“What’s good for the country is good for General Motors, and vice versa.”
So spoke Charles Wilson while he was President of GM in 1953. Ironically, it was on Wilson’s watch that GM agreed to generous health and pension benefits for its workers, those same benefits which are now such and economic drag on the company.
Now what would be good for GM is to offload its health and pension obligations onto the rest of the country. The big auto makers have energetically lobbied for nationalized health care.
Yesterday the New York Times opined that it would have been better if the government had provided pensions and health care for GM’s workers all along. Really?
Muni and state pensions are woefully underfunded, and taxpayers are on the hook. Would the country really be better off if Congress had been running enhanced industrial pensions? And will we be better off if the Federal Government takes charge of health care now?
GM shareholders have suffered tremendous losses because of management’s missteps. We can be glad that those mistakes are born by just one company, rather than all of us.
Douglas R. Tengdin, CFA
Chief Investment Officer
Leave a comment if you have any questions—I read them all!
Follow me on Twitter @GlobalMarketUpd