After months of speculation, the wait has come to an end.  On June 1st, the largest North American car manufacturer, General Motors, filed for Chapter 11 bankruptcy protection.  The move comes as little surprise as the writing has been on the wall for some time.  The question now, though, is what the future holds for the restructured, and to be anticipated rebranded “New GM”, car manufacturer.  Some clues on that can be gleaned from what measures they choose to undertake during their restructuring process.

Obviously, one major step that the “New GM” will need to take is to pull itself off the radar.  I know this might sound counter-intuitive when they have so much inventory left to move.  However, what GM needs to do now is take the time to redefine itself, both in terms of its product as well as how the company views itself if they are to once again draw consumers to their products.  Besides, if they had difficulties selling their cars before, I can’t imagine any amount of advertising is going to sway consumers to purchase a car from a company under bankruptcy protection while economic uncertainties still loom.

The reality for GM is that their current restructuring is not merely a setback that Click here to continue reading »”The Fall of GM – Have the Lessons Been Learned?”

I read an interesting post on Twitter today by Kirk LaPointe (@kirklapointe), managing editor for the Vancouver Sun and Adjunct Professor at the UBC School of Journalism, regarding Barack Obama’s visit to Canada later this week:

When Obama visits Cda on frist[sic] intl trek, no speeches, six hours, see ya. We’re the foreign policy equivalent of an O’Hare layover.

Despite what Canadians might feel about Obama choosing Canada as his first country to visit as the newly minted US president, with more details emerging regarding his trip to our country, it’s becoming increasingly apparent that this is more a dress rehearsal than a legitimate start to his foreign affairs platform. Indeed, many news reports have the Obama team admitting that Canada was chosen because of the easier logistics of arranging a trip to Ottawa than say Brussels or Paris. Also, notice how there’s been little if any attention in Washington in regards to Obama’s impending trip to the Great White North. Robert Gibbs, Obama’s Press Secretary, only bothered mentioning this visit at the end of his daily briefing on January 28th with this rather perfunctory remark – Click here to continue reading »”Obama To Canada – Sorry, But I’m Just Not That Into You”

In my previous entry, “US Auto Manufacturers And The Dodo Bird – Birds Of A Feather?”, I examined the current economic situation of the Big Three automakers in Detroit in regards to what led them into this predicament and what parallels can be drawn between them and the history of the Dodo bird. In this piece, I want to discuss the idea of bailing out these three failing automakers and why it’s not a good idea. As we’ll see, this all boils down to the basic economic concept of supply and demand.

At its most basic, the fundamental problem facing GM, Ford and Chrysler is that not enough consumers are buying their cars as people are understandably opting to buy more reliable and better built foreign cars, some with warranty coverages that were almost inconceivable a decade ago. The continual decline in car sales, among other factors, has resulted in all three manufacturers ending up with massive debts and with little capital to cover even basic operating costs. This is why GM, Ford, and Chrysler are now pleading with the Canadian and American governments for financial aid as without the injection of new capital, they’ll have no choice but to file for bankruptcy. And yet, what will the granting of public funds really accomplish in terms of addressing the problems these companies face? Will the granting of billions of taxpayers’ dollars actually rescue these companies from financial collapse? Click here to continue reading »”Why Bailing Out The Detroit Big Three Automakers Is A Bad Idea”

I posted on my blog a couple of days ago a fake car advertisement I found on the net which mocked the notion that public taxpayers should bail out the so-called “Big Three” US auto manufacturers. In that post, I mentioned that I wanted to share my perspective on this whole idea regarding public funds being used to bailout corporations who are falling under hard times. But before I do that, I want to discuss why exactly these “Big Three” car manufacturers are in need of help in the first place since I think that’s an important factor to consider in any discussion on whether these corporations deserve such aid from the public. And as the title and corresponding image for this post suggests, we’ll see by the end of this piece whether or not these “Big Three” corporations share a common fate to that of the Dodo bird.

Essentially, the fundamental reasons why these three manufacturers are now teetering of the brink of extinction is because of Click here to continue reading »”US Auto Manufacturers And The Dodo Bird – Birds Of A Feather?”