But wouldn't you agree that a rebate (or tax break) is just another incentive to lure a company to a location to entice it to pay tax for the foreseeable term? And what happens when that company starts making a loss? I'll brief you on what will happen in BMW's case, they will exit as quickly as they arrived and no amount of rebates/incentives will change that.

GM is different. If it weathers the storm, they will continue to keep people in jobs and pay its taxes. They will give back more than they will take in welfare. IMO, it's an avenue worth exploring. But it's obvious you don't want to see things that way.

 

I would agree with that.

Would you agree that there's a difference between offering a company a break on the potential state taxes they may owe in the future and backing up a truck with a billion dollars in cash and dumping it on them? Come on.

 

There's no yes/no answer to that question.

It depends on how valuable that entity is. There is no one rule for everyone. Government and politics is proof of that.

I see GM as an important company to prop up because its manufacturing presence is global. It's vastly different to, say BMW and the other transplants who mainly export.

Don't forget, GM helped build your country and many others before companies like Toyota, Hyundai, BMW etc... even had the wisdom to spread their global resources. You know who helped them achieve their success, right? It was buyers in countries outside of their own land looking to take advantage of the strength of the US dollar... which only recently has become a relatively weak international currency.

Wasn't always that way, though.

 

Either there's a difference between a cash giveaway and a tax break or there isn't. You know there is. It's ok to concede a point.

I don't think it does. I don't care if it's a corner grocery store or an auto maker...it's unethical, unconscionable, and unconstitutional to take money from a person and give it to a company. Apparently you disagree, but you're also from Australia. It's the difference between capitalism and socialism.

How is Toyota or BMW any less "global?" And if it's so important, why don't Australia send some of its tax dollars to GM?

Before you start waving the flag, remember that the only reason GM had success in the first place and grew to the size it is was because of the free market system and capitalism.

Let's face it - Henry Ford and Walter Chrysler would puke if they saw this socialist bull**** going on right now. And they'd still be working as a farmer/tool and die maker if their competitor was government sponsored at the time.

Fact: socialism is bull**** and leads nowhere but mediocrity. I won't support it with my dollars. The more pissed off I'm getting, the more I'm saying I'll never spend another dollar on the welfare case that GM has become. ***********.

 

The Aussie govt is indeed supporting Holden financially and have done so for many, many years. The federal govt has offered tax breaks and contributions to Holden ever since Holden started manufacturing cars in Australia. Our federal government is therefore throwing tax dollars at GM. This is common knowledge so I don't think you're across all your facts as much as you should be.

Tell me one thing, though. How is it that you don't think its worth throwing dollars at GM while there's heaps of other projects funded by tax payers that you haven't objected to. Do you think it's worthwhile spending tax dollars on NASA projects, funding occupations in foreign lands, offering police escorts to Holywood stars etc...?

I don't understand if you are just against saving the auto industry, in particular, or just an extreme conservative. Because if you are, then I'm wasting my time debating your points.


GM thrived during a period when they developed the best vehicles. GM failed in a period of extreme capitalism... when the auto market was flooded by cheap imports. Capitalism has failed GM, period.

 

I'm not against saving the auto industry. And I'm not an extreme conservative. I just don't like taxing individuals so you can give the cash to private industry. And I'm not a socialist.

Saying you shouldn't tax individuals for corporate welfare is certainly 'not' a conservative position. It's a free market, pro-individual position.



Being defeated by the competition is certainly not a failure of the free market. Indeed, that is how capitalism functions.

If your definition of "extreme capitalism" is losing to the competition - I guess you're right. But that's the way the system works.

I can see there's no way to connect our two viewpoints...because you think the people exist to be taxed, and the government exists to give tax money to the companies that "deserve" it...so they don't get run out of business by their competitors.

Socialism. Count me out. As I said earlier...this is the story of Airbus. It makes me sick.

 

How can you possibly live off the money that Asians are surviving on? Yet its these people who build the foreign cars that GM must compete with. Their currencies have made it far more attractive for them to export to countries with strong currencies (i.e. the USA).

Tell me how China can build cars that cost a fraction of what GM can manage has nothing to do with wages so low that they cannot be sustained in the US. So how do you exactly expect GM to compete on equal terms?

And there is a reason why BMW, Merc etc... sell cars in smallish quantities. It's because they are expensive. So expensive that only the very few could afford to pay for the high German labor/production costs.

That's capitalism. It's a world in which the Asian countries prosper at the expense of the developed nations as far as manufacturing is concerned. The banking industry thrives in that environment but the manufacturing industry isn't geared to work as well because of the disparate labor rates.

But if you're happy to continue to support foreign cars, it's your choice. Your money is helping to turn them into better mousetraps. Note I said your money. If it wasn't for your money (strong currency), the foreign cars wouldn't be so competitive.

 

One thing that is kinda frightening is the idea of the UAW having such a huge share stake in GM and the board seats that come with it. Talk about a land grab there. I mean...can you imagine how that would cloud anything related to labor negotiations? At some point GM would need to make small cars overseas...that is much harder with the UAW owning a 3rd the outstanding stock. I mean majority rules..but we already know that anyone who tocuhes GM's board will have to fit into a preset group of beliefs.

While I credit the UAW for how much ground they have given the last few years....I still have always gotten the impression they would rather see GM teeter on collapse forever than give the ground to fix the thing once and for all.

 

Notice that you haven't addressed any of my points. You just ask more questions of your own. That should tell you something.

And your points are preposterous.

1. The "asians" that have led to the downfall of GM are the Japanese. And the per capita income in Japan is almost identical to that of the U.S. So are you really going to argue that GM has failed because of the dramatically lower cost of labor in Japan?

Moreover, that presumes that people buy Japanese cars because they're cheaper. They don't.

2. The Chinese don't sell cars in the U.S. So the Chinese cost of labor is pretty irrelevant, don't you think?

3. When the day comes that China does produce cars with unrealistically low labor costs...or Tata decides to sell their car here...and you decide you want to try and compete with them...I guess it's time to close up shop, don't you? If you can't compete, you close your doors. Or you come up with a different product. (Notice that you mention that BMW does NOT compete with low cost producers...and they are profitable. Lesson learned here?)

If you think you're going to compete with Tata in the future, you're crazy. And everybody on this forum who pisses on the Volt and thinks the path to a prosperous future for GM is a new Malibu or Impala...you'll all got your head buried in the sand. You hit the nail on the head - you can't compete in that market. If that's all you got, close the doors.

4. One thing is for damn sure: if GM can't compete with Asians, or China, or any other competitor in the world...the answer sure as hell is NOT for me to work part of my day just to send the money to GM. The answer sure as **** is not for me to be GM's slave labor to keep it propped up indefinitely.

Your argument is based in insanity. GM can't compete with Chinese labor rates...therefore, we'll all work for free to keep it propped up? What planet do you live on?

5.
That's right - that IS capitalism. So if you don't want to follow that model, you're no longer capitalist. You're socialist. So realize that what you're advocating for GM is socialism. You don't want to deal with capitalism, because you don't think GM can compete.

 

I'm keen to understand how you would answer this question...

If capitalism is so great, why oh why is socialist China gathering more and more wealth as the US is plunging deeper and deeper into debt?

Oh, now I understand why capitalism is so great... it means we get cheaper goods from China.

Meanwhile, socialist China believes socialism is so great because they are wealthier than ever.

The virtues of capitalism, hey?

Meanwhile, you still haven't explained how capitalism will solve GM's problems short of setting up a dedicated manufacturing base in China and exporting everything to America. But wait, then GM would no longer be an American icon...

 

This one is turning into a bickering match that needs to be taken elsewhere.

 

China got wealthy because they are dabbling in capitalism. Capitalism is exactly why they are getting rich.

China has a lot to offer, cheap labor, no labor laws, no retirement, no letigious issues whatsoever, no environmental restrictions. < There are places in China where the sky is a color not found in nature.>

A part of what makes the US less uncompetitive is not our form of government but rather quality of life notions and the entitlements that have risen from those notions.

Not to open a can of worms, but one might need to look no further than the state of California to see a bit of what happens when socialism is embraced. Free spending for entitlements, porous borders, high business and land use regulation. They are essentially bankrupt. Businesses are fleeing California. In many circles California is considered toxic to business. California is essentially chapter 11 material. Cuts required have a slim and none chance politically.

GM's legacy cost has everything to do with profit capable small, inexpensive cars being difficult to produce at a profit. Asia has a couple of thousand dollars they can put into the car rather than into entitlements or two grand they can stack onto pricing as profit.

Some might say "Then get rid of the entitlements!". Easier said than done. Even if you toss out the moral and legal impediments, consider the political environment where it's perfectly acceptible that folks can get money for doing no work, where not "paying" for healthcare is seen by some as a "right", where people are not expected to work until the day they die, where the rights of the individual were once held supreme but being stressed less and less. Class warriors are having a field day.

Lenin once said "The Capitalists will sell us the rope with which we will hang them." Russia never came close.... China may well be another story.

 

China is the biggest booming auto market on the planet and I get the impression that some here would simply like to ignore that fact because of blind patriotism. Don't get me wrong, I'm as patriotic as the next red-blooded American, but facts are facts and good business is good business, regardless of race, political affiliation, social dynamics or creed.

We (the US auto-market) can simply ignore China and be forced to accept whatever comes out of its automotive growth; or work with them to improve the quality of the products they deliver over the next two decades. It seems like simple logic to me.

 

I certainly don't suggest ignoring China, anything but. GM jumped into China wit both feet because it's the emerging market and having it be a one way street for getting cheap imports rather than getting some trade money back would be supremely stupid.

Nearly every country is pumping money into China. They will deal with someone, regardless.

Part of the point to I suggest is that the rethink we as americans should consider is NOT that more government control will make us more competitive, as government in nearly everything results in either rationing, wasteful spending, or both. That freedom doesn't mean free stuff.
That cheap labor has a pretty high price for someone.

 

Canceling the Zeta Impala and running Pontiac into the ground is a good enough reason for me to see Wagoner go.


American style capitalism = FAIL

Chinese are really only Communist in name.