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Posts Tagged ‘General Motors’

On November 26, 2018, General Motors announced it was laying off 14,000 employees and shutting four factories in the US, one in Canada, one in South Korea, and two in undisclosed areas. Quite naturally, the US corporate news media announced GM was doing this to reduce sedan production because they were not all that profitable. Actually, GM cut 14,000 workers because of its falling share price.

GM had earned tens of billions of dollars the last few years. In 2016, after taxes, the automaker earned a global net income of $9.43 billion, a 2.6% decline from the $9.68 billion it earned in 2015. As recently as October 31 of 2018, barely two months ago, GM announced “third-quarter 2018 earnings results reflecting profitability in all core operating segments. Strong results in North America were driven by all-new full-size trucks, and crossovers. GM China equity income and GM Financial EBT were third-quarter records.” Click here for the source of information.

What the corporate news media is not reporting is that GM is opening new factories in Mexico, where it will produce the Blazer. GM also continues to invest heavily in China. So, US jobs are being exported once again. (Click here for more information.)

In the US, this means most of, if not all, 3,600 factory workers will be out of a job, though some workers could be transferred to other plants. At its operations in Oshawa, Canada, GM employs currently about 2,500 hourly workers and 300 salaried workers; and they’ll be gone. The US and Canada’s losses will be Mexico’s and the wealthy’s gain.

Shutting the eight factories will cost three-plus billion dollars. General Motors has to borrow the money because it has spent $13.9 billion in cash on share buybacks over the past four years while earning record profits now and then. Despite the buybacks, the price of GM shares has fallen quite a bit.

GM’s share price was over $47 in October 2017. Then the share price began to fall in spite of the billions of dollars of share buybacks with the Trump tax cuts, which should have jacked up its share price since buying $13.9 billion worth of GM shares took quite a bit of them off the market. Yet the price continued to plummet until barely above $30 in October 2018.

Notice GM did not use the billions of dollars it saved with the Trump tax cuts to purchase new plant and equipment or to upgrade its US facilities, although it is creating new jobs in Mexico and China with the tax cuts. Instead, the tax money went to prop up its share price, but to no avail. In the end, in order to attract rich investors into buying GM shares, the automaker had to lay off thousands of employees and export jobs to Mexico. The Trump tax cuts, which were focused on corporations and the rich, quite naturally, as expected, were middle-class job killers.

Since GM announced its reductions of employees, its share price has gone up to 37.95 as of November 30th, 2018. The rich are getting richer by producing nothing since the old wages and benefits earned by those GM employees who worked for a living and are now out of jobs are going straight into the pockets of the affluent via higher share prices, rising dividends, and surging corporate earnings.

That is not what the corporate news media wants you to know.

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What more evidence do you need that the US government and our political representatives represent the coprorate elite? Seven US corporations earned a combined $74 billion in 2013, paid their CEOs an average of $17.4 million a year, and received 2.5 percent of their earnings back as tax rebates, or about $1.4 million.

Click on the link below to discover the seven corporations that receive tax rebates on taxes they never paid.

http://www.schwartzreport.net/these-seven-corporations-make-billions-in-profit-and-have-tax-rate-of-negative-2-5-percent/

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Anywhere in the world, a thing is a thing, a person is a person, and an idea is an idea, except in the United States, where an idea is a person with more constitutional rights and political power than citizens, thanks to the soundly corrupted legal logic of the Koch Brothers wing of the United States Supreme Court.

Anybody with half a brain can see that a business corporation is “an imaginary business model given the legal rules to exist and operate by legislative authorization under the legal fiction of being an “artificial person.”

Only in the good old USA can ideas own things like furniture, antiques, computers, I-phones, office buildings, and factories. Hell, ideas can also hire people, and use slave labor overseas, and it’s all because of something state legislatures created two hundred years ago called a corporate charter, which has been a hell of a good idea for a few organic persons such as shareholders, CEOs, politicians, rich investors, and most likely more than a few US supreme court justices along the way. Got that?

General Motor’s (GM) owns things, like factories, office buildings, and land, but GM is still only an idea, in this case “an imaginary business model given the legal rules to exist and operate by legislative authorization under the legal fiction of being an “artificial person.”

GM is a business model given the legal rules to exist and operate. It doesn’t actually do anything since it’s only an idea given legal sanction. The investors in GM vote for a brain to operate the company and this brain is called the board of directors, which is based on the “rules to exist and operate.”

Next, these people hire another brain called a Chief Executive Officer (CEO) to actually make the decisions for General Motors, because GM is simply an idea without any parts, and without any tangible assets, until the CEO makes decisions on what to purchase, and what business strategies to follow, based on the “rules to exist and operate,” because the idea called GM can’t think for itself.

That’s how GM and Microsoft and Apple Inc. wind up owning tangible stuff. That could also be stated as, “That’s how intangible ideas wind up accumulating billions of dollars of tangible stuff, and distributing income and wealth to its investors and CEOs.”

Anyway, probably the closest thing you might be able to relate to this is a person born without a brain and without parents (Pretend they died an hour after birth). A court (board of directors) decides who is going to care for the baby (corporation that is an idea only so it doesn’t have a brain or a body), the caregivers (CEOs) are going to make decisions for the brain dead person (corporation) based on their judgments. They might buy the brain dead person stock in a corporation, but that brainless person is no more the stock in a corporation than a business corporation is the factory it owns. Got that?

So business corporations are still only ideas, not buildings or machines, and the wealth these ideas accumulate do not make them any different than when an organic person buys a new car. The new car is not the person that owns it, although this is something the corrupt supreme court hasn’t figured out yet, and given the corruption within the court, it isn’t likely to do so anytime soon.

That’s because there are trillions of dollars riding on the court’s decisions, and some of the justices are duck hunting buddies of the rich, or their wives earn hundreds of thousands of dollars a year from the rich that bring their cases to the court (like Citizen’s United), or the justices get to go on nice prepaid retreats and hobnob with the wealthy, etc…. You get the picture.

Okay, that’s not the only reason the Koch Brothers wing of the US court decides stuff the way they do. The primary job of the US Supreme Court is to rig the political and economic games for the 1 percent and against the 99 percent. That’s what the Citizen’s United decision was all about.

No where in the US constitution does it mention business corporations or ideas, but you know these original intent justices like to make stuff up whenever such stuff benefits their billionaire buddies.

Check out more below about why shareholders are not corporations and don’t deserve person hood rights.

the-easy-case-against-shareholders-being-corporations-and-deserving-corporate-personhood-part-3–Johnhively.wordpress.com

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1acartoon-bank-bailouts

Many highly-respected Washington types have been running around for the last three years yelling that because of its large budget deficits, the United States is Greece. Then we learned a few weeks ago that the immediate danger is the United States becoming Cyprus.

Cyprus is a small island country with a financial sector that has run amok, following in the footsteps of Ireland and Iceland and the United States. The assets of its banks were eight times the size of the country’s economy, which is a little more than in the USA, but maybe not, since the Federal Reserve provided permanent loans to several banks to the tune of $26 trillion at zero percent interest. That’s one and a half times greater than the gross domestic product of the United States.

Anyway, in Cyprus, when the banks’ big bets went bad, there was no way Cyprus’ government could afford the price of the bailout. As a result, Cyprus was forced to go hat in hand to the European Central Bank and accept whatever offer was put on the table. However the Cyprus crisis is finally resolved, it is not likely to be a pretty picture for the citizens of Cyprus. The cost is a minimum ten percent of their savings. In other words, to bail out rich people who had invested poorly, the 99 percent of Cyprus are going to pay the price of the epic incompetence of the 1 percent who bet badly. It’s one of those, “Too big to fail moments.” But the real question is, who says that any business is too big to fail? Let me see. It’s the executives and their flunkies in political office that say so, just like they told us trickle down economics was  good for us. They lied then and they’re lying now in order to protect their worthless assets. What would happen if they were allowed to fail?

Investment banks such as Goldman Sachs, JP Morgan and Citibank would be in the dustbin of history. How would that effect the 99 percent? Executives of these banks would have less money to buy legislation from their paid plutocrats in congress and the white house to redistribute income from the 99 to the 1 percent. Geez, is that so bad? On top of that, there are other, better managed, businesses that would be happy to step into the financial breach. That’s called letting the market decide winners and losers. Instead, we have the specter of more financial depravity by Wall Street’s finest.

As the Cyprus crisis was unfolding, the report of the Senate Permanent Subcommittee on Investigations on JP Morgan’s losses at its “London Whale” trading division. The report chronicles a series of bad bets on derivatives that were compounded by traders doubling down their stakes. They concealed the size of their losses both to bank officers and regulators, so the officers and regulators claimed. The end result was a $6 billion loss.

JP Morgan is a huge bank and can swallow $6 billion in losses easy enough, but the incident showed as clearly as possible that the Dodd-Frank reforms are not working, which is precisely what they were intended to do: nothing. The London Whale’s losing trades were all done in the Dodd-Frank era. The bill’s provisions worked perfectly because they did not prevent JP Morgan from making massive bets and misleading regulators about their nature and the risks involved.

If the regulators were not able to catch the London Whale’s huge gambles before they went bad, why would we think they will catch the next crap-shoot from the Wall Street gang? It’s time that we looked at this seriously: the regulators lack either the will or the competence to rein in the big banks. The big banks are going to get away with everything they want, regardless of the timid and valueless provisions of Dodd-Frank.

If the big banks are really too big to regulate and, according to Attorney General Holder, too big to prosecute, then the only sensible course is to break them up. Of course, Holder is lying on behalf of his Wall Street buddies. Regardless, there have been some promising developments in this area.

At the top of the list is Elizabeth Warren’s election to the senate. Senator Warren has already made it clear that she will use her seat on the Senate banking committee to try to hold the banks and bank regulators accountable. The other important development is that Warren seems to have an ally in Louisiana Senator David Vitter.

At first glance, this might seem an unlikely alliance. Warren is clearly on the left side of the Democratic party and Vitter is to the right of center of a very conservative Republican party. But Vitter, apparently, takes his belief in the market seriously enough to realize that there is no place for “too big to fail” banks in a free market. The point is straightforward: if a bank’s creditors know that the government will cover its losses, the bank is gambling with the taxpayers’ money, not its own.

If there is ever going to be enough political force to break up the big banks, it will have to come from this sort of left-right coalition that moves in toward the center. As it stands, the leadership of both parties is too closely tied to the financial sector to take any steps that fundamentally threaten their interests.

This has nothing to do with political philosophy: the leadership of both parties is owned by the financial industry. However, if the outsiders in both parties can build up enough popular outrage over Wall Street’s shenanigans, the party leadership may be forced to follow.

There is precedent for this sort of left-right coalition. In 2009, Representative Alan Grayson, one of the most progressive members of the House, joined with Ron Paul, one of the most conservative Republicans, to co-sponsor a bill calling for an audit of the Federal Reserve Board by the Government Accountability Office.

Over the next year, the bill gradually got more co-sponsors until eventually an overwhelming majority of members had signed on. It was difficult to see why the operations of such an important government agency should be exempted from normal oversight. As a result of this pressure, an amendment was slipped onto the Dodd-Frank bill that required the Fed to release the details of the $16tn in loans that were made through its special lending facilities.

It will take the same sort of dynamic to create the political space where the big banks can be broken up. Of course, this effort will be much harder. It means pulling the big banks away from the public trough, not just releasing some embarrassing information.

We can also expect the elite media to provide the same sort of condescension and misinformation in the battle to break up the banks as they did in the battle over the Fed audit. Proponents of downsizing the banks will be ridiculed, regardless of their expertise in finance. The big banks will be given every opportunity to push their line, in spite of its absurdity and the lack of supporting evidence.

It will be a tough fight. On its face, it seems that the Wall Street crew is invincible. But the London Whale episode and the silly efforts at cover-up should provide some grounds for confidence. These people can be pretty brazen in their contempt for the law and the general public. This arrogance on the part of the Wall Street gang is exactly what we need to give democracy a chance.

Now think about this. Bear Stearns wasn’t too big to fail, and neither was Lehman Brothers. Those were two of the biggest Wall Street investment banks. General Motors? It’s the second largest vehicle manufacturer in the world, and a close second at that. According to Republicans, it wasn’t too big to fail, either. Now politicians are playing the “too big to fail game.” It’s a lie, but some people such as Warren and Vitter have bought into it. Let them break up Goldman Sachs. Then its executives won’t have that lying argument about being too big to fail. But then maybe they’ll claim some weird trickle down effect if their business is allowed to exist after making more incompetent decisions.

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We’ve had sociopathic liars in high office before. Ronald Reagan comes readily to mind, so does George W. Bush and Dick Cheney come to mind. Yes, I know. President Obama has lied plenty of times, like when he told a crowd in Ohio in 2008 that he would renegotiate NAFTA if elected president, but Obama is not sociopathic! He’s just a liar. Wall Street Mitt the Twit Romney is an habitual liar and a sociopath.

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After spending an entire year protesting peacefully in front of the U.S. Embassy, maintaining an occupation day and night, four members of ASOTRECOL, the association of workers and ex-workers injured at the General Motors assembly plant in Bogota, Colombia sewed their mouths shut Wednesday August 1st, 2012, beginning a hunger strike that they are determined to continue until General Motors resolves their situation or they die.

These workers were fired for occupational injuries that they developed from the General Motors assembly line- from doing repetitive movements, lifting excessive weights, being put into harmful body positions and being pressured to maintain an accelerated work pace. General Motors Colombia operates in a way that exacerbates these injuries and abuses- obligating workers to work extra hours, hiring workers for short contracts, detecting which workers are injured inside the company medical facility, dismissing workers shortly after their injuries are detected, inventing the reason for the dismissal, intimidating workers into signing their dismissal papers, using falsified papers and bribed officials, and controlling the media through its advertising dollars.

General Motors received a bailout in 2008 and a significant percentage of the company is still owned by the U.S. people (around 26%). The tax dollars of workers here have been used to help a company abuse workers.

Wall Street Senator Ron Wyden voted for the Colombia Free Trade Treaty last year fully knowing what’s going on in Colombia, which is not only about the protest in front of the US embassy, but also the continuous murder of labor union leaders. Almost three thousand have been butchered in Colombia since 1986. Nobody has been been charged with a crime in these murders. That means the Colombian government is behind the butchery, and on behalf of US corporations. Wall Street’s president Barack Obama signed the illegal treaty into law late in 2011 knowing all of this. So did Wall Street Ron Wyden.

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