Amateur Megalomania

Best of the Web from Friday.

“Wal-Mart critics often note that corporations like Ford and G.M. led a race to the top, providing high wages and generous benefits that other companies emulated. They ask why Wal-Mart, with some $10 billion in profit on about $288 billion in revenue last year, cannot act similarly.”–New York Times, May 4

“Standard & Poor’s Ratings Services cut its corporate credit ratings to junk status for both General Motors Corp. (GM) and Ford Motor Co. (F). . . . The decision by one of the nation’s most respected ratings agencies comes as the two iconic American automakers are losing market share at home to Asian automakers, seeing sales soften for their most profitable models and are facing enormous health care and post-retirement liabilities.”–Associated Press, May 5

Priceless…

For many years now, GM hasn’t really been a auto company so much as a finance company. I read somewhere that the vast majority of profit comes from the finance arm, GMAC. I’m not sure about Ford. And with the high-profit SUV lines softening under the gas price pressure, it looks to be a bleak time for most of the domestic auto manufacturers. Time for the UAW and others to reconsider the inevitable future.

Meanwhile, don’t take advice from the NYT.

Filed under: Economics