Wednesday, August 15, 2012, Paul Kersey, SBPDL, August 15, 2012
The General Motors Bailout: When Corporate Fiscal Responsibility Collides with Black-Run America
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GM wanted to move its headquarters from Detroit to its Tech Center location in Warren to save money and potentially avoid receiving TARP funds. Government said “no” — Detroit is 90% Black; Warren is 78% white |
The Renaissance Center’s development was the result of private interests working to create a built environment in downtown Detroit that was comparable to the malls and office parks offered by the suburbs. Businesses that supported the development wanted to create a private space that could easily be controlled and monitored to fashion a safe, crime-free place for shopping, work, and nightlife. People could park, work, eat, shop, and see a movie all at one site, and the result was the creation of a minicity within Detroit. It was not only physically separated from the rest of the city–making pedestrian access difficult-but also the stores inside catered to a middle- to upper-class clientele. Some critics came to see the center as a “fortress” for the middle- and upper-class whites who still wanted a downtown experience. Symbolically, the center brought the suburbs to downtown Detroit. It was not only physically separated from the rest of the city–making pedestrian access difficult-but also the stores inside catered to a middle- to upper-class clientele. Some critics came to see the center as a “fortress” for the middle- and upper-class whites who still wanted a downtown experience. Symbolically, the center brought the suburbs to downtown Detroit.
In 1970, whites made up 99.5% of the city’s total population of 179,270; only 838 non-whites lived within the city limits. Racial integration came slowly to Warren in the ensuing two decades, with the white portion of the city dropping only gradually to 98.2% in 1980 and 97.3% as of 1990. At that point integration started to accelerate, with the white population declining to 91.3% in 2000 and reaching 78.4% as of the 2010 census.
The politics around GM, with its great size and complexity, not to mention its iconic status, promised to be even more intense. Our loving to-do list was full of pitfalls. One day Fritz called me to propose moving GM headquarters from the Renaissance Center to GM’s Tech Center in suburban Warren, where we had driven the Volt back in March.
The move would cuts costs, he said, as well as symbolize the leadership’s determination to become more to down-to-earth and hands-on. I thought the idea was great, just the kind of action I was hoping to see from Fritz. But when I described it to [Brian] Deese (who served on President Obama’s Economic Policy Working Group), he went nuts. “Are you out of your mind?” he said. “Think what it would do to Detroit!”
Though small in financial implications for the company – the headquarters was worth perhaps $165 million – compared to the $626 million that GM had paid for it just a year earlier (Sic … GM would spend only $76 million to buy the building in 1996, but spend $500 million renovating the complex) – GM’s departure would be a major blow to Detroit. In a one-year period, the once proud city was already suffering with one of the worst unemployment rates in the country, and among the worst murder rates, would see two of its biggest employers go bankrupt, its flamboyant ex-mayor Kwame Kilpatrick convicted of perjury, and its NFL franchise, the Detroit Lions, become the first in football history to go 0-16.
Deese had some people analyze what a mostly vacant RenCen would mean to Detroit real estate. The estimate: a double-digit hit on already deflated real estate prices. Fritz proposed donating the RenCen to the city- though who actually would use it was unknown.
Leaving the RenCen made strategic sense, however, and was supported by Harry and David. The Tech Center had lots of empty space and much larger floors, so more departments and people could sit near each other, improving teamwork and communication in a culture that desperately needed more of both.
The debate, not surprisingly, soon moved beyond Team Auto. Gene Sperling was one of the many to fight the move. “It’s over for Detroit if you do this,” he yelled in a meeting at [The United States] Treasury. “Don’t do this to Dave Bing” – the city’s new mayor, a former NBA star and successful auto-supplier entrepreneur. “He’s a good man trying to do a good thing.” The city relied on GM for $20 million a year in tax revenue, Gene pointed out, and the blowback would be fierce. Deese checked with Larry, who in turn spoke to Rahm [Emmanuel], and word came down that the move would be a bridge too far.
Fortunately, this unique intervention into a specific GM matter was never leaked to the press, saving us from having to explain how it comported with our policy of letting GM and Chrysler manage their own affairs.
As the Obama campaign continues to tout the GM bailout as an industrial policy success, the Treasury Department continues to revise upward the staggering losses inflicted on U.S. taxpayers.
On the day Government Motors, aka GM, announced it was recalling at least 38,000 of its vehicles — Impalas used by police nationwide and in Canada — due to a crash risk, a new Treasury report said it now expects to lose $25 billion on the bailout, $3.3 billion more than forecast earlier.
As the Detroit News reported, this loss was based on GM’s stock price at the time of the report, which was 15% higher than the previous report. Because the stock price has fallen since then, the latest report likely understates taxpayers’ real losses.
23 comments:
- countenance said…
- This is a point that must not be missed: The auto “bailout” wasn’t as much of a bailout as it was a special Congressionally-created bankruptcy path for GM and Chrysler alone, because standard Ch 11 bankruptcy procedure would have put the pensions and health benefits of retired union employees at the bottom of the pecking order. The UAW knew it, so they called Obama who called Pelosi and Reid to create this special bankruptcy path.
Even if GM and Chrysler would have declared Ch 11, they would not have been allowed to go out of business. No judge in the country would have permitted it.
Even if GM would have gotten TARP money instead of the special bankruptcy path, they still would have had to declare Chapter 11, and back to square one with the UAW.
- August 15, 2012 9:37 AM
- Anonymous said…
- BURN DOWN THE SUBURBS!!
http://www.nationalreview.com/articles/312807/burn-down-suburbs-stanley-kurtz
Just connecting the dots-Know what I’m saying?
- August 15, 2012 9:39 AM
- Anonymous said…
- GM will probably go backrupt in a few years at a cost of only a few hundred billion dollars of taxpayer’s money.
Then Detroit will be finished and blacks can rejoice that Detroit is an all black ghetto
- August 15, 2012 9:47 AM
- Discard said…
- Do Chicago, not Birmingham. Chicago is BHO’s turf, and reflects on him more directly.
- August 15, 2012 11:15 AM
- Zenster said…
- The politics around GM, with its great size and complexity, not to mention its iconic status, promised to be even more intense.
It is precisely GM’s “iconic status” which should have obviated the need for any TARP bailout.
Capitalism has a wonderful self-correcting feature which addresses mismanagement and poor product quality. It’s called bankruptcy.
This entire “too big to fail” mentality is so anti-Capitalist as to defy description. Does anyone honestly believe that the brand names of GM, like Chevrolet and Pontiac, would be allowed to slide into obscurity? Hell, that’s like thinking Xerox or Kleenex would go quietly into the night.
No, some other more responsibly run automotive manufacturer, or a group of them, would intervene if only for the established buyer loyalty enjoyed by these products.
Instead, by bailing out these mismanaged corporations, we have rewarded incompetence. No sounder defeat of Capitalism’s wholesome self-correcting features could be accomplished than by these bailouts.
Why has this incompetence been rewarded? Consider Wall Street. Why haven’t any of those financial geniuses who orchestrated this nation’s economic meltdown been frog-marched into open court and charged with collusion or malfeasance?
Guess who signs the reelection campaign checks?
We are in a one party system of the almighty dollar. Period.
Crony Capitalism (something that should be a total oxymoron) has, through political manipulation, morphed America’s industries and its financial institutions into a form of Consumerist Corporatism whose Globalist, Transnational PCMC (Politically Correct Multi-Cultural) goals dovetail at so many levels whereby they are rapidly becoming indistinguishable from Socialist bodies like the UN and EU.
It is also of interest to note what countenance observed about how:
This is a point that must not be missed: The auto “bailout” wasn’t as much of a bailout as it was a special Congressionally-created bankruptcy path for GM and Chrysler alone, because standard Ch 11 bankruptcy procedure would have put the pensions and health benefits of retired union employees at the bottom of the pecking order. The UAW knew it, so they called Obama who called Pelosi and Reid to create this special bankruptcy path.
Clearly, this is an election year nod by 0bama and his minions to blue collar unions and their traditional support for the Democratic Party. Too bad most of the Whites in those unions do not understand how any wealth that they are frantically trying to preserve will be leached out of them through hyper-inflation of the money supply and continuing trans-generational theft of our grandchildrens’ earnings by these Corporatist Bernie Madoff wannabes.
- August 15, 2012 11:46 AM
- SomeGuy said…
- Civil stability hangs by a thread in this country. I can only assume that the MSM purposely mask the grand story in an attempt to keep the patch on this busted tire. I cannot wait for the day when being respectable means being truthful and logical, because until then my very livelihood is at stake.
I’m just SomeGuy, desperately wishing we didn’t have to have this conversation…
- August 15, 2012 12:10 PM
- Anonymous said…
- I originally found your website via a link on a “ruin porn” website that featured some of Detroit’s landmarks. It was sad to see so many beautiful old brick buildings in such a state of decay. Some of them weren’t even that old (less that 10-20 years) but they were already past the point of saving either through neglect or through outright destruction (arson, etc.). The trees and plantlife are coming back and in some of the pictures, you can’t even tell that there had ever been a building there. All of the rubble is slowly disappearing under a sea of green.
- August 15, 2012 12:18 PM
- Whisky Tango Foxtrot said…
- http://news.cincinnati.com/article/20120815/NEWS0107/308150032
- August 15, 2012 12:23 PM
- countenance said…
- Zenster:
Your point can’t be understood well enough, either. The debate about Social Security is a bit of a red herring. People will still get their checks, but the whole check won’t buy a loaf of bread.
- August 15, 2012 12:32 PM
- Anonymous said…
- Paul,
You should really do a story on Gary, Indiana. It collapsed under BRA before the fall of Detroit or Chicago.
Mayor Hatcher, elected in 1968 was the first black mayor of Gary, and is still hailed as an icon.
Gary, Indiana is a total and complete failure. The media and academia still blame whitey for its demise.
- August 15, 2012 12:34 PM
- Anonymous said…
-
http://ca.sports.yahoo.com/news/guinea-ivory-coast-athletes-missing-london-151217689–spt.html
apparently, white privilege and racism is so awful that blacks must sneak into our countries to avoid going back to their own, indepedent black nations.
now if you’re thinking that doesn’t make any sense, congratulations: you’re not a libtard.
- August 15, 2012 1:19 PM
- Anonymous said…
- “But when I described it to [Brian] Deese (who served on President Obama’s Economic Policy Working Group), he went nuts. “Are you out of your mind?” he said. “Think what it would do to Detroit!”” – Then the name should be changed to General Detroit. Whats worse, this is why the workers there have to commute. the jobs can’t be allowed to follow them away from the rotted edifice.
- August 15, 2012 1:20 PM
- Zenster said…
- countenance: Your point can’t be understood well enough, either.
Thank you. I agree completely that Big Government™ will maintain the pretense of both Social Security and welfare but will quietly gut Social Security in order to finance all the EBT, TANF and Section 8.
- August 15, 2012 1:46 PM
- Sam said…
- I have not seen nor heard any information to confirm my suspicion, but I highly suspect GM shut down Saturn as a condition of the bailout from the feds. Saturn, a non-union operation, was THE moneymaker for GM, and I have suspected the reason GM started up Saturn, in Tennessee if I remember correctly, was to get out from under, and away from, the UAW. Saturn was producing some good cars, with many satisfied customers, so it would make no sense to shut it down, unless due to pressure from the feds, and we know how pro-union the feds are. A continuing successful Saturn operation would have been a huge black eye (no pun intended, well, maybe)for the socialist/communist/leftist element in the federal government. And now that the truth has been raised regarding GM’s intention to move its headquarters to Warren (gasp!, a predominately WHITE location), and the feds saying “no” to that move, it shows even more how corrupt this whole mess is.
- August 15, 2012 2:14 PM
- Dissident said…
- Have you ever noticed that all the Japanese and Korean automotive companies that have located in the US; have located as far away from the urban centers as possible. They have built in places such as Kentucky, Indiana, West Virginia, Texas, Ohio, etc.
There’s a reason for that you know.
- August 15, 2012 2:18 PM
- R Neville said…
- Penske tried to buy Saturn, but the feds shut that deal down.
- August 15, 2012 2:29 PM
- So CAL Snowman said…
- The best part about all of this is that 70% of GM’s automobiles are MADE IN CHINA! That’s right we didn’t save “American jobs” we didn’t save any manufacturing jobs whatsoever. Listen to the CEO of GM talking about all of GM’s partnerships with China.
“GM in 2010 said that it had repaid the 2009 loans. It did, too, and then borrowed money back at 5%. It had been paying 7%, which was a subsidy at that low rate to a busted company. Such a deal!
Over half of the bailout money went to buy GM shares, not make loans. That $26 billion in shares will be repaid (bought back by GM), we are assured, when GM’s shares hit $50. GM’s shares are under $25 today.
You say you didn’t know all this. You say it smells like crony capitalism to you. Me, too. But our sense of smell doesn’t count.”
*I vote for Chicago to be the next city tackled by SBPDL. Chicago has a nice demographic balance (if you like Brazil) which makes the black crime stats all the more eye popping.
- August 15, 2012 2:54 PM
- MuayTyson said…
- Give me Chi-town. My second choice would be St. Louis.
I have an ex who fancied herself a model which consisted of going to races and hustling cigarettes. At a race in St. Louis it started to rain so everyone ducked under a bridge. Now I’ve never been there but according to her these bridges are huge and hundreds of people can fit under them. Well as can be expected there were blacks there and of course a full scale riot between rival gangs broke out.
I didn’t hear anything from MSM about this but she said there were injuries and multiple ambulances and police cars responded. This was the late nineties St. Louis has been going down for a long time.
- August 15, 2012 4:35 PM
- Big Bear said…
- Police were more struck at how cocky the boys were for being so young.
Simple enough answer to that. Strip the little thugs naked and beat them with rubber hoses, then throw them in a hole with no toilet. The next day, drag them out, and a variation of the rubber hoses (say, waterboarding) then back in the hole.
By day three, those cocky, arrogant looks will be gone from their faces, perhaps forever.
- August 15, 2012 4:50 PM
- rjp said…
- Dissident said…
Have you ever noticed that all the Japanese and Korean automotive companies that have located in the US; have located as far away from the urban centers as possible. They have built in places such as Kentucky, Indiana, West Virginia, Texas, Ohio, etc.
There’s a reason for that you know.
Where they built in Kentucky, Indiana, West Virginia and Ohio were all areasformerly dominated by unions. Places where people might have been out of real jobs 5 or 10 years or more. The union back has to be broken before the jobs will return.
Give the area where I am from another 10 years and the United Steelworkers will no longer have a stronghold on those people and the jobs will come back there too. It takes a long time to break that union mentality.
Henry Ford thought he had a good idea, hiring negroes to keep the unions out. Turned out to be the worst idea ever. Once the unions broke on allowing negroes to join, Detroit was done. Unions accomplished some great things a long ago, now they are just protection for bad workers and extortionists.
- August 15, 2012 5:07 PM
- rex freeway said…
- When will we stop running from this parasitic race and say no? I’m half a century old. I sold my house two years ago as the second to the last white on the block. I’m in an area now where the black pop. is 3 percent. I’ve finally grown accustomed to not hearing sirens and helicopters 24/7. people go outside and enjoy themselves. neighbors talk to neighbors. The only break in was a racoon getting in the trash. Speaking of trash, there is none. yards are mowed, trash picked up. People caring about their property. I guess the parasites will never evolve into civilized productive citizens. But the government will always be there to coddle them and to try and force them upon everyone else.
- August 16, 2012 8:12 AM
- Concerned Citizen said…
- My vote is for Chicago. Let’s continue the assault of Northern liberal cities falling apart.
- August 16, 2012 8:38 PM
- Anonymous said…
- As an individual I can only speak for myself. Stuff that I don’t like is simply random, not because I am black. Do you understand? Are you so defeated that you have no self pride of individual opinion? I admit I did not bother to even read this blog, but decided to rant about the silly title “stuff black people don’t like.”
Just one more thing…I HATE GOD…THAT INCLUDES EVERYTHING!!! - August 23, 2012 10:57 AM
