestown thought they were going to a better place, most of the kids in the heavens gate thought much the same thing- we know better because they died and went into the ground; so if most of the people believe x is a better car it does not mean they are right.
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