Sorry I don't fit your typical stereotype of the UAW worker. Sorry the GOP has let America and you down, supply side, trickle down, and silly tax breaks have this nation in dire economic straits. Then again I live in a rather affluent area and assume your depression is due to your environment. All I hear from you is problems and no solutions.
However, the average UAW worker fits the profile of the stereotypical UAW worker.
As for the current state of the economy - there's plenty of blame to go around for both parties, but both Bush and McCain tried to institute reforms back in 2003 and 2005. Democrats (including and specifically Barney Frank) blocked those efforts. Additionally, the whole subprime market was generated by the Carter administration and then expanded by the Clinton administration.
Yes, Honda and Toyota are both losing money. The difference between them and GM however, is that their expenses go down when their income goes down. Japanese workers are paid comparatively low salaries, but substantial bonuses. ( You will recall this is the same system that is used by the Japanese employers in the states). In good times the bonuses are large. In bad times, the bonuses disappear and the wage costs go down.
I have never claimed that Japan has all the answers. They've been in a bad situation for at least a decade. It'sactually been more than a decade since Japan started phasing out the lifetime employment system. Companies there have abused national health care system by only hiring employees as part time, and thereby giving them no benefits at all. There is now a whole generation of "freeters" who are basically independent contractors and temporary employees.
My solution for Detroit? It's simple. GM should be forced into bankruptcy, and reorganized. I am reluctant to diminish the pensions of those who have already retired, but the current system is unsustainable.
Your solution from your comfortable ivory tower seems to be to keep doing what hasn't been working.
>It was a tinny truck. Sheet metal as thin as aluminum foil. Poor fit and finish. It was the only one of the 5 built here in the USA by UAW workers
I see blame being placed on the UAW for the thicness of the metal (perceived thickness? being tinny could also be a result of the shaping as well as the malleability of the metal alloy chosen), but the UAW didn't pick the metal thickness or physico-chemical properties.
I see fit and finish being blamed on the UAW and that could mean poor assembly by leaving things not aligned, tightened, etc., and that is on the assembler. However, the choice of materials from which to build the thing was made by GM and its suppliers in tandem working to minimize costs. That cost pressure is partly because of the high UAW costs for some workers and for many retirees and their checks and their healthcare plans.
In another post the fit and gap of the doors was mentioned. The choice of gap on the truck was chosen by GM and its engineering/design staff. The gasket type and fit for the door was by the GM staff not by the UAW. The UAW may have not installed the door properly to fit; that should have been corrected by the dealer in their predelivery inspection for which they are well compensated. Or it could have been readjusted after delivery for you upon warranty complaint. Obviously it wasn't. (My leSabre has 3 layers of seal along the bottom of the door which is really quiet.(
My visit to the Moraine plant, may its soul rest in peace, was eye-opening two winters ago. That line stopped often because of someone pulling the cord. The digital signs told who had stopped the line. There were people scurrying over to help fix whatever was noticed or needed. Sometimes the skillets stopped only for less than 30 seconds; couple of times it was for nearly a minute. I grant that was IUE/??? workers rather than UAW workers so may have been unique to that plant. But I was impressed.
I don't support the UAW as much as I used to, but they have been blamed for many choices that were the company management rather than the workers. The workers indirectly affected the choices by the cost pressures due to high legacy costs which the transplants enjoyed not having along with a currency bias that helped sell their cars.
I see fit and finish being blamed on the UAW and that could mean poor assembly by leaving things not aligned, tightened, etc., and that is on the assembler. However, the choice of materials from which to build the thing was made by GM and its suppliers in tandem working to minimize costs. That cost pressure is partly because of the high UAW costs for some workers and for many retirees and their checks and their healthcare plans.
There are many things the UAW has no control over. I blame the whole GM organization, from Wagoner to the guy pushing a broom for 30 years. They all should have seen this coming when the company was not profitable over 20 years. They all should have done their part to plug up the holes in the sinking ship. I was not so adamant against the UAW until the strikes this year. Then looking back I would say the real turning point was the strike of 1998. The UAW was all greed in that strike. GM should have been making money when they were selling large SUVs faster than IHop sells pancakes. The UAW has not allowed GM to make a decent profit for decades. Every time GM gets a break and has a vehicle that a few folks want, they strike the plant. That is not a Team player. It is totally selfish on the part of the UAW.
I feel for all the people that are impacted by the lack of new car sales. Including my good friend that lost his job at the big Ford agency here in San Diego. I just get the distinct feeling that the only people that are important in the auto industry are the UAW workers & retirees. They helped get this Congress and the new President elected and the rest of US have to reward them.
The only way for GM to survive is Chapter 11, by cleaning out the dead weight in all parts of the company. Getting rid of all the UAW work rules that do not pertain to safety. Get a realistic health care program. etc etc. We have family in Ohio, Indiana, Kentucky and Michigan. I don't want to see them destitute and moving out here to sponge off of me. So the sooner the bankruptcy gets started to sooner GM can become profitable.
Too Lucrative? :P How about a bloated cancerous tumor in the butt of the big three? The time for the mob mentality of labor Unions was spent to good use in the '40's. Now they are really just a malignacy. No better than the Mob holding a firebomb to the face of a shop keeper to pay a "security fee". It's time the auto assemblers get over them selves or they should be replaced by minium wage workers who won't mind working.
>Labor is 10 percent of the cost to produce a vehicle.
Is that the cost of assembling the parts as an automobile or is it the total cost of labor, as in the labor of making the seats, the steering wheel, the dashboard, the rearview mirror, the tires, and all the parts in the car as well as assembling the car?
Maybe this has been answered somewhere, but I missed it if it has been mentioned.
However, the average UAW worker fits the profile of the stereotypical UAW worker.
Engineering at Boeing and Bell Helicopter are union/UAW. The fast growing higher education is also being unionized in major universities at a rapid pace. I know that there is a highly skills trade part to the Big Three whom are union. They make/repair tooling, fixtures, dies, molds, robotics, and other means of production to get to the end product. Trust me you don't even want to see the skills trades hourly rate, but generally its $10 an hour over the national agreement.
I have dealt with these young eager engineers full of piss and vinegar. Both union and non union ready to set the world on fire. They learn quick, do great work, and are an American asset. In the corporate environment something happens where they transform and or morph into just employees. No different than that autoworker who comes in wanting to do a great job. Doing whatever he/she can to better their lot in life and that of their family. I hate to call it burn out, but many companies deal with this. Its the companies responsibility and to their benefit to keep its assets (employees) productive.
As for the current state of the economy - there's plenty of blame to go around for both parties, but both Bush and McCain tried to institute reforms back in 2003 and 2005. Democrats (including and specifically Barney Frank) blocked those efforts. Additionally, the whole sub prime market was generated by the Carter administration and then expanded by the Clinton administration.
The Reagan legacy is deregulation and ends with the Phil Gramm ENRON loophole prior to congress going into their recess in 2000. There is a quoted speech by GW Bush taking credit for the housing boom and his continuing efforts to remove such barriers as down payments. We could go on into the ethics of Gramm's wife being on the ENRON payroll and the rational behind the FED lowering interest rates after the dot com bust, but we could never convince you that the GOP are not the conservatives they claim. The classical liberal is been made to mean something bad, when they by nature are the real deregulates, hands off lassie faire, let the markets decide, no bail outs party. This is but a rerun of the S&L bail out the big fish/lobby.
Yes, Honda and Toyota are both losing money. The difference between them and GM however, is that their expenses go down when their income goes down. Japanese workers are paid comparatively low salaries, but substantial bonuses. ( You will recall this is the same system that is used by the Japanese employers in the states). In good times the bonuses are large. In bad times, the bonuses disappear and the wage costs go down.
Admission is the first step to recovery. Its economics 101 that the autos and housing are the first to go into recession and the first to recover. The process has been delayed by silly gimmicks, Zero down, employee pricing, red tag sale, to name a few. These do nothing but prolong the inevitable. Those who get in on these deals/gimmicks/promotions more than likely have a used car which is likely to be traded in. Hence, we glut the used car market (remember once you drive that new off the lot, its used). To reduce inventory deals/gimmicks/promotions/rebates are used to entice buyers. $5 dollar subs at Subway aren't going to make them much profit, however, they are only intended to weather the down cycle/keep the doors open for the better days to come. The car business is not any different. They have relied on leasing to move inventory. Leasing comes with the residual and or the assets value at some future date. So high gas prices affected this residual value. Its not very hard to imagine what some of these gas guzzling SUV's lost in value. Only a fool would go on to pay the residual value, so the bank or note holder is stuck with a bad investment, the market is glutting, hence the prices of these and all autos (foreign and domestic) take a hit, the banks now have to sell these assets and lick their wounds. Adding insult to injury, since they have other assets decreasing in value as well (housing). To fuel this economy, they seek help from govt, lower interest rates, rebates, tax incentives, bail outs, and anything to put out the fire. Remember, each percentage point the interest rate increases, that many fewer buyers and or qualified buyers on the market at any given time. Then too we must remember that interest rates are used to fight inflation (rising prices) and its not too wise to use them as a stimulus too much (were almost at zero). The only weapon left for govt is fiscal policy (congress spending). Too much govt spending may also cause a devalued dollar as oppose to other currencies.
My solution for Detroit? It's simple. GM should be forced into bankruptcy, and reorganized. I am reluctant to diminish the pensions of those who have already retired, but the current system is unsustainable.
A cost benefit of unemployment benefits/pension dumping/social services/loss of tax revenue/Wall Street and whatever else would be interesting on something this big and or that effects this many people. You don't even have any idea of the ripple effect of letting this happen.
current system is unsustainable
Are we forgetting that during the S&L bail out, Donald J. Trump, Trammell Crow, Hall Financial Group, and many more were too big to liquidate. They paid back all that money and in fact made billions after-wards. Chrysler Corp in 1979, Lockheed in 1971 and New York City in 1975.
Yes, Honda and Toyota are both losing money. The difference between them and GM
Any fool would have rather had GM stock during more years than those of Toyota/Honda. Its not even close. At the moment, for a time period, GM looks bad to some and very cheap to others. Honda/Toyota may look god to some and bad to others. Lets examine the GM history and all these unprofitable years.
Then too you fail to mention the fact that GM purchased EDS for about 4 billion and sold it for near 28 billion. When G.M. shareholders approved the spin-off of EDS years ago, the company's $2.5 billion purchase was worth $27.6 billion.
And after paying $5 billion for Hughes in 1985, G.M. has since sold its pieces for $9.5 billion to Raytheon, $3.75 billion to Boeing, and, in its latest deal, Echo Star will pay $26 billion.
General Motors sells 51% stake in General Motors Acceptance (GMAC) to Cerberus Capital Management, Citigroup and Aozora consortium for US$14bn in 2006
GM sells 78% stake in GMAC Commercial Holding (its commercial mortgage arm) to KKR, Five Mile Capital Partners and Goldman Sachs consortium for US$8.8bn in 2006
GM agrees to sell 17.4% stake in Suzuki for US$1.98bn in 2006
GM sells Avis in 1996
GM also aquired the AM general Hummer business, which is a cash cow in the military business today
Free advise: a smart man would look at the <a href="http:
Maybe this has been answered somewhere, but I missed it if it has been mentioned.
I don't think a break down of total labor has been posted. I see cost from $1500 to $3000 per car as legacy costs. I am assuming that is the price for retiree health care. Pensions should not be tacked on as there is a fully funded pension plan to pay those costs. That means that somewhere around 10% is just legacy cost.
Another question. Does it take that much more labor to build a $30k PU truck than it does a $20k Malibu? Or a $70k Escalade vs a $45k Denali Yukon?
We could go on into the ethics of Gramm's wife being on the ENRON payroll
We could ramble all day about totally irrelevant issues to the collapse of the Big 3 and what part the UAW is playing in that collapse. Why is Gramm's wife so important and Dingell's wife with her high paid do nothing job at GM never mentioned? Could it be you have been so biased against the GOP that you believe the Dems are above reproach?
You have pointed out all the assets the GM has sold over the last few years. Yet they still had $72 billion in losses over the same 4 years. Must be doing something wrong. Selling controlling interest in GMAC may have been real dumb now that no one wants to carry a lease on GM vehicles. Could it be that GM is paying for their ignorance in buckling under to the thug tactics of the UAW over the last 10 years?
You do not make a good case for the UAW holding onto the status quo.
Honda at Greensburg, Indiana plans to build 200,000 Civics a year using 2,000 employees when they hit maximum production some day. That is 100 Civics per worker per year. If workers get $15 an hour and make 100 cars in a year, that is $32k wages/100 cars= $320 per car for assembly wages. QUITE EFFICIENT USE OF US!!!!
An avg. Civic sells for $20k so 320/20000= 1.5% of total car value for cost of assembly wages paid to workers.
Now I realize that FICA taxes are paid and so are benefits and eventually there could be even bonuses. The 10% UAW piece of an American car has to be a high estimate and include the legacy costs and the engine production and trans production labor that is UAW as well, since there is not even a 2:1 base wage ratio.
It is easy to see how Honda derives more than half of it's worldwide profits from North America sales.
Yes, Honda and Toyota are both losing money. The difference between them and GM however, is that their expenses go down when their income goes down. Japanese workers are paid comparatively low salaries, but substantial bonuses. ( You will recall this is the same system that is used by the Japanese employers in the states). In good times the bonuses are large. In bad times, the bonuses disappear and the wage costs go down.
Admission is the first step to recovery. Its economics 101 that the autos and housing are the first to go into recession and the first to recover. The process has been delayed by silly gimmicks, Zero down, employee pricing, red tag sale, to name a few. These do nothing but prolong the inevitable. Those who get in on these deals/gimmicks/promotions more than likely have a used car which is likely to be traded in. Hence, we glut the used car market (remember once you drive that new off the lot, its used). To reduce inventory deals/gimmicks/promotions/rebates are used to entice buyers. $5 dollar subs at Subway aren't going to make them much profit, however, they are only intended to weather the down cycle/keep the doors open for the better days to come. The car business is not any different.
Frankly, I have no idea what you're talking about or how it applies to what I've said. It's a nice flurry slurry of fuzzy facts mixed with opinions, but rather an odd mix. You're welcome to blame the Republicans and Phil Gramm's evil wife if that makes you happy. Whatever.
78% of those polled by the very liberal CNN would not buy a GM or Chrysler product after the bailout was announced. Hopefully that translates into 2010 votes against those that have pushed for the bailouts. We need to clean out that bunch of losers in DC. They are as corrupt as the UAW. All part of the same group that believe because they were born with a UAW spoon in their mouth they are entitled to being overpaid for life. No matter how little their job is worth.
78% of those polled by the very liberal CNN would not buy a GM or Chrysler product after the bailout was announced.
Not quite what it said.
Are you more likely to buy a car from GM or Chrysler after Friday's bailout?
So if you are the 35% or so who already may buy a GM of Chrysler product they are not more likely to buy. If you are the 65% who would not be buying a GM of Chrysler you are not more likely to buy a car from them. If what you said was true there would be only 22% or less buying that would be a huge drop in sales and that is not being shown in Decembers sales at least.
Me personally and some of my friends are not more likely to buy a GM product because of the loans. So we would have been one of the 78%. The guy that always buys Ford/Toyota/whatever would also have been one of the 78%.
And that 22% would now be MORE likely to buy their products. So the bailout is causing more to buy the vehicles. Perhaps because they feel the companies will be around or because they want to keep the companies in business or whatever.
>but I don't support the 'only the best deserve to survive 'mentality that is preached here.
ooooohhh...here comes the mr. humanity in all his glory. The savior of the species that is going to be extinct.
Mr. Dave. This is called the Darwin's Theory.
And I do not like the idea that everybody in the soccer match gets a trophy regardless of whether they won or lost, and even Kindergarten kids get a graduation certificate.
Guess what? Do you know the US Tennis open player that came in 4th? or that football team that came in 4th place?
>High school kid runs a 4:08 mile and comes in 4th place at a high school meet. His parents run over and congratulate him.
Ah....I would not run over and congratulate him. Why should I? I would go over and offer my condolences and give him a spanking and a lecture so that he can try harder next time. Congratulate for coming in 4th? My foot.
>Can someone describe to me the place America would become if auto quality caught that of Japan, and how that would CHANGE MY life? Would I be able to have better schools? Better weather? Better returns from my investments? Better health? more free time? better home appreciation? lower taxes? lower car costs? lower food costs? lower clothing costs? lower fuel costs? lower utilities? cheaper insurance? better roads?
Are you somehow indicating that the poor quality of Automobiles is responsible for a better American life? and that improving the quality would somehow not improve the quality of life here?
>Myth: the UAW make too much and that makes american cars unaffordable.
True. higher wages are not what is making these cars unaffordable. It is the quality of car delivered at that price which is not realistic.
Time and again, you are missing the point. The reason for an UAW wage cut is to make them realize that they are not worth their pay. They have to bring up their standards of workmanship if they want that pay.
Don't get me started on welfare for the rich. Stadiums/arenas for rich folks who have found a way to avoid the risk inherent to being an entrepreneur.
I'm glad to see that you agree with me that all bailouts are economically corrosive - no matter who benefits from them. We can't end them but that shouldn't stop us from arguing against them whenever we can.
We classical liberals should take every opportunity to champion the core ideals of limited government, low taxes & maximum individual liberty.
Lets be realistic. When Ford Taurus was the number one seller $800 a car was the factory labor rate per car. You fail to account for tool and die cost. Parts get stamped out by dies, molds are made to do plastics, jigs and fixtures are used to hold parts for secondary operations, robotics are designed and built, castings and their tooling, and I could go on. Incidentally, Rolls Royce makes their cars one at a time and ignore these tooling concepts. Just price one of their cars.
Then too a supplier has labor cost too. This hard to factor in.
The engine block is more than likely cast, placed in a holding fixture, machined in a CNC machine (computer numerical control). I've been to the machine tool manufacturers and Japanese are slow, we have $500,000 machines running on Windows 95. However, that plant was a 24 hour operation with one person on site for this late night operation. Since we do low rate production we have made changes which allow fast, I mean fast turn around. Some the parts we have made and shown them are beyond their scope. They go to the tool show and make a Alpha Romero motor and a few push rods fast to impress. However, we are doing things light years beyond their scope.
In any case, I was told that the folks in Iraq were commenting that those Americans sure have lots of cruise missiles.
The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.
Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.
The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests.
“If they told us what they held, we would know the potential losses that the government may take and that’s what they don’t want us to know,” said Carlos Mendez, a senior managing director at New York-based ICP Capital LLC, which oversees $22 billion in assets.
Bill Kristol surprisingly backed up the UAW and the Democratic Party's plan of trying to offer a bridge loan to the Big 3 and not try to be "union busters." It's not out of any love for unions, but all about politics. As we saw with the AutoGate Memo, the Republican leadership decided to kill the rescue plan/bridge loan to the Big 3 purely for political reasons. Those reasons are to destroy the UAW and try to make them the scapegoats. Kristol -- who as you know is not on my team -- believes that the Southern Strategy of attacking workers is a huge political mistake.
Kristol: I don't think it's very smart for a bunch of Southern Republicans to decide that the future of the Republican party is to beat up working class union members in states like Michigan, Indiana and Ohio. The UAW is in a lot of trouble, they've shrunk by 2/3's in the last years...
An average automobile, 10% of the cost comes from wages and they were going to cut wages by ten or twenty percent, so it's one or two percent of the cost of the automobile. To have a huge fight for that. I think it was a mistake for the Republicans,
He's thinking of this in political terms for Republicans, and actually gets honest when he says that it's not the union workers or their wages at fault here. I was not in favor of a Car Czar because I don't trust Bush to make the choice based on the interests of the working class, but at least they see the problem this could cause our entire economy if the Republicans in Congress bankrupt the auto industry.
On the other hand, if Republicans want to immolate themselves into even further irrelevancy, I'm inclined to let them. The trick is to keep them from taking the whole country down along with them.
You do not make a good case for the UAW holding onto the status quo.
Croker and Shellby talk a big scam, it is that: a big scam. As the news comes out that the feds pay a subsidy of $5000 per employee there in the land of cotton, to Mercedes, Toyota, Nissan, Honda and etc...then the $45.00 per hour (plus health benefits, plus land subsidies,plus additional tax concessions) don't look so cheap. There's more to the Croker/Shellby scam and it will be revealled soon. Just wait for the AFL/CIO and The Teamsters to get involved. It's gonna be a mobfest on Croker and Shellby. Even smilin' Jack can see this coming. Good bye GOP! Thank your southern carpet shaggin stars! Your greed got ya caught!
The Republicans that have been the most vocal against helping the auto sector have been southern and from the states with large foreign auto manufacturers. I guess it is natural that they would try and protect these large foreign employers in their states, so we cannot fault them.
However, what amazes me is that these guys have any power. I guess with the Republicans now being so depleted they represent the only Republicans left.
The reality is that these Republicans from Alabama, Kentucky and South Carolina represent such a small portion of both the U.S. population and the economy that it is amazing that these guys can basically dictate what this country can and cannot do. We need to find a way to neutralize these guys for the benefit of the country, although if we let them continuing to act the way they do it will be to the detriment of their own party, as they can kiss the states of Michigan, Ohio and Indiana good-bye, just like they did with Nevada, New Mexico and Colorado, and likely Arizona, with the immigration debate.
Selling controlling interest in GMAC may have been real dumb now that no one wants to carry a lease on GM vehicles.
Anyone holding finincials when the musical chairs ended have taken a beating. From $53 to a little over $3 a share in five years. Make a mental note not to ask Gary for stock tips.
Why is Gramm's wife so important and Dingell's wife with her high paid do nothing job at GM never mentioned?
Why is it never referenced that John Dingell's wife is an heiress to General Motors and Texaco? She ain't exactly doing it for the money. Ya think they, the Dingell's, care about their state?
Germany, protects its industry via tariff. The Japanese, are so nationalistic they wouldn't buy anything made from america no matter the quality. They haven't forgiven us for dropping the bombs yet even though they attacked Pearl Harbor.
You amaze me gagrice. You would rather call a middle class where your average slob make $12-15 an hour like the Bush administration and the pseudo-right. How many people are going to buy things like new cars on $15 an/hr ??? Their disposable income isn't in line with the cost of living. I might be a minority here on edmunds but their are many who think and believe the way I do including people in your party and many of whom are non-union. You would rather sacrifice our economic power and national security so some ignorant slob can buy a that chinese made TV stand for $19.99 which is made out of cardboard with black lead paint from Walley World, and make your executive neighbor rich. I am at work taking a break otherwise I would be more than glad to get you some data. I know that is one reason why Regan, implemented a tariff on Japanese, motorcycles because Japan, implemented a "barrier" on engine specs which just so happened restricted Harley Davidson, from their market. I know back in the 1980's Japan, had tariffs on imported cars.You also can't get the "currency manipulation" issue through your head and hammer the UAW, GM, and just ignore the fact that for every Honyota, sold here in the U.S. which 50% are imported well it's an extra $4-13K in profits for the Japanese, automobile manufactuers. I'm not going to hammer Indiana, because their are some smart folks in the cities. You noticed they built those plants in the rural "farm" sectors of Indiana, but I won't get into why they did that. Let's just say it wasn't because they got such a great tax deal!!! Believe what you want gagrice, but remember that some of the data you get from so-called independent sources might have a vested interest to distort the facts. I know you like to trash the UAW, and think they are evil but they often site articles from independent sources. The teamsters aren't free of guilt if I thought the way you do. I however am of the thinking of instead of keeping the working man down which we have gradually done for the last 20 or 30 years why can't we think more/like other society's and include the working man or women??? I guess that isn't a option in capitalism???
Japanese workers are paid comparatively low salaries, but substantial bonuses.
With bonuses, the Toyota workers made more than the GM workers, averaging almost $30.00 an hour versus $27.00?
These guys can probably convince most of the country that union workers are overpaid. Unfortunately alot of people who are not in a union (and they are shrinking) can be made to believe that the REASON they are making cars no one is buying is BECAUSE of these union workers. However, for the God Bless America party, it's so fitting these frauds are made to go public with their attempts to strangle the one thing we still produce in this country, automobiles.
Explain that to your flag waving, Bible reading, right wing Southern base.
Toyota forecast an operating loss of $1.66 billion for the fiscal year ending March 2009. Toyota has never reported an operating loss since it began disclosing such figures in 1941. But it did have an operating loss in unofficial, internal calculations for the year ending March 1938, a year after the company was founded.
Operating income reflects a company's core business performance and does not include income taxes and certain other expenses. Last fiscal year, Toyota had an operating profit of 2.27 trillion yen.
Japan's top automaker also lowered its net profit forecast to just 50 billion yen for the year through March 2009 — a tiny fraction of the 1.7 trillion yen it earned last year.
And that 22% would now be MORE likely to buy their products. So the bailout is causing more to buy the vehicles. Perhaps because they feel the companies will be around or because they want to keep the companies in business or whatever.
I have to agree with you. US leads in innovation. machines equipped with FANUC are simply awesome. But again, I have always maintained the view that the US is the pioneer, and the Japanese are followers who implement what the US develops so religiously that their end results are way better. We, in the US, have started to relax and sit on our laurels when it comes time to implement. Simply inventing and discovering new stuff does not help. Most of Toyota's designs follow GM innovations. But they do a better job in translating the design document to final product.
Mazatrol is just a user friendly control. Haas an American made is much better on the controls for the user. But if you factor in a post processor, five axis work is a breeze. Besides I saw Heidenhain scales on that Japanese machine.
I did see the Japanese counter part, well trained to be given parts in the morning and come back finished at the end of the day. Using his Mazatrol. Then I saw Unigraphics post developed in Michigan of all places, ripping at 350 inches per minute and the American coming back in an hour, deburred and all.
I just asked a question...How? Let me make it simple. What did the quality of your auto do to make your life better today, as opposed to if you drove a new Malibu that you claim has "poor quality" today? My contention is that the differences in quality are not life changing.
Rocky you are really obsessed with US trying to sell cars to Japan. They don't want them nor do we pursue them. What cars have we actively tried to sell to the Japanese? Then you keep acting like we are sending them so much money when they are in a lot worse condition than the USA.
Just answer me one question from your inside knowledge of the UAW. What could the UAW possibly gain by striking the Malibu and Lambda plants this year? They knew that GM had lost $38 billion in 2007. That to me was when I decided the UAW was best broken up as it was no longer a viable Union. They have used the thug mentality and gotten their way with weaklings like Wagoner way too long. Time for C11 and cancel all the contracts and hire people that are willing to work for the going wage. No other way that GM can survive. Just think about your new job. The UAW is screwing you and every GM sales person in this country over. They are screwing every Domestic shop worker in every dealership in this country. You don't see mechanics getting nearly full pay when they get laid off. Or the Sales people or the customer service agents in the dealerships. The few UAW workers believe they are more important than the 100s of 1000s of associated workers around the whole country. The UAW would rather GM fold than to give a penny of their precious wage and benefit package. That is why I so dislike the UAW. You and the UAW keep throwing out that starting wage for new hires. Well what cuts did the old timers take. When was the last time all the UAW workers took a cut in pay?
the game changers: 200% increase in foreclosures half million job losses per month unemployment at 9.6% in Michigan tremendous equity losses continued drops in home values lowest ever levels of consumer confidence falling job confidence $1.46 gas charity giving substantially down recession small businesses failing credit rating declines abound 40 states bankrupt
None of these were around in early 2007
One day some will wake up and realize that the poor quality you claim US autos to have can't actually be found and that the above list is strongly contributed to when we buy keep sending money, we often have to borrow, to Japan.
The excellent US products already exist. When people get sick of the list above, the game will change. Just go on with your US bashing without ever stating a single fact to back it up.
My contention is that the differences in quality are not life changing.
That is crazy man. How about when the warranty is up and you get stuck with a $3000 repair bill? Is the UAW going to help you out because they may have been drunk that Monday when they assembled your engine? So it lasted 3 years then started using oil. For Starters GM needs to offer 10 year warranty to make people believe they consider their cars good.
The reality is that these Republicans from Alabama, Kentucky and South Carolina represent such a small portion of both the U.S. population
No they represent their states best interest. That is what they were elected to do. They also represent the feelings of more than 60% of the US population. Most people in the USA do not want to bail out GM, Chrysler and the UAW.
All your ramblings over the last several postings have absolutely no bearing on the UAW or the bailout. So like I said before no one here has convinced me that the UAW is interested in saving the domestic automakers. So why should the rest of US?
You also can't get the "currency manipulation" issue through your head
Most of the currency manipulation between China, Japan and the USA, was during the mid 1990s. You can thank the Fed which Democratic President Woodrow Wilson signed into law. Why don't you accept the fact that currency manipulation is a fact of life with the kind of banking we have had for nearly 100 years. One of the most devious currency manipulators on the planet is George Soros. Look at the countries he has devastated with currency manipulation. Many believe myself included that the recent run-up in oil prices was his doing. When SNL did a spoof on his getting the $700 billion from the recent banking bailout. It was not just for the humor. It had a lot of basis in fact. Facts that Bloomberg is trying to investigate and the Fed is keeping a lid on who got what and where it is going.
Currency manipulation has little to no affect on the quality of materials that GM uses in their vehicles. It has NO bearing on the fact that many UAW workers are less than professional in their jobs. It is one of your smokescreens to protect workers that should not needed protecting. If GM was building world class cars they would not have lost 25% of the market in the last 15 years.
The excellent US products already exist. When people get sick of the list above, the game will change. Just go on with your US bashing without ever stating a single fact to back it up.
You won't hear me bash American-made vehicles. I know that there are some good ones out there. If, for example, I were shopping for a family sedan (I'm not), I'd take a long, hard look at the Malibu. I also think that the Cadillac CTS is a terrific car & a great value.
But that doesn't change my view of bailouts. Because a company produces good products doesn't give that company the right to ask the government to pick my pockets against my will. If we give into that, we'll find ourselves living in a fourth-rate country - a 21st century Soviet Union - in which companies compete with each other for political influence instead of competing with each other to produce the best products. That's obvious.
You talk about "game changers" - rising unemployment, foreclosures, etc. That's exactly why I'd rather spend my share of the cost of a bailout supporting my local merchants & charities. Why should I send my money a thousand miles away when I really should be using it to support my neighbors? You should do the same with your money.
"In the next few months, United Auto Workers President Ron Gettelfinger will be at the bargaining table with management at General Motors (GM) and Chrysler, as well as the federal government, to hammer out a deal that will restructure the industry. While Gettelfinger has always managed to get something for his union though tough bargaining, this time might be different."
"The talks themselves are historic: The most powerful industrial union in America will be asked to reopen its contract to ensure the survival of the automakers. And Gettelfinger himself will be walking a tightrope.
On the one hand, he knows that the stakes are too high for the government to walk away from an industry that directly and indirectly employs an estimated 3 million people. On the other, he knows concessions are inevitable and that to sell them to his 640,000 members he needs to be seen as a defender of the working stiff."
Here is how Gettlefinger got that last contract through. Just as I have said. The long time members stuck it to the new hires. They did not give up anything in their package. That is not being a team player. That causes nothing but dissension on the floor of the plant. When the new guy is making $14 per hour next to some lazy old dude making $30 per hour. Unions do not survive with that kind of double standard.
form the article: How did he sell the concessions to his members? None of the current workers lost much of anything. They kept their pay, and their health-care benefits are still first-rate. Anyone losing a job got buyouts averaging more than $100,000, and they typically head into the pension rolls.
Cuts should have been across the board. That would be a Union, based on equality. There is no equality left in the UAW. It is the old guys vs the new hires. A horrible way to run a Union. Here is more on the subject including Gettlefinger blocking the GM Chrysler merger. Which is probably for the best.
Most industry observers believe Gettelfinger will fight to the death to keep wages where they are. But under threat of extinction and government prodding, he may well ditch the JOBS bank. Gettelfinger may even have to persuade his members to pay more for health care. When asked about it, he didn't rule it out: "I'll just have to wait and see what the government wants," he said. How about a GM-Chrysler merger? "No," he said firmly.
The problem is, Gettelfinger has a tough hand. If he goes on strike, "he loses the country," says Ned Hill, dean of the College of Urban Affairs at Cleveland State University. So he will have to hope the Obama Administration is lenient. "At this point, his cards are all political," Hill says.
I think he has already lost the country. I don't know anyone in CA that feels sorry for the UAW. They are more concerned about the lost jobs here in our state and the fact that CA is near bankruptcy. That will make the automakers going out of business insignificant.
Well let's wait and see what the next 3 months bring. Will GM's market share increase, remain constant, or decrease? I predict it will decrease, but we have gas getting cheap so perhaps the worship of SUVs and Trucks will rise again and all will be good with the D3....until gas goes up again.
One day some will wake up and realize that the poor quality you claim US autos to have can't actually be found and that the above list is strongly contributed to when we buy keep sending money, we often have to borrow, to Japan.
The excellent US products already exist. When people get sick of the list above, the game will change. Just go on with your US bashing without ever stating a single fact to back it up.
You stated that we only need to increase percentages by a few points and it has much more effect than wage cuts for the UAW. I stated that is easy to say and hard to do. What are the game changers?
You proceeded to list a bunch of economic problems and then rant about my supposed bashing of which there was none in my post.
So I'll ask again - how do you propose the market share increases by a few percentage points for the D3? What are the PRODUCTS that are going to be the game changers to do that?
You're ranting a lot but have not answered my question.
All your ramblings over the last several postings have absolutely no bearing on the UAW or the bailout. So like I said before no one here has convinced me that the UAW is interested in saving the domestic automakers. So why should the rest of US?
I keep waiting for the UAW strike where they are protesting that they are not allowed to make a high enough quality vehicle, the parts don't fit right, and they don't want their names on poor vehicles.
Instead they kick the sick dog (GM) when it's down and looking like it may still be gasping for air.
Although the UAW can be blamed for a portion of the problems which resulted in the necessity for a goverment bailout. The manufacturers ability, or lack of, to manage their companies plays an equally large part in the current situation.
The unwillingness to acknowledge any fault, and deflecting blame effortlessly by these supposedly capable executives on any target other than their ineptitude is beyond comprehension. Watching the body English of 2 of the Big 3 leaders and the UAW president during the Senate hearings revealed far more than their spoken words.
The ego punctures affected some more than others. Nothing is more painful than than finding that you aren't as clever, wise, proactive or dynamic as your self-created image indicates, then having to listen to that being televised all over the world. Ouch!
Guess what? The 'circumstances beyond our control' excuse just don't play well any more.
I'm tired of talking about who is at fault the GM fiasco. What should GM and the UAW do now?
Let's discuss where we are now and what must be done to lay the groundwork for GM's recovery. EVERYONE would like to go back to the 90's - Let's figure out how to get there. But remember - to get there, we can't go back. We HAVE to go forward.
Here's where we are: Car sales are miserable. It's true that people aren't buying Toyotas or Honda's either, but that doesn't help GM in itself. The question is - when people do start buying cars again, what are they going to buy? How can we get them to select GM cars over foreign competitors?
Are we agreed that a lot of GM's sales over the past several years were based on being able and willing to offer better terms on loans and better deals than the Japanese were willing to offer? Those kinds of deals are probably going to be difficult for GM to provide for the next year or two. If that isn't possible, it's going to come down to product.
Is the current product mix going to be what people want when credit loosens up? Some of that depends on gasoline prices.... $1.50 per gal = SUV's. $3.50 per gal = econobox. Odds say that gas prices go back up. What does GM have in the queue? What should they have? Are the current models good enough? Does GM have to have a whole line of gas-misers or electric cars?
I don't think that the Volt (assuming it comes in on time and at the projected price point) is going to do much if anything for GM's bottom line. Toyota is apparently only making S100 or $200 per car on the Prius - even after several years of production.
Will product be enough? For whatever reasons, GM's margins on cars aren't as high as their competitors. Where can costs be cut? In the supply chain? Will the UAw HAVE to make concessions? Must they be substanial?
What about the dealers? Should dealers be bailed out? Is GM better off if 2,000 dealers fail?
Enough about how we got here. What's the path forward?
dallasdude: Lets be realistic. When Ford Taurus was the number one seller $800 a car was the factory labor rate per car.
And let's be completely realistic and remember that when the Taurus was the best-selling car, the Accord and Camry were smaller than the domestic offerings.
Also remember that by the early 1990s Ford kept the Taurus in the number-one spot by offering hefty incentives and dumping a huge percentage of total production on fleet customers. Two practices that would eventually destroy the Taurus' brand equity.
lokki: Are we agreed that a lot of GM's sales over the past several years were based on being able and willing to offer better terms on loans and better deals than the Japanese were willing to offer? Those kinds of deals are probably going to be difficult for GM to provide for the next year or two. If that isn't possible, it's going to come down to product.
GM's marketing has been terrible for years. GM has to stop selling the deal, and start selling the car. Granted, GM had to do this for years because the product just was not competitive. But with the new vehicles, it can focus more on the product itself.
lokki: Is the current product mix going to be what people want when credit loosens up? Some of that depends on gasoline prices.... $1.50 per gal = SUV's. $3.50 per gal = econobox. Odds say that gas prices go back up. What does GM have in the queue? What should they have? Are the current models good enough? Does GM have to have a whole line of gas-misers or electric cars?
GM needs to have a full lineup of vehicles, just like Toyota does right now. I don't see Toyota dumping the Tundra and Sequoia in response to higher gas prices. There is still a market for those vehicles.
The full lineup of vehicles, however, does not mean a full lineup of brands. Accept that the general public under the age of 45 no longer views a Buick as more prestigious than a Pontiac or a Chevrolet. Pontiac's performance image has been dead for decades. Saturn is just another division of GM, not a different kind of car company. The differences between the Outlook, Traverse and Acadia are lost on most buyers (the Buick Enclave is distinctive and attractive).
At a bare minimum, GM needs Chevrolet and Cadillac. There might be room for a combined Buick-GMC. But everything else needs to go. Please - no more Chevrolets rebadged as Pontiacs. The G5 and G3 are jokes.
Make one vehicle, make it as good as possible, and then promote it as much as Toyota does the Camry, or Honda does the Accord.
What GM also needs to do is stop treating smaller vehicles like the red-headed stepchildren. It needs to lavish as much care and attention to detail on the Aveo and Cobalt as it does on the CTS and Corvette.
lokki: I don't think that the Volt (assuming it comes in on time and at the projected price point) is going to do much if anything for GM's bottom line. Toyota is apparently only making S100 or $200 per car on the Prius - even after several years of production.lokki: Will product be enough? For whatever reasons, GM's margins on cars aren't as high as their competitors. Where can costs be cut? In the supply chain? Will the UAw HAVE to make concessions? Must they be substanial?
The UAW wages should not be cut. What needs to be cut are health care benefits, and retiree health care. The UAW also needs to accept work rules and staffing requirements that are competitive with the transplant operations. Discipline at the plants must also improve. Daily absentee rates among blue-collar workers are much higher at the domestic plants than they are at the transplant operations. This cannot continue. But leave the wages alone.
lokki: What about the dealers? Should dealers be bailed out? Is GM better off if 2,000 dealers fail?
No. GM needs to shrink its dealer base, and also get rid of Pontiac, Saab, Saturn and HUMMER. Those brands are going to go away, and there is nothing anyone can really do about it.
First, the big three's (not just GM) management need to take control of their companpanies and tie up the mob controlled UAW. Now one can do business with their hands shackled.
I can tell you being on the inside that Saturn, isn't going anywhere and Pontiac, will be a niche brand. Those were the words coming from Rick Wagoner and Mark LaNeve. Saab and Hummer, will be sold or closed.
Just remember something.....If it wasn't for the UAW, the Big 3 would be lucky get a doggy bag let alone a bailout and a connection with democrats in congress. Remember the executives of these companies primarily support republicans and if you think democrats would bend over backwards to help a business team that supports republicans well you are crazy. The blame like grbeck, more/less said can't fall completely on the shoulders of the UAW. They don't get paid to run the companies or control the engineering of the products do they??? If they are going to have to take responsibility for that then they are grossly under paid!!!
Comments
However, the average UAW worker fits the profile of the stereotypical UAW worker.
As for the current state of the economy - there's plenty of blame to go around for both parties, but both Bush and McCain tried to institute reforms back in 2003 and 2005. Democrats (including and specifically Barney Frank) blocked those efforts. Additionally, the whole subprime market was generated by the Carter administration and then expanded by the Clinton administration.
Yes, Honda and Toyota are both losing money. The difference between them and GM however, is that their expenses go down when their income goes down. Japanese workers are paid comparatively low salaries, but substantial bonuses. ( You will recall this is the same system that is used by the Japanese employers in the states). In good times the bonuses are large. In bad times, the bonuses disappear and the wage costs go down.
I have never claimed that Japan has all the answers. They've been in a bad situation for at least a decade. It'sactually been more than a decade since Japan started phasing out the lifetime employment system. Companies there have abused national health care system by only hiring employees as part time, and thereby giving them no benefits at all. There is now a whole generation of "freeters" who are basically independent contractors and temporary employees.
http://en.wikipedia.org/wiki/Freeter
If that's not enough, they're getting laid off.
http://www.bloomberg.com/apps/news?pid=20601101&sid=aq2BRUMs9Q2Q&refer=japan
My solution for Detroit? It's simple. GM should be forced into bankruptcy, and reorganized. I am reluctant to diminish the pensions of those who have already retired, but the current system is unsustainable.
Your solution from your comfortable ivory tower seems to be to keep doing what hasn't been working.
I see blame being placed on the UAW for the thicness of the metal (perceived thickness? being tinny could also be a result of the shaping as well as the malleability of the metal alloy chosen), but the UAW didn't pick the metal thickness or physico-chemical properties.
I see fit and finish being blamed on the UAW and that could mean poor assembly by leaving things not aligned, tightened, etc., and that is on the assembler. However, the choice of materials from which to build the thing was made by GM and its suppliers in tandem working to minimize costs. That cost pressure is partly because of the high UAW costs for some workers and for many retirees and their checks and their healthcare plans.
In another post the fit and gap of the doors was mentioned. The choice of gap on the truck was chosen by GM and its engineering/design staff. The gasket type and fit for the door was by the GM staff not by the UAW. The UAW may have not installed the door properly to fit; that should have been corrected by the dealer in their predelivery inspection for which they are well compensated. Or it could have been readjusted after delivery for you upon warranty complaint. Obviously it wasn't. (My leSabre has 3 layers of seal along the bottom of the door which is really quiet.(
My visit to the Moraine plant, may its soul rest in peace, was eye-opening two winters ago. That line stopped often because of someone pulling the cord. The digital signs told who had stopped the line. There were people scurrying over to help fix whatever was noticed or needed. Sometimes the skillets stopped only for less than 30 seconds; couple of times it was for nearly a minute. I grant that was IUE/??? workers rather than UAW workers so may have been unique to that plant. But I was impressed.
I don't support the UAW as much as I used to, but they have been blamed for many choices that were the company management rather than the workers. The workers indirectly affected the choices by the cost pressures due to high legacy costs which the transplants enjoyed not having along with a currency bias that helped sell their cars.
2014 Malibu 2LT, 2015 Cruze 2LT,
I'm surprised it's that high.
You have to wonder if that's just for the domestics and what the labor cost is for the foreign automakers.
There are many things the UAW has no control over. I blame the whole GM organization, from Wagoner to the guy pushing a broom for 30 years. They all should have seen this coming when the company was not profitable over 20 years. They all should have done their part to plug up the holes in the sinking ship. I was not so adamant against the UAW until the strikes this year. Then looking back I would say the real turning point was the strike of 1998. The UAW was all greed in that strike. GM should have been making money when they were selling large SUVs faster than IHop sells pancakes. The UAW has not allowed GM to make a decent profit for decades. Every time GM gets a break and has a vehicle that a few folks want, they strike the plant. That is not a Team player. It is totally selfish on the part of the UAW.
I feel for all the people that are impacted by the lack of new car sales. Including my good friend that lost his job at the big Ford agency here in San Diego. I just get the distinct feeling that the only people that are important in the auto industry are the UAW workers & retirees. They helped get this Congress and the new President elected and the rest of US have to reward them.
The only way for GM to survive is Chapter 11, by cleaning out the dead weight in all parts of the company. Getting rid of all the UAW work rules that do not pertain to safety. Get a realistic health care program. etc etc. We have family in Ohio, Indiana, Kentucky and Michigan. I don't want to see them destitute and moving out here to sponge off of me. So the sooner the bankruptcy gets started to sooner GM can become profitable.
The time for the mob mentality of labor Unions was spent to good use in the '40's. Now they are really just a malignacy. No better than the Mob holding a firebomb to the face of a shop keeper to pay a "security fee".
It's time the auto assemblers get over them selves or they should be replaced by minium wage workers who won't mind working.
Is that the cost of assembling the parts as an automobile or is it the total cost of labor, as in the labor of making the seats, the steering wheel, the dashboard, the rearview mirror, the tires, and all the parts in the car as well as assembling the car?
Maybe this has been answered somewhere, but I missed it if it has been mentioned.
2014 Malibu 2LT, 2015 Cruze 2LT,
Engineering at Boeing and Bell Helicopter are union/UAW. The fast growing higher education is also being unionized in major universities at a rapid pace. I know that there is a highly skills trade part to the Big Three whom are union. They make/repair tooling, fixtures, dies, molds, robotics, and other means of production to get to the end product. Trust me you don't even want to see the skills trades hourly rate, but generally its $10 an hour over the national agreement.
I have dealt with these young eager engineers full of piss and vinegar. Both union and non union ready to set the world on fire. They learn quick, do great work, and are an American asset. In the corporate environment something happens where they transform and or morph into just employees. No different than that autoworker who comes in wanting to do a great job. Doing whatever he/she can to better their lot in life and that of their family. I hate to call it burn out, but many companies deal with this. Its the companies responsibility and to their benefit to keep its assets (employees) productive.
As for the current state of the economy - there's plenty of blame to go around for both parties, but both Bush and McCain tried to institute reforms back in 2003 and 2005. Democrats (including and specifically Barney Frank) blocked those efforts. Additionally, the whole sub prime market was generated by the Carter administration and then expanded by the Clinton administration.
The Reagan legacy is deregulation and ends with the Phil Gramm ENRON loophole prior to congress going into their recess in 2000. There is a quoted speech by GW Bush taking credit for the housing boom and his continuing efforts to remove such barriers as down payments. We could go on into the ethics of Gramm's wife being on the ENRON payroll and the rational behind the FED lowering interest rates after the dot com bust, but we could never convince you that the GOP are not the conservatives they claim. The classical liberal is been made to mean something bad, when they by nature are the real deregulates, hands off lassie faire, let the markets decide, no bail outs party. This is but a rerun of the S&L bail out the big fish/lobby.
Yes, Honda and Toyota are both losing money. The difference between them and GM however, is that their expenses go down when their income goes down. Japanese workers are paid comparatively low salaries, but substantial bonuses. ( You will recall this is the same system that is used by the Japanese employers in the states). In good times the bonuses are large. In bad times, the bonuses disappear and the wage costs go down.
Admission is the first step to recovery. Its economics 101 that the autos and housing are the first to go into recession and the first to recover. The process has been delayed by silly gimmicks, Zero down, employee pricing, red tag sale, to name a few. These do nothing but prolong the inevitable. Those who get in on these deals/gimmicks/promotions more than likely have a used car which is likely to be traded in. Hence, we glut the used car market (remember once you drive that new off the lot, its used). To reduce inventory deals/gimmicks/promotions/rebates are used to entice buyers. $5 dollar subs at Subway aren't going to make them much profit, however, they are only intended to weather the down cycle/keep the doors open for the better days to come. The car business is not any different. They have relied on leasing to move inventory. Leasing comes with the residual and or the assets value at some future date. So high gas prices affected this residual value. Its not very hard to imagine what some of these gas guzzling SUV's lost in value. Only a fool would go on to pay the residual value, so the bank or note holder is stuck with a bad investment, the market is glutting, hence the prices of these and all autos (foreign and domestic) take a hit, the banks now have to sell these assets and lick their wounds. Adding insult to injury, since they have other assets decreasing in value as well (housing). To fuel this economy, they seek help from govt, lower interest rates, rebates, tax incentives, bail outs, and anything to put out the fire. Remember, each percentage point the interest rate increases, that many fewer buyers and or qualified buyers on the market at any given time. Then too we must remember that interest rates are used to fight inflation (rising prices) and its not too wise to use them as a stimulus too much (were almost at zero). The only weapon left for govt is fiscal policy (congress spending). Too much govt spending may also cause a devalued dollar as oppose to other currencies.
My solution for Detroit? It's simple. GM should be forced into bankruptcy, and reorganized. I am reluctant to diminish the pensions of those who have already retired, but the current system is unsustainable.
A cost benefit of unemployment benefits/pension dumping/social services/loss of tax revenue/Wall Street and whatever else would be interesting on something this big and or that effects this many people. You don't even have any idea of the ripple effect of letting this happen.
current system is unsustainable
Are we forgetting that during the S&L bail out, Donald J. Trump, Trammell Crow, Hall Financial Group, and many more were too big to liquidate. They paid back all that money and in fact made billions after-wards. Chrysler Corp in 1979, Lockheed in 1971 and New York City in 1975.
Yes, Honda and Toyota are both losing money. The difference between them and GM
Any fool would have rather had GM stock during more years than those of Toyota/Honda. Its not even close. At the moment, for a time period, GM looks bad to some and very cheap to others. Honda/Toyota may look god to some and bad to others. Lets examine the GM history and all these unprofitable years.
Then too you fail to mention the fact that GM purchased EDS for about 4 billion and sold it for near 28 billion. When G.M. shareholders approved the spin-off of EDS years ago, the company's $2.5 billion purchase was worth $27.6 billion.
And after paying $5 billion for Hughes in 1985, G.M. has since sold its pieces for $9.5 billion to Raytheon, $3.75 billion to Boeing, and, in its latest deal, Echo Star will pay $26 billion.
General Motors sells 51% stake in General Motors Acceptance (GMAC) to Cerberus Capital Management, Citigroup and Aozora consortium for US$14bn in 2006
GM sells 78% stake in GMAC Commercial Holding (its commercial mortgage arm) to KKR, Five Mile Capital Partners and Goldman Sachs consortium for US$8.8bn in 2006
GM agrees to sell 17.4% stake in Suzuki for US$1.98bn in 2006
GM sells Avis in 1996
GM also aquired the AM general Hummer business, which is a cash cow in the military business today
Free advise: a smart man would look at the
<a href="http:
I don't think a break down of total labor has been posted. I see cost from $1500 to $3000 per car as legacy costs. I am assuming that is the price for retiree health care. Pensions should not be tacked on as there is a fully funded pension plan to pay those costs. That means that somewhere around 10% is just legacy cost.
Another question. Does it take that much more labor to build a $30k PU truck than it does a $20k Malibu? Or a $70k Escalade vs a $45k Denali Yukon?
We could ramble all day about totally irrelevant issues to the collapse of the Big 3 and what part the UAW is playing in that collapse. Why is Gramm's wife so important and Dingell's wife with her high paid do nothing job at GM never mentioned? Could it be you have been so biased against the GOP that you believe the Dems are above reproach?
You have pointed out all the assets the GM has sold over the last few years. Yet they still had $72 billion in losses over the same 4 years. Must be doing something wrong. Selling controlling interest in GMAC may have been real dumb now that no one wants to carry a lease on GM vehicles. Could it be that GM is paying for their ignorance in buckling under to the thug tactics of the UAW over the last 10 years?
You do not make a good case for the UAW holding onto the status quo.
An avg. Civic sells for $20k so 320/20000= 1.5% of total car value for cost of assembly wages paid to workers.
Now I realize that FICA taxes are paid and so are benefits and eventually there could be even bonuses. The 10% UAW piece of an American car has to be a high estimate and include the legacy costs and the engine production and trans production labor that is UAW as well, since there is not even a 2:1 base wage ratio.
It is easy to see how Honda derives more than half of it's worldwide profits from North America sales.
Admission is the first step to recovery. Its economics 101 that the autos and housing are the first to go into recession and the first to recover. The process has been delayed by silly gimmicks, Zero down, employee pricing, red tag sale, to name a few. These do nothing but prolong the inevitable. Those who get in on these deals/gimmicks/promotions more than likely have a used car which is likely to be traded in. Hence, we glut the used car market (remember once you drive that new off the lot, its used). To reduce inventory deals/gimmicks/promotions/rebates are used to entice buyers. $5 dollar subs at Subway aren't going to make them much profit, however, they are only intended to weather the down cycle/keep the doors open for the better days to come. The car business is not any different.
Frankly, I have no idea what you're talking about or how it applies to what I've said. It's a nice
flurryslurry of fuzzy facts mixed with opinions, but rather an odd mix. You're welcome to blame the Republicans and Phil Gramm's evil wife if that makes you happy. Whatever.At this link, you'll find the bottom line for GM
http://money.cnn.com/POLLSERVER/results/44132.html
78% of those polled by the very liberal CNN would not buy a GM or Chrysler product after the bailout was announced.
Not quite what it said.
Are you more likely to buy a car from GM or Chrysler after Friday's bailout?
So if you are the 35% or so who already may buy a GM of Chrysler product they are not more likely to buy. If you are the 65% who would not be buying a GM of Chrysler you are not more likely to buy a car from them. If what you said was true there would be only 22% or less buying that would be a huge drop in sales and that is not being shown in Decembers sales at least.
Me personally and some of my friends are not more likely to buy a GM product because of the loans. So we would have been one of the 78%. The guy that always buys Ford/Toyota/whatever would also have been one of the 78%.
And that 22% would now be MORE likely to buy their products. So the bailout is causing more to buy the vehicles. Perhaps because they feel the companies will be around or because they want to keep the companies in business or whatever.
ooooohhh...here comes the mr. humanity in all his glory. The savior of the species that is going to be extinct.
Mr. Dave. This is called the Darwin's Theory.
And I do not like the idea that everybody in the soccer match gets a trophy regardless of whether they won or lost, and even Kindergarten kids get a graduation certificate.
Guess what? Do you know the US Tennis open player that came in 4th? or that football team that came in 4th place?
>High school kid runs a 4:08 mile and comes in 4th place at a high school meet. His parents run over and congratulate him.
Ah....I would not run over and congratulate him. Why should I? I would go over and offer my condolences and give him a spanking and a lecture so that he can try harder next time. Congratulate for coming in 4th? My foot.
Are you somehow indicating that the poor quality of Automobiles is responsible for a better American life? and that improving the quality would somehow not improve the quality of life here?
True. higher wages are not what is making these cars unaffordable. It is the quality of car delivered at that price which is not realistic.
Time and again, you are missing the point. The reason for an UAW wage cut is to make them realize that they are not worth their pay. They have to bring up their standards of workmanship if they want that pay.
I'm glad to see that you agree with me that all bailouts are economically corrosive - no matter who benefits from them. We can't end them but that shouldn't stop us from arguing against them whenever we can.
We classical liberals should take every opportunity to champion the core ideals of limited government, low taxes & maximum individual liberty.
Then too a supplier has labor cost too. This hard to factor in.
The engine block is more than likely cast, placed in a holding fixture, machined in a CNC machine (computer numerical control). I've been to the machine tool manufacturers and Japanese are slow, we have $500,000 machines running on Windows 95. However, that plant was a 24 hour operation with one person on site for this late night operation. Since we do low rate production we have made changes which allow fast, I mean fast turn around. Some the parts we have made and shown them are beyond their scope. They go to the tool show and make a Alpha Romero motor and a few push rods fast to impress. However, we are doing things light years beyond their scope.
In any case, I was told that the folks in Iraq were commenting that those Americans sure have lots of cruise missiles.
The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.
Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.
The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests.
“If they told us what they held, we would know the potential losses that the government may take and that’s what they don’t want us to know,” said Carlos Mendez, a senior managing director at New York-based ICP Capital LLC, which oversees $22 billion in assets.
Kristol: I don't think it's very smart for a bunch of Southern Republicans to decide that the future of the Republican party is to beat up working class union members in states like Michigan, Indiana and Ohio. The UAW is in a lot of trouble, they've shrunk by 2/3's in the last years...
An average automobile, 10% of the cost comes from wages and they were going to cut wages by ten or twenty percent, so it's one or two percent of the cost of the automobile. To have a huge fight for that. I think it was a mistake for the Republicans,
He's thinking of this in political terms for Republicans, and actually gets honest when he says that it's not the union workers or their wages at fault here. I was not in favor of a Car Czar because I don't trust Bush to make the choice based on the interests of the working class, but at least they see the problem this could cause our entire economy if the Republicans in Congress bankrupt the auto industry.
On the other hand, if Republicans want to immolate themselves into even further irrelevancy, I'm inclined to let them. The trick is to keep them from taking the whole country down along with them.
Nah, the UAW is doing too good a job at (contributing to) doing this.
Croker and Shellby talk a big scam, it is that: a big scam. As the news comes out that the feds pay a subsidy of $5000 per employee there in the land of cotton, to Mercedes, Toyota, Nissan, Honda and etc...then the $45.00 per hour (plus health benefits, plus land subsidies,plus additional tax concessions) don't look so cheap. There's more to the Croker/Shellby scam and it will be revealled soon. Just wait for the AFL/CIO and The Teamsters to get involved. It's gonna be a mobfest on Croker and Shellby. Even smilin' Jack can see this coming. Good bye GOP! Thank your southern carpet shaggin stars! Your greed got ya caught!
The Republicans that have been the most vocal against helping the auto sector have been southern and from the states with large foreign auto manufacturers. I guess it is natural that they would try and protect these large foreign employers in their states, so we cannot fault them.
However, what amazes me is that these guys have any power. I guess with the Republicans now being so depleted they represent the only Republicans left.
The reality is that these Republicans from Alabama, Kentucky and South Carolina represent such a small portion of both the U.S. population and the economy that it is amazing that these guys can basically dictate what this country can and cannot do. We need to find a way to neutralize these guys for the benefit of the country, although if we let them continuing to act the way they do it will be to the detriment of their own party, as they can kiss the states of Michigan, Ohio and Indiana good-bye, just like they did with Nevada, New Mexico and Colorado, and likely Arizona, with the immigration debate.
Selling controlling interest in GMAC may have been real dumb now that no one wants to carry a lease on GM vehicles.
Anyone holding finincials when the musical chairs ended have taken a beating. From $53 to a little over $3 a share in five years. Make a mental note not to ask Gary for stock tips.
Why is Gramm's wife so important and Dingell's wife with her high paid do nothing job at GM never mentioned?
Why is it never referenced that John Dingell's wife is an heiress to General Motors and Texaco? She ain't exactly doing it for the money. Ya think they, the Dingell's, care about their state?
http://www.washingtontimes.com/news/2008/jun/25/debbie-dingell-john-wife/
http://query.nytimes.com/gst/fullpage.html?res=9901EFD81031F931A15750C0A96F95826- 0&n=Top/Reference/Times%20Topics/People/D/Dingell,%20John%20D.
You amaze me gagrice. You would rather call a middle class where your average slob make $12-15 an hour like the Bush administration and the pseudo-right. How many people are going to buy things like new cars on $15 an/hr ??? Their disposable income isn't in line with the cost of living. I might be a minority here on edmunds but their are many who think and believe the way I do including people in your party and many of whom are non-union. You would rather sacrifice our economic power and national security so some ignorant slob can buy a that chinese made TV stand for $19.99 which is made out of cardboard with black lead paint from Walley World, and make your executive neighbor rich. I am at work taking a break otherwise I would be more than glad to get you some data. I know that is one reason why Regan, implemented a tariff on Japanese, motorcycles because Japan, implemented a "barrier" on engine specs which just so happened restricted Harley Davidson, from their market. I know back in the 1980's Japan, had tariffs on imported cars.You also can't get the "currency manipulation" issue through your head and hammer the UAW, GM, and just ignore the fact that for every Honyota, sold here in the U.S. which 50% are imported well it's an extra $4-13K in profits for the Japanese, automobile manufactuers. I'm not going to hammer Indiana, because their are some smart folks in the cities. You noticed they built those plants in the rural "farm" sectors of Indiana, but I won't get into why they did that. Let's just say it wasn't because they got such a great tax deal!!! Believe what you want gagrice, but remember that some of the data you get from so-called independent sources might have a vested interest to distort the facts. I know you like to trash the UAW, and think they are evil but they often site articles from independent sources. The teamsters aren't free of guilt if I thought the way you do. I however am of the thinking of instead of keeping the working man down which we have gradually done for the last 20 or 30 years why can't we think more/like other society's and include the working man or women??? I guess that isn't a option in capitalism???
-Rocky
With bonuses, the Toyota workers made more than the GM workers, averaging almost $30.00 an hour versus $27.00?
These guys can probably convince most of the country that union workers are overpaid. Unfortunately alot of people who are not in a union (and they are shrinking) can be made to believe that the REASON they are making cars no one is buying is BECAUSE of these union workers. However, for the God Bless America party, it's so fitting these frauds are made to go public with their attempts to strangle the one thing we still produce in this country, automobiles.
Explain that to your flag waving, Bible reading, right wing Southern base.
Toyota forecast an operating loss of $1.66 billion for the fiscal year ending March 2009. Toyota has never reported an operating loss since it began disclosing such figures in 1941. But it did have an operating loss in unofficial, internal calculations for the year ending March 1938, a year after the company was founded.
Operating income reflects a company's core business performance and does not include income taxes and certain other expenses. Last fiscal year, Toyota had an operating profit of 2.27 trillion yen.
Japan's top automaker also lowered its net profit forecast to just 50 billion yen for the year through March 2009 — a tiny fraction of the 1.7 trillion yen it earned last year.
an hour ago
http://www.freep.com/article/20081222/BUSINESS01/81222005/1002
http://www.marketwatch.com/news/story/Toyota-expected-cut-earnings-outlook/story- .aspx?guid=%7B8D3DF307-AE54-4391-8239-14298C656486%7D#comments
Nice Spin job. Maybe CNN will hire you.
I have to agree with you. US leads in innovation. machines equipped with FANUC are simply awesome. But again, I have always maintained the view that the US is the pioneer, and the Japanese are followers who implement what the US develops so religiously that their end results are way better. We, in the US, have started to relax and sit on our laurels when it comes time to implement. Simply inventing and discovering new stuff does not help. Most of Toyota's designs follow GM innovations. But they do a better job in translating the design document to final product.
I did see the Japanese counter part, well trained to be given parts in the morning and come back finished at the end of the day. Using his Mazatrol. Then I saw Unigraphics post developed in Michigan of all places, ripping at 350 inches per minute and the American coming back in an hour, deburred and all.
Fanuc is old school and simplistic these days.
Let me make it simple. What did the quality of your auto do to make your life better today, as opposed to if you drove a new Malibu that you claim has "poor quality" today?
My contention is that the differences in quality are not life changing.
Just answer me one question from your inside knowledge of the UAW. What could the UAW possibly gain by striking the Malibu and Lambda plants this year? They knew that GM had lost $38 billion in 2007. That to me was when I decided the UAW was best broken up as it was no longer a viable Union. They have used the thug mentality and gotten their way with weaklings like Wagoner way too long. Time for C11 and cancel all the contracts and hire people that are willing to work for the going wage. No other way that GM can survive. Just think about your new job. The UAW is screwing you and every GM sales person in this country over. They are screwing every Domestic shop worker in every dealership in this country. You don't see mechanics getting nearly full pay when they get laid off. Or the Sales people or the customer service agents in the dealerships. The few UAW workers believe they are more important than the 100s of 1000s of associated workers around the whole country. The UAW would rather GM fold than to give a penny of their precious wage and benefit package. That is why I so dislike the UAW. You and the UAW keep throwing out that starting wage for new hires. Well what cuts did the old timers take. When was the last time all the UAW workers took a cut in pay?
200% increase in foreclosures
half million job losses per month
unemployment at 9.6% in Michigan
tremendous equity losses
continued drops in home values
lowest ever levels of consumer confidence
falling job confidence
$1.46 gas
charity giving substantially down
recession
small businesses failing
credit rating declines abound
40 states bankrupt
None of these were around in early 2007
One day some will wake up and realize that the poor quality you claim US autos to have can't actually be found and that the above list is strongly contributed to when we buy keep sending money, we often have to borrow, to Japan.
The excellent US products already exist. When people get sick of the list above, the game will change. Just go on with your US bashing without ever stating a single fact to back it up.
That is crazy man. How about when the warranty is up and you get stuck with a $3000 repair bill? Is the UAW going to help you out because they may have been drunk that Monday when they assembled your engine? So it lasted 3 years then started using oil. For Starters GM needs to offer 10 year warranty to make people believe they consider their cars good.
No they represent their states best interest. That is what they were elected to do. They also represent the feelings of more than 60% of the US population. Most people in the USA do not want to bail out GM, Chrysler and the UAW.
All your ramblings over the last several postings have absolutely no bearing on the UAW or the bailout. So like I said before no one here has convinced me that the UAW is interested in saving the domestic automakers. So why should the rest of US?
Most of the currency manipulation between China, Japan and the USA, was during the mid 1990s. You can thank the Fed which Democratic President Woodrow Wilson signed into law. Why don't you accept the fact that currency manipulation is a fact of life with the kind of banking we have had for nearly 100 years. One of the most devious currency manipulators on the planet is George Soros. Look at the countries he has devastated with currency manipulation. Many believe myself included that the recent run-up in oil prices was his doing. When SNL did a spoof on his getting the $700 billion from the recent banking bailout. It was not just for the humor. It had a lot of basis in fact. Facts that Bloomberg is trying to investigate and the Fed is keeping a lid on who got what and where it is going.
Currency manipulation has little to no affect on the quality of materials that GM uses in their vehicles. It has NO bearing on the fact that many UAW workers are less than professional in their jobs. It is one of your smokescreens to protect workers that should not needed protecting. If GM was building world class cars they would not have lost 25% of the market in the last 15 years.
You won't hear me bash American-made vehicles. I know that there are some good ones out there. If, for example, I were shopping for a family sedan (I'm not), I'd take a long, hard look at the Malibu. I also think that the Cadillac CTS is a terrific car & a great value.
But that doesn't change my view of bailouts. Because a company produces good products doesn't give that company the right to ask the government to pick my pockets against my will. If we give into that, we'll find ourselves living in a fourth-rate country - a 21st century Soviet Union - in which companies compete with each other for political influence instead of competing with each other to produce the best products. That's obvious.
You talk about "game changers" - rising unemployment, foreclosures, etc. That's exactly why I'd rather spend my share of the cost of a bailout supporting my local merchants & charities. Why should I send my money a thousand miles away when I really should be using it to support my neighbors? You should do the same with your money.
UAW on Givebacks: 'We Have Given at the Office' (Business Week)
"The talks themselves are historic: The most powerful industrial union in America will be asked to reopen its contract to ensure the survival of the automakers. And Gettelfinger himself will be walking a tightrope.
On the one hand, he knows that the stakes are too high for the government to walk away from an industry that directly and indirectly employs an estimated 3 million people. On the other, he knows concessions are inevitable and that to sell them to his 640,000 members he needs to be seen as a defender of the working stiff."
Auto Bailout: UAW Chief Draws a Line (also Business Week)
form the article:
How did he sell the concessions to his members? None of the current workers lost much of anything. They kept their pay, and their health-care benefits are still first-rate. Anyone losing a job got buyouts averaging more than $100,000, and they typically head into the pension rolls.
Cuts should have been across the board. That would be a Union, based on equality. There is no equality left in the UAW. It is the old guys vs the new hires. A horrible way to run a Union. Here is more on the subject including Gettlefinger blocking the GM Chrysler merger. Which is probably for the best.
Most industry observers believe Gettelfinger will fight to the death to keep wages where they are. But under threat of extinction and government prodding, he may well ditch the JOBS bank. Gettelfinger may even have to persuade his members to pay more for health care. When asked about it, he didn't rule it out: "I'll just have to wait and see what the government wants," he said. How about a GM-Chrysler merger? "No," he said firmly.
The problem is, Gettelfinger has a tough hand. If he goes on strike, "he loses the country," says Ned Hill, dean of the College of Urban Affairs at Cleveland State University. So he will have to hope the Obama Administration is lenient. "At this point, his cards are all political," Hill says.
I think he has already lost the country. I don't know anyone in CA that feels sorry for the UAW. They are more concerned about the lost jobs here in our state and the fact that CA is near bankruptcy. That will make the automakers going out of business insignificant.
Well let's wait and see what the next 3 months bring. Will GM's market share increase, remain constant, or decrease? I predict it will decrease, but we have gas getting cheap so perhaps the worship of SUVs and Trucks will rise again and all will be good with the D3....until gas goes up again.
So I'm sure you have an 18" TV at home as your primary set? After all, a big screen HDTV is not life changing.
However most people don't buy for life changing. They buy for desirable.
The excellent US products already exist. When people get sick of the list above, the game will change. Just go on with your US bashing without ever stating a single fact to back it up.
You stated that we only need to increase percentages by a few points and it has much more effect than wage cuts for the UAW.
I stated that is easy to say and hard to do. What are the game changers?
You proceeded to list a bunch of economic problems and then rant about my supposed bashing of which there was none in my post.
So I'll ask again - how do you propose the market share increases by a few percentage points for the D3? What are the PRODUCTS that are going to be the game changers to do that?
You're ranting a lot but have not answered my question.
I keep waiting for the UAW strike where they are protesting that they are not allowed to make a high enough quality vehicle, the parts don't fit right, and they don't want their names on poor vehicles.
Instead they kick the sick dog (GM) when it's down and looking like it may still be gasping for air.
The unwillingness to acknowledge any fault, and deflecting blame effortlessly by these supposedly capable executives on any target other than their ineptitude is beyond comprehension. Watching the body English of 2 of the Big 3 leaders and the UAW president during the Senate hearings revealed far more than their spoken words.
The ego punctures affected some more than others. Nothing is more painful than than finding that you aren't as clever, wise, proactive or dynamic as your self-created image indicates, then having to listen to that being televised all over the world. Ouch!
Guess what? The 'circumstances beyond our control' excuse just don't play well any more.
Regards,
OW
What should GM and the UAW do now?
Let's discuss where we are now and what must be done to lay the groundwork for GM's recovery. EVERYONE would like to go back to the 90's - Let's figure out how to get there. But remember - to get there, we can't go back. We HAVE to go forward.
Here's where we are:
Car sales are miserable. It's true that people aren't buying Toyotas or Honda's either, but that doesn't help GM in itself. The question is - when people do start buying cars again, what are they going to buy? How can we get them to select GM cars over foreign competitors?
Are we agreed that a lot of GM's sales over the past several years were based on being able and willing to offer better terms on loans and better deals than the Japanese were willing to offer? Those kinds of deals are probably going to be difficult for GM to provide for the next year or two. If that isn't possible, it's going to come down to product.
Is the current product mix going to be what people want when credit loosens up? Some of that depends on gasoline prices.... $1.50 per gal = SUV's. $3.50 per gal = econobox. Odds say that gas prices go back up. What does GM have in the queue? What should they have? Are the current models good enough? Does GM have to have a whole line of gas-misers or electric cars?
I don't think that the Volt (assuming it comes in on time and at the projected price point) is going to do much if anything for GM's bottom line. Toyota is apparently only making S100 or $200 per car on the Prius - even after several years of production.
Will product be enough? For whatever reasons, GM's margins on cars aren't as high as their competitors. Where can costs be cut? In the supply chain? Will the UAw HAVE to make concessions? Must they be substanial?
What about the dealers? Should dealers be bailed out? Is GM better off if 2,000 dealers fail?
Enough about how we got here. What's the path forward?
And let's be completely realistic and remember that when the Taurus was the best-selling car, the Accord and Camry were smaller than the domestic offerings.
Also remember that by the early 1990s Ford kept the Taurus in the number-one spot by offering hefty incentives and dumping a huge percentage of total production on fleet customers. Two practices that would eventually destroy the Taurus' brand equity.
GM's marketing has been terrible for years. GM has to stop selling the deal, and start selling the car. Granted, GM had to do this for years because the product just was not competitive. But with the new vehicles, it can focus more on the product itself.
lokki: Is the current product mix going to be what people want when credit loosens up? Some of that depends on gasoline prices.... $1.50 per gal = SUV's. $3.50 per gal = econobox. Odds say that gas prices go back up. What does GM have in the queue? What should they have? Are the current models good enough? Does GM have to have a whole line of gas-misers or electric cars?
GM needs to have a full lineup of vehicles, just like Toyota does right now. I don't see Toyota dumping the Tundra and Sequoia in response to higher gas prices. There is still a market for those vehicles.
The full lineup of vehicles, however, does not mean a full lineup of brands. Accept that the general public under the age of 45 no longer views a Buick as more prestigious than a Pontiac or a Chevrolet. Pontiac's performance image has been dead for decades. Saturn is just another division of GM, not a different kind of car company. The differences between the Outlook, Traverse and Acadia are lost on most buyers (the Buick Enclave is distinctive and attractive).
At a bare minimum, GM needs Chevrolet and Cadillac. There might be room for a combined Buick-GMC. But everything else needs to go. Please - no more Chevrolets rebadged as Pontiacs. The G5 and G3 are jokes.
Make one vehicle, make it as good as possible, and then promote it as much as Toyota does the Camry, or Honda does the Accord.
What GM also needs to do is stop treating smaller vehicles like the red-headed stepchildren. It needs to lavish as much care and attention to detail on the Aveo and Cobalt as it does on the CTS and Corvette.
lokki: I don't think that the Volt (assuming it comes in on time and at the projected price point) is going to do much if anything for GM's bottom line. Toyota is apparently only making S100 or $200 per car on the Prius - even after several years of production.lokki: Will product be enough? For whatever reasons, GM's margins on cars aren't as high as their competitors. Where can costs be cut? In the supply chain? Will the UAw HAVE to make concessions? Must they be substanial?
The UAW wages should not be cut. What needs to be cut are health care benefits, and retiree health care. The UAW also needs to accept work rules and staffing requirements that are competitive with the transplant operations. Discipline at the plants must also improve. Daily absentee rates among blue-collar workers are much higher at the domestic plants than they are at the transplant operations. This cannot continue. But leave the wages alone.
lokki: What about the dealers? Should dealers be bailed out? Is GM better off if 2,000 dealers fail?
No. GM needs to shrink its dealer base, and also get rid of Pontiac, Saab, Saturn and HUMMER. Those brands are going to go away, and there is nothing anyone can really do about it.
Agreed, although I think that GM will have a hard time shedding dealerships, which enjoy strong protection under state laws, unless it goes bankrupt.
IMO, this is one more reason why GM has no future unless it takes the bankruptcy route.
-Rocky
-Rocky