Question: where does the other 11 billion come from?
It's in the annual report that I linked. Seems that Delphi has a fairly large parts business with aftermarket parts makers, plus sells to companies such as Best Buy and Circuit City:
We have over 5,000 Independent Aftermarket customers including our Consumer Electronics customers such as Wal-Mart, Best Buy, and Circuit City. In addition, our Commercial Vehicle and New Markets customers include Caterpillar, Deere and Company, Freightliner, Volvo Truck, Hyundai, Tata Motors, Paccar, International Truck, Harley-Davidson, Lockheed Martin, General Electric, Siemens Medical, and Raytheon...In 2004, sales to our Independent Aftermarket, including Consumer Electronics that are sold through retail channels, Commercial Vehicle and New Markets customers were $2,264 million as compared to $1,688 million for 2003.
The one-time charge for Olds at the time of announcement alone was $2.5 billion, just counting production line shutdowns, personnel relocations and dealership buy-outs. Then there's the lost sales when would-be consumers turn to other brands, competitors . . .
I'd say your $40 billion "estimate" is more than a weeeeeeee bit off the mark...
Perhaps, but not as bad as counting up $16 billion on bad deals while completely ignoring $30+ billion in profits from good deals when discussing pros and cons of M&A. So far, management $14+ billion, to UAW 0; actually a couple billion to the negative for UAW.
The one-time charge for Olds at the time of announcement alone was $2.5 billion, just counting production line shutdowns, personnel relocations and dealership buy-outs.
I'm reading the annual reports to get my data. The accounting and the accompanying tnotes are clear.
I'd like to see your source (which amazingly just shrank by about 40% in a matter of minutes.)
I'm reading GM's financial statements, and neither your $2.5 billion nor the $4 billion figures are to be found in them. Unless you provide the source, I'll believe what GM filed with the SEC.
Is SEC filing the latest place you are choosing to hang your hat now? Keep in mind, we have already demolished every other bogus statisic and/or braindead alternative that you have put forth so far:
(1) counting $16 billion M&A loss while ignoring $30+ billino M&A gains; (2) counting inventory "duration" in one particular month, with no regard to product cycle or the niche nature of particular models; (3) comparing rental fleet price average to retail price average with no regard to the difference in product mix or consumer price elasticity; (4) insistence upon focusing effort towards domestic small cars when GM never made money on domestic small cars in the last three decades while making significant profit on large upscale vehicles; (5) insistence on GM follow Toyota's supposed example of organic growth and single-minded focus on carmaking, while in fact Toyota has been just as acquisition-happy, and has more subsidiaries and businesses more unrelated to carmaking than GM has; (6) insistence that GM should spend money on hybrids like Toyota did instead of upscaling plebian products like Envoy . . . while in fact Toyota has made far moe money from Lexus RX than from Highlander Hybrid.
Now, that has been the summary of our discussion so far . . . do you really want to carve the 7th notch with this SEC filing nonsense? If you insist, I will oblige:
Where in SEC filings subsequent to Oldsmobile closure do you see profit from closing Oldsmobile? The SEC filings did not take into account intangible profit or losses. If you want to rely on SEC filings as the benchmark, closing down any division as you suggest would result in a dead loss!
If on the other hand you want to account for subsequent intangible gains from closing Olds, such as savings from not having to market another brand like you said, then we have to also account for intangible losses, such as lost customer goodwills and lost potential sales. Olds was selling between 100k-200k units before it was closed down, let's take 150k; and as we know GM vehicle sale average is over $18k . . . let's be conservative, take $15k average for Olds. That's $2.25 Billion lost revenues each year; what's the current cash value discounting into the indefinite future for that? Even at 7.5%, that's $30 Billion! Even assuming 2/3 of a car's revenue goes into variable material cost and division/model advertising, only leaving 1/3 amortizing fixed labor and capital cost, that's still $10 billion! in lost profit and/or revenue to help amortize fixed labor and capital cost! That's in current cash value equivalent terms alone! Not counting any cash outlays for buying out dealership liabilities or production/personnel relocation cost.
Now you want to close down Pontiac with several times more unit sales??
That's a pretty lengthy and roundabout way of admitting that you have nothing to back up your various figures of $40 billion, 4 billion and 2.5 billion.
No hurry, I'm sure that you'll post them tomorrow...right?
Also, while we are having fun with the numbers, why don't we take a look at how much UAW is costing GM:
(1) What Rocky calls a "pimple sized" problem, the Job Banks costs GM over $2 billion in four years, or over $500 million each year. It's been in existence since 1984, so that's over $10 billion in 22 years! What a pie-sized pimple that is!
(2) Well, it is indeed a pimple compared to the rest of UAW cost. The semi-skilled UAW workers can fetch $25-30k at the most on the open labor market if not for GM or other domestic carmaking union contracts . . . so GM is overpaying to the tune of at least $30k per head! Out of 650k UAW workers, how many are at GM and Delphi? 200k? That's $6 billion a year in excessive wage alone! At the least.
(3) Do we even need to count benefits, free healthcare and retirement??
No wonder GM burned through close to $15-20 billion net profits from M&A activities in a few short years.
In other words, you are admitting defeat on all 7 points. Thank you for playing.
Obviously the $4 billion and $2.5 billion were based on different lengths of projection on lost sales and lost customer goodwills, the intagibles you have to consider if you want to count "savings" from closing down the division.
No, I'm basing my response on your inability to source your "data".
It's silly to count Old's future lack of revenues as if it was a "loss." If you took Finance 101, you should know that GM benefits from its shutdown, because the division's expenses exceeded its revenues. And the taxpayer helped to subsidize the charge (which is largely an accounting entry, rather than a bona fide loss) by eating the amount of the loss equal to its tax bracket, so the company came out even further ahead.
You remind me of the old joke about GM management -- "What we lose on margins, we'll make up with volume"! I hate to tell you, but selling more units at a loss won't ever lead to a profit.
Please go back and reread my previous before letting loose your urge to type.
The expenses that comes from UAW contracts do not go away with Olds just because the division is no longer there. Look through my math, I already allocated 2/3 of Olds future revenue towards variable cost associated with material and advertising. That's incredible generous. I'm only leaving 1/3 of revenue for profit or amortizing fixed labor cost. UAW retiree health benefit alone account for $2000 per vehicle . . . now there are less vehicle unit sales to help amortize that cost.
anybody know what happend to the two scroll bars where you could select a vehicle make and model on the "inside line" home page? On my computer, they've been gone for a couple of weeks now. thanks.
No I meant the bars that used to be on the home-page, they let you jump to the car reviews/road tests of that vehicle immediatley, i guess now we have to search manually through the main tabs.
Jobbs. He's an interesting topic. Went from rags to riches, back to rags, (not really) but back to riches, to the Billionaires club
Steve Jobs did not become a Billionaire at Apple. It was when he invested heavily into Pixar just before they made the movie Toy Story. Now you know the rest of the story. He went back to bail out his old company Apple. They could not afford to pay him more than a buck a year. I imagine he is well compensated for the iPod.
(1) What Rocky calls a "pimple sized" problem, the Job Banks costs GM over $2 billion in four years, or over $500 million each year. It's been in existence since 1984, so that's over $10 billion in 22 years! What a pie-sized pimple that is!
The cost's are high if you went off of the current data of today. Back in 1984' the cost of the job banks program when pay and health insurance was significantly cheaper the $500 million figure you are using is false. BTW- There were also a significantly lower amount of people on the program in the 80's since GM still had a large portion of the marketshare.
It's easy to look at things from a "one point of view" and you don't take in consideration the cost savings of expierence GM didn't lose to have to hire and retrain workers on the program that would later find work by location. My father was on the program for a short period of time, and when GM picked up full steam, he gladly went back to work.
(2) Well, it is indeed a pimple compared to the rest of UAW cost. The semi-skilled UAW workers can fetch $25-30k at the most on the open labor market if not for GM or other domestic carmaking union contracts . . . so GM is overpaying to the tune of at least $30k per head! Out of 650k UAW workers, how many are at GM and Delphi? 200k? That's $6 billion a year in excessive wage alone! At the least.
Semi-skilled my butt. I'd love for you to go do my aunt's job for a month, they have mandatory overtime which in many cases will keep you on the assembly line for 12 plus hours. semi-skilled includes setting screw machines to one-thousandth of a millimeter Semi-skilled I'm sure includes the operators that tear a machine a part and fix it. This isn't the Hoyota plant's where the workers are shut down waiting for a machine repairmen to plug it in. :P
(3) Do we even need to count benefits, free healthcare and retirement??
Last time I checked they no longer get free healthcare. Benefits like retirement. Well one would assume working for the 2nd biggest company in the world one would get a decent retirement and health benefits brightness. :surprise:
No wonder GM burned through close to $15-20 billion net profits from M&A activities in a few short years.
You would make a great GM executive. Blame the low man for years of mismanagement. Blame low man for not building the finest cars in each segment. If GM is so great at building cars without a union, explain to me why their cars in foreign country are not any better than the domestic build here? i.e. Holden Manaro/GTO, Opels, etc.
What excuse do you have for me now ? I'm paitently waiting ?
I would ask him why they decided to kill off my dream car The Buick Velite Roadster. Is their any plans to revive that car at a later date ?
When can we expect to see RWD Buick's ?
When is the earliest we could see the Buick LaCrosse Super ? Will it be RWD or FWD ?
Stuff like that pal. :shades:
Rocky
P.S.
I also would be very interested to see what ya'll would ask him. I discovered Edmunds the night Lexus GM Bob Carter joined this site for a live chat. I was so impressed that I became addicted to this site and that's how I discovered ya'll.
Edmunds has been like stress relaxer in a tough year of my life.
I've ran this through my mind several times and came up with a few questions.
There is over 13 million americans that belong to unions, and a very healthy portion of them the "buy american" or "buy union" is important to them. I am among those 13 million folks. There is also a huge crowd of americans that buy big 3 vehicles because they feel it's patriotic doing so. Granted the Asians have stolen alot of the big 3's thunder by manufactoring, buying amaerican parts from U.S. suppliers.
I can't imagine the catasrophic affects on the Big 3 once they lose this "fan base" if they continue to outsource to foreign country's. Many Big 3 vehicles are sold because of a relative working at one of the autoplants. The Japanese Transplants are intellegent using this tatic for their own benefit which really isn't braught up.
What I'm trying to get at is do many of you think GM, Ford, Chrysler, will be as successful without the UAW members, buy american crowd, lower, middle, upper, management that continues to promote their products which in alot of cases aren't as good as the rivals, but neverless has a positive affect on friends, family members, to still buy a domestic car ????
1. Are you telling me that anyone went into the Job Banks never left??
2. Semi-skilled my butt. I'd love for you to go do my aunt's job for a month, they have mandatory overtime which in many cases will keep you on the assembly line for 12 plus hours.
What a laugh. A long day for me is 17-18 hours, even when I was only making $40-50k a year. Not everyone has a job paid by the taxpayer to surf the internet all day, you know? I'm on unpaid vacation, what's your excuse to be on the internet during work hours?
This isn't the Hoyota plant's where the workers are shut down waiting for a machine repairmen to plug it in.
And guess what? The Hoyota plant approach would have produced better cars at lower cost. Guess why GM did not take that approach?? Job Banks and union job security!
The bottom line is, if the union workers are so skilled, why are they so afraid of leaving current jobs and finding new ones??
Last time I checked they no longer get free healthcare.
What a $7 deductible?? What a joke. That is free healthcare; $7 doesn't even pay for the receptionist, much less the doctor or rent on the doctor's office. And how long has that been in place?
3. Well one would assume working for the 2nd biggest company in the world one would get a decent retirement and health benefits brightness.
Well then, why aren't you making the argument that CEO of the 2nd biggest company in the world should get the 2nd highest pay package out there?? It's ludicrous. Like I said, I don't give a flying you-know-what how much they pay anyone when the company is doing well. When times are bad, everything should be on the table. Retirement should never be the responsibility of companies, as most of them do not last longer than a person's life. Companies should pay workers enough in good days for workers to save for themselves for rainy days. That also make the workers much much more mobile and able to negotiate the best pay for themselves. Of course, the slackers and union bosses are against that.
If GM is so great at building cars without a union, explain to me why their cars in foreign country are not any better than the domestic build here? i.e. Holden Manaro/GTO, Opels, etc.
GTO is actually a great car. For once, Pontiac dealers were able to charge more than MSRP when the car was introduced. It has power, refinement and very nice interior. The ultimate problem? Price is too high for something wearing the Pontiac brand, which is somewhat of a damaged goods after years of pathetic cars by "skilled" labors opposing automation. It goes to show, building a great car alone is no longer sufficient at this stage for GM.
The sales charts alone should give you the answer. The union members can make cars for each other if they want . . . just not enough of an economy of scale to count for much. The analogous debate was hashed out 80 years ago when Henry Ford introduced mass production. Many "craftsmen" were outraged that unskilled/semi-skilled workers could now make cars. They and their family initially only bought non-massed produced brands because they did not want "souless" cars made by "zombies" . . . the rest as they say is history.
"What I'm trying to get at is do many of you think GM, Ford, Chrysler, will be as successful without the UAW members, buy american crowd, lower, middle, upper, management that continues to promote their products which in alot of cases aren't as good as the rivals...."
Interesting take, Rock.
A couple of points: first, while there are 13 million Americans that belong to Unions, how many Americans does that leave who do NOT belong to Unions? And how many of those believe (rightly or wrongly) that the wages/benefits the Unions "extort" out of the manufacturer's show up to the consumer as either higher prices and/or lower material quality compared to products from non-union manufacturer's?
Second Point: How long will GM, Ford, Chrysler survive by RELYING on sales to 'patriotic' Americans and/or UAW members RATHER THAN actually building the vehicles Americans WANT which are BETTER than the imports at a competitive price? In other words, stop relying on promotion, UAW sales, 'Buy American', etc. and simply concentrate on product?
Frankly, if management must 'choose' between offending Union members, family, and hanger-ons OR taking the steps necessary to improve their product without increasing cost, I think it's fairly clear what the best business decision must be.
GTO is actually a great car. For once, Pontiac dealers were able to charge more than MSRP when the car was introduced. It has power, refinement and very nice interior. The ultimate problem? Price is too high for something wearing the Pontiac brand, which is somewhat of a damaged goods after years of pathetic cars by "skilled" labors opposing automation. It goes to show, building a great car alone is no longer sufficient at this stage for GM.
Your ability to misstate history for the sake of the union bashing is quite something. The car has never met sales expectations, and the 18,000 units of capacity allocated to building it has never been needed. Back in 2004, Forbes offered a more insightful analysis:
_____________________________ The problem is that GTO, which in its 1960s-70s heyday was about sexy styling and road-stomping muscle, is lagging way behind targeted sales, with more than a 100-day supply on hand at most dealerships. GM will be lucky to shift 12,000 units of the $31,795 GTO when it wanted to move at least 18,000. So why aren't the cars moving off the lots?
A lot of reasons, but the first one is likely that unlike in the bad old days when the first GTOs (nicknamed "the Goat") burned rubber on American streets, people have many more choices than they used to.
Still, we think the second major flaw with this car is that it's priced all wrong. Instead of keeping the sticker below $25,000, to compete with Ford Motor's Mustang, the last real muscle car on the road, at nearly $32,000 GM has the GTO competing with BMW's 3 series, Nissan Motor's 350Z, and Mazda's RX-8. In that echelon, the GTO stands little chance. _____________________________
Exactly right. Yet again, GM management makes another mistake -- the car was wrongly priced from the start. The GTO legacy/brand is that of a muscle car, i.e. a powerful motor and strong straight-line performance, but on humble, affordable underpinnings. So why use/ recycle a nameplate associated with affordable performance for a car with an MSRP north of $30k?
Pontiac has no brand history of being a premium-priced car -- that GM slot had been traditionally left to Cadillac and Buick. So why would anyone in GM management have ever expected a Pontiac -- any Pontiac -- to sell in the same price range as a BMW 3-series or an Infiniti G35, while Mustang GT's cost thousands less?
The car was priced and positioned to fail from the onset. And we all know who set the prices. (Well, most of us do, anyway.)
While I don't have a problem with unions, I do have a major problem when they try to dictate things that they have no business to do so. Now if they have a valid safety concern, I would agree with them, but to block a project just because it would limit the amount of labor required is ridiculous.
While I know it's not feasible, it's this kind of crap that would make me think about building my headquarters somewhere else.
A couple of points: first, while there are 13 million Americans that belong to Unions, how many Americans does that leave who do NOT belong to Unions? And how many of those believe (rightly or wrongly) that the wages/benefits the Unions "extort" out of the manufacturer's show up to the consumer as either higher prices and/or lower material quality compared to products from non-union manufacturer's?
Second Point: How long will GM, Ford, Chrysler survive by RELYING on sales to 'patriotic' Americans and/or UAW members RATHER THAN actually building the vehicles Americans WANT which are BETTER than the imports at a competitive price? In other words, stop relying on promotion, UAW sales, 'Buy American', etc. and simply concentrate on product?
Frankly, if management must 'choose' between offending Union members, family, and hanger-ons OR taking the steps necessary to improve their product without increasing cost, I think it's fairly clear what the best business decision must be.
I agree with you on all counts. My only addendum is that I doubt that management will take the steps necessary to improve the product or to regain hearts and minds. The current strategy seems to be one centered around further costcutting via outsourcing production, in the hopes that building mediocre products abroad will yield more profits than building them in the US and Canada. I'm still not seeing any serious steps to rationalize the product lines, eliminate unnecessary nameplates or improve quality with consistency across the board.
There are occasional signs of improvement, but they seem haphazard, unfocused and not revolutionary enough to impress consumers quickly enough to make much of a difference. There seems to be a lack of urgency from both the union and management, and I'm not sure that they'll ever find it.
"My only addendum is that I doubt that management will take the steps necessary to improve the product or to regain hearts and minds."
That's the problem.
Given the current climate between labor/management (and without pointing the finger at who's to blame because frankly, who's to blame is besides the point), I don't see HOW they go about improving the product.
To be quite honest, I don't think I'm any smarter than the current group at the head of GM (which probably puts me a little lower on the totem pole than some of the contributors in here) so I don't know what steps should be taken.
I do think however that the current climate between labor/management elimates even the POSSIBILITY of any real changes in operations to the point where GM CAN compete head-to-head with Toyota/Honda with their products priced similarly. So, how does one resolve that issue? Do we honestly expect them to kiss and make up (and STAY made up) at this point? I don't.
1. Are you telling me that anyone went into the Job Banks never left??
yeah I'm telling several that were in the Jobs bank have left. My father was their temporary because they built more parts than the number of vehicles being made, thus when he was low on the totem pole he got sent home for awhile. I believe the year was 1987, when this happened.
What a laugh. A long day for me is 17-18 hours, even when I was only making $40-50k a year. Not everyone has a job paid by the taxpayer to surf the internet all day, you know? I'm on unpaid vacation, what's your excuse to be on the internet during work hours?
Great assumption, but it's wrong. I don't have access to a computer at work brightness. I work 4 days @ 13+ hours per day and I get 4 days of rest. I don't get the luxury of 8 hours a day Monday through Friday like many americans. I work many weekends and holidays and required overtime.
BTW- Sice your keeping track of me when I'm on the net it's (A) I just got off of work (B) Right before I go to work or (C) I am off on my 4 days of rest. (D)When I'm sick, like I am now with one of the worst sinus and lung colds one could imagine having. I've been battling this head and lung cold for now going on 6 days (which ruined all my days off) and the antibiotics haven't helped a bit. I went and saw the Doc again today to get on something stronger. I however am going to go to work against my doctors wishes tommorow. Working in all weather conditions like I do has severly iritated my sinuses :sick:
And guess what? The Hoyota plant approach would have produced better cars at lower cost. Guess why GM did not take that approach?? Job Banks and union job security!
The bottom line is, if the union workers are so skilled, why are they so afraid of leaving current jobs and finding new ones??
Well because most of their skills are uniquely tied to the machinery that they run. Sure my father could go make similar money per hour in a screw machine shop, etc., but then he would give up all his vacation time, pension accurals, and go work somewhere else with a Vegas retirement plan called a 401K and start over. I never said GM workers are underpaid, but he works his butt off and has valuable years of expierence that can't be taught over night. Also thanks to this current administration and all its guestworker programs which undoubtly are lowering standards of living in this country, sure find a similar replacement job is tougher than in the past.
BTW-If his knowledge wasn't so valuable and is so easy to replace, why did his supervision ask him and other UAW members to be hired by the company as consultants to train the new workforce. Remember it's people like you brightness, that say those factory rat jobs are all semi-skilled labor. :confuse:
What a $7 deductible?? What a joke. That is free healthcare; $7 doesn't even pay for the receptionist, much less the doctor or rent on the doctor's office. And how long has that been in place?
Actually was only $2 bucks :P for a co-pay when I was on it. I will have to ask pops how much his insurance is costing him a month now, since the UAW gave in and allowed the company to start taking a portion out of their checks for medical benefits.
Well then, why aren't you making the argument that CEO of the 2nd biggest company in the world should get the 2nd highest pay package out there?? It's ludicrous. Like I said, I don't give a flying you-know-what how much they pay anyone when the company is doing well. When times are bad, everything should be on the table. Retirement should never be the responsibility of companies, as most of them do not last longer than a person's life. Companies should pay workers enough in good days for workers to save for themselves for rainy days. That also make the workers much much more mobile and able to negotiate the best pay for themselves. Of course, the slackers and union bosses are against that.
I agree with you 100%. Steve Miller said it costs the company $65 dollars an hour for wages, benefits, retirement. (Those are his figures) Dad said pay him $50 bucks an hour and he will buy his own insurance, fund his own retirement, etc. He said the company can pocket the other $15 bucks an hour, and would save on overhead that is currently responsible to handle the paperwork of those benefits !
BTW- Sure the CEO of the second biggest company in the world should be heavy compensated. However when their decisions fail, they should take ownership of those failed decisions and take a real paycut. Making $10 Million during one good year by cooking the books, and then latter confess about the figures in the books might have accounting errors is no way to conduct buisness. I understand brightness, you want everyone to share in the sacrifice. It's not my father who isn't doing his best job for the company. It people like J.T. Battenburg III, Alan Dawes, Rick Wagoner who have failed the company and have or will get to ride the "Golden Parachute" if they can't return the company to profitability.
However I would like to think we somewhat agree on this topic.
GTO is actually a great car. For once, Pontiac dealers were able to charge more than MSRP when the car was introduced. It has power, refinement and very nice interior. The ultimate problem? Price is too high for something wearing the Pontiac brand, which is somewhat of a damaged goods after years of pathetic cars by "skilled" labors opposing automation. It goes to show, building a great car alone is no longer sufficient at this stage for GM.
You should be a ballett dancer the way you tip-toed around that one :P No pun intended pal
The GTO isn't a great car brightness !!!! WOW !!!! You blaming this one also on the so called semi-skilled union members just goes to show everyone how you have only one point of view, and that is pointing all the blame on the "evil-union". brightness, you continue to amaze me that's for sure. I do hope in the future you would ask before you would assume pal.
I'm glad you like that one. I think both you and socala, hit the nail on the head. I do think GM to be successful, just like Ford and Chrysler, they need not to rely on the encouragements of the workforce, but let the product do all the talking.
Perhaps 2007' with all the new product coming out of GM will help. Most of the new product out of GM, seems like it can talk itself into a few homes.
I will however continue to do my best to promote the good product from GM. i.e. 2007 Enclave, CTS, etc.
Let me get this straight, when I said GTO did not sell well because it's priced too high, you call that "misstate history," then you went on to say GTO failed because the price was too high yourself??
Since when is Forbes the authority on cars? Comparing GTO to the $25k Mustang goes to show that neither you nor the Forbes writer knows anything about the cars. Since when was there a 400hp regular Ford Mustang? It's the SVT Cobra territory, and guess what? SVT Cobra cost $31k, too! The problem is of course, that Pontiac GTO turns out not even to have the brand cachet of either Mustang/Cobra or Chevy Corvette, which incidentaly is a $50-60k.
The problem is of course, that Pontiac GTO turns out not even to have the brand cachet of either Mustang/Cobra or Chevy Corvette, which incidentaly is a $50-60k.
No it does have the brand cachet. The problem is you can't take a Holden Monaro, slap a Grand Prix front end on it and call it a GTO. :surprise: This did huge damage to the respect of the company. I personally thought the GTO was a nice car, but it should of been called a Pontiac Monaro or something else. Maybe G8 coupe ? I dunno. You can't disrespect a lengend and hope the loyal GM fans will buy a copy.
BTW- It being built in Australia didn't help matters. :shades:
Since when is Forbes the authority on cars? Comparing GTO to the $25k Mustang goes to show that neither you nor the Forbes writer knows anything about the cars.
For one, I have a good deal more faith in the auto columnists at Forbes, one of the US' best business magazines, than I do in an anonymous poster on the internet who misstates other peoples' comments and exhibits one-track tendencies.
For another, you miss the point -- the final judge of the product is not either myself, you or the Forbes columnist, but the buying public. It is the public that does not view a GTO as being worth $30k, and that is the only group whose opinion counts.
UAW labor is used to build Mustangs, 300's and other successful products that come out of the Big 2.5 automakers. I doubt you'd find more than a couple of people who would have bought a Mustang but refused to do so because it was built by a union laborer -- the average consumer doesn't care, either way. My last cars were built by union labor (albeit in Germany and Japan), and that aspect of their employment never once crossed my mind when buying the car. The average consumer couldn't care less, just so long as they like the product, can accept its price point, and that the vehicle holds up to their satisfaction.
The UAW did not set the price point for the GTO nor did it cannibalize the Pontiac brand, management did that. And management obviously screwed that up big time, because they didn't come close to meeting their own projections. Pontiac was never a premium brand, and Bob Lutz was a fool to believe that it could be transformed into one while all those Pontiac fleet specials clog up the aisles at Avis and National.
Same as with the Saab 9-7X. Already a weak brand, that SUV will probably never recoup the amount spent to develop it, let alone turn a profit. Why does Saab need an SUV when GM is already swimming in lookalike SUV's that cost less?
And I'll bet it won't be long until this latest anti-fleet rhetoric coming out of GM turns out to have been yet another failed objective. This is a management team that seems bound and determined to miss targets, even low ones.
Our wonderful board is all happy. Go to The Big 3 and the domestic issues board. I'm sure they are lighting one-hundred dollar bills to light the Cuban Cigars after the sale of G-MAC :surprise:
would ask him why they decided to kill off my dream car The Buick Velite Roadster. Is their any plans to revive that car at a later date ? Not up to the Buick guys. The divisions can ask and work on concept cars but it is up to GM product planning and the board what makes it to production (run by Lutz). Buick would have loved it but no money since other programs needed it more. Maybe in the future.
When can we expect to see RWD Buick's ? The future. (Well actually there already is the Rainier )
When is the earliest we could see the Buick LaCrosse Super ? As I said before and read in the press, next year. Will it be RWD or FWD ? I do not understand this question, the LaCrosse is FWD and I do not know how it could be made into a RWD.
My point was that the Divisional GM's are in charge of Marketing and Advertising. The divisions are very involved in product planning but decisions are made at a different level with all of GM's money meted out for the betterment of all GM.
"1. Are you telling me that anyone went into the Job Banks never left??"
yeah I'm telling several that were in the Jobs bank have left.
Doesn't that mean the Jobs Bank is covering less people than it once did?? Contrary to your earlier claim?
Well because most of their skills are uniquely tied to the machinery that they run. Sure my father could go make similar money per hour in a screw machine shop, etc., but then he would give up all his vacation time, pension accurals, and go work somewhere else with a Vegas retirement plan called a 401K and start over.
In other words, the union worker would not be paid as much (benefits are just another way of saying wage, only with a dose of dishonesty); the union worker is being overpaid like I said. Defined contribution plan is what almost everyone has nowadays. If you want a defined benefit plan, you can buy your own annuity. Guess what? Life is a gamble; if you want someone else to assume all the risk for you, as in an annuity or a define benefit plan, you've to pay premiums. All those GM retirement benefit plans crafted by the union decades ago are nothing more than pyramid schemes that can never deliver in the long run.
Glad we agree on something. You know why GM had to pay this convoluted long-term benefit package instead of outright high pay in its haydays, right? If the money went directly to the workers, what would the union bosses get to hold the troops together?? So it had to be a plan that hog-tie the workers for a life-time . . . because workers are nothing more than pawns for the union bosses.
Rocky, you keep railing about executives not making anything right yet have "golden parachute." Guess what, the executives at least made GM $15-20 billion in M&A activities alone while the union is flusing $5-10 billion down the toilet for GM every year. Your talks about "golden parachute" is getting tiresome; considering you thought it would be extra-ordinary hardship to cut a $60k income down to $30k, why shouldn't someone else negotiate pre-determined termination pay? especially considering that executives often get blamed for things that are way out of their control or despite their great effort. Take for example, on this board, union supporters complete lambasting Wagoner despite him making GM hundreds of millions if not billions of dollars, just because he is the CEO, while your guys proposing pie-in-the-sky and braindead alternatives that would have made the situation far worse.
Let's have some perspectives here, how much does $20 million "golden parachutes" for three cost in total? $60 million. Or roughly 1/10 of your "pimple-sized" Jobs Bank problem. How much does overpaying 300,000 workers to the tune of $20k each cost? $6,000 million!
What's really funny is how union supporters keep insisting how valuable specific union workers' skill set is. Isn't missing the forest for a fig leaf?? If all the union workers' skills can command a high pay on the market place, what does anyone need the union for?
The GTO isn't a great car brightness
Go check one out for yourself. It's really a very good car. The problem with it is the Pontiac brand and the $31k price vs the volume expected to sell. When it just came out, dealers had a great time charging more than MSRP. Isn't selling close to MSRP the one thing GM is trying to do??
The fans that really mattered (ie. the ones with sufficient funds to buy one) paid more than MSRP at the beginning. There just ain't enough Pontiac GTO fans able or willing to write a check for $31k. As simple as that.
For one, Forbes is general-purpose magazine, the type that make mistakes on specific issues all the time. I have been mis-quoted and quoted out of context by clueless writers at general-purpose publications several times. Comparing the new GTO to non-SVT Mustang is simple lunacy. Heck, the piece did not even make a distinction between V8 Mustang and regular V6; the most popular Mustangs are not even priced at $25k like the article said, but at $15-18k with a V6. I hope you know better on that point than the Forbes writer does.
the final judge of the product is not either myself, you or the Forbes columnist, but the buying public.
The buying public paid over MSRP for GTO when it came out. What more do you want? The market for such a special vehicle simply turned out to be pretty small . . . a situation remniscent of the IS300.
The average consumer couldn't care less, just so long as they like the product, can accept its price point, and that the vehicle holds up to their satisfaction.
I agree with that, much to the chagrin of union supporters.
GTO price was heavily influenced by the cost of that 400hp V8 and shipping that a car from Australia; the other car that uses this engine costs $50-60k (corvette). I'm not sure if I'm getting your point, you said in earlier posts that GM management should focus on making good cars; Lutz did exactly that with GTO and Solstice at Pontiac; now you pan him for doing exactly what you said they should do. I was the one added the point about at price points that people want . . . which the GTO case proves in spades.
Why does Saab need an SUV when GM is already swimming in lookalike SUV's that cost less?
Isn't the objective here raising average selling price? Since you said only a couple paragraphs ago that it's a folly to try premium price with a brand with fleet specials clogging up the aisles (like Chevy and Pontiac) . . .
How many sides of a mouth are you talking out of simultaneously anyway?
-Forbes is a more credible source than are you. Given a choice, I'll take it as a source, rather than your "estimates" (which are really guesses and wishful thinking, not credible calculations)
-This article came out not long after the car hit the market, and inventories then were at 100 days. Since then, sales have consistently failed to hit annual targets. If you have an anecdote about a few people overpaying, that doesn't negate that average sales have been below projections, and the car was not a success.
Isn't the objective here raising average selling price?
So far, the Saab is overstocked and requires incentives to move. Its sales figures indicate that it will likely generate a loss. I thought that management was supposed to create profits and build brands, not engineer losses and tarnish brands, but perhaps I was mistaken...
Regardless Forbe's veracity in general, I would not read it as a source for car information, just as I would not consult SEC filings for intangible savings and losses :-) You do not have to make a judgement on Forbes in general, by that article itself, you'd notice that the factual errors: (1) Mustangs are not $24k cars; the most popular Mustangs are the V6 coupe priced between $16-18k; (2) Comparing regular $24K Mustang to $31k GTO that makes 400hp is complete nonsense. There is a whole specialized Mustang variant, called SVT Cobra at $31k just for that market segment; it had 390hp or thereabouts.
Perhaps GM should have made a 320hp Firebird first at around $25k, then follow that up with the 400hp GTO, but that's a different subject altogether.
So far, the Saab is overstocked and requires incentives to move.
Another indication that you know little of what you are talking about. Discounting from outrageous MSRP is Saab tradition ;-) Saabs often carry BMW level MSRP, with discounting down to about Acura price level for most retail sales. That's how the brand works.
What would you do? Say "no" to: (1) good cars at higher price levels in an effort to build up brands; (2) upscaling plebian models, following the example of Lexus and Acura;
and say "yes" to: (1) hybrids that nobody is making a profit on; (2) more effort on domestic small cars that have not turned a profit in three decades.
Sure, that your alternative makes a whole lot of sense. If you were in charge, you'd be closing a division every year, by necessity ;-)
When the GTO was introduced, a few Pontiac dealers TRIED to jack up the price, and promptly met with strong buyer resistance.
The car was a high-performance Edsel, plain and simple. GM set a modest sales goal of 18,000 vehicles, couldn't sell that many, so it cut the goal again, and STILL couldn't meet the adjusted target.
As for making Subarus and Trailblazers into Saabs - yes, that has garnered a few sales in the short run, but over the long run it has blurred what little image Saab has left.
Reminds of a story about the late, unlamented Cadillac Cimmaron in the 1980s. When someone suggested cutting the Cimmaron, the Cadillac general manager objected, saying it was "worth 20,000 cars."
Those extra 20,000 cars DID pad Cadillac's sales totals in the mid-1980s, but each Cimmaron sold screamed loud and clear that a Cadillac was nothing more than a gussied-up Chevrolet (and not a very good Chevrolet, at that).
Which helped Cadillac hand the luxury market to Mercedes-Benz and BMW (and later Lexus) on a silver platter. GM is now spending BILLIONS on Cadillac in the hope that it regains some of its former glory. While Cadillac has improved dramatically, it still isn't quite in the top tier of luxury marques.
That is the problem with GM management - too much reliance on short-term thinking, instead of long-term planning. Rebadged Subarus and Trailblazers may boost Saab sales in the short run, but where will they leave the brand 10 years from now?
I feel as bad as I did yesterday. :sick: The ZMAX antibiotic helped but it's not all that it's cracked up to be. It simpily didn't give me the "miracle" performance I was expecting. . So I'm trapped indoors for another afternoon and the wife says our 2 yr. old son is getting the early symptoms. I'm going on day 7 or 8 of having this sinus crap.
I hope none of ya'll get it. It has seriously kicked my butt. One of my supervisors said, "Rocky you sound horrible....You stay at home."
wow, your supervisor actually told you that you sound horrible and to stay home. Most of the supervisors I've had could care less if you're sick because they still want the required work done.
One manager I had pleaded with me to come in when I had a bad case of stomach flu. He told me to just duck into the bathroom when I needed to but to just come in! Oh, those supermarket jobs, where might we all be without them!
No, that would make me feel a tad better, even though you're sick, if my manager told me I best stay home. Have you typed up about 150 posts the past few days?
BTW-it's time for the UAW to take some reality pills and ease totally up...these aren't normally competitive times in the automotive industry. Give up some moolah happily or get prepared for your next industry to work in. Soon you won't recognize the GM you know and love today.
When the GTO was introduced, a few Pontiac dealers TRIED to jack up the price, and promptly met with strong buyer resistance.
That was a joke. The car was as hot as a snowball.
No. At least here in SC, the dealers jacked up the prices, and the buyers revolted. I know of two guys that were going to buy GTOs at MSRP (had to have one), saw MSRP + 5K, and ended up buying and modifying used Z28s. Both vow never again to buy a new GM product.
Around here, at least, the dealers killed the GTO.
wow, your supervisor actually told you that you sound horrible and to stay home. Most of the supervisors I've had could care less if you're sick because they still want the required work done.
They would rather me just infect my family, instead of 4,000 people I work with. I taking off of work does cut into the big wigs year end bonus. It's already been baught and paid for and the left overs they get.
BTW- If I had a indoor desk job, I might of went in. I also don't have the convience of reaching over and grabbing a kleenex, washing my hands, etc. to minimize the spread of germs. The nurse at my doctors office, lives next door and she looked at me last night and told me she wanted me to stay home and rest. I went to bed last night at 8:00 p.m. and slept until 8:20 a.m. :sick:
One manager I had pleaded with me to come in when I had a bad case of stomach flu. He told me to just duck into the bathroom when I needed to but to just come in! Oh, those supermarket jobs, where might we all be without them!
He's a sicko. :surprise:
No, that would make me feel a tad better, even though you're sick, if my manager told me I best stay home. Have you typed up about 150 posts the past few days?
I have typed up alot of posts. I have a box of Kleenex's nearby, and have swallowed and sprayed more medicine into my body in the last week than a Lab Rat. I am ready to go back to work. The wife and kids are getting on my nerves. :surprise:
BTW-it's time for the UAW to take some reality pills and ease totally up...these aren't normally competitive times in the automotive industry. Give up some moolah happily or get prepared for your next industry to work in. Soon you won't recognize the GM you know and love today.
Eh?
No it's time for GM management to swallow some reality pills. Cost cutting is only a temporary fix without good product. The UAW doesn't engineer, sign-off on products such as the Aztek, Torrent, 9-7x, Cobalt, Impala, etc. If GM had dominant vehicles that set the standard instead followed the leaders 4 steps behind, the UAW making a decent salary would be moot. However I have defended GM management somewhat saying they don't have a totally fair playing field with the competition which indeed makes the challenge tougher. However that is no excuse to allow products such as the Cadillac Catera to see production.
It's GM dealerships that also hurt the image of GM cars. Some of them are so crooked and greedy turboshadow, they keep potential customers out of the showrooms. I won't even talk about the service departments. Oh My GAWD :mad: I've had dealers tell me my fuel filter needed to be changed, when it was changed 2 weeks prior. :mad:
...that they worked 17-18 hrs a day when they were making "only $40K-$50K." Shoot, I know a lot of poor unfortunate low-wage workers who work that much and don't even break $25K. This is where we're all headed.
...right after college I worked two full-time jobs until I could break into my field. One job paid $5.50 an hour and the other a generous $6.37 an hour. I was working 80+ hours a week and tired all the time. I remember friends keeping me home from work for they were worried about me driving in that exhausted condition. Fortunately, I had no debt and my cost of living was very low as I shared a place with two other guys that rented for $365 a month. When I finally got a decent-paying job, it felt awesome getting off at 5 PM and not having to go anywhere else. I don't want to go back to where I was years before. It was bad as a young twenty-something. It would probably kill me today.
Comments
It's in the annual report that I linked. Seems that Delphi has a fairly large parts business with aftermarket parts makers, plus sells to companies such as Best Buy and Circuit City:
We have over 5,000 Independent Aftermarket customers including our Consumer Electronics customers such as Wal-Mart, Best Buy, and Circuit City. In addition, our Commercial Vehicle and New Markets customers include Caterpillar, Deere and Company, Freightliner, Volvo Truck, Hyundai, Tata Motors, Paccar, International Truck, Harley-Davidson, Lockheed Martin, General Electric, Siemens Medical, and Raytheon...In 2004, sales to our Independent Aftermarket, including Consumer Electronics that are sold through retail channels, Commercial Vehicle and New Markets customers were $2,264 million as compared to $1,688 million for 2003.
I'd say your $40 billion "estimate" is more than a weeeeeeee bit off the mark...
Perhaps, but not as bad as counting up $16 billion on bad deals while completely ignoring $30+ billion in profits from good deals when discussing pros and cons of M&A. So far, management $14+ billion, to UAW 0; actually a couple billion to the negative for UAW.
I'm reading the annual reports to get my data. The accounting and the accompanying tnotes are clear.
I'd like to see your source (which amazingly just shrank by about 40% in a matter of minutes.)
You are caught lying yet again!
The $2.5 billion number was one-time charge at the time of announcement, not the overall cost. Read, read and Reread! Fight the urge to type!
Funny, I find it baffling that they've held on for so long.
(1) counting $16 billion M&A loss while ignoring $30+ billino M&A gains;
(2) counting inventory "duration" in one particular month, with no regard to product cycle or the niche nature of particular models;
(3) comparing rental fleet price average to retail price average with no regard to the difference in product mix or consumer price elasticity;
(4) insistence upon focusing effort towards domestic small cars when GM never made money on domestic small cars in the last three decades while making significant profit on large upscale vehicles;
(5) insistence on GM follow Toyota's supposed example of organic growth and single-minded focus on carmaking, while in fact Toyota has been just as acquisition-happy, and has more subsidiaries and businesses more unrelated to carmaking than GM has;
(6) insistence that GM should spend money on hybrids like Toyota did instead of upscaling plebian products like Envoy . . . while in fact Toyota has made far moe money from Lexus RX than from Highlander Hybrid.
Now, that has been the summary of our discussion so far . . . do you really want to carve the 7th notch with this SEC filing nonsense? If you insist, I will oblige:
Where in SEC filings subsequent to Oldsmobile closure do you see profit from closing Oldsmobile? The SEC filings did not take into account intangible profit or losses. If you want to rely on SEC filings as the benchmark, closing down any division as you suggest would result in a dead loss!
If on the other hand you want to account for subsequent intangible gains from closing Olds, such as savings from not having to market another brand like you said, then we have to also account for intangible losses, such as lost customer goodwills and lost potential sales. Olds was selling between 100k-200k units before it was closed down, let's take 150k; and as we know GM vehicle sale average is over $18k . . . let's be conservative, take $15k average for Olds. That's $2.25 Billion lost revenues each year; what's the current cash value discounting into the indefinite future for that? Even at 7.5%, that's $30 Billion! Even assuming 2/3 of a car's revenue goes into variable material cost and division/model advertising, only leaving 1/3 amortizing fixed labor and capital cost, that's still $10 billion! in lost profit and/or revenue to help amortize fixed labor and capital cost! That's in current cash value equivalent terms alone! Not counting any cash outlays for buying out dealership liabilities or production/personnel relocation cost.
Now you want to close down Pontiac with several times more unit sales??
No hurry, I'm sure that you'll post them tomorrow...right?
(1) What Rocky calls a "pimple sized" problem, the Job Banks costs GM over $2 billion in four years, or over $500 million each year. It's been in existence since 1984, so that's over $10 billion in 22 years! What a pie-sized pimple that is!
(2) Well, it is indeed a pimple compared to the rest of UAW cost. The semi-skilled UAW workers can fetch $25-30k at the most on the open labor market if not for GM or other domestic carmaking union contracts . . . so GM is overpaying to the tune of at least $30k per head! Out of 650k UAW workers, how many are at GM and Delphi? 200k? That's $6 billion a year in excessive wage alone! At the least.
(3) Do we even need to count benefits, free healthcare and retirement??
No wonder GM burned through close to $15-20 billion net profits from M&A activities in a few short years.
Obviously the $4 billion and $2.5 billion were based on different lengths of projection on lost sales and lost customer goodwills, the intagibles you have to consider if you want to count "savings" from closing down the division.
It's silly to count Old's future lack of revenues as if it was a "loss." If you took Finance 101, you should know that GM benefits from its shutdown, because the division's expenses exceeded its revenues. And the taxpayer helped to subsidize the charge (which is largely an accounting entry, rather than a bona fide loss) by eating the amount of the loss equal to its tax bracket, so the company came out even further ahead.
You remind me of the old joke about GM management -- "What we lose on margins, we'll make up with volume"! I hate to tell you, but selling more units at a loss won't ever lead to a profit.
The expenses that comes from UAW contracts do not go away with Olds just because the division is no longer there. Look through my math, I already allocated 2/3 of Olds future revenue towards variable cost associated with material and advertising. That's incredible generous. I'm only leaving 1/3 of revenue for profit or amortizing fixed labor cost. UAW retiree health benefit alone account for $2000 per vehicle . . . now there are less vehicle unit sales to help amortize that cost.
Steve Jobs did not become a Billionaire at Apple. It was when he invested heavily into Pixar just before they made the movie Toy Story. Now you know the rest of the story. He went back to bail out his old company Apple. They could not afford to pay him more than a buck a year. I imagine he is well compensated for the iPod.
The cost's are high if you went off of the current data of today. Back in 1984' the cost of the job banks program when pay and health insurance was significantly cheaper the $500 million figure you are using is false. BTW- There were also a significantly lower amount of people on the program in the 80's since GM still had a large portion of the marketshare.
It's easy to look at things from a "one point of view" and you don't take in consideration the cost savings of expierence GM didn't lose to have to hire and retrain workers on the program that would later find work by location. My father was on the program for a short period of time, and when GM picked up full steam, he gladly went back to work.
(2) Well, it is indeed a pimple compared to the rest of UAW cost. The semi-skilled UAW workers can fetch $25-30k at the most on the open labor market if not for GM or other domestic carmaking union contracts . . . so GM is overpaying to the tune of at least $30k per head! Out of 650k UAW workers, how many are at GM and Delphi? 200k? That's $6 billion a year in excessive wage alone! At the least.
Semi-skilled my butt. I'd love for you to go do my aunt's job for a month, they have mandatory overtime which in many cases will keep you on the assembly line for 12 plus hours. semi-skilled includes setting screw machines to one-thousandth of a millimeter
(3) Do we even need to count benefits, free healthcare and retirement??
Last time I checked they no longer get free healthcare.
Benefits like retirement. Well one would assume working for the 2nd biggest company in the world one would get a decent retirement and health benefits brightness. :surprise:
No wonder GM burned through close to $15-20 billion net profits from M&A activities in a few short years.
You would make a great GM executive. Blame the low man for years of mismanagement. Blame low man for not building the finest cars in each segment. If GM is so great at building cars without a union, explain to me why their cars in foreign country are not any better than the domestic build here? i.e. Holden Manaro/GTO, Opels, etc.
What excuse do you have for me now ? I'm paitently waiting ?
Rocky
Rocky
I would ask him why they decided to kill off my dream car The Buick Velite Roadster. Is their any plans to revive that car at a later date ?
When can we expect to see RWD Buick's ?
When is the earliest we could see the Buick LaCrosse Super ? Will it be RWD or FWD ?
Stuff like that pal. :shades:
Rocky
P.S.
I also would be very interested to see what ya'll would ask him. I discovered Edmunds the night Lexus GM Bob Carter joined this site for a live chat. I was so impressed that I became addicted to this site and that's how I discovered ya'll.
Edmunds has been like stress relaxer in a tough year of my life.
Rocky
There is over 13 million americans that belong to unions, and a very healthy portion of them the "buy american" or "buy union" is important to them. I am among those 13 million folks. There is also a huge crowd of americans that buy big 3 vehicles because they feel it's patriotic doing so. Granted the Asians have stolen alot of the big 3's thunder by manufactoring, buying amaerican parts from U.S. suppliers.
I can't imagine the catasrophic affects on the Big 3 once they lose this "fan base" if they continue to outsource to foreign country's. Many Big 3 vehicles are sold because of a relative working at one of the autoplants. The Japanese Transplants are intellegent using this tatic for their own benefit which really isn't braught up.
What I'm trying to get at is do many of you think GM, Ford, Chrysler, will be as successful without the UAW members, buy american crowd, lower, middle, upper, management that continues to promote their products which in alot of cases aren't as good as the rivals, but neverless has a positive affect on friends, family members, to still buy a domestic car ????
Rocky
2. Semi-skilled my butt. I'd love for you to go do my aunt's job for a month, they have mandatory overtime which in many cases will keep you on the assembly line for 12 plus hours.
What a laugh. A long day for me is 17-18 hours, even when I was only making $40-50k a year. Not everyone has a job paid by the taxpayer to surf the internet all day, you know? I'm on unpaid vacation, what's your excuse to be on the internet during work hours?
This isn't the Hoyota plant's where the workers are shut down waiting for a machine repairmen to plug it in.
And guess what? The Hoyota plant approach would have produced better cars at lower cost. Guess why GM did not take that approach?? Job Banks and union job security!
The bottom line is, if the union workers are so skilled, why are they so afraid of leaving current jobs and finding new ones??
Last time I checked they no longer get free healthcare.
What a $7 deductible?? What a joke. That is free healthcare; $7 doesn't even pay for the receptionist, much less the doctor or rent on the doctor's office. And how long has that been in place?
3. Well one would assume working for the 2nd biggest company in the world one would get a decent retirement and health benefits brightness.
Well then, why aren't you making the argument that CEO of the 2nd biggest company in the world should get the 2nd highest pay package out there?? It's ludicrous. Like I said, I don't give a flying you-know-what how much they pay anyone when the company is doing well. When times are bad, everything should be on the table. Retirement should never be the responsibility of companies, as most of them do not last longer than a person's life. Companies should pay workers enough in good days for workers to save for themselves for rainy days. That also make the workers much much more mobile and able to negotiate the best pay for themselves. Of course, the slackers and union bosses are against that.
If GM is so great at building cars without a union, explain to me why their cars in foreign country are not any better than the domestic build here? i.e. Holden Manaro/GTO, Opels, etc.
GTO is actually a great car. For once, Pontiac dealers were able to charge more than MSRP when the car was introduced. It has power, refinement and very nice interior. The ultimate problem? Price is too high for something wearing the Pontiac brand, which is somewhat of a damaged goods after years of pathetic cars by "skilled" labors opposing automation. It goes to show, building a great car alone is no longer sufficient at this stage for GM.
Interesting take, Rock.
A couple of points: first, while there are 13 million Americans that belong to Unions, how many Americans does that leave who do NOT belong to Unions? And how many of those believe (rightly or wrongly) that the wages/benefits the Unions "extort" out of the manufacturer's show up to the consumer as either higher prices and/or lower material quality compared to products from non-union manufacturer's?
Second Point: How long will GM, Ford, Chrysler survive by RELYING on sales to 'patriotic' Americans and/or UAW members RATHER THAN actually building the vehicles Americans WANT which are BETTER than the imports at a competitive price? In other words, stop relying on promotion, UAW sales, 'Buy American', etc. and simply concentrate on product?
Frankly, if management must 'choose' between offending Union members, family, and hanger-ons OR taking the steps necessary to improve their product without increasing cost, I think it's fairly clear what the best business decision must be.
Your ability to misstate history for the sake of the union bashing is quite something. The car has never met sales expectations, and the 18,000 units of capacity allocated to building it has never been needed. Back in 2004, Forbes offered a more insightful analysis:
_____________________________
The problem is that GTO, which in its 1960s-70s heyday was about sexy styling and road-stomping muscle, is lagging way behind targeted sales, with more than a 100-day supply on hand at most dealerships. GM will be lucky to shift 12,000 units of the $31,795 GTO when it wanted to move at least 18,000. So why aren't the cars moving off the lots?
A lot of reasons, but the first one is likely that unlike in the bad old days when the first GTOs (nicknamed "the Goat") burned rubber on American streets, people have many more choices than they used to.
Still, we think the second major flaw with this car is that it's priced all wrong. Instead of keeping the sticker below $25,000, to compete with Ford Motor's Mustang, the last real muscle car on the road, at nearly $32,000 GM has the GTO competing with BMW's 3 series, Nissan Motor's 350Z, and Mazda's RX-8. In that echelon, the GTO stands little chance.
_____________________________
Exactly right. Yet again, GM management makes another mistake -- the car was wrongly priced from the start. The GTO legacy/brand is that of a muscle car, i.e. a powerful motor and strong straight-line performance, but on humble, affordable underpinnings. So why use/ recycle a nameplate associated with affordable performance for a car with an MSRP north of $30k?
Pontiac has no brand history of being a premium-priced car -- that GM slot had been traditionally left to Cadillac and Buick. So why would anyone in GM management have ever expected a Pontiac -- any Pontiac -- to sell in the same price range as a BMW 3-series or an Infiniti G35, while Mustang GT's cost thousands less?
The car was priced and positioned to fail from the onset. And we all know who set the prices. (Well, most of us do, anyway.)
While I don't have a problem with unions, I do have a major problem when they try to dictate things that they have no business to do so. Now if they have a valid safety concern, I would agree with them, but to block a project just because it would limit the amount of labor required is ridiculous.
While I know it's not feasible, it's this kind of crap that would make me think about building my headquarters somewhere else.
Second Point: How long will GM, Ford, Chrysler survive by RELYING on sales to 'patriotic' Americans and/or UAW members RATHER THAN actually building the vehicles Americans WANT which are BETTER than the imports at a competitive price? In other words, stop relying on promotion, UAW sales, 'Buy American', etc. and simply concentrate on product?
Frankly, if management must 'choose' between offending Union members, family, and hanger-ons OR taking the steps necessary to improve their product without increasing cost, I think it's fairly clear what the best business decision must be.
I agree with you on all counts. My only addendum is that I doubt that management will take the steps necessary to improve the product or to regain hearts and minds. The current strategy seems to be one centered around further costcutting via outsourcing production, in the hopes that building mediocre products abroad will yield more profits than building them in the US and Canada. I'm still not seeing any serious steps to rationalize the product lines, eliminate unnecessary nameplates or improve quality with consistency across the board.
There are occasional signs of improvement, but they seem haphazard, unfocused and not revolutionary enough to impress consumers quickly enough to make much of a difference. There seems to be a lack of urgency from both the union and management, and I'm not sure that they'll ever find it.
That's the problem.
Given the current climate between labor/management (and without pointing the finger at who's to blame because frankly, who's to blame is besides the point), I don't see HOW they go about improving the product.
To be quite honest, I don't think I'm any smarter than the current group at the head of GM (which probably puts me a little lower on the totem pole than some of the contributors in here) so I don't know what steps should be taken.
I do think however that the current climate between labor/management elimates even the POSSIBILITY of any real changes in operations to the point where GM CAN compete head-to-head with Toyota/Honda with their products priced similarly. So, how does one resolve that issue? Do we honestly expect them to kiss and make up (and STAY made up) at this point? I don't.
yeah I'm telling several that were in the Jobs bank have left. My father was their temporary because they built more parts than the number of vehicles being made, thus when he was low on the totem pole he got sent home for awhile. I believe the year was 1987, when this happened.
What a laugh. A long day for me is 17-18 hours, even when I was only making $40-50k a year. Not everyone has a job paid by the taxpayer to surf the internet all day, you know? I'm on unpaid vacation, what's your excuse to be on the internet during work hours?
Great assumption, but it's wrong. I don't have access to a computer at work brightness. I work 4 days @ 13+ hours per day and I get 4 days of rest. I don't get the luxury of 8 hours a day Monday through Friday like many americans. I work many weekends and holidays and required overtime.
BTW- Sice your keeping track of me when I'm on the net it's (A) I just got off of work (B) Right before I go to work or (C) I am off on my 4 days of rest. (D)When I'm sick, like I am now with one of the worst sinus and lung colds one could imagine having. I've been battling this head and lung cold for now going on 6 days
(which ruined all my days off) and the antibiotics haven't helped a bit.
And guess what? The Hoyota plant approach would have produced better cars at lower cost. Guess why GM did not take that approach?? Job Banks and union job security!
The bottom line is, if the union workers are so skilled, why are they so afraid of leaving current jobs and finding new ones??
Well because most of their skills are uniquely tied to the machinery that they run. Sure my father could go make similar money per hour in a screw machine shop, etc., but then he would give up all his vacation time, pension accurals, and go work somewhere else with a Vegas retirement plan called a 401K and start over. I never said GM workers are underpaid, but he works his butt off and has valuable years of expierence that can't be taught over night. Also thanks to this current administration and all its guestworker programs which undoubtly are lowering standards of living in this country, sure find a similar replacement job is tougher than in the past.
BTW-If his knowledge wasn't so valuable and is so easy to replace, why did his supervision ask him and other UAW members to be hired by the company as consultants to train the new workforce. Remember it's people like you brightness, that say those factory rat jobs are all semi-skilled labor. :confuse:
What a $7 deductible?? What a joke. That is free healthcare; $7 doesn't even pay for the receptionist, much less the doctor or rent on the doctor's office. And how long has that been in place?
Actually was only $2 bucks :P for a co-pay when I was on it. I will have to ask pops how much his insurance is costing him a month now, since the UAW gave in and allowed the company to start taking a portion out of their checks for medical benefits.
Well then, why aren't you making the argument that CEO of the 2nd biggest company in the world should get the 2nd highest pay package out there?? It's ludicrous. Like I said, I don't give a flying you-know-what how much they pay anyone when the company is doing well. When times are bad, everything should be on the table. Retirement should never be the responsibility of companies, as most of them do not last longer than a person's life. Companies should pay workers enough in good days for workers to save for themselves for rainy days. That also make the workers much much more mobile and able to negotiate the best pay for themselves. Of course, the slackers and union bosses are against that.
I agree with you 100%. Steve Miller said it costs the company $65 dollars an hour for wages, benefits, retirement. (Those are his figures) Dad said pay him $50 bucks an hour and he will buy his own insurance, fund his own retirement, etc.
He said the company can pocket the other $15 bucks an hour, and would save on overhead that is currently responsible to handle the paperwork of those benefits !
BTW- Sure the CEO of the second biggest company in the world should be heavy compensated. However when their decisions fail, they should take ownership of those failed decisions and take a real paycut. Making $10 Million during one good year by cooking the books, and then latter confess about the figures in the books might have accounting errors is no way to conduct buisness. I understand brightness, you want everyone to share in the sacrifice. It's not my father who isn't doing his best job for the company. It people like J.T. Battenburg III, Alan Dawes, Rick Wagoner who have failed the company and have or will get to ride the "Golden Parachute" if they can't return the company to profitability.
However I would like to think we somewhat agree on this topic.
GTO is actually a great car. For once, Pontiac dealers were able to charge more than MSRP when the car was introduced. It has power, refinement and very nice interior. The ultimate problem? Price is too high for something wearing the Pontiac brand, which is somewhat of a damaged goods after years of pathetic cars by "skilled" labors opposing automation. It goes to show, building a great car alone is no longer sufficient at this stage for GM.
You should be a ballett dancer the way you tip-toed around that one :P No pun intended pal
The GTO isn't a great car brightness !!!! WOW !!!! You blaming this one also on the so called semi-skilled union members just goes to show everyone how you have only one point of view, and that is pointing all the blame on the "evil-union". brightness, you continue to amaze me that's for sure. I do hope in the future you would ask before you would assume pal.
Thanks for the entertainment pal.
Rocky
Perhaps 2007' with all the new product coming out of GM will help. Most of the new product out of GM, seems like it can talk itself into a few homes.
I will however continue to do my best to promote the good product from GM. i.e. 2007 Enclave, CTS, etc.
Rocky
Since when is Forbes the authority on cars? Comparing GTO to the $25k Mustang goes to show that neither you nor the Forbes writer knows anything about the cars. Since when was there a 400hp regular Ford Mustang? It's the SVT Cobra territory, and guess what? SVT Cobra cost $31k, too! The problem is of course, that Pontiac GTO turns out not even to have the brand cachet of either Mustang/Cobra or Chevy Corvette, which incidentaly is a $50-60k.
No it does have the brand cachet. The problem is you can't take a Holden Monaro, slap a Grand Prix front end on it and call it a GTO. :surprise: This did huge damage to the respect of the company. I personally thought the GTO was a nice car, but it should of been called a Pontiac Monaro or something else. Maybe G8 coupe ? I dunno. You can't disrespect a lengend and hope the loyal GM fans will buy a copy.
BTW- It being built in Australia didn't help matters. :shades:
Rocky
For one, I have a good deal more faith in the auto columnists at Forbes, one of the US' best business magazines, than I do in an anonymous poster on the internet who misstates other peoples' comments and exhibits one-track tendencies.
For another, you miss the point -- the final judge of the product is not either myself, you or the Forbes columnist, but the buying public. It is the public that does not view a GTO as being worth $30k, and that is the only group whose opinion counts.
UAW labor is used to build Mustangs, 300's and other successful products that come out of the Big 2.5 automakers. I doubt you'd find more than a couple of people who would have bought a Mustang but refused to do so because it was built by a union laborer -- the average consumer doesn't care, either way. My last cars were built by union labor (albeit in Germany and Japan), and that aspect of their employment never once crossed my mind when buying the car. The average consumer couldn't care less, just so long as they like the product, can accept its price point, and that the vehicle holds up to their satisfaction.
The UAW did not set the price point for the GTO nor did it cannibalize the Pontiac brand, management did that. And management obviously screwed that up big time, because they didn't come close to meeting their own projections. Pontiac was never a premium brand, and Bob Lutz was a fool to believe that it could be transformed into one while all those Pontiac fleet specials clog up the aisles at Avis and National.
Same as with the Saab 9-7X. Already a weak brand, that SUV will probably never recoup the amount spent to develop it, let alone turn a profit. Why does Saab need an SUV when GM is already swimming in lookalike SUV's that cost less?
And I'll bet it won't be long until this latest anti-fleet rhetoric coming out of GM turns out to have been yet another failed objective. This is a management team that seems bound and determined to miss targets, even low ones.
Our wonderful board is all happy. Go to The Big 3 and the domestic issues board. I'm sure they are lighting one-hundred dollar bills to light the Cuban Cigars after the sale of G-MAC :surprise:
Rocky
When can we expect to see RWD Buick's ? The future. (Well actually there already is the Rainier
When is the earliest we could see the Buick LaCrosse Super ? As I said before and read in the press, next year. Will it be RWD or FWD ? I do not understand this question, the LaCrosse is FWD and I do not know how it could be made into a RWD.
My point was that the Divisional GM's are in charge of Marketing and Advertising. The divisions are very involved in product planning but decisions are made at a different level with all of GM's money meted out for the betterment of all GM.
yeah I'm telling several that were in the Jobs bank have left.
Doesn't that mean the Jobs Bank is covering less people than it once did?? Contrary to your earlier claim?
Well because most of their skills are uniquely tied to the machinery that they run. Sure my father could go make similar money per hour in a screw machine shop, etc., but then he would give up all his vacation time, pension accurals, and go work somewhere else with a Vegas retirement plan called a 401K and start over.
In other words, the union worker would not be paid as much (benefits are just another way of saying wage, only with a dose of dishonesty); the union worker is being overpaid like I said. Defined contribution plan is what almost everyone has nowadays. If you want a defined benefit plan, you can buy your own annuity. Guess what? Life is a gamble; if you want someone else to assume all the risk for you, as in an annuity or a define benefit plan, you've to pay premiums. All those GM retirement benefit plans crafted by the union decades ago are nothing more than pyramid schemes that can never deliver in the long run.
Glad we agree on something. You know why GM had to pay this convoluted long-term benefit package instead of outright high pay in its haydays, right? If the money went directly to the workers, what would the union bosses get to hold the troops together?? So it had to be a plan that hog-tie the workers for a life-time . . . because workers are nothing more than pawns for the union bosses.
Rocky, you keep railing about executives not making anything right yet have "golden parachute." Guess what, the executives at least made GM $15-20 billion in M&A activities alone while the union is flusing $5-10 billion down the toilet for GM every year. Your talks about "golden parachute" is getting tiresome; considering you thought it would be extra-ordinary hardship to cut a $60k income down to $30k, why shouldn't someone else negotiate pre-determined termination pay? especially considering that executives often get blamed for things that are way out of their control or despite their great effort. Take for example, on this board, union supporters complete lambasting Wagoner despite him making GM hundreds of millions if not billions of dollars, just because he is the CEO, while your guys proposing pie-in-the-sky and braindead alternatives that would have made the situation far worse.
Let's have some perspectives here, how much does $20 million "golden parachutes" for three cost in total? $60 million. Or roughly 1/10 of your "pimple-sized" Jobs Bank problem. How much does overpaying 300,000 workers to the tune of $20k each cost? $6,000 million!
What's really funny is how union supporters keep insisting how valuable specific union workers' skill set is. Isn't missing the forest for a fig leaf?? If all the union workers' skills can command a high pay on the market place, what does anyone need the union for?
The GTO isn't a great car brightness
Go check one out for yourself. It's really a very good car. The problem with it is the Pontiac brand and the $31k price vs the volume expected to sell. When it just came out, dealers had a great time charging more than MSRP. Isn't selling close to MSRP the one thing GM is trying to do??
I'm tapping out tonight brightness.
Rocky
the final judge of the product is not either myself, you or the Forbes columnist, but the buying public.
The buying public paid over MSRP for GTO when it came out. What more do you want? The market for such a special vehicle simply turned out to be pretty small . . . a situation remniscent of the IS300.
The average consumer couldn't care less, just so long as they like the product, can accept its price point, and that the vehicle holds up to their satisfaction.
I agree with that, much to the chagrin of union supporters.
GTO price was heavily influenced by the cost of that 400hp V8 and shipping that a car from Australia; the other car that uses this engine costs $50-60k (corvette). I'm not sure if I'm getting your point, you said in earlier posts that GM management should focus on making good cars; Lutz did exactly that with GTO and Solstice at Pontiac; now you pan him for doing exactly what you said they should do. I was the one added the point about at price points that people want . . . which the GTO case proves in spades.
Why does Saab need an SUV when GM is already swimming in lookalike SUV's that cost less?
Isn't the objective here raising average selling price? Since you said only a couple paragraphs ago that it's a folly to try premium price with a brand with fleet specials clogging up the aisles (like Chevy and Pontiac) . . .
How many sides of a mouth are you talking out of simultaneously anyway?
-Forbes is a more credible source than are you. Given a choice, I'll take it as a source, rather than your "estimates" (which are really guesses and wishful thinking, not credible calculations)
-This article came out not long after the car hit the market, and inventories then were at 100 days. Since then, sales have consistently failed to hit annual targets. If you have an anecdote about a few people overpaying, that doesn't negate that average sales have been below projections, and the car was not a success.
Isn't the objective here raising average selling price?
So far, the Saab is overstocked and requires incentives to move. Its sales figures indicate that it will likely generate a loss. I thought that management was supposed to create profits and build brands, not engineer losses and tarnish brands, but perhaps I was mistaken...
(1) Mustangs are not $24k cars; the most popular Mustangs are the V6 coupe priced between $16-18k;
(2) Comparing regular $24K Mustang to $31k GTO that makes 400hp is complete nonsense. There is a whole specialized Mustang variant, called SVT Cobra at $31k just for that market segment; it had 390hp or thereabouts.
Perhaps GM should have made a 320hp Firebird first at around $25k, then follow that up with the 400hp GTO, but that's a different subject altogether.
So far, the Saab is overstocked and requires incentives to move.
Another indication that you know little of what you are talking about. Discounting from outrageous MSRP is Saab tradition ;-) Saabs often carry BMW level MSRP, with discounting down to about Acura price level for most retail sales. That's how the brand works.
What would you do? Say "no" to:
(1) good cars at higher price levels in an effort to build up brands;
(2) upscaling plebian models, following the example of Lexus and Acura;
and say "yes" to:
(1) hybrids that nobody is making a profit on;
(2) more effort on domestic small cars that have not turned a profit in three decades.
Sure, that your alternative makes a whole lot of sense. If you were in charge, you'd be closing a division every year, by necessity ;-)
The car was a high-performance Edsel, plain and simple. GM set a modest sales goal of 18,000 vehicles, couldn't sell that many, so it cut the goal again, and STILL couldn't meet the adjusted target.
As for making Subarus and Trailblazers into Saabs - yes, that has garnered a few sales in the short run, but over the long run it has blurred what little image Saab has left.
Reminds of a story about the late, unlamented Cadillac Cimmaron in the 1980s. When someone suggested cutting the Cimmaron, the Cadillac general manager objected, saying it was "worth 20,000 cars."
Those extra 20,000 cars DID pad Cadillac's sales totals in the mid-1980s, but each Cimmaron sold screamed loud and clear that a Cadillac was nothing more than a gussied-up Chevrolet (and not a very good Chevrolet, at that).
Which helped Cadillac hand the luxury market to Mercedes-Benz and BMW (and later Lexus) on a silver platter. GM is now spending BILLIONS on Cadillac in the hope that it regains some of its former glory. While Cadillac has improved dramatically, it still isn't quite in the top tier of luxury marques.
That is the problem with GM management - too much reliance on short-term thinking, instead of long-term planning. Rebadged Subarus and Trailblazers may boost Saab sales in the short run, but where will they leave the brand 10 years from now?
I hope none of ya'll get it. It has seriously kicked my butt. One of my supervisors said, "Rocky you sound horrible....You stay at home."
Rocky
That was a joke. :confuse: The car was as hot as a snowball.
Rocky
One manager I had pleaded with me to come in when I had a bad case of stomach flu. He told me to just duck into the bathroom when I needed to but to just come in! Oh, those supermarket jobs, where might we all be without them!
No, that would make me feel a tad better, even though you're sick, if my manager told me I best stay home. Have you typed up about 150 posts the past few days?
BTW-it's time for the UAW to take some reality pills and ease totally up...these aren't normally competitive times in the automotive industry. Give up some moolah happily or get prepared for your next industry to work in. Soon you won't recognize the GM you know and love today.
Eh?
2021 Kia Soul LX 6-speed stick
That was a joke. The car was as hot as a snowball.
No. At least here in SC, the dealers jacked up the prices, and the buyers revolted. I know of two guys that were going to buy GTOs at MSRP (had to have one), saw MSRP + 5K, and ended up buying and modifying used Z28s. Both vow never again to buy a new GM product.
Around here, at least, the dealers killed the GTO.
They would rather me just infect my family, instead of 4,000 people I work with. I taking off of work does cut into the big wigs year end bonus.
BTW- If I had a indoor desk job, I might of went in.
I also don't have the convience of reaching over and grabbing a kleenex, washing my hands, etc. to minimize the spread of germs. The nurse at my doctors office, lives next door and she looked at me last night and told me she wanted me to stay home and rest. I went to bed last night at 8:00 p.m. and slept until 8:20 a.m. :sick:
One manager I had pleaded with me to come in when I had a bad case of stomach flu. He told me to just duck into the bathroom when I needed to but to just come in! Oh, those supermarket jobs, where might we all be without them!
He's a sicko. :surprise:
No, that would make me feel a tad better, even though you're sick, if my manager told me I best stay home. Have you typed up about 150 posts the past few days?
I have typed up alot of posts. I have a box of Kleenex's nearby, and have swallowed and sprayed more medicine into my body in the last week than a Lab Rat. I am ready to go back to work. The wife and kids are getting on my nerves. :surprise:
BTW-it's time for the UAW to take some reality pills and ease totally up...these aren't normally competitive times in the automotive industry. Give up some moolah happily or get prepared for your next industry to work in. Soon you won't recognize the GM you know and love today.
Eh?
No it's time for GM management to swallow some reality pills. Cost cutting is only a temporary fix without good product. The UAW doesn't engineer, sign-off on products such as the Aztek, Torrent, 9-7x, Cobalt, Impala, etc.
If GM had dominant vehicles that set the standard instead followed the leaders 4 steps behind, the UAW making a decent salary would be moot. However I have defended GM management somewhat saying they don't have a totally fair playing field with the competition which indeed makes the challenge tougher. However that is no excuse to allow products such as the Cadillac Catera to see production.
Rocky
Rocky
Rocky