Boycott General Motors

28 11 2018

 By Timothy D. Naegele[1]

There is reason to believe that General Motors is failing again, after having been bailed out by America’s taxpayers.  It stopped reporting monthly sales back in April of 2018, despite the fact that all of its domestic and foreign competitors had been reporting them on a regular basis. This was a drastic decision by GM’s management, which had reported such figures during the last auto sales crisis—described as the Crash of 2008.[2]

GM was on the ropes then. Chrysler and Ford were too, but company founder Henry Ford’s great-grandson Bill Ford and Boeing’s Alan Mulally[3]—who had become Ford’s president—put together a winning plan to save Ford without going into bankruptcy.  They hunkered down and sold off Aston Martin, Land Rover, Volvo, Jaguar, Ford’s dominant interest in Mazda, and consigned the Mercury brand to the dustbin of automotive history. In the process, their strategy succeeded impressively. Today, Fords are the largest selling vehicles in the United States; and the Ford F-Series trucks outsell all other vehicles.

Both GM and Chrysler went into bankruptcy; and with his Fiat conglomerate hanging by a thread in Europe, its gutsy chief Sergio Marchionne bought Chrysler, and the rest is business history.  Marchionne saved both of his companies.[4]  Today GM manufactures vehicles in 37 countries, and sells its core American automobile brands—Chevrolet, Buick, GMC, and Cadillac—through its U.S. dealers, some of which were put out of business following the last crash because they were deemed not to be buying enough cars from GM.[5]

It has been reported that the company plans to halt production at several of its American plants, and reduce its salaried workforce by 15 percent—or more than 14,000 employees—in a massive restructuring that will cost up to $3.8 billion. The Detroit automaker said “plants in Ohio, Michigan, Maryland, and Ontario will be ‘unallocated’ in 2019 and it will cease operations at two additional plants outside of North America by the end of next year.”[6]

This time, there must be no bailout for the company.  It must be allowed to fail and go out of business—which is exactly what GM did to many of its best dealers and their employees. In the process, long-time and loyal GM customers were hurt too, having been the source of monies to bail out the company.  No mercy was shown to any of them by GM’s management; and none should be shown to GM this time around.  This is true as well with respect to electric vehicles, and their taxpayer subsidies.[7]

 

Boycott GM

© 2018, Timothy D. Naegele


[1]  Timothy D. Naegele was counsel to the United States Senate’s Committee on Banking, Housing, and Urban Affairs, and chief of staff to Presidential Medal of Freedom and Congressional Gold Medal recipient and former U.S. Senator Edward W. Brooke (R-Mass). He and his firm, Timothy D. Naegele & Associates, specialize in Banking and Financial Institutions Law, Internet Law, Litigation and other matters (see www.naegele.com and Timothy D. Naegele Resume). He has an undergraduate degree in economics from the University of California, Los Angeles (UCLA), as well as two law degrees from the School of Law (Boalt Hall), University of California, Berkeley, and from Georgetown University. He served as a Captain in the U.S. Army, assigned to the Defense Intelligence Agency at the Pentagon, where he received the Joint Service Commendation Medal (see, e.g., https://en.wikipedia.org/wiki/Commendation_Medal#Joint_Service). Mr. Naegele is an Independent politically; and he is listed in Who’s Who in America, Who’s Who in American Law, and Who’s Who in Finance and Business. He has written extensively over the years (see, e.g., www.naegele.com/whats_new.html#articles), and can be contacted directly at tdnaegele.associates@gmail.com

[2]  See http://www.wsj.com/mdc/public/page/2_3022-autosales.html#autosalesE (“Auto Sales“); see also https://naegeleblog.wordpress.com/2015/11/30/a-34-trillion-swindle-the-shame-of-global-warming/#comment-14697 (“Is General Motors Failing Again?”) and https://naegeleblog.wordpress.com/2015/11/30/a-34-trillion-swindle-the-shame-of-global-warming/#comment-14324 (“The Passing Of An Auto Giant”)

[3]  See https://en.wikipedia.org/wiki/William_Clay_Ford_Jr. (“William Clay Ford Jr.”) and https://en.wikipedia.org/wiki/Alan_Mulally (“Alan Mulally”)

[4]  See https://naegeleblog.wordpress.com/2015/11/30/a-34-trillion-swindle-the-shame-of-global-warming/#comment-14324 (“The Passing Of An Auto Giant”)

[5]  See, e.g., https://en.wikipedia.org/wiki/General_Motors (“General Motors”)

[6]  See https://www.cnbc.com/2018/11/26/gm-unallocating-several-plants-in-2019-to-take-3-billion-to-3point8-billion-charge-in-future-quarters.html (“GM to halt production at several plants, cut more than 14,000 jobs”); see also https://www.freep.com/story/money/cars/general-motors/2018/11/26/ontario-plant-closure/2112539002/ (“GM closing Hamtramck, Lordstown, Oshawa plants, cutting jobs”)

[7]  See, e.g., https://naegeleblog.wordpress.com/2015/11/30/a-34-trillion-swindle-the-shame-of-global-warming/#comment-10525 (“The Swindle And Shame Of Global Warming: Electric Cars”)

It is clear that the boycott movement is growing.

See, e.g., https://www.google.com/search?q=Boycott+General+Motors&oq=Boyco&aqs=chrome.0.69i59j0j69i57j0l3.6839j0j8&sourceid=chrome&ie=UTF-8


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7 responses

28 11 2018
Ron Michaels

I agree with what you’ve said. I’ve written that the mechanics are misdirection and obfuscation designed to sneak under business scrutiny to hide the corrosion going on inside. Thanks for a great writeup. Good to hear from you. Coincidentally, checking the Board of Directors of GM pops out a list of folks who also would love the optics of showing up president trump and his “manufacturing in America” mantra. The presence of some of these people begs the question, “what is their experience in business and/or auto manufacturing and sales?”

>

28 11 2018
Timothy D. Naegele

Thanks so much, Ron. I agree with you.

A belated Happy Thanksgiving. 🙂

28 11 2018
H. Craig Bradley

SWISS CHEESE

I have a 1997 Chevrolet Lumina. While still mechanically sound, the paint is starting to peel-off. The plumber’s 2006 Chevy Van is also suffering the same fate. Chevrolet never was able to fix its paint defects since the 1980’s, but with zero percent interest, the FED was able to engineer profits for a otherwise “Zombie” Corporation.

How widespread is this phenomenon in American Industry today? I just read United Technologies is splitting itself into three separate corporations. This suggests that some of them will go to Mexico or just disappear in some manner. No MAGA. Just ongoing DECLINE.

Who will save the day?. Just read that 30% of all American consumers are still trying to pay-off the balance on their credit card from LAST Christmas ! We are simultaneously being told how well-off consumers are or how strong the economy is. I have my reservations on both accords.

Here is what I see: America is not growing, but China is. So, by 2030, we can expect 50 Million Chinese Affluent Chinese to hit the North American continent and go on a shopping spree buying whatever they want. So this time, we will import wealthy Chinese who will dominate the domestic consumer market, or specific segments of it most likely. The tastes of the American consumer will obviously be “outvoted”. Its a fete accompli. Not even China would buy GM today. How about Russia (Hugo)?

28 11 2018
Timothy D. Naegele

Thank you, Craig, for your comments.

I am not as pessimistic as you are about America’s future.

First, there was the Japanese “wave.” Then, the Chinese wave. America has withstood, and will withstand all of them.

Russia is a pygmy state. China has serious problems too.

28 11 2018
H. Craig Bradley

APPLES VS ORANGES

Japan is tiny compared to China. How many Billion Japanese are there? We saw the highly publicized trophy real estate the Japanese bought in the 1980’s. They leveraged a relatively small population using their currency and debt to appear larger than life, making a “big splash” in the process. The Media focused and amplified this real estate buying spree. When their bubble burst and they had to sell these properties at a loss, the media was silent.

The Chinese are different and smarter in the way they invest abroad. For one thing, its long term and its sustainable. Secondly, Chinese Tourists will be very specific and choosy in what they buy and where they go while visiting the U.S. The Media won’t pay attention unless you have former GM factory workers shinning shoes at The Ritz Carlton or pulling a rickshaw for wealthy Chinese in downtown L.A. or New York.

Come to think of it, one could stage such a scene and put it on Youtube and become a cult newscaster. Even if its not true, anything (story) is possible in today’s news media.

28 11 2018
Timothy D. Naegele

Thank you, Craig.

I have dealt with both the Japanese and Chinese over the years, and find them very similar . . . and largely sophisticated. But no more so than Americans.

I bought the largest minority bank in the U.S. for Chinese investors who were based in Hong Kong, which was quite an experience.

28 11 2018
Timothy D. Naegele

Emotional GM Workers Wipe Away Tears After Thousands Laid Off Ahead Of The Holidays [UPDATED]

Anger at GM plant closings

Valerie Edwards has written for the UK’s Daily Mail:

Heart-wrenching photos show General Motors workers wiping tears away after the company laid more than 14,000 people off without warning and just before the holidays.

In a massive restructuring, the auto giant announced Monday that it will cut 15 per cent of its workforce to save $6 billion and adapt to ‘changing market conditions’.

‘You’re going right into Christmas. You’re looking for celebration and that’s not there now,’ one GM worker told Today.

Another employee said through tears: ‘I’m just kind of hurting right now.’

One worker spoke of a workplace where people ‘were bawling their eyes out. I’ve never seen anything like it and we can’t get any answers’.

The moves include shuttering seven plants worldwide as the company responds to changing customer preferences and focuses on popular trucks and SUVs and increasingly on electric models.

The job cuts from GM’s current 180,000-strong work force will be particularly stinging in politically crucial areas of Ohio and Michigan, a region President Donald Trump has promised to revive.

Workers at the Ontario plant staged a wildcat strike to protest the closure.

Jerry Dias, president of Unifor, the Canadian labor union, said he ‘will vigorously fight again to maintain these good-paying auto jobs’.

Huston-Rough said the job cuts will be accomplished through ‘a combination of retirements, layoffs and work relocations’.

The job cuts will include a 25 per cent reduction in executive-level employees to ‘streamline decision making,’ the company said.

The plants will be officially closed by the end of 2019, but workers will gradually lose their jobs along the way, some as soon as the new year.

According to reports, the five North American plants concerned employ nearly 7,000, including 3,000 workers in the Ontario plant.

One woman said that she worries for ‘all of the people who have put in so many years of their lives and they don’t know what’s going to happen tomorrow’.

As workers continue to demand answers from GM, the company’s CEO, Mary Barra, said in a statement: ‘The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future.

‘We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.’

Trump expressed dismay at the plan and said he was ‘very tough’ with Barra when they discussed the reorganization.

‘I spoke with her when I heard they were closing and I said, “You know, this country has done a lot for General Motors. You better get back in there soon,”‘ he told reporters at the White House.

‘They better put something else in.’

Barra also met at the White House with Trump’s senior economic adviser Larry Kudlow, in what officials said was a previously scheduled meeting.

Trump’s aggressive trade policies have been aimed specifically at saving manufacturing jobs, including the renegotiation of the North American Free Trade Agreement, which took aim at rules governing auto trade to favor the US industry.

Still, GM will shutter three North American auto assembly plants next year: the Oshawa plant in Ontario, Canada; Hamtramck in Detroit, Michigan and Lordstown in Warren, Ohio.

In addition, GM will close two US propulsion plants — which produce batteries and transmissions — in Baltimore, Maryland, and Warren, Michigan, as well two unidentified plants outside of North America.

The company already had announced plans to cease operations at its Gunsan, South Korea plant.

While the company said in its quarterly earnings late last month that it saw costs jump by $400million due to Trump’s tariffs on steel and aluminum, a spokeswoman said the latest decisions ‘are not related to any recent trade or tariff decisions’.

The president threatened to punish GM following the company’s decision.

‘Very disappointed with General Motors and their CEO, Mary Barra, for closing plants in Ohio, Michigan and Maryland. Nothing being closed in Mexico & China,’ Trump tweeted Tuesday while a televised White House press briefing was going on.

‘The U.S. saved General Motors, and this is the THANKS we get! We are now looking at cutting all @GM subsidies, including…. for electric cars,’ he continued.

Senator Sherrod Brown, an Ohio Democrat, lambasted GM’s move as ‘corporate greed at its worst’ and also took a swipe at the 2017 tax cut favored by Trump which was touted as a jobs winner.

‘The company reaped a massive tax break from last year’s GOP tax bill and failed to invest that money in American jobs,’ Brown said on Twitter.

In Canada, Prime Minster Justin Trudeau expressed ‘deep disappointment’ with the plant closure.

Wall Street cheered the actions, while US and Canadian leaders expressed outrage.

GM shares jumped after the announcement, closing up 4.8 per cent on the day. Analysts were generally upbeat about the news.

‘In contrast to times past, General Motors under CEO Mary Barra is trying to get ahead of a potential crisis by making cuts now,’ Michelle Krebs of Autotrader said in a client note.

While GM has been increasing its focus on highly popular trucks and SUVs, the company said it would also prioritize investment in ‘next-generation battery-electric architectures.’

In an investor call, Barra said some GM cars would no longer be available in North America, including the Chevrolet Cruze.

The closures also drew sharp criticism from the US and Canadian labor union representing GM workers, which accused the company of shifting production overseas at the expense of North American workers.

UAW, the autoworkers union, blasted GM’s decision, saying the company was just looking for cheaper workers, and vowed to fight back.

‘This callous decision by GM to reduce or cease operations in American plants, while opening or increasing production in Mexico and China plants for sales to American consumers, is, in its implementation, profoundly damaging to our American workforce,’ said UAW vice president Terry Dittes.

China has become an increasingly important market for the automaker and in the first nine months of 2018, it sold 2.7 million cars in China compared to 2.6 million in all of North America.

However, spokeswoman Julie Huston-Rough denied the charge, telling AFP that ‘these products will not be manufactured in other locations for the North American market.’

She also said the company remains committed to its facilities in Ohio, despite the closure of the Lordstown plant, with six other locations and 4,000 employees, as well has hundreds of suppliers and dealers.

See https://www.dailymail.co.uk/news/article-6435109/Emotional-GM-workers-wipe-tears-away-thousands-laid-ahead-holidays.html (“Heart-wrenching photos show General Motors workers wiping away tears after company laid off more than 14,000 people without warning, just before the holidays“) (emphasis added; videos omitted); see also
https://www.dailymail.co.uk/news/article-6445193/Hundreds-GM-workers-gather-solemn-prayer-Ohio.html (“Hundreds of GM workers gather in solemn prayer in Ohio“) and https://www.thetruthaboutcars.com/2018/12/union-set-to-waste-general-motors-in-canada/ (“Union Set to ‘Waste General Motors’ in Canada”)

Like the NFL that has been boycotted effectively, with much more to come, so too General Motors must be boycotted and forced to surrender or disappear.

GM and its auto brands are collapsing, while BMW contemplates an expansion of its operations in the United States.

See, https://www.reuters.com/article/us-bmw-manufacturing/bmw-chief-says-considering-second-u-s-manufacturing-plant-idUSKCN1NX00R (“BMW chief says considering second U.S. manufacturing plant“); see also https://www.wvgazettemail.com/opinion/readers_vent/readers-vent-nov/article_9d0e1d7b-daee-50f9-ad1a-2f5aab506f02.html (“General Motors is failing again. This is no one’s fault except those running the company. They make too many poor quality vehicles no one wants. . . . No one wants electric cars except Obama and his troglodytes. I’d never buy anything made by GM“) and https://naegeleblog.wordpress.com/2009/12/17/is-redemption-possible-for-tiger-woods/#comment-14749 (“Nothing Ever Changes With Tiger Woods, Or Colin Kaepernick“) and https://naegeleblog.wordpress.com/2009/12/05/is-barack-obama-a-racist/#comment-14614 (“The NFL Must Be Boycotted Forever“)

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