General Motors is bankrupt, and has been for at least six months. In order to continue operations, the US Government and/or Federal Reserve decided to loan it money which would be repaid at some later date.
Today, a company called "Vehicle Acquisition Holdings" purchased the choice bits of GM. VAH got its money primarily from the US government.
Why is the US government buying these select fractions of GM? Apparently, because it is good for the economy.
This Vehicle Acquisition Company purchased GMC, Buick, Cadillac and Chrysler. Purchasing these companies apparently means that all of the factories, offices, and even the employees were purchased. Not only that, but GM actually sold its name "General Motors" to VAC... And VAC has now renamed itself "General Motors".
To confuse the public (lie to the public) GM, which no longer owns the "General Motors" name has now renamed itself as the "Motors Liquidation Company".
This bit of sleight-of-hand is meant to fool everyone into thinking that GM is doing okay and continues to exits. Of course, all of the bad stuff, all of the debts, all of the problems, still remain... but the "new GM" (VAH) owns none of those problems.
Bizarrely, the "new GM" (VAH) brought along a bunch of employees such as Rick Wagoner and Robert Lutz that lead into bankruptcy. In another twist, the most recent CEO of GM, Frederick Henderson, is now the CEO of the "new GM" (VAH).
For all of those GM stockholders out there, the stock is now worthless. In fact, the value of what remains of GM is all negative. One could argue that ethically all of the stockholders should be paying in to the "old GM" to help pay off all the debts, and to clean up all of the environmentally damaged sites. Since that is not going to happen, Earth and the government and the people of the future are just going to have to deal with the mess.
I wonder what would happen if I went in debt so deeply that I had to keep borrowing money from everyone just to stay alive. Then, after I had squandered it all, I said, "Hey, I have to shed all of these debts. I wonder if I could just borrow some money from one last person, and then sell myself to them, but only sell my body, and the property I own free and clear... And then my "estate" will be left with some of that money, and will just have to deal with trying to pay off the creditors."
Bizarre. Just another example of how humans and Earth get screwed by corporations.
Comment by: PT (David Alexander) (Jul-19-2009) Web site
Thanks for the explanation, WH. It is a feature coming soon, to have some HTML capability (links, bold, italic, etc) in comments.
Comment by: auntiegrav (auntiegrav) (Jul-18-2009)
Rushkoff has done a lot of work in the past with advertising and technology and "why we do what They say" ("Coercion"). "Life, Inc." seems to build on his previous experiences where every time he thought he was doing something to inform people about how they are manipulated, the manipulators take his books and turn them into training seminars to get better manipulation performance. "Life, Inc." explains how the playing field belongs to the corporations and their governments, and no matter what you do to play on the field, they set the rules and decide whether you get the lights or a share of the ticket revenue. The only way to be human is to not play the money game and to live a local life. Mostly impossible to do at this point, but circumstances are getting worse for Them and forcing reality upon us all.
Comment by: Wavehunter (William Coffin) (Jul-18-2009) Web site
Watched the Colbert video, AG, as well as Douglas Rushkoff's own video that you suggested on another Planet Thought. Great films worth watching. I'm not sure Rushkoff is saying anything new, but he's saying something important in a way people can accept and understand.
To make a link live, do as I do here but use triangular brackets <> in place of rounded ones:
(a href="http://www.planetthoughts.org/")Planet Thoughts(/a)
Comment by: auntiegrav (auntiegrav) (Jul-18-2009)
I forgot to mention the old saying: "If you owe the bank 10 thousand dollars, then you have a problem. If you owe the bank 10 million dollars, then the BANK has a problem." My brother recently purchased a piece of farm equipment that was half a million dollars and didn't blink an eye about it. "It's not like they can get the money back if something goes wrong with me or the chopper." Oh, and the last I heard, due to a design problem, it doesn't work very well. When everyone depends on profits to make decisions, then they stop thinking about anything else.
Thanks, Dave. Where do I find the html rules for making live links in these comments?
I even edited your comment to turn your non-living link into a live link. Good for idea-diversity.
Comment by: auntiegrav (auntiegrav) (Jul-18-2009)
Read Douglas Rushkoff's new book, "Life, Inc."
It goes even further than "The Corporation" into how government and corporations have always been in bed together, and in fact, corporations were created by royalty in order to concentrate power in the hands of government. Meanwhile, most of us have been fooled into the "less government" idea (which leads to "more efficient corporations"). It's a vicious circle of delocalization and rape of the landscape and reality.
Comment by: PT (David Alexander) (Jul-13-2009) Web site
The mention of Chrysler could be confusing here -- it was arranged in a separate deal and yes, is a separate company.
Comment by: Wavehunter (William Coffin) (Jul-12-2009) Web site
Watching the excellent film 'The Corporation' taught me how companies - with the help of bad law and crooked lawmakers - have created a situation in which they have all of the rights of individuals but few of the responsibilities. If I commit manslaughter, for example, I can expect jail time; if a corporation does the same, the fine will be a fraction of its annual earnings.
From a fairness point of view, these auto bailouts seem hard on Toyota. Lured into building cars in the USA and employing Americans, they are then disadvantaged as their competitors are subsidised. When it comes to free trade there is a double standard here.
From an environmental point of view, probably the only part of GM worth saving was the Chevy Volt electric car. After doing this, the US government would have done better by helping GM's former employees retrain as railway builders or solar panel installers and then subsidising these project for a green recovery.
(PS: Is it not the 'Chevrolet' brand that VAH/GM is saving and not Chrysler? I think Chrysler is a separate company with its own problems.)
Comment by: City Worker (Jul-10-2009)
You've got a lot of good information there, that I didn't know. I would like to point out, though, that not only corporations can free themselves of debt by going into bankruptcy. Individuals can, too.
Aaron Wissner is a teacher, educator, organizer and guest speaker. He is a graduate of the University of Michigan, with emphasis on mathematics, science, and education. Mr. Wissner has taught and consulted for sixteen years in public school, in areas ranging from mathematics, science, computers, to leadership and television news production. He is the founder and organizer of the grassroots Local Future Network, a non-profit educational outreach organization dedicated to saving Earth through culture change.
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PT (David Alexander)
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