Innovation will be critical to the success of a new General Motors
General Motors's new survival plan, presented to the public today, was strong enough to win President Obama's confidence and the federal government's commitment of an extra $30 billion toward its process of renewal.
In today’s White House press conference, held shortly after GM filed for chapter 11 bankruptcy, President Obama recognized that "the collapse of these companies would have been devastating for countless Americans and done enormous damage to our country beyond the auto industry."
He went on to say that the rebuilding and retooling of the auto industry is "good for American workers, good for manufacturing and good for the American economy."
Not wanting to throw additional taxpayer money after a plan of more of the same from GM, Obama approved GM’s plan to streamline its brands and clean up its balance sheet, giving the company a chance to become competitive again.
An attractive part of that plan is the goal of building more cars, including fuel efficient cars, "right here at the home." The hope is that a greater percentage of cars sold in the United States will also be manufactured here, reversing a decades-long slide that has benefited foreign automakers.
The future won’t be easy for GM employees. Members of the United Auto Workers can expect to see their pay further reduced, along with their health benefits, and today, General Motors is announcing its intention to close eleven manufacturing facilities and idle another three.
As a reward for returning to Washington with a sensible restructuring plan, the administration is pledging "a significant additional investment of about thirty billion dollars…an investment that will entitle American taxpayers to ownership of about sixty percent of the new GM."
Does that mean that the federal government will be running GM?
Obama reassured owners and potential buyers of GM products that their warranties would be safe and guaranteed, although he didn't say much to alleviate the anxiety that General Motors employees are surely feeling right now.
Film director and Michigan native Michael Moore, meanwhile, has a different vision for a new GM, one that involves building things, but not just cars.
Reminding us that sixty percent of GM will belong to taxpayers, he is urging President Obama to put shuttered auto factories to more progressive uses, like building the transportation of the future: light rail, hybrid and electric cars, and alternative energy devices such as wind turbines and solar panels.
There is a skilled U.S. workforce ready to do the work. Says Moore:
The industry's labor and capital can be put to better use than just building the Chevys and Cadillacs of yesterday.
In today’s White House press conference, held shortly after GM filed for chapter 11 bankruptcy, President Obama recognized that "the collapse of these companies would have been devastating for countless Americans and done enormous damage to our country beyond the auto industry."
He went on to say that the rebuilding and retooling of the auto industry is "good for American workers, good for manufacturing and good for the American economy."
Not wanting to throw additional taxpayer money after a plan of more of the same from GM, Obama approved GM’s plan to streamline its brands and clean up its balance sheet, giving the company a chance to become competitive again.
An attractive part of that plan is the goal of building more cars, including fuel efficient cars, "right here at the home." The hope is that a greater percentage of cars sold in the United States will also be manufactured here, reversing a decades-long slide that has benefited foreign automakers.
The future won’t be easy for GM employees. Members of the United Auto Workers can expect to see their pay further reduced, along with their health benefits, and today, General Motors is announcing its intention to close eleven manufacturing facilities and idle another three.
As a reward for returning to Washington with a sensible restructuring plan, the administration is pledging "a significant additional investment of about thirty billion dollars…an investment that will entitle American taxpayers to ownership of about sixty percent of the new GM."
Does that mean that the federal government will be running GM?
The federal government will refrain from exercising its rights as a shareholder in all but the most fundamental of corporate decisions. Our goal is to get GM back on its feet, take a hands off approach and get out quickly.So that's a no. Maybe. President Obama's approach to GM so far has been anything but hands off. The administration did dismiss CEO Rich Wagoner, after all.
Obama reassured owners and potential buyers of GM products that their warranties would be safe and guaranteed, although he didn't say much to alleviate the anxiety that General Motors employees are surely feeling right now.
Film director and Michigan native Michael Moore, meanwhile, has a different vision for a new GM, one that involves building things, but not just cars.
Reminding us that sixty percent of GM will belong to taxpayers, he is urging President Obama to put shuttered auto factories to more progressive uses, like building the transportation of the future: light rail, hybrid and electric cars, and alternative energy devices such as wind turbines and solar panels.
There is a skilled U.S. workforce ready to do the work. Says Moore:
Please, please, please don't save GM so that a smaller version of it will simply do nothing more than build Chevys or Cadillacs. This is not a long-term solution.It looks like Obama’s tough line with General Motors and Chrysler has saved the American auto industry from total collapse and our economy from greater peril, but does this solution further his other goals of reducing climate pollution and creating a world-leading clean energy industry that will free us from the shackles of fossil fuels?
The industry's labor and capital can be put to better use than just building the Chevys and Cadillacs of yesterday.
# Posted by Kathleen : 11:16 AM
Comments:
An end of an era for sure. Too bad we couldn't have ended it last September before dumping billions of our dollars into this obvious black hole this was then and now before power-hungry politicians got a hold of this. Too bad taxpayers will now be subsidizing crappy cars produced by our friendly Government Motors for years to come through tax subsidies and GM consumer tax credits. Too bad we the people have allowed our elitist leaders in D.C. to run over us, our liberties, and our freedoms the last several years (Bush) and months (Obama). An end of an era to be sure.
At least liquidation deals abound. Sigh. http://tinyurl.com/nv9oun
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