General Motors (GM) reported today that at least another 1.5 million of its vehicles are being recalled. The picture that is emerging of the automaker is that of a grossly mismanaged monolith with widespread problems going back at least 10 years.
GM CEO Mary Barra admitted that the defects in the automaker's products have contributed to at least a dozen deaths, while independent watchdogs say that number is much higher, totaling several dozen deaths.
In addition to today's recall, GM has already recalled 3.1 million vehicles over the past two months due to various and sundry defects that have been deemed potentially dangerous.
But the most damning news of all is that GM knew of these problems 10 years ago but failed to disclose the danger. Company executives said that repairing the defective vehicles would be too costly.
The defective vehicles are not limited to only one or two of GM's models but encompass most of it not all of the company's brands, including Chevrolet, Buick, GMC, Saturn, and Cadillac.
As a consequence, GM has been hit with a massive class action lawsuit, and Congress is conducting an investigation both in the House and the Senate.
But the thing that should be of critical concern to the American taxpayer, other than the injuries and deaths caused by GM's defects and coverup, is the fact that the company received billions of dollars of taxpayer funded bailouts early in Barack Obama's first term.
The bailout itself of GM was a display of Crime, Inc. The Obama administration tossed most of the company's most generous investors into the ditch, leaving most stockholders with nothing, while at the same time pouring billions of taxpayers' money into the union that represents GM workers. Further, the U.S. government itself became a primary stockholder in the company, representing the first time in American history that the federal government seized a private corporation and became the primary owner.
This leads to several obvious questions. During the years the Obama administration owned GM, why did Obama's hand-picked CEO fail to disclose the blatant problems within GM involving quality control? It would be foolish to think that no one was around in GM who knew exactly what had been swept under the rug for 10 years, and a good CEO would have discovered it, particularly when it involved multibillions of taxpayer dollars.
Further, did the Obama administration never stop to realize that a company in such deep financial trouble obviously had internal issues that led directly to a crisis? And if they did realize it, why did they not investigate it thoroughly? After all, the Obama administration pushed GM products on the public, bought thousands of its vehicles for its government fleet, and essentially led some Americans to believe it was their patriotic duty to buy GM products. So, where were the investigations into why the company had been losing market share, and why were consumers shying away from GM vehicles?
Apparently the administration did not want to know the answer to those questions.
And even when it was pointed out repeatedly by this reporter and others that the vehicles GM was rolling out after the bailouts were faulty, sometimes dangerous and not worth what they were priced -- such as the infamous Chevy Volt -- GM execs went after us with a vengeance, personally sending emails and other messages our way claiming we were lying and attempting to "ruin GM."
No, there was no attempt to ruin GM. GM had already ruined itself.
There is a reason why companies fail. Sometimes it is not the fault of the owners, the stockholders, or the workers, but changes in the market. But a great deal of the time such failures can be laid squarely at the feet of the top executives who mismanaged the company, especially when the company in question had once been a powerhouse of success like GM.
This is precisely why this reporter stated at the time that no company is "too big to fail" and that government bailouts using our tax dollars is just plain wrong. GM should have been allowed to go bankrupt. Some of the top mortgage and investment banks on Wall Street should have been allowed to go belly up. Chrysler should have been allowed to bite the dust. And so should have General Electric.
American capitalism is based in part upon the profit motive, which brings prosperity not only to the rich but to workers who benefit from it. But the downside is that when company execs mismanage the operation to the brink of financial ruin, that company should be allowed to fail. The unions should have to suffer the consequences as well. Everyone who had a stake in the manner in which that company operated must be allowed to fail. This is an important corrective in free market capitalism. The system has its own way of getting rid of the trash. And GM was producing trash and pushing it on the unsuspecting public. It needed to go belly up.
And when a large corporation goes belly up due to mismanagement and an inferior product, it serves as a warning to other business ventures. Take care first and foremost to run the business intelligently and produce a product that is better than anyone else's.
Obama never insisted on that with GM. And the result is that the American taxpayers flushed multibillions of their tax dollars down the toilet because of an administration that believed that some companies are too big to fail.
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