I was flipping through the program guide on our satellite TV system tonight, and discovered yet another post-season college football game: the GMAC Bowl. Pressed the info button, and quickly decided that I couldn't care less about either Tulsa or Ball State. But as I prepared to search for a different program, a thought flashed through my mind:
GMAC? That GMAC? The one that's lost an estimated EIGHT BILLION DOLLARS over the last two years, and just last month reorganized itself into a bank holding company so it could tap SIX BILLION DOLLARS of federal bailout money?
That GMAC? That GMAC has coughed up untold millions of dollars to sponsor a bowl game, and now deigns to approach us, the taxpayers, with hat in hand?
And it's not just GMAC. Taxpayers for Common Sense nails all the other bailout recipients that are sponsoring similar events.
Some time back, I joked to a friend that I wondered if we'd see the "Bankruptcy Bowl: Presented by Citi" from Pasadena on January 1st. Looks like we're getting that, plus much more.
I'm starting to get the same feeling that comes over me when I'm at the supermarket, and the person ahead of me at the checkout line has a large cart full of junk food --- and then pays for it with food stamps. And then whips out a wad of cash to pay for their liquor and cigarettes. The analogy isn't perfect, but it's the same visceral revulsion at the sense of being fleeced, and of being taken advantage of by someone "gaming" the system. No pun intended, but the term really does fit.
I tried watching some of the bowl game, but I had to turn it off.
God help this country.
2 comments:
I was going to write you saying; "Yeah, they suck! They're still sponsoring the Daytona 500, too." (I'm from Daytona and this was in the local paper this morning.)
GM Sponsors NASCAR Daytona 500
When I read the article (and not just the headline), a thought occured to me: these companies still have to advertise. NASCAR needs cash, GM needs advertising. I'm glad to see that they negotiated a better deal, for what its worth.
I don't want to see the Detroit carmakers go down in flames, or under repressive restrictions like post-WWI Germany (btw: I LOVED the Congressional Motors bit). But, the anarcho-capitalist within me wonders about what happened to Hudson, American Motors, and other former domestic car manufacturers: wouldn't they resurrect to fill the vacuum of domestic automaking if the oligarchy tumbled?
For the record, I am strongly considering the purchase of a Kia for my next vehicle, despite the regrettable acronym.
Could you enlighten me about the security of a GM warranty if they file for chapter 11?
Thanks,
-Randy
Randy - good point about this being a form of advertising, and that did occur to me after I published the post. And they almost certainly committed to this sponsorship before the financial markets crashed last summer.
What I'm less sure of is the degree to which bowl sponsorship is an effective form of advertising, particularly compared to other forms --- or is it more an act of corporate vanity? And an excuse for the corporate bigwigs to gather at the stadium, feel important, and watch the game from a luxury box?
Economies of scale have become so critical to auto manufacturing, I doubt we'd ever see a small company like AMC or Packard return. If one of the Big Three liquidated, you'd likely see the remaining companies (including the Japanese) simply absorb that market share.
The issue of vehicle warranties under Chapter 11 reorganization is important, and all stakeholders understand consumer confidence about warranties is critical for generating the sales needed to emerge from Chapter 11. It'd likely be one of the first things addressed, and probably with some sort of independent trust fund and administrative entity established to ensure all warranty claims would be met, regardless of what happens to the parent company.
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