General Motors, in Today's News 03.03.10

General Motors. The Obama-ites have the notion that GM's lack of sales and profits results from the buddy-system of management at the old GM. The Obama-ites think that all the problems can be solved with a new management and a 'you're accountable' management system.

And so, the administration through its friends, brought GM into bankruptcy, reorganized the whole thing under total government control, and brought in a new board of directors and chief executive officer. The Obama-ites just knew that these changes would soon bring profits as the new management system took effect.

The Obama-ites, however, overlooked one small factor: the GM vehicles, for the most part, stink; and the public has so little confidence in them that they are unwilling to shell out five-figures to own one.

And so, we get to witness the continuing corporate comedy at GM. Every time something doesn't go quite right, the new GM managers blame the old management system, and then make all kinds of changes in the corporate ranks.

The latest episode has GM announcing today an overhaul of its top managers because Ford outsold GM for the first time in decades. (This is the second executive shuffle in three months.) [!!!]

So it goes. Expect another executive shuffle when the next bad news occurs as the Obama-ites pursue the folly of their management solution.

GM will only revive when it is recognized that very few in the public want the GM products. This was the problem of the old GM and of the new GM. If GM wants to succeed they will need to design and produce a vehicle that inspires the public, regardless of management machinations.

Toyota, in Today's News 02.05.10

Toyota. Toyota's recall of 4.5 million vehicles because of sudden acceleration problems is like a dream come true for the leaders of General Motors, Ford and Chrysler. They are thinking something like, 'at long last, comes an opportunity to pay Toyota back for taking away the American auto manufacturers' preeminence.' 

And so, GM and the others are pulling out all the stops to influence Washington to initiate all manner of investigations against Toyota. As a result, congressional investigators expanded their view of Toyota to include the new Prius hybrid. And lo and behold, Toyota announced a recall of 270,000 of the Prius.

The House Oversight Committee plans a hearing on Toyota's recalls which will focus on whether Toyota failed to properly deal with safety complaints.

Today's Wall Street Journal, page B5, "One Democratic lawmaker who will lead a congressional grilling of Toyota, Rep. Bart Stupak of Michigan [read 'of the American auto industry'], predicts the Toyota hearing could surpass the Ford/Firestone uproar of a decade ago -- largely, he said, because Toyota appears to have dodged questions about problems with its accelerators for years." Gee, now where could he have gotten the idea to make the hearing a whiz-bang event?

Yep, there must be high-fives up and down the corridors in GM's and Ford's headquarters. But, it is dubious that all this manufactured concern will convince the American public that GM's vehicles are better quality than Toyota or other foreign brands.

The task before GM, especially, is to put together a vehicle that the American public will want. GM can't solve there declining sales by better promotion or by government-appointed new management or by jumping on Toyota. GM can only increase its sales by putting out a car that speaks for itself about good quality.

Obama, in Today's News 01.23.10

Obama. The Wall Street Journal termed Obama's Elyria, Ohio speech as a sharpening of "his populist tone." This is a nice way of covering over Obama's extreme rhetoric. Only communists up to now have said things the way Obama did. 

Case in point: Obama: "I'm not going to have the insurance companies click their heals and watch their stocks skyrocket, because once again there's no control on what they do." Lenin or Castro could not have said it better.

One of the prime cryptocracy goals to be achieved during the economic crisis precipitated by the cryptocracy was to bring the economy under government control and to begin to institutionalize a planned economy. The idea is that planning and central control will reduce the risk to the cryptocracy's wealth production. Annoying things like competition for the wealth would also be eliminated.

To this end, Obama has sought to establish czars and oversight committees for various industries, the auto industry and General Motors most notably. He has promoted a thorough reorganization of financial regulation giving oversight powers to the Federal Reserve. He has tried to bring the banks and insurance companies under government control. His health care reform is designed to bring this wide-ranging industry under central planners and bureaucrats.

The truth of the matter is that all these efforts are only crawling along. With the exception of the government take-over of GM, all Obama's 'reforms' are foundering, which is none too pleasing to the cryptocracy. And thus is explained Obama's desperate rhetoric which reflects his and the cryptocracy's frustration with the lack of success.

Health care is the most obvious of the failures. His effort to install a new system of financial regulation is going nowhere. The banks have fought back and tried to get the yoke of government control off their necks. His effort to control salaries and bonuses in the financial world has had only meek success.

There is an ominous side to this situation. The cryptocracy made the economic crisis possible in order to create a political atmosphere where quick passage of the cryptocracy's aims through Congress could occur. But few cryptocracy proposals have managed to make it through Congress into law. As Obama was quoted in reference to the health reform, "The longer it takes, the uglier it gets."

This result is a problem for the cryptocracy. Their favored mode of bringing change is to create a crisis and then rush through their 'reforms.' But, it didn't work as well as they wanted this time. So what are they to do? The very worrisome reality is that they are undoubtedly concluding that it will take an even greater crisis to achieve their ends. They are therefore certainly now preparing an even worse crisis. 

When the cryptocracy will drop the next crisis on us is unknown, but be prepared.

General Motors, in Today's News 12.02.09

General Motors. When the central planners decided to take over General Motors, Frederick "Fritz" Henderson, a veteran GM executive, played a key role. He turned on his boss, Chief Executive Officer Rich Wagoner, a man who had been central to Henderson's advancement in GM, and joined the cryptocracy attack brigade. 

Henderson stepped forward and took the job of CEO, repudiating Wagoner, the GM policies of past times, and, in effect, his own history. He worked hard to play the game and do what his masters wanted, all with a smirk on his face.

And so, what was his reward for such craven loyalty to the cryptocracy? Yesterday, the government-appointed GM Board of Directors forced Henderson to resign!

Moral of the story: If you are going to play along with the cryptocracy you better know what you are doing. Appreciation for loyalty and work done is not the cryptocracy's strong suit. Their mode of operation is to cynically use people until they are used-up, and then just dump them.

General Motors, in Today's News 08.27.09

General Motors. General Motors cars placed exactly zero (nada, nothing, zip) cars in the list of the top ten cars bought in the 'cash for clunkers' program. In addition, General Motors sold about a staggering 14% of all cars bought in the program.

Interpreting the figures, one has to conclude that virtually no one wants GM products.

And the central planners in the Obama administration think they can solve this problem with a flurry of legal, administrative and cost-cutting machinations! Fat chance!!

The only solution to GM's problems is the same as it was before the Obama intervention: produce autos that the public wants.

The only way to produce same is hard and imaginative work over years and years. Do the central planners and the Obama administration have the patience (and the money) to see it through? We will see.

General Motors, in Today's News 08.07.09

General Motors. General Motors has four cars in the top ten that are being traded-in under the 'cash for clunkers' program. It has one in the top ten being sold, and that one is number ten; that is, dead last. In other words, the public is dumping their GM cars and not replacing them with another GM car.

This data is what the central planners neglected to take into consideration in their drive to make GM profitable. The government board that is transforming General Motors figured that if they broke up GM, put in a new board, hired a no-nonsense board chairman, and instituted an 'accountability' system, then all would be well. GM would be making money in no time.

The only problem is the products produced by GM are, with a couple of exceptions, not desired by the public. The central planners can make all the managerial changes they want, but it still won't change this reality. 

The only way for GM to turn around is to bring out some autos that inspire the public. This unavoidable fact is exactly the same problem that the old GM faced. Solving the quality/inspiration problem will require years of work. New model cars just don't pop off the assembly line.

And so the bureaucrats great plans are heading toward achieving very little. They will try to get around their dilemma with advertising and public relations in an effort to change the opinions of the public about the GM products.

It won't work. The old GM tried to convince the public to buy their products in many, many different ways over the years. But the public was and is too smart for these smug bureaucrats. They have and will see through all the razzle-dazzle.

General Motors, in Today's News 07.16.09

General Motors.  Here is a good one: : "GM Seeks Younger Fans For Buick" (today's Wall Street Journal page B2 headline).

The central planners in their arrogant manner thought GM would be easy to transform. All that was required was to drive out the CEO and the board, put GM in bankruptcy, create a new good GM and a bad GM, install a no-nonsence CEO, and wallah, GM makes money.

There's just one problem: The GM cars don't inspire potential buyers. WSJ: "With the average U.S. Buick owner older than 70 [!!!!!], GM is trying to figure out how to attract new buyers, particularly young, more affluent ones. Buick's brand chief acknowledged Wednesday the strategy will be an uphill battle." [Emphasis added.]

Susan Docherty, chief of the Buick-Pontiac-GMC sales channel: "You talk to people in their 40s and 50s and they know it [the Buick brand]. But they say, 'This isn't for me.'"

All the machinations of the central planners runs headlong into the unpopularity of many GM brands and models, especially Buick. It will take years to redesign the models and to find a customer base for them. There is no central-planner machination that can change that reality.

And so there is not a whole lot of difference between the former GM and the new GM in terms of its ability to perform in the market. And it is this fact that will undermine all the central planners' ambitions for GM.

General Motors, in Today's News 07.11.09

General Motors. Today's Wall Street Journal (page B1): "General Motors Co. kicked off a new era following its exit from bankruptcy protection on Friday, with Chief Executive Frederick 'Fritz' Henderson promising to transform the auto maker into a leaner and more customer-focused company."

Three comments:

***Will it work? The government central planners and the new government-appointed board and Chairman are almost giddy with the success of their maneuver in bankruptcy court to re-form GM without its debts and unpopular car brands. Listen to them and you would think GM will slim down and be profitable in no time. 

It's dubious. First the slimming down is yet to happen. And to get rid of "hundreds of middle managers" is not so easy. Second, they are stuck with car brands and models that, with one or two exceptions, inspire no one.  It will take years to re-design those cars. And what happens in the meantime?

***Good and Bad GM. The GM described above is what the central planners call 'good GM.' Bad GM is still in bankruptcy court and will probably stay there a long, long time, until the planners figure out how to eliminate those troublesome debts and obligations. The media is all too willing to describe what Good GM is composed of. The media falls completely silent when it comes to Bad GM. When the media goes blank like this, one can be sure they are covering up something. 

***Obama. It is amazing that the self-professed pro-labor Democrats have pulled off such an anti-labor deed. And the unions say nothing! Amazing. Of course, if McCann had tried to do these things, the outcry from the Democrats would have been way up there in decibels. That the Dems could pull this off so easily, probably helps explain why the cryptocracy was so anxious to elect Obama.

Government-Controlled Economy, in Today's News 07.10.09

Government-Controlled Economy. Three news items today illustrate how far the new government control of the economy has proceeded:

***General Motors. Page one Wall Street Journal: "The new General Mortors Co. is poised to exit Chapter 11 as soon as Friday morning...The chances of a sustained turnaround hinge on a revamped board of directors the government has installed, in particular the new chairman Edward E. Whitacre Jr. The former AT&T executive was hand-picked by government's auto task force. He was charged with keeping a tight watch over GM management and its performance..." [Emphasis added.]

***Citigroup. Page one WSJ: "Citigroup Inc. shuffled its senior executives, including removing its finance chief, as it tries to appease U.S. regulators worried about its financial health and Chief Executive Officer Vikram Pandit's management team." [Emphasis added.]

***AIG. Page one WSJ: "AIG is asking the Obama administration's new compensation czar whether it should pay previously agreed-to retention bonuses." [Emphasis added.]

All the flowery talk about the beauty of capitalism, fair play, and competitiveness is pure b.s. All that the cryptocracy cares about is having absolute command of the economy so that their wealth generation is not threatened or interrupted. The cryptocracy's power grab in the wake of the economic crisis has meant a decisive turn in American political and economic life to central government planners now exercising control over all major decisions in key sectors of the economy: banking, auto, and insurance.

Any resemblance to the Soviet Union, the politburo, and its central-planned economy is purely accidental. [Sarcasm.]

And remember, it was not more than a couple of years ago that corporations could actually run their own businesses and make their own decisions. 

General Motors, in Today's News 07.06.09

General Motors. The nationalization of General Motors is now complete with only the paper work to be completed. Today's Wall Street Journal (page B1): "A federal judge approved the sale of General Motors corp.'s assets to a new government-run company..."

Yes, the cryptocracy moves fast when they want something. Two years ago this outcome would have seemed to be from another planet. Yet, here we are in the new world of a government-run economy, well on its way to a soviet style organization.

"The ruling paves the way for GM's government-brokered restructuring, in which the auto maker will move its 'good' assets -- including automotive brands Chevrolet, Cadillac, Buick and GMC -- to a new company owned by the U.S. Treasury."

Look out GM employees and retirees!!! The 'restructuring' means the government can re-set the terms and conditions of employment at GM without the bother of dealing with the unions. The government planners do not have the best interests of the employees in mind, to say the least.

Also, the "good" assets are only going to this enterprise. The bad assets, which include all those troublesome obligations on health care and retiree benefits, will go to a bad assets company. This company will take its time making it into the light of day as the planners figure out ways to make each one of the bad assets problems go away.

In short, the cryptocracy has taken the premier American corporation and turned it into a model for the dawning new world. A world where the cryptocracy exercises much greater control over the lives of Americans and over the economic life of the country.

Pay Czar, in Today's News 06.11.09

Pay Czar. WSJ: "The Obama administration scrapped the $500,000 salary cap it proposed for executives at firms receiving large amounts of federal assistance but appointed a pay czar to review, reject and even set pay levels -- with no appeal." (!!!) (Emphasis added.)

"...the new 'special master for compensation' will have broad authority over compensation for senior executives and top 100 earners at American International Group inc, Bank of America corp, Citigroup inc, General Motors Corp, GMAC LLC, Chrysler LLC, and Chrysler Financial." 

The sovietization of the American economy continues. Central planners in Washington now dictate major decisions and pay guidelines for some of the most important corporations. And on the pay question there is no appeal to the planners decisions! Lenin, Stalin and all of them couldn't have arranged their control better.

BTW, the pay oversight is not the key for the cryptocracy. What they are after is a control measure to ensure that their chief executives toe the line on implementing the cryptocracy's desires.

Former Chief of AT&T to Become GM Chairman, in Today's News 06.10.09

Former Chief of AT&T to Become GM Chairman. WSJ: "Edward Whitacre Jr., who turned AT&T Corp into world's largest telecommunications company, will become chairman of General Motors Corp. when the company leaves bankruptcy...Mr. Whitacre's selection, made by Treasury Department officials [!!] comes as GM and the government race to reshape GM's culture after it ran out of money in December and entered bankruptcy protection last week. Mr. Whitacre's bulldozing style and attention to detail contrast with a GM boardroom criticized for being overly supportive of underperforming executives and unwilling to press for accountability."

Two comments:

1). If someone had left the country a year or so ago and had no access to the news, he/she would feel like they are in never-never land upon reading the above. How far the country has come in so short a period of time. Companies used to be their own boss until the economic crisis and the direct intervention of the Obama people on behalf of the cryptocracy. Now a company like GM can't even choose its own officers. The government-controlled economy has arrived. The government appointing company chairmen is no different at all from how the Soviet Union functioned.

2). Here's the irony. The Democrats, who like to pride themselves as being a 'friend of the working person', are bringing in a hard-nosed company man to run GM!! This move is priceless because it graphically illustrates what the liberals' priorities really are. All the liberal talk is for the most part just that, talk. The real commitment is to the goals of the cryptocracy.

General Motors, in Today's News, 06.01.09

General Motors Files for Bankruptcy.  The cryptocracy's plan for General Motors is nothing short of audacious.  Cleave GM into (1) a "new GM" that is leaner, smaller, and free of debt and obligations, and into (2) an "old GM" that takes over all the brands that don't sell and all the benefit packages that GM has wanted to get rid of for decades.  The cryptocracy's dream is for new-GM to be quickly freed of all encumbrances via the bankruptcy proceedings by the end of summer, and then return as competitive money maker.  The old-GM is projected to stay in bankruptcy court for as much as ten years.  A decade of course gives the cryptocracy and the new managers time to attack the old-GM 'problems' in such a way that the managers don't have to confront all those affected at once.  

This is a fulfillment of one of the cryptocracy's biggest and best dreams.  All GM's problems, which the cryptocracy has been trying for decades to get the GM managers to deal with, are suddenly all taken care of. A new GM emerges and a legal framework has been established to deal with the billions of dollars of debt and employee benefits. Now government edicts from a bankruptcy court will do what the previous GM managers wouldn't or couldn't do.  And even better for the cryptocracy is the agreement of the United Auto Workers.  

It seems too good to be true, from the cryptocracy's point of view.  The big question is: will it work?  The cryptocracy almost alway over-reaches itself, and thereby causes it own debacle.  In this case, everything looks good on paper for them.  But, many powerful entities, court proceedings, mountains of debts and obligations, and tens of thousands of affected individuals and corporations are involved.  One can almost predict manifold unforeseen consequences that will gum up the works.

Plus, if the cryptocracy thinks that the only obstacle to selling GM brand cars is simply slimming down the company, boy are they in for shock. Public resistance to buying something that only has the government's endorsement going for it, will be hard to break down.  Especially given GM's record over the last couple of decades of producing inferior vehicles to Toyota, Honda and others.

The economic crisis produced by the cryptocracy has produced the conditions to attack many of the obstacles to their greater profits.  The GM bankruptcy has been one of their top priorities, now fulfilled.  For background commentary on this situation, go here. 

In Today's News 05.27.09

The new government-controlled economy.  A few weeks ago someone made the remark that GM now stands for Government Motors.  And how accurate he or she was.  Witness this sentence from today's WSJ:

"General Motors Corp and the United Auto Workers have agreed to a new restructuring plan that would give the union a significantly smaller stake in the company and leave the U.S. government owning as much as 70% of the car maker."  (Emphasis added.)

Such a government take-over would have been inconceivable just a year ago.  The cryptocracy seems to be in a hurry to transform the economy into one its sees as more risk-free.  The cryptocracy via Obama's auto task force has made significant strides in humbling General Motors and Chrysler.  Costs have been cut on all fronts. Whether the cuts are enough to satisfy the bank owners remains to be seen, but it's dubious.  

in Today's News 05.16.09

1.  Pakistan.  (WSJ) "A two-week-old Pakistani army offensive against Taliban militias is triggering a massive exodus of refugees -- one of the largest such crises since the Indian subcontinent was divided in 1947.  Nearly a million people have abandoned the Swat Valley...according to United Nations officials."

This outrageous human suffering was made in the USA. Hillary Clinton, in her swing through this area of the world, was the first to demand that the Pakistan government begin the offensive now in progress.  The US government then put heavy pressure on the Pakistani to the same purpose.  One has the impression that Pakistani did not want to do it (undoubtedly fearing what has happened), but the Obama administration made it very clear that Pakistan must attack the Taliban or relations with the US were at stake.

And so now there is one of the worst crises in the history of the Indian sub-continent.  This mass of humanity is now being herded into refugee camps that consist of rows of small tents pitched in the blazing sun.  Listen to Antonio Guterres, the UN High Commissioner for Refugees, "Many people are fleeing with nothing.  It will not be possible to meet their needs without massive and rapid help from the international community.  And if help doesn't come, it will be a humanitarian disaster." (!!!)

Will the Obama administration and Mrs. Clinton take responsibility for creating this catastrophe?  Don't count on it.  Will they take the lead in trying to alleviate the human suffering?  Don't count on it.  All that matters in Washington is that the Pakistan government did as they were told and the Taliban was attacked. 

2.  The New Government-Controlled Economy.  The closing of Chrysler and General Motors dealerships gives an indication of why the cryptocracy is now opting for a government-controlled economy. 

The big banks and their owners have been pressuring the auto makers (especially General Motors) for years to dramatically reduce spending.  Wages, health and retirement benefits, bloated dealerships, and inefficient corporate functioning were the targets.  The cryptocracy was driven to distraction over the zillions of dollars that were wasted (from the cryptocracy's viewpoint) on these silly expenditures.

General Motors and the others have made several runs at trying to meet the demands of the bank owners.  All of them pretty much failed.  Failed because of union intransigence, the incredible hide-bound bureaucratic complaceny, and the weight of past decades of glorious American auto-maker success.

It is now clear that the cryptocracy finally lost patience. They created the economic crisis so that emergency governmental action could be taken in regard to various sectors of the economy including to bust up General Motors and others like them. The bank owners obviously decided that the only way to accomplish their aims was to move to a government-directed economy where corporate entities would be under supervision and restraint. And where action would be taken immediately on the demands of the bank owners.

Mere mortals usually think that politics and the economy are evolving normally. The bank owners have a much different view. They believe that many, many changes urgently need to be made.  They are always on the prod to accomplish their secret agenda.  Their outlook is intense; they are always contemplating drastic action to ensure their control, their fortunes, and their investments, and their political agenda.