General Motors May Fail This Month Without Aid, UAW Chief Says
12-06-2008, 11:53 PM
#51
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Here's an interesting article on the UAW Union.
http://www.tnr.com/politics/story.ht...2-56dfc3323682
http://www.tnr.com/politics/story.ht...2-56dfc3323682
12-06-2008, 11:56 PM
#52
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OK I'm long winded........but thats exactly what I was talking about. If they fail though there is no restructure, no funding to do so and thousands lose their hard earned retirement and other's lose their jobs due to no fault of their own.
I have said restructure from the beginning, but without something to work with, there is no restructure.
I have said restructure from the beginning, but without something to work with, there is no restructure.
12-07-2008, 07:54 AM
#53
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Freedom doesnt mean equality, I don't know where you came up with that one. All people have been free since the ending of the slave movement, but that doesnt mean that they were all equal.
12-07-2008, 08:27 AM
#54
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I think it's a pendulum thing. Initially, unregulated capitalism bled laborers dry, ie, child labor, life threatening work conditions, etc. Not so sure if such practices don't still exist to some extent in some other countries, with which our labor force is increasingly competing.
12-07-2008, 06:45 PM
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I actually had a chance to watch some of the hearings. GM's chief did state labor was 10% of the cost and he did state their labor costs are now competitive. One senator asked why they are not making money. He stated it was due to the restructuring costs the past several years.
In my opinion it is extremely terrible management. The unions are only a problem because the big 3 were not making what people wanted and were continuously losing market share. As their market share eroded and people stopped buying their cars, the labor costs and legacy costs became more of an issue. This is in no way a defense for the outrageous salaries and benefits these guys were getting but my point is I think labor is secondary to mismanagement.
Anyone who doubts management is the problem can look at Mulally vs. Wagoner. Mulally even said his company used to just build whatever and expect people to come buy it. Now they are actually trying to build what people want. Mulally listed concrete improvements that have been put in place since his arrival. He listed the mistakes made and stated how they are in the process of being fixed.
Wagoner on the other hand does not get it. He has spent 31 years at GM and does not see any of the problems. His speech gave no concrete improvements or details to convince people the company is on the right track. He stated to investors 2 years ago, that GM has a plan. Now we know, they really don't have a plan. I looked at GM's submission to Congress. It touts the Malibu, CTS, and Acadia as successes. Yes, but you have 60+ other cars that are not. Only now are they talking about closing some divisions and dropping Saab.
I can't imagine how $17 billion is going to keep GM in business for more than a few months. They recently announced they may close some divisions possibly Saturn and Pontiac. You can count on their sales being nonexistent. Consumers have no confidence in GM which means their sales are only going to get worse and the economy appears to be getting worse.
I think a major restructuring is needed. Some of the ideas I have read are prepackaged bankruptcy allowing them to come out of it in 12-18 months. That is probably the best approach. I think a new GM coming out of the ashes will give people confidence in them again if they can focus on a few divisions and build what people want. Unfortunately, no matter what there are going to be tons of job losses because the market share still does not justify the number of dealers, 8 divisions, and 66 different models.
In my opinion it is extremely terrible management. The unions are only a problem because the big 3 were not making what people wanted and were continuously losing market share. As their market share eroded and people stopped buying their cars, the labor costs and legacy costs became more of an issue. This is in no way a defense for the outrageous salaries and benefits these guys were getting but my point is I think labor is secondary to mismanagement.
Anyone who doubts management is the problem can look at Mulally vs. Wagoner. Mulally even said his company used to just build whatever and expect people to come buy it. Now they are actually trying to build what people want. Mulally listed concrete improvements that have been put in place since his arrival. He listed the mistakes made and stated how they are in the process of being fixed.
Wagoner on the other hand does not get it. He has spent 31 years at GM and does not see any of the problems. His speech gave no concrete improvements or details to convince people the company is on the right track. He stated to investors 2 years ago, that GM has a plan. Now we know, they really don't have a plan. I looked at GM's submission to Congress. It touts the Malibu, CTS, and Acadia as successes. Yes, but you have 60+ other cars that are not. Only now are they talking about closing some divisions and dropping Saab.
I can't imagine how $17 billion is going to keep GM in business for more than a few months. They recently announced they may close some divisions possibly Saturn and Pontiac. You can count on their sales being nonexistent. Consumers have no confidence in GM which means their sales are only going to get worse and the economy appears to be getting worse.
I think a major restructuring is needed. Some of the ideas I have read are prepackaged bankruptcy allowing them to come out of it in 12-18 months. That is probably the best approach. I think a new GM coming out of the ashes will give people confidence in them again if they can focus on a few divisions and build what people want. Unfortunately, no matter what there are going to be tons of job losses because the market share still does not justify the number of dealers, 8 divisions, and 66 different models.
12-07-2008, 11:22 PM
#58
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Although we don't have Chapter 11 Bankruptcy here we have just bankrupt and you fold and shut shop without paying any bills.
Australian taxpayers have also helped Mitsubishi (they left Australia), and the Feds gave GMH and Ford and Toyota billions for "Green" car development!.
The US situation is grave.
Obviously the UAW have to change completely and remove the exorbitant costs and entitlements which has assisted putting the Big 3 where they are today.
Why don't the US Federal Government take control of all the Legacy and Pension costs from the car companies.
Then start afresh with new employee contracts that will make your Auto industry more competitive.
You say wage costs are only 10% of the price of a car, but in Japan and Korea it is around 1%.
It's not the cost of making the actual car it is the ongoing life long costs after the employee has retired (free health, dental for everyone and the family dog) which has killed your Auto industry.
Imagine, there must be millions of past Auto workers over the decades which still sucks the cash from their "old' employer.
Also why cant the "Oil Industry" assist GM, Ford and Chrysler.
After all car makers use their product and both are reliant on each other.
The Oil barons have done very nicely out of the Auto industry and the car consumer, why can't they put something back?
Australian taxpayers have also helped Mitsubishi (they left Australia), and the Feds gave GMH and Ford and Toyota billions for "Green" car development!.
The US situation is grave.
Obviously the UAW have to change completely and remove the exorbitant costs and entitlements which has assisted putting the Big 3 where they are today.
Why don't the US Federal Government take control of all the Legacy and Pension costs from the car companies.
Then start afresh with new employee contracts that will make your Auto industry more competitive.
You say wage costs are only 10% of the price of a car, but in Japan and Korea it is around 1%.
It's not the cost of making the actual car it is the ongoing life long costs after the employee has retired (free health, dental for everyone and the family dog) which has killed your Auto industry.
Imagine, there must be millions of past Auto workers over the decades which still sucks the cash from their "old' employer.
Also why cant the "Oil Industry" assist GM, Ford and Chrysler.
After all car makers use their product and both are reliant on each other.
The Oil barons have done very nicely out of the Auto industry and the car consumer, why can't they put something back?
Last edited by ASH8; 12-07-2008 at 11:52 PM.
12-11-2008, 09:06 AM
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The death spiral intensifies...... big3 suppliers are starting to demand payment up front as carmakers' cash dwindles.
GMAC denied bank holding company status.
Things are getting grim.
GMAC denied bank holding company status.
Things are getting grim.
12-11-2008, 11:11 AM
#60
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note that Ford isnt even asking for money in this "bailout". but they feel they need GM and Chrysler to stay afloat to avoid a cascade that could hurt Ford. Their cash position is actually good right now and they are willing to go forward with only the loans approved with the new cafe standards in the energy bill last year
12-11-2008, 11:44 AM
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The bailout's they're asking for will cover their operating expenses for a quarter. When the quarter is over, they'll come back begging for more money, because they cannot bring any money in. Nobody wants to buy their cars. To top it off, GM and Chrysler have never built up a capitol reserve in case anything went wrong. running your Production lines on credit instead of capitol is ******* stupid. Ford is in good shape because they believe in sound management practices, but they're still going to have to cut production and jobs because of a drop in demand.
There is no longer a market for their cars, they have a huge amount of inventory in the supply chain that they cannot move, and to keep assembly line people employed they have to keep building more cars which they cannot sell, even at a loss. I've seen dealerships with buy 1 get one free deals on pickup trucks.
When the market you're selling to evaporates, people HAVE to loose their jobs. You cant just throw taxpayer money at them and expect things to get better.
People are not going to buy cars in the same numbers they used to. Because of that we need less dealerships, less factories, less product made, and that means jobs will HAVE to be cut, or we'd be sitting around spending tax money for people to do nothing. I'm not OK with that. At all.
I realize a lot of people are employed in the auto industry, and it would be bad if GM/Chrysler went into chapter 11, but we don't have any other choice. It's inevitable, so why should I waste my retirement money to keep them afloat for a month or two?
There is no longer a market for their cars, they have a huge amount of inventory in the supply chain that they cannot move, and to keep assembly line people employed they have to keep building more cars which they cannot sell, even at a loss. I've seen dealerships with buy 1 get one free deals on pickup trucks.
When the market you're selling to evaporates, people HAVE to loose their jobs. You cant just throw taxpayer money at them and expect things to get better.
People are not going to buy cars in the same numbers they used to. Because of that we need less dealerships, less factories, less product made, and that means jobs will HAVE to be cut, or we'd be sitting around spending tax money for people to do nothing. I'm not OK with that. At all.
I realize a lot of people are employed in the auto industry, and it would be bad if GM/Chrysler went into chapter 11, but we don't have any other choice. It's inevitable, so why should I waste my retirement money to keep them afloat for a month or two?
Last edited by Socket7; 12-11-2008 at 11:54 AM.
12-11-2008, 12:33 PM
#63
Administrator
read usa today article about Mullaly and his plans- he says exactly what you just did- the are moving to less production because the market has shrunk . thats that. he goes on to say he cant comprehend that others in the industry dont work that way
12-11-2008, 12:37 PM
#64
Administrator
oh here is the on line article
http://www.usatoday.com/money/autos/...nterview_N.htm
its a good read
http://www.usatoday.com/money/autos/...nterview_N.htm
Mulally has said his strategy since he left running Boeing to take over Ford two years ago was to speed up the three-step line of attack the company had in place: cut production to match demand; make cars people want; and focus on core brands.
In a recent speech to the Rotary Club in Seattle, Mulally's hometown, he had the audience laughing when he walked them through the steps of his deceptively simple strategy.
"I know," he said, pausing for dramatic effect. "This is revolutionary."
"I know," he said, pausing for dramatic effect. "This is revolutionary."
New way to do business
Sarcasm aside, in some ways that thinking is a big departure from how the Detroit 3 have operated.
For decades, the U.S. carmakers dealt with their high fixed labor and production costs by pumping out more cars, regardless of market conditions. That spruced up their balance sheets, because carmakers book the profit on a car when it leaves the plant and is shipped to a dealer.
At that point, a complicated financing dance begins, with the automaker giving the dealers loans to pay for the cars until they're sold. Then the automakers cough up thousands per car in rebates to persuade consumers to buy the car — ideally, coaxed by interest rate incentives with money borrowed from the automakers' finance arms.
Until recently, the Detroit automakers often made more money in a quarter from their banking operations than from making cars.
Under Ford's plan, revenue won't look as rosy as in the past because demand-driven production totals will be lower. But if that means cars can be sold without costly sales incentives, profits should improve.
"This is a completely new business plan, where we take the hurt," Mulally says. "We are going to be the leader in sizing our operations to the real demand out there. And we'll keep doing it. … No matter when (the market) comes back, no matter what the industry is, we've sized our operations to the real demand."
That's meant fewer jobs at all levels of the company. On Ford headquarters' 12th floor, several offices sit dark and empty following a trimming of upper management. Ford has eliminated 14,000 jobs across all pay levels in the last three years and closed 17 plants, cutting $5 billion in costs.
But being smaller is the only thing that makes sense in this environment, Mulally says, admitting he was a little surprised that industry leaders hadn't approached business this way in the past.
"It was the only thing I knew as a business person," he says. "Clearly, this is a new plan for Ford, and it's working. … We got on this journey, and for the first quarter, before the credit and financial meltdown hit, it was working."
Sarcasm aside, in some ways that thinking is a big departure from how the Detroit 3 have operated.
For decades, the U.S. carmakers dealt with their high fixed labor and production costs by pumping out more cars, regardless of market conditions. That spruced up their balance sheets, because carmakers book the profit on a car when it leaves the plant and is shipped to a dealer.
At that point, a complicated financing dance begins, with the automaker giving the dealers loans to pay for the cars until they're sold. Then the automakers cough up thousands per car in rebates to persuade consumers to buy the car — ideally, coaxed by interest rate incentives with money borrowed from the automakers' finance arms.
Until recently, the Detroit automakers often made more money in a quarter from their banking operations than from making cars.
Under Ford's plan, revenue won't look as rosy as in the past because demand-driven production totals will be lower. But if that means cars can be sold without costly sales incentives, profits should improve.
"This is a completely new business plan, where we take the hurt," Mulally says. "We are going to be the leader in sizing our operations to the real demand out there. And we'll keep doing it. … No matter when (the market) comes back, no matter what the industry is, we've sized our operations to the real demand."
That's meant fewer jobs at all levels of the company. On Ford headquarters' 12th floor, several offices sit dark and empty following a trimming of upper management. Ford has eliminated 14,000 jobs across all pay levels in the last three years and closed 17 plants, cutting $5 billion in costs.
But being smaller is the only thing that makes sense in this environment, Mulally says, admitting he was a little surprised that industry leaders hadn't approached business this way in the past.
"It was the only thing I knew as a business person," he says. "Clearly, this is a new plan for Ford, and it's working. … We got on this journey, and for the first quarter, before the credit and financial meltdown hit, it was working."
12-11-2008, 01:38 PM
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12-11-2008, 01:56 PM
#68
not to mention. the Big 2 (excluding Ford for now) is like a pit hole with no end. GM had 20 years of time to correct their mistake. Isn't that long enough ? and what they got ? more Ultra size SUVs ? more garbage ?
and Chrysler just asked for failure themself. Look at all the piece of **** that they have for the past 5 years. my god. they look and perform so awful that no one even wanna walk near them.
and what about market freedom ? then we see all these bailout bullshit.
how about market freedom my *** ?
12-11-2008, 02:14 PM
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What I object to is paying BILLIONS of dollars to a corporation that is rife with bad management, has made poor planning decisions, capitulates with union leeches, and now wants to line their own executives pockets before running the entire ******* operation into the ground, leaving all those people unemployed anyways.
Which is EXACTLY what will happen if this bailout goes through.
GM will eat through a BILLION dollars of bailout money in about 90 days, then be back to congress to beg for more money like a heroin addict looking for a fix. Chrysler will do the same, and what will that money be spent on? Building more cars to pile onto dealerships that already have hundreds of thousands of cars they cannot sell.
Please, enlighten me as to how a company that cannot sell their product can be commercially viable regardless of how much money you give them for operating expenses. You're just going to flood a market thats already saturated and make the product worth less and less.
Last edited by Socket7; 12-11-2008 at 02:18 PM.
12-11-2008, 02:38 PM
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Not like our tax dollars are not going to them now.
not to mention. the Big 2 (excluding Ford for now) is like a pit hole with no end. GM had 20 years of time to correct their mistake. Isn't that long enough ? and what they got ? more Ultra size SUVs ? more garbage ?
and Chrysler just asked for failure themself. Look at all the piece of **** that they have for the past 5 years. my god. they look and perform so awful that no one even wanna walk near them.
and what about market freedom ? then we see all these bailout bullshit.
how about market freedom my *** ?
not to mention. the Big 2 (excluding Ford for now) is like a pit hole with no end. GM had 20 years of time to correct their mistake. Isn't that long enough ? and what they got ? more Ultra size SUVs ? more garbage ?
and Chrysler just asked for failure themself. Look at all the piece of **** that they have for the past 5 years. my god. they look and perform so awful that no one even wanna walk near them.
and what about market freedom ? then we see all these bailout bullshit.
how about market freedom my *** ?
the biggest problem with GM is the union i would love them to go bankrupt just to get rid of the union and redo their whole business but for them to do that it is going to screw america.
12-11-2008, 02:40 PM
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I'm fine with paying for peoples unemployment. At least I then know that it's going to americans who have fallen upon hard times.
What I object to is paying BILLIONS of dollars to a corporation that is rife with bad management, has made poor planning decisions, capitulates with union leeches, and now wants to line their own executives pockets before running the entire ******* operation into the ground, leaving all those people unemployed anyways.
Which is EXACTLY what will happen if this bailout goes through.
GM will eat through a BILLION dollars of bailout money in about 90 days, then be back to congress to beg for more money like a heroin addict looking for a fix. Chrysler will do the same, and what will that money be spent on? Building more cars to pile onto dealerships that already have hundreds of thousands of cars they cannot sell.
Please, enlighten me as to how a company that cannot sell their product can be commercially viable regardless of how much money you give them for operating expenses. You're just going to flood a market thats already saturated and make the product worth less and less.
What I object to is paying BILLIONS of dollars to a corporation that is rife with bad management, has made poor planning decisions, capitulates with union leeches, and now wants to line their own executives pockets before running the entire ******* operation into the ground, leaving all those people unemployed anyways.
Which is EXACTLY what will happen if this bailout goes through.
GM will eat through a BILLION dollars of bailout money in about 90 days, then be back to congress to beg for more money like a heroin addict looking for a fix. Chrysler will do the same, and what will that money be spent on? Building more cars to pile onto dealerships that already have hundreds of thousands of cars they cannot sell.
Please, enlighten me as to how a company that cannot sell their product can be commercially viable regardless of how much money you give them for operating expenses. You're just going to flood a market thats already saturated and make the product worth less and less.
12-11-2008, 02:43 PM
#72
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http://www.autoblog.com/2008/08/07/l...year-straight/
lexus is still #1 but toyota fell 2 spots being beaten by who? uh oh ford and GM
http://blogs.thecarconnection.com/bl...able-vehicles/
listen to the podcast here buick tied lexus for #1 uh oh another GM company in the top 3
lexus is still #1 but toyota fell 2 spots being beaten by who? uh oh ford and GM
http://blogs.thecarconnection.com/bl...able-vehicles/
listen to the podcast here buick tied lexus for #1 uh oh another GM company in the top 3
Last edited by limepro; 12-11-2008 at 02:45 PM.
12-11-2008, 02:49 PM
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So much for Toyota's vaunted reputation for quality. On July 18, the Japanese auto giant announced a recall of 418,570 vehicles worldwide for faulty engine parts.
http://www.businessweek.com/autos/co...717_855947.htm
it has been a constant decline for toyota over the past few years
and here is for last years most recalled vehicles
http://blogs.cars.com/kickingtires/2...st-recall.html
1. Volkswagen New Beetle: 1,002,000
2. Toyota Sequoia: 533,124
3. Jeep Liberty: 149,605
4. Nissan Altima: 140,582
5. Hyundai Tucson: 128,300
6. Dodge Nitro, Jeep Wrangler: 80,894
7. Suzuki Forenza, Reno: 75,697
8. Volkswagen Passat, Passat Wagon: 58,800
9. Chrysler Sebring, 300, Dodge Caliber, Magnum, Charger, Nitro, Jeep Compass, Liberty, Commander, Grand Cherokee, Wrangler: 50,665
10. Infiniti G35 Coupe: 23,934
11. Chevrolet Aveo: 17,676
12. Nissan Versa: 16,309
13. GMC Acadia, Saturn Outlook: 13,032
14. Ford Expedition: 10,061
http://www.businessweek.com/autos/co...717_855947.htm
it has been a constant decline for toyota over the past few years
and here is for last years most recalled vehicles
http://blogs.cars.com/kickingtires/2...st-recall.html
1. Volkswagen New Beetle: 1,002,000
2. Toyota Sequoia: 533,124
3. Jeep Liberty: 149,605
4. Nissan Altima: 140,582
5. Hyundai Tucson: 128,300
6. Dodge Nitro, Jeep Wrangler: 80,894
7. Suzuki Forenza, Reno: 75,697
8. Volkswagen Passat, Passat Wagon: 58,800
9. Chrysler Sebring, 300, Dodge Caliber, Magnum, Charger, Nitro, Jeep Compass, Liberty, Commander, Grand Cherokee, Wrangler: 50,665
10. Infiniti G35 Coupe: 23,934
11. Chevrolet Aveo: 17,676
12. Nissan Versa: 16,309
13. GMC Acadia, Saturn Outlook: 13,032
14. Ford Expedition: 10,061
12-11-2008, 03:08 PM
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the bailout was already approved for 10B read my above post i am for them going bankrupt and dropping the union but it is going to screw over so many people but to gloat about it and be happy about it. your job will be next because without those millions making any wages they wont spend money, without them spending money the market falls further opening up more international trade killing off almost all jobs in the US
The bailout was approved by the house, and the president approves of the bill.
The senate has not approved the bill, and (real, not neo) conservative republicans are having NONE of it, for the reasons I've stated above. One senator has promised to filibuster the bill, and I think hes a hero. He has support from other republicans too, and the public.
Now, lets address my job, since you bring it up, even though you don't know who i work for or what I do. My company has a huge cash reserve, meaning we can actually pay our own operating expenses. We have no debt, and we command major market share in just about every market we produce products for. We do OEM work for many major manufactures, and we are a global company that does sales in pretty much every continent in the world. Our supply chain is short and efficient, and we only produce enough product to satisfy demand. We have very little capitol locked up in unsold inventory, and last quarter we still saw growth in our company.
That said, we are letting people go. I watch the termination messages in my inbox pop up every couple of days. Sales, marketing, finance, IT, there are cuts everywhere. We aren't buying new hardware like we used to. The future is going to be difficult, but since we have competent management, our company is in no risk of going under. We make products people actually want at affordable prices. Personally, I'm not worried about headcount cuts in my department. Back when our company had 300 employees, we had 3 people supporting them all and we were understaffed. We now have something like 900 employees, we have 4 people. The company I work for is pretty much the antithesis of GM and Chrysler.
A Bailout cannot save GM or Chrysler. The companies are not viable in any sense of the word. They WILL go under regardless of the bailout, and if we're going to have to pay for the unemployment costs of all those people, I'd rather not have thrown 10 billion dollars down the toilet before doing so.
so yes. We should cheer GM and Chrysler going into chapter 11. It's the only way they can become viable again and compete in the market.
Furthermore, Do you realize that if they do go into chapter 11, not everyone gets laid off? Many companies continue to operate while in chapter 11, continue to make products and pay employees.
Last edited by Socket7; 12-11-2008 at 03:17 PM.
12-11-2008, 03:15 PM
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If you ask me, the solution IS deceptively simple. Make cars that people would want to buy.
In a recent NY Times op-ed piece, someone suggested that Steven Jobs should run GM for awhile as a national service. He'd make a car that people would want to buy. I thought to myself, "Geez, that's bloody insightful - imagine, an iCar!"