The auto bailout is cheap. What about the jobs program that Obama is running for financial tycoons?

The most likely outcome is Obama killing the UAW, destroying their pensions, putting thousands of people out of work, and leaving them without healthcare!

But damn! We just couldn't touch those AIG bonuses!

GM, as GM, will be the greek guy pushing the rock up the hill every day and having it roll back down.

The key is whether they can find exec. leadership that truly innovate and literally reinvent the company and the industry. That doesn't sound like a fit for the shell of GM, but who knows?

Long run, whether they can come up with cars that excite the public and that are reliable and forwardlooking on energy is the test.

The first thing a new CEO should do is move headquarters out of Detroit and the second thing is to use west coast designers (like the asian carmakers do) that don't look like frumpets.

My guess is that the legacy hangs too heavy on the firm, but not just too many dealers, the unions, and debt overhangs. Its the culture. It is IBM versus Apple, without IBM's executive depth of customer-oriented senior managers.

But, in an earlier era, Ford did the original Mustang and won new life. Does that lightning strike twice?

"the world’s most expensive jobs program"

That already exists, in many places, from agriculture to finance.

David Brooks is pop sociologist with a unreconstructed neoliberals worldview. There are many people to read out there: he is not one.

But the recession won't last forever. And then Brooks's question regains its force: If G.M. can never sustain itself, will we ever be able to let it unwind?

When the recession ends, why won't people buy GM cars and why won't GM be able to sustain itself?

I think this guy has a preety good take:

http://www.haloscan.com/comments/angrybear/3468600536261481333/

Movie Guy says: Today, 11:04:43 AM

"I agree with William Holstein. The Obama Administration is forcing GM to take the bankruptcy route and do so without Wagoner's restructuring knowledge and previously existing relationships. That clock is now running much faster than it was last week.

Obama and his administration have demonstrated no superior knowledge of the automobile industry. In fact, they have told more than their share of outright lies and half truths about the U.S. domestic automobile manufacturers. What is clear is that they don't know much about the industry. Typical dummies.

The issue that may bite the administration will be whether the suppliers survive and that has implications across the board for the other automobile OEMs. And the dealers who will lose their franchises, left with buildings and equipment costs to shoulder without their previous product line.

If one reviews in detail what has been undertaken by GM during the past 24 months, it's obvious that GM was headed in the right direction.

While GM may have filed bankruptcy without the stupidity of Obama's decision, it would have done so with a stronger team in place. As it stands now, GM is down for the count.

Some of the typical GM and anti-American automobile OEM haters are going to witness a train wreck that even they can't justify in terms of negative economic impacts across the nation. Of course, this will all be done in typical communist fashion whereby a handful of know-it-all blowhards decide which products that the masses should buy.

I expect that this move will go in the negative column of Obama decisions. Just ask the union employees throughout the automobile industry.

As a reluctant investor in GM (through the Fed Gov.), I sure hope that they kill the Volt. It would be a huge money looser.

Now with the feds owning GM will they exempt GM from CAFE? Gov. often exempts itself from the laws that it makes. Now that could lead to recovery. They should be specializing in what they do best that is making big vehicles.

If G.M. can never sustain itself

Is there any particular reason to think that this is the case? Every car company in the world (except Porsche, I suppose) is losing money right now. GM was (very) profitable just a couple years ago.

Those profits were based on different conditions (cheap gas, SUV-desirability), but there's no structural reason that they can't be profitable on a different basis in another 2 years. They resolved the bulk of their outstanding costs before the recession hit (this, incidentally, is the main reason they don't have the cash to make it through this downturn). For the first time in almost 40 years, they are probably making the best family car sold in this country, and people are buying it. There will always be a market for light trucks, which no Japanese company has ever shown an ability to build profitably. The Volt is a gamble, but one that could change the game more than the Prius has (9 years on, Toyota still doesn't make a hybrid that builds on the Prius' success; GM is explicitly aiming to spread Volt's tech throughout its lines within months of Volt's introduction).

IOW, while I won't deny that it's entirely possible that GM could fail to return to profitability, it's not a sound assumption for the long term - if GM can reach the long term.

Oh, that was me at 4:16.

I'd like to note that the image Ezra has used is pretty apt for most liberal blog commentary on the auto bailouts: DeSoto and GM are/were carmakers, Edsel was a make of car, produced by Ford, which, in case you haven't noticed, has refused bailout money. Out of the dozen or more dead American automakers of note, the illustrator couldn't come up with 2. Showing a depth of knowledge that Yglesias, Avent, and (to a lesser extent) Klein have been modeling admirably.

Toyota still doesn't make a hybrid that builds on the Prius' success; GM is explicitly aiming to spread Volt's tech throughout its lines within months of Volt's introduction).

Batteries are way to expensive for the Volt to make money. Barring a huge break through (Firefly Energy?) in battery costs GM will loose big money on each Volt it sells.

If the global recession continues for another two or three years, the Volt will be unsellable, because nobody will have any income and the price of crude oil will be not too far from where it is now.

If the global recession lifts sometime in the next year, the Volt will be sellable, because the price of crude oil will rise.

If the global recession lifts and the US participates in that lift, the Volt will be selling as fast as they can make them, because there will be income to buy it and with the biggest crude oil glutton on the planet roaring back into gluttony, the price of oil will spike.

My Suburban is making a funny noise. I think I'll call the warranty people.

202-456-1414

JRoth:

No, DeSoto was (just like Edsel) a brand owned by a larger automaker -- Chrysler. Chrysler wound down DeSoto in the late 50s, early 60s. Just as Chrysler wound down Plymouth not so long ago.

So the illustrator wasn't wrong. He's have been more right, of course, to compare apples to apples (like having tombstones for Packard and Studebaker, say).

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