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Who killed GM - Big Oil?

15K views 113 replies 61 participants last post by  robsaw 
#1 · (Edited)
“Who killed GM…..”

I was thinking today; we all have seen the "who killed the electric car" discussions and I wondered if we could one day see similar discussions on who really killed GM and why. My guess is that the suggested culprit would be Big Oil, and by that I mean Really Big Oil, as in Sovereign Oil Companies who really own the oil industry.

But why would they want to kill GM? Could it be because the largest car company on the planet decided to bet the farm on the electrification of the automobile? And take away Really Big Oil’s largest customers, the American people?

Could Really Big Oil want GM so harmed financially that they could not deliver the Volt, or at least at affordable numbers and price so that the Volt fails?

Everyone knew that GM was going to subsidize the Volt by their profitable SUV’s and Trucks. GM bet the farm on this. If you were Really Big Oil and wanted to prevent GM being able to do that, what could you do to harm GM’s sale of those SUV’s and Trucks? Well some might say that the easiest way to kill GM’s profitability and thus its Volt would be to raise the price of gasoline. But Really Big Oil couldn’t raise the price of oil that much could they?

Anyone hearing the testimony to Congress on speculation in the oil markets knows that something funny is going on, but it’s not normal speculation. Because speculators can’t withhold oil from the markets and because there are just as many speculators shorting the price of oil, they should not be making the kinds of differences we see.

Others say that it’s simple supply and demand, that China and India are causing an imbalance. But China and India didn’t just spring to life economically, they have been pretty much consistently growing for ten to twenty years, and the same for their car markets in those countries. But the rise in oil price is more recent and now ahead of the rise in consumption in those countries too, while consumption is static or falling in the West.

Still others say that it’s the falling US dollar that is really affecting the price of oil, which is priced in dollars, and thus especially hurts the US more than anyone else. This is true that the falling dollar does harm the US price of gasoline more than in any other country, but then one has to look at why the dollar is falling.

Perhaps the dollar is falling because of the balance of trade, but that has been out of whack for decades. Perhaps it’s the sub-prime mortgage and credit crunch debacle that’s pushing the dollar lower, or the Fed’s lower interest rates. But the dollar didn’t fall precipitously when for years the Fed lowered interest rates after 911. And foreigners don’t buy many US domestic houses so fear of investing in that market would not make much difference, and up until now US corporate earnings and even the GDP has not even confirmed a recession in the US. Yet still the dollar falls.

But of course the easiest way for the dollar to fall would be if those who own large amounts of it were to sell it or simply stop buying it. And we all know that Really Big Oil, as in Sovereign Oil Companies, are among the largest holders of US dollars. So a very small shift in their buying and selling habits would make for a large effect on whether the US dollar goes up or down.

But would Really Big Oil use their clout on the currency markets, and their ability to secretly push the price of oil up, to raise the cost of gasoline in the US just to harm GM? A company that has done nothing to them except be the first and largest automaker to try to introduce a new technology that would finally free the American people, if they commute less than 40 mile per day, from ever having to buy gasoline from Really Big Oil ever again.

Why would anyone try to destroy a company like GM if they were about to take away Really Big Oil’s biggest customers for the last 50 years?

It will be interesting to see if such “Who killed GM” discussions and perhaps documentaries appear and also to see what they may have to say……..



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Discussion starter · #2 ·
I'll just add that if the price of oil stays high from here for a decade then it would seem unlikely that Really Big Oil was manipulating prices to destroy the Volt, as ongoing high prices helps electric cars.

But anyone following the topic knows that battery costs and manufacturing volume restrictions over the next 3-5 years will limit electric cars. Beyond that only a fall in the price of oil will do them great harm.

So if the price of oil stays high and kills GM over the next 12 to 18 months by drying up all their cash from SUV’s and Trucks but then drops after that to make electric less viable, then suspicion may be justly cast.

It seems that right now GM's plans for funding their turnaround and the Volt have met up with the perfect storm. It just remains to be seen if that storm were also perfectly planned or not....



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Discussion starter · #7 ·
Big Oil did not kill GM...
If it did, why aren't Toyhonisan dying too?
At worse we can say that big oil has given Toyhonisan a bad head cold...
GM on the other hand seems to be bleeding out.

What/who killed GM?
1) Inability to quickly adapt
2) Inability to recognize the obvious
3) Inability to plan ahead
4) Inability to effectively diversify and the big one
5) A completely misdirected focus.

Might I add we aren't dead yet... I'm still hoping for a turnaround.
Really Big Oil has never worried about Toyota's PR toy the Prius; selling 100K per year. It is a trifle and still a gasoline car, no different than any European econo-car in terms of mileage, and Really Big Oil has never worried about them either. There are always going to be people who want economical cars. It is simply part of the Bell Curve of Really Big Oil customers. But the Volt is different.

The Volt is what is spurring other manufacturers to build plug-ins too, but they will give up if the Volt fails and then oil drops in price. The Volt could potentially cut the heart out of the Bell Curve of Really Big Oil customers.

GM has made terrible decisions in the past and that is why Toyota and others have far more cash reserves and less overheads. But GM did have a chance to make up for those past errors and fund a turnaround and subsidize the Volt. The GMT 900's, both offered that opportunity and put in place a weakness for GM.

But nothing else GM sold could have been renewed first and made the profit margins needed to fund the renewal of the rest of the entire GM range. Only the GMT 900's. And given even the rising fuel prices at the time continuing to rise as they were; that plan would have still worked and was working.

But something intervened, oil began rising at a rate experts today still can't explain.......

GM's weakness in its plan had been exposed. The makers of the Volt had a special vulnerability.



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Discussion starter · #23 ·
This is by far the stupidest conspiracy theory EVER!

Big Oil decides to Kill GM which has produced a gazillion gas gluzzers, because it is trying to produce the VOLT??? NUTS!!!

The Volt isn't on the market yet and hasn't stopped the consumption of an ounce of gasoline yet. It is going to cost a around $40K and may turn out to be too expensive to be successful. Even if the VOLT is a runaway success GM will be quite limited in how many it could produces. And even if Big Oil had any fear of this (which I sincerely doubt) many other car manufacturers will eventually be capable of producing a vehicle like the Volt. Is Big Oil going to try and Kill Honda and Toyota also?

This theory is complete CRAP-O-RONI in my opinion.
You forget a few details. And around the world GM no longer sells gas-guzzlers. They are making their biggest inroads in foreign markets with four cylinder Chevy’s.

And if the GM’s SUV's at home were still selling then the Volt would not be $40K but subsidized down to under $30K where they would sell a lot more in numbers which would produce further cost savings. And as the technology amortised and came down in price so too would the cost of the Volt and the other GM cars that would have begun to benefit from the technology. GM could have been producing half a million cars with this technology in 10 years time and at very affordable prices. Add that to what Toyonda etc would produce in competition and 15 years from now the average family car would consume no gasoline at all in an average week. That was the plan for the Volt. That would have done bad things for Really Big Oil.

How people have forgotten.....

And other car manufacturers will not try to build such a vehicle if the Volt fails. Toyota and Honda et al were very happy with a small number of hybrids to make them look green but had no plans for a plug-in and indeed had spent a lot of money telling people they did not need to plug their cars in.....

How people have forgotten....



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Discussion starter · #38 · (Edited)
Thank you for the tree hugger conspiracy theory. There is only one slight problem with that theory.

Stop looking at Exxon, Cononco, Chevron, Shell, etc. as "Big Oil" and start looking at them as "Big Energy." There current business model is framed around oil, but there isn't anyone in those companies dumb enough to stay that way in the long term. We all know that fossil fuels are going the way of the dodo bird, eventually. The only thing we really disagree on is how quick they are going.

Oil companies are investing in alternative energies probably more than the automakers because if we run out of oil or oil simply becomes taboo, they are out of business. They own the infrastructures of energy in this company, and they are looking to stay alive in a world without oil, whenever that actually occurs.
My comments were not about "Big Oil" (Exxon, Chevron, Shell, etc.) but were about "Really Big Oil" (sovereign national oil companies).

Here is a list. Note that the first public oil company (Exxon) does not appear until number 17th on the list for size.

Now look below at the 16 companies before Exxon and the governments that own them and ask yourself if you think any of these people would conspire to protect their vested interests?


Total Reserves in Oil Equivalent Barrels, Million of Barrels:

1 National Iranian Oil Company (Iran) 302,496
2 Saudi Arabian Oil Company (Saudi Arabia) 302,279
3 Iraq National Oil Company (Iraq) 134,145
4 Qatar General Petroleum Corporation (Qatar) 170,848
5 Abu Dhabi National Oil Company (UAE) 126,132
6 Kuwait Petroleum Corporation (Kuwait) 108,316
7 Petroleos de Venezuela.S.A. (Venezuela) 106,060
8 Nigerian National Petroleum Corporation (Nigeria) 67,314
9 National Oil Company (Libya) 50,464
10 Sonatrach (Algeria) 39,918
11 Gazprom (Russia) 29,261
12 PetroChina Co. Ltd. (China) 20,758
13 OAO Rosneft (Russia) 20,195
14 Petronas (Malaysia) 19,334
15 OAO Lukoil (Russia) 15,931
16 Petroleos Mexicanos (Mexico) 15,218
17 ExxonMobil Corporation (United States) 13,746


The above national oil companies and the intelligence agencies of their governments may well see the Volt, which has it's aim as to move vehicular energy use away from oil to electricity, a very real national threat.

These nations do not own US coal and natural gas and nuclear companies that generate electricity, so the Volt and what it represents poses a total net loss to them....


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Discussion starter · #41 · (Edited)
I've been to several of those countries. The problem with your theory is that most of the people in those countries are too stupid to figure out a way to manipulate other companies, much less drive one to bankruptcy. And to think that they're worried about a car technology that is 15+ years minimum from having any type of impact on oil is another big stretch. Oil will be king for at least the next 50 years - and that's only if it is truly a limited resource (which is debatable). You're giving them way too much credit.

Also, as it seems that rising gas prices are the reason that GM and others are investing in new technologies, wouldn't it make more sense for those companies/countries to lower crude oil prices to avoid becoming obsolete? When gas is cheap, nobody cares about hybrids and electric vehicles.
Yes I agree with you in that I do not put this at the feet of the traditional Arab oil states, but we have a new sophisticated player who came into the market recently and whom can sway those traditional players. Russia! Since the collapse of the Soviet Union there is now more spying in the world than during the cold war. Why? Because both the western and Russian intelligence agencies cut loose thousands of highly skilled operatives who specialised in everything from special ops to socio-economic and psychological warfare. Most went to work for private companies and now work in industrial espionage.

So we now have the Russians as real players in oil and gas, and their companies are run by men who may range from ex Russian Mafia to ex KGB; and they do indeed either have, or have access to, the skill-sets to manipulate anything and everything with enough money. And they now have enough money....

Oh, and 15 years is actually not a long timeframe for people working in global strategic fields. And the Russians want to maintain the monopoly AND get high prices. Why wouldn't you if you are clever enough to do it?


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Discussion starter · #52 ·
Nice work MonaroSS. Start the fire, then go back to "Readers Talent". :rolleyes:
What a s#!t storm! :D
Hey, I'm the kind of guy who guesses who the murderer is 15 minutes into the 'who done it' movie. I do it by looking for motive. You look at who benefits and who loses. Then you look at who benefits from who loses.

I was just having an idol thought about oil prices and where the money trail leads and also who loses the most and is there anyone who benefited from those who lose. Turned out that one group benefited from both trails. So I wrote my little idea down and posted it in 'Non-Car related discussion' as I thought it may get some people off the blame GM/Wagoner bandwagon for a minute or two. Turns out it didn't.

Then turns out that GMI moved it to 'GMI Commentaries' and posted it on the News Ticker and then it was taken up as a 'The best auto news from the rest of the Web' link at The Detroit News.

Who woulda thunk it....

Just hope it doesn't turn out to be true like in the Pelican Brief......especially now I've implicated the Russian Mob.....:hyper:




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Discussion starter · #56 ·
Well, it's no secret that "Really Big Oil" has a lot of power over the American economy. They openly smacked us around in the the 1970s, people promptly forgot, and we did nothing to become energy independent.

Could they be engaging in a silent campaign to squeeze out the American economy in order to change our government's foreign policy? It's not like Iran/Saudi/Argentina does not have reason to.

However whether they are specifically targeting GM is another question. I tend to think that they're just a weakened company that is caught in the crossfire.
You may be right. It may just be a happy unintended consequence that they also take out the chief protagonist for the electrification of the automobile...


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Discussion starter · #65 ·
But who benefits from the discussion? Hmm, considering the lack of introspective assessment by dedicated a fan base + the oft purported, but unaccountable impact of consistent negative media exposure (think MMAL), it would have to be the main competition. Does GM have any enemies? Considering that other domestic manufacturers are tarred with the same brush and probably in more **** than the general, it would have to be what has become the global "Big One".

Gu-tenmorugen, Otaka San.:worship:
Bonsowa-ru, ....and it's Otaku:




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Discussion starter · #68 ·
I wasn't throwing insults! To be honest, I just googled "Toyota Strategic Management Team" and picked a senior name: Hideaki Otaka.
Unfortunately, it was probably more of an insult than Otaku :D
Actually among those who like their porn in cartoon form it can be a self deprecating term of endearment. :yup:

So naturally I didn't take it as an insult......
....oouch!




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Discussion starter · #70 ·
Hey, let's use occam's razor here.

If someone wanted to take out GM, the easiest way to do it would be to just buy them out. Last I checked their market cap was pretty much pocket change for a Saudi prince.

Taking out the world's largest economy and starting a global recession is massive overkill if the main goal is to shut down a near bankrupt corporation. This spat is about much bigger issues.
"All other things being equal, the simplest solution is the best" is fine but here all things are not equal.

Firstly it would not be easy for anyone to take over GM, secondly it would be doubly hard for a foreign sovereign entity, or any entity perceived as a front for same. Those Sovereign Wealth Funds filling up with US dollars by the day would love to invest in many large companies but they are effectively locked out by political pressure. Pressure that is applied because politicians and the public believe they will try to use that foreign ownership to redirect the company for strategic political reasons.

And so you say that foreign oil money should just buy GM so that they can then shut down the Volt Program to prevent the electrification of the automobile? That’s your simplest solution? All hell would break loose. Talk about confirming every conspiracy theory for the last 50 years that Big Oil buys up and suppresses anything that threatens fuel consumption….

And on the last point of overkill on creating a world recession: They actually haven't yet created an economic downturn that so far has resulted in destroying very much demand for oil. Just the experience of testing those limits of what the world can and will bear makes it a job worth doing. I bet that after this last year the oil countries now feel they are sitting on far more money than they previously thought they could ever extract from the rest of the world.

Sometimes it pays to test the market.........



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Discussion starter · #75 ·
So then plan is, raise the price of oil, and kill GM. Then, before other manufacturers can bring out plug-ins, drop the price of oil and kill demand for plug-ins.

Interesting theory.
Interesting to read this thread again after the price of oil has indeed come down after it killed demand for GM's profit makers and slowed the US economy to the point that it seriously exacerbated the credit crunch.

Now there is no financial support for electric cars with low gas prices.....




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