Normally, I get a LOT of useful information about the capital markets from this source, but this editorial pegged the pisstivity meter.
Read it for yourself, and decide. From Investors’ Business Daily.com
Time For Conservatives To Lighten Up On GM?.
By KEN BLACKWELL, Investor’s Business Daily
From THIS, to THIS…………………………….
…And the “good conservative” Blackwell, who, most likely, voted for Obama, says WE need to “cut GM some slack?? WTF, over.
About five years ago amidst the background of a national financial crisis, an American icon admitted that the mistakes of its past had caught up to its present: General Motors filed for bankruptcy and turned to taxpayers for help.
A Republican president — George W. Bush — initiated what eventually became a $50 billion government bailout plan.
In the years since then, GM has restructured its business practices and redesigned its product line, brought on new management and many new board members, returned the company to profitability and invested more than $8 billion in the U.S.
But you’d never know that from reading recent editorials in the media.
Five years ago, GM may have deserved robust indignation from American taxpayers. But today, GM is doing plenty to earn its place at the forefront of the U.S. auto industry. The new GM has an interesting story to tell, and it’s time to give that story a fair hearing.
It starts with a contrite, and somewhat chastened, company determined to implement change. The bailout money came with certain stipulations, yes, but even beyond those, management knew that without significant internal restructuring and a new commitment to building better vehicles, any taxpayer investment in GM would be wasted.
GM re-negotiated a deal with the United Auto Workers (UAW) that is grounded in reality, not union perks. The agreement gave employees a direct stake in the company and also included a five-year no-strike provision.
The company’s legacy costs have been scaled back from $32.9 billion at the time of the bailout, to $7.8 billion at the end of 2012. Its balance sheet today shows the company’s debt at $4 billion, compared to the $45.8 billion for the old General Motors.
And since 2009, the new GM has invested $8.8 billion in the U.S., while adding 25,500 jobs here in the U.S.
As a result, the company has seen 14 consecutive quarters of profitability. In 2012, GM earned nearly $8 billion by selling more cars in the U.S. under four brands than it ever did with eight. In August of this year, GM saw retail sales that were up 22% from 2012.
GM’s operations in China have become the subject of one-sided criticism. It’s strange that a global company with a renewed commitment to free-market practices would be condemned for seizing the opportunity to expand business in another part of the world.
Not competing in one of the top two auto markets globally makes no sense, and other auto manufacturers are working night and day to establish the kind of foothold and market share that GM has achieved in China.
Noticeably absent from the critiques of GM’s business ventures in China are other facts.
Despite recent reports, GM’s largest manufacturing footprint is still in the U.S., with 41 facilities and 85,500 employees who assemble the cars, stamp parts and build engines, transmissions and tooling.
Moreover, GM’s operations are completely self-funding. In other words, no taxpayer money is being sent overseas to support Chinese operations. In fact, the company has repatriated dividends of $3.7 billion back to the U.S. from China.
It’s also worth pointing out that General Motors began its expansion into China in 1997 — 10 years before any help from the taxpayer. The company has always been committed to building vehicles where their customers are; by the end of 2015, GM will have 21 facilities in China.
For the first time in decades, GM is operating on sound financial footing with the flexibility to run its business unburdened by past mistakes. It’s making better cars, and selling more of them.
By the end of 2013, GM will have successfully bought back its remaining shares from the Treasury Department — the kind of progress that doesn’t just come from a government directive.
We’ll never know what would have happened if the Bush administration had sent General Motors and Chrysler on their way. Maybe the auto industry, which supports 8 million U.S. jobs and $500 billion in wages, would have survived. Maybe instead we’d be talking about the great auto industry collapse of 2008.
The bottom line is: Because difficult decisions were made, GM is a better company today than yesterday, and we don’t have to witness our government spending an estimated $30 billion on unemployment benefits paid to idle auto workers.
As principled free-marketers, it’s easy to demonize a major company that preferred partial government ownership to structured bankruptcy. As right-leaning Americans, it’s tempting to trot out the auto bailout every few months as a constant ding against the Obama administration. But in the process, we accomplish little save for convincing the public conservatives are stuck in the past.
It’s time to look to the future, where General Motors Co. becomes once again an enviable, profitable private company and an American success story.
• Blackwell was the mayor of Cincinnati from 1979 to 1980, Ohio’s state treasurer from 1994 to 1999 and Ohio secretary of state from 1999 to 2007. In 2006, he was the Republican candidate for governor.
Let me get this straight. GM, after DECADES of mismanagement, union pandering, shameful wasting of money on crap designs, and crappier cars, goes to the federal government, hat-in-hand, to BEG for taxpayer relief from THEIR stupidity?
Then-president Bush (no, I don’t miss him) decided to put together a package to tide GM over after the big commercial lenders saw the writing on the wall that this bloated whale was about to be beached.
Along comes the 2008 elections, and what with the TONS of money and support the UAW gave to Obama, they wanted something in return. The package that the incoming Obama Regime put together, according to some reports 10 TIMES as much as Bush had proposed, did EVERYTHING to save the UNION, and SCREW the bondholders, shareholders, and creditors.
The GM bankruptcy turned 100 YEARS of bankruptcy law upside down. In return, we saw GM start to build new plants. A couple here, but the MAJORITY of GM plants built went to China, Mexico, and Brazil.
While I have ZERO issue with GM competing anywhere in the world they can, WHY should the American taxpayers, which, BTW, are STILL on the hook for close to $30,000,000,000 for this fiasco, be the means for GM to invest in GLOBAL operations BEFORE expanding the opportunities HERE?
For Blackwell, supposedly a conservative republican, to tell conservatives to “cut GM some slack” after going to a government who is going hell bent for leather the SAME direction of the old Soviet Union, requires the willing suspension of disbelief.
A question for Mr. Blackwell: IF the white republican had won the election, would YOU feel the SAME WAY about this? I have my doubts. Also, Mr. Blackwell, WHERE is there ANY indication the “new” GM is doing business ANY differently than the “old” GM ?
The UAW is STILL firmly entrenched, the wasteful ways are still in place, the ONLY thing different I see is now, instead of the MARKET deciding what types of cars and trucks they are putting out there, a government that can’t find it’s ass with both hands in front of a mirror is making a LOT of those decisions.
This government can’t run itself, let alone a supposedly “for-profit” business.
And THAT, Mr. Blackwell, WILL be GM’s downfall. You get in bed with a mangy cur, you WILL get it’s fleas. Watch for GM, in the next 5 years, be back to the table YET AGAIN.
This time, they MUST be told NO. Let them go the way of Packard, Studebaker, et al. No one much cared when THEY went bankrupt.