Government Motors Rides Again - If You Can Get It Started

GBFan

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When General Motors went bankrupt in 2009 and had to accept a federal bailout, its critics—and rivals—referred to the company derisively as "Government Motors.” The implication? Far from being a dynamic private sector entity, producing vehicles and innovating, it was a bureaucratic arm of the Obama administration. Managers, workers, and other stakeholders would go about their day with the government perpetually looking over their shoulders and telling them how to run the business.

Of course, aside from clamping down on businesses and instilling a fear of using corporate jets, the Obama administration didn’t micromanage G.M. General Motors went public in the fall of 2010. Soon thereafter, the government started selling its shares in the company. Treasury sold the last of its shares in December 2013, closing out the investment with a $10 billion loss.

Six years ago, the failure of G.M.’s financial engineering brought greater government oversight. Now a failure of electrical and business engineering is turning G.M. into Government Motors again.

The long-running saga surrounding problematic ignition switches for the Chevrolet Cobalt has been an embarrassment for G.M. A problem that could have been averted at a relatively small cost wound up causing accidents that killed 13 people. And the botched response has brought down the government’s wrath on the company. In doing so, it has thrust the strong arm of the government directly into the company’s operations.

First, the National Highway Transpiration Safety Administration (NHTSA) came down as hard as it could Friday on General Motors. “What NHTASA is doing is the most it can do under the existing law,” said Clarence Ditlow, director of the Center for Auto Safety in Washington, D.C. NHTSA levied a $35 million fine against G.M. It may seem like a slap on the wrist, but that is the hardest hit allowed.

Typically, a fine and a promise to behave better gets companies off the hook. But NHTSA has promised “unprecedented oversight requirements” that will have the agency up in the company’s grill. NHTSA is demanding that GM changes the way it does business when it comes to putting cars together and dealing with problems and defects. In addition to the fine, NHTSA “ordered GM to make significant and wide-ranging internal changes to its review of safety-related issues in the United States, and to improve its ability to take into account the possible consequences of potential safety-related defects.” As part of the consent order signed Friday, NHTSA will micromanage G.M.’s internal investigation and recall efforts, specifically prescribing initiatives such as “including targeted outreach to non-English speakers, maintaining up-to-date information on its website, and engaging with vehicle owners through the media.” What’s more, G.M. must “submit reports and meet with NHTSA so that the agency may monitor the progress of G.M.'s recall and other actions required by the consent order.”

The Justice Department has far more tools at its disposal to punish corporations for such episodes than NHTSA
Stockholders took the news in stride. The company’s stock barely budged on Friday, treating the consent order as a non-event.

But there’s more to come—and G.M. still has plenty to fear from the federal government. The Justice Department has far more tools at its disposal to punish corporations for such episodes than NHTSA—large fines, jail sentences, and big plea deals. And in March started looking into General Motors.

While Justice has been slow to pursue criminal cases against blue-chip financial corporations, it has shown less restraint when going after automakers. In March, the Justice Department formally charged Toyota in a criminal case that carried a $1.2 billion penalty over issues relating to misleading consumers about issues with gas pedals sticking, which was responsible for up to 21 deaths. It was, the Justice Department noted, “the largest penalty of its kind ever imposed on an automotive company.”

What’s more, the G.M. investigation is being led by the office of the U.S. Attorney for the Southern District of New York. Led by Wall Street scourge and prosecutor Preet Bharara, the Southern District has an epic undefeated streak prosecuting insider-trading cases and relishes going after high-profile defendants. (On Friday, hedge fund trader Michael Steinberg was sentenced to 3.5 years in jail for his insider-trading conviction.)

So as G.M. labors to comply with the consent order imposed by NHTSA, it will have to cope with the prospect of an expensive prosecution. “I cannot believe Justice will not impose a fine larger than what it did against Toyota,” said Ditlow. The real question remains to what degree Justice will pursue criminal charges against the company, or against specific individuals.
 
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Its like you have no understanding that the government actually did not sit around running GM...I guess its to hard to look at the fact that this is what companies do...the fuck over people to make more money...and they lie to hide problems with products that would cost a lot to fix. By the way Unicorns are not real
 
Its like you have no understanding that the government actually did not sit around running GM...I guess its to hard to look at the fact that this is what companies do...the fuck over people to make more money...and they lie to hide problems with products that would cost a lot to fix. By the way Unicorns are not real
Well if you're owner the responsibility is yours. If you opt not to assume your responsibility thats yor choice but the responsibility remains. They tinkered with the business as they felt like to suit political purposes. This is actually a great example of why govt has no business thaking over businesses, they are not competant to do so. If only they had allowed the reorg process to do its job...
 
Its like you have no understanding that the government actually did not sit around running GM...I guess its to hard to look at the fact that this is what companies do...the fuck over people to make more money...and they lie to hide problems with products that would cost a lot to fix. By the way Unicorns are not real

THIS is the type of ignorance that hobbles society today .. blinding in its scope and delusional in its interpretation of reality.
 
Well if you're owner the responsibility is yours. If you opt not to assume your responsibility thats yor choice but the responsibility remains. They tinkered with the business as they felt like to suit political purposes. This is actually a great example of why govt has no business thaking over businesses, they are not competant to do so. If only they had allowed the reorg process to do its job...

Actuly when your about to make a huge fucking loan to someone, you actuly do get to say only if you do x y and z...you think Normal banks just give you a loan and require nothing from you? If your going to make a loan you make sure that that company is doing the things you think will best make sure they can pay you back. Thats just simple economics...( thus hard for republicans)
 
Actuly when your about to make a huge fucking loan to someone, you actuly do get to say only if you do x y and z...you think Normal banks just give you a loan and require nothing from you? If your going to make a loan you make sure that that company is doing the things you think will best make sure they can pay you back. Thats just simple economics...( thus hard for republicans)
There was no loan they bought in. Lee Iacocca got Chrysler a loan way back when. If Bo just fave them a lian they could have gone through chspter 11. How quickly they forget...
 
There was no loan they bought in. Lee Iacocca got Chrysler a loan way back when. If Bo just fave them a lian they could have gone through chspter 11. How quickly they forget...
You mean Bush right...Or do you pretend Bush had nothing to do with the auto bail outs?
ALso no, no they could not have. You see in order to have that, you need banks to help...banks that where all under.
http://money.cnn.com/2012/09/06/autos/auto-bailout/index.html

But I know, the bail outs just saved GM and Chrysler, have been mostly paid back, and helped keep thousands of jobs...and where supported by Ford as without Ford was going to maybe go under as well ( Toyota possibly as well)
But just keep pretending it was horrible...the way it saved the company.

by the way, GM did go Chapt 11
http://en.wikipedia.org/wiki/General_Motors_Chapter_11_reorganization
 
Well, there goes the neighborhood .... guess you scared away facts and logical thought.
 
You mean Bush right...Or do you pretend Bush had nothing to do with the auto bail outs?
ALso no, no they could not have. You see in order to have that, you need banks to help...banks that where all under.
http://money.cnn.com/2012/09/06/autos/auto-bailout/index.html

But I know, the bail outs just saved GM and Chrysler, have been mostly paid back, and helped keep thousands of jobs...and where supported by Ford as without Ford was going to maybe go under as well ( Toyota possibly as well)
But just keep pretending it was horrible...the way it saved the company.

by the way, GM did go Chapt 11
http://en.wikipedia.org/wiki/General_Motors_Chapter_11_reorganization
Funny how BO takes the credit.
Govt could have provided the bridge loan or been a guarantor. But that would have been bad for the union and fair for all.
 
Funny how BO takes the credit.
Govt could have provided the bridge loan or been a guarantor. But that would have been bad for the union and fair for all.

THey both played a part, and I give both credit for saving the nations Economy...though Bush could have also done more to prevent the fall ( though not on the auto part) And bitch all you want, fact is they did it...and just keep pretending you know some other way...because Im sure your realy well versed in the area of saving Billion dollar companies.
 
THey both played a part, and I give both credit for saving the nations Economy...though Bush could have also done more to prevent the fall ( though not on the auto part) And bitch all you want, fact is they did it...and just keep pretending you know some other way...because Im sure your realy well versed in the area of saving Billion dollar companies.
Size is unimportant and reorganization is tried and true.
 
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THey both played a part, and I give both credit for saving the nations Economy...though Bush could have also done more to prevent the fall ( though not on the auto part) And bitch all you want, fact is they did it...and just keep pretending you know some other way...because Im sure your realy well versed in the area of saving Billion dollar companies.

Saved what? The economy? The one that resulted in a constant 6.5% unemployment only by lying to the American people and manipulating the reporting process? That economy? Or, the economy that has resulted in the lowest labor participation rate in the past 80 years? Really a good economy, huh? Could it be the one that has resulted in over 40% of citizens relying on handouts from the government to survive? Damn, that just gives you a tingle, doesn't it?

Or, is it the one that ran the national debt up to $17 trillion? Or, maybe it's the one that has resulted in the number of long-term unemployed at just about a million people? That one the economy you're so proud of? Or, the additional 2.2 million who looked for a job in the past 12 months and have just given up? Would that be the one? Maybe, you're getting all excited about the economy that has resulted in an average per-home income loss of $6,000 per year? Funny thing to get excited about, wouldn't you say?

They saved nothing ... absolutely nothing.
 
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