DetNews columnist warns of the dangers of nationalizing GM
Detroit News columnist Daniel Howes has penned a commentary on what he believes the "mind-numbing" future could be if the White House and the United Auto Workers end up with majority control of General Motors.
Howes fears that a government-and-UAW-controlled boardroom would end up an echo chamber, with both parties worried mainly about maintaining jobs and recouping their investments first. Those left on the outside – and poorer for it – would be the "short-changed" investors and "neutered" bondholders. Ford would also be left to deal with the repercussions of having the government as its next door competitor.
The scenario he paints could be considered slightly alarmist, and frankly, there's a nice hopscotch through American history of the government taking previously unheard of steps when dealing with labor and private enterprise. Howes is also presenting a scenario in which the government fails to execute efficient oversight of the company that it has repeatedly said it does not want to own, and he also lets those "wiped out" investors and "neutered" bondholders completely off the hook for responsibility for GM's current state. As a Ford representative said, "it's uncharted waters for us." That goes for the rest of the country as well... and we won't know the future's tale until it's told.
[Source: Detroit News]
Reader Comments (Page 1 of 3)
Sektor 4:04PM (4/29/2009)
What difference does it make if the national government controls GM anyway?
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zamafir 4:15PM (4/29/2009)
We're doomed, VW until recently has been majority held by the state it's in (in terms of largest single chunck), and we've all seen what's happened to it. Veyrons, Murcies, Gallardos, R8s, Sciroccos, TDI Jettas. Oh Noez, the end is near! Zomg, Socialism bad. Comrade obama will do us in!
“America it's them bad Russians.
Them Russians them Russians and them Chinamen. And them Russians.
The Russia wants to eat us alive. The Russia's power mad. She wants to take
our cars from out our garages.
Her wants to grab Chicago. Her needs a Red Reader's Digest. her wants our
auto plants in Siberia. Him big bureaucracy running our fillingstations.
That no good. Ugh.”
Mazda FTW! 4:21PM (4/29/2009)
zamafir - The diff might be that the German (and the Japanese govts.) have genuine pride and care for their national auto industries. The American govt couldn't care less unless it's a oil company or a bank.
IMHO, GM should simply pack it's bags and leave North America. Instead of wasting money on operations here, they should maintain Holden in Australia, Chevy in Middle-East, Buick in Asia and Opel in Europe and whatever runs in South America. Perhaps the new base should be in either China or Europe.
Alex 4:24PM (4/29/2009)
zamafir, stop doing the drugs.
Dan 4:08PM (4/29/2009)
Howes' column is an incoherent, rambling mess. There are plenty of arguments to be made against national control of GM; Howes doesn't really make any of them.
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Robert O 4:11PM (4/29/2009)
Oh please. As if quality decision-making has been coming out of GM for the last 30 years - that's how long they've had to respond to the global competition. Seems that if you are going to build mediocre products, you might as well do so as a way to employ people. Private investors get to live by the rules of the market - that's what they want, that's what they deserve, that's what they get.
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andy 4:10PM (4/29/2009)
I think it's almost common knowledge that nothing good can come from a company run by the Government and its own union.
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Polly Prissy Pants 4:33PM (4/29/2009)
Nothing good really came from having GM run by their executives and shareholders either. I doubt any incompetent gov't body could do much worse.
M22 5:37PM (4/29/2009)
Polly: "Nothing good really came from having GM run by their executives and shareholders either. I doubt any incompetent gov't body could do much worse."
Then why let a fledgling company survive? Why not let the market kill off an unsustainable business?
"What difference does it make if the national government controls GM anyway?"
You want to see the creation of the ultimate monopoly? Let the government nationalize all the companies it wants. Let the government take control of your life. Have them decide how much you'll be paid, who can work, what products will be built. It worked awful well in Russia and Britain, didn't it?
Rogue_G 4:11PM (4/29/2009)
Government control couldn't possibly make GM any worse than it already is. What, is oversight and stability so much of a 'boogeyman' for people?!
Oh yeah, and he's part of the Eastside Republican Club: http://www.eastside-republican-club.org/forum174.htm
Thanks for playing, scrub!
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Richard 4:20PM (4/29/2009)
You socialists always say it couldn't be worse!
You should all move to Paris, Havana or Moscow to see how much worse that kind of thinking makes it.
How much worse could it get? Click here, Comrade: http://en.wikipedia.org/wiki/British_Leyland
Here's to the American public soon deciding with their votes as they have decided with their car-buying pocketbooks: structured mediocrity sucks!
Rick C. 4:48PM (4/29/2009)
Republican club? The guy is just pushing political ideology . The same 'we don't need supervision', cater to the corporations ideology that brought us the meltdown we're currently in.
Remember, power (and money) corrupts, and absolute power (and more money) corrupts absolutely.
Vega 5:06PM (4/29/2009)
@Richard:
The fact that you equate Paris (free market economy) with Moscow or even Havanna (one of the last true communist holdouts in the world) instantly disqualifies your comment as a brainless talking point.
M22 5:37PM (4/29/2009)
Rick C.: "Republican club? The guy is just pushing political ideology . The same 'we don't need supervision', cater to the corporations ideology that brought us the meltdown we're currently in."
In fact, it had nothing to do with lack of supervision that caused the current meltdown. It was government meddling in subprime mortgages that precipitated the collapse.
Or didn't you know that?
"cater to the corporations ideology"
I think it's fair to say it's called catering to the individual responsibility and freedom of every person in the U.S.
"Remember, power (and money) corrupts, and absolute power (and more money) corrupts absolutely."
Then why give control of any business to the government, the richest and most powerful body in any country?
Rogue_G 6:56PM (4/29/2009)
Really now, British Leyland? That the best you got? Britain itself is a niche market, and its systemic backwards logic of vehicle construction lead to its downfall. GM, Chrylser and Ford all know how to make good cars, its the management of the associated companies that are dragging them down. The British Leyland example is completely unrelated, as the vehicles produced after the original takeover were really unreliable and hurt the reputation of the company. GM has been hurting itself over the past couple decades without any government interference, so there's not much more reputation left to lose at this point. So far, all this government interference has succeeded in killing dead brands and eliminating the pointless badge engineering that has been watering down the Generals identity and reputation in the first place.
Don't come in here decrying 'comrade' this and 'moscow' that. The editor is a republican hack, and every single one of you siding with him are no better. Cheers!
Jake 4:16PM (4/29/2009)
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Pay 3 times as much for a car that will be delivered in 8 - 12 weeks. Warantee, baa-hah-hah, you can't sue the govt. anyhow. EPA and safety regs? We are the EPA, sucka. Each car comes with 8-track cassette deck, batteries not included.
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Tim 4:16PM (4/29/2009)
That's not even slightly surprising coming from the News.
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John 4:18PM (4/29/2009)
Chery automotive is owned by the government. China's banks are owned by the government.
It's sad we are patterning ourselves after communist countries now...
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Mike 4:18PM (4/29/2009)
It makes a huge difference if the union owns GM. Employee owned I have no problem with. Unions are in all three US automakers.Can they just strike Ford and take it over? Will they be able to new manufacturing methods another automaker comes up with. Example ford comes up with a way to cut time in building a car, union takes it GM union counterparts and installs it in union owned GM. It's a conflict of interest with nonunion owned automakers with plants unionize by the UAW.
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adam1drift 1:11PM (4/30/2009)
that is a great point! Its not just the political ramifications of this decision but business ones... how can ford survive if the competition is working it its plants? how can ford or any other american car company make it if the government and the UAW owns control over its own company... they obviously would promote their own company over others...