Michael Moore on the bankruptcy of GM

I was going to write something tonight on my conflicted feelings on the bankruptcy of GM, but then, as I was thinking about what to write, I happened across this letter by director Michael Moore. And, as I agree with almost all of it, I thought that I’d reprint it here in its entirety, and save myself the work.

I write this on the morning of the end of the once-mighty General Motors. By high noon, the President of the United States will have made it official: General Motors, as we know it, has been totaled.

As I sit here in GM’s birthplace, Flint, Michigan, I am surrounded by friends and family who are filled with anxiety about what will happen to them and to the town. Forty percent of the homes and businesses in the city have been abandoned. Imagine what it would be like if you lived in a city where almost every other house is empty. What would be your state of mind?

It is with sad irony that the company which invented “planned obsolescence” — the decision to build cars that would fall apart after a few years so that the customer would then have to buy a new one — has now made itself obsolete. It refused to build automobiles that the public wanted, cars that got great gas mileage, were as safe as they could be, and were exceedingly comfortable to drive. Oh — and that wouldn’t start falling apart after two years. GM stubbornly fought environmental and safety regulations. Its executives arrogantly ignored the “inferior” Japanese and German cars, cars which would become the gold standard for automobile buyers. And it was hell-bent on punishing its unionized workforce, lopping off thousands of workers for no good reason other than to “improve” the short-term bottom line of the corporation. Beginning in the 1980s, when GM was posting record profits, it moved countless jobs to Mexico and elsewhere, thus destroying the lives of tens of thousands of hard-working Americans. The glaring stupidity of this policy was that, when they eliminated the income of so many middle class families, who did they think was going to be able to afford to buy their cars? History will record this blunder in the same way it now writes about the French building the Maginot Line or how the Romans cluelessly poisoned their own water system with lethal lead in its pipes.

So here we are at the deathbed of General Motors. The company’s body not yet cold, and I find myself filled with — dare I say it — joy. It is not the joy of revenge against a corporation that ruined my hometown and brought misery, divorce, alcoholism, homelessness, physical and mental debilitation, and drug addiction to the people I grew up with. Nor do I, obviously, claim any joy in knowing that 21,000 more GM workers will be told that they, too, are without a job.

But you and I and the rest of America now own a car company! I know, I know — who on earth wants to run a car company? Who among us wants $50 billion of our tax dollars thrown down the rat hole of still trying to save GM? Let’s be clear about this: The only way to save GM is to kill GM. Saving our precious industrial infrastructure, though, is another matter and must be a top priority. If we allow the shutting down and tearing down of our auto plants, we will sorely wish we still had them when we realize that those factories could have built the alternative energy systems we now desperately need. And when we realize that the best way to transport ourselves is on light rail and bullet trains and cleaner buses, how will we do this if we’ve allowed our industrial capacity and its skilled workforce to disappear?

Thus, as GM is “reorganized” by the federal government and the bankruptcy court, here is the plan I am asking President Obama to implement for the good of the workers, the GM communities, and the nation as a whole. Twenty years ago when I made “Roger & Me,” I tried to warn people about what was ahead for General Motors. Had the power structure and the punditocracy listened, maybe much of this could have been avoided. Based on my track record, I request an honest and sincere consideration of the following suggestions:

1. Just as President Roosevelt did after the attack on Pearl Harbor, the President must tell the nation that we are at war and we must immediately convert our auto factories to factories that build mass transit vehicles and alternative energy devices. Within months in Flint in 1942, GM halted all car production and immediately used the assembly lines to build planes, tanks and machine guns. The conversion took no time at all. Everyone pitched in. The fascists were defeated.

We are now in a different kind of war — a war that we have conducted against the ecosystem and has been conducted by our very own corporate leaders. This current war has two fronts. One is headquartered in Detroit. The products built in the factories of GM, Ford and Chrysler are some of the greatest weapons of mass destruction responsible for global warming and the melting of our polar icecaps. The things we call “cars” may have been fun to drive, but they are like a million daggers into the heart of Mother Nature. To continue to build them would only lead to the ruin of our species and much of the planet.

The other front in this war is being waged by the oil companies against you and me. They are committed to fleecing us whenever they can, and they have been reckless stewards of the finite amount of oil that is located under the surface of the earth. They know they are sucking it bone dry. And like the lumber tycoons of the early 20th century who didn’t give a damn about future generations as they tore down every forest they could get their hands on, these oil barons are not telling the public what they know to be true — that there are only a few more decades of useable oil on this planet. And as the end days of oil approach us, get ready for some very desperate people willing to kill and be killed just to get their hands on a gallon can of gasoline..

President Obama, now that he has taken control of GM, needs to convert the factories to new and needed uses immediately.

2. Don’t put another $30 billion into the coffers of GM to build cars. Instead, use that money to keep the current workforce — and most of those who have been laid off — employed so that they can build the new modes of 21st century transportation. Let them start the conversion work now.

3. Announce that we will have bullet trains criss-crossing this country in the next five years. Japan is celebrating the 45th anniversary of its first bullet train this year. Now they have dozens of them. Average speed: 165 mph. Average time a train is late: under 30 seconds. They have had these high speed trains for nearly five decades — and we don’t even have one! The fact that the technology already exists for us to go from New York to L.A. in 17 hours by train, and that we haven’t used it, is criminal. Let’s hire the unemployed to build the new high speed lines all over the country. Chicago to Detroit in less than two hours. Miami to DC in under 7 hours. Denver to Dallas in five and a half. This can be done and done now.

4. Initiate a program to put light rail mass transit lines in all our large and medium-sized cities. Build those trains in the GM factories. And hire local people everywhere to install and run this system.

5. For people in rural areas not served by the train lines, have the GM plants produce energy efficient clean buses.

6. For the time being, have some factories build hybrid or all-electric cars (and batteries). It will take a few years for people to get used to the new ways to transport ourselves, so if we’re going to have automobiles, let’s have kinder, gentler ones. We can be building these next month (do not believe anyone who tells you it will take years to retool the factories — that simply isn’t true).

7. Transform some of the empty GM factories to facilities that build windmills, solar panels and other means of alternate forms of energy. We need tens of millions of solar panels right now. And there is an eager and skilled workforce who can build them.

8. Provide tax incentives for those who travel by hybrid car or bus or train. Also, credits for those who convert their home to alternative energy.

9. To help pay for this, impose a two-dollar tax on every gallon of gasoline. This will get people to switch to more energy saving cars or to use the new rail lines and rail cars the former autoworkers have built for them.

Well, that’s a start. Please, please, please don’t save GM so that a smaller version of it will simply do nothing more than build Chevys or Cadillacs. This is not a long-term solution. Don’t throw bad money into a company whose tailpipe is malfunctioning, causing a strange odor to fill the car.

100 years ago this year, the founders of General Motors convinced the world to give up their horses and saddles and buggy whips to try a new form of transportation. Now it is time for us to say goodbye to the internal combustion engine. It seemed to serve us well for so long. We enjoyed the car hops at the A&W. We made out in the front — and the back — seat. We watched movies on large outdoor screens, went to the races at NASCAR tracks across the country, and saw the Pacific Ocean for the first time through the window down Hwy. 1. And now it’s over. It’s a new day and a new century. The President — and the UAW — must seize this moment and create a big batch of lemonade from this very sour and sad lemon.

Yesterday, the last surviving person from the Titanic disaster passed away. She escaped certain death that night and went on to live another 97 years.

So can we survive our own Titanic in all the Flint Michigans of this country. 60% of GM is ours. I think we can do a better job.

Michael Moore

While I feel for the GM employees who will lose their jobs in the restructuring, I can’t help but think that the company, to a very large degree, deserves what’s happening. GM made its job fighting against environmental standards and convincing people that they needed Hummers when they knew damned well that such a course, while profitable, wasn’t sustainable. And, now, like John Dingell before them, they’re being forced to accept the consequences of their actions… Again, I feel for the men and women who will suffer as a result of these recent developments, but, like Moore, I believe that, in the end, all of this could be good thing. The credit collapse that led to the implosion of Big Three could very well, when all is said and done, be seen as the stroke of good luck that we needed in order to avoid catastrophe.

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  1. Fran
    Posted June 1, 2009 at 9:34 pm | Permalink

    Out of a job yet?

    Keep making crap.

  2. ypsiPawz
    Posted June 1, 2009 at 9:52 pm | Permalink

    can’t argue with anything said…

  3. Ol' E Cross
    Posted June 1, 2009 at 10:45 pm | Permalink

    It’s hard, as I generally support Moore’s agenda, but he’s not a fool. He’s riding on false pretense and knows it. I’d like to see Moore do a comparison of the labor practices of GM vs. the labor practices of Toyota. Or even, the average mpg of the two. I’d like to see “who killed the electric car” include the RAv4.

    Until that movie is made, everything the fat bastard says is self service.

    Flint should cut him on the face.

  4. Paw
    Posted June 2, 2009 at 10:21 am | Permalink

    Cut him on the face, OEC? Do you really think MM is that bad for Flint? I’ll agree that he’s self-serving, and that his documentaries tend toward propaganda, but what has he done to Flint to deserve being slashed?

  5. Burt Reynolds
    Posted June 2, 2009 at 11:21 am | Permalink

    Michael Moore speaks the truth

  6. kjc
    Posted June 2, 2009 at 11:23 am | Permalink

    every filmmaker is self-serving. hell, everybody is.

  7. roots
    Posted June 2, 2009 at 1:07 pm | Permalink

    Convert the factories! Shape the future! Save Michigan!

  8. Ryan
    Posted June 2, 2009 at 1:23 pm | Permalink

    I found the segment with Ralph Nader and Harley Shaiken on Democracy Now significantly more interesting than Moore’s letter: http://www.democracynow.org/2009/6/2/ralph_nader_and_labor_professor_harley

    As much as I love the idea of bullet trains and public transportation, it seems pretty absurd to discuss what the government should do with a company they said they aren’t going to run. We’re going to see more of the same from the 1 party system and the private companies that control it.

  9. Scabio
    Posted June 2, 2009 at 3:25 pm | Permalink

    Sorry Michael M, but the union workforce punished (and killed) GM, not the other way round.

  10. kjc
    Posted June 2, 2009 at 4:06 pm | Permalink

    “Sorry Michael M, but the union workforce punished (and killed) GM, not the other way round.”

    yeah, if you believe the pathetic media coverage.

    I like Dean Baker on why that take is bullshit. but there are many sources.


  11. BornInYtown
    Posted June 2, 2009 at 10:01 pm | Permalink

    fuck you fran

  12. Meta
    Posted June 4, 2009 at 12:17 pm | Permalink

    From today’s Progress Report:

    The Present And Future Of GM
    This week, auto giant General Motors (GM) followed Chrysler and filed for Chapter 11 bankruptcy, making it the fourth largest U.S. company to ever take such a step. As a result of the pre-packaged bankruptcy plan, the U.S. government will own a 60 percent stake in GM, with the United Auto Workers (UAW) receiving 17.5 percent, the Canadian government taking 12.5 percent, and GM’s unsecured bondholders taking 10 percent. In order to finance its bankruptcy, “the fallen icon of American industry will rely on $30 billion of additional financial assistance from the Treasury Department and $9.5 billion from Canada,” which is in addition to the $20 billion GM had previously received in low interest loans from the Bush administration. As the American Prospect’s Harold Meyerson put it, government investment “was simply the one course available to avert an economic holocaust in the Midwest (not just in Michigan but in Ohio, Indiana, and other states as well) that would plunge the nation deeper into recession.” Of course, this hasn’t stopped conservatives from claiming that the bankruptcy plan puts the U.S. “on the road toward socialism.”

    WHY BANKRUPTCY NOW?: In an interview Tuesday with Fox News’s Greta Van Susteren, Vice President Cheney admitted that the Bush administration deliberately decided to pass the buck on GM, giving the company a bridge loan and then leaving the problem for Obama. Other prominent Republicans, like Republican National Committee chairman Michael Steele, responded to Obama’s plan by saying that the company should simply “go into the market, they work out their situation in the market.” But the Obama administration’s packaged bankruptcy makes sense for both GM and the country’s economic stability. Without the government financing its bankruptcy, GM “would have ended up in liquidation, shedding 60,000 hourly jobs instead of 20,000” and selling assets at firesale prices. And as the New Republic’s Jonathan Cohn wrote, “the pain wouldn’t have stopped there. It would have spread to GM’s suppliers and, eventually, to all of the communities where these workers spend money.” By delaying bankruptcy, the administration was able to announce that it would back GM’s warranties, set plans to close dealerships, allow suppliers time to diversify, and work out a deal to ensure that autoworkers received some of the benefits and pensions that they earned. As economist Dean Baker explained, “back in December and January, when none of these pieces were in place, there was still enough up in the air that I think it would have been reckless to have done a bankruptcy.”

    THE PLIGHT OF THE BONDHOLDERS: A favorite conservative reaction to the GM bankruptcy has been to claim that it unfairly benefits unions and violates the rights of GM’s bondholders. A group of Republican House members said that “the proposal seems to favor the rights and claims of the UAW, a political ally of the current administration…over the rights and claims of the company’s diverse group of bondholders.” Some have even gone so far as to claim that the administration’s plan is illegal. Rep. Eric Cantor (R-VA) said that “the White House [is] coming in and favoring the UAW, basically making the rights of the bondholders inferior, outside any kind of legal framework whatsoever. There has been a downright suspension of the law.” But, as the Washington Post noted, “[T]here are a number of precedents for retiree health funds getting preferential treatment during bankruptcies, particularly in the steel industry in recent years.” It’s also likely that the GM bondholders would get no more in liquidation than they are getting under the current plan, which may be why a majority of bondholders (54 percent) support the plan. And as for the claims of illegality, Reuters’s Felix Salmon pointed out that an unsecured bondholder “has no ‘legal right’ to get exactly the same outcome as any other creditor.” “[I]f the bondholders have a better idea of what’s fair, they’re more than welcome to provide tens of billions of dollars in debtor-in-possession financing in order to make that happen. But of course they’re not willing to put in so much as a nickel, which means that it’s not up to them,” Salmon wrote.

    A RESPONSIBLE EXIT STRATEGY: House Minority Leader John Boehner (R-OH) responded to the GM plan by saying “the only thing it makes clear is that the government is firmly in the business of running companies using taxpayer dollars.” However, according to the New York Times, “[A] quick restructuring appears possible” precisely because of the agreements brokered by the administration with the union and GM’s bondholders. As Obama said, “GM will be run by a private board of directors and management team with a track record in American manufacturing that reflects a commitment to innovation and quality. They — and not the government — will call the shots and make the decisions about how to turn this company around.” Reuters noted that the administration has “created safeguards to prevent interference, including prohibiting government officials from sitting on the firm’s board or working for firms in which the automaker invests.” Steve Rattner, head of the Obama administration’s auto task force, said that GM’s shares will be sold off in a series of transactions over the next 12 to 18 months in order “to maximize the return” for taxpayers. “Obviously we could exit tomorrow if we wanted to by handing out shares at the corner of Pennsylvania and 17th or selling them for a dollar, but we have a huge amount of taxpayer money here,” Rattner said. “But while we want to exit as soon as possible, we also want to exit as soon as practicable in terms of being good custodians of the taxpayers’ money.”

  13. Posted June 6, 2009 at 9:22 am | Permalink

    This was a great piece – and I would be so ecstatic to see even half these steps taken in Obama first term *fingers crossed*

    I hope that GM’s factories and workforce is put to good use… and I hope, more than anything, the remaining two of the big three learn something from this lesson. And learn it fast. Before they’re going through the same bankruptcy process.

  14. Ricker 76er
    Posted June 8, 2009 at 9:08 pm | Permalink

    Amen Michael Moore.

  15. Mick Muer
    Posted June 8, 2009 at 10:52 pm | Permalink

    The thing that is disgusting about Moore, is pretending that he care’s a bunch about American workers:

    The things we call “cars” may have been fun to drive, but they are like a million daggers into the heart of Mother Nature.

    He can’t pretend to believe that GM could have employed so many workers with the best paying jobs in the nation without “planned obsolescence.”

    He tries to pretend he’s for the workers who build the cars but against the cars the workers build. It doesn’t last long.

    GM may well deserve to die. Moore may be right in raising his glass to toast it’s demise. But to pretend salivating at the death of GM is somehow divorced from the loss of jobs is just pretending. No, it’s moore. It’s gross political posturing while real people are suffering.

    If Moore has balls, here’s the script I’d give him: “The American car companies have been raping Mother Nature and the American consumer for far too long; and the UAW workers need to pay for their complicity in the rape and murder of our economy.”

    Or something along those lines. At least let him say something that can be construed as honest…

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