Blue Chip To Buffalo Chips

The media says

they built cars people wouldn’t

buy, or that quality was too low. Neither is true.

By time you read this, it will almost seem normal: General Motors in bankruptcy. While this outcome for what was once the world’s leading industrial enterprise is now “old news,” the real story behind the story is either being suppressed, or is simply ignored. What killed GM? The mainstream media says it’s because they built cars people wouldn’t buy, or that quality was too low. Neither is true. GM has had competitive products across every vehicle market segment for at least five years and made a fortune in the high-profit light truck/SUV market. Technologically, their products were similar to their competition and achieved high consumer satisfaction ratings for the last half decade. Look at mainstream media coverage and you’d think they’re talking about 1995.

Did they screw up a decade ago? You bet. I owned a ’93 Oldsmobile Achieva that was truly horrendous; but we’re taking about 1993 for Pete’s sake … what about now? Another “red herring” perpetrated by the media is that unions killed GM. The fact is, modern assembly operations are highly automated and GM vehicles were often selling at lower prices than their competition … consumers didn’t reject the cars because they didn’t like the CAW. What really happened is the result of a disease that could wreck our whole economy, yet is unspoken by the Canadian press: Greed Capitalism.

In the “good old days” sound, conservative management that delivered solid growth made companies like GM the pinnacle of the equity investment world. Not now. The new breed of institutional investor, driven by greed for massive bonuses, demanded and got big returns now and to Hell with the future. “What have you done for me this quarter?” was the watchword, while companies like Toyota and Honda ran R&D programs with timelines that extended to decades. The markets drove GM towards short-term gain then threw them in the ditch when the economy collapsed.

What’s the lesson here? There really isn’t one, since the big money players ultimately control industrial capital and don’t care what happens beyond the next bonus cycle. And GM is only one example. Unless we do something to slow down the insanely rapid capital flows and predatory trading practices of investment banks, fund managers and their industry, no manufacturing business is safe. This isn’t free enterprise, it’s a form of Socialism for the big money investors … squeeze out every drop, then discard and move on, maybe to China … remember this when you go to the polls, because it might be your job next!

What do you think? Have your say and speak your mind! letterstotheeditor@ssgm.com