For as long as I can remember, most issues of Forbes magazine have been graced by columns on the automotive industry by long-time (more than 50 years) journalist-of-that-industry Jerry Flint.
Over the years, my only real gripe with Mr. Flint has been his long-running belief that “we” needed to do more to help the Detroit automakers – a viewpoint that I’ve never shared. But aside from that blemish, his columns have always been interesting and insightful, reflecting (literally) a lifetime of experience with the automotive industry.
Despite the storms that have ravaged Detroit over the past three decades, Mr. Flint has always been an optimist who has been able to find some reasonable grounds for hope for Detroit and the “Big Three.”
Until now.
In his latest column, Mr. Flint sadly gives up and throws in the towel on GM.
This is so gut-wrenching that I’ll just provide two or three excerpts, and let you go read the whole column on your own. It’s a difficult but worthwhile read on the situation.
Don’t wonder about General Motors; its future is set. With or without a bankruptcy proceeding, the company will struggle on. But there will be no quick return to greatness or even a return to mediocrity.
The government will continue to support GM for the next three years and eight months. The decisions will be made in the White House and will be political. Five midwestern states will be decisive in the next presidential election, and they might be hard to carry if the party in power doesn’t save some Rust Belt jobs. But after the next election GM will be largely on its own.
….
With politicians in the driver’s seat this could get really interesting. If “good” means profitable, then this part of the company will be making gas-guzzlers like Suburbans, Cadillac Escalades and full-size pickups. But in the Obama Administration gas-guzzling is bad and low-margin small cars are saintly. So Washington will find some way to wreck even the good half of the company by ordering it to make more small cars and fewer big ones.
A few years from now the surviving parts of this has-been will be down to a 10% share of the market, with lots of its vehicles being bought by the government. That sounds pessimistic given that, as of this morning, GM is the largest vehicle seller in North America. My calculation is based on the expectation that Chevrolet and Cadillac, which now get 12% of the market, are all that will be left of the once great company.
….
Someday a new Moses might come out of the wilderness and rebuild this company. He will gather a band around him like the greats of that old GM: Alfred Sloan and Charles Kettering, Charles Nash and Walter Chrysler (yes, they were GM men first), William Knudsen and Ed Cole. But fighters like these aren’t the leaders that a government would choose. If GM is reborn, it won’t be in my lifetime.
That’s basically, “I saw the world end”….
Daniel Horowitz
Neil Stevens
Moe Lane
Steve Maley
Jake Walker
If the market demands SUV's then someone will provide them.
Common_Cents (Diary) Friday, May 1st at 10:11PM EST (link)It’s sad what the government is doing but they won’t win the war.
Obama=Golfer in Chief, Leading from,
behind, the Back Nine.Leaders don’t create movements. Movements create leaders. Get involved. Your future depends on it.
Govt “invests” YOUR tax money for POLITICAL return rather than economic return.
In pre-liberal utopia US that would be true but…
General_Confusion (Diary) Friday, May 1st at 11:58PM EST (link)The government via CAFE, CO2 “pollution” controls, energy taxes and additional crash protection (due to small size) will see to it NO manufacturer will be able to build anything recognizable as a SUV or work truck. I also expect the affordability of the new eco-crud mini-mobiles to be done away with as more and more government regulation and union “requirements” are mandated on other non-government controlled vehicle companies to “level” the playing field.
The Obama administration has a direct controlling stake in Union controlled and owned auto manufacturing. He will use the full weight of the government to enact the Democrat version of what a PC car should be. Any manufacture that offers non-PC product or non-union manufacturing will be locked out the US market by legislation.
Bottom line, don’t like what the US Government/Union “big” two offer…TOUGH…You will have NO choice!
So far big trucks are exempt
JoeG Saturday, May 2nd at 12:29AM EST (link)CAFE stops at a GVWR of 8,500 lbs. They are increasing it to 10,000 lbs.
That exempts the 1 ton trucks. I know it won’t stop them from sliding up the cargo rating scale, but until they are able to pass a law that you can’t buy a one ton truck unless you prove the “need” the public will always be able to go around CAFE by buying a big enough truck.
What will die is the 1/2 ton pickup. There is just no way to make them meet CAFE.
Hey, maybe its time to start a used SUV hedge fund!
Common_Cents (Diary) Saturday, May 2nd at 4:17PM EST (link)They may be in short supply over the next few years.
Obama=Golfer in Chief, Leading from,
behind, the Back Nine.Leaders don’t create movements. Movements create leaders. Get involved. Your future depends on it.
Govt “invests” YOUR tax money for POLITICAL return rather than economic return.
It's the UAW's problem to fix.
smagar (Diary) Friday, May 1st at 11:10PM EST (link)If eco-smart cars won’t sell, then THEY need to tell Team Obama.
This Republican has been buying Toyotas and Hondas for years. This year, my wife needed a bigger car to carry around Little Smagar and his accoutrements. We tried considering a GM or Ford car, but three things pushed us eventually to a Honda CRV:
1) We’ve lost faith in the Big Three. My wife still tells me stories that she heard from her grandfather, who worked in a GM plant: never, ever buy a GM car made on a Monday or Friday.
2) I didn’t want to give any money to the UAW. They’ve spent too much time and effort going after Republicans—and I’m a Republican. They bite my hand, and then they expect me to feed them? Um….no.
3) Honda makes a car that we like and we trust.
If the UAW is willing to commit economic suicide, in order to sustain their fealty to Democratic Party politics, then they deserve to go the way of the dinosaurs.
Although, I think the UAW has found another path to survival (as the author notes above): becomin the government’s primary auto supplier. What a smart move—as long as you provide votes, money and election workers, you don’t have to worry about building quality cars!
“Who will stand/On either hand/And guard this bridge with me?” (Macaulay)
Not likely.
mbecker908 (Diary) Saturday, May 2nd at 12:08AM EST (link)You have to understand that the Administration will not allow the UAW to commit economic suicide. They may let the US economy go to hell, they may be more than willing to destroy major industries (is coal next?) but they certainly won’t let union members suffer.
Don't be so sure. Obama got their votes.
farstar99 (Diary) Saturday, May 2nd at 1:38AM EST (link)He’s gotten what he needs from them, and jobless, they’re more dependent on him than ever. The union’s Mafia bosses, Obama’s Chicago pals, will still pay him graft and get their illegal cuts of the dues. Scratch a union member and he bleeds hammers and sickles. So what are they going to do, vote Republican? Fat chance. They’re a lock, and he knows it.
Too true, just as you and I are picking up the tab
olsmithie (Diary) Saturday, May 2nd at 2:52PM EST (link)for UAW retirement programs, we will likely pick up the tab to keep the UAW members from experiencing any other “discomfort.”
It’s really no different than the “vote buying” the government calls “welfare.”
Regards
You can help fix it too
clos2thedge Saturday, May 2nd at 2:41PM EST (link)I understand your thoughts on buying an American car. However, if you had done a little research, you would have found that Ford offers many models to meet your needs. I have been watching what’s been happening at Ford, and I am impressed. I believe they will come out of this in great shape. They have a winner in the Fusion, and the hybrid version of that gets 8 M.P.G. better than the Camry. The new Fiesta has been getting rave reviews from the automotive press, and a new Taurus debuts this summer to more automotive accolades. Ford hasn’t taken any government assistance, which is a big plus as far as I’m concerned. I’m sick of watching this country go to hell. I own a Lexus, but will be trading it for a new Fusion. I want to get back to what MY grandfather told me….BUY AMERICAN.
There's going to be a run on real cars just like
Achance (Diary) Saturday, May 2nd at 1:03AM EST (link)the run on guns! Anybody got a lead on a well-restored 1949 Dodge PowerWagon; my kind of truck and with no electronics for when the EMP comes?
In Vino Veritas
No but saw a '45 Ford pickup in primo condition this week!! rrrrr rrrrr nt
olsmithie (Diary) Saturday, May 2nd at 2:53PM EST (link)Bush Signed CAFE Limits
DavidSage (Diary) Saturday, May 2nd at 2:25AM EST (link)Bush signed into law the new CAFE limits that will essentially kill full size trucks and SUVS when they go into effect. Another “compassionate” attempt by Bush to try and get Liberals to like him.
Bill Clinton didn’t raise CAFE limits when he had a chance with a Democrats Congress, but our supposed conservative Republican President Bush did.
What’s ironic is the only thing that kept all those Union jobs going were fullsize trucks and SUV’s. They’re the only vehicles Americans actually want to buy from the Big 3, take those away, and Detroit is dead. If Americans are forced to buy small cars, they’ll buy imports, destroying whatever is left of the Big 3.
55555! nt
Rod_Patrick (Diary) Saturday, May 2nd at 4:06AM EST (link)Yeah.
Rod_Patrick (Diary) Saturday, May 2nd at 4:07AM EST (link)But raising CAFE limits is totally a different animal than what the Obama Administration is doing right now:
GRABBING PRIVATE INDUSTRIES.
No threadjacking (nt)
Neil Stevens (Diary) Saturday, May 2nd at 4:31AM EST (link)RS contributing editor, technical administrator, and “a hardy variety of crabgrass.”
Read the RedState Posting Rules
Unlikely Voter: Poll Analysis, Election Projection.
“I rejoice that America has resisted.” – William Pitt, the Elder
Another irony
DerKrieger (Diary) Saturday, May 2nd at 11:30AM EST (link)…is that Conservatives are the biggest buyers of Big 3 vehicles. We’ve been supporting the UAW and attacks against the GOP for decades. If we stopped buying Big 3 vehicles they’d all go under. I have a Tahoe that I am very happy with but I will never buy another GM product. I won’t buy a Chrysler either. Not sure about Ford.
“In questions of power, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.” – Thomas Jefferson
“I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.” – James Madison
Whenever the legislators endeavor to take away and destroy the property of the people, or to reduce them to slavery under arbitrary power, they put themselves into a state of war with the people, who are thereupon absolved from any further obedience.” — John Locke, 1690
This indicates the lack of business acumen of Obama: INVESTING IN LOSING BUSINESS.
Rod_Patrick (Diary) Saturday, May 2nd at 4:09AM EST (link)Sadly, the money that will be lost is owned by US, the American people.
I must respectfuly disagree, the "O" knew
olsmithie (Diary) Saturday, May 2nd at 3:02PM EST (link)exactly what he was doing to these businesses.
He needed them to accept TARP, or some government money to get his hooks in them and effectively nationalize them, all the while repaying the thugs in the UAW who went to the mat for him.
As with welfare, he has locked in the UAW vote forever. NOW to grow the UAW, (card check) and voila’ more Obama voters.
He needed these businesses on their knees to be able to get his hooks into them.
I would submit that he cared not what his actions did to the industry.
And you are SO right on who pays the bill, that’s the saddest part.
Regards
ha ha ha!
Rod_Patrick (Diary) Saturday, May 2nd at 8:31PM EST (link)Huh. You blew off their cover.
Bro, you’re right. But that’s supposed to be an inside story.
Living in MI
smitch61 Saturday, May 2nd at 8:23AM EST (link)I will not expect anyone outside of Michigan to truly understand and that is okay. It has been a sad few days here in the great state. The unions continued support of the Democratic party has baffled me for years, how ironic the party they support assisted in their demise. The government has been trying to get their claws in the car companies for years to no avail. They are in now, and in to stay. You can campaign all day long against “the man” the big bad company, or how you are screwed on a daily basis from those stupid wealthy CEO’s… If any company does not make a profit, nobody makes any money. It seems so simple to me. I am a bit surprised at the feds confidence that these companies will come back with a government and UAW ownership…. I will not purchase a vehicle from a company owned by either… I will by FORD, or any foreign vehicle built in the US.
The UAW has taken from GM for years, there is nothing left to give.
My grandfather told me many years ago….. that the government and the UAW would bring the great companies down…. I am glad he is not alive today to see it.
Buy FORD
djemi (Diary) Saturday, May 2nd at 11:46AM EST (link)Bonds, Stock, Car and Truck
“If I can’t shoot rabbits,then I can’t shoot fascist”
“With age, comes Wisdom, but only if you are paying Attention, son” my ‘Old Man’
RS Help files (h/t JLenardDetroit) Grassroots in Michigan
Moes Strategy
I wouldn't buy any UAW anything (nt)
Neil Stevens (Diary) Saturday, May 2nd at 11:53AM EST (link)RS contributing editor, technical administrator, and “a hardy variety of crabgrass.”
Read the RedState Posting Rules
Unlikely Voter: Poll Analysis, Election Projection.
“I rejoice that America has resisted.” – William Pitt, the Elder
I am sympathetic to that thought . . .
JSobieski (Diary) Saturday, May 2nd at 8:27PM EST (link)If GM and Chrysler ultimately go out of business, Ford will be the only UAW shop in the world—which will certainly doom it as well.
The best way to fight this is not to quietly boycott, but to publically argue, explain, and educate people that capitalism is another word for freedom, and that investors are free to invest money here in an American company, or in South Korean, Japanese, or ultimately Chinese auto companies.
If we cannot get more voters to think like investors and bond holders, we are screwed, and refraining from the purchase of a UAW vehicle will do nothing to save us from our fate.
These folks need vocal leadership, not quiet economic lessons that they haven’t learned to date.
I am a Michigan resident and the events of the past 12 months are so truly disturbing. I know of several individuals who have initiated applications for concealed carry permits because they figure there will be violent civil unrest in the upcoming months.
My rules of the road for primary season.
Rule #1: Vote for YOUR first choice in the primaries
Rule #2: Vote for the R in the general.
Rule #3: Don’t let anyone convince you to violate Rule #1 or Rule #2
Rule #4: When in a center-right argument, reaffirm Rules #1-#3–it will help us all to get along better.
Rule #5: If you are using the language of the left, you probably aren’t furthering conservativism
Rule #6: The priority is issues first, candidates second, and supporters third. Nobody is bigger than the issues. Conversely, if you spend your time focusing on supporters, you are wasting everyone’s time.
STOP THE MADNESS!
A reduction in the rate of spending increases is NOT a cut!
In-state tuition for illegals is NOT amnesty!
Requiring someone to pay their medical bills is NOT an individual mandate!
Reducing tax rates is NOT a tax increase!
Bless you. nt
Flagstaff (Diary) Saturday, May 2nd at 12:00PM EST (link)“The press is so powerful in its image-making role that it can make a criminal look like he’s the victim and make the victim look like he’s the criminal. If you aren’t careful, the newspapers will have you hating the people who are being oppressed and loving the people who are doing the oppressing.”– Malcolm X, Audubon Ballroom, December 13, 1964
As a fellow Michigan resident, I share your sadness
JSobieski (Diary) Saturday, May 2nd at 8:34PM EST (link)at this long story of decay. There appears to be little appreciation for capitalism in this state. How long until the same change in attitude pertains to freedom more generally.
My rules of the road for primary season.
Rule #1: Vote for YOUR first choice in the primaries
Rule #2: Vote for the R in the general.
Rule #3: Don’t let anyone convince you to violate Rule #1 or Rule #2
Rule #4: When in a center-right argument, reaffirm Rules #1-#3–it will help us all to get along better.
Rule #5: If you are using the language of the left, you probably aren’t furthering conservativism
Rule #6: The priority is issues first, candidates second, and supporters third. Nobody is bigger than the issues. Conversely, if you spend your time focusing on supporters, you are wasting everyone’s time.
STOP THE MADNESS!
A reduction in the rate of spending increases is NOT a cut!
In-state tuition for illegals is NOT amnesty!
Requiring someone to pay their medical bills is NOT an individual mandate!
Reducing tax rates is NOT a tax increase!
Skanderbeg, What about the current Chrysler issue?
Rod_Patrick (Diary) Saturday, May 2nd at 11:09AM EST (link)GM is now a forgone issue. It’s now a member of the Obama Syndicate.
The fight is currently brewing at Chrysler. The holdout lenders are really fighting back against the Obama Syndicate. I think we should support Thomas Lauria, the lawyer for the holdout lawyers.
The last info that I have read about the case is this one:
http://amlawdaily.typepad.com/amlawdaily/2009/05/white-cases-thomas-lauria-lawyer-for-the-holdout-lenders.html
I’m not sure if there is any new update on the issue.
I hope if this is not threadjacking (Neil, sorry if it is.)
I just think that this diary particularly Flint’s plight is related to the on-going case by Lauria against the Obama Government.
GM is not a forgone conclusion either
JSobieski (Diary) Saturday, May 2nd at 8:31PM EST (link)Bankruptcy law gives the bond holders superior rights to the union pension plans. Even a single bond holder can muck up the works on Obama’s crime syndicate.
People talking about short, quick, and surgical reorganizations in bankruptcy court are idiots. Just like the Republican AG for Michigan who was talking on the radio that the Big 3 should at least file their Chapter 11 cases in Michigan. There was 0 chance of that, but the guy spouted off on it several times on local radio.
I am starting to conclude that MIchigan is not fit for self government. The best way to maximize freedom and economic rights is to a colony to 20th Century England (see Hong Kong). Michigan is a disaster.
My rules of the road for primary season.
Rule #1: Vote for YOUR first choice in the primaries
Rule #2: Vote for the R in the general.
Rule #3: Don’t let anyone convince you to violate Rule #1 or Rule #2
Rule #4: When in a center-right argument, reaffirm Rules #1-#3–it will help us all to get along better.
Rule #5: If you are using the language of the left, you probably aren’t furthering conservativism
Rule #6: The priority is issues first, candidates second, and supporters third. Nobody is bigger than the issues. Conversely, if you spend your time focusing on supporters, you are wasting everyone’s time.
STOP THE MADNESS!
A reduction in the rate of spending increases is NOT a cut!
In-state tuition for illegals is NOT amnesty!
Requiring someone to pay their medical bills is NOT an individual mandate!
Reducing tax rates is NOT a tax increase!
You're right bro.
Rod_Patrick (Diary) Saturday, May 2nd at 8:37PM EST (link)Let’s help these people. We need to communicate with them that they are not alone in their fight against the Government.
They have the backing of at least 49% of the people.
And I agree with you. Michigan is a disaster. The number of people dependent on the government food stamp is SHOCKING AND OVERWHELMING.
Sigh
drothgery Saturday, May 2nd at 12:39PM EST (link)My parents always had GM cars. My first two cars have been GM cars. Whenever I have to rent a Ford or Chrysler or an import there’s something subtly wrong with how they feel.
But I’m not going to support Government Motors. So when my Pontiac needs replacement (which won’t be for a while, as it’s paid for and extremely low mileage for a six year old car), I’ll be looking at Toyota, Honda, and (eek) Ford.
I won't buy a car from a Car Company that was forced by obama and the Unions in Government Bailouts
bobojake (Diary) Saturday, May 2nd at 1:45PM EST (link)and my first car was a 1960 BelAir 3 speed overdrive 283 that got 23 miles to the gallon between Newport RI and Nebraska 3 differnt trips in the USN.
EX CHEVY MAN until obama gets his dirty mitts out of any company or business he takes over.
"1960 BelAir 3 speed overdrive 283 that got 23 miles to the gallon"
olsmithie (Diary) Saturday, May 2nd at 3:07PM EST (link)Isn’t it odd that after the government made that an environmentally friendly engine,(307), the gas mileage went down?
I’ve put millions of miles on GM’s, gonna miss them…
Regards
Twin GM 305s in my boat with over 1800 hours on them.
Achance (Diary) Saturday, May 2nd at 3:28PM EST (link)They’ve never missed a beat. Get tuned up and the oil changed twice a season and the anti-freeze in the fresh water cooling checked/changed. That’s it for engine maintenance in a 18 year old boat that lives in salt water year round. Can’t say the same about the drives, though! They’re Mercruiser Alphas and have had a hard life.
In Vino Veritas
Oops, that would be a 305 wouldn't it.
olsmithie (Diary) Saturday, May 2nd at 8:32PM EST (link)The 289 became the 307. My apologies to the Ford folks…
Regards
No, oldsmithie, there was both a GM 305 and a 307.
Achance (Diary) Sunday, May 3rd at 9:08PM EST (link)The Ford 260 became the 289 then the smog version became the 302. To make any horsepower with the smog motors you had to make them bigger and make them use more gas.
In any event, the small block GM had the same architecture from its introduction in ’55 and started life at 265 c.i., then 327, then the 350 as “real engines.” Smog motor versions were the 305, 307, and even a 400. The marine versions have the smog motor bore and stoke, but they don’t have the emissions controls; something the government is working on, of course.
Frankly, some good things have come of it all. When my engines give up the ghost, soon unfortunately, I’m going to replace them with fuel injected, electronically controlled engines and “fly by wire” controls. The drivability of modern electronic engines is infinitely better than carburettors, chokes, and cables.
In Vino Veritas
GM vs "buying American"
bk (Diary) Sunday, May 3rd at 11:46PM EST (link)While popping around different dealerships today, I couldn’t help but notice this info on the labels for the Chevy Equinox:
Engine: from China
Transmission: from Japan
Assembly plant: Ontario Canada