I cite General Motors particularly in this article, but equally Ford and Chrysler are as much to blame. Detroit is a big behemoth that takes years to react to anything, even when that thing is killing it.
I do feel incredibly sorry for the individual people who will might be losing their jobs. In a time of uncertainty and possible rising unemployment, the "real" people at the work place have families that need to be fed, mortgages of which the banks are not going to show kindness and the very real prospect of upcoming hardship.
General Motors who was once the biggest company in the world, is peering into the financial abyss. Notwithstanding the fact that could have and should have avoided the malaise some time ago and reacted to the fact that people weren't buying their produce some time ago. I myself even foresaw this in June of 2006.
http://rollo75.blogspot.com/2005/06/horse-358-gm.html
One thing that has to be mentioned here is that in the past, when GM said "Jump!" the US Federal Government used to ask "How high?" At one point GM had become the largest corporation registered in the United States, in terms of its revenues as a percent of GDP. In 1953, Charles Erwin Wilson, then GM president, was named by Eisenhower as Secretary of Defense. When he was asked during the hearings before the Senate Armed Services Committee if as secretary of defense he could make a decision adverse to the interests of General Motors, Wilson answered affirmatively but added that he could not conceive of such a situation "because for years I thought what was good for the country was good for General Motors and vice versa". Later this statement was often misquoted, suggesting that Wilson had said simply, "What's good for General Motors is good for the country."
This attitude still seems to persist some 55 years later. The three big automotive companies went cap in hand to the US Congress, of whom it was expected a great wad-o-cash would be handed over; and it seems, they didn't get it.
After three days of negotiations with Republicans, Senator Reid declared the debate was over. There was no prospect of getting the 60 votes needed.
http://business.smh.com.au/business/gm-chrysler-face-bankruptcy-by-end-of-the-year-20081212-6xi9.html
One wonders though if maybe, they didn't ask nicely enough. I find this, er, plea (?) from GM itself, through truth in point it sounds rather like General Motors was trying to hold Congress to ransom:
http://au.youtube.com/watch?v=72cHfOKoA1c&feature=pyv
http://gmfactsandfiction.com/
The effect would be devastating in ways of which you never have thought:
* Nearly 3 million jobs would be lost in the first year alone – with another 2.5 million to follow over the next two years
* Personal income in the United States would drop by more than $150.7 billion in the first year
* The cost to local, state, and federal governments could reach $156.4 billion over three years in lost taxes, and unemployment and health care assistance
* Domestic automobile production would more than likely fall to zero – even by international producers, due to supplier bankruptcies
To sum this up: You'd better give us the money we want or else all these people are gonna lose their jobs. To be fair I think it's quite reasonable that the US Congress told them to go outside and shout at the wall. Certainly the CEO Rick Wagoner doesn't seem to care about his employees, even if the company were to go bankrupt, he's still sitting on $4.6m a year:
http://archive.newsmax.com/archives/ic/2005/11/28/102638.shtml
As General Motors slashes jobs, closes plants and battles to avoid bankruptcy, the company’s CEO has set up a retirement plan that will pay him at least $4.6 million a year – nearly twice his current salary.
So yes, I feel sorry for the workers who are going to lose their jobs but it is simply beyond me to even feel the slightest bit sorry for the company as a whole when their very own CEO (who by the way is currently on $28m a year) and directors like him who should be responsible, think it worthy to scoop the benefits themselves and leave their employees floundering. I for one don't think we'll see Rick Wagoner worrying about where his next meal is coming from in a hurry. This is a far cry from the days of the depression when Henry Ford himself, kept his workers on at the factory and paid them despite not selling anything because he realised that I he kept on paying his workers then they'd keep the local shopkeepers and other people in business.
Almost as an aside though perhaps related, whilst trawling through the news articles this week I happened to find the following through Reuters:
http://www.reuters.com/article/GCA-autos/idUKTRE4B700220081208?virtualBrandChannel=10276
With sport-utility vehicles at the altar and auto workers in the pews, one of Detroit's largest churches on Sunday offered up prayers for Congress to bail out the struggling auto industry.
"We have never seen as midnight an hour as we face this week," the Rev. Charles Ellis told several thousand congregants at a rousing service at Detroit's Greater Grace Temple. "This week, lives are hanging above an abyss of uncertainty as both houses of Congress decide whether to extend a helping hand."
...
Ellis said he started to organize the service last week after hearing from auto workers, retirees and their widows who were all fearful of even harder times.
At one point, Ellis summoned up hundreds of auto workers and retirees in the congregation to come forward toward the vehicles on the altar to be anointed with oil.
"It's all about hope. You can't dictate how people will think, how they will respond, how they will vote," Ellis said after the service. "But you can look to God. We believe he can change the minds and hearts of men and women in power, and that's what we tried to do today."
Does this mean to say that after going to mummy for money, that they're now going to daddy? It is a good and worthy thing to rely on God for His provision (since He provides us with everything anyway) but do you really think that God is going to reward rampant greed, selfishness and poor stewardship?
"When you ask, you do not receive, because you ask with wrong motives, that you may spend what you get on your pleasures" - (James 4:3 NIV)
Did we see this in action? I'm quite sure that the three CEOs of the Automotive Companies didn’t exactly help their case by flying to Washington on separate private jets. I wonder.
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