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Wagoner actually walked away from the Fiat deal, which was also initiated before his tenure. Wagoner has been doing the reverse of M&A, namely, spin-offs, which are highly profitable for GM shareholders.
That's just false. Not only was Wagoner an architect of the FIAT deal (he was company president at the time), he is also the one who negotiated the put/ buyout option that caused GM to pay $2 billion to extricate the company from the very same deal that he put together! So he cost the company not once, but twice, within four years. Cost of the acquisition and disposition: $4 billion.
I wonder if others reading this forum could get away with it if they cost their employers $4 billion. Then again, if your strategy department told you that V-8 SUV's were the wave of the future, I could see why there might be a few disconnects.
In any case, the issue isn't with Wagoner, per se, but with the entire GM management team, past and present (and probably future, as well.) Bloated product lines, featuring products customers don't want, built in large quantities no one needs, along with bad M&A deals involving companies that weren't profitable before or after the deals, seem to be a company tradition, not the policy of any one person.
The Union saved a lot of jobs of employees I would have allowed to be fired. It is the Unions job to police the quality of employee. I don't see that happening anymore.
Where do you think GM made what they have made? It sure wasn't from selling Vega and citation cars. It was PU trucks and big SUVs. And if you look at current sales of the Tahoe, it is still a money maker. By the way GM bought 50% of SAAB in 1989 when Swedish industry was near bankruptcy. They bought Opel in 1929. Both before Wagoner took the reins in June of 2000.
In any case, you see GM's failure to succeed in the small car business as some sort of success? Again, what would you do with the product lineup, given the likely long-term direction of oil prices?
I don't think you would give GM credit if they sold the most in every category. I think GM and the UAW will work out an arrangement that puts GM back in the black.
Gee, too bad GM management didn't think about using some of those big profits in the 90's to look forward and get innovative. Hell, even VW turned themselves around (for a time) by putting out drastically better cars with beautiful interiors. I guess the GM management thought the cheap oil would last forever and they could sell high-margin trucks and SUVs indefinitely. How sill of those of us who are not even high-paid MBAs that this wouldn't last forever...
Wagoner went to GM Brazil when that division was down. He pushed for new innovatie models suited for local market instead of generic GM hand-me-downs; the division rebounded. Wagoner went to China, personally negotiated the deals for expansion there; again, with new innovatie models suited to local market. "I learned . . . when I was . . . " is often a more diplomatic way of saying "My experience at . . . proved that . . ."
"First of all, collusion among employers is very much against the law"
ROFL, yeah, the law stops all bad things from happening. He who has the gold makes the rules.
If you start with that assumption, why bother making more laws? I actually believe that he who has the gold often has a better chance at making rules to his own liking. That's a classic Liberterian belief . . . the logical foundation behind the principle of minimizing rule count: the more rules the more the field would be tilted in favor of he who has the gold. Never suspected that you are on the same side ;-)
"Apparently, wages in China surged 40%"
But most people are still peasants, modern day serfs. In a completely unregulated market, we'll be headed there too.
Every part of that observation is wrong. Rural population and peasants are not the same thing in today's China, with all the village enterprises. The experience over the past 20 years in China, and some 500 years in the West, pretty much proved that free market is what frees people from their bondage. Free labor market is the very opposite of slavery and serfdom; wasn't the battle cry of mid-19th century America Free Soil vs. Slavery? What's ironic is that 100 years later, the labor union tied the workers to the fixed capital in a new form of serfdom, one which the workers do not dare to migrate from.
"employers have to pay more to keep them."
Not if they all act together. Looking at the people in control, why do you think they would act ethically? They'll do what earns them the largest bonus, and that's it.
The very idea of free market is that there should be so many of them (employers) that they can not realisticly act together. The goal of the businessman is making profit; minimizing labor cost can be one of the ways to achieve that goal but is not the goal itself. Even if there were "agreement" on wages (which would be highly illegal) at $100, suppose I can make $30 more if I pay $20 more to get a specific worker, what's the "unethical" thing to do? To cheat on my competitor in the wage agreement! and hand the extra $20 to the worker under the table so I can get $30 more in income! That's why Free Market works; it does not count on anyone being moral or ethical! Nobody should be "in control" of market power per se, because power corrupts.
"where free market is replaced with its only alternative in the distribution of wealth and natural resources: coercion."
Why can't you fathom this? There is no real "free market". There's as much bizarro-world socialism here as anywhere. It'd be a shame if you and your gifted little supposed business were faced with "coercion"...one amazing story after another...
Of course there are elements of coercion in our market. The most obvious example is the currency itself. We are all coerced to pay tax with a very specific type of paper called Federal Reserve Notes. So long as the Fed keep a modicum of restraint on the printing of these paper, and make it, as Greenspan said, a de facto although not de jure gold standard (which would be the closest thing to a sound money), most business and individuals can put up with that. When that coercion becomes too egregious, the free market instinct in people will certainly make it known (e.g. hoarding commodities etc.) Free market is not just a state of economic mode; it's within the very social instinct of human beings, the very manifestation of freedom itself. Lack of freedom in one aspect of economic life certainly does not justify abridgement in other aspects . . . no more than banning all religion and -ism would be justified on the ground that one is already not allowed to yell fire in a crowded theater anyway.
You're someone's shill, it's just a matter of finding out who...
I'd like to find the answer to that question too, so that I can get paid for the effort ;-) When I have time, oh, years from now, I may consider writing some books.
Bloated product lines, featuring products customers don't want, built in large quantities no one needs, along with bad M&A deals involving companies that weren't profitable before or after the deals, seem to be a company tradition, not the policy of any one person.
Thank you for ignoring everything I wrote in reply to your earlier post, and repeating yourself. I thought repeating for repeating's sake and completely ignore what others have to say in a conversation was reserved for the 4yr olds ;-) To recap, bloated product line is mandated by existing dealer network; products that customers do not want courtesey of union production line quality; built in large quantities no one needs thanks to union work rules that stipulate full pay when not working. All that is quite understandable when one considers what cars were like when the workers had 100% job security, full benefit packages and zero incentive to improve quality and productivity, in other parts of the world. . . Soviet Lada, for example, cars that were worth less than the material that went into them.
"I actually believe that he who has the gold often has a better chance at making rules to his own liking."
And you think that's a good thing? Do you think that such rules will look out for anyone but the person making them? Dude, you really do have too much faith in humanity. I hope it doesn't cause you pain, it very well might. It's really a hilarious thought to assume that given an absence of any labor regulation, that those in control will give a damn about those below them. They give what they give now because they've been forced. Take away the requirements, and nothing would grow but social ills and their bank accounts.
". The experience over the past 20 years in China, and some 500 years in the West, pretty much proved that free market is what frees people from their bondage"
Where are these free markets? There are none, not in China, not here. You speak of a pie in the sky that isn't a part of the real world. Kind of like how laws actually stop people from engaging in a given action. Dream on.
"The very idea of free market is that there should be so many of them (employers) that they can not realisticly act together."
That's just a theory! Why on earth do you think events would play out in that manner? You're playing a game of "if" that is reflected in no way by the real world.
Here's something for you to ponder...look at what drove the creation of widespread unions on this continent in the first half of the last century. Do you think these conditions would have just naturally fixed themselves without organized opposition? Do you think that these conditions won't return if labor regulations are all lifted?
Oh well, it's all moot...your dream world won't be taking place. You'll never see that "freedom". It's too unregulated for psycho neandercons, and also too unregulated for uber-lefties. As far as unionization, yes I do think it is going to decline...the massive power of the UAW will die...but the pendulum will swing back when the abuses become common again.
Yet, you would have made the same mistake all those lemmings did, namely, assuming that hand-me-down models would do well in developing markets like Brazil and China; not saying I would do any better myself until I saw the actual sales numbers. How much is that uncommon insight worth in market terms? That is for the shareholders to decide. Your standards do not matter at all until you own enough shares of GM to be accountable. How's that for accountability?
"I actually believe that he who has the gold often has a better chance at making rules to his own liking."
And you think that's a good thing?
That's neither good nor bad. It's simply a statement of fact, like your statement that "He who holds gold makes rules" These are not advocacies, but observations.
Do you think that such rules will look out for anyone but the person making them? Dude, you really do have too much faith in humanity.
Not at all. Please re-read my previous post. Whoever has power will use that power to their own advantage. Power corrupts. How did you manage to translate that skeptic view of the world into "too much faith in humanity"? BTW, this skeptic view of the world was exactly what the founding fathers of this nation took.
I hope it doesn't cause you pain, it very well might. It's really a hilarious thought to assume that given an absence of any labor regulation, that those in control will give a damn about those below them. They give what they give now because they've been forced.
Nor does anyone give a damn about those below them even with labor regulations. Remember? Illegality doesn't mean it is not done in this realist view of the world; you said it yourself in previous post regarding employer wage collusion. All the rules introduce is yet another layer of people living off the labor of workers, namely the union bosses and their political feudal overlords; this time, really have no easy competition as forming a viable political party is a lot harder than starting a private business.
The experience over the past 20 years in China, and some 500 years in the West, pretty much proved that free market is what frees people from their bondage"
Where are these free markets? There are none, not in China, not here. You speak of a pie in the sky that isn't a part of the real world. Kind of like how laws actually stop people from engaging in a given action. Dream on.
The market place in China is certainly much more free than it was 20-30 years ago; "market place" itself was outlawed in China until circa 1980, but as both of us know, all it meant was that goods exchange had to take place in "the black market," where corruption imposes an extraodinarily high taxation. As the Chinese market place became more and more free over the three decades, the country has transformed from one that could not feed itself or clothe itself to one that exports so much manufactured goods to the rest of the world that it's actually the leading force against inflation . . . because the millions of people have been motivated to be productive in the freer market place. Purely free market does not exist, just like world peace does not exist; that does not however mean that, we should advocate over-regulation or outright killing each other. Both Freedom and Peace are worthy pursuits even if pure forms do not exist; even relatively free market place and relative peace convey tremendous benefits to those live under them.
"The very idea of free market is that there should be so many of them (employers) that they can not realisticly act together."
That's just a theory! Why on earth do you think events would play out in that manner? You're playing a game of "if" that is reflected in no way by the real world.
There is no need to ask "why"; it's already playing out that way. Read that article about Chinese labor cost rising 40% in 2005 due to multinationals and local manufacturers chasing after the same labor pool. I'm pretty sure that was not due to the employers suddenly all became generous in their hearts ;-)
Here's something for you to ponder...look at what drove the creation of widespread unions on this continent in the first half of the last century. Do you think these conditions would have just naturally fixed themselves without organized opposition? Do you think that these conditions won't return if labor regulations are all lifted?
Giant industrial monopolies were the fundamental reason behind the rise of union in the first half of 20th century. The solution to that problem should have been the break-up of monopolies, not the establishment a supposedly counter-balancing monopoly in labor. The idealists that you rail so much about thought the unions would then look after the workers, all workers. Well, they had too much faith in humanity, as you say. Unions look after union members only, and more importantly, the union bosses, because they are the ones actually in power. The real immediate reason for the rise of union of course was that the progressive movement became corrupted, and the political elements realized that legalizing unions would buy more votes than busting industrial monopolies, and a unionized labor pool would make it harder for smaller businesses to thrive, further enhancing the positions of the established big companies, who are donors to the political parties along with the unions.
Is that similar to warehousing votes?
Kind of like the ones that got flooded out in Katrina.
Just thought I would poke my nose in. Keep going I'm enjoying the discussion....
The fact that BMW botched the Rover acquisition is irrelevant. As Wharton and I have already pointed out here, most M&A deals don't work. They especially don't work when the acquired company's main problem is the absence of a decent product lineup. M&A turnaround deals can work well if the company has good products, but suffers from poor cost controls -- in those cases, you make the acquired firm more efficient, and continue to sell the products that customers want, turning those losses into profits.
Again, cost controls can reduce hemorraging, but they can't make a bad company good. FIAT was in trouble before GM invested in it, it continued to be bad while GM owned it, and GM then had to make an exit payment to avoid getting even deeper into it.
Step back and accept the facts -- GM management negotiated a costly provision that forced it to make a payment to avoid taking over the whole of FIAT. Wagoner and his boss both cut this deal. Hence, GM management, including Wagoner, are responsible for losing $4 billion on this deal alone, and they lost it in near-record time.
I don't see why Wagoner (who was president of the company) thought that GM could succeed in undertaking an activity -- buying a money loser with poor products and a weak brand -- that others have failed with, time and time again. Part of the logic behind the case study method pioneered by Wagoner's alma mater HBS is to study others who have come before you, and to learn from their mistakes. He did not learn from this mistake, and it cost the company, its shareholders and employees $4 billion. To defend such stupidity is absolutely shameful, and shows you to be so blind in your hate of unions that you wouldn't know a bad management team if it kicked you in the head.
For a fraction of the $4 billion squandered on FIAT, Wagoner could have consolidated existing brands and reduced the number of nameplates to a more manageable level, using the money saved to improve product quality, create meaningful differentiation, and deploy its marketing and R&D dollars more effectively. If GM made products people wanted, there wouldn't be excess inventories to the degree there are now, it's the cumbersome lineup and the obsolete distribution channels that create the burden.
And the basis for that statement is? I guess I am not asking you so much than I am telling you to explain. What insight do you have to my automotive market knowledge? Oh yeah, I don't have a good old boys club membership card - the key to acumen! Maybe if I had been born on at least second base and had a cookie cutter MBA handed to me, I'd make a different decision.
". How much is that uncommon insight worth in market terms? "
There's no insight. There were two established paths - some chose one, he chose the other. Simple.
"Your standards do not matter at all until you own enough shares of GM to be accountable."
Cop out. Pathetic. If you can't admit that he operates in a vacuum of accountability, just say so and move on. Turning it back on me might end up being a dangerous game. I can set any standards I please, and by my standards he is mediocre at best.
So is your little business a shell funded by a trust like what employs so many people you claim to have connections with in Vancouver, or is it just patronized by family? I am surprised to see someone who is so against regulation and the current economy being able to succeed, that's all. Accountability...comical.
". How did you manage to translate that skeptic view of the world into "too much faith in humanity""
Because you have absolute blind faith for anyone in a position of corporate power....that you'll defer to anyone who can put "CEO" after their name. My bad.
" All the rules introduce is yet another layer of people living off the labor of workers"
And with no rules, we'll have two layers. Serfs and elites. You really seem to have no problems with that. The west shouldn't be like China.
" even relatively free market place and relative peace convey tremendous benefits to those live under them. "
The market is free enough right now. World peace is a tangent.
"There is no need to ask "why""
I guess not, if you can't answer. Thanks.
"Read that article about Chinese labor cost rising 40% in 2005"
Why do you think events in China would/could apply to anywhere else in the actual free world? Why is (1.4 x basically nothing) of any relevance? When you're starting from almost nothing, it is not difficult to find improvement. The comparison is not relevant to a society that is already in relative prosperity.
"The solution to that problem should have been the break-up of monopolies"
Shoulda, coulda, woulda...sorry. The monopolies were not able to be "busted" (nor will they ever be), so another front had to be found. I'll take some union corruption over the conditions advocated and created by irresponsible robber barons.
Really, who is pulling the strings? Go spend some time with the wife and child. When you mention you just had a kid, and you spend all this time here, you make me feel bad. I'm sure you're a decent enough guy and all.
Never attribute to malice what can be explained by stupidity. There are certainly a lot of things I should be doing now instead of wasting time debating folks with obviously fixated views unperturbed by facts . . . but hey, posting is addictive ;-)
What you call a mistake that should have been obvius was actually less obvious than even marketting trap of selling crappy hand-me-down cars to developing markets like VW and Toyota used to do. GM negotiated to acquire FIAT for less than $8 billion over all at a time when GM market cap was over $60 billion. That would have made the steal of the century if FIAT's financial conditions were as good as its books presented. FIAT's expertise was in design and making small cars, both areas that you so vehemently advised GM putting more effort towards only a few posts ago. FIAT also had existing partnership with GM Europe. It all looked great until the book cooking was revealed.
After the book cooking was revealed, considering the cost of bad acquisition deals like Rover and Jag, each costing the acquirer $6-10 billion after acquisition, it was very brave and intelligent for GM management to walk away from the deal.
I don't see why Wagoner (who was president of the company) thought that GM could succeed in undertaking an activity -- buying a money loser with poor products and a weak brand -- that others have failed with, time and time again.
M&A at that scale is the purview of CEO, not COO/president. In any case, none of the automotive giants would be where they are today without M&A, save perhaps BMW and Honda; even BMW's post-WWII volume car production was largely based on a purchase. It's ludicrous to claim that all M&A are bad . . . and the only right time to buy is when the target is down, so that you don't overpay on hypes. Even today, Toyota's acquisition of Subaru is another example of buying while it's cheap. Considering how far the US dollar has fallen in the last five years, the domestic carmakers' timing in buying European brands half a decade ago was not all that bad.
I don't think anyone could have convincingly argued against the FIAT deal when it was inked, given what was known at that time. In fact, it was heralded as a match made in heaven by the automotive press. Now compare that to the $4 billion lost due to work stoppage by union action around the same time frame, it makes one wonder why union lovers are not pointing fingers that way at all.
As for the argument that a fraction of $4 billion could have streamlined the nameplates and improved product quality, that's just does not make any sense. The Oldsmobile closure alone cost $2 billion, not counting reduced sales due to pending closure. All the other name plates are much bigger operations or have special purpose. Worse yet, no real savings is proven with the Olds closure! As for improving product quality, if an attempt at improving product quality and productivity at one single factory led to a 13week work stoppage that cost $4 billion in 1998, how much do you think a fraction of $4 billion would go in that regard?
Hate to tell you, but one thing that any MBA knows is that a company's market cap is not based on how what kind of resources that I have available to pay for it. Strike one.
FIAT's expertise was in design and making small cars, both areas that you so vehemently advised GM putting more effort towards only a few posts ago.
Wrong again. Companies such as Toyota and Honda have expertise in building small cars. FIAT had a reputation of building unreliable product, and selling it at a loss. Strike two.
It's ludicrous to claim that all M&A are bad
I never said this. I pointed out that (a) Wharton shows that 70% of M&A deals don't work and that (b) M&A deals tend to fail when the acquired company lacks fundamentals that can create revenue (i.e. good products or a good brand). A company with good products but with inefficient cost structures can be turned around, but a company that doesn't have the brands needed to create revenue is not likely easy to turnaround.
Funny how Toyota figured out the solution -- build good brands organically, and differentiate them. Buying bad brands carries more baggage and liability than value. (After all, that's why they're bad brands.)
Strike three...so why isn't the management team out?
Well, it's not like this is the only time GM management did something stupid like this. It's not only Waggoner, it is the entire team and it has been going on for an awfully long time. I'm actually shocked that GM has held on for so long, given the crappy things they've done:
1 - Fiat, as discussed ad nauseum here
2 - Saab, as if they didn't already have enough rebadges. Let's rebadge yet again, call the Saab 9-7x "born from jets" like it was an original Saab design! Put the ignition key on the console and viola! - suddenly becomes Swedish!
3 - Lousy interiors; VW improved radically in the 90's. GM was making money then, where was their competitiveness?
4 - Hybrids - dare I say more? You may think they're a fad - I think not. Instead they're going for corn in the gas tank - much more a fad IMHO.
5 - Let's not forget GMs purchases of EDS and Hughes at a time when they should have been focusing on quality automobiles. They can't afford to put quality in -- but they can afford to spend like wives at the Nordstrom's sale.
In the March 20 Business Week, page 11, there is a blurb. Seems that Honda and Toyota are expected to replace >90% of their current models in the next 3 years, as opposed to 64% for GM and 59% for Ford. It's all about product!
Now I'm FAR from pro-union - I actually think the union situation is a disaster -- but that doesn't relieve the GM management from decades of stupid mistakes. I say clean the whole house.
How can you consolidate when you are fighting Union contracts that protect against plant closures? 1998 was an example of losing close to 4 billion when they tried to do just what you are suggesting.
There ain't no way out now and I have no real reason to take personally GM's failure to use their brains back about, oh, 25 years ago.
Instead, what do I see? Boring looking huge SUV's and pick-em-up trucks built with the savviest of drivers in mind. Don't forget to pick up that chew that's hardening on the floor, would ya Elroy?
Yikes. Talk about designing in the dark ages for dark age buying folk.
Raze it and start over. Better yet, let it rust into forgetfulness. After all, GM is the company that found that the car design work of their grandfathers in the 60's was not enough of a legacy to want to build further on.
Evidently it was just there to let grass grow onto while a few restorers recognized the coolness and restored away with glee. New GM product with flair? The Pontiac Solstice is a start.
The UAW was enough of a boulder to swamp any hopes of GM returning strong in the 2000's. Too much carry-on baggage to be able to take off when they need to. They are able to taxi down the runway a bit but taking off? Now? :sick:
2021 Kia Soul LX 6-speed stick
"One big question is whether he will push for heads to roll from the very top and fulfill the dream he expressed long ago of being GM's chairman and CEO. "Jerry is a strategic and analytical thinker who could be the chairman
to pull GM out of this crisis," says Thomas Stallkamp, a former Chrysler president who worked with Mr. York for years.
"But he's not the right guy to be the CEO," Mr. Stallkamp contends. "GM's leader needs to be larger than life and reaching out to the workers and unions," he says. "Jerry isn't a touchy-feely kind of guy."
in. Then Mr. York criticized GM's auto-sales report for lumping sales to
consumers together with fleet sales to companies. "I want to see how we're
moving the metal," attendees say Mr. York told Mr. Wagoner.
Rocky
http://www.iht.com/articles/2006/03/20/business/gm-5862709.php
http://business.guardian.co.uk/story/0,,1735482,00.html
It sounds like all these deal are just plugging the holes in the dike. I hope it works.
Rocky
http://www.donlen.com/manufacturer_fleet_incentives.html
http://www.upi.com/NewsTrack/view.php?StoryID=20060321-011446-4995r
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aS8KV2BfYRJ8&refer=home
We are looking at Fiat through our "American" eyes...over here, Fiat (like Renault) has a terrible reputation.
Europeans have a different view of the company.
My cousin works at Opel, and was assigned to Fiat during 2004. As part of the deal between GM and Fiat, the companies worked jointly on a small car platform (Opel/Vauxhall Corsa and Fiat Punto). I visited him while he was working in Turin.
While Europeans realize that Fiat has serious problems, the company is still recognized for its expertise in small cars. GM and Fiat shared costs as they developed a new generation of small cars, and GM was able to tap Fiat's expertise in this area.
Plus, Fiat is well ahead of GM in diesel technology, which is very important in Europe. GM had been seriously lagging in this area. It is my understanding that GM was able to obtain access to Fiat's diesel technology as part of this deal.
From America, the deal looks like a total disaster, and we wonder why GM ever hooked up with such a complete loser. From the European perspective, the deal makes more sense, and while it obviously didn't turn out as GM hoped, the company still reaped some important benefits from the collaboration.
As for GM's performance in the American market - the vehicles we are seeing debut were initiated under the Ron Zarella regime, and still bear his imprint. He had no experience in the automobile industry prior to his tenure at GM, and this lack of experience shows up in everything from the product itself to how it was marketed.
Plus, throughout the 1990s, after its brush with bankruptcy in 1992, GM saved money by skimping on product investment. Hence, the continued recycling of four-speed automatics, overhead valve V-6s and old platforms.
Wagoner, in other words, inherited a mess from a product standpoint.
Lutz and Wagoner have been tweaking the new products when possible. If it weren't for the efforts of Lutz, those vehicles would be even worse. GM vehicles HAVE been improving over the past few years. The new Chevy Tahoe, Cadillac Escalade and GMC Yukon are pretty impressive. Wagoner and Lutz have been working quietly to revamp and streamline GM's processes and corporate structure.
The bottom line, according to credible insiders who post on other auto-related websites, is that Wagoner is making important changes to GM's way of doing business that are not immediately apparent to outsiders. Firing Wagoner at this point will be a symbolic move more than anything else, as it will not affect the upcoming product.
The products developed completely during the Lutz and Wagoner era will begin debuting this fall.
Come January 1, 2008, Wagoner and Lutz will no longer have any excuses.
I gotta ask dad if he's elgible to retire soon. I'll talk to him this Friday
Rocky
http://money.cnn.com/2006/03/22/news/companies/gm_delphi/
http://www.freep.com/apps/pbcs.dll/article?AID=/20060322/BUSINESS06/603220331/10- 19
Terry.
FIAT was already losing its competitive position in Europe prior to the GM acquisition, as it was getting squeezed by Asian imports and VW (which has been building competitive low end brands such as SEAT and Skoda for the European market.) The company was already losing market share in Europe prior to GM's deal, so even within its home market, its star was fading.
And it is clear from the put option negotiated by Wagoner that GM got outfoxed. The put option required GM to purchase FIAT at fair market value if FIAT demanded it. Given that FIAT was already on a downward slide prior to GM's commitment, and being that FIAT continued to manage the company after the deal, why would GM put itself in a situation in which it could be forced to infuse money into a company with market share in decline and that was loaded with debt? That's just bad negotiation, and a gambit that lost GM an additional $2 billion.
Plants that are competitive in the world market have been built in several states by Toyota/BMW/Honda/Hyundai etc.
I'm not sure anyone at the UAW smells the coffee. The coffee isn't just boiling now: it's all over the stove and on the floor!
GM/Ford/Chrysler need to end their current UAW arrangments immediately. I hate to see them take bankruptcy just to free themselves from the UAW. Is there another way?
You're absolutely on the money .... the big problem now, we are looking at 2nd and even 3rd generation employee's ... there is just a TON of fear, distortion and alot of false pride that goes on in the UAW -- and of course the workers "feel" they are paying in more ways than one ... and the UAW leaders put alot of scare tactics in these employee's ..
All this nonsense about early retirement that hit the news today is a joke .... early retirement programs have been offered for 4/5 years, and some of those were LARGE.! .... the problem has been - Who's going to take the first step.?
I have dozens of friends that work in the plants ... when I recommended looking into it, they all say the same story - I'll get to it, I'll get with programmer, I'll make more money if I stay another 3 years, blah blah blah .... Bud, 3 more years (depending on the position) is only good for another $128 a month .. these are younger guys in that 45/55 range that "could have" retired with 70% of their base pay ..
Stop and think about .... 70% of $75,000 a year is "about" $50,000 and some chance ... thats about their take home home pay right now ... 3/4 years ago they could have walked away, got the $50 grand (for the rest of their life) .. and Still got all of their benefits ..
Now, they're going to be one of many, not one of the few ... and those figures will dwindle to less than half in the next few months and they'll be in lump sum amounts -- and we know what happens with people that get lump sums, 60% of the people that have won State lotterys have filed bankruptcy - that should tell ya something ..... If you sat in those Union meetings like I have, you'd swear you were in the 1950's ...
Like lemmings to the sea ......... :sick:
Terry.
FULL retirement in 20 YEARS.
Guaranteed lifetime medical,dental and optical coverage at NO cost including drug plan without co-pay.
Retirement payout at 80 % of base pay and percentage of overtime worked.
$150,000 Educational voucher for retraining. Cash if refused.
A new car for retirees.
Part time employement that will bring in 50K a year.
COLA adjustments in monthly payout.
A cabin up north for hunting and lake access for bass fishing.
Now this may be acceptable but direct deposit would be prohibited.(The wife might find out how much your REALLY make. That would be ugly.)
See that was easy wasn't it. How do you pay for all this ? Well just spread out the costs among management pay reductions. Huh, no you don't expect me to do the math.....Just rationalize it ! The partridge in a pear tree doesn't come now it is a Christmas bonus. :surprise:
I realize people want their share of the pie, but, and it's a big butt, that pie is filled with rotten fruit and nasty, dingy, hardened filling that has some serious holes in the can it came out of. :surprise:
Was I being clear enough on the damage already suffered by GM? Or do we need that 2"x4"x4' stick of lumber to help make somebody see some sense again? After the stars clear, maybe!
2021 Kia Soul LX 6-speed stick
http://www.autonews.com/apps/pbcs.dll/article?AID=/20060322/SUB/60322020/1003
http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_levin&sid=akLO- - FsnCqyZY
http://www.autonews.com/apps/pbcs.dll/article?AID=/20060322/SUB/60322020/1003
http://www.freep.com/apps/pbcs.dll/article?
http://www.detnews.com/apps/pbcs.dll/article?AID=/20060323/AUTO02/603230400/1148- - /BIZ
http://www.latimes.com/business/la-na-workers23mar23,0,4918627.story?coll=la-hom- - e-headlines
http://www.ledger-enquirer.com/mld/ledgerenquirer/news/local/14162886.htm
http://www.chicagotribune.com/business/chi-060322delphi,1,7950467.story?coll=chi- - -business-hed&ctrack=1&cset=true
http://www.theoaklandpress.com/stories/032306/bus_2006032306.shtml
http://www.nydailynews.com/business/story/402043p-340543c.html
http://www.autospectator.com/modules/news/article.php?storyid=3467
They can see the handwriting on the wall (and in the media). The old line militants will be gone. Perhaps they will even agree to a steeped wage with new hires having lower wages and beni's?
So, UAW members should be very happy with what they have, rather than complaining all of the time. It could be much, much worse!
It will be interesting most definitely. rorr, I'm not sure what you mean by "would you expect it to be any other way". So your mad that the workers get a lousy $30K a year for putting a large number of years in at the second biggest buisness in the world. What do you want ? Do you want them to join the 323 million americans crowd on one of the major social programs ????? :surprise: That's one place you won't find a UAW worker. You and I if are retirements don't pay-off will have to choose to join or take the guillotine. :sick: We are suppose to be the richest country in the world and we have children going sometimes days without a meal.
I know these aren't your words, but "many" sometimes don't stop and think about the future and the direction this once great teacher (country) is showing the rest of the world. Our standard of living keeps going down, and I found out another interesting fact a few days ago. The American dollar 5 years ago used to have a exchange rate of $1,000 Mexican Peso's. Now that number is only (10). Does anyone besides me find something wrong with that ?
Rocky
Want to know what you can get free in America as an Illegal? Look for the informational literature in the Mexican Consulate. Huh ?
2014 Malibu 2LT, 2015 Cruze 2LT,
Ain't that the truth ... the ER's are filled with them and we get to pay the bills - how nice.
Terry.
Myself and others on this forum have been predicting this and the next "logical" step for GM is chapt 11
Well, the first thing I find wrong with that is your assertion that our standard of living is going down. I'd like to know the source of THAT piece of information.
Second thing that is wrong is your history of the Peso.
http://en.wikipedia.org/wiki/Mexican_peso
After a number of years of inflation and devaluation following Mexico's defaulting on external debt in 1982, the Bank Of Mexico introduced the 'New Peso' in 1993 where one 'New Peso' was equal to 1000 of the old Pesos. So your idea of an exchange rate of $1000 Pesos to the dollar is based on the OLD PESO.
Initially, the Mexican government tried to fix the New Peso value at about 3.3 pesos to the USD. They adjusted this to 4 pesos to the USD in 1994 but were unable to hold that line and decided to let the value of the peso float. Over a period of a week in 1994 its value crashed to over 7 pesos per USD before intervention took place.
http://en.wikipedia.org/wiki/1994_economic_crisis_in_Mexico
Currently the peso is a bit over 10 per USD. So, the whole thrust of your example was backwards: the Peso has been LOSING value to the dollar (from 3.3 in 1994 to over 10 in 2006).
Which makes me wonder how many other 'facts' you've got bass-akwards..... :confuse: