# What Happens if GM Goes Under? **URL:** \ **Category:** Great Debates\ **Created:** [November 7, 2008, 5:13pm UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662 "2008-11-07T17:13:00Z")\ **Posts on this page:** 16\ **Page:** 4
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [November 10, 2008, 7:29pm UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/61 "2008-11-10T19:29:10Z")
> [@DanBlather](#): > > I just hope it’s not the line workers. It is. It always is. The accountants that started running the big 3 a few years ago discovered that if they broomed a bunch or workers ,the short term bottom line looked good. They walked in front of the board and showed great profits. They received huge salaries and bonuses. That is the flaw in capitalism. Most execs are itinerant workers, moving around short term and running off to the next corp to loot. There is no incentive to look long term. Corporations can not look into the future. They are judged by what each year shows. That is why they cook the books. When the truth comes out ,they are sitting on millions of bonuses and salaries and are long gone. ---
**Author:** ![Tristan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tristan/32/18058_2.png) [@Tristan](https://boards.straightdope.com/u/Tristan)\ **Post date:** [November 10, 2008, 8:34pm UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/62 "2008-11-10T20:34:06Z")
> [@mazinger\_z](#): > > exaggerating when they said that everything is run through GM. Maybe EDS can pick up some slack, and prevent some brain drain, but that’s more like a buoy in the middle of a tsunami. EDS hasn’t been part of GM for well over a decade at this point. And they are well on their way to screwing themselves too, so they aren’t going to be much help. ---
**Author:** ![erislover](https://avatars.discourse-cdn.com/v4/letter/e/71e660/32.png) [@erislover](https://boards.straightdope.com/u/erislover)\ **Post date:** [November 10, 2008, 8:38pm UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/63 "2008-11-10T20:38:48Z")
> [@gonzomax](#): > > That is the flaw in capitalism. That is the problem with publically traded corporations. ---
**Author:** ![MOIDALIZE](https://avatars.discourse-cdn.com/v4/letter/m/e274bd/32.png) [@MOIDALIZE](https://boards.straightdope.com/u/MOIDALIZE)\ **Post date:** [November 10, 2008, 9:34pm UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/64 "2008-11-10T21:34:26Z")
> [@sailor](#): > > Can you expand on this? Examples? Because as far as I know there are plenty of international treaties which prevent this kind of thing and countries can complain and there are arbitration and adjudication systems set up. I am quite sure this would not be allowed by the rules of the EU. So, please enlighten us with examples we can discuss in particular. > > And, by the way, the USA has a rather poor record of abiding by the rulings when they are not in their favor. The biggest current example is Japan’s efforts to weaken the yen to help its exports, particularly [automotive exports](http://www.knollenberg.house.gov/News/DocumentSingle.aspx?DocumentID=68443). China has also been criticized for undervaluing [its currency](http://en.wikipedia.org/wiki/Renminbi#Purchasing_power_parity). ---
**Author:** ![smiling\_bandit](https://avatars.discourse-cdn.com/v4/letter/s/e9a140/32.png) [@smiling\_bandit](https://boards.straightdope.com/u/smiling_bandit)\ **Post date:** [November 10, 2008, 10:23pm UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/65 "2008-11-10T22:23:30Z")
_blink blink_ You have no idea what Toyota is, do you? Toyota is abut as Japanese as _Avatar: the Last Airbender_ at this point. They are a global company which happens to be headquartered in Japan. But Japan is a marginal area for them today, heavily bought-in by global investing firms and so forth. It builds cars in the U.S. by the truckload (literally), using components made everywhere in the world. Likewise, GM. Eit: This is more or less directed across the board. ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [November 11, 2008, 12:32am UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/66 "2008-11-11T00:32:11Z")
> [@MOIDALIZE](#): > > The biggest current example is Japan’s efforts to weaken the yen to help its exports, particularly [automotive exports](http://www.knollenberg.house.gov/News/DocumentSingle.aspx?DocumentID=68443). China has also been criticized for undervaluing [its currency](http://en.wikipedia.org/wiki/Renminbi#Purchasing_power_parity). That is not direct help of any kind to any industry in particular. It is general monetary policy which affects the entire country equally and just like the USA does when it sets interest rates or other general policies. Direct help to a particuular industry is a totally different thing and that is what we are discussing. ---
**Author:** ![lobotomyboy63](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lobotomyboy63/32/2900_2.png) [@lobotomyboy63](https://boards.straightdope.com/u/lobotomyboy63)\ **Post date:** [November 11, 2008, 12:44am UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/67 "2008-11-11T00:44:24Z")
A million years ago, probably in _Car and Driver_, I read that the Japanese companies shared their technology among themselves via the government somehow. They couldn’t compete with the big three here if they each invented their own wheels, so they didn’t. If that’s true, Japanese vs. American cars isn’t like the old GM vs. Ford vs. Chryster model of competition. Maybe GM, Ford, and Chrysler should pool some information as well. If GM had gobbled up Chrysler, that might have happened as a result, anyway. ---
**Author:** ![MOIDALIZE](https://avatars.discourse-cdn.com/v4/letter/m/e274bd/32.png) [@MOIDALIZE](https://boards.straightdope.com/u/MOIDALIZE)\ **Post date:** [November 11, 2008, 2:00am UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/68 "2008-11-11T02:00:01Z")
> [@sailor](#): > > That is not direct help of any kind to any industry in particular. It is general monetary policy which affects the entire country equally and just like the USA does when it sets interest rates or other general policies. Direct help to a particuular industry is a totally different thing and that is what we are discussing. Except when it overwhelmingly helps their automotive industry. Which it does. ---
**Author:** ![ASAKMOTSD](https://avatars.discourse-cdn.com/v4/letter/a/919ad9/32.png) [@ASAKMOTSD](https://boards.straightdope.com/u/ASAKMOTSD)\ **Post date:** [November 11, 2008, 3:09am UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/69 "2008-11-11T03:09:41Z")
> [@Tristan](#): > > EDS hasn’t been part of GM for well over a decade at this point. > > And they are well on their way to screwing themselves too, so they aren’t going to be much help. Well, technically they are on their way to screwing HP now… ---
**Author:** ![Keweenaw](https://avatars.discourse-cdn.com/v4/letter/k/da6949/32.png) [@Keweenaw](https://boards.straightdope.com/u/Keweenaw)\ **Post date:** [November 11, 2008, 3:42pm UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/70 "2008-11-11T15:42:21Z")
> [@smiling\_bandit](#): > > _blink blink_ > > You have no idea what Toyota is, do you? > > Toyota is abut as Japanese as _Avatar: the Last Airbender_ at this point. They are a global company which happens to be headquartered in Japan. But Japan is a marginal area for them today, heavily bought-in by global investing firms and so forth. It builds cars in the U.S. by the truckload (literally), using components made everywhere in the world. > > Likewise, GM. > > Eit: This is more or less directed across the board. Avatar: the Last Airbender is much more Chinese influenced than Japanese. Drawn by some talented Koreans among others. **“happens to be headquartered in Japan”** Conveniently equates to the destiniation of the profits. Likewise GM’s profits go to the US. Toyota and GM are also significantly different in the amount of foreign components used in US manufacture, the number of employed and the number insured in the US. Here is the Toyota board of directors > **[Company | Toyota Industries Corporation](https://www.toyota-industries.com/company/index.html)** > > Toyota Industries Corporation was founded in 1926 by Sakichi Toyoda to manufacture and sell the automatic looms which he had invented. Since then Toyota Industries has diversified and expanded the scope of its business domains to include textile... Here is GMs [http://www.gm.com/corporate/investor\_information/corp\_gov/board.jsp](http://www.gm.com/corporate/investor_information/corp_gov/board.jsp) Toyota still looks pretty Japanese to me. Not that thats a bad thing. I just dispute the idea that Toyota & GM’s globalization work has somehow made them indepentent of their domestic loyalties. ---
**Author:** ![sailor](https://avatars.discourse-cdn.com/v4/letter/s/a587f6/32.png) [@sailor](https://boards.straightdope.com/u/sailor)\ **Post date:** [November 13, 2008, 12:24am UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/71 "2008-11-13T00:24:05Z")
> [@MOIDALIZE](#): > > Except when it overwhelmingly helps their automotive industry. Which it does. That is just silly. America is free to independently set its monetary policies, just like any other country. What we are discussing here is direct subsidies to specific corporations. Do you have any specific examples of the Japanese government subsidizing a Japanese car manufacturer so it would be more competitive? Because that is what is being discussed here: the US government helping out an American corporation. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [November 13, 2008, 12:56am UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/72 "2008-11-13T00:56:55Z")
> [@lobotomyboy63](#): > > A million years ago, probably in _Car and Driver_, I read that the Japanese companies shared their technology among themselves via the government somehow. They couldn’t compete with the big three here if they each invented their own wheels, so they didn’t. > > If that’s true, Japanese vs. American cars isn’t like the old GM vs. Ford vs. Chryster model of competition. Maybe GM, Ford, and Chrysler should pool some information as well. If GM had gobbled up Chrysler, that might have happened as a result, anyway. In America it is called patent pooling. That is where industries share developments . Not good for the inventor, ---
**Author:** ![MOIDALIZE](https://avatars.discourse-cdn.com/v4/letter/m/e274bd/32.png) [@MOIDALIZE](https://boards.straightdope.com/u/MOIDALIZE)\ **Post date:** [November 13, 2008, 2:37am UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/73 "2008-11-13T02:37:59Z")
> [@sailor](#): > > That is just silly. America is free to independently set its monetary policies, just like any other country. What we are discussing here is direct subsidies to specific corporations. Do you have any specific examples of the Japanese government subsidizing a Japanese car manufacturer so it would be more competitive? Because that is what is being discussed here: the US government helping out an American corporation. Countries are certainly free to set their own monetary policy. But when the US engages in open market operations, its for the purpose of meeting an interest rate target (which in turn influences spending and investment), not to artificially weaken the currency in order to flood the world’s markets with our goods. If American business interests and the government didn’t think these types of actions constituted a subsidy, they wouldn’t be complaining about it so much. As for specific examples, a quick Google search turned up: -Former Toyota exec Jim Press telling BusinessWeek that the Japanese government had subsidized [“100% of the development of the battery and hybrid system that went into the Toyota Prius.”](http://www.businessweek.com/bwdaily/dnflash/content/mar2008/db20080321_805508_page_2.htm) (Toyota[denied this](http://www.businessweek.com/autos/autobeat/archives/2008/04/chryslers_jim_p_1.html)). -Japan’s plans to develop a search engine to [rival Google](http://www.ft.com/cms/s/0/b3046d5c-5b1d-11dc-8c32-0000779fd2ac.html). -South Korea’s superconductor industry developed largely thanks to government investment in the industry (which the companies of course deny). The US, the EU, and Japan have all levied retaliatory tariffs against superconductors manufactured by Hynix because the company has almost collapsed twice this decade and the South Korean government has [subsidized their continued existence](http://www.wtopnews.com/?nid=108&sid=1483485). If I recall, one of factors that precipitated the South Korean economy’s collapse during the Asian financial crisis was their government borrowing a bunch of money in US dollars to finance investment and development of their superconductor industry. The US dollar got strong, and the demand for RAM chips declined just as the manufacturing facilities they invested in were coming online. There you go. Now perhaps you can provide a cite to support your contention that “the USA has a rather poor record of abiding by the rulings when they are not in their favor.” ---
**Author:** ![Digital\_Stimulus](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@Digital\_Stimulus](https://boards.straightdope.com/u/Digital_Stimulus)\ **Post date:** [November 13, 2008, 7:29am UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/74 "2008-11-13T07:29:34Z")
> [@MOIDALIZE](#): > > Now perhaps you can provide a cite to support your contention that “the USA has a rather poor record of abiding by the rulings when they are not in their favor.” I’m not familiar with the details, but I’ve never heard anything but scorn for the U.S.'s actions in the [U.S./Canada Softwood Lumber Dispute](http://en.wikipedia.org/wiki/United_States-Canada_softwood_lumber_dispute). Just an example…and the only one I, personally, can cite off the top of my head. ---
**Author:** ![jakeofalltrades1964](https://avatars.discourse-cdn.com/v4/letter/j/df788c/32.png) [@jakeofalltrades1964](https://boards.straightdope.com/u/jakeofalltrades1964)\ **Post date:** [November 13, 2008, 9:57am UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/75 "2008-11-13T09:57:54Z")
Wow… a lot of strong feelings on this- but I felt like putting my 2 cents in. Remember when America dominated the electronics market? RCA, Magnavox, etc… we ended up having our butts handed to us by overseas markets because they learned to make a superior product cheaper, more reliable, and faster. Same thing with the automotive industry. It used to be the big three. Look at American made cars in the 80s. They sucked! They confused cheap with ‘cheaply made’. The gas crunch came and went and that forced car companies to start making econoboxes. But they were cheaply made. I see a lot more 1970s VW bugs and Honda Civics from the 80s than Chevy Chevettes and Gremlins. I see the point of our economy- for each job an automotive employee has, they support several others. A large chunk of the economy will collapse. BUT- the auto makers have had decades to learn, and they no listen so well. We’re even losing ground in the big truck/SUV market, and we CREATED it with the Suburban. Why bail out the people that were too subborn or stupid to see the big picture? Here’s a radical idea… sell the factories to foreign automakers with the stipulation that the American workers keep their jobs. Sorry to say, but that might happen because what else would they do with several automobile factories and all the tooling? Big business doesn’t seem to care about the economy- they still get their outrageous bonuses and so forth, but it’s us workers that pay for it. I’m all for keeping jobs in America, and it may be time for us to choose between patriotism and buying American made cars to going to work for and buying ‘imports’. My two cents 🙂 ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [November 13, 2008, 1:20pm UTC](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662/76 "2008-11-13T13:20:27Z")
The sad thing is, GM cars are very good now. I have had SATURNS, and every one of them has been excellent (which I cannot say for my NISSAN stanza). [Previous page](https://boards.straightdope.com/t/what-happens-if-gm-goes-under/471662.md?page=3)