General Motors is showing a brave face to the world today after announcing another quarter of devastating losses.
From WSJ.com:
"The second quarter this year has been one of the fastest-changing markets I have ever seen," GM Chief Financial Officer Ray Young told reporters. "We're going to get this quarter behind us and move ahead."
Some future Kentucky governor will have to remember this approach when the same tidal wave that is drowning GM -- unsustainable employee benefits -- starts to take our state under.
Even with the wholly insufficient HB 1 from June's special session requiring the state to pour billions more dollars we don't have into employee benefits, the hole will keep getting bigger.
The last half-century at General Motors should have served as a valuable object lesson for Kentucky's policymakers, but it didn't. GM's ability to invest in itself and make its products more competitive has been severely hampered for decades while foreign automakers have whizzed past them and their Detroit brethren who negotiated the same union contracts.
Now they have inferior products, smaller market share, and bills they can't afford to pay. Their picture will become Kentucky's picture as our benefits-driven fiscal situation worsens.
Hang on; it's going to be a bumpy ride.
2 comments:
No one ever accused the unions of having the best interests of a company or any employer first and foremost in their approach. That's not their job. How often do you see the teachers union lobbying for pay for performance, bring on the competition of charter schools, supporting scholarships for children with learning disabilities, aggressive learning goals with accountability for achieving them, etc.? It is leadership that must swallow hard and make the tough decisions that go against the lobbyists. The time will come but only after it is too late. Kentucky doesn't have courageous leadership.
GM has nobody to blame but themselves. Right now GM can make a turbine-driven car equipped with batteries and a super capacitor that can charge those batteries in five seconds. That includes their Hummer. The turbine can get over 100 mpg. Turbines run on just about anything that will burn.
GM already has all the parts and equipment to do that right now. They don't need a government handout to reward their incompetence like the banks were given by Federal Reserve Chairmen Ben Bernanke.
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