Watching GM Implode

This is one sad day, GM is is imploding. The stock is now at 1950's values, below $5, down over 30%.

Standard & Poor's Ratings Services placed GM's debt on CreditWatch with negative implications, meaning the automaker's credit, which is already in junk territory, could face another downgrade

They are heavily affected by the credit markets and as we all know, are also operating at a loss.

This is really bad because of course much, much too late, GM just started bring jobs to Flint well as a plug-in electric. If this goes the way it looks like it maybe going, might the United States nationalize GM for jobs and manufacturing? (This is a question, leave a commment).

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Well deserved

GM laughed at Demming. Japan made him a national hero. Why? Because GM business model depends upon planned obsolescence, i.e. poor quality. The USA is better off without GM. A culture of deceit is unAmerican.

Mr. (Mrs.?) Anonymous

While it's all very well and fine to say that the US is better off without GM, I think that statements of this sort are most often based in ignorance, not fact.


1) If there is not GM, a vital component of the US industrial base that has been our fallback when threatened by foreign enemies is destroyed leaving us at the mercy of enemies who have a very different idea of how the world works than us.

2)The absence of a domestic automotive industry will mean that efforts by the government to reduce our dependence on foreign energy sources will be in the hands of foreign nations.

3) The Japanese transplants have a policy of matching UAW wage rates negotiated with the Big 3. That wage is ~$28 hour. Toyota was caught saying that wages would be cut from the current rate matching UAW wage rates to around $12-14/ hour once GM was pushed beneath the water. Honda doesn't even match pay now. It pays $12-$14 hour in Ohio and Indiana.

4) Unemployment is already floating around 9% in Kokomo and Elkhart in Indiana, Detroit in Michigan, and Flint. Flint's been fucked for a while. If GM falls, so do Indiana, Michigan, and Ohio. The economies of these states are intimately tied to the auto industry, and a GM collapse would mean that unemployment would most likely climb into the double digits. I honestly think that the unemployment brought by a GM collapse in these states would be, far, far worse than the Depression. The ripples would be dramatic. UAW wages keep towns afloat. If those disappear, then the jobs that they support do as well.

And before you start praising the Japanese carmakers, read this article. Toyota has greenwashed its labor record. And even in environmental terms, the company has used the decline of GM to expand its presence in SUVs and trucks. Toyota is no facing the same problems with an aging workforce that have caused GM such problems.

Ignorance loves to wrap itself

in garbage platitudes. Feeding this troll any facts will only make his/her head explode.

Mr. (Mrs.?) Anonymous

Toyota has not been immune from the slowdown - they had their worst sales quarter in a decade. they are now offering incentives - almost unheard of for japanese brands

They too are doing the very US branded thing and making big gas guzzling SUVs and trucks as well

and their flagship Corrolla is bigger and heavier and worse gas mileage than it used to be.

Quality rating agencies have also noted declines in the quality of Toyota and other import brands

they have already scaled back their aggressive US plant building plans and are even rumored to be considering closing some of their older facilities like Princeton IN


It used to be "what was good for GM was good for the country"

Now its what is bad for GM is what's bad for the country

A GM implosion would have a far more devasting effect on mainstreet than Wall Street bank failures - at least here in the great lakes region, so many jobs in the service supply and support industries depend on the domestic auto industry

If you want to completely finish off the middle class in this country - take out GM, and the rest will fall too.

The "smart" money is on Ford to pull thru - their international ops remain strong, and they are busily retooling domestically


Something you never hear the free marketeers talk about is the success of Conrail

In the mid 70's congress took over the assets of several bankrupt railroads to form Conrail. it was rough going at first, but over time it became profitable and well run organization, that was later able to be sold at a profit to the taxpayers to Norfolk Southern and CSX. CSX on the other hand, was run by John Snow, former Bush treasury secretary, and during his tenure had one of the worst maintenance and safety records of all the major railroads.

What would make sense to me would be a conrail style takeover of GM, turn it around then eventually sell off to a worthy buyer - such as Canadian auto parts giant Magna for example that unfortunately lost out to Cerberus in the Chrysler buyout bid

This can be done and works when you buy hard assets, such as railroad property and equipment - items with value, or in the case of auto - physical plant, captial equipment, inventories and intellectual property. Why it doesn't work well with finacial institutions is that the "assets" are largely paper, that can become completely worthless in the blink of an eye.


I think I understand the conservative hands off, smaller government, get out of my face and lower my taxes. The US has done so much that plain isn't smart. I don't think we need smaller government but I think both sides can agree we need smarter government.

I just heard that Amtrak is being subsdized at a major loss and because of the politics, they keep getting the subsidies even when it makes no sense. They have long distance train tickets that are 2x, 3x the price of airfare, they don't allow pets on trains and so on and it takes forever. So obviously that form a travel is just not going to be used. That just is not wise, not responding to real market conditions.

How do we get smart government when it comes to these sorts of economic subsidies in the national interest? Out of the hands of our lobbyist ridden Congress and to an agency but then an administration can plunder an agency as the Bush administration has done.


it would be interesting to analyse why Conrail succeeded yet Amtrak hasn't

I think some key issues is that passenger rail has historically far more politicised than mundane old freight moving rr's. The air lobby has long sought to undermine opassenger rail, as well as was the darling for subsidies, plus the US had a love affair with personal transportation which was the root of the decline in rail travel

If the US were serious about passenger rail it could be succesful ala most of Europe and Japan, and the high cost of fuel may eventually lead us to that point.

Did you guys ride european or even central american trains?

Yes,you can make the trains work.I have ridden trains in Mexico and Central America better than AmTrak. Europe? Forget about it, no comparison.

I live in a socialist state on the east coast of the united states where you can go anywhere without a car. Why is socialism looking better every day? Is it Bush, Bernanke? Poulson?

My remaining healthcare comes from another east coast socialist state who mandates care after employment. What did you think I have a job?

Bush is the ultimate communist. Why? Because all his policies, all his sucessors believe in state control of private enterprises.Show me an enterprise example of where I am wrong.

Burton Leed


Sorry, I should have quantified it. They are referring to the cross country from CA to Chicago trains, not the trains that take a few hours or are commuter trains (which are awesome and should be greatly expanded). The trips that keep getting subsidized are 2,4,6 day train trips.

Yeah, I rode lots of trains in Europe, and made me realize just how screwed our public transport is in the US. So much easier to lay back and ride the train.


Regional hi speed rail could very well compete favorably with air and auto travel.

From what I understand the northeast corridor is profitable.

When I was spending some time in the UK a few years ago the train was the way to get around - relaxing - you could sight see, read, do some work on the laptop, take a nap - all in one trip! and get there faster than drving.

i frequently ride the trains when in the new york metro area and long island, when you figure gas and tolls and trime it is much more economical to get around