And Now Some Good News

This seems worth noting:

General Motors, which nearly collapsed from the weight of its debts two years ago before reorganizing in a government-sponsored bankruptcy, said Thursday that it earned $4.7 billion in 2010, the most in more than a decade.

It was the first profitable year since 2004 for G.M., which became publicly traded in November, ending a streak of losses totaling about $90 billion.

In addition, G.M. said 45,000 union workers would receive profit-sharing checks averaging $4,300, the most in the company’s history.

“Last year was one of foundation building,” G.M.’s chief executive, Daniel F. Akerson, said in a statement. “Particularly pleasing was that we demonstrated G.M.’s ability to achieve sustainable profitability near the bottom of the U.S. industry cycle, with four consecutive profitable quarters.”

Mind you, if the “fiscal conservatives” had their way, GM would be belly up, and millions more people would be out of work.






72 replies
  1. 1

    stomp, stomp, stomp on those posts!

  2. 2
    Eric S. says:

    Happy news!

    I just finished reading Overhaul. I highly recommend it if the industry interests you at all. The disfunction they found in the GM management is almost unfathomable.

  3. 3
    Punchy says:

    In addition, G.M. said 45,000 union workers would receive profit-sharing checks averaging $4,300,

    OVERPAYD!

  4. 4
    Punchy says:

    In addition, G.M. said 45,000 union workers would receive profit-sharing checks averaging $4,300,

    OVERPAYD!

  5. 5
    4tehlulz says:

    The fact that “workers” are getting part of the profits that should have gone to the true laborers, shareholders, shows that Obama truly is socializing our economy.

    Someone should something. Or something.

  6. 6
    Carnacki says:

    Unemployment for the middleclass and poor seems to be a feature and not a bug for the rich and powerful so that we are even more powerless against them.

  7. 7
    Culture of Truth says:

    Yes, but in the long run it would have better to let GM die to serve as a lesson to our workers, who will now lazily create profitable businesses but for the wrong reasons.

  8. 8
    terraformer says:

    It has always and ever been about cheap labor.

    And GM equals unions. And collective bargaining just isn’t fair because it means that the oligarchs can’t pay people a pittance and get away with it.

    We’ve been here before.

  9. 9
    peach flavored shampoo says:

    Wait a minute. They earned ~5 billion, but are still ~$85 billion in the hole, and they felt it necessary to give out bonuses?

    So they’ll be in the black in about….17 more years?

  10. 10
    Poopyman says:

    No fair! Why should GM be doing better than Wall Street?

    NEW YORK (CNNMoney) — Wall Street workers may be feeling a little leaner since cash bonuses fell nearly 8% last year, according to New York State Comptroller Thomas DiNapoli.
    __
    But bonuses still averaged more than $120,000. And that doesn’t take into account salaries or commissions, which can significantly bump up workers’ total compensation packages.

  11. 11
    Dan says:

    It will surprise nobody that the GM news is buried deep in the recesses of the foxnews website. Reading that website is really like peeking into a very disturbing alternate reality.

  12. 12
    GeneJockey says:

    Ah, but you see it wouldn’t be PEOPLE out of work. It would have been UNION THUGS out of work. That’s different!

    Seriously, though – at the time of the original bailout the Conservatives wanted GM to fail as a way of punishing Unions, presumably for having the temerity to fight for better conditions for their members.

  13. 13
    MattF says:

    But, y’see, losing the GM jobs wouldn’t have counted because they weren’t real jobs. Or something.

  14. 14
    Judas Escargot says:

    Awesome (and related) article by Matt Stoller on nakedcapitalism:

    But these economic theories aren’t about efficiency, they are about a value system. [FL Gov. Rick] Scott is arguing for a low trust low cost world, with no education, no regulatory standards, and low quality output. This is the dominant strain of thinking among American elites.

    Brazilification will continue, until morale improves…

  15. 15
    elmo says:

    Unpossible. Everybody knows car companies that deal wtih the UAW can’t be profitable. And besides, union members are getting bonuses. And you say that like it’s a good thing.

    Every patriotic American knows that the best way to grow the economy and create jobs is to destroy one of America’s largest remaining manufacturers and throw every member of the UAW out of work.

    Then fire all the teachers, too. We can cut and fire our way back to posterity and bring back the middle class in this country!

  16. 16
    Lee says:

    @peach flavored shampoo:

    The $85b was a bailout for GM, Chrysler and GMAC not just GM. I would guess that the GM portion of the $85b is unrecoverable since old GM declared bankruptcy.

  17. 17
    daveNYC says:

    Wait a minute. They earned ~5 billion, but are still ~$85 billion in the hole, and they felt it necessary to give out bonuses?

    That’s not how the math works.

  18. 18
    Culture of Truth says:

    “Ok, looks like Obama got lucky”

    [ clenches fist ]

    this time…”

  19. 19
    Bulworth says:

    Mind you, if the “fiscal conservatives” had their way, GM would be belly up, and millions more people would be out of work.

    But we would have been one step closer to not failing free market conservative capitalism.

  20. 20
    schrodinger's cat says:

    There is a method to the GOP madness, fight against deficit spending and monetary easing, scream for austerity, pass tax cuts for the rich, then blame Obama if the economy tanks again. Use it as an issue for 2012 elections(just like they did in 2010. We know there are enough voters who fall for this GOP bag of tricks, they at least did in the last election cycle.

  21. 21
    Stillwater says:

    One small correction to the linked story:

    General Motors, which nearly collapsed from the weight of its debts mis-management two years ago

    That’s better.

  22. 22
    Poopyman says:

    @elmo:

    Then fire all the teachers, too. We can cut and fire our way back to posterity and bring back the middle class in this country!

    We can arrange that:

    Today, the city of Providence, Rhode Island sent out layoff notices to every single teacher in the city. Every single one of them. If you want to understand why this is happening, why wages in the US keep getting cut, this chart tells the story.

    (Stoller, via)

  23. 23
    Roger Moore says:

    @Culture of Truth:

    Yes, but in the long run it would have better to let GM die to serve as a lesson to our workers, who will now lazily create profitable businesses but for the wrong reasons that bailouts are for banksters, not for businesses that make tangible goods used by real people.

    FTFY.

  24. 24
    daveNYC says:

    I’m also not sure what they mean by ‘nearly collapsed’. It basically went into a government sponsored bankruptcy action.

  25. 25
    schrodinger's cat says:

    Obama should have nationalized the banks after the 2008 financial crisis.

  26. 26
    jonas says:

    It should also be noted that GM’s profit is largely the result of the IRS letting them walk away from a ginormous tax charge. Now it can be argued that saddling the company with this charge would weigh on its stock value, hurting the taxpayer more in the long run since Uncle Sam still owns the company (and is owed a lot by it). But it still sends the message that companies really shouldn’t have to pay their fair share. The oil companies in the Gulf are essentially getting comped billions in royalties they should be paying right now due to a regulatory oversight. If you think that the GOP Congress realized this and then agreed to close the loophole and raise some money to pay down the deficit, you are an idiot.

    Fuck. Just fuck.

  27. 27
    cmorenc says:

    @Dan :

    It will surprise nobody that the GM news is buried deep in the recesses of the foxnews website. Reading that website is really like peeking into a very disturbing alternate reality.

    So obviously is spending a few minutes watching Fox News. Last night at the gym, the only stationary bike open was the one smack in front of the teevee with Fox News on (closed-captioning) and I watched Bill O’Reilly spend twenty minutes discussing the Wisconsin situation with a couple of his guests, and the financial untenability the unions had caused the state, without mentioning ONCE that the unions had agreed to all the financial concessions specified by Gov. Walker. Those only watching Fox would be likely to misunderstand that the Unions were stubbornly holding out for raises in wages and benefits against Gov. Walker’s defense of the public purse in hard financial times, rather than understanding that the only controversial sticking point was that he was trying to end the right to end the union’s rights to collectively bargain for state workers.

  28. 28
    burnspbesq says:

    there seems to be a lot of misinformation out there about the financial structure of the GM rescue.

    The people who got killed in the bankruptcy were the holders of GM debt.

    The federal government put it’s money in for stock. The federal government has lost zero. In fact, one can argue that the federal ggovernment left money on the table by selling before GM’s return to profitability was fully reflected in its stock price.

    All of this is explained in Rattner’s book, which I strongly recommend.

  29. 29
    Roger Moore says:

    @Stillwater:
    You make it sound as though the debt and mismanagement are unrelated. Debt was the proximate cause of the collapse, mismanagement was the ultimate cause. The media tends to focus primarily on proximate causes, which are relatively easy to identify, rather than ultimate ones, which are often vague and debatable.

  30. 30
    NonyNony says:

    Mind you, if the “fiscal conservatives” had their way, GM would be belly up, and millions more people would be out of work.

    Which in conservative land would be a good thing, because now those union voters will be more likely to vote for Democrats in the next election. Better for GM and Chrysler and Ford to all collapse so that non-union Toyota, Honda and Hyundai plants in the South can fill the gap with voters who vote Republican.

    If you watched Congress at all during the debate over the auto bailout it was clear that “fiscal conservatism” wasn’t driving the debate at all – on the Republican side it was almost all about kicking union workers in the nuts and trying to reward foreign companies for putting factories in the South.

  31. 31
    kindness says:

    But John, conservatives & Republicans WANTED the US auto industry to tank & go belly up. It would have been a twofer for them. A worse economy makes the idiot Americans out there vote for the groups that put them in that position for some strange reason and the Republithugs really hoped the industry would be re-born in a non-union condition.

    Republicans….doing every thing they can to make the economy and country worse just so they can win more elections.

  32. 32
    wenchacha says:

    Can somebody explain: I think the US Govt. owns 61% of GM Preferred shares. Presumably, if the share price continues to rise, we the people will see returns increase. Is there a point predetermined when the govt. would sell off some of its shares?

    UAW members and retirees had to agree to GM shares vs cash to fund an employee-managed health coverage plan. This was in lieu of the actual dollars that GM owed to the underfunded plan. So between regular taxpayers and current and retired UAW-GM members, seeing GM make like a phoenix is a really good thing.

    Please keep that in mind the next time you’re out buying a car!

  33. 33
    burnspbesq says:

    @Jonas:

    The Money article to which you linked is equal parts speculation and bullshit. Talk to a tax lawyer, and he or she will tell you that there are a large number of perfectly legitimate planning techniques that a bankrupt company can use to preserve “tax attributes” such as NOL caregivers on emergence. I haven’t looked at the registration statement for the GM IPO, but there is probably some discussion of tax matters there.

  34. 34
    cleek says:

    @wenchacha:

    I think the US Govt. owns 61% of GM Preferred shares.

    at one point, they did. now it’s down to 33%

    Is there a point predetermined when the govt. would sell off some of its shares?

    “within the next 2 years” seems to be the latest line.

  35. 35
    Joseph Nobles says:

    Poor Republicans. If they had given a damn about labor and the middle class in this country, the GM success story could have been theirs.

  36. 36
    Michael D. says:

    Fat Cat auto-workers! $4300.00??? And here we are complaining about banker bonuses!!

  37. 37
    Culture of Truth says:

    @Joseph Nobles: “If we had known we’d have pretended to care!”

  38. 38
    Gin & Tonic says:

    @Poopyman: Everybody involved understands that Providence does not intend to lay off all its teachers. The contract dictates that if you have tenure and you’re not notified by March 1 then you’re on the payroll for the entire next school year. So school district, including Providence, routinely send out scads of layoff notices just in case. This is the only way they can legally lay *some* teachers off for next year.

  39. 39
    Froley says:

    In addition, G.M. said 45,000 union workers would receive profit-sharing checks averaging $4,300, the most in the company’s history.

    Bass fishing boat manufacturers rejoice! (Just teasing.)

  40. 40
    Steeplejack says:

    @Poopyman:

    Money.CNN.com: “[. . .] salaries or commissions, which can significantly bump up workers’ total compensation packages.”

    Oh, really? Fucking compensation, how does it work?

  41. 41
    Scamp Dog says:

    @peach flavored shampoo: I believe those losses were wiped out by the bankruptcy, so shareholders of the old GM lost out. The $5 billion profit is for the new GM, which goes to new shareholders and workers. Since the workers help earn those profits, they should get to share them.

  42. 42
    Stillwater says:

    @Roger Moore: Absolutely. I just think that refraining from mentioning the role management played feeds several memes: one is that unions pay and benefits caused the demise of the once great GM; another is that CEOs and capital managers are always brilliant strategists serving the general welfare by maximizing efficiency and blah blah, which is just false on its face.

  43. 43
    danimal says:

    @Scamp Dog:

    Since the workers help earn those profits, they should get to share them.

    SOSHALIST!!! The Galtian overlords of the management class deserve those bonuses, not the whiny underlings on the assembly line. Surely there’s a banker somewhere that could trickle down those bonuses better than the proles who are getting them.
    /snark

  44. 44
    Sasha says:

    Mind you, if the “fiscal conservatives” had their way, GM would be belly up, and millions more people would be out of work.

    That assumes millions more people out of work isn’t exactly what “fiscal conservatives” want.

  45. 45
    Nellcote says:

    It’s a puzzlement to me that saving the auto industry didn’t translate into more Dem votes.

  46. 46
    Mike in NC says:

    Conservatives wanted GM to fail as a way of punishing Unions, presumably for having the temerity to fight for better conditions for their members.

    Has anyone ever seen an American-made automobile with a Tea Party bumper sticker? Not where I live.

  47. 47
    trollhattan says:

    But, but, but…hippies have taken them over and made the Volt Failmobile!(C)

  48. 48
    Jay C says:

    @Nellcote:

    It’s a puzzlement to me that saving the auto industry didn’t translate into more Dem votes.

    Maybe because, rather than trumpeting the success of the GM restructuring, the Obama Administration seems to have basically ignored it, as if it were more of an embarrassment than a triumph?

  49. 49
    Jay C says:

    @Jay C:

    #48 should read “GM/Chrysler restructuring”, but couldn’t edit.

    FYWP.

  50. 50
    Mike E says:

    @Nellcote: Obviously, it was good for Pres. McCain!

  51. 51
    Pococurante says:

    And yet all those southern GOP senators, where the Japanese build their cars, wanted to further decimate Ohio and Michigan by destroying GM.

    I wonder why else GOP and republican voters wanted to destroy Ohio and Michigan?

    In addition, G.M. said 45,000 union workers would receive profit-sharing checks averaging $4,300, the most in the company’s history.

    Oh right – evil unions composed of citizens that own their company, believe in their product, and want to preserve the middle class status.

    Stupid unions. /snark

  52. 52
    wenchacha says:

    @cleek:
    Thanks. That’s not too bad, then.

    There are some auto-towns that ought to be pretty stoked about those bonuses. If the workers are fortunate enough to still be paying their mortgages and eating something other than catfood, they may spend some of that $4.3K in the local economy. That’s the whole idea of capitalism, correct?

    Back in the day, Rochester NY would be abuzz with bargains galore when Kodak gave out their annual bonuses to workers. Now, not so much.

    Remind me again: Kodak never had a union, and still the company has seen a serious decline. How did liberalism kill Kodak? Probably some EPA regs or something.

  53. 53
    Eric k says:

    Wenchacha,

    Kodak is a classic example of a company not reacting to a changing market. Digital was killing their core business and they waited way too long to adapt to it

  54. 54
    Caz says:

    I’m not sure why you put fiscal conservatives in quotes. I guess because you think they are calling themselves that, when in reality they are just, what, assholes?

    In any event, if they had their way, GM would have filed for bankruptcy and would have restructured, not gone belly up. Unless you consider the bankruptcy process and restructuring to be “belly up.” Some workers would have lost their jobs. That tends to happen when companies don’t provide quality products at competitive prices and lose huge chunks of market share.

    I did not know that the government was supposed to be in the business of ensuring private sector jobs by subsidizing noncompetitive companies. But then, I’m an “asshole.”

  55. 55
    El Cid says:

    @Judas Escargot:

    Brazilification will continue, until morale improves…

    And that is the Brazil of the 1970s, still under the junta, where “growth” was a miraculous success while people dropped into absolute poverty and fled the countryside to live in shacks on hillsides near cities (favelas), not the lefto-commies of today who actually do such crazy things as end starvation in the country.

    We just don’t need the military dictatorship they had, because so many of us are willing to vote for us to be that way.

  56. 56
    burnspbesq says:

    @Scamp Dog:

    “Since the workers help earn those profits, they should get to share them.”

    I completely agree, but that puts us in an awkward position re Chrysler, which paid bonuses to hourly workers despite making losses.

  57. 57
    Yutsano says:

    @El Cid: Heh. I’m just dying for the announcement that Brazil is moving towards universal health care. That should cause a few conservatives to lose their shit up here.

  58. 58
    burnspbesq says:

    @Caz:

    “In any event, if they had their way, GM would have filed for bankruptcy and would have restructured, not gone belly up.”

    I’m willing to reserve judgment on whether you’re an asshole, but it’s clear that you don’t know what you’re talking about.

    What you claim would have happened if self-proclaimed fiscal conservatives had gotten their way (with the implication that it didn’t happen) is, in fact, what happened. A pre-packaged bankruptcy is still a bankruptcy, and the United States Bankruptcy Court for the Southern District of New York has thousands of documents on file to prove it.

  59. 59
    Yutsano says:

    @burnspbesq: Why Burnsy. I never took you for a troll hunter. Shame on you for using actual facts. :)

  60. 60
    Caz says:

    burnspbesq,

    That’s not what happened, becuase in a bankruptcy, the taxpayers don’t give billions of dollars to the company, and the government doesn’t become the majority shareholder of the company.

    So it’s you who doesn’t know what you’re talking about.

  61. 61
    Arclite says:

    @arguingwithsignposts: Dude, enough already. I like lots of posts.

  62. 62
    Arclite says:

    @Poopyman:

    Today, the city of Providence, Rhode Island sent out layoff notices to every single teacher in the city. Every single one of them. If you want to understand why this is happening, why wages in the US keep getting cut, this chart tells the story.

    Wow, that’s so stupid. The union leader and the head of the schoolboard just worked out an unprecedented deal to reform the schools and the mayor goes and undercuts the whole thing by pink slipping everyone.

  63. 63
    New Yorker says:

    In addition, G.M. said 45,000 union workers would receive profit-sharing checks averaging $4,300, the most in the company’s history.

    For some reason, I picture the Koch Brothers screeching like the Wicked Witch of the West after Dorothy threw water on her.

  64. 64
    Freddie says:

    It’s always worth noting that, had GM not had to pour huge amounts of its liquid capital into “stock buy-backs” to artificially inflate the stock price and keep shareholders happy, it very well might have avoided bankruptcy altogether.

    But, you know, stock brokers and weekend warriors will always have the best interests of the company at heart….

  65. 65
    cleek says:

    @Eric k:
    they handled digital badly. it’s not that they didn’t get into it, i worked on software for their digicams way back in ’94, and they had pro-quality digicams as far back as ’91. Kodak just didn’t really commit to digital until their competitors had already been at it for years.

  66. 66
    Brachiator says:

    Mind you, if the “fiscal conservatives” had their way, GM would be belly up, and millions more people would be out of work.

    Sometimes the invisible hand has to choke the shit out of workers. I am … amused … at how conservative pundits continue to insist that Obama’s dealings with the auto industry resulted in failure and in the government takeover of a huge segment of the private sector.

    These fools are not only stuck in the past, the precise moment when the government offered a partial bailout of the auto industry, they are stuck in a permanent lie about the past.

    This kind of thing isn’t about “controlling the narrative.” It’s about the childish prattling of a lie over and over again because they need to shut out reality.

  67. 67
    ppcli says:

    I’m a bit late to this party, but I thought I’d add the view from Michigan. If Obama hadn’t stepped in to save GM and Chrysler, this state would be economically dead. It would have been a catastrophe of incalculable proportions for virtually everyone in Michigan. And the Republicans desperately wanted it to happen. They fought tooth and nail against the rescue. That is, they essentially fought tooth and nail for the collapse of Michigan’s economy. But the Republicans got the same midterm bounce in Michigan that they got in every other state. I really find this mind-numbing.

  68. 68
    Bob says:

    @Lee:

    No, the GM portion of this money is not unrecoverable. The loan portion was repaid, and the rest is in stock owned by the feds. The feds sold a part of the stock and will sell off more as it rises in value. Will the feds get all the money back? Probably not, but they avoided the cost of economic diaster and that has value too.

  69. 69
    Triassic Sands says:

    This country would be a lot better off if GM had been left to die and we had much higher unemployment, because bailing out GM turned this country into a socialist hell hole where the rich are being bled dry everyday by the parasitic masses.

    Or something like that.

  70. 70

    @Caz:

    I’m not sure why you put fiscal conservatives in quotes. I guess because you think they are calling themselves that, when in reality they are just, what, assholes?

    Yes, they’re assholes. Contemptible, lying assholes. The last Republican president who was truly a fiscal conservative was Dwight Eisenhower. Ronald Reagan claimed to be a fiscal conservative, yet while he was president he never submitted a balanced budget and the national debt increased by 1.6 trillion dollars on his watch, a whopping 189% increase. By comparison the GDP only increased by 182 percent during the Reagan years. By the time George H.W. Bush left office the national debt had increased to over 4 trillion dollars.

    Clinton came into office with a national debt of around 4.5 trillion dollars. When he left office eight years later the debt had increased to about 5.6 trillion dollars, an increase of 36 percent. On the other hand the GDP increased by 54 percent.

    Then there’s George W. Bush, the worst president the United States ever had. I don’t know if we’ll ever recover from the damage that this stupid fratboy, his cronies and the fools, retards and stooges who supported him inflicted upon the country. When George W. Bush took office the national debt was 5.6 trillion dollars. When he left it was over 10 trillion dollars. A 189 percent increase, just like Reagan’s. GDP only increased by 47 percent during the Bush years. Just one more way that George W. Bush sucks shit compared to Bill Clinton.

    You can check the numbers for yourself at these two sites:

    http://en.wikipedia.org/wiki/N.....tial_terms

    http://www.presidentialdebt.org/

    “Fiscal Conservatives” are full of shit when it comes to government spending. “Fiscal Conservatives” like to bitch about “Tax and Spend” Democrats. But the truth is that Republicans are even worse, because they’re the party of “Borrow and Spend”. “Fiscal Conservatives” are like a bunch of irresponsible teenagers who get a credit card and go to town buying all sorts of crap with it, without having any plan to pay the credit card bills when they come due. Republicans lie about their economic policies just like they lie about their patriotism and their commitment to family values. So yes, Caz, they’re assholes, and you’re an asshole too.

    I did not know that the government was supposed to be in the business of ensuring private sector jobs by subsidizing noncompetitive companies. But then, I’m an “asshole.”

    You certainly are, and a stupid one to boot. Here’s hoping that the rest of your life will be short and painful. Newsflash Caz, Republicans love ensuring private sector jobs by subsidizing noncompetitive companies. Who’s kept billions of dollars flowing into ethanol subsidies over the last 30 years. Why that would be Senator Charles Grassley, R, Iowa. Who keeps tariffs in place on imported sugar, thus driving up sugar prices and forcing us to endure shitty high fructose corn syrup? Well that would be the same Senator Grassley and also the Republicans in Florida. Which president signed TARP into law? Well that would be George W. Bush. Who was trying to keep the alternate F-35 engine program going? Well that would have been the Republicans in Ohio and Indiana, who were funneling money to GE and Rolls Royce to develop an unneeded engine for an unneeded airplane.

    Hell, if you look at the Department of Defense it’s basically a huge subsidy program for noncompetitive companies. Outside of Boeing there are no major defense contractors who have any civilian sales. Cut defense spending and watch companies like General Dynamics and Lockheed Martin start to go under, unless of course they develop a civilian market for M-1 tanks and Trident missiles.

  71. 71
    burnspbesq says:

    @Yutsano:

    Shame on you for using actual facts.

    Mea culpa.

  72. 72
    burnspbesq says:

    @Caz:

    That’s not what happened, becuase in a bankruptcy, the taxpayers don’t give billions of dollars to the company, and the government doesn’t become the majority shareholder of the company.

    Really? Then explain why a Google search on “GM Bankruptcy” returns approximately 630,000 links.

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