 
River_rat
Member
Username: River_rat
Post Number: 352
Registered: 02-2006
| | Posted on Thursday, June 26, 2008 - 2:33 pm: |    |
GM has reached a new low under $12 a share on trading today and the talk on the floor is that bankruptcy and release from the onerous contracts and retiree benefits is the only way out of financial ruin. Can Ford and Cerebrus be far behind. This is very scary for Detroit.
From the floor |
Cinderpath
Member
Username: Cinderpath
Post Number: 609
Registered: 05-2006
| | Posted on Thursday, June 26, 2008 - 2:40 pm: | |
GM at least has product plans- I think the situation at Chrysler is downright scary. |
Craig
Member
Username: Craig
Post Number: 870
Registered: 02-2007
| | Posted on Thursday, June 26, 2008 - 3:20 pm: | |
Frightening is right. Check out the delayed quotes & financial summaries at YahooFinance... GM market cap ticked down and then up $300 million in less time than it has taken me to type this post. |
Professorscott
Member
Username: Professorscott
Post Number: 1403
Registered: 12-2006
| | Posted on Thursday, June 26, 2008 - 3:27 pm: | |
The financial markets are losing faith in the endless downsizing and turnarounds.
Ford's stock as recently as January 2004 was over $16.50, and a few minutes ago was trading at $5.04, nearly a 70% loss in share value in less than five years. GM shares have lost nearly 80% in the same timeframe.
People who still think GM is "too big to fail" do not remember the Pennsylvania Railroad. Nothing is too big to fail. The little three had better figure out what kinds of vehicles sell, and start making them, and do so right quick. |
Chub
Member
Username: Chub
Post Number: 529
Registered: 11-2003
| | Posted on Thursday, June 26, 2008 - 3:34 pm: | |
They should have been working on solar powered vehicles 30 years ago and had them on the sales floor available to the public by the mid 1990's.
Something like this:
http://thoughtsonglobalwarming.blogspot.com/2008/06/sleek-137-mpg-solar-powered-car.html
(Message edited by chub on June 26, 2008) |
Detroitnerd
Member
Username: Detroitnerd
Post Number: 2590
Registered: 07-2004
| | Posted on Thursday, June 26, 2008 - 3:35 pm: | |
Hey, we're four posts into this thread already, and I'm still waiting.
Um, isn't ANYBODY going to blame the unions? Where are the haters?  |
Frankg
Member
Username: Frankg
Post Number: 345
Registered: 08-2007
| | Posted on Thursday, June 26, 2008 - 3:43 pm: | |
Hard to blame the unions now, with the concessions from the latest Big 3 contracts. I even saw a comment in the Wall Street Journal that with the new Big 3 contracts, the US is now the low cost producer! |
Professorscott
Member
Username: Professorscott
Post Number: 1405
Registered: 12-2006
| | Posted on Thursday, June 26, 2008 - 3:45 pm: | |
The unions didn't make the decision what kind of cars to build, also. |
Detroitnerd
Member
Username: Detroitnerd
Post Number: 2592
Registered: 07-2004
| | Posted on Thursday, June 26, 2008 - 3:48 pm: | |
Just because things weren't the union's fault in the past never stopped some on this forum from blaming them every time. I'm sure somebody on this forum can find a way to blame the unions, if they have enough heart, that is. |
Club_boss
Member
Username: Club_boss
Post Number: 513
Registered: 12-2006
| | Posted on Thursday, June 26, 2008 - 3:54 pm: | |
GM's market value is now roughly equivalent to that of tax-preparation provider H&R Block
GM has gone from a $94.00 dollar, with a with a market cap of about $56 billion, to an $11.00 stock, with a market value of only about $7 billion.
GM has tundra size parking lots filled with unsold SUV’s, I believe there is a 180-day supply.
I think the board should hold Wagoner accountable, too little, too late, and the Volt comes out in what year?
Humbling facts...
GM's value is now:
Half that of cosmetics company Avon
A quarter of Internet media company Yahoo!
A fifth of online auction house Ebay
An eighth of drugstore chain CVS
A ninth of fast-food giant McDonald's |
Cinderpath
Member
Username: Cinderpath
Post Number: 611
Registered: 05-2006
| | Posted on Thursday, June 26, 2008 - 3:55 pm: | |
Nobody was blaming the unions when SUV sales were humming along in the 90's and profits were big. Unions are just the latest scapegoat for the real problem: PRODUCT |
Digitalvision
Member
Username: Digitalvision
Post Number: 903
Registered: 11-2003
| | Posted on Thursday, June 26, 2008 - 4:02 pm: | |
Brace for impact... I know quite a few investors who think it's going to get worse before it gets better.
I don't know if GM will go bankrupt or declare it but there is more draconian cuts coming. Suppliers are getting retroactive mandated cuts for the past six months... GM is expecting some of their suppliers to PAY BACK money they've already paid for services at a previously agreed amount. So, for instance, if GM paid you $100,000 since January, to keep doing business with them you need to cut a check for $50,000 and all future work is at that half-rate. |
Mwilbert
Member
Username: Mwilbert
Post Number: 298
Registered: 11-2007
| | Posted on Thursday, June 26, 2008 - 7:10 pm: | |
I continue to believe both GM (North America) and Chrysler will have to enter bankruptcy within a year. Not positive about Ford, but they aren't looking great either. Chrysler is worst; I expect them to go first. |
Benfield
Member
Username: Benfield
Post Number: 24
Registered: 06-2008
| | Posted on Thursday, June 26, 2008 - 10:26 pm: | |
They really don't deserve to stay in business the way they've performed. |
Sstashmoo
Member
Username: Sstashmoo
Post Number: 1861
Registered: 02-2007
| | Posted on Thursday, June 26, 2008 - 11:23 pm: | |
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. |
Perfectgentleman
Member
Username: Perfectgentleman
Post Number: 7286
Registered: 03-2006
| | Posted on Friday, June 27, 2008 - 12:03 am: | |
Much of the reason that the big 3 has not been competitive in the compact and sub-compact market IS because of legacy costs based on past union contracts. Toyota, Nissan and Honda can put more dollars into the car and less into benefits for retired workers. In a tough segment with lower margins, the big 3 were put at a huge disadvantage there so they pushed SUV's, trucks and luxury cars where they had some margin to play with.
It also doesn't help to have an adversarial relationship with your work force. I agree we need manufacturing Stash, but we also need to understand that labor costs need to be subject to market forces and not some artificial construct based on negotiations that are conducted under threats of a company shutdown. |
Lilpup
Member
Username: Lilpup
Post Number: 4532
Registered: 06-2004
| | Posted on Friday, June 27, 2008 - 12:14 am: | |
"labor costs need to be subject to market forces"
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.
On the other hand, with transportation costs skyrocketing and the domestic market plummeting the cost of importing isn't as advantageous 9hence Toyota's recent announcement that they will likely reduce their exports to the US). You can bet that if Toyota starts cutting production in the US in favor of exporting their employees here will start looking toward the union. They have flirted with it in the past under much less trying circumstances. |
Perfectgentleman
Member
Username: Perfectgentleman
Post Number: 7290
Registered: 03-2006
| | Posted on Friday, June 27, 2008 - 12:19 am: | |
Yeah, I agree that the only way a union environment can thrive is under a protectionist policy, that doesn't make unions or protectionism a good idea necessarily. Our trade policies do need to be looked at however, especially as it relates to China.
There won't be a big "comeback" for the UAW anytime soon. It is a failed system. No company in their right mind would want to put up with that, all they have to do is look at the big 3 and see the result. A union card today just puts a target on your back to get canned, most workers in right to work states understand that, and they are kicking our ass. |
Lilpup
Member
Username: Lilpup
Post Number: 4533
Registered: 06-2004
| | Posted on Friday, June 27, 2008 - 12:29 am: | |
There are still strong unions is the US, they just tend to be in other industries. Those in the arts in particular have been going to the mat lately (currently AFTRA, backed by SAG). |
Otter
Member
Username: Otter
Post Number: 220
Registered: 12-2007
| | Posted on Friday, June 27, 2008 - 12:33 am: | |
Sstashomoo,
Should people in other countries stop buying 'foreign junk' produced in the US?
The attitude that stuff we make is awesome or 'world-class' and stuff other countries make is 'cheap junk' or etc. is not formula for success.
PG,
The UAW may not be doing the domestic automakers any favors, but any culpability is limited to acting as a drag force on recovery efforts. The domestic auto industry is in the place it's in because it spent too many years half-assing product and taking its customers for granted. Even when you stop doing that it takes a long time to convince people that you've stopped. |
Perfectgentleman
Member
Username: Perfectgentleman
Post Number: 7294
Registered: 03-2006
| | Posted on Friday, June 27, 2008 - 1:10 am: | |
Lilpup -
The unions in the "arts" have also been weakened. I guess you think strikes are a show of strength, but it can also be construed as desperation. Plenty of films are being shot with non-union crews these days. The Musicians Union has become all but irrelevant and most of the members of SAG are unemployed. For every Tom Hanks there are 1000 SAG members waiting tables who haven't had an acting job in years.
Otter -
I agree there is plenty of blame to go around in regard to the problems in the domestic auto industry. Poor management has certainly played a role. Poor quality was something that everyone was to blame for. It seemed that the domestics took their customer base for granted and gave the foreign automakers an opening to erode their market share.
Even the sometimes ridiculous union demands were agreed to by foolish executives in management. To this day I always buy American cars even with my reservations about the big 3 and the unions. Economic patriotism is no longer considered a virtue I guess. |
Sstashmoo
Member
Username: Sstashmoo
Post Number: 1862
Registered: 02-2007
| | Posted on Friday, June 27, 2008 - 1:10 am: | |
We can't compete with third world countries. Period. Unless, we want to live like them, then yes we can.
Otter, the stuff we make is awesome. Our levels of technologies are unsurpassed. And we're giving it all away when we outsource our manufacturing. You think China cares about copyrights and patents? I'm going to guess you don't hold any.
Quote: "and stuff other countries make is 'cheap junk' or etc. is not formula for success."
China and all of Asia has used the US for a dumping ground for all it's garbage for 40 years. Anyone that thinks Chinese products surpass US products is a very poor judge of quality. |
Perfectgentleman
Member
Username: Perfectgentleman
Post Number: 7295
Registered: 03-2006
| | Posted on Friday, June 27, 2008 - 1:13 am: | |
Stash - totally agree with you on China, their quality is shit and their intentions are anything but honest. We are saving nothing by dealing with them as we are losing jobs and industrializing their nation at our expense has driven up oil prices. Dealing with them is dumbest fucking thing we have ever done. NAFTA is a picnic compared to giving MFN status to China. |
Danny
Member
Username: Danny
Post Number: 7434
Registered: 02-2004
| | Posted on Friday, June 27, 2008 - 1:14 am: | |
GM Stocks are going to worthless one day so sell your shares and move on to a better investments. |
Perfectgentleman
Member
Username: Perfectgentleman
Post Number: 7296
Registered: 03-2006
| | Posted on Friday, June 27, 2008 - 1:16 am: | |
Or, take a gamble and maybe you end up with a windfall like the folks who bought Chrysler at a couple bucks per share. |
Sstashmoo
Member
Username: Sstashmoo
Post Number: 1863
Registered: 02-2007
| | Posted on Friday, June 27, 2008 - 1:17 am: | |
Quote: "the domestics took their customer base for granted and gave the foreign automakers an opening"
The autos here deserve some sort of award for building vehicles at staggering cost due to unions, Insurance companies etc, and still produced a product at a globally competitive price.
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? Blaming them is so easy now. Where were you 5 years ago? Probably driving an SUV. |
Perfectgentleman
Member
Username: Perfectgentleman
Post Number: 7297
Registered: 03-2006
| | Posted on Friday, June 27, 2008 - 1:21 am: | |
Stash - I drive an American made SUV NOW! My remarks about quality and taking the customer for granted were referring to the 80's and early 90's mostly. I totally agree that it is tough for a domestic to make money in the sub-compact segment and the quality has gotten MUCH BETTER. Nobody wants them to make it more than I do. |
Lilpup
Member
Username: Lilpup
Post Number: 4535
Registered: 06-2004
| | Posted on Friday, June 27, 2008 - 1:27 am: | |
"I guess you think strikes are a show of strength, but it can also be construed as desperation"
No, actually, strikes are about the only time the general public sees a union. There are a lot of unions out there that many people don't even think about, if they know they exist at all.
How many people knew the strength of the Writers' Guild before their strike? How many people knew about IATSE before they shut down Broadway (which the musicians also did a few years earlier)? How many people realize that some retail stores have union cashiers? Does anyone outside of New York give a thought to the transit workers? Not unless their bus drivers go on strike. Teachers, nurses, dockworkers, pilots, construction, even the Detroit Symphony Orchestra is union. |
Giver108
Member
Username: Giver108
Post Number: 3
Registered: 06-2008
| | Posted on Friday, June 27, 2008 - 1:31 am: | |
Face the facts folks, when gas hit $4/gal., the game changed. The UAW didn't see it, management didn't see it either. Well now it's here and looking like it will stick around. Everyone who works in the auto industry just had their a-hole pucker. 2008 is going to be ugly for the 3. I predict some sort of bailing by Cerberus where they end up selling Jeep and just about canning the rest of their lineup. Ford family members are going to start aborting ship to cash out before it's too late. At least GM is smart enough to raise their prices. It's about time they realize that it does not make a good business model to sell stuff for a loss.
Legacy costs will be the end of the 3. You can't continue to pay for things you can't afford. I think the unions should start to see their days are numbered. |
Sstashmoo
Member
Username: Sstashmoo
Post Number: 1864
Registered: 02-2007
| | Posted on Friday, June 27, 2008 - 1:39 am: | |
Pg, I ask myself continually, why are they allowing this to continue. This open door we have left for China and the robberbarons here is quasar stupid. |