Yes, GM Is on a Roll; Is It for Real?

Bob Stempel

The General Motors story is complicated; it’s always been complicated. Right now, the company is doing well and just announced a $2 billion investment in 17 U.S. plants, mostly in the Midwest, that will create (or save, depending) 4,000 jobs.

At the company’s Toledo transmission plant, CEO Dan Akerson told the cheering crowd: “We’re committed to investing in the infrastructure of this company and manufacturing jobs in the United States.” Hoorah, Dan.

How ironic that the auto press is also celebrating the contribution of Bob Stempel (above), the ex-CEO who just died, praised as a true “car guy” who just happened to oversee two years of GM’s free-fall and demise in the 1990s.

GM CEOs have been generally a sorry lot, the most recent demonstration of that being the tenure of Ed “Doofus” Whitacre. The jury is still out on Akerson.

Anyway, Dan pointed to the multiplier effect that the 4,000-job investment will generate—another 28,000 U.S. jobs and $2.9 billion more to the country’s gross domestic product. And the company made a feel-good video about this.

In another irony, the White House sent congratulations on the $2 billion GM investment and then congratulated itself on President Obama’s bold intervention to provide the “tough love” needed to save/create the 4,000 jobs.

Even as they disperse their production abroad and build cars with fewer and fewer U.S.-made parts, “American” auto companies crow about saving U.S. jobs. I still happen to think the bailout was the right choice, but few are being honest about its consequences.

Industry apologist Daniel Howes wrote a truly incredible puff piece, advising us that GM and the other Detroit automakers are all smiles as they head into the future. About GM, he informs us that the company has moved on from its blighted past. It has good financials, improving sales, strong presence in global markets and a revitalized product development cycle.

With all that good news, why is the stock price dropping? I think the company’s future looks positive, but why don’t these cheerleaders point out some of the potentially serious pitfalls ahead? How can they consistently praise themselves for saving jobs when some 400,000 were lost before and during the bankruptcy process?

Should we cut our automotive and government leaders some slack as they try to put the best face on the recovery? Why, or why not?

—jgoods

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1 Comment

  1. If you could simply dismiss all your debts and keep all your stuff, would you “be on a roll?” If you’re like most people, you have a fair amount of debt so that would definitely give you a boost in your standard of living. No house payment (but you keep the house) or car payments or medical bills, personal loans, credit cards.

    GM’s profits are really money stolen from investors, creditors and retirees. Of course, GM’s reptilian managers will now expect huge bonuses simply for dumping their debts. It won’t last, of course, these idiots will do what they are best at…. pissing away money by the billions…. and will be right back in trouble in a few years.

    And don’t let those jobs fool you. They aren’t new jobs, they’re just hiring back from the hundreds of thousands of unemployed they created. Except salaried people over 40, of course. They’ll claim they can’t find anyone to fill those jobs and get green cards for foreigners.

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