As free enterprise collapses (and is killed) all around us, stories of GM pop up. See this story about GM's remarkable loss for 2008. While GM seeks to become a larger and more durable ward of the state it:
- Lost money across its various operating units
- Burned through $6B of cash
- Underfunded its pension obligations by $12B
- Courts auditor claims of inviability
"They are in fact-gathering mode right now, and so we are here in order to respond to their questions. This is not a negotiation session by any means, they are going to continue to gather facts and continue to ask for clarifications in terms of our submissions."
Summers and Geithner are obliged to compile a massive restatement of the incredibly obvious for political consumption. Me, I get to draw conclusions quickly because I don't answer to anyone. But what's left to understand? GM was massively dominant while America was massively dominant, conditions which no longer exist. Massive domination bred a culture where management and labor joined hands to run the company for their benefit, not owners' and certainly not customers'. Owners let them and so did customers, until of course the latter had better alternatives. If far more of GM's prodigious cash flow in the flush years had gone into research and innovation, not fat retirement benefits like 30 and out the company would have a better fighting chance. Dependency is hopelessly embedded in the culture and the principal constituencies (labor and management) are too vested in the status quo to turn the company into an innovator.
How do I know?
By looking at the results.
If anyone in Washington is listening, you'll do taxpayers a great service by not bathing the company in cash it will never be able to repay and use the money on one time assistance to those communities ravaged by its downfall.
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