the darkerside to rants

GM is bankrupt

So it is done. GM, General Motors, the American heart is no more. Today GM filed for bankruptcy, something they should have done nine months ago if not longer.

Depending on who you talk to people have different opinions of why GM failed.

Michael Moore:

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.

New York Times:

In its bankruptcy petition, G.M. said it had $82.3 billion in assets and $172.8 billion in debts. Its largest creditors were the Wilmington Trust Company, representing a group of bondholders holding $22.8 billion in debts, and affiliates of the United Auto Workers union, representing nearly $20.6 billion in employee obligations. In a court affidavit, Fritz Henderson, G.M.’s chief executive, said that bankruptcy and a Treasury-sponsored sale of General Motors’ assets to a so-called “New G.M.” were the automaker’s only option to move forward. Failing that, he said, the company faced liquidation. “There is no other sale, or even other potential purchasers, present or on the horizon,” Mr. Henderson said.

Of course there is the usual scapegoat, the Union. This is not necessary something that was said out loud in the media, though politics as well as the news media never tired to say how much the Union needs to make “concessions”. This all harks back to the “Golden Days” of GM and the Big Three. Of course a bit of envy by the average Joe who spent thousands to get a degree why a guy who had a high school diploma got excellent benefits etc. for putting tyres on cars.

But the reality is probably something rather simple: The North American consumer.

There is no desire by the average consumer to drive a small car when they can get a big one. That is unless they get forced into it by high gas prices. This is where GM failed the most, they sold lots of cars for a long time and management clearly did screw up along the way with horrible cars and a God like attitude thinking it would all be fine.

Everybody is to blame in the fail of GM, but in the end GM is just a reflection of North American society as a whole, the seeking of the quick buck, the idea of entitlement when it comes to ones own possessions all contributed to it.

Maybe the people who considered a failure of GM the failure of (North) American society right. What will be left after it is said and done? The official line is that GM will rise from bankruptcy as a new company and will make cars and come back to glory; as will Chrysler apparently.

But I doubt it. I think the days of GM and Chrysler are done. The reason for a “structured insolvency” is simple: A complete failure would reflect badly on the politicians and the country as a whole. GM, although probably no longer the heart of America it still has an iconic status. I predict that in a year from now what is left of GM and Chrysler will be quietly brushed under the carpet in the hope that nobody will notice.

Oh, and watch the DOW next week, both Citi Group and GM are going to be taken out of the index and will be replaced with Cisco, I expect the DOW will see a rise next week, but don’t be fooled.

It seems since I wrote the original piece about the “swine flu scare” on Saturday things have taken a life of their own.

There have been quite a few “horror” stories in the media, not to mention the repeat mention of the “Spanish Flu” of 1918 and the millions of dead and the clear implication that the current outbreak could reach the same proportions.

Now Raul has pointed out an interesting article with regards to Twitter and how it is actually leading to even more panic (not that this surprises me).

If my reading list on Twitter was only restricted to the individuals who had produced the posts above, by now I would be extremely scared and probably feeling a great urge to post a scary Twitter update myself.

[...]

The problem is that while thousands of concerned and misinformed individuals took to Twitter to ventilate their fears, government and its agencies were still painfully missing from the social media space;

[...]

I think it’s only a matter of time before that the next generation of cyber-terrorists – those who are smart about social media, are familiar with modern information flows, and are knowledgeable about human networks – take advantage of the escalating fears over the next epidemic and pollute the networked public sphere with scares that would essentially paralyze the global economy. Often, such tactics would bring much more destruction than the much-feared cyberwar and attacks on physical – rather than human – networks.

The article makes a few good points, but the latter makes the mistake to think that this kind of abuse could be prevented.

Over the years I observed a few trends which Twitter now increases.

First of all there is the “participation” aspect. 9/11 was probably the first live broadcast terrorist event in human history, something that went around the globe in near realtime, with people participating online and at work, giving a play by play. Everybody was part of the event, even if you were thousands of kilometres away.

In the following months this became even more obvious as people repeatedly “felt” for the losses of the family members who had lost someone. Having outright emotional outbursts and depression.

This all comes down to the fact that we want to belong. With human face to face interactions having been greatly reduced by modern technologies and the way we live (from “hiding” in your car on the way to work, to living in large houses that are mostly self contained) people try to find other ways of emotionally connect. Part of this is the “fake” emotional attachments to completely strangers whose stories are broadcast in the news or the Internet.

Secondly, people are easily scared, very few people understand how a pandemic works, what makes things so dangerous and mostly how this could impact them directly. The examples given in the article linked above are symptomatic for this. The media is mentioning pigs (swine) and people but leaves a lot of additional information out that would calm people down. After all, if it doesn’t fit in the two minute blurp on TV or the 30 second read on the news website nobody will bother. Not to mention: “When it bleeds, it leads”.

Thirdly, the limited nature of twitter, as the article points out 140 characters don’t allow you to give a lot of context, though there is a bigger problem. People who are concerned first and foremost want to warn their “friends”, because of the “cred” that comes with having “befriended” someone people tend to be less suspicious of the information being presented and so a “Ponzi Scheme” of misinformation is being kicked off. This is were the amplification factor of Twitter comes into play.

Even people who may be skeptical will most likely think to be better “safe than sorry” and will contribute to the misinformation. After all, a “friend” warned them.

This is one of the downfalls of social media. Where there is a clear authority in the news media (in the past anyway) that you could question, in social media it all depends on the trust you give the person on the other end. The more scared you are though, the higher your bullshit threshold, because if in doubt….

If the media wouldn’t have been as sensationalistic about the outbreak over the weekend, my suspicion is that Twitter itself would be less flooded with these warnings and misinformation. As the media is continues feeding the fears with their talk about pandemics, millions of deaths etc. we have reached a perfect positive feedback loop in misinformation.

As people will “foster” more and more relationships through social media, the always connected, always plugged in and always short, way of life will continue to amplify these kinds of misinformation.

Unless people learn to be less panicky and more determined to get context this Swine Flu was just the beginning.

It seems almost daily newspapers in North America are shuttering their doors, in Canada TV Stations are being closed down, so far mostly in smaller towns but how much longer before large markets are being shuttered as well?

In Canada, CanWest, the parent to the National Post and Global TV (as well as Canada.com) appears to be in it’s death throws.

I am a bit torn over the news of the demise of the news media.

First and foremost the news media in the context of TV has long sold out to “headline grabbers” the “slang” “News at 11″ to denote useless crap and non-news is evidence of this.

Meanwhile in Canada (and from what I have read) the newspaper business underwent consolidation which means many smaller newspapers were fed most of their “news” from Headoffice and not sourced locally. Worse though is that most newspapers have turned to rebroadcasters for Wire Services like Reuters etc. Which means the real value of having the printed word and staff resources has gone out of the window. Instead of utilizing the power of a newsroom and staff reporters who have the time to follow up on leads, newspapers have reduced themselves to soap boxes for news bites.

The Internet, with it’s almost instantaneous “broadcasting” ability has not only beaten the newspapers but also the TV news, and where newspapers had the ability to be something else and make a difference they rather “gave in” to the arms race that is the Internet and lost… badly.

Of course this is nothing new. I met over the years people and reporters who still thought newspapers were important because things like Watergate broke in the New York Times and not on a TV station.

But those people missed the point back then and they do miss the point now. Just by it’s nature a newspaper could never compete with real time media like TV and the Internet. Sure, wire services, with people sitting in every remote corner of the world can punch out a news piece, but this is not reporting, nor is it what really is the strength of the newspapers. That is, in deep research and analysis that goes beyond yesterdays news.

The Internet is beating both TV and the Newspapers in the news reporting business. There was an earthquake somewhere? I read about it first in Twitter before it even hits the major websites. I do not know the details but I know it has happened. TV waits for the news hour (or a scroller at the bottom) and Newspapers may or may not get to it tomorrow if they don’t miss the deadline.

I call this post an “obituary of sorts” because even though the Newspapers are only put into their grave now the death has been going on for a long time. When the Newspapers decided to fight TV on “equal ground”, cut their newsroom staff down and turned themselves into a rebroadcaster of wire services they sealed their death.

I wish I could say I will miss the newspapers, but the reality is over the last ten years they have become less and less useful, not because something more superior (e.g. Blogs or the Internet itself) filled their role, but because they gave up. They came to a duel with a sniper and only brought a pocket knife. It wasn’t fair, it isn’t pretty but they are done for.

So no, this is not an obituary on the newspapers, if anything it is an obituary on a well informed public, on the ability for a few people to make a difference. Just imagine for a moment if Watergate would have happened in the 2000s. It would have been published on a blog, by two anonymous guys that nobody knows. It would have been dismissed as some crooks cooking something up. No harm would have come, no inquiry etc.

Just imagine how the future will look like without a respectable organization that really does work for the people. There is a reason why the newspapers once were considered the fourth power… It’s too sad that we were willing to sell one of the foundations of our democracy for a quick buck and quick news…. Just imagine we couldn’t know what Paris Hilton was doing tonight right when she’s doing it.

Yes, the last thing was sarcastic.

Rest In Peace, Fourth Power and News Organizations.