GM’s Ransom Note to America

With the president-elect, Congress and the current White House divided on how or if American taxpayers should save the domestic auto industry, General Motors is taking its case directly to the public with this video and accompanying web site. More threat than appeal, the message, in a nutshell, is "Do it, or else."

On gmfactsandfiction.com, the reeling giant "Tells It Like It Is":

From plants to parks. From dealerships to driveways. From gas stations
to grocery stores. What happens in the automotive industry affects each
and every one of us. In fact, the collapse of the U.S.-based auto
industry wouldn’t just impact the more than 239,000 Americans directly
employed by the Big Three. One out of every 10 people in America is
employed in a service that is related to the U.S. auto industry. If a
plant closes, so does its suppliers, the local stores, the hot dog
vendors, and the local restaurants.
The effect would be devastating in ways of which you never have thought.

Writing your congressperson yet? Well what are you gonna do now that your "suppliers and dealers" can’t get credit? Who’s gonna keep you supplied, man?

In all seriousness, while its fate is on the minds of many, New Yorkers included, GM may not be helping its case here. Rather than inspiring confidence that the company would put taxpayer dollars to good use, the "Facts and Fiction" campaign reeks of desperation and even paranoia. (See the web site’s "Submit a Myth" widget: "If you’ve read or heard something about GM we’d love to know about it so that we can have an opportunity to address it.") Again revealing itself to be two steps behind, GM doesn’t seem to have caught on to the fact that Americans are currently more receptive to change than fear mongering.

So that’s the problem, huh? Think GM can’t change? GM can change, baby. Just give GM another chance.

  • Anger and fear spilling out like gasoline, as an outmoded, inflexible industrial business model comes to an end…

  • This would seem to be the IDEAL time to take control away from GM! GM, you’re fired, but you can hang out and watch while we use your resources to build the trains the country really needs.

    Seriously, strings strings and more strings, and we don’t ASK GM or any other failing automaker if they wouldn’t mind accepting them, we TELL them what they are and how they’ll be used and that they should’ve thought about the ugly downsides of capitalism when they decided they wanted the responsibility of being a company in the first place.

  • “If a plant closes, so does its suppliers, the local stores, the hot dog vendors, and the local restaurants. The effect would be devastating in ways of which you never have thought.”

    Pretty much the entire northeast, and much of the midwest, discovered this when manufacturers — not just of cars, but of clothing, appliances, etc. — discovered they could save a buck by moving from the unionized north to the non-union south. Yet the north survived by adapting its economy to non-manufacturing industries. So the regional-devastation scenario has an antecedent and is survivable.

    Also, it’s likely that the factories and other assets of the American car makers will be bought up by foreign car makers. In which case the factories may continue operating and some (if not all) jobs would survive. If U.S. car-maker assets are bought by a diversified company like Porsche — which manufactures the streetcars in Vienna — the prospects for a transformation from car building to train building would be brighter.

    Then issue, then, is not regional economic devastation or saving jobs. The question is whether the factories and assets of U.S. car makers should continue in the hands of American-owned companies. That’s not a compelling reason for a bailout.

  • Well, I liked the music. Sounds like something John Carpenter would produce for one of his 80s films.

  • Larry Littlefield

    Not to ruin your day, but in July I wrote this post comparing the financial industry in New York to the auto industry in Detroit.

    http://www.r8ny.com/blog/larry_littlefield/barrier_to_entry.html

    Both became concentrated in a few firms that screwed their customers with bad product while their well connected employees earned far more than other similar employees elsewhere. They used their political clout to protect their perrogatives, and competition, when it came, came from elsewhere, leading to a decline.

    In the post, I wrote of my fears that NY would keep losing financial firms, and new ones would not arise to replace them. Since then, three of five “bulge bracket” investment banks have gone bust and/or been taken over, and two have converted into lower-profit banks. I was betting on a loss when I wrote the post (Bear Sterns was already gone), but not five out of five.

    Worth a read. We’ve got our Dingels here.

  • john the bicyclist

    GM makes it sound like the last days of the USSR. Remember when we were warned about tanks in the streets, soviet troops attacking citizens? Well, it just collapsed and disappeared quietly without bloodshed.

    GM is really like the USSR. Bloated, mismanaged, collapsing under its own weight. But still a threatening, frightening organization, brutal.

    Also note that the car industry died in the UK (remember British Leyland? You don’t?) and that event didn’t flush the country down the toilet.

  • Steven O’Neill

    OOh, myths. I entered this one on their site:

    “GM helped destroy the urban trolleys and interurban trains, thereby moving the country away from urban densities and into the sprawl and patterns of overconsumption that has this us in the mess we are currently in.”

  • vnm

    So we should give money to a company that bullied its way to oblivion by lobbying and lobbying and lobbying against fuel efficiency standards? Anyone who wants to see why these guys are going down in a ball of flames should watch Who Killed the Electric Car. It’s a great film — very indicative of the mindset of G.M.

  • Jay

    Go read the first dozen pages of “On A Clear Day You Can See General Motors” by J. Patrick Wright and John Z. DeLorean. Written in 1973

    The names and faces have changed, but GM has not.

  • rex

    It is interesting that there is no confession, no admission of guilt or remorse on GM’s part. Just a desperate threat that if we let them die, we will be sorry. Maybe, maybe not.

    How many times have we been threatened by the big three in the last 30 years? The idea that GM/Ford/Chrysler is somehow an American corporation and Toyota et. al. is somehow foreign is ludicrous. GM is no more looking out for US interests than any other multinational corporation. It doesn’t work that way, because it is not set up that way.

    Pull the plug! It is time to move forward.

  • I just called by Senators and representative–DID YOU? Of course, neither of them said what their position was on the issue but I told them money would better better spent on public transportation projects in America.

    And I don’t think any of the car manufacturers will just die and fade away. They will realize they nee to downsize (produce fewer cars with smaller overhead), begin to produce other things (I think we have enough rail infrastructure to fix to last us the next 50 years), and they will change. GM as we know it is dead with the bailout or not.

  • rlb

    “So we should give money to a company that bullied its way to oblivion by lobbying and lobbying and lobbying against fuel efficiency standards?”

    No, we should give money to a company whose industrial infrastructure would be impossible to match over the course of the next few years.
    I think the Backbone analogy is an apt one. The backbone of the auto industry connects to machine shops, paint suppliers… e.g. the hands and whatever other parts of the body. The brain, unfortunately, is Detroit. Instead of letting the brain self destruct, it should be taught new principles, and different ways of using it’s very functional body parts. The op-ed and Stanley Crouch’s piece from today’s headlines have the right idea.
    The notion of international companies coming in and swooping up the defunct factories is a nice one, but unlikely anytime soon. The percentage of US-made foreign cars is dwarfed by what the big three produce. Besides, nobody’s really buying cars now.
    The problem is that way more than the atrociously managed auto makers futures are at stake. It’s tempting to say you’ve dug you’re own hole, good luck. But that would erase years of accumulating realationships and know-how. The amount of time required to build up the industrial infrastructure already in place to support the massive car companies makes it worth saving them, albeit completely restructured to produce other products.

  • I think GM should start manufacturing bicycles.

  • This is a tough one, since the collapse of the U.S. auto industry could have a profound ripple effect on an already-quite-fragile world economy and panicky stock markets. It’s easy to demonize the Big Three, and it’s deserved, but we’re also talking about hundreds of thousands of jobs. Better, I think, for the government to provide loan guarantees to GM and Ford in exchange for major concessions, including the types of vehicles they build, a major focus on plug-in hybrids, etc., etc.

  • Max

    GM could be engaged to build the trams, commuter trains, subway trains, and high speed trains we will need as we reinvest in our infrastructure. We could stop importing these commodities (buy American) and keep GM and its employees working.

  • Omri Schwarz

    If there isn’t a bailout before the bankruptcy, there will be a bailout IN THE FORM of bankruptcy. The receivers will reform and restart every part of GM that is worth a rat’s ass, doing away only with the hopelessly unprofitable divisions.

    This is naked blackmail and we should not give into it. Write your representatives!

  • I like bikes

    That’s so funny about the bicycle thing, Jason, because I told my relatives that last summer.

    I have really mixed feelings about the general motors thing; my dad and quite a few people in my extended family worked for general motors, tho the last retired in the late 80s. I am not a big fan of cars, and haven’t had one for about 6 or 7 years now.. I really don’t think gm thought their retirees would live this long after retiring, and I am worried about my parents’ pension and they have already lost their health insurance, which makes me worried for me, because I was sorta counting on that to take care of them.

    Anyhow, even my mom can recognize that gm is full of idiots and keeps forwarding me nyt stories about how awful it is.

    ok, back to whatever you were talking about!

  • Streetsman

    The focus here needs to be on providing financial assistance to car companies’ attempts to advance in new and better directions, not just giving them cash to keep pushing more SUV’s. They helped create this mess, and they can be a part of the solution, but only if they are willing to change their tune.

    Anyone who went to urban planning school knows that these are the same companies that muscled out rail and street cars in towns and cities all across America, not to mention developing and marketing dangerous SUV’s as a way of avoiding the regulations on cars. The big three car companies have a track record of corporate ethics comparable with big tobacco or Wal-Mart – completely profit-oriented, deeply invested using analytical psychology to manipulate the consumer, only conforming to safety standards when legally required, and systematically and, at times violently, destroying all competition regardless of public good.

    Now they are holding jobs hostage in a time of crisis. They employ millions of Americans and yet have fallen so far behind international competition that they are about to collapse. And their answer is to threaten economic doom and demand economic subsidy? Having proven to be irresponsible custodians of such a large portion of the American workforce, I would be very reluctant to add more fuel to the fire that is their unsustainable business model.

  • One or my favorite columnists at The Star-Ledger is Paul Mulshine despite his overall political views. Over the summer he wrote a column comparing US automakers with their Japanese and European counterparts. The gist of it was as follows:

    Japanese and European auto executives are more like wise old men (& women) who are looking out over the 20 years and adapting their companies to future realities.

    American auto executives are like testosterone drunk teenagers who’s only interest is how to show off at this weekends party.

    Well at least it was something like that.

  • Sean

    Ugh. Anyone want to throw together a reply-video showing how GM destroyed America’s transit infrastructure back in the 1950s?

  • You mean this article, Andy?

    Right on, Sean. I think we should use the bailout money to pay for yearly transit passes for every GM customer who promises to burn their SUVs. (Not really, because it would be wasteful and bad for the air, but still.)

  • Ian Turner

    For the record, in 2007, GM represented roughly 40% of US auto production. There were about 11 million vehicles produced, and about 4 million of those were made by GM. To say that other companies will swallow up that large of a chunk of production facilities in any short term is troublesome, to say the least.

  • Ian Turner

    In addendum, “auto production” here includes both cars and trucks.

  • misterbadexample

    It takes some 90 barrels of oil to produce a car. If oil prices settle between the current price and July’s peak, the price of a car will be beyond anything the middle class can afford.

    We need gm’s infrastructure and workforce. We don’t need gm cars.

  • Niccolo Machiavelli

    In the sad but true category, GM, (“The General”) was a huge maker of locomotives up to just a few years ago through their Electro Motive Division, now spun off as Electro Motive Diesel. After the spin off The General plunged even deeper into the giant SUV, Hummer and Pickup market. In the irony category it was Arnold Schwarzenegger who insisted on owning a HUMVEE the military predecessor to the Hummer.

    Try to save the auto companies as a subset of an overall Industrial Policy is one thing but as a substitute for industrial policy doomed to failure. Even that the Europeans have been doing for decades with limited success (see “Renault”). Ironically again, GM and Ford have done well in the European market when pitted against the national companies of France and Italy (Renault and FIAT (Fix It Again Tony)) respectively.

  • I like bikes

    Detroit Free Press: Seize this moment to end oil addiction

    http://www.freep.com/article/20081118/BUSINESS01/811180367

  • Cap’n Transit,

    No it wasn’t that one but that does come close. If I could figure out how to browse their archives I could find it. NJ.com is not an easy website to browse and search. I love the Star-Ledger and am very upset that it is at the verge of folding (no pun intended) but maybe if their site was better like the NY Times, then they might not be in such a fix.

    Hmmmm… Get’s me thinking if the newspapers want a bailout too from Uncle Sam just like GM et al. If they could only produce a page by page online version in some sort of PDF format I think the papers could still be relevant. I’ve seen some Canadian papers go that route. Kinda’ cool to flip through the same paper you could by but it’s online.

    Sorry for my digressions.

    BTW I looked for his column (figured it out) but I couldn’t find it. Damn!

  • gecko

    Years of hyper-industrialization have taken its toll. Hopefully, this will be a bit of a reprieve.

    There are a lot of huge projects on the table such as complete fossil-free United States electric power in ten years as proposed by Al Gore which includes building a new national electric grid; and, retrofitting the built environment to greatly reduce our ecological footprint.

    Reinventing transportation scaled more closely to real human and environmental needs should be another. Ending poverty is a third and speaks volumes to who we are and who we will be not to mention how effective we will be in mitigating global warming.

    There’s a lot of work to be done and it will not be the first time the automobile industry has been redirected toward more pressing matters.

  • gecko

    Excerpt from: TRANSPORT REVOLUTIONS Moving people and freight without oil
    by Richard Gilbert and Anthony Perl

    “The high oil prices in particular could give rise to two or more revolutions in land transport during the first half of the 21st century. One would involve the replacement of internal combustion engines by electric motors. Another would involve widespread powering of these motors directly from the electric grid rather than from on-board fuel. Together, and with necessary organizational innovations, these transformations would allow considerable movement of people and freight by land in an era of severe energy constraints and concerns about carbon emissions.”

    “All belligerents in the Second World War limited civilian automobile production and restricted the use of cars, but the scale of motorization in the US going into the war put her effort to restrict the automobile in a class by itself.

    “The industry’s claim that its manufacturing capacity could not be converted to military production was quickly disproved as the major manufacturers pulled car assembly lines apart, retrofitted as much as 75 per cent of this machinery to produce war materiel from anti-aircraft guns to heavy bombers, and literally threw the remaining material and equipment into scrap heaps.

    “Petrol (gasoline) rationing began in 17 states along the East Coast from the middle of May 1942 and was extended nationwide by December of that year.

    “The wartime experiment in putting the brakes on motorization revealed how quickly and dramatically the often characterized ‘love affair’ with the automobile could be set aside.”

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