Another interesting tidbit is that now that GM is out of bankruptcy, its severance payments to those 400 to-be-let-go top managers won’t be subject to bankruptcy court approval and will probably not be disclosed to the public.

That is, unless the public, who own 60% of this investment vehicle, demand through their government to know the details of where their money is going.

Note to self – individual privacy issues could be dealt with any one of several wyas, e.g., by making GM’s right to disclose severance terms a term of the severance agreement.

GM is out of bankruptcy but not out of the woods. It needs a sustainable direction. If we want it to build smaller more fuel efficient less carbon using cars, then the government needs to reset priorities by taxing the hell out of larger products and increasing model level fuel standards. And of course none of this will work if the banks and credit aren’t fixed.

As for the Uighur story, it is a masterpiece of superficiality. I wrote several months ago as an aside that one of the things that global depression would bring would be both a return to protectionism and nationalism, and that nationalism would manifest itself not just between national players but within countries between ethnic groups. I think that China’s central bank taking shots at the dollar as reserve currency one week and the government beating up on the Uighurs the next are manifestations of the tensions that the economic and financial meltdown has caused. It is a case of blaming the other, which is always easier than admitting mistakes or being honest about the difficult times ahead.

Vlasic writes as if he spent as much time in China as Niall Ferguson, which is very little. It’s very superficial and “China friendly”, notwithstanding its scrubbed recitation of considerable repression of whole peoples – taking away their language, their culture, their autonomy, their lands. If this were the Middle East, it would make China Israel and the Uighurs Palestinians.

China feels free to engage in sometimes murderous, always brutal, repression now that the US is virtually in its hands. There are at least four reasons for it:

1. Our debt burden to them is enormous and growing.

2. Walmart is the world’s biggest retailer and fills its stores with its cheap clothes and shoes, toothpaste and food products. It and other American businesses also depend on China for data processing and IT development, R&D, semiconductors, hidden cameras and recording machines, manufacturing equipment, cars and parts. We also depend on it as a dumping ground for leaded products like used electronic equipment (outmoded CRT’s contain lots of lead in their screens and soldered connections) and other waste.

3. The US has considerably lowered the bar for state conduct. The “beacon of civilization” has normalized domestic spying, state secrecy and torture. It ignores civil rights and the rule of law. Interrogation and spying done overseas are increasingly becoming the norm for domestic police operations. Suppression of public dissent has increased.

4. The US has reignited claims to empire that flamed out over the battlefields of Vietnam, Algeria, Kenya, Malaysia and India. The US’s historical maltreatment of American Indians and African slaves and its current imperial ambitions in the Middle East combine to give China a green light for its own empire. Vlasic’s article points out the Uighurs may be sitting on considerable reserves of oil. China’s ambitions won’t stop there or in Tibet.

For those reasons and others, the US has given China a season pass to do “whatever it takes” to make their ambitions come true.

Excuse me, that was Michael Wines’ article on China, not Bill Vlasic’s.

Vlasic wants GM to end up like Chrysler, perhaps?

But Wall Street’s passion for gutting and selling companies has little to do with credibly reforming a global concern.

Hey, those Wall St M&A “specialists” need to be able to churn and burn so they can cop the fees doncha know.

An actual viable GM wouldn’t allow them to do such things co they don’t like it.

GM’s need for ruthless, self-serving, short-term managers sounds like someone should make a call to Carly Fiorina.

Bob Lutz, at 77, will not be one of those let go with a golden “thank you”. Which suggests that CEO Fritz Henderson’s dream of remaking GM’s culture may remain a dream.

I can’t find the exact quote on Google but just how much did Maxium Bob say Toyota was losing on every Prius made? My point why have a non believer help run GM.
We have seen what not believers in government regulation have done running banks, wars and our entire government for eight years.

Book Salon up at the Mothership with Charles Morris’s The Sages hosted by Nomi Prins

Yup. Pretty much describes how they’ve dismembered Delphi and kept it in bankruptcy for more than three years. It’s really still GM-Lite: between retained management, which received hefty bonuses to stay (a marvel, given that their skills sent it into bankruptcy) and private equity/LBO’s demands for profit at any cost, it may never come out of bankruptcy.

My prediction: GM will be owned by the Chinese within three years.

Carly would fit right in and would know as much about auto and managing/reforming large enterprises as Mr. Obama’s pick. An organization run in her image would be like a newsroom run by David Brooks.

Excellent point. My guess is that Lutz is there for “continuity”, which is short hand for keeping some subset of the powers that be confident. He will stifle needed reforms and likely pursue the wrong ones. He doesn’t believe in global warming or his car company’s need to make products that respond to it. He’s more a Roger Smith kinda guy, which suggests Fritz Henderson remains as captive to GM’s inertia as those who came before him.

“Only an outsider who has no “skin in the game” (except a completion bonus that rewards immediate drastic cuts) can make the necessary changes to remake this venerable company…Only a management team that has to live longterm with the consequences of its decisions is likely to make decisions that allow the company to survive long.”

I would only disagree to the extent that management is only part of the problem and even less of the solution–these guys are not the masters of the universe except in their press kits. The problem is with investors and the very concept of investment that has taken hold in the last 30 or so years.

The ideals of classical political economy have been perverted into something very close to their opposite: gambling with an inheritance. Profit is no longer viewed as gains in value realized through work but as the prize for luck or the recognition that common tradesmen and mere laborers owe to privilege and wealth.

Having a management team that counts for its survival on the fate of the firm is no use if the wealth of the investors is not similarly tied. The credit default swaps and collateralized debt obligations are merely symptomatic of an investment culture that has long believed that high profit need not and should not entail either long-term commitment to any particular endeavor nor assumption of any meaningful degree of risk. Investors expect to make the bulk of their money by selling their shares rather than by collecting dividends. They have no interest in the particular business or its health because they do not have to profit from the earnings or productivity that capital funds. More churn in the market is actually better from their poiint of view, because more stock sales mean more chances to flip your holdings and boost your takings.

While this gambler’s logic persists, changes to management teams will ultimately mean little. Greed and risk aversion will drive pursuit of short-term gains. Investment markets will remain volatile. Fortunes will be made by luck and collusion rather than from sound, competitive business decisions and solid productive effort.

The myth of the blameless investor is a major part of the political impasse that created the current situation and blocks meaningful recovery and reform. Greedy gamblers have been presented as the victims of conniving AIG managers or Bernie Madoffs. But the investors are principally to blame. Their insatiable expectations drove the bad business decisions and enabled the incompetnets and crooks that took their money. No fraud ever succeeded by targeting the honest and the industrious–a classic con targets actual or would be con men, people whose lust for gain without honest effort makes them easy marks. We have become a nation of rubes because we have been trying to be a nation of thieves.

Better management is thus not the answer to the survival of productive industry in America. We must have better investors. It is now amply clear that only government regulation can provide them. We have to make broad changes to both corporate governance and tax policy, so that investors have a real stake in the productivity and long-term viability of their investments. We should adopt mechanisms that limit or severely penalize short-term speculative gain. We should force investors to profit from the earnings of their businesses and not from the sale of their shares. We should limit or ban mechanisms that insulate–or appear to insulate–investors from the actual business they invest in and the actual risks that those investments entail. Above all, we should make sure that every American–not just the wage earners–works for a living.

You folks need to be a little less hard on Bob Lutz. Whatever his political beliefs — or his willingness to throw down with climate change deniers — he knows how to put cars in the showroom that people will want. He honed that skill through stints with BMW, Ford of Europe and Chrysler before he came to General Motors. Indeed, a lot of folks believe that Chrysler sealed its doom by passing over Lutz for CEO in favor of Bob Eaton, who helped engineer the Daimler clusterfuck, which led to the Cerberus debacle. Lutz is certainly not a candidate for the head of the EPA, but given his involvement in such hits as the Cadillac CTS and Chevy Malibu, and even the less successful Pontiac Solstice and G8, GM is better off with him than without him.

Your conclusion might have been spot on in 1999.

I don’t disagree that Bob Eaton’s handling of the DB deal was incredibly short-sighted. He was either easily deceived or intentionally destroyed his firm. I think you’d have to travel far to find anyone in the industry who believed the PR spiel that it was a merger – it was obviously and was always intended as a takeover – much less that it was a merger of equals.

I think it likely that Eaton concluded that neither he nor anyone else could manage the company out of its fate and cashed out, and put the happiest face on it he could, other stakeholders be damned. Any other interpretation requires that he be so guileless or self-deceived that he would have never made chairman anywhere.

Lutz may be brilliant at design and talented at marketing in a muscle car sort of way, but he seems too rigid – Detroit’s defining characteristic – successfully to lead the whole company. He’s a good number two, a senior contributor and gadfly, but not the guy who should have the last word on what to do, where to go, or how to get there.

I think you give management more credit than it deserves. In all fairness, I do not know Mr. Lutz. But I have met a number of high executives in the last 20 years, and they have almost all been as dumb as posts, myopically vain, or, most often, both.

Modern executives perform essentially the same role as “spokesmodels”. They project the kind of Success that investors large and small imagine for themselves. Hence their prominence in the press and advertising–something largely unheard of 30 years ago. They are celebrities. It is no accident that Trump has his own TV show.

These guys ( and a few gals) are pretty clueless about the nuts and bolts of their businesses, assuming they even try to take an interest. Many if not most of the undertakings they initiatives they champion end in disaster. Few are innovative. More often than not, one executive simply copies what his frat brothers at other companies are doing. They get into trouble readily, because they are too self-involved to criticize their own actions and too given to herd instinct to criticize those of their fellows. Everybody does it, right?

We would do better in this country to ignore the relentless self-promotion of the CEO class. Turn off the “Apprentice” and instead devote time to close reading of “Dilbert.”

I agree that private equity/LBO management priorities, which used to be those of marginal bottom feeders and loan sharks, have become the norm for many investors and even for commercial lenders (whose commercial arms have been subsumed into the investment banking culture).

It’s bad enough when you have to borrow from them; as Delphi knows too well, it’s hell when they own a controlling interest in you.

The worst of all worlds is to have “I” bankers actually in charge of operations rather than in their usual role of advisers for a bag of hard cash. It’s like having Rumpelstiltskin spin gold thread; he’s too easily bored and hamfisted. Many disdain the commitment, the time it takes to cash out. Like Palin, they become bored and make bad decisions.

Owning a company, like owning a hull in the water, is not the same as running or sailing it; the skills needed to do one are often harmful to the other. That’s why good management teams bring together diverse skills and personalities that can both compete and cooperate.

As you say, it will take reforms of corporate law, tax and lending laws to rein them in. Sadly, Mr. Obama is no reformer. The status quo made him. He will not attempt even mild reforms unless activists and a depression force him to.

I’ve met many who fit that personality type, and many who are really quite good. They aren’t often in the same company.

Your point about copy cat behavior is important. I’ve seen it even at one of the top ten public libraries. They want to mimic Borders, when they operate to fundamentally different purposes, and treat an educated and cooperative workforce as if they were wrestling with the proverbial recalcitrant UAW or Teamsters. All because they are mimicking the management schtick of the day, either inherited or newly repackaged by the last “consultant” in the door.

Even his detractors allow that he has done a masterful job. His nickname is “the stability secretary” — a tribute to his ability to step into chaos and haul it to order.

Is Michael Wine’s article fascist paean or satire? I think I know the answer. But a linky would be nice anyway.

Yes there are some really dysfunctional corporate management ideas floating around in librarianship. It’s not just one library.

I’m sorry which hand “marginalizes” a culture that helped create the Tang dynasty, the velvet or the iron?
Marginalize is sort of like saying the Israeli military makes “incursions” into Lebanon, because we dare use “dirty” words like ethnic cleansing or blitzkrieg.