General Motors May Fail This Month Without Aid, UAW Chief Says
12-04-2008, 03:34 PM
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General Motors May Fail This Month Without Aid, UAW Chief Says
I do not want this to turn into a political flame fest, just posting this as GM's possible failure would affect us ALL.
Discuss....
Discuss....
Dec. 4 (Bloomberg) -- U.S. lawmakers were told General Motors Corp., the country’s largest automaker, may fail this month if they don’t give the cash infusion the company seeks.
“I believe we could lose General Motors by the end of this month,” Ronald Gettelfinger, president of the United Auto Workers union, told a Senate panel today in Washington.
The Big Three automakers renewed their plea for an emergency federal bailout as a deadlocked Congress showed no progress in deciding how to aid them. GM Chief Executive Rick Wagoner said his company needs an “immediate” $4 billion, and $4 billion more next month.
“We’re here today because we made mistakes,” Wagoner told the Senate Banking Committee. “Forces beyond our control have pushed us to the brink.”
Wagoner, Chrysler LLC Chief Executive Robert Nardelli and Ford Motor Co.’s Alan Mulally together are asking for as much as $34 billion in federal aid. “I am sorry to be asking for this support,” Wagoner told reporters before the hearing began.
The three men are trying to recover from their appearance before Congress two weeks ago when they were ridiculed for arriving in Washington in separate private jets to plead for funds and left empty-handed. They demonstrated contrition today, pledging to work for $1 a year, traveling to Washington by car and providing specific plans for viability.
“We need to act,” said Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat. Letting automakers fail would amount to playing “Russian roulette with our entire economy.” He said later he was “impressed with the detail of the GM plan.”
‘Cataclysmic’
Senator Charles Schumer, a New York Democrat, said “we realize that letting you fail would be cataclysmic.” He said that if the industry fails, “millions of workers lose their jobs.” He added, “I don’t care where the money comes from.”
The senior Republican on the panel, Senator Richard Shelby of Alabama, said the automakers’ plans aren’t “serious” and have “few concrete details.”
“If you made this presentation to get a bank loan I suspect that any sensible banker would summarily reject your request,” Shelby said. He said earlier he still opposes a bailout.
Mark Zandi, chief economist of Moody’s Corp.’s Economy.com, said the government should aid automakers because liquidations and hundreds of thousands of layoffs would otherwise result. The $34 billion won’t be enough to avoid bankruptcy, he said.
“They would ultimately need $75 billion to $125 billion to avoid this fate,” Zandi told the panel.
Back in a Year?
Senator Jon Tester, a Montana Democrat, said that if Congress aids automakers now, “there is a potential we could be back here in a year, maybe less.”
Democrat Senator Carl Levin, from the carmakers’ home state of Michigan, said “it’s essential” that President George W. Bush and President-elect Barack Obama “become more active” in talks to rescue the carmakers.
White House spokeswoman Dana Perino said it is up to the automakers to show that their plans for revamping their companies will work.
“It’s too early to give these plans a grade,” Perino said. “The linchpin of our support has been that we would not provide taxpayer dollars unless they could prove viability.”
GM said it needs $18 billion altogether, and Chrysler is seeking $7 billion this month to avoid running out of cash. Ford has requested a $9 billion credit line it said it may not need to tap.
“I recognize this is a significant amount of public money,” Nardelli said. “We believe this is the least costly alternative considering the depth of the economic crisis and the options we face.”
Source of Funds
U.S. lawmakers have said they may schedule votes next week to aid automakers after hearings today and tomorrow. Leaders haven’t resolved a deadlock over how to provide aid, with Republicans backing use of Energy Department loans intended to help retool the industry and Democrats preferring to tap a $700 billion rescue package targeted for financial institutions.
“The collapse of one or both of our domestic competitors would threaten Ford because we have 80 percent overlap in supplier networks and nearly 25 percent of Ford’s top dealers also own GM and Chrysler franchises,” Mulally said.
GM and Chrysler executives have held private discussions on possibly accepting a pre-arranged bankruptcy as the last-resort price of securing the bailout, according to a person familiar with the talks.
Bankruptcy Consequences
The executives have said publicly that bankruptcy would lead to liquidation as customers abandon the companies. Wagoner said today bankruptcy isn’t in his plan.
Staff for three members of Congress have asked restructuring experts if a pre-arranged bankruptcy -- negotiated with workers, creditors and lenders -- could be used to reorganize the industry without liquidation, a person familiar with that matter said.
“Chapter 11 reorganization -- even a so-called pre-packaged bankruptcy -- is simply not a viable option,” Gettelfinger said. “The situation at GM, Ford and Chrysler is extremely dire,” the autoworkers’ president said. “It is imperative that the federal government act this month.”
Acting U.S. Comptroller General Gene Dodaro told the committee, in response to a question from Shelby, that the Federal Reserve had authority to put money into the carmakers, as it did with insurer American International Group Inc.
Fed officials have said they want the solution for automakers’ cash problems to come from Congress and taxpayers, not the central bank.
How to ‘Play This’
“Congress will have to decide how they want to play this,” said St. Louis Fed President James Bullard in a Bloomberg Television interview Dec. 2. Rescuing the auto companies “is one thing we don’t have to do,” he said.
Fed officials have an aversion to extending the too-big-to- fail doctrine beyond financial institutions. The premise of the central bank’s $85 billion rescue of AIG in September was that the insurer’s failure posed a threat to the system through its role in the derivatives market.
Other obstacles involved in lending to carmakers might be finding large pools of collateral for the Fed to loan against. Officials are also unlikely to grant bank holding company status to auto-firm subsidiaries as a potential conduit for aid to the parent. Transactions between banks and affiliates are strictly regulated by the Fed.
“I believe we could lose General Motors by the end of this month,” Ronald Gettelfinger, president of the United Auto Workers union, told a Senate panel today in Washington.
The Big Three automakers renewed their plea for an emergency federal bailout as a deadlocked Congress showed no progress in deciding how to aid them. GM Chief Executive Rick Wagoner said his company needs an “immediate” $4 billion, and $4 billion more next month.
“We’re here today because we made mistakes,” Wagoner told the Senate Banking Committee. “Forces beyond our control have pushed us to the brink.”
Wagoner, Chrysler LLC Chief Executive Robert Nardelli and Ford Motor Co.’s Alan Mulally together are asking for as much as $34 billion in federal aid. “I am sorry to be asking for this support,” Wagoner told reporters before the hearing began.
The three men are trying to recover from their appearance before Congress two weeks ago when they were ridiculed for arriving in Washington in separate private jets to plead for funds and left empty-handed. They demonstrated contrition today, pledging to work for $1 a year, traveling to Washington by car and providing specific plans for viability.
“We need to act,” said Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat. Letting automakers fail would amount to playing “Russian roulette with our entire economy.” He said later he was “impressed with the detail of the GM plan.”
‘Cataclysmic’
Senator Charles Schumer, a New York Democrat, said “we realize that letting you fail would be cataclysmic.” He said that if the industry fails, “millions of workers lose their jobs.” He added, “I don’t care where the money comes from.”
The senior Republican on the panel, Senator Richard Shelby of Alabama, said the automakers’ plans aren’t “serious” and have “few concrete details.”
“If you made this presentation to get a bank loan I suspect that any sensible banker would summarily reject your request,” Shelby said. He said earlier he still opposes a bailout.
Mark Zandi, chief economist of Moody’s Corp.’s Economy.com, said the government should aid automakers because liquidations and hundreds of thousands of layoffs would otherwise result. The $34 billion won’t be enough to avoid bankruptcy, he said.
“They would ultimately need $75 billion to $125 billion to avoid this fate,” Zandi told the panel.
Back in a Year?
Senator Jon Tester, a Montana Democrat, said that if Congress aids automakers now, “there is a potential we could be back here in a year, maybe less.”
Democrat Senator Carl Levin, from the carmakers’ home state of Michigan, said “it’s essential” that President George W. Bush and President-elect Barack Obama “become more active” in talks to rescue the carmakers.
White House spokeswoman Dana Perino said it is up to the automakers to show that their plans for revamping their companies will work.
“It’s too early to give these plans a grade,” Perino said. “The linchpin of our support has been that we would not provide taxpayer dollars unless they could prove viability.”
GM said it needs $18 billion altogether, and Chrysler is seeking $7 billion this month to avoid running out of cash. Ford has requested a $9 billion credit line it said it may not need to tap.
“I recognize this is a significant amount of public money,” Nardelli said. “We believe this is the least costly alternative considering the depth of the economic crisis and the options we face.”
Source of Funds
U.S. lawmakers have said they may schedule votes next week to aid automakers after hearings today and tomorrow. Leaders haven’t resolved a deadlock over how to provide aid, with Republicans backing use of Energy Department loans intended to help retool the industry and Democrats preferring to tap a $700 billion rescue package targeted for financial institutions.
“The collapse of one or both of our domestic competitors would threaten Ford because we have 80 percent overlap in supplier networks and nearly 25 percent of Ford’s top dealers also own GM and Chrysler franchises,” Mulally said.
GM and Chrysler executives have held private discussions on possibly accepting a pre-arranged bankruptcy as the last-resort price of securing the bailout, according to a person familiar with the talks.
Bankruptcy Consequences
The executives have said publicly that bankruptcy would lead to liquidation as customers abandon the companies. Wagoner said today bankruptcy isn’t in his plan.
Staff for three members of Congress have asked restructuring experts if a pre-arranged bankruptcy -- negotiated with workers, creditors and lenders -- could be used to reorganize the industry without liquidation, a person familiar with that matter said.
“Chapter 11 reorganization -- even a so-called pre-packaged bankruptcy -- is simply not a viable option,” Gettelfinger said. “The situation at GM, Ford and Chrysler is extremely dire,” the autoworkers’ president said. “It is imperative that the federal government act this month.”
Acting U.S. Comptroller General Gene Dodaro told the committee, in response to a question from Shelby, that the Federal Reserve had authority to put money into the carmakers, as it did with insurer American International Group Inc.
Fed officials have said they want the solution for automakers’ cash problems to come from Congress and taxpayers, not the central bank.
How to ‘Play This’
“Congress will have to decide how they want to play this,” said St. Louis Fed President James Bullard in a Bloomberg Television interview Dec. 2. Rescuing the auto companies “is one thing we don’t have to do,” he said.
Fed officials have an aversion to extending the too-big-to- fail doctrine beyond financial institutions. The premise of the central bank’s $85 billion rescue of AIG in September was that the insurer’s failure posed a threat to the system through its role in the derivatives market.
Other obstacles involved in lending to carmakers might be finding large pools of collateral for the Fed to loan against. Officials are also unlikely to grant bank holding company status to auto-firm subsidiaries as a potential conduit for aid to the parent. Transactions between banks and affiliates are strictly regulated by the Fed.
12-04-2008, 03:51 PM
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(trying to walk a fine line here)
I agree with that statement. I believe the Unions were of tremendous help back when the Auto Industry was booming and BEFORE we had the Labor Laws / structure that we have now.
These days, I think can do more damage then good in some industries. Just look at the sheer cost they add to things, it's crazy to think we'll actually compete with the Japanese with Employee Compensation Rates as high as they are under the UAW.
Something is gonna have to give if the Big 3 are to survive here.
I would hate to see the day GM goes under but as a banker I can say that in tough times when revenue is low, the best way to stay afloat is to reduce expenses in an effort to offset the decrease in revenue. If that doesn't do it, then hope your capital reserves kick in and you live to fight another day.
I just don't see how GM can cut more cost when UAW contracts cost them so much.
I agree with that statement. I believe the Unions were of tremendous help back when the Auto Industry was booming and BEFORE we had the Labor Laws / structure that we have now.
These days, I think can do more damage then good in some industries. Just look at the sheer cost they add to things, it's crazy to think we'll actually compete with the Japanese with Employee Compensation Rates as high as they are under the UAW.
Something is gonna have to give if the Big 3 are to survive here.
I would hate to see the day GM goes under but as a banker I can say that in tough times when revenue is low, the best way to stay afloat is to reduce expenses in an effort to offset the decrease in revenue. If that doesn't do it, then hope your capital reserves kick in and you live to fight another day.
I just don't see how GM can cut more cost when UAW contracts cost them so much.
Last edited by Jedi54; 12-04-2008 at 04:04 PM.
12-04-2008, 04:13 PM
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I would hate to see the day GM goes under but as a banker I can say that in tough times when revenue is low, the best way to stay afloat is to reduce expenses in an effort to offset the decrease in revenue. If that doesn't do it, then hope your capital reserves kick in and you live to fight another day.
12-04-2008, 07:51 PM
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I agree. Just file chapter 11 now and get it over with. I think they could start from scratch and build back up faster than people think. Dont buy into the scare tactics that they are using - as usual. The blow for filing bankruptcy will be nowhere near as bad as they are making it out to be.
Another point...all of these supposed job losses if they go bankrupt...well if there is no more gm, obvoiusly everyone will have to buy the other brands, so companies like Honda, Toyota, Hyundai and Mazda will surely expand and grow AND HIRE MANY MORE WORKERS! ...in the US!
Either that, or give them this bailout with the stipulation that this is it.. Not another dime from the government - EVER.
12-04-2008, 10:50 PM
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i would only feel right to bail them out with my tax dollar if they bust the union so they can be on level ground vs foreign companies. too bad not many politians republican or democrats dare to mess with the union and their voting power. with GM burning $1B a month bailing them out now is a waste of money, they will be back in the same situation a year from now.
save GM and destroy the UAW
save GM and destroy the UAW
Last edited by playdoh43; 12-04-2008 at 10:52 PM.
12-04-2008, 10:59 PM
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GM is too big to save
I think GM is just too big to save. Nobody can give them enough money. I hear they have $48 billion in debt. That is bigger than the GDP of most nations.
I hate to say it but I don't even think Chapter 11 is even going to save them. Once they stop paying their bills, who is going to want to do business with them? GM has put more small businesses OUT of business. They squeeze their suppliers so hard on margin that WHO would WANT to do business with them?
I'm afraid I see them liquidating. And yes, losing GM will be BAD for the economy. I just think there is no helping any of this.
I hate to say it but I don't even think Chapter 11 is even going to save them. Once they stop paying their bills, who is going to want to do business with them? GM has put more small businesses OUT of business. They squeeze their suppliers so hard on margin that WHO would WANT to do business with them?
I'm afraid I see them liquidating. And yes, losing GM will be BAD for the economy. I just think there is no helping any of this.
12-04-2008, 11:25 PM
#11
what makes those congress stupid *** think that the tax payers (like us) have any interest to save ANY of the loser 3 ?
Those fat executives have their COMPANY private jet to go anywhere they want, thats probably couple 10 if not hundreds of million dollars over the past 10 years. and all the charge they put on the company's bill, like parties, vacations, and spendings,etc. you not gonna believe it. This is a big problem in corporate america.
and **** those Unions. Oh yeah, I still remember back then they just want to strike every fuxking year just to get some ridiculous raise. Their assembly line worker's average hourly wage is like what 26 bux an hour ? and most of them not even high school grad. So that means they're getting paid forget about 26. lets just say 20 bux per hour to put bumpers and **** on ? I mean Im sure some high school kids can do the SAME job for 10 bux or less an hour. Not to mention some College grad these days can't even get 20 bux an hour. shitz.
Everybody knows the major cause of failure came from those ridiculous Union cost. Some even laugh that GM is not even an Auto company, more like some health insurance company.
yea yea yea now the higher ups said they will only take 1 dollar per year as salary. my ***. all the stock and stuff they're holding, if the bailout works, stock gonna go up and how much is THAT gonna worth?
GM, Chrysler and Ford should burn in hell.
Make all big 3 a history. Restart everything and say "Fuxk off" to unions next time.
if they really gonna save them. I mean, they might as well like Easy said. dig a hole and just dump all money in there.
Oh oh even better, after all the money is in, pour some lighter fluid on it then just strike a match.
Those fat executives have their COMPANY private jet to go anywhere they want, thats probably couple 10 if not hundreds of million dollars over the past 10 years. and all the charge they put on the company's bill, like parties, vacations, and spendings,etc. you not gonna believe it. This is a big problem in corporate america.
and **** those Unions. Oh yeah, I still remember back then they just want to strike every fuxking year just to get some ridiculous raise. Their assembly line worker's average hourly wage is like what 26 bux an hour ? and most of them not even high school grad. So that means they're getting paid forget about 26. lets just say 20 bux per hour to put bumpers and **** on ? I mean Im sure some high school kids can do the SAME job for 10 bux or less an hour. Not to mention some College grad these days can't even get 20 bux an hour. shitz.
Everybody knows the major cause of failure came from those ridiculous Union cost. Some even laugh that GM is not even an Auto company, more like some health insurance company.
yea yea yea now the higher ups said they will only take 1 dollar per year as salary. my ***. all the stock and stuff they're holding, if the bailout works, stock gonna go up and how much is THAT gonna worth?
GM, Chrysler and Ford should burn in hell.
Make all big 3 a history. Restart everything and say "Fuxk off" to unions next time.
if they really gonna save them. I mean, they might as well like Easy said. dig a hole and just dump all money in there.
Oh oh even better, after all the money is in, pour some lighter fluid on it then just strike a match.
Last edited by nycgps; 12-04-2008 at 11:31 PM.
12-04-2008, 11:48 PM
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I'm tired of seeing my tax money, money that I earned by being a responsible person, being given to people who are both wealthier then me and less responsible.
I don't see any way the big 3 can become profitable again. not with unions, not with franchises, not with the number of managers and and employees.
It was never profitable to begin with. The money that supported them never actually existed, it was credit that has now been defaulted on.
Refinance your home, take out some equity and buy a car with it, with a loan from GMAC.
I don't see any way the big 3 can become profitable again. not with unions, not with franchises, not with the number of managers and and employees.
It was never profitable to begin with. The money that supported them never actually existed, it was credit that has now been defaulted on.
Refinance your home, take out some equity and buy a car with it, with a loan from GMAC.
Last edited by Socket7; 12-04-2008 at 11:52 PM.
12-05-2008, 01:13 AM
#14
Let them fail.
If every one of the 1.5 million people they say would be affected lose their jobs, pay their salary. It would be cheaper.
Wont happen, though.
A couple tens of thousands of over-paid, under-worked folks will have to go get a job.
Even so, labor is only 10% of the price of a new car.
The problem is a lack vision, leadership and restraint on the part of the "Big Three".
Let 'em sink. They can't be competitive ever again, anyway.
It sickens me to watch those CEOs threaten that our National security is tied to their solvency.
If that is true, then we have no National security. Get used to it.
If every one of the 1.5 million people they say would be affected lose their jobs, pay their salary. It would be cheaper.
Wont happen, though.
A couple tens of thousands of over-paid, under-worked folks will have to go get a job.
Even so, labor is only 10% of the price of a new car.
The problem is a lack vision, leadership and restraint on the part of the "Big Three".
Let 'em sink. They can't be competitive ever again, anyway.
It sickens me to watch those CEOs threaten that our National security is tied to their solvency.
If that is true, then we have no National security. Get used to it.
12-05-2008, 05:43 AM
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To those who say unions are the problem, what if everyone worked for free? GM's cars would be 10% cheaper, but they would still be crap that people don't want to own. (Assuming MM's 10% number.) GM's failure is mostly that of poor leadership.
That said, I do agree that autoworkers are overpaid and overprotected with inflexible rules. Someone said that the annual compensation (including benefits) is something like $100k. Is that true?
A large part of the superiority of Japanese cars is their culture that promotes a better partnership between management and labor. For example, they might have a 1-day strike, which sends a message to management, which gets it, and makes changes. Instead of just comparing labor costs between US and Japan, look at Japanese CEO pay.
Bail-outs in general are a bad idea. Bankruptcy may be better, but only if it promotes better leadership in the future. These are bad times. There's no quick fix. Need hard work and vision to succeed in the long term. Same as it ever was.
That said, I do agree that autoworkers are overpaid and overprotected with inflexible rules. Someone said that the annual compensation (including benefits) is something like $100k. Is that true?
A large part of the superiority of Japanese cars is their culture that promotes a better partnership between management and labor. For example, they might have a 1-day strike, which sends a message to management, which gets it, and makes changes. Instead of just comparing labor costs between US and Japan, look at Japanese CEO pay.
Bail-outs in general are a bad idea. Bankruptcy may be better, but only if it promotes better leadership in the future. These are bad times. There's no quick fix. Need hard work and vision to succeed in the long term. Same as it ever was.
Last edited by robrecht; 12-05-2008 at 05:45 AM.
12-05-2008, 07:37 AM
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These are tuff times....like you guys I am angry but at the same time I feel bad for the big 3. I wish they could reorganize,slash some of there brands that aren't doing so well, and restructure... I know easier said then done. 
My wife suggested that they should sell some of there brands, like I told her, who would want to buy Hummer,Pontiac or Lincoln, etc? These brands are made up of rebadge vehicles from the parent company , with the exception of hummer. Chevy Cobalt= Pontiac Sunfire, Ford Fusion=Lincoln MKZ, etc. These companies need to be put to rest. Cut the fat big 3......
My wife suggested that they should sell some of there brands, like I told her, who would want to buy Hummer,Pontiac or Lincoln, etc? These brands are made up of rebadge vehicles from the parent company , with the exception of hummer. Chevy Cobalt= Pontiac Sunfire, Ford Fusion=Lincoln MKZ, etc. These companies need to be put to rest. Cut the fat big 3......
12-05-2008, 08:37 AM
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Wow speaking of cutting the fat....look at this.
http://www.autoblog.com/2008/12/05/m...with-taurus-x/
http://www.autoblog.com/2008/12/05/m...with-taurus-x/
12-05-2008, 08:37 AM
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I don't really blame the unions for this, reason being - if someone came to you and said here are your guaranteed benefits, great salary, etc...who wouldn't take it? GM management set the tone decades ago for both themselves and their employees.
Look back historically, just the other day I saw a Life Magazine from the early 60s and one of the stories on the cover was how great things were and what Americans would do with their 4 day work week because we were so far ahead of everyone else. We thought we were invincible, and we signed away accordingly - and 80s forward have been a trial.
Bottom line, once you give a union something without any foresight to consequence and the future - good luck taking it back. I have a handful of union employees in the department I head, and like the UAW their compensation is great considering their level of education and accountability in the workplace. But it's when I see the John Hancock's some of the company's incompetent officials that signed the agreements is when I know where the real problem is located.
Look back historically, just the other day I saw a Life Magazine from the early 60s and one of the stories on the cover was how great things were and what Americans would do with their 4 day work week because we were so far ahead of everyone else. We thought we were invincible, and we signed away accordingly - and 80s forward have been a trial.
Bottom line, once you give a union something without any foresight to consequence and the future - good luck taking it back. I have a handful of union employees in the department I head, and like the UAW their compensation is great considering their level of education and accountability in the workplace. But it's when I see the John Hancock's some of the company's incompetent officials that signed the agreements is when I know where the real problem is located.
12-05-2008, 08:46 AM
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Wow speaking of cutting the fat....look at this.
http://www.autoblog.com/2008/12/05/m...with-taurus-x/
http://www.autoblog.com/2008/12/05/m...with-taurus-x/
12-05-2008, 10:03 AM
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I know the job losses are bad, but I think even more of the problem is not the job losses themselves, but who is losing their jobs. Most of the these factory workers don't have any education past high school and I'd bet there is a large chunk that never even graduated high school. What else are these people supposed to do? Any other job they could get would not pay anywhere near the $25 an hour they probably get now. I don't necessarily feel that bad for them when you look at how good these union pigs have had it over the years. I'm simply stating the fact that all of these people are uneducated and that is going to be a huge problem.
12-05-2008, 10:04 AM
#21
I don't really blame the unions for this, reason being - if someone came to you and said here are your guaranteed benefits, great salary, etc...who wouldn't take it? GM management set the tone decades ago for both themselves and their employees.
Look back historically, just the other day I saw a Life Magazine from the early 60s and one of the stories on the cover was how great things were and what Americans would do with their 4 day work week because we were so far ahead of everyone else. We thought we were invincible, and we signed away accordingly - and 80s forward have been a trial.
Bottom line, once you give a union something without any foresight to consequence and the future - good luck taking it back. I have a handful of union employees in the department I head, and like the UAW their compensation is great considering their level of education and accountability in the workplace. But it's when I see the John Hancock's some of the company's incompetent officials that signed the agreements is when I know where the real problem is located.
Look back historically, just the other day I saw a Life Magazine from the early 60s and one of the stories on the cover was how great things were and what Americans would do with their 4 day work week because we were so far ahead of everyone else. We thought we were invincible, and we signed away accordingly - and 80s forward have been a trial.
Bottom line, once you give a union something without any foresight to consequence and the future - good luck taking it back. I have a handful of union employees in the department I head, and like the UAW their compensation is great considering their level of education and accountability in the workplace. But it's when I see the John Hancock's some of the company's incompetent officials that signed the agreements is when I know where the real problem is located.
they used to strike every frickin' Year JUST to get some ridiculous raise. I mean Union's idea was "good". but greedy bastards worldwide has been abusing that term to get unreasonable profit for themselves.
and whenever they strike, companies will lose millions of dollars every day.
Of course we cant blame 100% to the Unions. Lack for future visions is another problem.
Anyway, just let them go down in flames
12-05-2008, 10:33 AM
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It's not just the unionized salaries of the big3, its the total benefits package. It's unreasonable for workers to expect that in addition to job security, high pay, and full pension, they get free health and dental for life for the immediate family and extended family. (I have to figure out a way to bring the UAW into banking, haha)This type of cost structure is unsustainable. It saps the company of resources otherwise directed towards r&d, retooling, modernizing, etc.
Management is the other problem. Instead of having car people in management, they hire business people. Thus, profitability depends on business processes as opposed to creating a modern, avant-garde vehicle that people want to buy (corvette is one of the exceptions). They have obcene pay and benefits packages. Most execs are hired from outside the company with pay that does not engender loyalty. As such, these organizations have stopped being a meritocracy. Too bad.
I think the big3 are headed for bankruptcy. Nothing will stop that now. A bailout here would merely delay the inevitable by maybe one or two years. As a taxpayer, you would be throwing good money after bad. Remeber that these are no longer car companies. The car operations were just the front. The big3 became banks to offset decades of bad product development. In fact, Cerberus Capital only bought Chrysler to get access to the financing arm. This is evidenced by the fact that Cerberus Capital (cash rich) refuses to fund the car operations any longer and is opting to let Chrysler go begging in Washington. GMAC has long been the only profitable division of the company. While not as big a contributor to the bottom line at Ford, FMCC was a healthy chunk of the earnings.
The big3 financing arms are already trying to tap the TARP program. So one way or the other, taxpayers will foot the bill. Up here in Canada, there is talk about throwing public money into the ailing auto industry as well. Sorry for lengthy post...... just my 2 cents.
Management is the other problem. Instead of having car people in management, they hire business people. Thus, profitability depends on business processes as opposed to creating a modern, avant-garde vehicle that people want to buy (corvette is one of the exceptions). They have obcene pay and benefits packages. Most execs are hired from outside the company with pay that does not engender loyalty. As such, these organizations have stopped being a meritocracy. Too bad.
I think the big3 are headed for bankruptcy. Nothing will stop that now. A bailout here would merely delay the inevitable by maybe one or two years. As a taxpayer, you would be throwing good money after bad. Remeber that these are no longer car companies. The car operations were just the front. The big3 became banks to offset decades of bad product development. In fact, Cerberus Capital only bought Chrysler to get access to the financing arm. This is evidenced by the fact that Cerberus Capital (cash rich) refuses to fund the car operations any longer and is opting to let Chrysler go begging in Washington. GMAC has long been the only profitable division of the company. While not as big a contributor to the bottom line at Ford, FMCC was a healthy chunk of the earnings.
The big3 financing arms are already trying to tap the TARP program. So one way or the other, taxpayers will foot the bill. Up here in Canada, there is talk about throwing public money into the ailing auto industry as well. Sorry for lengthy post...... just my 2 cents.
12-05-2008, 10:35 AM
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It's not just the unionized salaries of the big3, its the total benefits package. It's unreasonable for workers to expect that in addition to job security, high pay, and full pension, they get free health and dental for life for the immediate family and extended family. (I have to figure out a way to bring the UAW into banking, haha)This type of cost structure is unsustainable. It saps the company of resources otherwise directed towards r&d, retooling, modernizing, etc.
Management is the other problem. Instead of having car people in management, they hire business people. Thus, profitability depends on business processes as opposed to creating modern, avant-garde vehicles that people want to drive (corvette is one of the exceptions). They have obcene pay and benefits packages. Most execs are hired from outside the company with pay that does not engender loyalty. As such, these organizations have stopped being a meritocracy. Too bad.
I think the big3 are headed for bankruptcy. Nothing will stop that now. A bailout here would merely delay the inevitable by maybe one or two years. As a taxpayer, you would be throwing good money after bad. Remeber that these are no longer car companies. The car operations were just the front. The big3 became banks to offset decades of bad product development. In fact, Cerberus Capital only bought Chrysler to get access to the financing arm. This is evidenced by the fact that Cerberus Capital (cash rich) refuses to fund the car operations any longer and is opting to let Chrysler go begging in Washington. GMAC has long been the only profitable division of the company. While not as big a contributor to the bottom line at Ford, FMCC was a healthy chunk of the earnings. Now that there is a global credit freeze, their banking activities dead.
The big3 financing arms are already trying to tap the TARP program. So one way or the other, taxpayers will foot the bill. Up here in Canada, there is talk about throwing public money into the ailing auto industry as well. I'm against corporate welfare. Darwinism rulz! Sorry for lengthy post...... just my 2 cents.
Management is the other problem. Instead of having car people in management, they hire business people. Thus, profitability depends on business processes as opposed to creating modern, avant-garde vehicles that people want to drive (corvette is one of the exceptions). They have obcene pay and benefits packages. Most execs are hired from outside the company with pay that does not engender loyalty. As such, these organizations have stopped being a meritocracy. Too bad.
I think the big3 are headed for bankruptcy. Nothing will stop that now. A bailout here would merely delay the inevitable by maybe one or two years. As a taxpayer, you would be throwing good money after bad. Remeber that these are no longer car companies. The car operations were just the front. The big3 became banks to offset decades of bad product development. In fact, Cerberus Capital only bought Chrysler to get access to the financing arm. This is evidenced by the fact that Cerberus Capital (cash rich) refuses to fund the car operations any longer and is opting to let Chrysler go begging in Washington. GMAC has long been the only profitable division of the company. While not as big a contributor to the bottom line at Ford, FMCC was a healthy chunk of the earnings. Now that there is a global credit freeze, their banking activities dead.
The big3 financing arms are already trying to tap the TARP program. So one way or the other, taxpayers will foot the bill. Up here in Canada, there is talk about throwing public money into the ailing auto industry as well. I'm against corporate welfare. Darwinism rulz! Sorry for lengthy post...... just my 2 cents.
