Saturday, December 13, 2008

Running buisness like a government

According to GM they need billions and billions of dollars to stay in business. Government seems willing to give it to them provided GM "restructures" and builds "greener cars".

I once owned a green car, a 1974 Chevy Vega station wagon.
It was a very nice color green.

I haven't bought an American made car since. Not that I disliked my Vega, I kind of liked it. I just never liked anything I've seen since well enough to buy it.

Unfortunately as far as I can tell no one actually makes much money selling "green" cars. Toyota claims to have made money on every hybrid since 2004. But however efficient they are at burning gasoline, I'm not sure hybrids are such green cars anyway. There are enormous economic and environmental costs embedded in the proper disposal or recycling of the batteries.

Recently GM employed around 266,000 people world wide including about 84,000 blue collar workers in North America. They have already announced their intention to layoff 13-15,ooo workers and close a number of plants.

Currently by most measures GM makes cars a well and anyone. They got into this trouble partly by making the high profit cars and SUV's people wanted. They didn't get where they are today by not investing in "green cars", which would have lost money on every sale for a while and cost a lot to develop. Right now even Toyota isn't selling many cars.

They also did fail to plan ahead by underfunding their retirement programs. They had Union help in that one, if the Unions were truly looking out for their members they would have negotiated fully funded, actuarially sound retirement programs, in lieu of higher wages and more benefits, short sighted management and union officials both failed in their responsibiities there.

It's pretty much the way Social Security works. Fortunately Social Security doesn't depend on selling cars to fund it, and it isn't in that great a shape.

1 comment:

Lisa Paul said...

Got a meme award yesterday that I was supposed to pass along to eight other bloggers. Instead, I decided to point my readers to eight NOLA bloggers that I’ve been silently reading for awhile now.

Thanks for your interesting posts and for keeping NOLA front and center, in a personal way, for those of us who only see the city through the occasional news story. My post here