So GM closed 5 assembly plants and stop producing several models that don't compete as well in the market place against foreign made models
GM closed 5 plants and claim they will use the capital to produce cars of the future market
GM continues to produce and sell high end SUVs and trucks that have a higher margin of profit, as emission and mileage controls have been relaxed
Do you think GM has an obligation to the workers and community by keeping the plants open and providing jobs plus keeping a community alive and well
Do you think GM 1st obligation is to the shareholders by keeping production open in Mexico where wages are lower, thus keeping share holders happy
GM has multiple obligations, legal and moral, to owners, pensioners, various localities they've made promises to, employees, and more. They all depend on the corporation not going bankrupt. or having their charter pulled. Plenty of companies - like Schwinn - have followed short term logic and outsourced production only to have the producers turn around and drive them out of business.
It's 10 years since they were in such a hole they needed to be bailed out. It could happen again, but if they've betrayed enough people, the bailout won't be there.
GM is obligated to stay in business. Bailouts should never happen and this is a great example as to why.
I find the cycle to be somewhat amusing. of course about 15-20 years ago, car companies made that shift to making more big vehicles (trucks and suvs), because they are more profitable than making the sedans.
but then suddenly, gas went to 4 bucks a gallon and the price of big vehicles plummeted. I remember here locally, when people had big gas guzzlers (like a big chevy suburban with a big V8), and they couldn't give them away. and suddenly everyone wanted a geo metro.
now everyone is buying a big suv again, and GM is closing the plants that make smaller sedans. that tells me that probably soon the price of gas will surge, and everyone will want a small car again.
I am a bit confused
Corporations have an obligation to stay in business. Bailouts should never happen. This is an example why
Maybe everybody else understands your thought but I don't
GM is obligated to stay in business. That is a very fine objective. But what happens if they do not have the cash flow to pay the suppliers
You say no bailout and many would agree with you.
However, GM does not have a magic wand that produces cash
I have to think you collect a pay check every week or monthly [what ever] with no thought as to where the money comes from
Have you ever had to meet a pay roll, pay bills outside the normal household budget etc that requires cash flow from the business revenue
I just have to shake my head
You say otherwise but you really sound like a liberal or socialist. Free money for everything and if it isn't free then there should be money to pay the bills. GM has an obligation to find the money
The capitalist world is based on winners and losers. No magic money wand allowed.
Your posts are usually well thought out, but this one is different. Please correct me
I felt my statement was intuitive, but I guess I need to elaborate.
GM is obligated to stay in business. They are responsible for their decisions and must make the right ones to remain in business. If they fail, they alone must face the consequences and either adjust or allow someone else to come along and fill the business need. It's how capitalism effectively allocates resources. When the government gets involved with bailouts, they alter that process and ultimately end up wasting money that would have been better used elsewhere. This has nothing to do with liberalism or socialism. It is pure capitalism.
Over the last 40 years or so, I have been quite heavily involved in assorted businesses and am quite familiar with how they work. Not many ways I am aware of where you get a better idea of how a business works than by designing their software other than creating and running the business yourself, which I have also done.