Once again, I must voice my disapproval for the manner in which our Provincial and Federal governments have addressed this extremely important matter. Tony Clement has remarked that if the federal government does nothing the ripple effect on the Canadian economy would be disastrous. Let’s face it, politicians care not about common sense or the public purse strings. They are driven by the re-election bug and a political system that is so detached from the everyday realities of ordinary Canadians that they cannot see the forest for the trees. How could you rationally think of restructuring GM when the Federal, Provincial and Municipal workforce is filled with overpaid and redundant employees whose employment mirrors that of GM – nepotistic and corrupt? Politicians must first eliminate 40% of our public work force before they can fully appreciate what is happening with GM. These jobs have been lost because poor management, greed and lack of accountability – much like our government work-force.
There are several critical issues which should have been addressed and our politicians have failed to do this. First, they must identify the component parts of the North American automotive manufacturing segment? Should only a manufacturer with historical roots in this country be considered to be a relevant contender? Second, what policy, market simulation and consumer research has been done to substantiate the investment in General Motors and potentially Chrysler and Ford? What over-sight board has been established to guard the use of these government funds, so they are not they are not used to protect pension benefits for irresponsible GM employees and how will the issue of management compensation be monitored? Thirdly, what R&D and innovation strategy has been put in place to crystallize the future success of GM in the global economy? Finally, what marketing strategy will GM pursue to recapture market share and the confidence of the consumer at large?
With more and more foreign controlled manufacturers committing capital and jobs in North America we must examine if this bailout plan is damaging their future ability to compete and create more jobs. Even if we bailout the North American manufacturers, what assurance do Canadian taxpayers have that their future market presence will be positively received and that their products are products that consumers will want. Who will bear the cost of this bailout if it fails? We simply do not have the answers? I can assure you that it will not be the unions and existing bondholders.
What we fail to see is that General Motors is a global company that has failed globally and not in the North American market alone. Creating complex business partnerships between bondholders, nation states, new equity partners and existing stakeholders, which will include unions and employees, will not create a viable and leading-edge company. Companies must be driven by effective management, a vision, capital, great product, team-members who have passion for success and a marketing plan that creates profits - not dreams of it. The mistake is that we will produce an after-bankruptcy corporation, that for the most part, is made up of old ideas, old leadership and no vision for success.
Mr. Clement is absolutely right, there will be a ripple effect and it will be in the thousands of retail dealership jobs that will be lost, subcontractors who will fail because of their dependence on retail franchise operations, curtailment of banking revenues, and the closure of many other related businesses.
We must also come to terms with the fact that the market is saturated and that overall sales may diminish or stay stagnant for years to come. In other words, the market may not grow and existing manufacturers will be fighting for a smaller piece of the pie. One or more may have the support of governments and the others will not. So much for the free enterprise system and protectionist policy!
What most Canadian taxpayers may not know is that we have a way out. We could be leaders in the automotive game but we have a failed political vision. Canada is home to Zen Motor Cars – one of the first global electric vehicle manufacturers and we cannot seem to sell them in Canada - innovation stagnated by legislation. Secondly, our souring relationship with China is damaging enormous potential economic growth. China has trillions of dollars available for foreign investment, but our governments are afraid of the “Asian Factor”. Anglos grasping for that last piece of national control – farcical. I am confident China could be a leading edge contender for the take-over of General Motors. After all, Berkshire-Hathaway and Warren Buffet have invested hundreds of millions of dollars in China’s emerging electric car technology. Could he be wrong? We must come to terms with the fact that the automotive industry is in a state of flux. Within the next decade this industry will saturated with hybrid technology, electric vehicles, super-combustion gas engines, ethanol and gas vehicles and potentially unheard of propulsion systems – look at Joseph Newman’s perpetual propulsion system. The Germans, Japanese and Koreans are here but be on the lookout for the Italians, Indians and Chinese! Multiculturalism is not a social force but an economic force.
The future landscape of the automotive marketplace will probably eliminate look to eliminate dealership store-fronts and manufacturers may seek to become direct sellers to the public. Dealerships may become store-front boutiques and repair facilities will shrink due to less invasive repair techniques. Oil based mechanical systems are expensive and not environmentally friendly – the new technologies must face that harsh reality.
Let market forces dictate what happens to GM and all the others that may follow. Taxpayers should support mandated social programs, not bailouts.
Thank you,
Joseph Pede
Joseph Pede
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