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I've been there. I worked for a company that lost it's biggest customer and nearly went out of business, 70% of the employees were let go. We didn't get a bail out. I did't go crying with my hands out. I quit before I got a pink slip and moved on.
Let's see if we don't have to bailout GMAC even more.
Remember, even Cadillac wants to distance itself from the GM brand...
Regards,
OW
How is this GM's fault?? At the end of the day, it was the city and state that put their eggs in the one (automotive) basket. They have had (and still have) the opportunity to attract other automakers and/or industries, yet have not done this.
So what happens if they DO go belly up in spite of the help the Big 3 have gotten?? California isn't much better off. What if BOTH states go belly up in the next couple years?? Tell me that won't be another big bailout.
But of course some posters (not necessarily you) have complained about cities and states attracting automakers with incentives (when it was foreign brands and states like Alabama or NC, etc.)
We can't have it both ways.
Why would any sane industry locate in Detroit at this point, anyway?
If you are referring to the 50's through 70's, then probably correct. Japanese auto workers overtook Americans in the 80's.
Being great once is not enough. One has to continually make effort to stay on top, and the other team has to do the same!
Because the average auto worker can now get an average house for 100K. Why rent?? This would allow a re-balancing of the UAW-type wage structure. It all balances out in the end.
GM was and exemplifies how a huge corporation that ruled the earth can and DID, FAIL.
Regards,
OW
Too bad GM is behind in the world of the high build quality...except for the Lemko-mobiles, of course.
Change is good...
Regards,
OW
Then the city goes to ruins when 2 out of 3 die from the same corporate disease. At least Ford cut it's losses but is far from escaping from intensive care at the moment.
Nonetheless, despite a 2009 that proved better than even its biggest boosters could have hoped for, Ford's bond rating remains in junk territory and "their debt burden is a reality that can't be dismissed," says Rebecca Lindland, an analyst with HIS Global Insight. While she has a favorable view of Ford's prospects overall, one near-term problem, she says, is that "the car market is still not out of intensive care." Her firm estimates that American car buyers will purchase 11.5 million vehicles in 2010, a 10% rise from 2009, but still vastly short of the 15.5 million to 16 million units she says would normally sell, based on historic demand, demographics, and other factors.
Another lingering problem for Ford is its agreement with the United Auto Workers, which has used the company's recent success against it, rejecting contract changes that would allow Ford to reduce job classifications, freeze the pay of new hires, and be relieved of the threat of a strike over the next six years. The Ford vehicles that have advanced furthest in quality scores, meanwhile, are built by nonunion workers in Ford's Hermosillo, Mexico, plant, a fact that suggests no easy resolution to the labor problem.
And, as noted earlier, Ford has launched ambitious corporate makeovers before — to no avail. As we noted in 1995, under the Ford 2000 plan, 1999 model year vehicles would herald an era in which "all regional boundaries are supposed to vanish, along with superfluous rungs of corporate hierarchy and $2 billion to $3 billion of overhead." A decade later, the company is still promising the imminent appearance of a global platform.
Eat My Dust
You know GM is in far worse shape...it's run by the government at the moment. Chrysler is "The Lovely Bones".
Regards,
OW
I'm not necessarily saying that they would have to attract new Automotive business. Any new industry would help.
The question is would foreign companies have located to Michigan for their automotive infrastructure had the South not offered hundreds of millions in incentives? Honda I believe, has no southern plants, but do fine in Ohio, which did (and thanks to them still do) have the automotive infrastructure (suppliers, etc.).
The question is why didn't Detroit hear it and plan for the future. Newport, RI was DEVASTATED economically when the Navy (it's birthplace) pulled out. The only thing it had was the America's Cup, and that was only every 3 years, and 10 years later that was gone. The only thing it has going for it now is tourism, and it does that well. But for 20 years Navy housing sat empty and boarded up. It was an eyesore. It took a long time to pry the duplexes out of the Navy's hands so it could be redeveloped.
It's like the alcoholic which drinks to their death. Detroit WAS GM, Ford and Chrysler. As they go, so goes Detroit. Balance always returns after a time...
PITTSBURGH — This is what life in one American city looks like after an industrial collapse:
Unemployment is 5.5 percent, far below the national average. While housing prices sank nearly everywhere in the last year, they rose here. Wages are also up. Foreclosures are comparatively uncommon.
A generation ago, the steel industry that built Pittsburgh and still dominated its economy entered its death throes. In the early 1980s, the city was being talked about the way Detroit is now. Its very survival was in question.
Life after Steel
There will be life in Detroit...after all, it is Detroit Rock City. :shades:
Regards,
OW
Why would any sane business locate in Detroit? Above is your answer.
Money - I doubt the city is offering any money since they don't have any.
Jobs - That's what the employer brings, not what the city offers. I guess if there is high unemployment it is easier to get workers. But not so sure that most workers in Detroit have many skills. The skilled ones mostly have left.
Taxes home - not sure what that is. Certainly cost of living is very low and that is a plus.
Gas - what?
I don't see any big advantages. I know if I were Intel relocating from CA to Detroit, I would have a lot lower costs, but I'd lose 75% of my skilled workforce in moving to Detroit. The weather sucks, the crime is high, and there are few other jobs if anything happens to Intel.
Regards,
OW
Guess who will buy GM when it goes public?
Again, we will never be fully repaid....read it and weep!
The Treasury Department sank billions into auto finance giant GMAC Inc. without an exit strategy or proof the company was viable — a decision that could cost taxpayers $6.3 billion, a new watchdog report says.
The government said the $17.2 billion bailout was a necessary step to save troubled automakers General Motors and Chrysler. GMAC provides critical financing to auto dealers, who borrow to finance their fleets until the cars can be sold to consumers.
Yet GMAC faced far fewer conditions than the bailed-out automakers, the report says. When the automakers were rescued, they were forced into bankruptcy. Shareholders lost their investments, creditors took a hit and executives were forced to detail plans for making the companies viable.
GMAC was treated more like banks that received bailouts without having to explain what they were doing with the money, the report says.
The report was released Thursday by the Congressional Oversight Panel overseeing the $700 billion financial bailout that Congress passed in October 2008.
"Treasury missed many opportunities to improve accountability and protect taxpayer money," panel chair Elizabeth Warren said in a conference call with reporters. She said Treasury didn't make GMAC show how it would return the taxpayer money, or how the investment would increase credit to consumers.
"These decisions mean that Treasury is now struggling to deal with a GMAC that is not financially rehabilitated, Treasury has no exit strategy and taxpayers are not fully protected," Warren said.
Regards,
OW
As far as I'm concerned, the Big 3 had a miserable poorly performing work force, equal to only the worst in history and all-time. I think the Big 3 workers caused their own demise. They made horrible cars and stole peoples money with fraud.
I tend to agree. I used to know a guy who worked at the Ontario, Oh GM plant, I believe he was a tool & die maker. All he did was brag about how he could work doubles and get drunk. Was this true? I don't know, I never witnesses it first hand, but he bragged about it all the time. He's probably not doing that now, as the plant has closed.
Another example of fine a fine UAW employee was back in '98, my brother's car got hit in the street around 11:30 at night in front of my parents house. This was a 25mph residential area. This guy hit my brother's 87 RX-7 so hard, it jumped the curb, went air born and hit my dad's '92 Crown Vic, that was in the driveway, and pushed it into the lawn. It totaled my brother cars. But here is where the story gets interesting. This guy was driving home from his 3 - 11 shift from the Ford plant and was stone drunk. I seriously doubt this guy got off at 11pm, and drank enough after his shift to completely drunk by 11:30. I guess it's possible, but highly unlikely.
So while my sample is extremely small and I'm sure the UAW employs many dedicated and hard working employees, but the fact remains that of all the UAW members I've come into contact with appear to have drinking problems while on the job.
Then add all the stories over the years regarding drug dealing and using, and on and on. Who knows how much of this stuff is true.
Still, my FIL has told me all kinds of stories of guys getting drunk and high while working at the steel mills. He too, once got a DUI after working a double at the mill back in the mid 70's. So I know this stuff happens.
So, if I start a business and support my small community but fail, the government should support me only for the good will??
Sign me up!!
Regards,
OW/PMO
Right on. Lots of people complain and whine about bailout money, but the same people spend fortunes of money going elsewhere in the world, which is what deteriorates our economy in the first place.
The only disadvantage to bailing out our automakers, as is done by other countries through the decades, is that the administration chose not to rid the GM of the UAW by full bankruptcy. Instead they played politics, so now they're still stuck with that mess of a socialistic union mindset, the UAW.
2014 Malibu 2LT, 2015 Cruze 2LT,
i am not crying about these 2 vehicles but u wanted examples and both of these vehicles are from GM of Canada maybe you can shed some light on which plant these 2 vehicles came from
Right on. Lots of people complain and whine about bailout money, but the same people spend fortunes of money going elsewhere in the world, which is what deteriorates our economy in the first place
so many American's wouldn't have to turn to Japanese, Korean, and German vehicles if GM, Ford, and Chrysler had actually given a crap about their products and customer service for over 25 years, which they didn't; I gave GM more then enough time and chance to turn around in the 25 years I stayed with them, but enough was enough and I'm not going to be scolded because I went else where to save my bank account from being depleted on towing and repair costs! It was and still is the best financial decision I have made and so have millions upon millions of other American's who grew up and raised on GM, Ford, or Chrysler products!
In fact it was one of the hardest decisions in my life to finally leave GM in 2005 because I grew up with great GM products in the 1950s and 1960s and so I had major brand loyalty for a long time, until GM left me to fend for myself, would not stick up or by their products when there were problems and I just got tired of almost going broke! I had other family members go through the exact same feelings and experiences as me but with Ford instead of GM!
I'm annoyed GM and Chrysler were bailed out, but I'm more annoyed and angry with the fact that they had to in the first place; any company, who is actually turning a profit, making good quality/reliable products, has good customer service at the corporate and dealership level should have never need to be bailed out or go bankrupt! its just excuse after excuse from GM, Ford, and Chrysler loyalist who blame all the rest of us who got tired of flushing our money down the toilet with GM, Ford, and Chrysler for having to switch to foreign auto companies instead of actually owning up to the real stupidity, incompetence, mismanagement, poor policies/agendas and blunder after blunder that got the big 3 into the situation they were in the first place! any logical, semi-educated person could see their impending doom, except GM and Chrysler management; I will give Ford some credit that they planned and anticipated far better than GM and Chrysler and thus not needing as much in loans and no bankruptcy
the real reason why GM and Chrysler needed bailouts and subsequent bankruptcy was not because of the recession but because of almost 25 years of poor quality/unreliable products, poor customer service, debt, UAW BS, and little to no profits; the recession was just the tip on the iceberg which pushed them over the edge! instead of making excuses for the big three, you and everyone else should be wanting them to grovel at our feet and thanking us for allowing them to stay in business and giving them a second chance, which many don't feel they deserve, because it was the American taxpayer and Fed gov't that allowed them NOT to fail and be wiped away from existence!
only time will tell if GM, Ford, and Chrysler have really truly learned from their predecessor's past stupidity, incompetence, and mistakes so that they will never be in the situation they were in; despite my problems with GM, and other family members with Ford, I believe in second chances so hopefully all 3 have learned because after this bailout and bankruptcy there are no more chances for screwing up in my book! and if so, then all 3 can go straight to hell!
To help other companies avoid GM's fate, it's worth exploring the five reasons that GM failed:
1. Bad financial policies. You might be surprised to learn that GM has been bankrupt since 2006 and has avoided a filing for years thanks to the graces of the banks and bondholders. But for years it has used cars as razors to sell consumers a monthly package of razor blades -- in the form of highly profitable car loans.
But financial engineering ended up driving GM into bankruptcy years ago -- a look at its balance sheet over the last decade reveals that GM has been bankrupt -- in that its liabilities have exceeded its assets -- since 2006. And this condition has gotten worse every year from a negative net worth of $5.4 billion in 2006 to a negative $91 billion net worth in the first quarter of 2009.
And the two Harvard MBAs who drove GM to bankruptcy -- Rick Wagoner and Fritz Henderson -- both rose up from GM's finance division, rather than its vehicle design operation.
2. Uncompetitive vehicles. Compared to its toughest competitors -- like Toyota Motor Co. (TM) -- GM's cars were poorly designed and built, took too long to manufacture at costs that were too high, and as a result, fewer people bought them, leaving GM with excess production capacity.
3. Ignoring competition. GM has been ignoring competition -- with a brief interruption (Saturn in the 1980s) -- for about 50 years. At its peak, in 1954, GM controlled 54 percent of the North American vehicle market. Last year, that figure had tumbled to 19 percent. Toyota and its peers took over that market share.
4. Failure to innovate. Since GM was focused on profiting from finance, it did not really care that much about building better vehicles. GM's management failed to adapt GM to changes in customer needs, upstart competitors, and new technologies.
5. Managing in the bubble. GM managers got promoted by toeing the CEO's line and ignoring external changes. What looked stupid from the perspective of customer and competitors was smart for those bucking for promotions.
GM's failure after 101 years is an indictment of American management in general. It highlights the damage to our economy that results when finance becomes the tail that wags the economic dog. And it shows what happens to any company that rests on its laurels and fails to adapt to change.
Regards,
OW
If I worked for GM now, I'd be playing a low profile and working to restore all GM has lost in the last decades instead of berating former customers that were smart enough to leave the USA manufacturers in droves as their products turned to junk!
Guess who supported the former GM and C all of those years of incompetence?
Regards,
OW
My first exposure to a GM car was the 1974 Vega GT that my friend bought. A very nice looking and driving car for its day, we commuted to college. Within 2 years he had rust all over his front and rear windows (in a CA climate!), while my pathetic used 1966 VW Bug had none. Then by 60K miles his block corroded and leaked coolant into the block. My friend and I both decided we were never buying GM again.
My sister in law had a new Citation in the '80's and it was a real POS.
Any more examples needed?
I even have had a couple of people on this forum try to tell me that I didn't take care of my cars and that is why ALL EIGHT GM products were such trouble with breaking down and repair work!
HMM, starting in 1971 and continuing until, I'd say, 2008 just before the plug was pulled on GM. Wouldn't you agree??
You can go to bed now.
Regards,
OW
I'd much rather have a profitable car company XYZ get in business and pay additional taxes on profits rather than suck the tax fund dry with bailout needs.
The money should have been refunded to all American citizens equally; then things would have worked out more fairly. Not to failed corporations.
Perhaps because spending their money on domestic "bailout worthy" companies led to a deterioration of their own wallets and bank accounts, so people choose to spend it on "non bail-out worthy" companies instead.
So the lesson learned is that you have to SUCK HARD AND SUCK BAD so that the government will help you stay in business, and nevermind if people want the best VALUE for their money.