GM's Chief pushing for higher gas taxes.

On Sat, 11 Jun 2011 23:22:44 -0400, Scott Dorsey wrote:

> =?iso-2022-jp?q?Hachiroku_=1B$B%O%A%m%=2F=1B=28B?= > wrote:
>>
>>This is the interesting part: a company that focused on their
>>*shareholders* more than their *customers* wound up driving the customers
>>away in droves, got into serious trouble, and wound up royally screwing
>>the shareholders in the end!
>
> This is always what happens when companies do this. We live in an age
> where shareholders aren't in it for the long term, so they care only
> about short-term profits. When companies attempt to focus on keeping
> their stock profitable in the short term, rather than focussing on making
> a good product so that they keep a customer base, they screw themselves,
> their customers, and ultimately their investors.

I guess I'm just an old timer...at 50....


>
> And sadly, far too many American businesses are doing this. GM is by
> no means unique.

True. It bit GE in the @$$, too...

>
>>Now they are back on their feet, and they're playing to the *shareholders*
>>again!
>>
>>How frigging *stupid* can you be?!?!?!
>
> Agreed. And they are doing some pretty boneheaded things. At the time of
> the collapse, they had finally developed some decent new products, including
> (for the first time) a Cadillac that didn't drive like a wallowing pig. Of
> course, they laid off the teams that developed these things when the fall
> came.
>
>>Toyota, Nissan and Honda play to the *customers* and their shareholders
>>didn't have to take a bath, even with all of Toyota's woes.
>
> Sure, but they're also not trying to get Americans to invest in them either.
> They have shareholders who are interested in more than the past six months'
> numbers.
> --scott

Seriously, why was the bailout such a bad thing?
Thanks,
Ben

"ben91932" > wrote in message
...
> Seriously, why was the bailout such a bad thing?
> Thanks,
> Ben

In my opinion it was a bad thing becasue it interfered with what should have
happened. Without the bailout, GM most likely would have declared
bankruptcy. The courts would have reorganized GM to best protect the
creditors and stockholders. Likely the current UAW contracts would have been
voided. During the reorganization, deadwood could have been trimmed.
Creditiors would have gotten something, as would stockholders. By
nationalizing GM the way the governemet did, they esentially took the good
parts of the company (along with most of the bad management) and gave a
chunk to the UAW, and kept a chunk for the government. Creditors and
stockholders were left only with the worthless, or less than worthless
assests that were pared away from the old GM (see Motors Liquidation
Company). The net is, the US government conficated GM from its owners (the
"stockholders"), kept part of it and gave the rest to the UAW. To make
matter worse, they left much of the managent that ran the company into the
ground in place. I can't see how this is consistent with a "free market
economy." It is very much how the British government handled the collaspe of
the UK auto industry. Take a look at how well that worked out...

Ed

"ben91932" > wrote in message
...
> Seriously, why was the bailout such a bad thing?
> Thanks,
> Ben

Because it cost a lot of our money, and it didnt work.

On 2011-06-15, hls > wrote:
>
> "ben91932" > wrote in message
> ...
>> Seriously, why was the bailout such a bad thing?
>> Thanks,
>> Ben
>
> Because it cost a lot of our money, and it didnt work.

It is worse than just theft and not working, it is outright harmful.

The assets of the bailed out companies remain in the hands of the same
incompetent, corrupt, overly risk taking or whatever people ran the
companies into being bankrupt in the first place. Without a bailout
these assets are sold to the highest bidder. These are often competent
_SMALLER_ companies that are sound and looking to expand. Another
customer for these assets are people looking to start companies and
could really use some cost effective equipment, buildings, etc. Job
creating companies are cut off in the favor of job sheding companies.
The long term is sacrificed for immediate.

Worse is that sends two loud and clear messages:
1) If you can get government to cover your loses you can take huge
risks. Huge risks pay off big so companies who can get government to
backstop their loses take more risks than they otherwise would have.

2) People looking to start new businesses do not have anyone in
government protecting their interests. They see that the system is not
fair and weighted against them. Their risk increases. They may decide
that the risk/reward ratio is too adverse for their tastes and not start
the business.

Noting is going to improve until government gets out of the way and at
least restores some image of fairness. That's what happened finally
after WW2. The regulation and intereferences stablized and people could
again plot a course by determining risk.

Bailouts are part of stopping the past interferences, excesses, and so
on from correcting. No correction means no recovery.