Is Government Motors Really Turning a Corner or Just Busy Shuffling Inventory?

Why is it that that some companies can get away with so much finagling, manipulation, and usurping of laws and regulations, while their competitors are forced to comply or be sued, or selectively enforced? Well, much of it has to do with our incessant belief that the incestuous relationship between big business and government and/or unions and big government is “business as usual” – and when government is in bed with big business that means government is pro-business.

Well, at least that’s the way it looks to me as I step outside the box and look around and I am not going to point any fingers, but there is far too much of it going on in what we duly claim as a free-market capitalism based economy. For instance, when computer companies at the top of the dot-com bubble were playing around with their book-to-bill ratios, there were SEC regulators rounding them up and fining those companies, and putting their executives in jail.

Yes, I admit that was in the late 1990s – so long ago indeed. However, why is it that some of those old “bad dog, bad dog!” practices are somehow okay when it comes to taxpayer subsidized companies, or when it is in bad form to such evidence into question due to economic issues and thus, look the other way – all in the name of jobs?

There was an interesting article in ZeroHedge Online recently titled; “GM Parks 510,000 Cars with Dealers, 31% Higher Than Last Year,” by Tyler Durben posted on February 1, 2011, which stated (excerpt); “…behind the scenes, GM has continued to shove a whopping 510,000 cars with dealers: In January 2011, the firm had 510k cars at its dealers, compared to just 390,000 in January 2010, a 30% increase.”

Is it just me or do you see the flawed strategy here – you see wasn’t General Motors one of the companies that used the “Obama Version” of the bankruptcy law to violate its franchise agreements with its franchised dealers and cut over one-third of them – do you recall, it wasn’t more than a few years ago. Now it’s loading up its existing dealerships with inventory it cannot sell, but why – surely not in anticipation of future sales? The dealers don’t need or want those cars right now.

And yes it does provide jobs in the interim, a good thing for Detroit and all their vendors, and a great thing for Juarez Mexico and the like, but realize GM sold more cars in China than in the US and they are not batting 1,000 quite yet or even firing on half of their cylinders you see. Okay so, why did I bother to write this article you wonder, like who cares? Ah ha, but the purpose here is to make you think, try it sometime.