Posted by
voice_of_reason on Saturday, June 13, 2009 8:46:29 AM
GM is bankrupt because it hasn't made a profit since about 2005. Although profit is a dirty word in the lexicon of people who share Michael Moore's mindset, it is what keeps companies alive. Absent the profit motive, America will be just another squalid worker's paradise where everyone pretends to work, and our Govt pretends to give a ____.
The causes of GM's lack of profitability are likely to be studied for many yrs, but if I had to pick just one, it would be:
* the Two Fleet Rule: see http://online.wsj.com/article/SB122584326266699163.html for more on this. [I picked this one because it is both real and symbolic of numerous other instances of politically inspired meddling]
GM's revenues have been shrinking for some time. As revenues shrank, GM's expenses could not be scaled down - mostly due to fixed costs associated with union contracts, healthcare and pension liabilities which were negotiated during better times, sometimes under threat of strikes etc.
Unfortunately, this is what happens when companies are treated [by the Govt, labor and by Michael Moron] as a perpetual source of jobs and political influence while destroying the main component that makes jobs possible - profit.
Michael Moore, surrounded by 'hard-hit friends and family in Flint, Michigan', bemoans the loss of blue collar jobs. He strikes an appropriately proletarian chord - tres chic, Michael, now you can go back to Hollywood for a mockumentary sequel]. He suggests that the new GM [Government Motors] employ all those workers in building more unprofitable things! Borrow billions of Chinese yuan so that we can travel from NY to LA in 17 hours? What's wrong with taking a 5hr non-stop from JFK to LAX for ~$280 [round trip]?
Michael's friends - who support Big Govt and Big Labor - have finally got what they want. He mentions a sort of perverse 'joy' - striking a mournfully optimistic pose, which might screentest well as the happy ending for his next movie. In his case, it is a fat, sweaty mix of Schadenfreude and political vindication. Rejoice, says Michael, the workers finally control the means of production, and a watermelon-green utopia is just around the corner.