Leadership

It was right to fire the chairman of GM

Back in July of 2008, leadership coach John M McKee asked if the US auto industry was destined to fail. In this article, he discusses why it was right to fire General Motor's CEO Richard Wagoner.

The news is awash in stories regarding President Obama recently firing the chairman of General Motors. Depending on your political bent, his action was either:

- the best thing that the government could do to ensure the billions being invested by taxpayers have any chance of being returned, or

- the beginning of the end of free enterprise and capitalism in the US, as the government starts making industrial management decisions beyond its power and capability

I believe that, given the choices, the President made the best one.

In a blog that I wrote last July, I noted that GM was due for a big tumble. At the time, some folks thought that I was overstating the potential crisis which I saw looming. But, with the results now in, Obama had to do something.

Although there's little evidence in the US that governments at any level can run business or enterprise as effectively as entrepreneurs or trained management teams; General Motors has not shown any capacity to dramatically turn around its fortunes. And Richard Wagoner, GMs Chair and CEO, was given ample time by the company's Board of Directors to show some vision, leadership and strength. If a boss can't do what (s)he's paid to do; it's time for a new boss. And if those who are supposed to make that decision can't or won't (that would be the Board); someone else needs to get involved. Especially when there are billions of taxpayers' $ at risk.

During his tenure, Wagoner showed himself to be an effective internal manager and moved up the ranks from analyst to head honcho. Externally however, he showed little of the savvy, consumer understanding, or guts required to be a market or corporate leader. He failed because he didn't act like a leader.

When he took the helm; the company was the country's largest employer, the world's largest manufacturer of autos, and highly profitable. It had cool and sexy ideas for the next generation of product including the EV1 which was a good looking, fairly well built, all-electric car driven by thousands of happy customers in California and Arizona. Environmentalists saw as the future. Enthusiasts were encouraged that a car they'd drive had hit the marketplace - especially from GM! But Wagoner killed it in 2003 because, "the economics weren't right" (and since said it was his worst mistake).

With an eye on short-term profit, he ramped up the big truck, SUV segments - including the purchase of the Hummer Brand - and backed away from development of the kind of small, sexy, well built products for which many younger or caring consumers expressed a desire. There's a difference between optimizing a strategy or profits versus maximizing them: One is all about balancing the right amount of success now with an eye toward the future. The other is about wringing every cent out now and dealing with the future later. While I am all about optimizing profits, I disagree with any strategy that mortgages a company's future as it seeks to maximize short term earnings. And, he not only sold those gas guzzlers, he marketed them like crazy thereby creating demand where it may not have previously existed.

Leaders make tough decisions. The best base those decisions on their own beliefs and values; not simply on figures and studies about profits and costs. Anyone with a general understanding of finance/stats can figure out production schedules based on past trends, but it takes a leader with a good gut instinct to assess the future of a segment and successfully push her/his company toward it. We never saw that from Wagoner. Great leaders embrace change. Knowing they can't resist the future, they run toward it, taking their teams with them. Other leaders believe that the organization's best years are behind them and they drag their feet trying to hold back coming events. Saving General Motors as it exists today is unlikely. Regardless of who's running it. In the same way that America's once-largest telco company AT&T needed to be broken to create value and encourage entrepreneurism and profitablity; so should GM.

America's once-largest corporation does have some good products. There's a lot of existing loyalty for several of its brands. Others - not so much. I believe that a passionate leader, without the existing structure of the existing corporation, could take charge of a small brand like Saturn as a free standing enterprise and successfully compete with auto manufacturers based elsewhere. The other big brands like Chev or Caddy would also be more likely to succeed if they were separate organizations and able to move more quickly in a worldwide marketplace.

Breaking up GM makes sense.

john

Leadership Coach

About

John M. McKee is the founder and CEO of BusinessSuccessCoach.net, an international consulting and coaching practice with subscribers in 43 countries. One of the founding senior executives of DIRECTV, his hands-on experience includes leading billion d...

267 comments
txjim
txjim

Here's the top AND the bottom line: What the Obama Administration has done here is CLEARLY in violation of the Constitution of the United States. It's like a baseball umpire declaring: "OK, folks we are gonna play the rest of this game without any set rules; I'll make them up as we go along. The Founders of this country, the voters and the elected officials of this country (for the last 200 years) had it all wrong. My experience as a "Community Organizer" outweighs all their knowledge. Now, do as I say or you don't play!"

StoneSatellite
StoneSatellite

Perhaps, but I also believe the head of the UAW Ron Gettelfinger is just as guilty if not more so. He should be canned as well.

eclypse
eclypse

At least get rid of someone who is directly responsible for the mess we're in now. The only reason I think the GM CEO should have been fired was for accepting government help in the first place - that was probably more to bail out the unions than the company...

jnewma3
jnewma3

There was already a way to save the taxpayer's money. Not invest in the first place and let the company reorganize (Chapter 11). This option has been around a LONG time and it works. And who wants the goverment deciding on your job?

Oz_Media
Oz_Media

If GM actually makes an appealing offer to a European manufacturer to take them over, GM will become like most other major manufacturer's, and saved under an unbrella. If Chrysler is bought by FIAT, there's hope, but if GM finds an even better owner there's great hope for GM and Americna automobiles in general. I have often commented on teh poor build, engineering, fit and finish of north American scars, even when compared to same model vehicles built in Europe. For exmaple a Ford Focus in England is a hot little rocket, a Ford Focus out here is a POS econobox because we just build crappy cars to suit a cheap consumer market. There's no such thing as small, efficient and strong engines out here. If these maufacturer's are pulled under a European manufacturer's umbrella there is HOPE, very slim hope that they will in turn start sending decent car manufacturing out here, quality engineering. Then its just a matter of the consumer sucking it up and realizing that for a few grand more you can get twice the car. Hope, not fact but hope.

JohnMcGrew
JohnMcGrew

Or was eliminating culpable parties not the point?

maxwell edison
maxwell edison

[i]"Did Obama do the right thing by firing the CEO of GM?"[/i], should send shivers up anyone's spine. It's simply mind-boggling to think that an elected government official - in the United States of America - could [i]fire[/i] anyone in corporate America. Although as a point of accuracy, President Obama did not [i]fire[/i] Richard Wagoner, per se. The White House asked him to resign as a condition for monetary aid for GM. Had Wagoner refused, although the government could have withheld the bail-out money, they would have had no authority to [i]fire[/i] him. The whole thing, however, should cause everyone to stand back and ask how this could be happening in the United States of America. First Richard Wagoner and Banking CEOs. Will you be the next target of government control over your own position or salary? If you're the IT director - or even a lower level employee - for any number of banking interests, investment companies, et al, the answer could be yes. http://www.washingtonexaminer.com/politics/Beyond-AIG-A-Bill-to-let-Big-Government-Set-Your-Salary-42158597.html I'm reminded of the old adage, be careful what you wish for (ask for), you just might get it.

Oz_Media
Oz_Media

As the OP states, there is a lot more to it than this surface discusison has addressed. The CEO of GM WAS given an opportunity to offer a plan, that plan failed to meet the objectives set out and therefore was ousted. At that point, failing to offer a turnaround plan, the government steppped in. [i]"Chrysler, judged by the administration as too small to survive, got 30 days' worth of funds to complete a partnership with Fiat SpA, the Italian manufacturer, or some other automaker.[/i] Chrysler is investgating a potentially viable alternative, GM's plan was rejected. You fail at running a business, you ask for help from the government, they set an ultimatum and you fail to meet it. How else do you want the money handed over? "Here's you go, lets pretend you are AIG and you can just continue to piss away tax payers money and still fail in the end. Just let us know when you need more" Sure. Apparently Obama is seeking more from tehse companies, like a push for an alternative fuel vehicle, which was scrapped by Wanking Wagoner. The other issue is that IF GM fails now, the government has promised to uphold all vehicle warranties, why shouldn't they have a stake in who is in charge? They offered a chance for a plan, that plan was seen to leave the taxpayers holding the bill after an expected failure. Shareholders? Have they offered to foot the bill? Nope they just want the government to secure their investments too, they should have no say unless they are willing to step up. "Other presidents have forced showdowns with major industries, with mixed results. Harry Truman's decision to nationalize the steel industry on the eve of a strike in 1952 was ruled unconstitutional by the Supreme Court. But Ronald Reagan succeeded in busting the air traffic controllers' union three decades later." So when is it right and when is it wrong? You don't know (nobody really does), you only know what YOU personally would want. I think that's why your country remains divided as well, some just cannot accept the fact that you NEED the government to take the reins when your capitalist system fails (as all systems of commerce do in some way). Either that or I am all for just letting them sink and die on their own, like any other company.

Oz_Media
Oz_Media

A long way to go before hesheit qualifies as a troll on TR, that's for damn sure!

jmgarvin
jmgarvin

I mean it was meandering and dull. It was a decent attempt with the CAPS, but a sad attempt with the content. 2/10

jmgarvin
jmgarvin

you aren't getting my vote in 2010.

TonytheTiger
TonytheTiger

WHERE my car is made, as long as it is a quality product. People in other countries have just as much right to try to better themselves as we do here. Money spent on protectionist practices is a large part of the world's problem.

JohnMcGrew
JohnMcGrew

...as long as they're beholden to the government for financing, and the government uses that leverage to dictate what should be built, by whom, and where. What we'll end up with is a bunch of expensive yet subsidized, poorly built econboxes that nobody will want and taxpayers will have to be either legislated or paid to buy.

jdclyde
jdclyde

like ANY Democrat would dare step on the toes of the unions? Not going to happen, or we would have had educational reform decades ago.

jmgarvin
jmgarvin

GM will have to file chapter 11 and the UAW will get nothing. If they are too greedy to budge, then they are too stupid to see they are hurting those they are supposed to be protecting (which IMHO is par for the course with unions, they just want the free money and free ride).

boxfiddler
boxfiddler

It's going to be a rough and tumble carreen down this mountain. We're getting it...

SKDTech
SKDTech

that government should never NEED to step in and take the reins in a capitalist system. A capitalist system will balance itself out when given a chance, if the government steps in then it only keeps everything off balance and it takes even longer to fix itself. If a company or corporation is being run so poorly as to fail then another company will step up and fill in the gap. Capitalism only fails when interfered with by external entities such as government.

AV .
AV .

Get Rid of Incumbent Politicians. Time to clean house in 2010. AV

NotSoChiGuy
NotSoChiGuy

..an (I) next to a candidates name these next couple of elections will almost guarantee I'm voting the other way.

Oz_Media
Oz_Media

People in other countries demand and receive a better quality than people in North America do form our own manufacturers. So if your key focus is to buy quality, you should be the first one to complain about all the low quality crap produced in North America and our VERY limited options in that marketplace. Even average people in Baghdad have access ot better quality vehicles than wedo, we get the bottom of the barrel when it comes to quality anything, whether it is vehicles, electronics, clothing, homes you name it, its cheapo-crappo out here compared to elsewhere. North Ameriicans have been taught to accept far lower standards than others who take pride in quality craftsmanship. Our very own North American bred manufacturer's make better "quality products" for Europeans than they do for our own citizens. If your interest is buying a quality product, why does the fact they we are offered lower quality products, not of interest to you? Do you actually listen to what you say? Can you imagine the noise if Microsoft built a fast secure OS for Japanese and Europeans and we got stuck with an insecure, bloated piece of junk instead? At least they got that right, everyone gets junk!

Oz_Media
Oz_Media

Chrysler had a bid put forth to FIAT. the reason their bailout was considered was because FIAT has been building grat compact cars of late, NOT econoboxes (that's the US answer to European cars, not the European's). This relationship would bring new technology to Chrysler, allowing them to offer a more advanced a better engineered product line. FIAT is also on teh cutting edge of alternate fuel vehicles, again bringing THAT technology to the US marketplace as US manufacturer's have avoided it for many years now. Subsidized econoboxes? I don't even know how you can come up with that or where from. The government isn't subsidizing auto production, nor looking to, the government will have little or no leverage. This LOAN is to give existing manufacturer's 60 days to implement a turnaround plan, finding new ownership etc. Not to just float them like the bank bailouts have done. In case you haven't noticed, Europeans actually build FAR better quality compact and subcompact cars than full sized North American sedans. Engineering is superior, fit and finish is superior, options are superior, horsepower is superior, EVERYTHING is superior. This even applies to US car companies offering products in Europe. Ford make WAY better subcompacts fo reth European market than teh garbage they toos out here. It's not teh manufacture's fault though, it is teh consume rwho wants cheap as can be, and are willing to sacrifice quality for price. Look at Ford US and check out the limited line of cheap, low quality sub compacts tehy offer. Then look at Ford UK and look at the 10 models of high quality, high horsepower subcompacts they make for European consumers. They are night and day different, with the European cars walkign circles around the US models in every aspect of the product line. You can't blame manufacturer's for meeting consumer demand, blame North American consuemrs for being too stupid and cheap to invest in a more economical and better built vehicle. Europeans did and look at what they get for $15K compared to the pure crap we get for the same money from eth same manufacturer.

JohnMcGrew
JohnMcGrew

It looks more like the UAW will end up owning most of and controlling both Chrysler & GM, at least if Obama gets his way.

JohnMcGrew
JohnMcGrew

The Obama Administration is now talking of a "controlled bankruptcy", where the government would engineer the reorganization, as opposed to a traditional bankruptcy handled by the courts. http://www.breitbart.com/article.php?id=CNG.6fae3f1b56ae11cbc7849c94b0b723a0.811&show_article=1&catnum=1 What would you like to bet that the UAW will get much better standing under this scenario than they would under a typical chapter 11 filing where their contracts would simply be cast to the wind?

jdclyde
jdclyde

having known many UAW members, they got out of high school and found themselves in an income bracket they never could have dreamed of. They started to think of themselves as equal to the DOW engineers, and tried following the same lifestyle. Due to that, they make 80K+ a year, and are living paycheck to paycheck. They can't AFFORD to take a paycut because so many are so heavily mortgaged. And these same union weasels already sold out future generations the last contract. "F'em, we got ours" is now the motto of the UAW.

j-mart
j-mart

Like any "theoretical" political system capitalism, socialism, or any system that can be dreamed up can always on "paper" to be made to work perfectly. In the real world, throw in the human traits, self interest, dishonesty corruption, greed, etc they all fail to work. If these human traits disappeared, it would be possible to pick any theoretical system at random, say drawn from a hat as in a raffle, and have it work perfectly with no real need for any central "government" to make it work and give every a fair shake. But this is the real world, some form of government is a necessary evil to hack whatever system being run to attempt to give everybody a fair go. Governments being "Human" in nature will never be perfect at this task either. The present problems have been caused by the greedy and stupid and fixing them is no simple matter. GM aren't going anywhere unless they change. In the world today there is probably at least one or two more Auto Manufacture's more than needed so sooner or later one or more could still go unless they are propped up by a government intervention for a considerable time.

Oz_Media
Oz_Media

The whole issue is, they were prompted to seek exactly that solution. Look at how Chrysler is looking to FIAT to take over. GM simply came back with anotehr bad businss plan, yuo want the money, just like any business loan, you must have a viable business plan or you dont get the money. The alternative is to find someone who does or go titties up. However, the government had already agreed to carry warranties for any existing owners. In that case it is in EVERYONEs better interests to have the best shot at success and reduce the government burden of carrying warranties for millions of vehicles. I dont think YOU should be paying for someone elses warranty.

TonytheTiger
TonytheTiger

If a company (anywhere in the world!) can't compete without unfair subsidy, they deserve to fail. The US bitched when Japan was dumping steel undercutting our prices. This is the same, except the US is now the perpetrator.

JohnMcGrew
JohnMcGrew

American's do pay more for quality cars. They buy Toyota, Lexus, Honda, VW, BMW, etc, etc. You are right that there are a lot of American's who do not. But clearly, there doesn't seem to be enough of those people to support GM, Ford, and Chrysler anymore. Either way, it has been their decision to decide what cars to sell here. Also keep in mind that cars they sell in America have to live up to emission and safety standards that are much higher than for most of Europe, which adds substantial costs. So if they want to sell a car for a market that will only pay $20k, then something's got to give. Again, those are business decisions that they must make to compete. And it looks as thought they've made the wrong decisions.

Oz_Media
Oz_Media

I have said it so many times and peopel STILL don't get it. Its not abotu foreign manufacturer's building better cars, we all know that has been fact for decades now, nothign new there. But you then say that GM and Chrysler haven't been able to figrue that out. Wrong. Ford, is an American auto pioneer. Ford build better cars for sale on the European market than they do for the US market. Apply your logic to that fact and it falls apart. Why would an AMERICAN company build better compact and subcompact cars for Europeans than for Americans? because Americans refuse to pay the money for a quality American car. They are lead ot believe that Japanese or European imports are tha answer, and if you're going to spend money don't buy American. in Europe, Ford's sub compacts sell like hotcakes as they KNOW they are a great value for money there, they don't even MAKE half those models for teh north American market, the one's the DO make have teh larger 4-cyl engines, have very poor fuel economy due to cheaper engineering and have shorter lifespan, poor fit and finish etc. Europeans have learned to expect/demand more from a manufactured product, therefore Ford had to step up for their marketplace. Americans want cheap so they get cheap. My Explorer has an Engine designed un Germany, it gets better mileage, more horsepower and longer life that teh exact sae behicel with teh exact same SIZE of engine sold in North America. So how does your import car theory apply to that too? Like i said, yuo just missed teh point, it's not offshore manufacturug it is LOCAL manufacturing that lacks. They build great cars for other countries but crap for their home country's citizens, all because they must meet consumer demand to offer a cheaper car, not a BETTER car.

Oz_Media
Oz_Media

That's the absolute opposite of what was said, 360 degrees wrong! It is the COMSUMERS that force the car companies to buildl crap. The manufacturer's are meeting consumer demand. if consumers were educated beyond heresay and media spins, they would have a better chance at requesting quality products. If the manufacturer's only built decent cars, consumers would be buying decent cars. How is that oh so horrific force applied by manufacturer's a bad thing, if it provides a better value for money for the consumer? Face it, most consumers are stupid as all hell when it comes to buying cars. They just go on eth same old crap that has been spewed for decades and they believe it without qualification. Chevy sucks! FOrd Sucks, GM Sucks! They have no idea WHY they have no facts to support it but they buy on reputation. Take Ford Explorer's, a handful have issues with tires blowing out at

Oz_Media
Oz_Media

That's the problem WE have here, builders are forced to maek cheap cars so that tehy sell here. The Euro buggies er nto really that much cheaper, especially after export/import taxes, but they are 100% better. As I said before, even Ford build better cars for Europeans than they do for Americans. It's not the manufacturer, Ford is a US company that sells better cars to a foreign market. That's just because people won't pay the extra $5K for a smaller motor, even if it is more efficient and has more horsepower. Face it; North Americans as a whole, just aren't the brightest bulbs on the tree. I find many people out here are sheeple, they hear something and then go spewing it like it is correct, only because they don't know any better or don't take the tie to find out for themselves. How many times have you heard, Ford is junk they just blow up when rear ended. It's 100% pure horsesh*t. Or Chevy's rule, but with no logical supporting argument at all. When we were warmign up in teh bar fo rth ehockey game on Friday a guy wanted to com eand chat, so he started in with pointing at a friend's shirt and saying "Boston sucks!" So another friend said, "Yeah? Why don't you like Boston?" His reply " They just suck" again "But WHY do they suck, what is it you don' tlike?" the reply "I don't know, they just suck." Just goes ot show how much reason goes into some people's thought process. and not to drag other discussions into it or anything, but this is also why I am against people acquiring guns so easily, or supporting the death penalty, too many stupid peopl esee too many others suffer. Seriously, I do not consider myself "smart". Astute maybe, clever, I've beeen called bright and sharp, but I am not exactly Einstein. So therefore if I think over 50% of the people I meet are dumber than me, what does that leave? If I'm of average intelligence and really not THAT clever and most others are seemingly dumber than me, how can we justify arming them or letting them decide who is guilty of a crime worthy of their lives?

JohnMcGrew
JohnMcGrew

Subsidized production: It's happening right now! What do you think those government bailout loans were? They are, in fact, a subsidy. The government stepped in to "loan" the GM and Chrysler billions, because GM and Chrysler were unable to borrow any more money from the open marketplace at rates that they'd be able to afford. Also, how about the $7,500 that the federal government is going to credit those who buy a Chevy "Volt"? Is that not a subsidy? Quality: And yes, many of the foreign manufacturers for the most part do build a better quality product compared to GM & Chrysler. Don't you think that IS the problem? It's not the consumers fault; they've been shunning American nameplates for BMWs, Toyotas, Hondas, etc because of quality for the last 30 years! You can't blame the consumers for GM & Chrysler not being able to figure that one out. Government Leverage: Just yesterday, the Obama Administration voiced their intent to replace half of GM's board with members of their choosing. You don't call that "leverage"?

TonytheTiger
TonytheTiger

if they can build a better mousetrap, they SHOULD gain market share. If American companies can't fairly compete, they DESERVE to fade away into the sunset.

TonytheTiger
TonytheTiger

[i]it has everythgin to do with the US consumer's mindset[/i] That people should be forced to buy what they don't want.

Slayer_
Slayer_

Because the majority of people seem to be sick of the american BS vehicles, everyone buying euro and jap vehicles now. Cheaper with better quality, performance, emissions, you would have to be stupid to buy american at this point.

Oz_Media
Oz_Media

That has nothign to do with FIAT, it has everythgin to do with the US consumer's mindset. And I was also not relating to anything even close to the Prius. they won't bring it here for the same reason that Ford only makes cheap garbage here, consumer demand.

TonytheTiger
TonytheTiger

[i]FIAT is also on teh cutting edge of alternate fuel vehicles, again bringing THAT technology to the US marketplace as US manufacturer's have avoided it for many years now.[/i] Why didn't Fiat bring it here? Could it be because it DOESN'T SELL... as evidenced by the dismal sales of Prius and others? Oh, but that's because oil prices dropped right? Oh, I know, let's make the government interfere more in the markets... say by adding a $10 per gallon gas tax... to make the sales of alternate fuel vehicles go up... That's what a socialist country would do, isn't it? Of course, that tax would weigh heavily on the poor you pretend to care so much about, but hey, we can always add a tax to the alternate fueled vehicle to offset this effect... but that might make buyers balk, so let's add another $10 per gallon to gas to make sure... and round and round we go!

JohnMcGrew
JohnMcGrew

We had a whole nation of people mortgaged over 100% and living paycheck-to-paycheck, and not prepared for the day when they might have to miss a few.

AV .
AV .

I'd love to see the UAW union get nothing. If GM can get rid of them via Chapter 11, that is their best bet. AV

JamesRL
JamesRL

Even if the UAW agrees to a 50% pay cut, the big liability for GM especially is the number of retirees drawing pension and health benefits. Only bankruptcy would get rid of that obligation, those "rights" can't be negotiated away. As to living beyond their means, I think many people have done that to date, including UAW/CAW members. James

jmgarvin
jmgarvin

Greed doesn't have a political party....

JohnMcGrew
JohnMcGrew

If we were to apply these "fairness" principles to professional sports. Let's see how long it takes for people to get tired of that. After it all becomes mediocre and boring, perhaps then people will realize the effect that this ideology has on the economy.

NickNielsen
NickNielsen

Everybody starts the race, but not everybody finishes first. What's truly scary is people don't understand that the only way to ensure that everybody wins the race is to both shorten the race and cripple the more capable contestants.

TonytheTiger
TonytheTiger

Different people have different talents and capabilities, and some of those are more marketable than others... It's just the way it is.

jdclyde
jdclyde

First, what makes the playing field NOT level, that would cause a need for the government to step in. Second, what steps should/could a government take to level the field? If you could point at a real world example of this happening successfully, please do. Thanks! jd

TonytheTiger
TonytheTiger

[i]Governments need to be strong and fair minded and to keep a level playing field.[/i] Too many people just want a "fair advantage".

JohnMcGrew
JohnMcGrew

Didn't find anything about "fair minded" and having to "fix things" in our Constitution. Can you please point it out? In case you haven't noticed, the current crisis was ENTIRELY created by the government attempting to "keep a level playing field" and trying to "fix things". We really don't need that kind of help.

j-mart
j-mart

Real Socialism has and never will exist. Everyone working together selflessly for the good of all rather than any self interest. Or for that matter pure Capitalism. complete fair competition for all with absolutely no artificially created advantage for anyone ?, for starters Microsoft as we know it today could not exist in this world. We will never be able to test properly the merits and failings of either system because our "human characteristics prevent us from creating either.

j-mart
j-mart

or any other system you can dream up only exists in it's purest form, in theory only. In the real world, no matter the system, be it capitalism, socialism, or whatever, we see it only in "humanized" imperfect form. A major meltdown of the economy, as we have now, theoretically does not happen with "perfect" capitalism or socialism, it takes the "crops to Fail" or some other natural disaster to make tough times. The " Free Market " is just BS, those with more than they need control it to screw the rest of us. Governments need to be strong and fair minded and to keep a level playing field. Governments should not be directed by "Theory and BS " sometimes they need to step in and fix things, even up the playing field once in a while, that's their job.

Oz_Media
Oz_Media

So when you move into a country that holds your resources, dispose of an elected leader (Mahmoud Ahmadinejad) and insert your own preferencial dictator(Shah, Mohammad Reza Pahlavi)to gain government control of said resoruces, that is not socialism because it is being applied in another nation and stops Russia from getting control. America, and England have been fighting to keep control of Middle East oil, while America only partially relies on the oil (10%), the UK relies heavily on it (over 80%). But governmental control of resources is not socialism when it is applied in foreign nations it seems. When that plan fails you and you are again forced to enter that country and topple the government, in order to control said resources, that is not socialism either. Americans have supported socialist activities that they apply to other nations, and scorn them for not doing so earlier. However any such governance applied INSIDE America is deemed flawed governing of the nation. INFIDELS ALLALLLALLLALALLAAAH!!!! :D I think US/UK history in teh Middle East only goes to show just how two-faced the US agenda is. We all know the UK is built on monarchy and socialism, and they dont' deny it. But for America, the land of democracy, to remove the first democratic leader since a monarchy in Iran, then insert a dictator in his place is completely two faced reality of what America really stands for; God bless America and nobody else. Socialism works unless it's within your own borders, nice way to show your true colours.

TonytheTiger
TonytheTiger

can't exist except on the back of wealth that has already been created. Once that's gone, it collapses.

JohnMcGrew
JohnMcGrew

...is compared directly with paper socialism. Notice that it's rarely compared to real-world socialism, which has always been a train-wreck. Not that anything that precipitated the current melt-down had much to do with "capitalism", paper-perfect or otherwise. There was very little about Fannie/Freddie and non-existent interest rates that Smith, Hayek, or Friedman would have approved of.

JohnMcGrew
JohnMcGrew

http://www.cbc.ca/news/background/healthcare/ On June 9, 2005, the high court struck down a Quebec law that prohibited people from buying private health insurance to cover procedures already offered by the public system. "Access to a waiting list is not access to health care," two of the justices wrote in their decision." That's pretty much what socialism does; equalizes misery. In order to make thing's "fair", they outlaw private insurance and practice. Of course, people with means and initiative will always find a way. So they come to America.

TonytheTiger
TonytheTiger

[i]More Americans seek Canadian pharmaceuticals and health care than Canadians do US health care[/i] is due to the fact that there are 10 times as many of us :) Old Joke: I heard the reason Canadians live longer is that they have to wait in line to die too.

JohnMcGrew
JohnMcGrew

From all the Canadians (including prominent politicians) who come to America for vital and timely procedures that either are not available in Canada, or require a wait that would guarantee death otherwise.

Oz_Media
Oz_Media

A business sman crossed the border so now all Canadians need US health care. You know the opposite rings true more often than not though. More Americans seek Canadian pharmaceuticals and health care than Canadians do US health care, and in case you've been sleeping for the last couple of years,we have both privatized and subsiduzed health care options available. We are known for having the best medical training programs in the world, which is why doctors from all over the world, including the US, come to Canada for studies. Canada's health care system has shown a history of providing some of the most important health care advancements in the world. So your health care issue, while many months late and definitely newsworthy 10 yars ago, is completely incorrect and simply a needless and inapplicable comment. What a brilliant deduction, you guys are so clever it makes me wonder why you aren't guiding the planet. FACT:American companies have moved countless jobs to Canada for the sake of health care benefits and lower health care costs. Since 2004 Ontario, not Michigan, has been North Americans largest car-producing region, why? because auto manufacturer's sought out the benefits of a more cost effective health care system. Canada's economy is still very strong in comparison to the US and UK. Last year we were ranked as "the healthiest banking system in the world" America at 40th and Britain at 44th. (by the World Economic Forum) I don't care what happens with your economy, I have more than one career path and can skin a cat many ways. As long as I live here, I at least have a future. Canadian financial instututions are pushing for new rules for institutions so that others can be led by example, you should be so lucky as to have your president follow Canada's lead with respect to your economy failing or suceeding. We warned you two decades ago that this was inevitable...well the bankers did, not myself, and ou scoffed at it...again YOUR bankers did, not you yourself. now we see the reality. We refused to follow teh US lead of removing restrictions on financial industries, thank god. Non recourse motgages basically put the burden on the banks if you don't pay yoru mortgages, wow some pretty stuck up banks to think that'd work! Ours puts the onus on the homeowner to pay their own debts or lose their investments. The number of reasons NOT to live in America are simply countless!

JohnMcGrew
JohnMcGrew

...where is that Canadian business man going to go for his health care?

Oz_Media
Oz_Media

My comments had nothing to do with not caring about biggest cusomers, nothing at all. But you can't expect me to lay awake at night or change my way of life. So if it makes it easier for you to digest, if your economy fails we are all doomed. Now you go on worrying about thet, I'll tune my motorbike for the weekend, should be warm and sunny this weekend and I'm about to enjoy it, failing economy or not. It hasn't effected me at all, and I don't see that it will. Cutting back on luxuries, at worst, is not something I see as scary or something to fear. It's life, take it as its dealt out and don't fear what may be tomorrow, I really couldn't give two SHTS what happens tomorrow, REALLY. I woke up today and that's all that really matters isn't it? However, if you can prove that I will not wake up tomorrow if I don't show concern, just let me know and I'll give it some thought. Until then life carries on as always and I am not about to cry about the sky falling. Face it, it aint that bad, we live in luxury compared to others around the world, even with the impending fears of a nonexistant tomorrow.

Oz_Media
Oz_Media

As we are humans and have global transportation options, if the economy fails and we all end up in caves again, I'd move, not sure about you but I expect more from a country. Yes, it is what a country can do for ME, I already pay to live here by paying income tax, as you would anywhere else you chose to live, so teh government stays out of my face and they can play all eth economc games they choose. It's just the cost of living anywhere. Paying my tax money is exactly what I DO for my country and that's all that should be expected of me. Now should I not need to move to escape this pending amageddon, there is no reason for concern. Should the end of the country near, I will leave, I am not obligated to live here either. As for a global recession, so what? I just don't see why people are so fixated on a recession, I won't die as a result of the country going broke. If the economy resorts to nothing at all, and there are absolutely NO jobs and nO money left in the entire nation, how is that making my life any harder than anyone else's? Again I won't die because of it. The economy is not a physical entity, it only exists on paper and in the minds of fat pocketed investors. If it crumbles and we all are left in the dark, then we are ALL left in the dark, why would I complain I still don't have it any tougher than anyone else? People seem to think this is the end of life as we know it, however countries have suffered far greater recesions than this in the past and have recovered just fine. What is there to worry about, seriously? Losing a job? so what, I can do more than one thing and earn a living on my own anyway. Might have to head to the hills and live off the land for a year? I should be so lucky. Even a worst case scenario does not kill people so what's the concern about? F'k the US economy, who cares? F'k the Canadian economy, who cares? The economy is just an imaginary statistic anyway, its nothing physical. No mater what happens with the economy, we all wake up to face another day anyway. As for trade relations, of course we depend on the US, I have never said otherwise, EVER. As it seems that Ontario is the only province that actually manufactures anything sold into the US, who the hell cares when I live in BC? We don't sell ships to America, we don't sell kitchens and manufactured wood products to America, we don't sell transportation to America (that's why Bombardier didn't move manufacturing out here from Germany). For someone with supposedly as much economic knowledge as you, you fail to recognize that manufactured exports are the one of the largest and most impotant parts of BC's economy...or at least according to the Business Council of BC, but what do they know anyway? It's probably why we have over 50 companies over 500 employees, that manufacture exports for the US market, because we don't know about manufacturing for export purposes, just selling services and raw materials. But the bottom line again, who really gives a toss what the economy is doing? Got laid off and can't find work? You should have thought about acquiring more valued or essential skills instead of banking on one career choice for life (that's the mentality I was raised with as someone growing up with parents that faced such hardships after the war). It always seems to be mainly the people who have had it fairly straight in life that fear such challenge. Someone like myself who has been kicked down and pinned numerous times, only to rise again, doesn't see value in worrying about such issues and welcomes challenge. We should be so lucky as to see the US car industry fails here, they will just be forced to start delivering quality products in a more competitive marketplace. Perhaps this is also a wakeup call to keep more business in the nation, instead of outsourcing or biuying Chinese because it's a few pennies cheaper. Either way I really don't care, I was just sayign to someone today. My life hasn't changed at all, not one tiddly bit due to this supposed recession. Our business is entirely dependant on new housing and renovation trades, which have seen a bump but are seeing steady growth already as mutimillion dollar homes are being built in droves here once again. Either way, I have the same amount of money in my pocket, the same amount of gas in my truck, I have the same expenses (sure they nickle and dime you with small increases), but I see no change in life today than life 5 years ago, except that I make more money now of course. Recession? Ecomonic turmoil? the end of the world as we know it? For some perhaps and I do honnestly pity those who are out of work due to cutbacks, but those that are srong will see themselves through it and carry on just like any other day. big deal.

JamesRL
JamesRL

Oz, sitting on the west coast, is counting on oil and lumber to keep Canada afloat as the US goes through an agonizing recession. James in Ontario, home of manufacturing jobs (along with Quebec) is a little more concerned. Sure US will still buy oil to fuel their cars and heat their homes. The lumber sector will drop dramatcially as new home sales spiral down in the US (and in Canada). But the huge impact in Ontario is manufactured goods. We build literally, planes, trains, automobiles as well as many other goods. Those are not the kinds of things that sell in a recession, let alone depression. But the jobs that are being lost in those sectors also impact other sectors including service etc. Sure I'm not expecting the US GDP to drop in half. But even if their imports from Canada drop 20%, thats the difference between economic viability and bankruptcy for many businesses in Canada. And Quebec has a similar manufacturing base, and similar issues. The auto industry is a major issues - Canada produces about 20% of the cars built in North America, and buys only half of that - the rest sold to the US. If production is cut in half, as it could be, then not only the automakers will suffer, but the parts manufacturers, steel makers, transportation and others will suffer. Yes the auto market won't stay down forever. But it won't go back to 2007 levels anytime soon either. People will try to squeeze another year or two out of their cars. Ontario and Quebec combined are 62% of Canada's domestic product. Alberta and British Columbia combines are just over 25%. James

jdclyde
jdclyde

who needs who more, the customer or the seller? Customer can always say they can buy somewhere else, as there are plenty of developing nations already working hard to get more of the trade at lower costs. Sellers can always say there are plenty of customers, so they can afford to not care about their biggest customer. Both are stupid things to consider, as both trains of thoughts are not in their best interests. Ego leads to the fall, huh?

Oz_Media
Oz_Media

So if teh US ecomony tanks, they will no longer drive automobile, no longer be allowed to have lights or power, no longer be able to buoild new homes, no longer be able to eat, no longer be able to breathe. The US economy can hit rock bottom, these essentials will still be in demand, though at lower volume. As we cannot produce enough resources to meet current demand, drivign our export prices high and reducing teh purshases, it would not be such a stretch to see it double or triple in short time, now that WOULD equate for a reduced US need. It's not a matter of the US just vapourizing into thin air, even in the worst recession they still need such imperative resources. I never said it wouldn't effect us, I never said we wouldn't feeel a crunch, I simply said we woul dhave an easie rtyime reallocating those exports elsewhere, I even mentioned that we WOULD feel an initial blow but that blow would be softened eventually. So don't get onto me abotu readin gcomments, you seem to think I was saying we don't need your money (towards the US), which is not what I said at all, in fact not even close to what I said. Canada simply has a better chance of recovering from those lost exports than America does form losing imports.

JamesRL
JamesRL

I disagree Oz, if the US economy tanks, we would not be happy in Canada economically. Do you not even read what I say? If we TRIPLED our trade with our next two largest trading partners, it would still equal only 12-15% of our current exports. That would not make up for a big drop in trade with the US. How easy do you think it is to triple trade, especially if oil goes up and the cost of shipping our goods to overseas markets goes up. We also don't have the same access to European markets that other EU countries do, and thats a problem. If you want me to be more argumentative, just keep dismissing my posts as nonsense. I will be happy to clarify for you. James

Oz_Media
Oz_Media

For all the times people seemingly correct me by offering the similar comments. I didn't say it would be peaches and cream but we do have other trade partners and would balance our trade over time. Perhaps we would lose some trade too, that doesn't mean we'd sink though. CURRENTLY, we woul dfeel an immediate impact (I think I already said that) but it would ease over time as we created new trade relationships with other allies (they already want more of our exports but we are comitted to US exports). So where was I wrong and in need of correction? Or was it just clarification for my educational purposes or was it just that someone had to say SOMETHING in order to add to what I had already said?

JamesRL
JamesRL

The vast majority of our trade is with the US. In 2007, 76% of our exports and 65% of our imports came from the US. That cannot be easily replaced. The US is also the country that Canada invests the most in, so Canadians stand to lose billions in investments if the US goes down. Our next biggest export partner is the UK with 2.8% and China with 2.1% Gee we triple our exports to UK and China, and we lose 20% of exports to the US, we still lose big time. James

Oz_Media
Oz_Media

teh only reason is because oil is stil traded by many countries under the PetroDollar. With several nations already using the Eurodollar, it is th US that stands to lose out if the rest turn that way. As Saudi's have trillions invested in teh US, once they decide to use the Eurodollar the US dollar would be like the Yen and nobody woul dhave any use for a valualess US dollar. If Bush had stayed another term, I am confident far mroe countries would have been trading in Euros already, perhaps the changing of the guard has helped in that respect too. We, Canada, rely on many US trade relations, but we also trade overseas with other allies. Our trade would inisitlaly suffer but I am sure it would settle in no time.

Oz_Media
Oz_Media

I just finished defending the US again. When discussing this with a farily well known and successful Canadian businessman/broker, his comment was "f'k 'em, let the ********* sink and die. Who the hell cares if America perished tomorrow anyway?" I'll omit the additional expletives but I think you get the viewpoint. And this was from someone with several US based businesses who spends most of his time in the US.

Editor's Picks