“As GM Goes, So Goes the Nation”
By David Glenn Cox
“As GM Goes, So Goes the Nation.” Such was the conventional wisdom in the 1960’s when GM churned out Chevelles, Camaros, Cutlasses, Catalinas, and Cadillacs by the millions. Maybe the saying "runs like a Cadillac" will outlive the company; maybe “As GM Goes, So Goes the Nation” has never been truer. GM’s future is bleak, analysts predict that GM may soon go broke as new car sales stumble.
Did the American market run out on GM? Or did GM run out on the American market? Maybe they were too busy investing in China and wondering how to make the translation, “The heartbeat of China, that’s today’s Chevrolet!” GM is the number two foreign automaker in China behind Volkswagen, and GM’s plans for the future are dependent on success in China and not in the good old USA! GM’s number one concern has been showing US workers the door, and while that looks great on the bottom line, it doesn’t help to sell cars.
The problem for GM has been whether to build high-profit big cars that few can afford or low-profit small cars that don’t help their bottom line as much. GM’s answer has been to build the high profit SUV’s and import rebadged small cars from Asia. Oddly, no matter how many workers they cleave from North American payrolls, their market share still shrinks. I wonder why that is? Maybe their focus has shifted from building good cars and making a lot of money to just making money and screw building cars.
GM has spun off subsidiaries for the sole purpose of breaking unions; they have pressured suppliers to do the same. GM’s axle supplier, American Axle, just resolved a strike by buying out almost two-thirds of their workforce and reducing the prevailing wage from $23.00 per hour to $14.00 per hour. Now they can be competitive! Now they can expand overseas! Now they can give the CEO an 8.5 million dollar bonus on top of his 1.5 million-dollar salary! CEO Dick Dauch was awarded a hell of a lot more than forty pieces of silver, but then again, he sold out more than just one man.
The board's compensation committee cited the executive's ''accomplishments and commitment during a period of significant change in our industry.'' He must be famous by now; if you say Big Dick at American Axle they’ll know just who you are talking about! Funny peculiar, not funny ha ha, the new, lower paid employees at American Axle can’t afford to buy any new GM products. American Axle lists 90% of their profits as coming from sales to America’s big three automakers, that’s spelled Irony. Maybe Big Dick will help them out and buy a couple of Chevys, but I bet he won’t.
He’ll probably go for that flashy import, GM products are so “middle class.” The valets at the country club might even give Big Dick the eye in a Chevy or Pontiac as they don’t see too many of those these days. Mercedes and Lexus are today’s status symbols. If he showed up in a Cadillac they might suspect his regular car was in the shop. Caught in the jaws of their own making, the rich don’t want them and the poor can’t afford them; that’s today’s Chevrolet!
With seven-year car loans and leases, GM reaches out to the working poor they helped to create and asks, “why don’t they love us anymore?” Remember when Pat Boone used to sing, “See the USA in your Chevrolet!” Now Bob Seeger sings “Like a Rock” as Chevy sales do just that: plummet, like a rock. GM has invested four billion dollars in their China operation. Now cars sales for GM in China have stalled and cars are piling up in inventory as Toyota joins the Chinese market. They can run but they can’t hide; no matter how many times they cut the board, it’s still too short!
But, “As GM Goes, So Goes the Nation,” and the pundits will tell you again and again, “consumer spending is 70% of the economy.” An economy strangled blue by lower wages and pushing the customers GM needs to survive under water. The Wal-Marting of America, of reducing costs by reducing wages has come full circle to bite them on the ass. Prosperity lost is not easily regained. One wage earner with ten million dollars might buy half a dozen cars but a thousand wage earners at the old American Axle wages bought a thousand cars.
GM’s stock price fell to $10.00 a share, a level not seen since 1954. However in 1954, $10.00 would buy a tank of gas, a bag of groceries or a night at the movies. Today? Not even McDonalds for two, two gallons of gas, or milk and bread. In actuality GM’s stock price has never looked worse. GM’s new plan is centered around firing white-collar workers and eliminating another GM brand name. Maybe that will work; it didn’t work last time when they eliminated Oldsmobile, but if at first you don’t succeed, fire and fire again!
“As GM Goes, So Goes the Nation.” GM goes to hell on greed and not paying attention to the company's primary business, building cars. America as well goes to hell by ignoring her people to focus on corporate profits and tax breaks. But without a prosperous people the corporate profits all go away, and “As GM Goes, So Goes the Nation.”
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