Your tax dollars at work:
According to today’s Washington Post, the company currently employs 88,000 workers in the United States. (That seems low, but that’s what the paper says.) GM has gotten $19.4 billion in loans from the U.S. government and Obama promised another $30 billion yesterday.
$49.4 billion divided by 88,000 workers comes out to $561,363.63 per worker.
Can that possibly be right? That in an effort to avoid layoffs, Uncle Sam has pursued a course more expensive than handing each worker a check for a half a million dollars?
Well, the math is correct, but it’s not right, in any sense of the word. I see some very interesting campaign ads coming out of this in 2010.
Actually, the math is wrong. Keeping GM as a going concern also means jobs for auto parts suppliers and dealers. So the correct math would be to divide the total of GM and non-GM employees by the amount of money spent.
Isn’t that dollar amount about the same amount that each individual household currently owes to the national debt?
We are all being forcibly coerced into paying for a company and workers incapable of making products that can reasonably compete in a true free market system. This is absolutely appalling. Since when was it GM’s “right” to make crappy cars?
Don’t start telling me that, “GM’s cars aren’t all that bad”. I have a friend who bought a top of the line Saturn Sky Redline. It looks sexy enough from 20 feet and 20 mph. However, when you sit it in it the interior is utter rubbish. He has had to take it back about 8 times to have various interior pieces replaced and refitted. Some of the pieces continue to pop off or make rattles so much so that he has given up on the dealer and just made his own fixes with glue and bits of tape. The Monsoon radio deck has been replaced twice. A connector in the gauge cluster wiring harness came loose. The stitching on the rag tap is already fraying and wrinkling along the passenger side. While trying to show off the acceleration he had a terrible time getting the shifter into 3rd gear. He tried to tell me about all the Sky owners that gave up and went and bought a Miata because, “it has a truck”. I couldn’t help but say, “And is actually well built”. He just gave me a sideways look.
Miata’s have trunks, not trucks….
If you did that math for CitiBank it would work out to $10 Million per employee.
The rather stunning silence of the conservative right about the Wall Street bailouts speaks very loudly.
Mr. Lee,
These “bailouts” were not for the employees. The extensions of credit to these financial entities enabled them to settle accounts with counterparties, and prevent wholesale destruction of asset values due to an artificially contrived problem.
Ah… what’s the use. A leopard can’t change his spots, and you can’t see wider than your self-imposed blinders allow you.
May I suggest you discard your attempts to control the narrative, and reply to the actual post? Would that be too much to ask of someone of such developed intellect as yourself?
The rather stunning silence of the conservative right about the Wall Street bailouts speaks very loudly.
Don’t confuse your own deafness with silence, you moron.
This is just a lie:
The rather stunning silence of the conservative right about the Wall Street bailouts speaks very loudly.
Reuters September 2008
UPI October 2008
Right Wing News November 2008
The Hill December 2008
I suspect jack will claim that conservatives supported giving bonuses to Citigroup executives, while ignoring Chris Dodd (D-Delware) admitted to FoxNews that heinserted the bonus provision for Citigroup. Probably because he wanted his own personal bailout as Huffington Post suggests.
Rand, you’re being too subtle. It’s a great turn of phrase that will reach deaf ears…
Jack, there was no silence, or don’t you read Malkin? She was all over it at the time.
While we note the absurdity of the bailouts, it doesn’t seem to matter. The morons are marching with the party in power leading the band. They are taking the people’s tax money and using it to insure political ends. It’s not about running a car company, banks or any other business… it’s all a smokescreen for paying off the people that will keep them in power… forever.
I’m really hoping 2010 and 2012 prove me wrong. Carl, say something optimistic please… I can’t live in such a funk.
Jack,
you and most liberals were drinking kool-aid when we were screaming, yelling and emailing at our Congressional worms about doing the bailouts AT ALLLLLLLL!!
@ Josh,
Damn, makes me glad my wife gave up on that Sky she was looking at and went for the Miata instead – at $150 per month cheaper too.
I should also add that our experience with the Miata was so good that we went back to Mazda for her next car.
I was even more amazed at another statistic in the Wall Street Journal article: GM has 91,000 employees in this country and 493,000 retirees. Doesn’t that seem a bit large?
I like Marc Ambinder’s idea posted today.
Obama should ask Mitt Romney to serve as chairman of General Motors.
Rand,
I apologize for interjecting this here, as I know that it isn’t entirely related to this thread…
I am typically most reluctant to ban anyone, but this latest from Jack isn’t just stupid, it is openly dishonest….
Ban him…
>Keeping GM as a going concern also means jobs for auto parts
>suppliers and dealers.
But is this true? It seems to me if demand for automobiles remains the same then demand for suppliers and dealers should also, even without GM.
Jurgun, the problem (or feature, depending upon how you look at it) is that the auto parts suppliers already exist overseas and are busily making parts for these cars. If GM/Chrysler go under, the chain of companies that produce parts for those brands will likely tank as well. As far as the dealerships go, anything that destroys dealerships is fine with me….
As far as I am concerned, this isn’t a really big problem, but I am a heartless conservative free-marketer who believes in creative destruction (ht: Polyani)…
Ok Chris, I’ll go you one better. My 3 and 5 y/o granddaughters owe 164 bucks a piece for GM alone. Their share of health care reform they don’t need will be $2033.Their share of the increased deficit will be $31,000 before they’re old enough to work.
This is so dumb. We didn’t even “save” those 88,000 jobs, we just made sure they were employed by a particular brand. If GM was liquidated the factories would be re-opened under new management and that new management would have to hire some (kind of large) fraction of those 88,000 people to build the cars.
That’s the unseen part of all this, to use Bastiat’s terms – the new company that would have come after. In the absence of permanent demand destruction car sales will come back and someone will have to meet that demand. Toyota and Ford can only ramp up production so much.
Bill Maron, don’t forget that your granddaughters will inherit your share of the debt eventually too. :-/
Jurgen & Brock – considering Toyota and Ford took huge year-end losses, my guess is that they would be able to ramp up production to meet current car demand without needing GM’s factories or workers.
Bill Maron – what makes you think the government is going to own GM forever? They have stated a plan to take it public again, which means they will sell their stock and cash out.
Bill Hensley – the 493,000 retirees sounds about right. Now you understand one of GM’s problems, and the reason they got the UAW to take over health care for those retirees.
The 88,000 jobs don’t get saved anyway, as they’re certainly not planning to avoid cuts. Obama Motors will have 11 fewer plants and 21,000 fewer factory employees. Subtract a similar percentage (1/3) of white-collar jobs too, I imagine.
Keith Hennessey – collection of basic facts.
Chris Gerrib Says:
June 2nd, 2009 at 11:23 am
“They have stated a plan to take it public again……….the 493,000 retirees sounds about right. Now you understand one of GM’s problems, and the reason they got the UAW to take over health care”
And who’s statement are we gonna listen to today? The one that says they should go public in 6 months? The one for 18 months? The one that says it will probably be a “few” years? How are they going to sell chunks of shares for a stock that is practically junk at this point? Who is going to buy stocks in a public company which shows no qualms at taking a dump on investors? Obama derided the bond holders as being speculators that should have known better. Will these prospective penny stock buyers being labeled as such?
In a true free market a company would never position themselves in a fashion where they would risk so much on their retiree pension programs. As more pensioners join the retiree pool GM has to offset the cost of these additional burdens to the consumer. Obviously the consumer was only willing to go so far with inflated sticker prices to float this absurd benefits package. GM only sacrificed so much because they were forced into this arrangement by the unions. The unions were backed by the gov’t with laws and the courts. This is theft on the part of the government. This is evil on the part of materialists bent on pandering to the lowest common denominator populist in order to fill the vacuum of their want with power. The gov’t wants power, the people need something but want to pay nothing, and so the ends justify the means.
Josh – this is hardly the first time the government has rolled out an IPO after a company failed. See Conrail. Nor is this the first bankruptcy that the bondholders got stiffed. (A federal judge will have to sign off on the bondholders deal, and they will be allowed to argue their case.)
I have no idea when they plan to execute the IPO, and the government probably has only a vague idea, since a whole bunch of factors, including getting through the bankruptcy, have to happen first.
Regarding GM’s retirement issue, we can argue all day over who’s fault it is. Here’s the problem – the die was cast decades ago, so unless you’re prepared to throw thousands of 60, 70 and 80 year old retirees out on the street, it’s a problem that needs fixing.
Also please bear in mind that these individual retirees made a good faith reliance on contracts extended to them from (at the time) the largest company in the world. These contracts were negotiated (not forced, negotiated) for decades during Republican and Democratic administrations.
GM closed at 75 CENTS. What makes you think that price will get anywhere close to something worthwhile with the G and UAW involved? Until they sell that stock, what I said holds. Given the leadership, 2 bucks might be a good price to sell.
The other half of this when somewhere.
Whatever par value is assigned to the stock, I bet investors stay away in droves. unless the G is going to guarantee dividends, why buy it?
Bill Maron – when they come out of bankruptcy, they will have to re-issue new stock. The price of the old stock is based on people betting that the bankruptcy proceeding will fail. It’s irrelevant to the stock price post-bankruptcy.
Chris Gerrib Says:
June 2nd, 2009 at 1:27 pm
“Josh – this is hardly the first time the government has rolled out an IPO after a company failed”
Doesn’t make it right then, isn’t right now.
“the government probably has only a vague idea”
The government has a plan…..vaguely. That is so assuring.
“Regarding GM’s retirement issue, we can argue all day”
Feel free to argue with yourself if you enjoy carrying on all day in that manner. My original statement was and continues to be right.
“unless you’re prepared to throw thousands of 60, 70 and 80 year old retirees out on the street”
Hope they got plenty of savings. You know in China, they don’t have social security. People SAVE their money to cover their expenses sans work. Yet, it is China who is LENDING us money. Jeez, funny that.
“These contracts were negotiated….during Republican and Democratic administrations”
I don’t care what hat you hang on the face of fascism. Its still wrong. It is still inherently evil.
Josh Reiter – “Hope they got plenty of savings” !!!
And I’m the evil one?