PEN-L message, Re: Query: Ford/General Motors

In a message dated 7/23/2004 4:04:00 PM Central Standard Time, cbrown@xxxxxxxxxxxxxxxxx writes:

>CB: Well GM is only about the third largest company in the world now. I wonder if what's good for General Motors is still good for America.

Way back in the thirties it was Alfred P. Sloan ( I think) who said GM is in the business of making money, not cars. Nice slogan for the merger of industrial and finance capital as Finance Capital.

Comment

Would one call General Motors and Ford Motors primary sources of profitability - outside of purely vehicle financing . . . mortgages for instance (DITECH) . . . a tendency towards the domination . . . if not outright domination . . . of speculative capital? This is meant in the sense that no one speaks of an industrial capital today that is dominated by banks . . . but rather something that is different.

General Motors owned the Hughes communications outfit (counterpart and competitor of DIRECTV). All the large automakers have these massive high tech communications networks to tie their organizations together. For instance DaimlerChrysler has it own television network that runs continuous news in its plants as well as its financial arm . . . Chrysler Financial. These communications system are league beyond video conferences and match modern news agencies like CNN.

About a year or so ago on Marxmail we had a discussion about "profitless prosperity." "Profitless prosperity" was the exact term used by the financial analyst of Ford Motor Company in a worldwide broadcast on the state of the auto industry and its market shares and projections for the future back in December 2002.

It was in fact about a year ago that a discussion took place where Sartesian pointed out the 40% drop in labor input per vehicle since 1973 . . . yet the competition in auto is a dogfight . . . always requiring a massive outlay of capital to intensify the production process (organic composition), maintain the production and administrative infrastructure as well as other cost associated with labor.

Profitless prosperity on the basis of vehicle production speaks of the incredible pull of value in the direction of zero and not away from zero. These companies possess incredible and magnificent industrial and communications infrastructures tied together an increasingly interactive world.

Wait until the vehicles from China hit the market and go after first the Korea makers and then everyone else. The vehicles are already produced and waiting approval for market entry.

For my money I cannot understand the economic incentive for the large automakers to NOT advocate for a nationwide health plan paid by the government. Chrysler has a 1 employed for two retired workers cost structure . . . and just cut some of our health benefits . . . for retired workers and GM slashed the medical benefits for its retired executive workers (nonunion) almost a decade ago and won it case in court about 3 . . . maybe four years ago.

Jergen Schemp announced back in 2001 that perhaps upwards of 200,000 workers would be cut from the world automotive industry. Then again it was rumored that a section of the management of Chrysler Motors wanted to drop the car division altogether and concentrate on trucks.

Strange.

General Motors put on the back burner for a moment its new production facility design of modular produced vehicles . .. where the modules are shipped to a central point for assembly. By the early 1970 General Motors already had the blueprints for a 90 - 95% automated engine assembly plant . . . and I remember their statement that such a plant would destroy the labor market and their consumer base. Even without utilizing the advance technology available per unit labor input has still dropped at least 40% in 30 years.

What next . . . trying to make money at big stakes crap tables?

Melvin P.