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Originally Posted by Russo
excuse me, how many other big companies failed over the last six years? GM got bailed out simply because of the union voting block..
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Six years? If you consider the companies that failed immediately before GM you should understand why GM was saved. Look what the collapse of Salomon and Lehman did to the financial services industry. Look how that shock impacted the global economy. GM filed for bankruptcy June 1, 2009, a time when the financial services industry was in shambles as a result of the aforementioned collapses and nobody could afford to, or were willing to, privately fund their bankruptcy. I know, I was a senior consultant in the organizational planning division of consulting services at Goldman from 2004-2010. You don't seem to understand what would have happened to GM if they had not found funding. The liquidation of GM would have brought down numerous suppliers leaving competitors on the hook to find new ones. In the automotive industry it generally takes at least six months to change suppliers. The entire industry
needed GM to maintain continuing operations, so a large cash injection was necessary. The market environment at the time is the most critical factor.
You do understand that one of the fundamental responsibilities of the Federal Reserve is to act as a lender of last resort under conditions in which demand for liquidity cannot be met by private industry, right? The Fed intervened to prevent a liquidity crunch that could have led to total collapse and saving the auto industry was critical.
Quote:
Originally Posted by Russo
Three things contributed to the fall:
Unions
Government
Mismanagement
by the government instituting "non-right to work" laws, they crippled the ability for GM to hire cheaper labor that would keep them competitive against other manufacturers.. the unions ate GM from the inside out by their strong arm tactics (as they do with any host they leech off of).. finally, the mismanagement of GM through union contract negotiating as well as the failure to manufacture a product that people wanted to buy.. it's quiet easy to see why they failed and I'm shocked that most people who work in the private industry doesn't see this..
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Though I feel you put too much emphasis on unions and too little on brand architecture, I don't disagree with much of what you say here. What's your point? You were wrong about management remaining entirely the same, it didn't. Industry-related legislation has changed and continues to in an effort to bolster the industry against recession. What does any of your post suggest in regard to the need or lack of need for the bail out?