Monday, June 1, 2009

GM: From Bail-Out To Bankruptcy In 2009

(In December 2008, a short time before the "U.S. Corporate Welfare State" used billions of dollars in public funds to help bail-out the General Motors [GM] corporate executives and their insitutional stockholders by investing in GM's worthless stock under the pretext of "preventing GM from going bankrupt and laying off UAW workers", I posted the following reference to GM's previous corporate welfare grants):

If GM, Ford and Chrysler end up getting a big corporate welfare grant from the “U.S. Corporate Welfare State” before they begin their new wave of 2009 layoffs of UAW members, it won’t be the first corporate welfare grant that the Big Three ever received. As Mark Zepezauer and Arthur Naiman noted in the 1996 edition of their book Take The Rich Off Welfare, in the 1990s the U.S. government gave “GM, Ford and Chrysler—whose combined 1994 profits were almost $14 billion--$333 million a year to develop more fuel-efficient cars;” yet “at the same time, the Big Three” propagandized “in favor of watered-down fuel-efficiency standards.” During the 1990s, Ford, GM and Chrysler also “each used accelerated depreciation to defer a billion dollars in tax payments,” according to the Take The Rich Off Welfare book.

The same book also recalled:

“The extent to which automobiles dominate our lives didn’t just happen by accident—at least part of it was the result of a criminal conspiracy. Back in the early 1930s, most people living in cities got around on electric streetcars. Concerned that this wasn’t the kind of environment in which they could sell a lot of buses, General Motors, using a series of front companies, began buying up streetcar systems, tearing out the tracks, buying buses from itself and then selling the new, polluting bus systems back to the cities—usually with contracts that prohibited purchases of `any new equipment using fuel or means of propulsion other than gas.’ Sometimes the contracts required that the new owners buy all their replacement buses from GM.

“…In 1949—after these companies had destroyed more than 100 streetcar systems in more than 45 cities, including New York, Los Angeles, Philadelphia, San Francisco, Oakland, Baltimore, St. Louis and Salt Lake City—GM, Chevron and Firestone were convicted of a criminal conspiracy to restrain trade…”

With regard to the most recent corporate welfare grant to the Big Three proposal, UAW Local 2334 President David Sole in Detroit recently wrote the following:

“Handing more money to the same auto bosses who got us into this mess won’t solve the problems the auto industry faces.

“…They will continue to try to eliminate jobs and cut wages and benefits. Their only concern is maximizing profits, which is what led them to concentrate on making SUVs and trucks domestically, while shipping production of fuel-efficient cars overseas…

“Since the auto bosses have brought the companies to the brink of ruin, the workers, their unions and the communities in which these factories are situated must assert their right to run the plants and replace the bloated, short-sighted executives and the big shareholders who kept them at the helm.

“Worker-community control of the Big Three is the only solution. Under worker-community control the demand for government funds to rebuild and retool the plants to make energy-efficient cars and mass transit equipment could rally wide support.”

(I also indicated in a December 2008 post why the Big Media Monopoly may have been pushing for having the "U.S. Corporate Welfare State" invest so much public tax money in an automobile corporation whose executives were driving the firm into bankruptcy, despite these GM executives' past record of business mismanagement and wasteful expenditures on executive salaries and advertising).

One reason the Big Media conglomerates in the United States might have wanted to see the Big Three transnational automobile companies get a big corporate welfare grant from the U.S. government is that GM, Daimler-Chrysler and Ford have, historically, been among the top buyers of advertising in the U.S. corporate media world. In 1999, for example, GM spent over $2.9 billion on advertising and was the Number 1 advertiser in the United States. That same year, the Number 3 advertiser in the U.S. was Daimler-Chrysler, which spent over $1.5 billion on advertising. And in 1999, Ford spent over $1.1 billion on advertising and was the Number 5 advertiser in the United States.

In 2007, GM spent over $3 billion on advertising and was the Number 4 advertiser in the U.S., while Ford spent over $2.5 billion on advertising and was the Number 6 advertiser in the United States. In addition, over $1.7 billion was spent on advertising by Chrysler, which was the Number 14 advertiser in the United States, according to Advertising Age magazine’s chart for 2007.