Tuesday, February 12, 2008

GM Loses Big! No word on the workers

GM Loses Big:

Ah, dear old Megan. If you love corporations so much, why don't you marry em? huh? huh?

GM has posted the largest loss in automaker history, $38.7 billion for 2007. Almost all of that is a writedown of deferred tax assets--a masterpiece of big bath accounting. On a cash flow basis, the company seems anemic, but not fatally wounded.
Paraphrase: My first sentence is a lie. In the second sentence, I actually tell you how it's a lie but use a term you won't understand. In the third, I say the GM's condition is "meh"

Once again, the company is hoping to reduce costs by offering buyouts to more of its union employees. It's astonishing how lavish these buyout packages can be, and yet still save the company money--early retirement plus $45,000 is apparently cheaper than keeping them on the line. It's a sign of something deeply out of whack in the labor market when companies are consistently this desperate to shed workers--how can the UAW swing enough clout to keep the automakers tottering in and out of unprofitability?
Because we all know, that if GM could just pay its workers in gum drops and wishes, they'd make a killing. I popped onto NYTimes.com today and read an article, by a JOURNALIST <cough> and it said:
The swing was attributed to a drastically slowing vehicle market and big losses at its finance arm, the General Motors Acceptance Corporation.
Wait a second... does that mean.... GM is losing money partly because of a slow economy and poor decision made by management? But our muse says naught! There must be some mistake! I think "slowing vehicle market" and "losses at its finance arm" were mistranslated imporperly from the original Hebrew, and thus the confusion. (Did I just go too obscure? Does that joke work? Has anyone read "The Promise?")

But the company's behavior seems inexplicable. All three of the automakers are crippled by their deals with the union, not just because of wage and benefit costs, but because the union tends to strongly resist productivity enhancements that might cost jobs. Yet none of the automakers has taken any sort of stand. The company and the union are like two skydivers trying to share a small parachute--locked in each other's arms as they hurtle to their death, because neither wants to be the one to let go.
This is great. She frames the entire debate about how the unions are keeping GM from being profitable, and then sums it up by saying "the automakers are doomed." Well, if they're doomed, why don't we point some fingers at STUPID ASS AUTOMAKERS that have been pushing the Yukon, Denali, Jupiter, Googleplex, Solar System and whatever big ass SUV/Truck that no one wants to drive anymore because SURPRISE gas prices went up in an unprecedented move not seen since, well, that one time when there was like a little less gas than we needed and.. oh I forget. Get me another plumtini.

Yup, it's all labor's fault. If only the unions hadn't pushed for those pesky losses in the finance division, GM would be in top shape!

1 comment:

Anonymous said...

The thing I find fascinating is that in one post, Megan talks about how CEO's are truly worth all that money because, hey, the market decides that, and the market can't be wrong. Yet, when those very same executives whom she previously pumps up are the ones who agreed to these negotiations, there's no mention that, just maybe, the executives screwed up. When executives manage obscene payouts to themselves, with no connection to reality or performance, that's the market at work. When workers get a decent package, damn them to hell, they're destroying the economy!

I know you pretty much said the same thing, but it's shocking how Megan seems so unaware of this inconsistency.