[Marxism] Call to Nationalize General Motors

Walter Lippmann walterlx at earthlink.net
Wed Dec 3 08:08:30 MST 2008

Yesterday's LA Times includes this op-ed advocating nationalization of
General Motors. This morning I heard an NPR report about hwo the UAW
is meeting in Detroit to figure out what else they can give back to
"their" employers to help "their" industry. Below this, Micheal Moore's
proposals for the auto industry, which seem pretty sensible from what
I can see. Yesterday I spent over $300.00 on what was described to me
as a routine periodic maintenance of my 1998 Honda Accord, including
new front brake, which added some $200.00 to the bill. None of this
chatter about GM in the dominant media talks about the irrationality
of the entire system of people getting around in their individually-
owned and individually-operated metal boxes. What's really needed is
a first-class public transportation system in the United States of
Model Perfection.

Neither of the critics talk about immediate expropriation without
compensation and nationalization under workers control, but who's
perfect? The idea that we can now publicly discuss nationalizing
private industry is already a positive politico-cultural step for
a country where the Almighty Dollar is worshipped by most people.

Walter Lippmann
Los Angeles, California

>From the Los Angeles Times
Nationalize GM
The federal government should buy GM. 
We can run it, then sell it at a profit once it recovers.
By Dan Neil

December 2, 2008

At the moment, D.C. and Detroit are brooding on a Morton's Fork:
Watch the American automakers auger in and take hundreds of thousands
of jobs with them, or bail out these failed and incorrigible
companies whose management so richly deserves whatever hell (flying
coach?) awaits them.

Tops on the critics' list of grievances is Detroit's failure to
anticipate the inevitable. Why didn't these companies sufficiently
invest in next-generation technology -- fuel-efficient small cars,
high-mileage hybrids, plug-ins and all-electric vehicles -- that
could help wean the U.S. off foreign oil and take the automobile out
of the climate-change equation? As the auto executives again bring
their begging bowl to Congress, a consensus is forming: No bailout
unless Detroit builds greener cars.

>From my perch, as someone who drives all of the Big Three's North
American product offerings, I think a lot of the anger is reflexive
and misplaced. Detroit makes some amazing cars, and anyone who thinks
otherwise should hold a Corvette ZR1 to his head and pull the
trigger. The Ford F-150 pickup I drove last week flat-out humbles
rivals from Toyota or Nissan. Considering that the domestic carmakers
are shouldering titanic "legacy" costs -- it's estimated that $2,000
in healthcare, pension and employee post-retirement benefits are
baked into the price of every UAW-built vehicle -- just being
competitive in any segment is a signal achievement.

Nonetheless, the question remains: What to do about the domestic
automakers? My modest proposal: Nationalize GM.

To be clear, I mean that the federal government should buy GM; forget
rathole loans or nonvoting equity shares. The company's stockholder
value has been essentially wiped out. The company's enterprise value
-- the lock, stock and forklift price -- is about $32 billion; its
total debt is $45 billion. Let's make GM an offer.

If you feel the gall of free-market ideology rising, consider that
the measures being bruited about as preconditions for a bailout --
firing GM's top management; forcing a bankruptcy-like renegotiation
of contracts with the UAW, suppliers and dealers (it has too many);
and creating a czar of product development to force the building of
green cars -- are nationalization in all but name. I say embrace it.

Here are the benefits of nationalization:

GM's fundamental problem is that it's too big -- and expecting it to
fix itself in exchange for a $10-billion to $15-billion loan (its
share of the vaunted $25-billion bailout) or magically right-size in
Chapter 11 is foolhardy. It would take too long, cost too much and
bankruptcy, should it come, would send customers running for the
hills. Time is of the essence. Congress, writing a GM law and using
federal power to abrogate contracts, could achieve at least some of
these goals at a stroke.

GM is full of talent and potential. The company spent $8.1 billion on
research and development last year, second only to Toyota. Of all the
carmakers, GM is closest to commercializing a full-size, four-door,
plug-in electric vehicle, the Volt, due in the fourth quarter of
2010. The Volt should travel about 40 miles in all-electric mode
before requiring the services of its onboard, gas-powered generator.
Many owners could go weeks before they used any gasoline. This is
precisely the sort of car that environmental and energy security
advocates have been clamoring for.

GM's business is growing in other parts of the world; it's only the
North American operations that are killing the company. This is a
corporation that had $181 billion in revenue and sold 9.4 million
vehicles in 2007. To put it another way: GM, though distressed, looks
like a good investment. Also, the federal government can sell the
company -- at a profit -- once it's righted and sailing forward

GM is competing with companies that are quasi-national now. If you
consider the advantages the government of Japan has bestowed on
Toyota, Nissan and Honda -- in terms of healthcare and retirement
benefits for its employees -- the unevenness of the field is clear.
The same goes for most European companies, and the rising rivals in
China will enjoy similar state-subsidized advantages.

The government can afford long-term planning. Many of GM's strategic
missteps -- such as betting large on trucks and SUVs and not
investing early in hybrid technology -- were the result of willful
shortsightedness at the board level, responding to a financial market
in which shareholders look for the quick return. Putting Uncle Sam in
charge would fundamentally enlarge the return-on-investment horizon.

We need government-sized automotive help anyway. This country should
be putting millions of plug-in hybrid and electric vehicles on the
road. As far as I can tell, without big subsidies, there is no way in
the near term to build these vehicles and make a reasonable profit,
due to the stubbornly high cost of advanced batteries. Besides, if GM
were owned by the government, it wouldn't spend time and money
litigating and lobbying against clean-air and safety rules

Why not pick up Ford and Chrysler too? If Chrysler goes south, it's
too small to drag down the rest of the domestic auto industry. Ford,
which has been pursuing its "Way Forward" cost-cutting plan for more
than two years, will probably survive the moment without government
assistance, though it's going to be close.

To be sure, the yard marks of democratic capitalism have moved under
us in recent months. Last week, the feds announced that the
government would take a $20-billion stake in Citigroup and guarantee
hundreds of billions in risky assets, a move that would have seemed
pure socialism had we not lived through the last few months. Have we
not in effect nationalized the mortgage-loan industry?

I say, let's avoid the euphemisms and have the courage of our
supercharged Keynesian convictions. By nationalizing GM, we can aim
the company's astonishing resources at one of the biggest
public-policy problems we have: oil. Restructured and refocused, GM
could build green vehicles by the millions in a few years and still
have the capacity to build gasoline- and diesel-powered pickups
(which we'll still need) ... and maybe even some Corvettes on the

Dan Neil is The Times' automotive critic. dan.neil at latimes.com

Saving the Big 3 for You and Me ...a message from Michael Moore
Wednesday, December 3rd, 2008 


So what to do? Members of Congress, here's what I propose:

1. Transporting Americans is and should be one of the most important
functions our government must address. And because we are facing a
massive economic, energy and environmental crisis, the new president
and Congress must do what Franklin Roosevelt did when he was faced
with a crisis (and ordered the auto industry to stop building cars
and instead build tanks and planes): The Big 3 are, from this point
forward, to build only cars that are not primarily dependent on oil
and, more importantly to build trains, buses, subways and light rail
(a corresponding public works project across the country will build
the rail lines and tracks). This will not only save jobs, but create
millions of new ones.

2. You could buy ALL the common shares of stock in General Motors for
less than $3 billion. Why should we give GM $18 billion or $25
billion or anything? Take the money and buy the company! (You're
going to demand collateral anyway if you give them the "loan," and
because we know they will default on that loan, you're going to own
the company in the end as it is. So why wait? Just buy them out now.)

3. None of us want government officials running a car company, but
there are some very smart transportation geniuses who could be hired
to do this. We need a Marshall Plan to switch us off oil-dependent
vehicles and get us into the 21st century.

This proposal is not radical or rocket science. It just takes one of
the smartest people ever to run for the presidency to pull it off.
What I'm proposing has worked before. The national rail system was in
shambles in the '70s. The government took it over. A decade later it
was turning a profit, so the government returned it to private/public
hands, and got a couple billion dollars put back in the treasury.

This proposal will save our industrial infrastructure --and millions
of jobs. More importantly, it will create millions more. It literally
could pull us out of this recession.

In contrast, yesterday General Motors presented its restructuring
proposal to Congress. They promised, if Congress gave them $18
billion now, they would, in turn, eliminate around 20,000 jobs. You
read that right. We give them billions so they can throw more
Americans out of work. That's been their Big Idea for the last 30
years -- layoff thousands in order to protect profits. But no one
ever stopped to ask this question: If you throw everyone out of work,
who's going to have the money to go out and buy a car?

These idiots don't deserve a dime. Fire all of them, and take over
the industry for the good of the workers, the country and the planet.

What's good for General Motors IS good for the country. Once the
country is calling the shots.

Michael Moore
MMFlint at aol.com


     Los Angeles, California
     Editor-in-Chief, CubaNews
     "Cuba - Un Paraíso bajo el bloqueo"

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