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The Forum > Article Comments > Goodbye to GM, hello Rudd Car > Comments

Goodbye to GM, hello Rudd Car : Comments

By Oliver Hartwich, published 20/3/2009

The taxpayer subsidies Kevin Rudd is giving Holden may end up in the coffers of its ailing parent, General Motors, in Detroit.

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In God's little acre it was once said: " what is good for our Country is good for General Motor's, and vice versa ." It became a National catch-cry. As symbolic as the Washington Monument and apple pie. All yankee-doodle's embraced it. Infectious, it became a standard notion around the Globe.

So what went so incredbly wrong ?

GM/Chrysler got caught up in the American Dream, and even as they produce the lion's share of the US auto market, with 14 different models,commercials, SUV's and Hummers, their profits were roller-coaster eroding. When gasoline rocketed to $ 4.00 p/g sales plummeted. In the US it was quite acceptable, even by Congress that 35 mpg was the norm for max fuel economy. Hilary Clinton, Joe Biden, Pelosi voted in favour of. This standard was pursued throughout GM's tenure. Fuel emissions, CO2 pollution, and fuel economy was the last thing the technocrats had in mind. In the land of plenty, and importing >70% of it's crude from Canada, South America, and the Middle East, the technology became moribund, whereas Toyota, Hyundai etc strived for efficacy and extended mileage. It's gross myopicy has cost taxpayers dearly.

The decline exacerbated fourfold. Gm technocrats gambled on the popularity of the gas-guzzling SUV model. Amidst all the dazzling PR razzamatazz, it bombed out. The Iraq War saved the Hummer. The military ordered 5000 of these hungry beasts.

GM 2007 losses accumulated $ 43.3 B. Highest on record. By 2009, and $ 14 b in the red, GM began closing plants in the south. GM made no profits since 2004.In the NYSE, Mar 2009 shares hovered between $2.93 / $ 3.80. Dividends $ 0.25 !. Meanwhile, Alabama, Georgia, Delaware and Louisiana lost 34,000 full time jobs, following cuts world-wide of 47,000. Stateside, 533,000 jobs were lost Nov, alone. Overall 4.4 million people are unemployed. 7.6 % of the poplulation.
GM has spent $ 95 M on Washington lobbyist in a decade, becoming # 16th, behind the Banks, Insurance giants, Mortgage houses etc. Gm's score to date, $ 30.9 M of Govt stimulus, $ 116 M in the pipeline
Posted by jacinta, Tuesday, 24 March 2009 12:23:42 PM
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The GM saga in Aust originated in 1931, when it partnered Holden Body Builders PLC.. It took 17 years before it produced a home-brand automobile - the FX Holden, from Fisherman's Bend.Vic. It became an instant success story. Plants in Dandenong and Lang Lang followed in Victoria. Elizabeth in SA. Acacia Ridge in Qld. Over 7 million cars were built, many for export. GM factories abound in 11 Asia-Pacific countries. 244,000 people are employed directly. Sales, dealerships, ancillary products etc possibly account for over half that number again.

It comes as no surprise the Wizard of Oz shelled out $ 6.2 M to rescue the ailing giant. Besides being a Political statement, vote catcher, and blatant pork-barreling, it boosted Vic's Labor Govt re-election opportunities, like his overt promises to Anna Bligh, last week. Broke, debt-ridden, in recession,and severely improvished at the loss of GST earnings,Vic's economy is similar to NSW, Qld, SA and WA. The familiar hand-out..oops stimulus didn't go far enough. Kevingate's union cabal, like their counterparts, industrial belligerent United Auto Workers in Detroit, claimed they were short-changed. In the US, auto workers are paid $ 85.00 ph, and sacked workers receive full pay until work becomes available. Their retirement Plan is Bank guranteed.

Draconian, Gillard's Industrial Relations Bill passed Parliament with bribes to Senator Fielding, and Brown's Greenies again. Oz's biggest bra/jock manufacturer Pacific Brands, despite Rudd's $ 17 M handout, went straight into CEO, Management bonuses, prodigious pay hikes. The aftermath, 1850 workers made redundant, and the company moved off shore. This pantomine has been played out too often, it becomes blase. Others will soon follow, contracts lost.

At the end of the day, throwing money every-which-way is the panacea for third-world Armageddon. Future generations will be severely disfranchised with mismanaged National debt hanging like noose's around their young necks. Significant debt and deficits in the trillions, incurred by shameless, unmandated demigods.

A monolithic legacy bordering on unbridled, egotism and populism. Making the Guiness Book of records, a seat in the UN Security Council, or opportunistic celebrity status is as delusional as the Emperor with no clothes.
Posted by jacinta, Tuesday, 24 March 2009 2:57:24 PM
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