Government Motors Breaks Up With Big Oil
The auto industry has long had a symbiotic relationship with the oil industry. If oil companies are the drug pushers, then car companies are the crack pipe manufacturers.
But after its near-death experience a few years ago, at least one auto company appears to be distancing itself from its drug pusher. General Motors’ new spokesman for environment and energy matters, Shad Balch spoke out on the breakup, according to Climatewire.
“The oil industry didn’t do us any favors when we were going through bankruptcy and they were making billions of dollars in profits,” Balch told a panel featuring California Air Resources Board (CARB) Chairwoman Mary Nichols, automakers and environmentalists.
Balch, who came to GM two years ago from former Governor Schwarzenegger’s administration had some mea culpa tough love for GM itself too.
“People did not want to buy one of our products because we had a history of fighting and looking for any other alternative other than building better cars,” he told the panel.
“For whatever reason, there was an aversion to ever saying anything against oil companies, so it made it appear as if we were in bed with them,” he said.
But he espouses a change, “There seems to be such a public hatred towards petroleum-based fuel, so why not build a vehicle that uses anything but?”
But of course, he would say that. He is gummint motors.
GM was initially bailed out in the last months of the Bush administration with $9 billion under TARP, after years of decline and losses.
In March 2009, an incoming President Obama declined to provide more financial aid without far more radical reform proposals, ultimately forcing out longtime easygoing CEO Rick Wagoner, rejecting the company’s restructuring plan and finally, after its creditors balked at deep write-downs, forcing the company into bankruptcy court.
Declaring that combined losses of $54 billion prior to the bailout were the result of “a failure of leadership from Washington to Detroit” President Obama said at that time,”We’ve seen problems papered over and tough choices kicked down the road, even as our foreign competitors outpaced us. We, as a nation, cannot afford to shirk responsibility any longer.”
The bankruptcy process was completed in three months with GM selling its good assets to a new leaner company renamed the General Motors Company. As a result, it had to shed many of the excesses of the past — overproduction, bloated vehicle lineups, expensive rebates and fuel- inefficient vehicles.
The new company is 26 percent public-owned, and is much more focused on fuel economy and structural efficiency. It reclaimed its much earlier title as the world’s largest automaker in 2011, and made a profit in both 2010 and 2011.
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