 
Philbert
Member
Username: Philbert
Post Number: 382
Registered: 10-2003
| | Posted on Friday, June 27, 2008 - 1:51 am: |    |
quote:
"and they were, are, and always will be. However, without globalization the market was regionally contained and union agreements did not pose a disadvantage. Only with globalization and the allowance of millions of imports has the unionized market been undercut."
I'm someone that earned about 1/3 in salary and with no benefits compared to what GM factory workers got.
No problem with that. But I bought GM out of obligation of buying American and my friends bought beater used Honda's and Toyota's with ungodly miles on them.
I'm not from Michigan so I have no ties to the auto industry.
So I was spending on payments working in a restaurant about 1/4 of my after tax income for a piece of basic junk, not once but three times I bought new GM. I bought GM and my friends drove beater used Japanese cars that cost nothing to maintain and always worked. I have no sympathy for GM. You cost me a lot and I earned so far less than your protectionist employees do.
Sorry people. You blew it big time. Cry poverty all you want but your industry screwed me while I made low wages with no benefits.
Who evers fault it is, the designers, the managers, the factory workers, whatever. All you did was scream protectionism so you could sell a lousy product while making incredible wages compared to the rest of America and charging us a fortune for that junk. |
Lilpup
Member
Username: Lilpup
Post Number: 4536
Registered: 06-2004
| | Posted on Friday, June 27, 2008 - 1:58 am: | |
"Legacy costs will be the end of the 3"
No, those go away in 2010. I don't think things are as dire with the Big 3 as Wall St. believes, though there's really no way of knowing what the big picture is at Chrysler. I think Wall St.'s current panic is a reflection of their own situation since they are just now being hit with what the automakers had to deal with a few years ago.
In a weird way, mainly due to overseas success, I think GM and Ford are better positioned to deal with this North American downturn than Toyota is. Toyota could pay a huge price for their entry into the truck market. |
Otter
Member
Username: Otter
Post Number: 224
Registered: 12-2007
| | Posted on Friday, June 27, 2008 - 7:26 am: | |
PG,
I suppose it's true that there's plenty of blame to go around, but sort of banal, by which I mean that when it comes to the quality of the cars that the US industry produced for so long, it was the fault of management, product planning, engineering, development, bean counting, etc. rather than the assembly workers. If you have, say, a door assembly that turns into a rattling nightmare after 30,000 miles on 30% of cars built, this is not the fault of the people who built it, but of the people who conceived of it, designed it, developed it, put cost into or took cost out of it, etc. If some assembly operation can't be reliably done, perfectly, most every time, by most any operator with reasonable training, then the operation, the part, or both, need to be redesigned. It's true that there is occasionally who-gives-a-s**t-ness by line workers, e.g. dropping loose fasteners into cavities just for 'fun', etc., but for the most part line workers have a lot of pride in what they build and they want to build the best products they can. However, they have a pretty limited amount of control over said product. When it comes to the control they do have, historically, companies like Toyota have a better record of feeding input from line workers into part and operation design. |
Mwilbert
Member
Username: Mwilbert
Post Number: 299
Registered: 11-2007
| | Posted on Friday, June 27, 2008 - 7:36 am: | |
"No, those go away in 2010"
Chrysler and GM probably don't have until 2010 before entering bankruptcy. In any case, their big problem right now is their crushing debt levels, which aren't going away in 2010.
"In a weird way, mainly due to overseas success, I think GM and Ford are better positioned to deal with this North American downturn than Toyota is."
The idea the Ford and GM are better positioned for a North American downturn than Toyota is without foundation. There are many reasons, but here are a few:
Toyota is infinitely stronger financially than either Ford or GM.
Toyota has a higher percentage of its sales outside North America than either Ford or GM.
Toyota actually makes money on the cars it sells.
Its product mix is much less skewed to trucks and SUVs than Ford and GM, even with its recent truck introductions. |
Otter
Member
Username: Otter
Post Number: 225
Registered: 12-2007
| | Posted on Friday, June 27, 2008 - 7:55 am: | |
Sstash,
We can compete with 3rd-world countries on some things, but lowest-cost manufacturing of many manufactured goods is probably not one of them. But we (the US and other first-world economies as well) compete very well with the 3rd world in other areas.
To your second paragraph, I was talking about the Japanese (and Koreans) specifically, and about automobile manufacturing, since that is the topic at hand - not Chinese manufacture of consumer goods. Some of the cars we make are great, some aren't. Some of the cars the Japanese are make, some aren't. But I think more of theirs are, on thwe whole, better. But categorically saying that what we make is great because it's ours, and what 'they' make is crap because its theirs, is
not much more than flag-waving and does not offer any insight into questions like why, say, the US auto industry is where it is wrt its competition, or how we can improve that position.
And you're right, I hold no patents or copyrights. |
Danny
Member
Username: Danny
Post Number: 7435
Registered: 02-2004
| | Posted on Friday, June 27, 2008 - 8:07 am: | |
There are some rumors flying that Wall Street want to consider GM to closed down or sell the company. If it happens, the big three might become the big two.
Face it, oil prices are going up. There are no new alternative plans to make fuel efficient cars and the Japanese auto market is still booming. Tokyo is now becoming the automobile city of the world. "The New Detroit" |
Peachlaser
Member
Username: Peachlaser
Post Number: 196
Registered: 08-2006
| | Posted on Friday, June 27, 2008 - 8:15 am: | |
Here's my perspective on why gas costs so much and GM, Ford and Chrysler are tanking. http://www.lasersol.com/air_wa ter/red_wagon.html |
River_rat
Member
Username: River_rat
Post Number: 353
Registered: 02-2006
| | Posted on Friday, June 27, 2008 - 8:23 am: | |
As the originator of the thread, I applaud many of the comments and hope that it doesn't turn into a union-bashing, management-thrashing tirade. What has happened could have been foreseen and should have been expected. There has been a huge sea-change in world economics.
In the 20th century, despite two World Wars, the entire economic engine was controlled by Europe and North America. This changed radically with the ascendancy of Japan and Korea as manufacturing centers followed by the (forced) transformation of China into a global producer through political force. Add to the mix the primacy of oil as the energy source for the world and the location of the source being in radical and nationalistic Middle Eastern nations and we see what is the category five problem for our Detroit. We were a manufacturing center dependent on oil.
Rather than blame speculators (I am one), recognize that we, as a society, need to rethink how we can compete on the global scale. Unfortunately, we are in a political system that is very polarized and self-serving, hobbled by pork-barrel projects, fairly corrupt (really corrupt in D) and unable to galvanize a public that has little understanding of the conundrum we find ourselves in.
I don't think we want to hear the answers of how to solve our problems because we will go back to emotional issues that blame others and don't look forward to solutions. Too bad, so sad.
From the floor, waiting to speculate and trade, |
Club_boss
Member
Username: Club_boss
Post Number: 514
Registered: 12-2006
| | Posted on Friday, June 27, 2008 - 9:16 am: | |
I think selling the company or closing the automotive side of GM is premature.
The news is not all doom and gloom:
Cash…GM, which does have a negative book value, can continue to trudge along and burn cash for approximately another twelve months and then GM's automotive cash flow burn is going to need an cash infusion in a big way, this will lead to shareholder dilution and yet another cut to the company's dividend.
GM’s claims $146 billion in assets; $43 billion of it is property, most of which is the depreciated book value of plant and equipment. There is no way that GM could sell its used factories for anything close to that amount, however in many cases GM own the land as well, and those prices listed on the books is what it cost GM 40+ years ago.
Assuming GM does not donate the land (or sells it for pennies on the dollar) to the community as a goodwill gesture for turning the cities tax bases upside down and putting thousands of locals out of work, I think the value is understated as far as property goes.
Another $17 billion in raw materials, parts, inventories and finished goods—which include those damn trucks and SUV’s, that sit around Michigan in those car-city size parking lots.
The raw materials are on the books at cost, but given the recent run up in metals prices, they are worth more on the open market than GM paid for them in their global purchasing agreements. The finished goods, listed in inventories, are on the books at GM's cost, which is less than the invoice that a dealer pays, and less than the MSRP on the sticker. I think it's safe to say that those inventories are worth at least the $17 billion.
They also have $185 billion in liabilities. Most of that is in pensions; however the liability may not be that high, in that GM could default on at least some of that.
GMAC’s problems are not accounted for.
Remember Ford had to put all of its assets on the line to secure financing, including intellectual property, such as the blue oval and the F150 name rights. GM hasn't had to put up anything yet to secure financing.
Down but not out… |
Perfectgentleman
Member
Username: Perfectgentleman
Post Number: 7299
Registered: 03-2006
| | Posted on Friday, June 27, 2008 - 10:28 am: | |
Otter - You aren't taking into account that the product is affected by the fact that the big 3 had to put less money into their cars to BECAUSE of union contracts. To think the unions were all good and are exempt from some of the blame is not realistic. The work rules, the retention of bad workers, the strikes, the enormous financial burden of past contracts makes a company weaker. They have less money for engineering, R&D and less to actually put into the car.
quote:How many people knew about IATSE before they shut down Broadway
IATSE? Broadway is one of their last strongholds. The projectionists in movie theaters used to be in that union too, now next to none of them are unionized. The strike on Broadway did not elicit much sympathy at all for those workers, people were pissed that they had planned vacations in NYC to attend shows and now their money was wasted. The other businesses in their area lost millions of dollars and other working people were adversely affected. This is another example of union workers willing to screw anybody and everybody to get their way.
Same with Detroit, clearly the auto buying public has little sympathy for UAW workers as they have no problem buying foreign cars. They see them as overpaid and underworked willing to go on strike at the drop of a hat. Whether this is totally justified or not isn't the point.
As already mentioned, there are millions of people around the country who were doing the same jobs as UAW workers at other companies that were only getting a fraction of the pay and benefits. They were buying American cars for lots of money and sometimes they were getting burned. The resale sucked and they had problems and the manufacturer refused to stand behind their product. This breeds resentment.
This has happened to me on my last 3 American vehicles. I continue to buy them out of loyalty to the area and the country. What I get in return is cars that don't retain their value and thousands of UAW workers putting Democrats in office that are actively working to put the big 3 out of business and destroy this state.
When people in the business community see that striking workers are perfectly willing to put Performance Transport out of business the last thing they want is to locate in a place like Michigan. If they were to go under, 100's if not thousands of non-union employees would also lose their jobs. Did the union care? No.
Pretty much nobody other than union people can get away with walking out on their employer over wages and benefits, other people see it as childish, stupid and obsolete. There are also millions of people out there making more money that have better job security than union workers. They want no part of it and they have little sympathy for people who are now crying the blues even though they brought the problem on themselves to a great extent. |
Lefty2
Member
Username: Lefty2
Post Number: 1458
Registered: 07-2007
| | Posted on Saturday, June 28, 2008 - 12:57 am: | |
They could really save a ton of money if they laid off all of the workers.
Or maybe Kerkorian could come in and turn around all the companies. |
Rid0617
Member
Username: Rid0617
Post Number: 202
Registered: 03-2008
| | Posted on Saturday, June 28, 2008 - 4:12 am: | |
""labor costs need to be subject to market forces"
And so should executive pay and bonuses but that never happens. |
Zrx_doug
Member
Username: Zrx_doug
Post Number: 261
Registered: 03-2008
| | Posted on Saturday, June 28, 2008 - 4:37 am: | |
"Leave our trade borders unregulated, keep buying the foreign junk and see what it gets you. The US is about to learn a bitter lesson, we can't build an economy on services. We need manufacturing.
Yahoo is worth more than GM. Man is this country stupid."
Most excellent post, Sstash.
I'm wondering if there will be anything left to rebuild after the inevitable crash, or if we'll simply become the new third world without much of a fight.. |
Dsmith
Member
Username: Dsmith
Post Number: 163
Registered: 07-2005
| | Posted on Saturday, June 28, 2008 - 5:10 am: | |
I think most people underestimate the problems arising from GMAC's adventures in residential mortgage lending. |
Mwilbert
Member
Username: Mwilbert
Post Number: 301
Registered: 11-2007
| | Posted on Saturday, June 28, 2008 - 8:31 am: | |
"I think most people underestimate the problems arising from GMAC's adventures in residential mortgage lending."
I agree. Even without the mortgage problems, the drop in truck/SUV demand leaves GMAC with a lot of off-lease vehicles that they can't sell for what they expected. GMAC isn't going to be providing the cash cushion for GM that it has in the past. |
Lilpup
Member
Username: Lilpup
Post Number: 4541
Registered: 06-2004
| | Posted on Saturday, June 28, 2008 - 8:46 am: | |
GMAC's extreme losses from the housing crunch have already been posted, unless you believe they haven't seen the worst, yet. |
Otter
Member
Username: Otter
Post Number: 230
Registered: 12-2007
| | Posted on Saturday, June 28, 2008 - 7:15 pm: | |
Otter - You aren't taking into account that the product is affected by the fact that the big 3 had to put less money into their cars to BECAUSE of union contracts. To think the unions were all good and are exempt from some of the blame is not realistic. The work rules, the retention of bad workers, the strikes, the enormous financial burden of past contracts makes a company weaker. They have less money for engineering, R&D and less to actually put into the car.
PG,
While it is true that the Big 3 spend more money than the Japanese on labor costs, this does not explain mediocre cars. It may even be arguable that they pay more for labor than foreign automakers with plants in countries like Germany and Japan. Most of the cost differential, however, lies in retiree benefit costs, which are rather immense at GM. Much of this lies in things like health care, which is government-paid rather than employer-paid in all other industrialized countries. But picking nits on things like labor costs is sort of beside the point because it takes a short view. The Big 3 got where they are today because of management, cost and engineering decisions made beginning decades ago. I was at DCX when the Sebring/Avenger and Compass/Caliber/Patriot came out, and from my certainly not all-knowing experience I can say that the cheapness that is abundantly evident in the interiors of those cars, as well as some NVH properties, was not the result of not having enough money to spend because of labor or etc., but because of poor allocation of resources and poor priorities and sometimes sort fo a general just-good-enough-ness. That is but an example. |
Danny
Member
Username: Danny
Post Number: 7440
Registered: 02-2004
| | Posted on Saturday, June 28, 2008 - 7:19 pm: | |
GM, Chrysler and Ford,
Honda will release its first hydrogen powered car in the world market within 2 years. Once its out, you all finished, bankrupt kaput!
So hurry up with that fuel cell engine. |
Sstashmoo
Member
Username: Sstashmoo
Post Number: 1869
Registered: 02-2007
| | Posted on Saturday, June 28, 2008 - 8:26 pm: | |
Quote: "The Big 3 got where they are today because of management, cost and engineering decisions made beginning decades ago."
They got where the are today because of a sucker-punch from the oil industry. Not going to the mat with the greedy labor unions. Agreeing to ridiculous conditions that could come back and bite them in the ass hard, and they did.
This notion that labor costs somehow don't effect the end-product, is laughable. You say this is managements fault? It is actually, and the employees. The big 3 should have stuck together and kicked the unions out, long ago. Management and shareholders worried about this quarter instead of long term viability. And of course, the union took all they could get. Well, they got it.
In business, costs are everything and they most certainly do dictate the quality of goods produced. And another factor is employees with the powerful UAW behind them, and their attitude is "screw the company and their products" like they don't even work there. I've worked in almost all these plants around here. I don't know how they've survived this long.
If the big three were smart, they'd ban together right now and kick the UAW to the curb. It would be a rough few weeks, but it's their only hope.
Danny, last year it was biodiesel, then it was solar, then it was manure power. I'll believe it when I see it. |
Mp2dtw
Member
Username: Mp2dtw
Post Number: 4
Registered: 06-2008
| | Posted on Saturday, June 28, 2008 - 8:56 pm: | |
When I was in high school (80-84), I was the only person I knew who didn't have a parent laid off, everyone thought Detroit was dead and that there'd never be another job created here. With time, we recovered from that recession (which I think was a depression in Detroit-Flint-Saginaw). We'll bounce back from this too.
Blaming the UAW for any of this is ridiculous. The resiliency of our region's economy can be, in part, credited to a UAW which gave each and every one of us living in SE Michigan a better standard of living. (I am not now, nor have I ever been affiliated with any union.) If you like weekends, paid vacation time, living wages, etc. you can thank the organized labor movement.
GM, Ford and Chrysler haven't been as well-managed as they could've been for the past 40 years or so. If they didn't have contingency plans, as seems to be the case, for another gas crisis several execs deserve the sack. But Ford and GM seem to be reacting much faster and more intelligently this time around--at least I see no Chevettes & Pintos on the horizon so far. Unfortunately, as things look now, Studebaker stands nearly as good a chance at making a comeback as Chrysler has of finishing this decade independently. |
Angry_dad
Member
Username: Angry_dad
Post Number: 214
Registered: 02-2006
| | Posted on Saturday, June 28, 2008 - 10:25 pm: | |
Part of what kept oil costs low was the strength of the dollar. Bernake lowered interest rates to keep the US able to control it's debt and make exports attractive.
How many of you realize that only earlier this year Japan raised their prime..... to a half percent. That's after nearly a dozen years of a prime at nearly a tenth of a percent.
What is happening to GM is happening to all manufacturing. Rather than stand on their own, other economies have used the US and dollar value to prop up their currency. Now wouldn't this be good for us because of the low costs? Try again. the swing between the rates is being paid for with the trade surplus that those who deliberately devalue their currency. In effect, we are paying them to put us out of business.
Both parties will tell us how protectionism is bad. Why don't we tell them that they are right. It is bad because quite simply we are the ones that it is being used against. Currency manipulation is the ultimate protectionism.
Would the US really be worse off if we took care of ourselves? |
Dsmith
Member
Username: Dsmith
Post Number: 164
Registered: 07-2005
| | Posted on Monday, June 30, 2008 - 10:43 am: | |
The death spiral continues... GM is down to $11 a share. |
Scottr
Member
Username: Scottr
Post Number: 884
Registered: 07-2006
| | Posted on Monday, June 30, 2008 - 11:39 am: | |
quote:Honda will release its first hydrogen powered car in the world market within 2 years. Once its out, you all finished, bankrupt kaput!
From the press release announcing the beginning of production of the fuel-cell-driven FCX Clarity, dated June 16, 2008:
"The combined sales plan for Japan and the U.S. calls for a few dozen units within a year and about 200 units within three years."
Yeah, 200 units is gonna bankrupt GM, Ford, AND Chrysler. |
Lefty2
Member
Username: Lefty2
Post Number: 1472
Registered: 07-2007
| | Posted on Monday, June 30, 2008 - 11:41 am: | |
oil up,gold up, dollar down, auto stocks down.
The Fed printing too much money to pay for war etc.
Oil was traded based on the dollar, now it will use the Euro as the base currency. Doesn't help the US. |
Lilpup
Member
Username: Lilpup
Post Number: 4574
Registered: 06-2004
| | Posted on Monday, June 30, 2008 - 11:49 am: | |
Yet Shell just opened a hydrogen fueling station in CA when they won't carry E85.
I'm increasingly convinced the oil companies are conspiring with the Asian, especially Japanese, automakers against Detroit. |
_sj_
Member
Username: _sj_
Post Number: 2292
Registered: 12-2003
| | Posted on Monday, June 30, 2008 - 12:07 pm: | |
The first most are wrong about is that people who speak out against how unions are killing governments and other industries are not haters. They are people who understand how the market works and how ignorance is killing a once thriving industry. They refuse to see the tell tale signs and continue to hide behind false rhetoric.
quote:How many people knew the strength of the Writers' Guild before their strike?
What strength would that be?? That strike and upcoming strike will not produce a better environment. The union heads are just as naive and the heads of the companies that continue to believe that consumer will continue to purchase inferior products.
quote:The Fed printing too much money to pay for war etc.
This is not a new problem, this has been a problem for decades.
quote:They built big ol' SUV's? Sure did, that's what everyone wanted. A few short years ago, they couldn't build them fast enough. Should they have pulled them and started building 2 cylinder hybrids that nobody wanted?
They made you believe that is what you needed, they built the cars that made them their only profits and then spent millions on advertising and making you believe you wanted an SUV.
Go into any showroom, they will push you a truck or SUV at $29 a month(A recent Dakota add) or SUV at between 200-300 a month loaded. Not becuase it what you want, becuase it is what is making money.
quote:Face the facts folks, when gas hit $4/gal., the game changed. The UAW didn't see it, management didn't see it either.
Exactly, but instead when other saw this coming or any other crisis they were labeled as haters.
When the Big Three sell cars at huge discounts to employee which in turn ends up as a net loss and people tell you the employee subsidies have to be cut or ended they are haters.
You need to remove your red, white and blue glasses and solidarity pin and see the real world. The world were you are not the only game on the block and can over charge for garbage and get away it.
You have to do it better, cleaner, faster and cheaper than the other guy or risk losing customers. That is what happens in a mature marketplace.
But again I will just be a labeled a hater becuase I refuse to look at the world through empty slogans.
You can blame management, you can blame foreign car buyers, but just remember in your house you own something that is foreign made. No one is blameless. This same superiority complex killed countless other industries. It is time to learn from mistakes of the past instead of making them again. |
Scottr
Member
Username: Scottr
Post Number: 885
Registered: 07-2006
| | Posted on Monday, June 30, 2008 - 12:21 pm: | |
Lilpup, you could have said the exact opposite of that 2 years ago, when Shell and GM partnered to add E85 to six stations in Chicago. |
Lowell
Board Administrator
Username: Lowell
Post Number: 4879
Registered: 10-2003
| | Posted on Monday, June 30, 2008 - 12:33 pm: | |
Time to buy yet? It dipped below 11 for a minute this AM.
"Buy when there is blood in the streets"
[Attributed to Rothschild, Rockefeller, JP Morgan, Warren Buffet and more.] |
Gaz
Member
Username: Gaz
Post Number: 314
Registered: 04-2008
| | Posted on Monday, June 30, 2008 - 12:43 pm: | |
The bottom line is how it affects us all. While GM has thousands of new SUV's sitting around, just try trading in your old SUV. A lot of dealers here aren't accepting them as trade-ins.
I think what bothers me the most is the effect it will have on Detroit. Jobs are already in short supply, and apparently still dwindling. Adding this to the mixture just flat-out sucks. |
Dsmith
Member
Username: Dsmith
Post Number: 165
Registered: 07-2005
| | Posted on Wednesday, July 02, 2008 - 3:14 pm: | |
Look out below!
Down another 14% to $10 a share. |
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