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 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.