GM - Bankruptcy?

[bigvegan]

http://www.consumerenergyreport.com/...m-new-company/

General Motors May File For Bankruptcy, Form New Company

Posted by Samuel R. Avro on Saturday, February 14, 2009



Amidst an ongoing financing struggle, and facing a Tuesday deadline to present a restructuring plan, General Motors Corp. is seriously considering filing for Chapter 11 bankruptcy and forming a new company, according to a report in today’s Wall Street Journal.
“GM will offer the government two costly alternatives: commit billions more in bailout money to fund the company’s operations, or provide financial backing as part of a bankruptcy filing, said people familiar with GM’s thinking,” the paper said.
The company is going through unprecedented financial struggles and will have to lean on the federal government for support.
Last week, GM announced plans to cut 14 percent of its workforce –10,000 jobs– as well as other measures intended to keep the company afloat.
Chrysler LLC also faces the Tuesday deadline along with GM to prove the viability of their companies in exchange for receiving $17.4 billion in federal loans.
The “plan includes a Chapter 11 filing that would assemble all of GM’s viable assets, including some U.S. brands and international operations, into a new company,” the article reads. “The undesirable assets would be liquidated or sold under protection of a bankruptcy court. Contracts with bondholders, unions, dealers and suppliers would also be reworked.”
The U.S. government has already committed $13.4 billion from its federal coffers to save the company.
According to the company website, GM employs 252,000 people in every major region of the world, and sells and services vehicles in some 140 countries.
GM is also attempting to sell its Hummer SUV and Swedish Saab brands.
General Motors declined to comment on the Wall Street Journal article, according to the newspaper.

[Steve1968LS2]

They should since the unions don't want to give anything to help GM stay alive.

It seems the UAW would rather have 100% of nothing than 90% of something.

It sucks for those retired from GM, but you can't get blood from a turnip and if I were them I would rather get a little less than chance getting nothing if GM goes chapter 7 (or in this case chapt 11).

[Van B]

It seems the UAW would rather have 100% of nothing than 90% of something.

Simply brilliant.

[chicane67]

I say... give the Unions 100% of nothing. That is what they deserve... after all, they did this to themselves.

Ditch the Unions, start out with and train a new workforce. Hell... I bet there are a bunch of people out of jobs right now that would work for the same money that the other US factories are getting paid. It's funny how they don't have the issues that the big three have concerning operational costs/overhead.

Yes it sucks to be a legacy employee... but it is the Unions that have screwed them. Maybe if they weren't so... "What can you do for me now"... and actually weren't as self centric... the people that made the money for them would be taken care of.

Cant get blood from a turnip...

Cant pad something when it's down to the bone...

...It's time that the Union's practice a little common sense and logic... and find a little consensus. But now we are back to getting blood from a turnip.

[wicked68]

they should be forced to do what they need to do without federal assistance.

I think it is unfair and actually imoral for the govt to pick what companies it will give money to help out for them running it crappy and then turn around and take that money from me and if I dont agree and decide not to give it to them they will come with guns and arrest me and if I dont agree to be arrested they will kill me?

That is armed robbery if you ask me - its funny how they passed a constitutional amendment to force states to comply with equal protection thought processes yet the conveniently left this off when it comes to self application.

We have arrived at socialism I am afraid.

Now on top of it all I hear they are tyring to pay peoples mortgages that are not making the payments for WHATEVER reason - so I see now that I am living well below my means I get to pay for the asshats living beyond their means. NICE.......

[shmoov69]

The current govt will bail them out AGAIN just to "save" the unions IMO.
Check out the employee free choice act (or something like that) that I'm sure will get passed now since there is no people with a clue in the current govt. Don't like unions? It's getting ready to be shoved up all our arses. And I don't know what "we the people" can do about it. The govt clearly doesn't care!

[andrewb70]

they should be forced to do what they need to do without federal assistance.

I think it is unfair and actually imoral for the govt to pick what companies it will give money to help out for them running it crappy and then turn around and take that money from me and if I dont agree and decide not to give it to them they will come with guns and arrest me and if I dont agree to be arrested they will kill me?

That is armed robbery if you ask me - its funny how they passed a constitutional amendment to force states to comply with equal protection thought processes yet the conveniently left this off when it comes to self application.

We have arrived at socialism I am afraid.

Now on top of it all I hear they are tyring to pay peoples mortgages that are not making the payments for WHATEVER reason - so I see now that I am living well below my means I get to pay for the asshats living beyond their means. NICE.......

I totally agree.

Andrew

[gman]

why don't you like unions? just wondering.

[Nicks67GTO]

Im a UAW Electrician for John Deere. My company profited over 2 billion dollars last year and set record profits 5 years running. Everyone at John Deere makes good money. From Skilled Trades to the line worker to the stock room boy. The salary guy, to the CEO, and share holders have been very happy as a whole too. So why does eveyone hate the union? Mine seems to work well with our company. Everyone is happy. We have a good work enviornment, its safe, its efficient, everyone is very well trained and the production workers have an incentive plan {the more product they put out the more they get paid}. What seems to be the problem? I think theres alot more to GM's woes than just the unions.....

[Bad69RSSS]

The way I see it the union is a necessary evil most of the time.

In the case of GM the compnay owns most of the responsiblility for destroying itself. After all, didn't it agree to the terms of the UAW contracts in the first place? Didn't managment fly around in private jets because first class wasn't good enough? This ship was sinking WAY before the current economic downturn and GM has done little to correct course and speed.

On the union side, what does the highest paid labor in the industry get you? It surely isn't quality anymore!

I say this and my household is exclusively Chevrolet consumers...

GM/UAW management

[bigvegan]

"I think theres alot more to GM's woes than just the unions....."

You mean like making cars the public as a whole didn't want for the better part of 3 decades?

Yeah, that might be part of it too.

[ProTouring442]

"I think theres alot more to GM's woes than just the unions....."

You mean like making cars the public as a whole didn't want for the better part of 3 decades?

Yeah, that might be part of it too.

They sure sold an awful lot of those cars nobody wanted. Even today GM is still the second largest producer of automobiles in the world, and, if given access to the Japanese market, they probably still would be.

in 1965 GM domestically sold 4,551,399 cars that people presumably wanted

in 1970 GM domestically sold 3,681,484 cars that people presumably wanted

in 1975 GM domestically sold 3,665,990 cars that now, according to your calculations,nobody wanted

in the boom year of 1980 GM domestically sold 5,053,190 of those cars nobody wanted

in 1985 GM domestically sold 4,490,883 of those cars nobody wanted

in 1990 GM domestically sold 3,307,102 of those cars nobody wanted

in 1995 GM domestically sold 2,930,619 of those cars nobody wanted

And these figures do NOT include SUV sales!

Shiny Side Up!
Bill

[ProTouring442]

The way I see it the union is a necessary evil most of the time.

In the case of GM the compnay owns most of the responsiblility for destroying itself. After all, didn't it agree to the terms of the UAW contracts in the first place? Didn't managment fly around in private jets because first class wasn't good enough? This ship was sinking WAY before the current economic downturn and GM has done little to correct course and speed.

On the union side, what does the highest paid labor in the industry get you? It surely isn't quality anymore!

I say this and my household is exclusively Chevrolet consumers...

GM/UAW management

Yes, GM agreed to those contracts, and in most cases they did so while under the extreme duress of a strike or pending strike, at a time when they would be loosing millions of dollars a day due to the lost production.

As for GM correcting its course, remember that a company of this size does not change course easily. It's a bit like reversing the props on the Queen Mary.

One of the things that actually hurt GM in the long run was the boom years of the late 70s through the mid 80s. While these times created a lot of profit, they caused GM to expand beyond what,in retrospect, seems reasonable, and scaling back to a more reasonable size is not an easy thing for any company to do. This is especially true when you still have to pay your employees despite the fact that you have relieved them of their jobs! There are a lot of factors that all car companies helped to create, of which they might not have seen the consequences.

Cars last a LOT longer today as compared to the "glory days." Thus, people tend to keep them longer, and when they keep them longer, they don't buy new cars. The SUV craze helped mask this factor however as people were purchasing SUVs when they otherwise would have held on to their car.

We also have the fact that the competition from imports really started to come online in the 80s, their quality and ability to produce cars Americans would buy finally came into its own. Prior to the 80s, Japanese imports were small, had few options, and were a bit too utilitarian when compared to those produced by the "Big Three."

Add into this mix the fact that the US Government saddled the domestics with crash and safety standards that, because of the "gas crisis" of the early and late 70s, they allowed the smaller imports to skirt.

Nonetheless, GM has most definitely made some huge mistakes, a fact that the US news media LOVES to point out. Realistically, the bias against GM, Ford, and Chrysler by the US Media is incredible. As an anecdote, I once saw a spot on "quality" where they showed a man reach under a Cadillac and grab the urethane bumper cover and give it a pull. The cover, doing what it was supposed to do, flexed, to which the reporter replied, "you would never see poor quality like this on a Toyota."

Chapter 11 reorganization is probably the best thing for GM, though their doing so will cost me a bit of money when they cancel their common stock. They will be able to cut a lot of deadwood much more quickly then they can in their current situation.

Shiny Side Up!
Bill

[wicked68]

Im a UAW Electrician for John Deere. My company profited over 2 billion dollars last year and set record profits 5 years running. Everyone at John Deere makes good money. From Skilled Trades to the line worker to the stock room boy. The salary guy, to the CEO, and share holders have been very happy as a whole too. So why does eveyone hate the union? Mine seems to work well with our company. Everyone is happy. We have a good work enviornment, its safe, its efficient, everyone is very well trained and the production workers have an incentive plan {the more product they put out the more they get paid}. What seems to be the problem? I think theres alot more to GM's woes than just the unions.....

I dont think any one hates unions per se.

I use union electrical workers at my building for all our big electrical installations - and its fine - I use a third party company to do this and they all like working here in our environment - so they sit down with us and negotiate a price that works for us and if we dont like a worker we send them packing and they give us someone else and we are not tied to them - so it all works very well. they are all well trained and midful of their work. But I am not tied to them if they are horrible - I can make a change and I have before.

What I am angry about is that I am being forced at gunpoint to give money to a group that is private enterprise and was free to make their decisions. I blame management for bad decisions on the direction of their cars and I blame unions on being too greedy and inflexible on their work as a whole - they both made horrible decisions and should suffer for it. Instead they are making me suffer for it by taxing me to fix their screw ups. This is horribly unfair and at its essence is undeniably un American. Its like they took a trip to communist USSR and said - hey we got some great ideas - lets do it guys.

What if my business started going bad because I paid myself an unrealistic salary and went out and made bad prodcut decisions etc ? Because I am small I would simply go out of business. If bankruptcy were a state court and state law issue I would have the ability to go and file a federal lawsuit on the grounds of the bailout violating my 14th amendment rights to equal protection under the law but since these idiots did not apply it to federal actions they canbe discriminatory in their application of federal law but then turn around and chastise the states for their unequal application.

Its shameful and I can say its embarrasing where our country is going.

what happened to everyone standing up and saying we can compete - we are the best - we are flexible and we will do whatever it takes to make it work - bring it on world!

Its been replaced with crybabies and rattles screaming about who took their toy and how mommy should get them for kicking sand in their face. What a bunch of pus.......es we have become.


something else - the fear mongering that obama is putting out there is disgusting. Did he never take a history course? To say that we might go into a depression and it might become PERMANENT? are you kidding me - you mean that we would NEVER get out of it - not even in 200 years. Come on people . the sad thing is that there are people that believe this crap. I have a guy that works for me that is all bought in that if we dont spend a trillion dollars on govt spending that we very well might go into a permanent depression that we would always have 25% unemployment. SAD SAD SAD. This guy is a graduate of Georgia Tech also so I guess you cant say that a college education makes you smart.

Did you all know that there was no federal income tax before the early 20th century and we did just fine???? The federal income tax was never meant to be permanent. Since we have enacted the federal income tax and allow the fed to spend with debt - we have emptied out treasury and in fact if you go in the treasury now all you will see is iou's posted all over the walls?

Ddi you know that the current federal debt means that every worker in the US also has a federal debt mortgage of 66K right now? if someone told you that you had a credit card bill of 66K what would you do? Well you have just been informed because you are the guarantor of the federal debt - its yours - not the govt. Eveyone thinks "the govt" is this thing that sits in this continuum somewhere that does not affect them - look at the constitution - the ability to spend and raise debt as "backed by the full faith of the people of the US". Its your debt - own it. What if someone told you that they were taking your personal credit card and going to europe and then china to spend money on vacation and all kinds of stuff and they were going to max it out and you had to pay for it? would you be pissed off? well why are you not now?

Why is it ok for the fed govt to run up debt and its not for states or for you personally? where and when did they get this ticket and pass to run out spend wildly with no end in site? Its a basic violation of financial principles that is ruining us. Wait till they hit hyper inlfation or rates get jacked up again and the fed cant stop them because to continue to borrow will require a high rate - because foreigners wont invest in US tbills as they see them risky. This will mean that when we get into a rough patch again we wont be able to manipulate money flow by the fed dropping interest rates - it will simply mean our currency will rapidaly devalue on the open market and we will get hit with hyper inflation on all the goods from overseas we try to buy.

I think its going to be ugly because if this were my personal finances - I would feel like I was in a hole I could not get out of without radical help.

[Mathius]

I'm sure the unions are making their money but I think a lot of people are overlooking the fact that our government is so f*cked that you have to charge ridiculous amounts per hour to cover medical and whatnot.

I mean seriously, I don't know what the average union worker is making but he's probably making around $30/hour TAKE HOME. To me, that's decent money, not fantastic. When we're living in an economy where a 14oz jar of peanut butter costs $5, I think you HAVE to make $30/hour if you want to support a family, particularly and not have your wife work.

But two points on this..

#1, we've just taken for granted that this things are how they are, and every household now has two people working for a living, we're not raising our kids properly and society as a whole is going to hell.

But the way I see it one parent SHOULD be staying home with the kids, and the union jobs are the only ones that actually stayed on scale with the cost of everything else going up.

I don't blame the unions for this, I blame companies like Wal-Mart, Home Depot, Target, etc. that are paying their employees peanuts for a full time job. The idea that you can't live on a starting wage at one of these places working full time is disgusting.

Not to mention the union jobs are about the only ones these days where you can still get a pension, and one big enough to actually retire on. Doesn't every working man deserve that?

#2 the point I started to talk about when I began this responses, is a union tinner for example in my area makes $33.50/hour. But the union scale, the price the employee pays is $45 something/hour. Now I'm sure the union is pocketing some of that money, but a hell of a lot of that is health insurance and benefits as well. Then you factor in unemployment, social security, etc. which is all part of that...

Are the unions really being so inflexible based on that?

Mathius

[Mathius]

They sure sold an awful lot of those cars nobody wanted. Even today GM is still the second largest producer of automobiles in the world, and, if given access to the Japanese market, they probably still would be.

To me, that's a very HUGE if. I mean who else are they competing with.

Another point... just because people are buying vehicles doesn't mean GM wouldn't sell more if they were selling what people wanted. You have to have a car to drive to work.

You can't even walk into a used car lot (in my area) and find more than a handful of cars older than 2000.

I don't know about you, but except for the F-Bodies, maybe a Monte, a CTS perhaps, or a bare handful of pickup truck types, there isn't too many cars later than 2000 that I even like the look of, let alone want to drive. But I have to get to work, so I buy the best that's available, or I buy some older project vehicle and fix it up like I did with my '92 Camaro, my '89 Ranger, and my '76 Chevelle, all of which were daily drivers at one point or another.

Mathius

[parsonsj]

You mean like making cars the public as a whole didn't want for the better part of 3 decades?

That's just ignorant.

BV, sometimes I think you're here only to stir up trouble. Care to share your project plans with us?

How about a name? We've asked all members to put their name in their signature.

jp

[wmhjr]

Mathius,

Yes - the unions are being totally inflexible - because they (and others) have failed to recognize the reality of today. To put it bluntly, the issue is that times have changed as a result of increased competition, incredibly improved technology, and an inability to comprehend thta standards of living are all relative.

I've said this before, but will keep saying this until people start to recognize the truth - because nothing short of that will allow any possibility whatsoever for our country to get back on track without becoming totally socialist (which frankly I think we are unfortunately going to do). People are basing what they think are "fair" wages on their own experience, and frankly the history of the 50s and 60s. During that time period, labor in the US had a tremendous advantage domestically, because overseas labor could not compete due to extrordinarily high financial barriers resulting from the vast distances of the Atlantic and Pacific oceans. Of equal significance is the pure fact that even logistics (importing) was very much more expensive due to the very inefficient supply chain operations making importation costs so much higher. As a result, US companies had a captive market, and so did US labor.

However, since then there has been an incredibly rapid (and still increasing) improvement in technology and engineering which have all but eliminated such physical barriers from being a concern. Supply chain operations are incredibly efficient. Robotics, CAD design, and frankly the fact that the PC I'm typing this post on has more computing power than all computers on the planet combined in the 60s - have all created increased competition.

Now add to this that people have always - and always will - want value. Translation? Better quality at a lower price. Don't forget one REALLY important thing. These "evil" corporations everyone wants to hate? Well, somebody owns them. People. 401K retirement accounts. Mutual funds. Frankly, you and I. And other people invest in them taking great financial risk - which is what sustains the company. Yet other people took HUGE risk and started the company. Not you, not me, and certainly not the 40% of Americans who don't pay a darned cent in taxes every year.

Think about something else. Everyone wants the June Cleaver home. Nice non-stressful jobs, house, a couple cars, vacation, maybe some hobbies - all protected. But remember what I said about relative? I'm guessing that back in the early 1800s people didn't have that, right? Or in the early 1900s.

The point is that we need to wake up and smell the coffee. People simply CANNOT expect that they're going to be able to have an unskilled labor job, own their own house, have a couple cars, etc. Just not gonna be the way in the future. I don't like it, but I understand it. Our "standard of living" will continue to "decline" (compared to what it was) while other "competitive" countries will see their standard of living improve. Maybe some day there will be parity. I don't like "globalization" but I can understand that bitching about it won't stop it. Doing so is simply a refusal to acknowledge reality - and we'd better start realizing this fast.

That's because the only other alternative is a completely socialistic society - something that our current crop of criminals that some people just put in power are already doing. Remember that 40% of Americans who pay zero tax? Who exactly do you think they voted for? Of course, many of them (as of Tuesday) will now get a "credit" - meaning they're going to get money EVEN THOUGH THEY PAID NO TAXES TO BEGIN WITH! This country has NEVER had more than 20% of our GDP be devoted to "social spending". As of Tuesday, that number jumps to just under 40%. Guess what the common accepted % of GDP spending for social programs in a Socialist nation is?

47%. We're almost there with one stroke of a Democratic pen.

Oh, and before I forget to mention it - some people will claim that FDR successfully did this in the 30s. Absolutely untrue.

When FDR increased social spending in the mid 30s, it resulted in a sharp increase in recessionary economic results in '36 - '38. A 1938 Gallup poll showed that 75% of Americans felt that FDRs policies were stifling the economy. The only thing that saved FDR was WWII. Fact - not fiction.

[Steve1968LS2]

why don't you like unions? just wondering.

Nobody hates unions.. we just hate the one-sided way they view economics.

They would rather drive GM into the dirt rather than give up anything. They see no problem in someone being paid $75 and hour to bolt in seats and it's unfair to pay that person $74 an hour even if it means that GM will go BK.

Unions use to be about collective bargaining but now it's more about collective extortion.

Union contracts are the main reason GM is in this bind but they don't seem to care at all about that.

[wmhjr]

Also, a couple other things.

1) No, every man does not "deserve a pension". They deserve to be fairly paid. They need like everyone else to save money. That's what things like IRAs and 401Ks are for. The world has changed. Sorry, but true. There are a few places where a "pension" makes sense. Like the military and government service - where the government controls exactly how much you can be paid. And where (for the military) you're taking a risk with your life. Not just because you put plastic part A into plastic slot B. Thinking that deserves a "pension" is an entitlement mentality.

2) Medical. Sure we have issues there, but let's not confuse the issue. Non-union shops also pay medical. It is what it is - mostly because of ridiculous legal action which makes medical care (due to malpractice) so friggin expensive. And from somebody who in the military had government health care, I can tell you first hand that you SURE don't want that. We paid for full family medical coverage from my wife's employer even though I was active duty military because our care (first CHAMPUS and then TRICARE) was so incredibly poor.