Back in 1971 when I was working for Merrill Lynch, an economist in New York told me:
“What is good for General Motors is good for the nation.” He said, GM was so integrated with the U.S. economy at so many levels, that the two were inextricably entwined.
Well after years of poor management, bad decisions, international competition, bankruptcy, and a U.S. Government take over, General Motors made a profit.
The profit was substantial, and observers believe it represents a realistic chance that General Motors will be able to carry on a long term plan to issue new stock, pay the government (and the taxpayers) back, and be a viable industrial part of the U.S economy, again.
Anyway you cut it, this is good news for General Motors. It is good news for America. Because, it also suggests that there is a recovery of demand. There is also a recovery of confidence. Two key factors whose opposites killed G.M.
We cannot forget the millions of stockholders of the old GM, who stuck with the company for generations, who put their savings and retirement accounts in GM and who trusted GM’s management. Those people lost their equity. Those people largely have paid the price. Because GM’s huge debt became so demanding that the company simply could not generate enough cash flow, during a free falling economy to pay it’s bills. I was one of those stockholders. In a dream, I would think that GM would somehow give some nod, some token of financial appreciation to all of us who held on to it’s stock right up to the end, in hopes that all of the well paid bright managers there would find a way to save the day. They failed.
But, GM had a bright spot today when it again made a profit. $865 million dollar profit, for the first quarter of 2010, the first profit since the second quarter of 2007. The company would have simply died, had the U.S. Government not stepped in with loans and finally required deep cuts and a change in management and style. The company cut 10,000 jobs but still employs 77,000 Americans, and 205,000 worldwide. Many on the far right demanded pure “capitalism” and encouraged the government to let GM fail, but Democrats rightly said: “GM is too important to our nation to throw away. We cannot allow our industrial base to disappear.”
In the automobile industry, Ford has stood out as a winner, not taking federal money and also showing profits. Both GM and Ford must have had some silent pleasure at Toyota’s missteps, especially in light of Toyota’s aggressive competition that has cut into both Ford and GM’s profits over the past decade.
GM and Ford are building excellent cars now. They are standing by their products with good warranties. And in light of what we have seen from Toyota, the safety record of Ford and GM looks very good now days.
Now if GM will just get the electric car, the "VOLT" into production, it could begin to show leadership and trully knock the socks off of the global auto business. We are ready for the "new" GM to show us what it can do with new technology, and the time for the electric car is soon to be upon us. We believe the Oil Spill of the Gulf, marks a threshold in time and the future of renewable energy has now just started. GM can lead the way, and do it right!
Our hearty congratulations to General Motors and it’s 70,000 American workers who made this profitable quarter happen. Now we are expecting greater things from you all!