Every nameplate and badge requires its own seperate accompanying bureaucracy, share of R&D dollars and a marketing budget. With the loss of effectiveness of the tiered/ progressive marketing system created by Sloan, the overlaps are inevitable and the brand diminution exacerbated.
The lack of perceived difference between Chevrolet and Pontiac, for example, just create brand confusion as consumers stop seeing the point of either one. You may notice that Toyota was careful to create very different identities for Scion and Lexus, an obvious effort to try to reduce as many marketing conflicts as possible, and to make each badge identity distinct.
If you calculate the retail sales for each badge, you are going to find the mass market badges such as Toyota and Honda generate more average retail sales per nameplate than Chevy, Pontiac, etc. The GM nameplates simply create more market inefficiency -- spend a given amount on advertising or brand development, and GM gets less for it.
During CY 2005, Toyota sold 432,000 Camrys in the US, most of those to retail sales (i.e. maximum margins). Compare that to Chevy, that sold 246,000 Impalas in the US, many of those discounted to fleets. Who do you think gets more bang for its promotional and marketing dollars?
I understand where your coming from "pf_flyer" but when you talk about a topic such as this, it's almost impossible not to talk about subjects relating to the topic such as the current government situation and other governments that affect the UAW and the domestic auto-manufactors. It's all ties into why Union folks like my father, and his employer-GM/Delphi are facing a breaking point in todays global climate.
Product, Politics, Governments, all have positive and negative affects on the auto-industry as a whole. I agree personal attacks should be left out of it and should be taken down.
Your the boss like I said, and if you disagree with any of my post you have the right to take it down. I don't have any hard feelings pal, but want you to hear my point of view :shades:
"...if it's not going to constantly invest R&D in all of those nameplates and keep them updated with the competition."
Well, let's just look at minivans (since that's where my head is right now). GM offers minivans under the Buick, Chevy, Pontiac and Saturn banners (unless I've missed one). But, underneath all the minor little surface differences, they're essentially the same vehicle. So, if Toyota spends $500million to develope ONE minivan (the Sienna; and that number was pulled out of thin air so NOBODY start hammering me for backup sources ), are you saying that GM must spend $2 BILLION (for 4 "different" minivans) to be on a 'level' R&D playing field?????
No. GM should be able to develope a competent 'base' minivan for a comparable amount of R&D dollars. The money spent to differentiate between all the various GM versions SHOULD be minor in comparison to the money spent developing the basic structure.
How about trucks? Let's say Toyota spends $500M in R&D on a new Tundra. Does this mean that GM must spend $500M on a new Silverado and ANOTHER $500M on a new Sierra? Uh, no.
I think you guys are confusing R&D money with what I would call 'product differentiation' money. The R&D money SHOULD be spent where it benefits as many different models as possible (platforms, engines, controls, etc.).
Of course, I agree that there should be shared platform development.
There are some on the thread who confuse "badge engineering" (creating similar cars that are so similar to one another that consumers either see no, or are confused by, the difference) and platform development.
That being said, whatever goes into designing each vehicle for each individual nameplate is funded by R&D, not by marketing and promotion. Marketing and promotion pay for advertising, PR, etc., not for the sheetmetal and the stuff wrapped inside of the sheet metal.
How about trucks? Let's say Toyota spends $500M in R&D on a new Tundra. Does this mean that GM must spend $500M on a new Silverado and ANOTHER $500M on a new Sierra? Uh, no.
No but GM should spend $500 Million on the Silverado and spend another $100 Million to make the Sierra different from the Silverado instead of just badege engineering it and changing the grill. :confuse:
If GM wants to have a bunch of minivans (Which I disagree with) then they needs to distinguish each one. I however think 2 would be sufficient. The bottom line is the brands need to have different flavors and compete against different segments, instead of having minimal changes like grills and badges. This also goes for Ford and Chrysler, and I hope they have learned their lesson.
BTW- Isn't the Taurus going to die after this year ?
Hey the truth hurts even me. I couldn't blame someone buying a Accord, TL, over let's say a Grand Prix. However I will go to bat for the Lucerne vs. Avalon. The Grand Prix is so outdated it could be hung in a museum. :mad: My Aunt has a 2004 GTP, and dad made the comment that all they did was give it a marginally better interior over my mothers 99' and the grill basically looks the same. I told dad, "See why I wanted a Grand Prix, but baught the TL" It chapped his behind, but understood why someone young with a family would pick the TL (which by the way is in the same price bracket) over the Grand Prix. I told him even with my GM discount, the residual of the GP wouldn't make up the 15% difference + rebates over a 3 or 4 yr. lease.
The TL was a better buy and you most of you know the rest of the story. :mad: I told him I wished Honda and GM would merge and Delphi would supply the parts, or atleast Fuel Injectors to keep him happy. He said Honda did pay a visit to their plant, but didn't want to pay Delphi's prices. Hyundai- OTOH did decided to buy Delphi Fuel Injectors. :confuse:
Very true. Back in 2001, I decided that Saab 9-5 had a more plush interior than the Camry and Accord, and GMAC was offering a better deal on the Saab than what was available for ES and TL . . . so I gave GM a shot. Not everyone will give GM a fair shot based on today's quality after the bad reputation the 70's and 80's.
That's why everyone at GM has to make extra effort and sacrifices to win back the confidence of consumers. Pays for the management and white-collar workers are already cut back dramaticly . . . yet the UAW still wants to party as if it were the 60's heydays.
The union contracts did give milion GM workers a good life; that's was quite acceptable in the company's heydays, as everyone remotely related to the "General" basked in the sun. Retirement and future medical benefits however will only be sustainable if the union contracts are restructured significantly . . . otherwise, it will all be empty promises and/or tax payer liabilities.
"That being said, whatever goes into designing each vehicle for each individual nameplate is funded by R&D..."
Then I guess I was one of those confusing "badge engineering" costs with R&D.
I always associated R&D with platform, engines, electronics, etc. Basically, the items common across several different models. I always placed the 'badge engineering' money in a seperate fiscal compartment (a compartment located in small room with a sink in which this money was placed in a round white recepticle, a small chrome handle was pulled and with a loud "fawoooooshhhhhhh" the money disappeared...)
So in your opinion, the only way GM can save the day is further restructuring of the union contracts ?
I believe a five or six year contract with no raises for the pre 99' might get passed. I think the UAW membership would be happy to keep what they got. I also think even GM could get away with further increasing out of pocket costs to let's say $150 a month.
No raises and a slight increase in healthcare costs would yield the company Multi-Billions in future and current savings.
In case you did not realize, most companies on that list fall under three categories:
(1) natural monopolies, like the railroads and Bechtel; (2) where union is quite impotent, like SWA, GE, Kellogs, General Mills, etc.. (3) already drasticly restructured through bankruptcy, like Harley Davidson (4) outsourcing overseas like mad, like Whirlpool
However the Success of these company's will depend on how well the goverment protects them.
Hahaha, why don't we just hand over all companies to the government . . . heck we can do even better: let's get paid in government lottery tickets and coupons/ration cards for cars, housing, food, clothing.
What's next a illegal alien flying our airplanes ?
They already do. They are called pilots for foreign airlines; they are "illegal" the moment they step out of the airport duty-free zone. Von Mises was right: the easiest way to convince the dummies to surrender their freedom is fear-mongering.
It's a way to keep GM afloat and the workers don't lose their homes, and material things. Once you factor in the annual "cost of living" it is essentially a wage regression. It allows the UAW employees to gradually reduce expenses, like selling the boat or extra car, to cut costs. If Rick Wagoner wants to cut their wages, he will provoke a strike, since many won't beable to afford such a huge cut. This would be his best way to avoid a strike, and still save GM future anticipated employee costs.
GM isn't using UAW labor to build Aveos, GTO's or Saab 9-5's or 9-2's, yet those are also well overstocked.
Are we talking about stock-to-sale ratio or unit margin? Niche models naturally have longer "duration" simply because of the distribution channel factor, unless a car is made to order. Toyota Echo had hundreds of days of "duration" too. On the other extreme, LS430 has longer "duration" than ES330, for example, but don't tell me for one moment LS430 has less margin than ES330 because of it.
"If Rick Wagoner wants to cut their wages, he will provoke a strike, since many won't beable to afford such a huge cut. This would be his best way to avoid a strike...."
And the results of a strike would be......?
Might such a move tip GM into BK? THEN where would the UAW be?
To clear things up, I'm not saying that all of GM's woes should be laid on UAW's doorstep (or even a majority of their problems). I DO think however that the UAW leadership must face facts that the gravy train has derailed.
You had an interesting list of Union companies previously. I wonder what a list of companies who turned to BK after failed Union negotiations looks like?
I contacted Buick a couple of days ago at faq@buick.com and asked if they could not only give us a live chat with Buick's General Manager, but with the other GM's of General Motor's divisions.
Hopefully GM will consider facing us fans and interested public.
The lack of perceived difference between Chevrolet and Pontiac, for example, just create brand confusion as consumers stop seeing the point of either one.
Notice, Chevy and Pontiac were both brands carried over from the days when GM had some 50% of the market. It's not like GM managment is trying to create another Pontiac right now. What's your solution to the problem? Spend $40 billion paying off all the dealership obligations and closing on Pontiac overnight? Where would you borrow the money from? In case you did not know, GM was already in the process of buying some dealerships in preparation for steps taken in that direction.
During CY 2005, Toyota sold 432,000 Camrys in the US, most of those to retail sales (i.e. maximum margins). Compare that to Chevy, that sold 246,000 Impalas in the US, many of those discounted to fleets. Who do you think gets more bang for its promotional and marketing dollars?
Of course Chevy. I hardly saw any Impala ad whereas Camry ads are on TV during every program break.
That's the problem with the union, it's still thinking in terms of "no raise." For all your railings about multi-million dollar CEO pays, when the going gets tough, Wagoner cut his own pay in half . . . Jobs cut his pay to $1, that's one single dollar! when Apple was in dire straights.
That's the problem with union contracts. I have no beef with union ravishness when the going is good; they deserve their time basking in the sun, too. Inflexible labor becomes a big problem when things sour, and in every business it happens from time to time, like Apple, which has been to hell and back several times . . . if Apple had a union labor structure, it would long have been dead.
You had an interesting list of Union companies previously. I wonder what a list of companies who turned to BK after failed Union negotiations looks like?
Well honestly I haven't heard of any that had negotiations go that bad. Oh wait I do know one. It was a company in Ohio or Indiana ?-Neways, many years back that was asking for an absurd raise that the company couldn't honestly afford. They ended up firing all the striking union employees, and replacing them. It was so absurd that even the union reps wouldn't support their efforts. Even I supported the company's position. :surprise: They wanted to make $35 bucks an hour, when they were already making twenty something already. :confuse: They had no public support from anyone and did get what they deserved, a nice pink slip and some parting gifts. They were being as greedy as the worst CEO.
See I do support "the company" when a union at the grass roots level gets way to greedy.
Steven Jobbs working for a dollar is a joke.....Seriously ?...It's like a sales pitch at the local Chevy Dealer. The guy owned millions worth of shares of his stock and Uncle Bill helped him through the tough times giving him a Billion Dollars a year to keep him afloat to avoid further anti-trust suits. Now Jobbs is one of the world wealthiest men. The difference between a CEO working for a dollar this year is no big deal. The last 5 years he made $5 million a year. "Oh I feel your pain Uncle Jobbs" :confuse:
If you pay me $5 million for one year, I will work the next 5 for free. :P
I find the UAW threats of a strike against GM or Delphi baffling. Does anyone outside of Detroit really believe that new-car buyers will rally around the UAW as a result?
Sorry, but most will yawn, and go on buying Toyotas, Hondas, Nissans, Hyundais, etc.
It's way too late to expect public sympathy for the union, along with a resulting change in buying habits. That horse left the barn a LONG, LONG time ago...
One of the essential points here is that in light of the fact that the different badges lost much in the way of differentiation long ago, why create so many competitive products?
As this point, there is really no need for each badge to have a complete lineup of cars. Various badges could be combined to the point that there should be few or no overlaps among them, while all fleet cars could get dumped via one badge so that the remaining badges could have their reputations either lifted or else dumped entirely.
I can't see why GM shouldn't reduce its nameplate lineup by about half, with an emphasis on creating a few bread-and-butter nameplates that can restore its reputation and be sold in high retail volumes. If Nissan could sell over 250,000 Altimas last year, with very few going to fleets, you would think that Chevy could develop a car that could accomplish the same thing without the deep discounting typical of the fleet business...but to do that, Chevy first needs to build a competitive car worth buying that ordinary people actually want...
Steven Jobbs working for a dollar is a joke.....Seriously ?
That was not a joke. Jobs left Apple in 1985. He came back to Apple in 1996, when the company was on the verge of bankruptcy. He drew a salary of $1. I think it's still $1 today, although with the successful turn-around of the company, he gets compensation in other ways. That is the ultimate flexible labor :-) While I do not expect union workers' wages go down to $1/yr, some significant flexibility in keeping with the company performance should replaced the partying-like-the-heydays fixed wage structure . . . something along the lines of doubling the minimum wage as base pay, and significant bonus for when the company does well.
I agree that a incentive base type bonus would be great for UAW members. I however would be concerned with quality over quanity, but do feel a happy medium could be met.
Your idea of paying workers good during the "heydays" and drastically cutting those wages back during the bad times, is hard for someone who might make $60,000 one year and $30,000 the next. It's not the same as making $10 million one year and making $5 million the next. :surprise:
See where I'm coming from pal ?
However I do agree with some of what you had to say atleast. :shades:
Glad we at least have some basis of agreement on flexible performance-based pay. Do you happen to realize that is precisely what union has been against all these 120 odd years? That's why union is considered the promoter of mediocrity by most people.
is hard for someone who might make $60,000 one year and $30,000 the next. It's not the same as making $10 million one year and making $5 million the next.
It's certianly different, and probably in a way exactly opposite to what you have in mind. If I may, I will venture to guess that you are still in the early years of your career with many promotions ahead of you; mark my words, with every promotion and pay increase, you will find new financial obligations to reach a new level of equilibrium. Also, tax liability will be much higher at higher income levels. I was saving over half my income when I was making $25k a year . . . nowadays, even as I spend less on myself and my family than on my tax bills, I can not even save 1/3 of my income. Cutting my income in half when I was making $25k would have little impact on my living style; cutting in half now would have immediate effect. Also it's relatively easy to find a part-time job or send wife/kids out to work to make up for the $30k reduction, whereas making up for a $5 million reduction would be very very hard, if not impossible.
Another point to keep in mind is that, according IRS data, $65k is the cut-off line for the top-20% of all tax filers. That's for household income when filing jointly. That's the social engineers' definition of "The (abominable) Rich" We are not exactly talking about the poor workers here.
Decided by how much value he was creating for consumers (and shareholders as consequence) every step of the way. The very epitomy of Free Enterprise value creation in the best Anglo-American tradition, as things should be in this great country of ours.
Frankly, I'm surprised that GM-Daewoo, with it's incredible overstock of US-spec Aveo's, is not selling them in South Korea.
Having lived 4 years in South Korea (and most likely will have to return for more), the South Korean's will pay a premium to buy a US-spec vehicle. For example, many US servicemen can sell their US vehicles to South Koreans for more than they paid for it.
(Of course, there aren't very many US servicemen that are authorized to bring their vehicles over to South Korea... and even less actually want to.)
So, if GM-Daewoo is sitting on a large overstock of US-spec Aveo's... They could sell them in South Korea as a 'premium' version of the Daewoo Kalos while charging more (simply because they are US-spec).
And the South Korean's will buy it, because of the 'mystique' of owning a US-spec car.
It's certianly different, and probably in a way exactly opposite to what you have in mind. If I may, I will venture to guess that you are still in the early years of your career with many promotions ahead of you; mark my words, with every promotion and pay increase, you will find new financial obligations to reach a new level of equilibrium.
I have no desire to join the breakfast club, If you don't fit in, you might as well quit. I don't want to leave the confines of my union job where I can speak my voice and be respected. I also wouldn't like being a lower level supervisor where your "hair do" is more important than your character. :surprise:
So promotions for me are out of thee question if I keep this career. :shades:
brightness, you'd have to see it to believe it. BTW- yes I'm relatively young age 27 and worked for my employer for almost four years.
By promotion, I meant pay increases. You will never find yourself with too much money regardless how much you are making; trust me on that one ;-) That's why free market is the only fair way to adjust conflicting demands from disparate individuals. Any government redistributor, or union bosses, is bound to favor . . . themselves!
As of Delphi's 2004 annual report, GM comprised about 54% of Delphi's total revenues ($15.4 billion out of $26.2 billion). In comparison, Ford, DaimlerChrysler, Renault-Nissan and VW Group collectively comprised about $850 million in revenues, or about 3% of Delphi's total revenue.
In other words, not a big deal. Delphi was largely serving GM, the other automakers are not highly dependent upon Delphi in terms of dollar value. Whether or not some of those parts are mission critical and can't be obtained elsewhere, that I couldn't tell you, but I would have to doubt it unless I saw some proof to the contrary.
Per GM's annual report, the company took after-tax accounting charges of $587 million to write off Oldsmobile. I'd say your $40 billion "estimate" is more than a weeeeeeee bit off the mark...
As of Delphi's 2004 annual report, GM comprised about 54% of Delphi's total revenues ($15.4 billion out of $26.2 billion). In comparison, Ford, DaimlerChrysler, Renault-Nissan and VW Group collectively comprised about $850 million in revenues, or about 3% of Delphi's total revenue.
Question: where does the other 11 billion come from?
Regardless, ending Oldsmobile was the beginning of the end for GM.
But GM has no hope of rebounding without a proactive effort to cut out the dead weight. Corporate turnarounds are impossible unless companies can focus on creating core products that people will pay for, and GM has obviously been slipping. As Frederick II, the Prussian king wisely observed, "He who defends everything defends nothing." When the walls are coming down, you have to choose your priorities, and choose them wisely.
Cutting Olds was one move for which I'll applaud GM management. Let's just hope that they don't drop the ball, as they often do.
Comments
Rocky
Too late. We bought an Odyssey in February of last year. And the GM offerings in that market, at that time, were laughable.
And for that, I blame management and not the UAW (to stay somewhat on topic)...
The lack of perceived difference between Chevrolet and Pontiac, for example, just create brand confusion as consumers stop seeing the point of either one. You may notice that Toyota was careful to create very different identities for Scion and Lexus, an obvious effort to try to reduce as many marketing conflicts as possible, and to make each badge identity distinct.
If you calculate the retail sales for each badge, you are going to find the mass market badges such as Toyota and Honda generate more average retail sales per nameplate than Chevy, Pontiac, etc. The GM nameplates simply create more market inefficiency -- spend a given amount on advertising or brand development, and GM gets less for it.
During CY 2005, Toyota sold 432,000 Camrys in the US, most of those to retail sales (i.e. maximum margins). Compare that to Chevy, that sold 246,000 Impalas in the US, many of those discounted to fleets. Who do you think gets more bang for its promotional and marketing dollars?
Product, Politics, Governments, all have positive and negative affects on the auto-industry as a whole. I agree personal attacks should be left out of it and should be taken down.
Your the boss like I said, and if you disagree with any of my post you have the right to take it down. I don't have any hard feelings pal, but want you to hear my point of view :shades:
Sorry, & lets carry on....
Respectfully,
Rocky
Rocky
YES!!! :P
"...if it's not going to constantly invest R&D in all of those nameplates and keep them updated with the competition."
Well, let's just look at minivans (since that's where my head is right now). GM offers minivans under the Buick, Chevy, Pontiac and Saturn banners (unless I've missed one). But, underneath all the minor little surface differences, they're essentially the same vehicle. So, if Toyota spends $500million to develope ONE minivan (the Sienna; and that number was pulled out of thin air so NOBODY start hammering me for backup sources
No. GM should be able to develope a competent 'base' minivan for a comparable amount of R&D dollars. The money spent to differentiate between all the various GM versions SHOULD be minor in comparison to the money spent developing the basic structure.
How about trucks? Let's say Toyota spends $500M in R&D on a new Tundra. Does this mean that GM must spend $500M on a new Silverado and ANOTHER $500M on a new Sierra? Uh, no.
I think you guys are confusing R&D money with what I would call 'product differentiation' money. The R&D money SHOULD be spent where it benefits as many different models as possible (platforms, engines, controls, etc.).
Who are you and what have you done with the real Rockylee? :P
1st Qtr
Taurus ... 51800
Fu/lan ... 37500
Loyal customers those..... Ooops fleet sales..
There are some on the thread who confuse "badge engineering" (creating similar cars that are so similar to one another that consumers either see no, or are confused by, the difference) and platform development.
That being said, whatever goes into designing each vehicle for each individual nameplate is funded by R&D, not by marketing and promotion. Marketing and promotion pay for advertising, PR, etc., not for the sheetmetal and the stuff wrapped inside of the sheet metal.
No but GM should spend $500 Million on the Silverado and spend another $100 Million to make the Sierra different from the Silverado instead of just badege engineering it and changing the grill. :confuse:
If GM wants to have a bunch of minivans
(Which I disagree with) then they needs to distinguish each one. I however think 2 would be sufficient. The bottom line is the brands need to have different flavors and compete against different segments, instead of having minimal changes like grills and badges. This also goes for Ford and Chrysler, and I hope they have learned their lesson.
BTW- Isn't the Taurus going to die after this year ?
Rocky
My Aunt has a 2004 GTP, and dad made the comment that all they did was give it a marginally better interior over my mothers 99' and the grill basically looks the same. I told dad, "See why I wanted a Grand Prix, but baught the TL"
It chapped his behind, but understood why someone young with a family would pick the TL (which by the way is in the same price bracket) over the Grand Prix. I told him even with my GM discount, the residual of the GP wouldn't make up the 15% difference + rebates over a 3 or 4 yr. lease.
The TL was a better buy and you most of you know the rest of the story. :mad: I told him I wished Honda and GM would merge and Delphi would supply the parts, or atleast Fuel Injectors to keep him happy. He said Honda did pay a visit to their plant, but didn't want to pay Delphi's prices. Hyundai- OTOH did decided to buy Delphi Fuel Injectors. :confuse:
Rocky
That's why everyone at GM has to make extra effort and sacrifices to win back the confidence of consumers. Pays for the management and white-collar workers are already cut back dramaticly . . . yet the UAW still wants to party as if it were the 60's heydays.
The union contracts did give milion GM workers a good life; that's was quite acceptable in the company's heydays, as everyone remotely related to the "General" basked in the sun. Retirement and future medical benefits however will only be sustainable if the union contracts are restructured significantly . . . otherwise, it will all be empty promises and/or tax payer liabilities.
Then I guess I was one of those confusing "badge engineering" costs with R&D.
I always associated R&D with platform, engines, electronics, etc. Basically, the items common across several different models. I always placed the 'badge engineering' money in a seperate fiscal compartment (a compartment located in small room with a sink in which this money was placed in a round white recepticle, a small chrome handle was pulled and with a loud "fawoooooshhhhhhh" the money disappeared...)
So in your opinion, the only way GM can save the day is further restructuring of the union contracts ?
I believe a five or six year contract with no raises for the pre 99' might get passed. I think the UAW membership would be happy to keep what they got. I also think even GM could get away with further increasing out of pocket costs to let's say $150 a month.
No raises and a slight increase in healthcare costs would yield the company Multi-Billions in future and current savings.
We will see next march.
Rocky
No kidding. Well THAT'S mighty generous.....
(1) natural monopolies, like the railroads and Bechtel;
(2) where union is quite impotent, like SWA, GE, Kellogs, General Mills, etc..
(3) already drasticly restructured through bankruptcy, like Harley Davidson
(4) outsourcing overseas like mad, like Whirlpool
However the Success of these company's will depend on how well the goverment protects them.
Hahaha, why don't we just hand over all companies to the government . . . heck we can do even better: let's get paid in government lottery tickets and coupons/ration cards for cars, housing, food, clothing.
What's next a illegal alien flying our airplanes ?
They already do. They are called pilots for foreign airlines; they are "illegal" the moment they step out of the airport duty-free zone. Von Mises was right: the easiest way to convince the dummies to surrender their freedom is fear-mongering.
It's a way to keep GM afloat and the workers don't lose their homes, and material things. Once you factor in the annual "cost of living" it is essentially a wage regression. It allows the UAW employees to gradually reduce expenses, like selling the boat or extra car, to cut costs.
Like I said, we will see in March.
Rocky
Are we talking about stock-to-sale ratio or unit margin? Niche models naturally have longer "duration" simply because of the distribution channel factor, unless a car is made to order. Toyota Echo had hundreds of days of "duration" too. On the other extreme, LS430 has longer "duration" than ES330, for example, but don't tell me for one moment LS430 has less margin than ES330 because of it.
And the results of a strike would be......?
Might such a move tip GM into BK? THEN where would the UAW be?
To clear things up, I'm not saying that all of GM's woes should be laid on UAW's doorstep (or even a majority of their problems). I DO think however that the UAW leadership must face facts that the gravy train has derailed.
You had an interesting list of Union companies previously. I wonder what a list of companies who turned to BK after failed Union negotiations looks like?
Hopefully GM will consider facing us fans and interested public.
Rocky
Notice, Chevy and Pontiac were both brands carried over from the days when GM had some 50% of the market. It's not like GM managment is trying to create another Pontiac right now. What's your solution to the problem? Spend $40 billion paying off all the dealership obligations and closing on Pontiac overnight? Where would you borrow the money from? In case you did not know, GM was already in the process of buying some dealerships in preparation for steps taken in that direction.
During CY 2005, Toyota sold 432,000 Camrys in the US, most of those to retail sales (i.e. maximum margins). Compare that to Chevy, that sold 246,000 Impalas in the US, many of those discounted to fleets. Who do you think gets more bang for its promotional and marketing dollars?
Of course Chevy. I hardly saw any Impala ad whereas Camry ads are on TV during every program break.
Nobody wanted to merge with GM because of the union liability if they could afford a poison-pill provission. Honda was able to fend off the overtures.
That's the problem with union contracts. I have no beef with union ravishness when the going is good; they deserve their time basking in the sun, too. Inflexible labor becomes a big problem when things sour, and in every business it happens from time to time, like Apple, which has been to hell and back several times . . . if Apple had a union labor structure, it would long have been dead.
Well honestly I haven't heard of any that had negotiations go that bad. Oh wait I do know one. It was a company in Ohio or Indiana ?-Neways, many years back that was asking for an absurd raise that the company couldn't honestly afford. They ended up firing all the striking union employees, and replacing them. It was so absurd that even the union reps wouldn't support their efforts. Even I supported the company's position. :surprise: They wanted to make $35 bucks an hour, when they were already making twenty something already. :confuse: They had no public support from anyone and did get what they deserved, a nice pink slip and some parting gifts. They were being as greedy as the worst CEO.
See I do support "the company" when a union at the grass roots level gets way to greedy.
Rocky
If you pay me $5 million for one year, I will work the next 5 for free. :P
Sorry, but most will yawn, and go on buying Toyotas, Hondas, Nissans, Hyundais, etc.
It's way too late to expect public sympathy for the union, along with a resulting change in buying habits. That horse left the barn a LONG, LONG time ago...
As this point, there is really no need for each badge to have a complete lineup of cars. Various badges could be combined to the point that there should be few or no overlaps among them, while all fleet cars could get dumped via one badge so that the remaining badges could have their reputations either lifted or else dumped entirely.
I can't see why GM shouldn't reduce its nameplate lineup by about half, with an emphasis on creating a few bread-and-butter nameplates that can restore its reputation and be sold in high retail volumes. If Nissan could sell over 250,000 Altimas last year, with very few going to fleets, you would think that Chevy could develop a car that could accomplish the same thing without the deep discounting typical of the fleet business...but to do that, Chevy first needs to build a competitive car worth buying that ordinary people actually want...
Well I'm not sure how you would plan on buying a car from Toyota, Honda, Hyundai, since all of them buy parts from Delphi ?
Rocky
Rocky
That was not a joke. Jobs left Apple in 1985. He came back to Apple in 1996, when the company was on the verge of bankruptcy. He drew a salary of $1. I think it's still $1 today, although with the successful turn-around of the company, he gets compensation in other ways. That is the ultimate flexible labor :-) While I do not expect union workers' wages go down to $1/yr, some significant flexibility in keeping with the company performance should replaced the partying-like-the-heydays fixed wage structure . . . something along the lines of doubling the minimum wage as base pay, and significant bonus for when the company does well.
Your idea of paying workers good during the "heydays" and drastically cutting those wages back during the bad times, is hard for someone who might make $60,000 one year and $30,000 the next. It's not the same as making $10 million one year and making $5 million the next. :surprise:
See where I'm coming from pal ?
However I do agree with some of what you had to say atleast. :shades:
Rocky
Rocky
is hard for someone who might make $60,000 one year and $30,000 the next. It's not the same as making $10 million one year and making $5 million the next.
It's certianly different, and probably in a way exactly opposite to what you have in mind. If I may, I will venture to guess that you are still in the early years of your career with many promotions ahead of you; mark my words, with every promotion and pay increase, you will find new financial obligations to reach a new level of equilibrium. Also, tax liability will be much higher at higher income levels. I was saving over half my income when I was making $25k a year . . . nowadays, even as I spend less on myself and my family than on my tax bills, I can not even save 1/3 of my income. Cutting my income in half when I was making $25k would have little impact on my living style; cutting in half now would have immediate effect. Also it's relatively easy to find a part-time job or send wife/kids out to work to make up for the $30k reduction, whereas making up for a $5 million reduction would be very very hard, if not impossible.
Another point to keep in mind is that, according IRS data, $65k is the cut-off line for the top-20% of all tax filers. That's for household income when filing jointly. That's the social engineers' definition of "The (abominable) Rich" We are not exactly talking about the poor workers here.
Having lived 4 years in South Korea (and most likely will have to return for more), the South Korean's will pay a premium to buy a US-spec vehicle. For example, many US servicemen can sell their US vehicles to South Koreans for more than they paid for it.
(Of course, there aren't very many US servicemen that are authorized to bring their vehicles over to South Korea... and even less actually want to.)
So, if GM-Daewoo is sitting on a large overstock of US-spec Aveo's... They could sell them in South Korea as a 'premium' version of the Daewoo Kalos while charging more (simply because they are US-spec).
And the South Korean's will buy it, because of the 'mystique' of owning a US-spec car.
:shades:
:P
I have no desire to join the breakfast club, If you don't fit in, you might as well quit. I don't want to leave the confines of my union job where I can speak my voice and be respected. I also wouldn't like being a lower level supervisor where your "hair do" is more important than your character. :surprise:
So promotions for me are out of thee question if I keep this career. :shades:
brightness, you'd have to see it to believe it.
Rocky
Rocky
I was shocked to find out that Ford still makes the Taurus...
...only to read that the Taurus is only made for fleet sales, now.
In other words, not a big deal. Delphi was largely serving GM, the other automakers are not highly dependent upon Delphi in terms of dollar value. Whether or not some of those parts are mission critical and can't be obtained elsewhere, that I couldn't tell you, but I would have to doubt it unless I saw some proof to the contrary.
2004 Annual Report (see p. 8)
I'd like to see a legitimate source for the $40 billion. Getting rid of Olds didn't cost nearly that much, so show us where you got your figure.
Per GM's annual report, the company took after-tax accounting charges of $587 million to write off Oldsmobile. I'd say your $40 billion "estimate" is more than a weeeeeeee bit off the mark...
How a company could go from making the most popular car in the U.S. in the mid-80s (Cutlass) to extinction is such short order remains baffling.
Question: where does the other 11 billion come from?
But GM has no hope of rebounding without a proactive effort to cut out the dead weight. Corporate turnarounds are impossible unless companies can focus on creating core products that people will pay for, and GM has obviously been slipping. As Frederick II, the Prussian king wisely observed, "He who defends everything defends nothing." When the walls are coming down, you have to choose your priorities, and choose them wisely.
Cutting Olds was one move for which I'll applaud GM management. Let's just hope that they don't drop the ball, as they often do.