Will General Motors declare bankruptcy?

[Joey D]

You can't pin everything on the union's salaries and benefits -- management's decision to borrow more than the company is worth is a major factor as well.

But GM wouldn't have had to borrow the money if the unions hadn't
a.) Sucked money out of them
b.) Made the build quality poor, resulting in poor sales


The managment is at fault for not stepping up to the union. But when you look at it would it have done any good? Probably not.

While that is a very valid claim, it forgoes one fact proven over and over by multiple magazines: Toyota and GM both sell cars. Toyota sells cars that are a whole hell of a lot better, and regardless of whether Toyota's cost less for more (which most of them really don't), or whether it's cheaper to build cars in U.S. or not (which it isn't cheap), Toyota's are time and time again better cars, and by the time GM or Ford strike back with a new model, Toyota (and Honda) is already a step ahead. No amount of brand loyalty or patriotism will forgo that simple fact, because (ignoring the fact that Toyota builds most of their current cars in the U.S. anyways), it's a little extreme if you refuse to buy a carjust because it's built by a foreign make, even if they are imported.
Also not helping is the fact that up until recently (and I'm not completely sure of this), many GM cars for the American market were built in Canada, which does have national healthcare and benefits.

I could careless where the car is built. It's where the profits go is what I have a problem with. You buy a Toyota, money goes to Japan. You buy GM money goes to America. Plus if a GM is built in Canada, there is no problem with it because of NAFTA and what not. But I think people should buy GM's because it pays my salary but thats just me .

 

[a6m5]

I could careless where the car is built. It's where the profits go is what I have a problem with. You buy a Toyota, money goes to Japan. You buy GM money goes to America. Plus if a GM is built in Canada, there is no problem with it because of NAFTA and what not. But I think people should buy GM's because it pays my salary but thats just me .

Revenues: Toyota = $172.7 billion; GM = $193.5 billion

So far it looks like GM is selling more than enough cars, trucks, and loans...

Cost of Goods: Toyota = $138.5 billion; GM = $160 billion

As revenues rise, so too should the cost of goods. Toyota's gross margin is 19.8%. GM's is 17.3%... close enough.

GM spent $20.4 billion on operating expenses, TM "only" $18.7 billion...

If these numbers provided MrktMkr is correct, isn't Toyota putting way more money into U.S. than Japan?(from the U.S. market).

 

[Joey D]

It doesn't say where the money is spent, I would bet most of it is spent in Japan to develope new cars.

 

[a6m5]

It doesn't say where the money is spent, I would bet most of it is spent in Japan to develope new cars.

Good point. I still think Toyota(again, from the U.S. market) spends way more in the U.S. though. More details on where Toyota spends their money would be interesting. I've been noticing it a lot lately, but automakers have to continuously spend or invest in order to sell their cars. Doesn't give you much time to enjoy the success. I can see how it can be tough for smaller car makers.

 

[Joey D]

I can tell you that GM is spending a good deal of it's money in China right now, and it seems to be paying off.

 

[MrktMkr1986]

I can tell you that GM is spending a good deal of it's money in China right now, and it seems to be paying off.

It definitely is! I did a case study on GM's prescence in China. I like that new Buick minivan that's based off the Chevy Venture. They should bring it here to compete against the new Mercedes-Benz R-class.

If these numbers provided MrktMkr is correct, isn't Toyota putting way more money into U.S. than Japan?(from the U.S. market).

I don't have access to that kind of info...sorry. Maybe if I dig up a few quarterlies and annual reports I might find something about the sales concentration in different regions, but I haven't seen anything about where Toyota puts it's money.

But GM wouldn't have had to borrow the money if the unions hadn't
a.) Sucked money out of them

I wouldn't say "suck" money out of them. They're asking for fair wages.

Delphi was/is trying to push $9-12/hour wages on it's workers... well below the poverty line (assuming it's a family of 5).

b.) Made the build quality poor, resulting in poor sales

Perhaps... but it's managements responsibility to manage the company's finances.

The company (based on the MRQ) has a debt-to-equity ratio of nearly 20! Toyota's is 1.69 (based on FY2004). Capital-intensive industries like the automotive industry tend to have higher overall D/E ratios (usually around 2 to 4) -- so Toyota's is about right.

There's no excuse for that, really (20!) -- union or not.

The managment is at fault for not stepping up to the union.

True.

But when you look at it would it have done any good? Probably not.

Maybe... but someone should really be concentrating on dealing with all that debt. Strike a deal with the banks, the bondholders, something?!

 

[a6m5]

I don't have access to that kind of info...sorry. Maybe if I dig up a few quarterlies and annual reports I might find something about the sales concentration in different regions, but I haven't seen anything about where Toyota puts it's money.

Well, worldwide, I'm sure it'll be scattered. As far as the U.S. market is concerned, my guess is that more of Toyota's money goes into the U.S. than Nippon. I mean in order to function in the States, I'm sure Toyota does some(if not a lot) R&D here. I'd think most of the Toyota's NA operations are based in the States. They also spend a lot of "$$$" in marketing, etc.

 

[LeadSlead#2]

I'm going to have to say that the build quality argument is Definetly a matter of opinion...

 

[Joey D]

I wouldn't say "suck" money out of them. They're asking for fair wages.

Delphi was/is trying to push $9-12/hour wages on it's workers... well below the poverty line (assuming it's a family of 5).

Except fair wages is equal to sometimes 40 bucks an hour? Also some union employees demanded they come in over GM shut down, which they got paid double time for, but they weren't allowed to work. So they sat around watched tv, swept the floor, emptied trash, and other light labor jobs. My boss was put in the position, he said "hell no" to that and ended up in big trouble with the UAW man. Eventually he had to let them come in after a few greivences were filed.

Perhaps... but it's managements responsibility to manage the company's finances.

The company (based on the MRQ) has a debt-to-equity ratio of nearly 20! Toyota's is 1.69 (based on FY2004). Capital-intensive industries like the automotive industry tend to have higher overall D/E ratios (usually around 2 to 4) -- so Toyota's is about right.

There's no excuse for that, really (20!) -- union or not.

Think about it, build quality is bad so they have to spend more money in research to make the cars better and redesigned. This means they loose a lot of money in poor sales and research. The build quailty now is much better then in was say in the mid 90's, but people still have the notion it's bad.

Maybe... but someone should really be concentrating on dealing with all that debt. Strike a deal with the banks, the bondholders, something?!

There are people working on this, in fact a whole team of people is working on this. I haven't got a clue who any of them are.

I'm going to have to say that the build quality argument is Definetly a matter of opinion...

Mid 90's they sucked, now they are much better. Buick is one of the best and Pontiac is up there too.

 

[LeadSlead#2]

No one in this web site, or any other, is going to convince me that mid 90's GM cars are any worse than mid 90 Japanese cars...why? because I've been in enough Japanese cars from the mid 90's to say they are crappy as well. not that GM's cars from then were great, but that the cars I've been in from Japan, are just as bad, if not worse...

 

[Tornado]

Mid 90's they sucked, now they are much better. Buick is one of the best and Pontiac is up there too.

Yeah, but again, the Japanese car makes are still a step ahead (but the new Buicks are nice. My grandpa rented one when his Lexus went in to get serviced last month. Very comfortable cars. Perfect for old people. I don't see why Buick even wants to change their demographic).

No one in this web site, or any other, is going to convince me that mid 90's GM cars are any worse than mid 90 Japanese cars...why? because I've been in enough Japanese cars from the mid 90's to say they are crappy as well. not that GM's cars from then were great, but that the cars I've been in from Japan, are just as bad, if not worse...

Give me one example.

 

[Zardoz]

...don't start *****ing about fuel prices because you've got it made...

Yes, at the moment, we do have it made.

But it isn't going to last:

https://www.gtplanet.net/forum/showthread.php?t=73281

 

[LeadSlead#2]

94 Mazda MX-3 --- 94 Pontiac Sunbird

 

[Joey D]

Yeah, but again, the Japanese car makes are still a step ahead (but the new Buicks are nice. My grandpa rented one when his Lexus went in to get serviced last month. Very comfortable cars. Perfect for old people. I don't see why Buick even wants to change their demographic).

Buick is still better, they have the awards to prove it. I would take a Buick over a Lexus anyday.

Yes, at the moment, we do have it made.

But it isn't going to last:

https://www.gtplanet.net/forum/showthread.php?t=73281

You are kidding me right? Gas has gone down over the past 3 months $1.60 around me. I'm paying 1.87 for a gallon of gas. No body can complain about prices till they hit 3 bucks again.

Plus everyone knows the oil will run out, it's not a big surprise. Hence why hydrogen is being developed now.

 

[MrktMkr1986]

Buick is still better, they have the awards to prove it. I would take a Buick over a Lexus anyday.

Why won't they bring that Buick minivan to the US market? It could boost sales and offset some of those interest payments.

You are kidding me right? Gas has gone down over the past 3 months $1.60 around me. I'm paying 1.87 for a gallon of gas. No body can complain about prices till they hit 3 bucks again.

Lucky you... it's still about $2.60/gal for premium (93 R+M/2) here.

94 Pontiac Sunbird

The turbos are the only decent versions.

 

[Joey D]

Why won't they bring that Buick minivan to the US market? It could boost sales and offset some of those interest payments.

There is a Buick minivan (sport van). It's called the Terraza and it starts at $28,530, comes with 3.5L V6, 201hp, and AWD. Although it's not all that pretty.

 

[Wolfe]

There is a Buick minivan (sport van). It's called the Terraza and it starts at $28,530, comes with 3.5L V6, 201hp, and AWD. Although it's not all that pretty.

*pic*

Erm, I wouldn't really call that a Buick, since it's available under pretty much every brandname GM has.

 

[Joey D]

It's still a Buick mini-van and it has a lot more to offer then the other ones do. But the Buick is the best, followed by the Pontiac, then the Saturn, then the Chevy. If I was going to get one I would get the Buick since its going to be the best outta all of them.

 

[Wolfe]

It's still a Buick mini-van and it has a lot more to offer then the other ones do. But the Buick is the best, followed by the Pontiac, then the Saturn, then the Chevy. If I was going to get one I would get the Buick since its going to be the best outta all of them.

If I were to get an SUV/truck, I'd get an SUV/truck. If I were to get a minivan, I'd get a minivan. (However, I'll never buy a minivan, and I'd only get an SUV/truck if I needed it for work/carrying things or wanted it for offroading)

This thing and its rebadged cousins are just an ugly, poor attempt at making a "macho" minivan, with that swollen lump at the front.

 

[Joey D]

They may be ugly, but they are way better then the previous vans they replaced. GM just didn't get the stylin right. In fact it's so ugly I'm surprised Dodge hasn't tried making something like this, hell I wouldn't be surprised if the next Caravan had a ram front end on it. But that's another story.

But at the end of the day it's a good van that has been hit by the ugly train. Maybe just go for a Honda or Nissan, I'm sure they are better anyways.

 

[LeadSlead#2]

they didnt make turbo sunbird's after 91, I believe....and my point isnt that its a great car...

calling any minivan ugly is awfully redundant

 

[MrktMkr1986]

There is a Buick minivan (sport van). It's called the Terraza and it starts at $28,530, comes with 3.5L V6, 201hp, and AWD. Although it's not all that pretty.

Thanks...

Either I misunderstood the article or it was outdated because the impression it gave me was that this vehicle (may or may not have been the Terraza...) was exclusive to the Chinese market.

they didnt make turbo sunbird's after 91, I believe

True.

....and my point isnt that its a great car...

I know... that's just my opinion.

 

[Tornado]

94 Mazda MX-3 --- 94 Pontiac Sunbird

I'm afraid giving an example of a Japanese car that sucked that was also an American car is not the best example of Japanese build quality (As in the Honda Passport/Isuzu Rodeo or Mitsubishi Sapporo/Dodge Challenger).

 

[LeadSlead#2]

are you saying the Mazda is American? (if you are, you need to be clearer)

IF (and I do mean IF) the Mazda is, how about
97 Mitsubishi Mirage --- 98 Pontiac Grand Am

 

[Joey D]

Actually Mazda is like 33% American, they are part of the Ford Group.

 

[LeadSlead#2]

Mazdas count as Japanese, regardless you know why? because if we were talking about RX-7's or a car people liked, it would be ALL Japanese baby

 

[a6m5]

are you saying the Mazda is American? (if you are, you need to be clearer)

IF (and I do mean IF) the Mazda is, how about
97 Mitsubishi Mirage --- 98 Pontiac Grand Am

Mitsubishi is considered Japanese Dodge(by me ), and I agree that Mirage isn't the greatest car, but Grand Am? Don't get me wrong, I love Grand Am. It's been one of my favorite cars since I was a kid(we are talking 80's here), but they don't stand up to Japanese cars in its class.... at least not the good ones. God, I love Grand Ams and don't ask me why, I just do.

Edit:

Mazdas count as Japanese, regardless you know why? because if we were talking about RX-7's or a car people liked, it would be ALL Japanese baby

On Mazdas, it depends on the vehicle. RX-7? Japanese. Navajo or "B" pick up trucks? American. MPV?..... not sure. I think it's a Mazda car with Ford engine.

 

[Joey D]

Mazdas count as Japanese, regardless you know why? because if we were talking about RX-7's or a car people liked, it would be ALL Japanese baby

Still there is Ford influence, if it wasn't for Ford then Mazda wouldn't be remotely as big as it is now. Trust me there is Ford influnces in Mazda.

 

[LeadSlead#2]

if you love them so, how could possibly think those cars were better? wouldnt you love them then? I'm not saying the cars I name are great - what I'm simply saying is, nobody has ever given a reason for saying the Japanese cars are better (other than interior quality) which is crap to me --- plus people have a habit of driving top-model Japanese & base model American -then comparing the two

 

[Joey D]

if you love them so, how could possibly think those cars were better? wouldnt you love them then? I'm not saying the cars I name are great - what I'm simply saying is, nobody has ever given a reason for saying the Japanese cars are better (other than interior quality) which is crap to me --- plus people have a habit of driving top-model Japanese & base model American -then comparing the two

Just because you love a car doesn't mean its the best. I love the Blazer but there is no way its the best small SUV ever.

Japanese cars are "considered" to be better because of quality and dependablity, something older American cars didn't have. Now they do, but in the past they didn't.