Carlyle buys GM division. What this means for them and us.

[Mr Rabble]

First a link to the story :



This is interesting for a number of reasons. The most obvious aspect of this story is the buyer.

Why would a large defense contractor run by the presidents father want to buy a profitable company which produces heavy duty transmissions? Hmm, where would a defense contractor find a market for transmissions for use in diesel engined heavy vehicles? What transmissions are used in military Hummers? Let me know if you can guess their market...

Perhaps more importantly, albeit slightly less obvious here is watching the "free hand" of the market save a failing company. GM could certainly use the influx of capital, especially when it comes from taxpayer dollars. Since Carlyle's biggest source of revenue is the US government, we can safely say that we the taxpayers are indirectly subsidizing GM. And so it goes.

[MonkeyFunk]

1. George H. W. Bush doesn't "run" the

Carlyle Group.

[Mr Rabble]

4. Right. He just sits on the board then?

Do you think that Carlyle would be able to exert the amount of influence without poppy Bush?

While he may not publicly hold the title, he is clearly running Carlyle where it matters.

[MonkeyFunk]

6. The chairman is Louis Gerstner...

former chair of IBM. He's got enough influence.

And no, I don't think Bush is on the Board of Directors.

[KoKo]

2. k&R

[Psephos]

3. GM is selling a profitable asset so it can invest in its core business

It needs every damned dime it can scrape up, too. Foreign competitors such as Toyota have plenty of cash to invest in new product and capacity.

If you want to see GM continue to provide jobs and benefits to middle America, this kind of consolidation and re-focus is critical. Without ammo, there's no way to compete.

Bush Senior doesn't "run" Allison, btw. Also, the bit about taxpayers subsidizing GM is silly. Come to Michigan, look at the devastation wrought on our cities by GM's and Ford's shrinkage, and then tell me who was supporting who.

It's a sad business indeed when a majority of posters on a progressive board think bad news for domestic carmakers is good news for everyone else. It's not. It's a catastrophe. I am at the point where I no longer consider someone progressive who purchases a car not assembled with American labor. Instead, I consider them a hypocrite.

My opinion, nothing more, nothing less.

[Mr Rabble]

5. Well, the facts just don't support you here.

GM selling is indeed a move to "consolidate". And wouldn't you know it, their stock price went up. Now that is just great for investors, but the average GM worker has been bled to death for the last 30 years by GM, all in the name of shareholder profit. I can't imagine that the outcome here will be any different.

And lets be clear here. GM is not directly "competing" with the japanese firms. GM sells an overwhelming % of its cars to our government as fleet vehicles; police, other law enforcement, military, etc...that is straight government subsidy. If GM had to compete directly without state intervention they would have vanished 20 years ago.

GM and Ford have been pillaged by its directors for years, with absolutely no thought given to the workers. Take a look around Michigan- do you think GM and Ford give a crap about their workers?


Either this is, or is not a free market. The obvious answer is that it is anything BUT a free market.

What is sad business indeed, is when a majority of posters on a progressive board are unable to see that this move which is going to be a bad thing- long term- for everybody, including GM workers, don't see through the obvious.

[Psephos]

8. What are you smoking?

Whew-wee, the stock went up 3/4ths of a point (a measly 2%) - because investors approve of GM's move to free up some working capital. BTW, the "fat-cat" investors include most GM workers, pension funds for teachers, individual middle-class people, state universities, on and on and on.

You say "the average GM worker has been bled to death for the last 30 years by GM" - yeah, I wish I could be bled to death at $70/hour.

I come from a GM family - you obviously don't - and GM provided a decent middle-class living for millions of people for a very long time. GM is not so competitive these days for a variety of reasons, including (or even especially) big management mistakes, but don't forget that more than $2000 of every GM car sold goes to pay for medical and retirement bennies for retirees and families of workers. Are you going to help chip in and pay for these benefits when GM goes bye-bye? I already know the answer.

I do take a look around Michigan (I've lived here my whole life) and I see decades-long community partnerships anchored by the taxes paid by GM, Ford and Chrysler. These are dissolving into nightmares because people like you don't buy cars made in the US.

You - yes, YOU - are the real pillager. YOU don't give a crap about GM and Ford workers. You sling ideology around like you know something, but your actions say everything.

Get lost. You're part of the problem, not part of the solution. I listen to what people do, not what they say. If you're not helping preserve American jobs when you spend your cash on a car, you're not a progressive. The situation is dire and there is no more room for bullshit.

My opinions, nothing more, nothing less.

[AndyTiedye]

9. GM and Ford are TRUCK Manufacturers

That is why they try to sell us all trucks. SUVs are trucks.
Some of them are very nice trucks. A few even get decent mileage.
Like this Ford Escape Hybrid:

which is still the most fuel-efficient SUV on the US market.
Made in Kansas City, USA, by union labor.

When we needed a CAR (as opposed to a TRUCK), we got a Prius.
If Ford or GM made anything remotely comparable we would have bought it,
but they don't.

They never built anything remotely like the Civic Del Sol either.
Sadly, now nobody does.

[Psephos]

10. When you needed a car, did you visit Saturn?

Saturn's line-up easily meets your criterion of "anything remotely comparable." Might want to take a look at the total manufacturing energy footprint of a Prius, too. They're complex machines that soak up a lot more energy to manufacture, and have some rather nasty impacts when they've reached the end of their lives, too, with their battery packs. By now I'm sure you've learned that the EPA gas mileage figures are quite overstated because the gasoline motor shuts down during idle and braking. The old EPA test regime did not recognize that, and counted the downtime as free mileage.

Meanwhile it seems more than a bit odd that the US government gives $3150 tax credits to buyers of Toyotas. GM workers coughing up tax cash to subsidize Prius drivers seems the heart of irony to me.

I'm not trying to be hard on you, just providing some counterpoint. If that picture in your post is your Ford Escape, then you have already shown strong cred with me.

BTW, if you are lamenting the demise of the Del Sol, take a look at the Pontiac Solstice. Wow.



Read this article, too.

http://www.topspeed.com/cars/pontiac/pontiac-solstice-ar1248.html

GM made some radical breaks with its traditional way of developing cars with the Solstice. It went from concept to a drivable prototype for car shows in four months. From a production commitment to actual production in less than two years. The car's engineering is superb, and its aesthetics have been envied around the world. This is what GM can do, if unshackled. Hundreds of thousands of middle class jobs depend on GM transforming itself exactly this way. It would be nice if "progressives" on DU would consider the effect bad-mouthing (and not buying) domestic cars has on the future of sustainable middle-class jobs.

[Rosemary2205]

11. WOW - what a BEAUTIFUL car!!

[Psephos]

12. Plus, it won't bankrupt you at $20k ;-)

[Rosemary2205]

13. I'm slobbering all over the monitor! :)

sounds goofy but I'd love to be able to give up the chairlift van to that baby!! hubba hubba.

And I don't get all loopy about cars either. :) :)

[AndyTiedye]

14. GM Lost Many of Us When They Crushed the EV1s

Saturn's line-up easily meets your criterion of "anything remotely comparable."

Only for very remote values of remotely comparable, and accepting a huge penalty in the MPG department.

Might want to take a look at the total manufacturing energy footprint of a Prius, too. They're complex machines that soak up a lot more energy to manufacture, and have some rather nasty impacts when they've reached the end of their lives, too, with their battery packs.

The batteries aren't going to end up in the landfill, they get recycled. Surely worthwhile to reclaim all that nickel anyway. These are NiMH, not lead-acid batteries.

By now I'm sure you've learned that the EPA gas mileage figures are quite overstated because the gasoline motor shuts down during idle and braking. The old EPA test regime did not recognize that, and counted the downtime as free mileage.

Shutting down during idle and braking does save gas, especially in stop-and-go driving. It also cuts down enormously on pollution under those conditions, since gas engines often burn quite dirty at idle.
Maybe it doesn't save quite as much as the old Prius EPA figures claimed though. But we do live in the mountains, so our mileage always does vary.
Oddly enough, we come in within 1 MPG of the EPA figure on the Escape Hybrid, which is the closest we have gotten on any vehicle here.
You would think it would suffer from the same overstatement, if not worse, due to having the aerodynamics of a brick.

Meanwhile it seems more than a bit odd that the US government gives $3150 tax credits to buyers of Toyotas. GM workers coughing up tax cash to subsidize Prius drivers seems the heart of irony to me.

If GM had continued to build the EV-1, and had built upon that technology, they would be getting those subsidies too.
Instead, they sent all the EV-1s to the crusher.

:cry::grr::cry::grr::cry::grr::cry::grr::cry::grr::cry::grr::cry:

I'm not trying to be hard on you, just providing some counterpoint. If that picture in your post is your Ford Escape, then you have already shown strong cred with me.

It is. Traded in a RAV4 for it -- the Escape is bigger, more comfortable, and gives us around 29 mpg (it is the Escape HYBRID) compared to around 22 for the RAV4.

BTW, if you are lamenting the demise of the Del Sol, take a look at the Pontiac Solstice. Wow.

But my Del Sol gets almost 40 mpg. Does any other 2-seater convertible come even close to that?
Well there is one that doesn't burn any gas at all. An American company too. Very tempting! http://www.teslamotors.com

[Mr Rabble]

16. Wow. Guess I should turn in my family card then, huh?

See, I AM A GM WORKER. I currently drive a Silverado. So there goes that line of crooked logic.

We have been bled to death. Very few of us make $70 an hour. I don't know of any hourly workers who even approach that.

Maybe you can now explain why we would sell off the most profitable business division in our portfolio?

This is yet another step toward a total "restructuring" which will include further decimation of our workforce, further off shoring, etc...on our way to bankruptcy.

Nice to see that you have bought into managements propaganda though.

[UTUSN]

7. Whenever Carlyle is mentioned, I remind that a Jimmy CARTER staffer, David RUBENSTEIN

is one of the co-founders. Yes, CARTER had a veritable nest of vipers at his breast: Tweety, pollster (I'll refresh on the name) later of a string of loser candidates and projects (the New Coke), and this dude. But he fired Shrub, so there's that in his favor.

*******QUOTE*******

http://www.informationclearinghouse.info/article3994.htm

.... In a column posted yesterday on Salon.com, Joe Conason writes: "Preferring to avoid public scrutiny for obvious reasons, executives at the Carlyle Group usually say nothing about their firm's connections with the Bush dynasty. But last April 23, Carlyle managing director David Rubenstein spoke quite frankly about the comfy sinecure he provided to George W. Bush more than a decade ago -- and how useless Bush turned out to be. Whether he knew it or not, Rubenstein's remarks to the Los Angeles County Employees Retirement Association were recorded."

Rubenstein said, "We put (Bush) on the board and (he) spent three years. Came to all the meetings. Told a lot of jokes. Not that many clean ones. And after a while I kind of said to him, after about three years - you know, I'm not sure this is really for you. Maybe you should do something else. Because I don't think you're adding that much value to the board. You don't know that much about the company.

Rubenstein continued: "He said, 'Well, I think I'm getting out of this business anyway. And I don't really like it that much. So I'm probably going to resign from the board.' And I said, thanks - didn't think I'd ever see him again. His name is George W. Bush. He became President of the United States. So you know if you said to me, name 25 million people who would maybe be President of the United States, he wouldn't have been in that category. So you never know. Anyway, I haven't been invited to the White House for any things." ....

********UNQUOTE*******

[Eurobabe]

15. They'll be making tanks soon?