GM - Bankruptcy?

[parsonsj]

If GM was just Chevy and Cadillac and got to pick the best products from the rest of the GM lineup, and had 1500 dealerships like Toyota, instead of 4500 like they do now, they'd have a fighting chance.

Maybe. I think that argument has some merit; certainly more than the very broad brush you've been using, which discounts the product price. In fact, the variety of GM brands is exactly counter to your original argument: GM was working hard to find niche markets to get consumers the vehicles they wanted. It was that very ability of the world's largest automaker to have such a wide variety of brands and vehicle types that seems to have gotten it in trouble.

As far as the union blame, the UAW must share in this debacle. People don't buy product purely on features. Most folks use some sort of value method, where cost enters their purchasing decision. At the traditional cost of new cars, it becomes crucial.

GM has lost market share for a variety of reasons, the least of which is making cars "the public as a whole doesn't want". Up until the credit markets dried up GM was doing fine. Cost, dealership structure, wide brand variety, new competitors in our market without reciprocation, the credit crunch, the myth of low quality, etc.

Those are some valid reasons why GM is in a world of hurt.

jp

[ProTouring442]

Well, it seems I may have been incorrect. Though I am certain concerning my recollection that there were 2 different standards on early pollution controlled vehicles, I cannot find proof and thus will retract my assertion. However, I will say that the intent of the Congress was certainly to "scold" the domestic auto makers as the quote below shows.

The 1970 CAA Amendments represent a congressional shift in auto pollution law from flexibility to stringency. Senator Muskie opened the debate stating, "Detroit has told the nation that Americans cannot live without the automobile. This legislation would tell Detroit that if this is the case, they can make an automobile with which Americans can live" (source: http://www.answers.com/topic/nationa...dards-act-1965)

Worse, the timing of the implementation of both safety and emissions standards, and the near simultaneous occurrence of the various oil crisis most definitely uniquely hurt the domestic manufacturers.

Shiny Side Up!
Bill

[MonzaRacer]

Ok in the 60s you had GM, Ford,AMC,Chrysler not including foreign makers (which made up less than 2% of all other imported vehicles then)Noe we have toyota,honda,kia,lexus,infinity,subaru,hyundai, oh hey have I forgot any, a lot those do not use UAW workers, and take away some of the market share.
And I am sure I have forget a few.

when a 4 maker market opens up, the stakes get bigger, when the company tried to trim costs so they didnt end up like International Harvester, the NEED of the cars/trucks and the market demand kept them making cars and paying ridiculously overpriced wages/benefits.
An IH tractor in an industry costs $50,000-$80,000 when they went under(I know this as my grandfather bought one right after Case bought the tractor end)At that time you could by a Truck for about $10,000 or less and they sold thousands literally hundreds of thousands.

I have afriend who works in Michigan for a US auto manufacturer, his house was valued at $500,000, he brought home $85,000 a year, his wife $50,000 same employer but no union contract, she just had a big college degree. Same house in Indiana would go for $90,000-$100,000 and he would bring home $35,000-$40,000 and his wife $25,000-$30,000.

The jobs are not high skill jobs for the most part, some are.

Oh and the local job is same job he is doing in MI but without the union.

I have personally built cars that will run clean at the tail pipe, make good power and just plain dont need half crap tacked on them.
Also extending UAW control to the sub producers of parts was just ridiculous, and caused way to many local small factories to close due to cost and thus throw jobs over seas, over borders, etc. Now with his benefits he brought home about $125,000+ and hers was probably close to $70,000 (separate because both worked there before getting hitched).

One reason John Deere is solvent is is because of larger heavy equipment still selling,and being a more world placed entity.
Some unions are useful and not so top heavy/greedy as UAW. But a lot are simply the strong arm types of old.
If the government and others would actually take them to task, and remember if GM goes down a LOT of jobs disappear from USA, never to be replaced. Chrysler has been trimmed down by 2 sales and Ford has taken different steps so far. But still if one falls how much farther can the rest be?
The big "bail out" was to let the companies operate as their own credit partners, rather than ask banks for short term loans they make them them selves.
As for me I want to see Citi get gutted and sold off, they were the first to break the law and get away with it, and that led to a lot of the Wall street issues, that and Investment Banking firms trying to be the Corner bank.

When big money people fail to remember what they should have had drilled into their heads when they started their jobs, then they ran down the slippery slope to failure, but had big contracts paying them in win or loss situations.

Best hope GM doesnt have to file, if they do then a lot of people and industry will fail and as well a lot of retirements too. then look out.

[Steve1968LS2]

It was inevitable. GM has alienated such a large portion of their customer base its amazing this hasnt happened a decade sooner. I got so sick and tired of the crappy cars and horrendous dealer practices that I havent bought a new GM vehicle since 1979. And have no plans to alter my vehicle purchase habits.

I see this as getting it going ahead of the curve. GM has been betting the farm on the Volt. And its going to be a complete stinker. Even for GM.

lol.. are you serious? You might want to consider looking at sales numbers and how many cars GM actually sells.

It's not thier volume, it's their operating costs which, because of union contracts, is through the roof.

The "crappy cars" comment sounds like someone still stuck in 1979... ;)

[Steve1968LS2]

Best hope GM doesnt have to file, if they do then a lot of people and industry will fail and as well a lot of retirements too. then look out.

Keep in mind that if GM files it will be chapter 11 and NOT chapter 7. GM will still exist but they will be able to void and renegotiate contracts.

Remember.. Chapter 11 is reorganization.. Chapter 7 is "bye bye"

[MonzaRacer]

Keep in mind that if GM files it will be chapter 11 and NOT chapter 7. GM will still exist but they will be able to void and renegotiate contracts.

Remember.. Chapter 11 is reorganization.. Chapter 7 is "bye bye"

Dont forget though it may restructure BUT a lot of people will get put out and hurt, figures are on one of the sites I found stated that closer to 45 percent of GM and 30-40 percent of the second and third tier vendors would disappear, over night. Think of it as this if there was 10 GM vendors in your town 3 to 4 of them closing overnight with no help for anyone. Id rather see UAW smacked back down to a more manageable level.

[parsonsj]

It was inevitable. GM has alienated such a large portion of their customer base its amazing this hasnt happened a decade sooner. I got so sick and tired of the crappy cars and horrendous dealer practices that I havent bought a new GM vehicle since 1979. And have no plans to alter my vehicle purchase habits.

[emphasis added] I love fact-based decisions. I figure any decision made in 1979 ought to still be good now.

jp

[Twentyover]

Now I dont have hard numbers for you here, but if im not mistaken between 1965 and 1995 the population in America about doubled didnt it? That would then make their sales in 1995 alot less impressive.

1965 approximately 185 million
1995 approximately 270 million

Approximately 50% increase in population

[Nicks67GTO]

1965 approximately 185 million
1995 approximately 270 million

Approximately 50% increase in population

Thanks!

[Nicks67GTO]

I have afriend who works in Michigan for a US auto manufacturer, his house was valued at $500,000, he brought home $85,000 a year, his wife $50,000 same employer but no union contract, she just had a big college degree. Same house in Indiana would go for $90,000-$100,000 and he would bring home $35,000-$40,000 and his wife $25,000-$30,000.

The jobs are not high skill jobs for the most part, some are.

Oh and the local job is same job he is doing in MI but without the union.

So i guess im not seeing your point. It seems like youre trying to complain about the union wage but if i read correctly....
-He owns a house in michigan that is roughly 500K.
-If he lived where you do, it would be worth 100K.
-He works for a big auto manufacturer.
-He makes about 85K/year.
-If he lived where you do, that exact same job would be 40K/year.
-So a comprable house is 5 times more expensive in Michigan than it would be if he lived where you do, yet hes only making roughly 2 times more than he would if he lived where you do. So whats the gripe again?

BTW id like to see how many hours were worked to attain that 85K....If a guy worked 40 hours a week screwing cars together and made 85K well thats a high wage. If he worked 68 hours a week to make 85K well thats more realistic and he earned every bit of it.....

[Steve1968LS2]

Dont forget though it may restructure BUT a lot of people will get put out and hurt, figures are on one of the sites I found stated that closer to 45 percent of GM and 30-40 percent of the second and third tier vendors would disappear, over night. Think of it as this if there was 10 GM vendors in your town 3 to 4 of them closing overnight with no help for anyone. Id rather see UAW smacked back down to a more manageable level.

Well then, I guess those losses would be on the UAW since they are unwilling to give in any.

If GM goes Chapter 7 then 100% of the employees and vendors would be finished.

[Steve1968LS2]

Now I dont have hard numbers for you here, but if im not mistaken between 1965 and 1995 the population in America about doubled didnt it? That would then make their sales in 1995 alot less impressive.

But remember that today there's MUCH more competition..

Who were the US auto makers competing agaist in '65? Well, besides each other.

Sales is not the problem.. overhead and production costs are.

[Damn True]

Not so much. The factors are pretty simple, really.

Market share drops when people prefer the competitors' products to those of a given company.

In this case, GM has gone from having 60% of the market to less than 25%.

So, 75% of the American car-buying population prefers to buy non-GM cars and DON'T WANT GM cars.

You can blame the unions all you want, but the fault here is GM's management and a bloated dealership structure that has left them with an unsustainable number of brands.

If GM was just Chevy and Cadillac and got to pick the best products from the rest of the GM lineup, and had 1500 dealerships like Toyota, instead of 4500 like they do now, they'd have a fighting chance.

But no, they're going to blame the unions instead of standing up to the dealerships, while asking for GOVERNMENT BAILOUTS themselves, fail to see the writing on the wall, and probably go bankrupt in the process.

Socialism is bad. Lemon socialism is worse.

BZZZZT! Again, more stuff that you "know" that just isn't so. If it were simple you'd be right. It isn't and you aren't.

Market share drops when the consumer has more good stuff to choose from.

25% market share in a market split among well over 20 quality manufacturers is doing pretty damn well.

By comparison, McDonalds holds roughly a 20% market share in the fast food industry. Down from close to 45% 20 or so years ago. Would you say they are poorly run or offering stuff nobody wants? Of course not. Their market, like GM's has become increasingly fragmented. There are more choices. People still go to McDonalds. A lot. But they also go to Burger King, Chipotle, Panera and Subway when they are feeling guilty about the size of their arse.

[wmhjr]

60% of the market to less than 25%.

So, 75% of the American car-buying population prefers to buy non-GM cars and DON'T WANT GM cars.

You can blame the unions all you want, but the fault here is GM's management and a bloated dealership structure that has left them with an unsustainable number of brands.

Actually not quite true. It's a mixed bag, for sure. But think about this for a minute....

We all know that there are acceptable price points for different kinds of vehicles. I mean, maybe somebody would pay $25K for a G6, but they wouldn't pay $30k. Chief among other factors, which drives market value for a particular vehicle type is the competitive landscape. In other words, you can't charge an extra $5K for a vehicle that your competitor sells for $25K.

So now lets look at labor costs in the big 3. The higher labor costs (including the legacy costs demanded by the unions) make the COGS (cost of good sold) much higher for a comparable product.

But they know they can't get that higher price, right? So, what do they do? They reduce cost. How? Well, they can't reduce the cost of labor - Unions prevent that. So, they reduce the cost and complexity of materials. That's code for lower quality and use cheaper stuff.

GM - and the Big 3 in general - are in rough shape. Anyone who didn't see this coming even after they got that initial bailout was wearing rose colored glasses. It's gonna get worse. They need bankruptcy to get out of this mess.

[wmhjr]

I don't know, my 1993 Bonneville went over 200K with no major problems, and I sold my wife's Miata at 130K due to its needing new too much work.

My wife's Mercedes SLK230 has an interior made from cheap cardboard, with the dye peeling off the dash, its gone through 2 security modules (at $700 plus labor) and all this at only 50K.

Shiny Side Up!
Bill

Hmmmm....

Neighbors Bonny? Junk. He's on his 3rd motor in 150k miles. Also just replaced (again) all tranny lines - they rusted out. He hates that car. See how individual experiences are? Meaningless. It's in the aggragate that you see trends.

For example, I've had tons of new GM vehicles. I'd say that in the last 20 years, they were at best "OK". '90 Lumina? Junk. '90 GMC Sierra? Good, but rusted out. '96 Chevy 1500? Good truck. '00 Chevy silverado? Absolute trash. Rusted frame, body rusted out, brakes shot - at 50k miles. You want it? I'll sell it at salvage prices. I even have pics.

'98, '99, '00 BMW M3's, Z3 and M-Roadster? Absolutely perfect except for the '99 Z had a wire that chafed at the trunk lid joint. Each of them were sold at over 75k miles. '94 Miata? Great little runner. Had a little rust, but FAR lower than either my '90 GMC or my '00 Chevy. 172k miles. '00 Mercedes CLK320? Perfect except had to replace fuel tank sensors once. Just under 80k miles. BTW, interior was perfect the day I sold it.

Anybody wants living proof as to GM lack of quality can ask me - I'll send you the pics of the rust 2000 Silverado LT frame that I've spent all winter repairing. The one with 50k miles. Yeah, Toyota had a frame rust problem. Difference is that they supported their customers. Not GM. I should also be clear - my vehicles are WELL maintained. When I sell a vehicle, I typically get good money because they are very well maintained and don't show wear. So, when I'm saying that the GM vehicles have been bad, remember that they've been cared for EXACTLY like the other vehicles. The only difference is the product, and it shows.

Like somebody else said here, I'll never make the mistake of buying another GM vehicle. And my decisions are not based on 1979. My most recent purchase is a $40k 2000 Silverado Extended Cab 4wd LT (leather, all available options) that is now a piece of junk sitting in the garage still while I repair the rusty frame, rusty cab, replace every single brake element (all backing plates, all lines, even the ABS module), all u-joints, fuel lines - the list can go on and on. Though this is only the most recent failure on GMs part for me, it's the last. I couldn't even sell the truck for $4500 right now - and it has only 50k miles on it. It is junk. I'm that guy that GM alienated. The one that never bought anything EXCEPT GM up until the late 90's. It's on them.

[toxicz28]

It's not thier volume, it's their operating costs which, because of union contracts, is through the roof.

The "crappy cars" comment sounds like someone still stuck in 1979... ;)

To blame it on union contracts, is as bad as the "crappy cars" comment, or "cars nobody wants" comment.
The UAW has been making concessions to GM at least as far back as Oct. 2005, (http://money.cnn.com/2005/10/17/news...00/gm_wagoner/)
gave more concessions in Sept. 2007,
(http://www.msnbc.msn.com/id/20978036/)
and are currently in talks for more concessions(http://www.google.com/hostednews/ap/article/ALeqM5h3Xse72PYkbkP9YlLlG_uZsRi6jQD96C5H880).
Let me give an (extreme) example whether you're union, non-union, or just a schlep trying to live somewhat comfortably. Almost everyone should be able to relate to this.
You haven't recieved a pay raise in 3+ years, the cost of everything (food, energy, health insurance, etc.) has gone up to the point that you're barely scraping by. And now, the company you work for wants to cut your pay by 10-20%.
How eager would you be to do that?
And, how much more would you be willing to give up before you said enough is enough?

Let's also not forget GM's unwise spending practices (union contracts aside, because I'm sure their executive, management, and other non-union positions only make minimum wage ) .
Like recieving and spending $140 million to renovate /retrofit a plant only to close it in less than a decade. (http://query.nytimes.com/gst/fullpag...50C0A964958260)

If GM was just Chevy and Cadillac and got to pick the best products from the rest of the GM lineup, and had 1500 dealerships like Toyota, instead of 4500 like they do now, they'd have a fighting chance.

FYI, GM doesn't own all of the dealerships, and the ones they do, they are closing. The others are privately owned and at a risk of closing as well.
If people can't, or aren't buying cars, I don't think it would matter how many dealerships are selling a brand of car. They are all in jeopardy.
http://www.lohud.com/article/2008812310361
http://www.greenvilleonline.com/arti...NESS/902140326
http://www.bizjournals.com/memphis/s...2/daily19.html

[trapin]

I've recently decided to stay out of Big 3 discussion on this board because I feel my employment at GM fosters a conflict of interest. But I will throw in this little observation about the UAW. With all apologies to any UAW members here.

I am a member of the only salaried union here at GM; we are part of the UAW. There is one major thing wrong with the UAW that absolutely must be dealt with; it’s called seniority. Unfortunately, seniority is considered to be the bedrock of the UAW and it would be near impossible to negotiate out of a contract. The reason for that is the Union would lose a good number of people. It needs to go because it is solely responsible for placing an unfair stigma on the UAW as a whole by protecting people who either bend or break the rules. And it’s those people who wind up on the 5 o’clock news or in the press. For every bad seed in the UAW there are 30 good ones who don’t deserve having their faces pushed in the mud. There are a ton of hard working/good people in the UAW that you never hear about because they never do anything stupid to get their faces on TV. That’s too bad. You get rid of seniority and you can finally flush out these bad seeds and give the hard working men and women in it's the ranks the recognition that they have long deserved.

That is all. Thanks.

[Mathius]

Let's bring this back to GM please. Otherwise we'll close it down as a political thread.

jp

I think the problems ARE political, especially since you have guys on here talking about how 401k is adequate for retirement, and that it's ok that in most homes both parents have to work. That's why America is on the decline in the first place.

I worked retail for 9 years and only earned 7k between company contributed 401k, MY contributed 401k, profit sharing, and stock holding. In the end of all that it came out to not even a thousand dollars a year. How the hell are you supposed to retire on less than $1000.00 per year?

I've worked both ends of it, and yeah, maybe the auto workers aren't a "skilled trade" like the tinners or plumbers, etc. and maybe they shouldn't make as much, but people quoting $75/hour are not talking about take home pay.

But I'll keep my mouth shut so you don't have to close the thread and I'll go elsewhere.

Mathius

[Jim Nilsen]

Until we all take time off from our personal lives to stand on the doorstep of the people in charge of everything that is wrong, it won't change.

Until we all realize that the people who are in charge will not stop doing what they do until we physically stop them it will continue.

Has GM, Chrysler, or any other entity had anyone on the very top get fired yet? Have the stockholders done anything?

What is going on is as close to a party that is illegal with police protection at the door. Your not invited and you will be expected to pay for complaining.

Each and everyone of us is the government as a whole and we can't get a simple understanding that any one person won't argue about. So we are divided and losing.

It's like treating cancer. They say they don't know the cause and they say there is no cure yet we keep it alive? Why do we keep it alive?

All of the car companies and our representatives know about the FORD plant in Brazil, All of them know how to make a fuel efficient car that we want. So why do they fail?
US. It's our fault and we condoned it by not doing anything to stop it. Bill by Bill we let them pass laws that ruin cars and the ability to make them what they need to be. We have protected everyone hurting us with a law somewhere.

This country isn't broke financially as much as it is socially. We all got stupid and lazy and uncaring. We foresake ourselves and play the blame game. We bought bad cars no matter what and we also bought bigger trucklike vehicles when they tried to force small cars down our throats, but that was US that did it.

Phone calls don't mean crap anymore and threads like this don't either.They just get to realize that we don't see what they are doing so they can keep it going. When we look our repesentatives in the eye and they finally get scared for there lives and at the same time feel protected by us to do the right thing, all of the people in charge are going to fear for their lives from the people who have been dictating what goes on by greed and power.

We all get duped when a man says we have to have these corporations and banks to survive and do nothing to stop them because of it. You don't get rid of the company or bank you just get rid of the people in charge. We are all being led to believe that you can't do that these days yet we just got a new president and we still have a country.

Crooks are crooks and we need to show up with a great big CITIZENS ARREST.

If the people that have the most to lose don't start to smell the truth yet, we will all be told that we must like it that way or somebody would have done something.

The companies know what they are doing and we are getting suckered all the way to giving them what is left for pennies on the dollar and that is how they will all come out better on the other side and why they are still throwing the parties. They will win more when everything is lost. They will foresake you and your family to do it while saying it is good for you and the only thing they can do.

Come face to face with your problems and you stand a chance to see them for WHO they really are.

Were being sold out by our own complacent selves.

I'm doing my part how about you?

[shmoov69]

So i guess im not seeing your point. It seems like youre trying to complain about the union wage but if i read correctly....
-He owns a house in michigan that is roughly 500K.
-If he lived where you do, it would be worth 100K.
-He works for a big auto manufacturer.
-He makes about 85K/year.
-If he lived where you do, that exact same job would be 40K/year.
-So a comprable house is 5 times more expensive in Michigan than it would be if he lived where you do, yet hes only making roughly 2 times more than he would if he lived where you do. So whats the gripe again?

BTW id like to see how many hours were worked to attain that 85K....If a guy worked 40 hours a week screwing cars together and made 85K well thats a high wage. If he worked 68 hours a week to make 85K well thats more realistic and he earned every bit of it.....

A couple points here,
First off, the guy was overpaid to start with. He is just now starting to come in line, but not there yet. Yes it sucks, but it is what it is.
Second, why do you think that everything is so freaking expensive?? Because of cheap labor? I don't think so! Things are more expensive there BECAUSE of the union. People make more money, so the cost of living goes up, simple logic here.

I have said before, I would not be so opposed of the union IF and ONLY IF you got a superior worker......ie, you get what you pay for. But that aint the case! you usually get "that aint my job" or the whole seniority thing. You also have basicly a legal mafia so to speak. You want to see a small riot? Bring in "scabs" to replace the "union" workers and see what kind of violence happens, from the "union" side. And usually nothing is done about it. Pretty crappy IMO

This whole thing is not just UAW's fault, nor is it just GM's fault, it is just a combination of bad decisions, for a long long time.

Bailout? No, shouldn't. But yes, will be.