Will General Motors declare bankruptcy?

[VIPFREAK]

GMs "success" has little to do with the individual cars they sell. Their cars are great, actually -- management is poor.

Well... Maybe if your talking about the companies that GM aquired then I'd say yeah they have SOME great cars but the core company is just as ****ty... "poor" as the management.

 

[Young_Warrior]

Their management reflects on their cars...

Agressive competition and high oil prices dont count as:

A: Everyone is competing against one another and if your cars arent up to the job then well...
B: US oil prices are nothing compared to that of western Europe especially the UK. A couple of months back when your fuel prices were at theyre highest thanks to hurricanes you guys were marely tasting what we pay near enough on a daily basis.

Unjustified executive compensation

Which company doesnt do that. Its more or less a regular practice in the UK and germany.

Crippling debt

If they made better cars maybe they wouldnt be in debt.


What are the current interest rates in the US. You do know that GM will pay alot less interest than the average person. You shuld see how little interest people who are in debt have to pay let alone a giant organisation.

 

[MrktMkr1986]

Agressive competition and high oil prices dont count as:

A: Everyone is competing against one another and if your cars arent up to the job then well...
B: US oil prices are nothing compared to that of western Europe especilly the UK.A couple of months back when your fuel prices were at theyre highest thanks to hurricanes you guys were marely tasting what we pay near enough on a daily basis.

A: If GM had no competition (it would be a monopoly! ) it would be price maker. Aggressive competition in an industry forces prices to drop. Lower prices = less profit no matter how good or bad the individual cars actually are. Aggressive competition is a significant factor.

B: Explain how this is not a factor. I see that as reducing demand for GMs vehicles.

Which company doesnt do that. Its more or less a regular practice in the UK and germany.

That's not the point. Paying executives large sums of money for losing money is a disincentive. It doesn't matter what company does it or not. Other companies are not losing $1.1 billion/quarter.

If they made better cars maybe they wouldnt be in debt.

It's got little to do with making a "better" car. That's subjective. It's about adapting to prevailing market forces.

What are the current interest rates in the US. You do know that GM will pay alot less interest than the average person. You shuld see how little interest people who are in debt have to pay let alone a giant organisation.

If you know anyone that shells out $3.7 billion in interest payments (in THREE MONTHS) I'd like to talk to them.

 

[Young_Warrior]

A: If GM had no competition (it would be a monopoly! ) it would be price maker. Aggressive competition in an industry forces prices to drop. Lower prices = less profit no matter how good or bad the individual cars actually are. Aggressive competition is a significant factor.

B: Explain how this is not a factor. I see that as reducing demand for GMs vehicles.

Mercedes and BMW prices are quite a tad bit more than their non german rivals and well the 3 series is the number 1 selling executive in the UK and no doubt it sells very well in the US aswell?

But demand wouldnt be reduced if they were good cars and the management made the right cars.

But yes I will give you that one as even if GM made the best cars in the world some idiots would go and buy an inferior product.

But still GM should adjust its corporation so to function effectively and protect themselves from rainy days.

 

[MrktMkr1986]

Mercedes and BMW prices are quite a tad bit more than their non german rivals and well the 3 series is the number 1 selling executive in the UK and no doubt it sells very well in the US aswell?

Highly likely, but I'm not sure.

But demand wouldnt be reduced if they were good cars and the management made the right cars.

Again, you make the statement "if they were good cars". That's all subjective. A car you would consider good, I might think is bad and vice versa.

The part about making the right cars is true. If GM's cars/trucks were designed with fuel efficiency in mind, their sales would increase.

But yes I will give you that one as even if GM made the best cars in the world some idiots would go and buy an inferior product.

What are you implying here?

But still GM should adjust its corporation so to function effectively and protect themselves from rainy days.

Agreed.

 

[Zardoz]

This story says 12 plants are closing, not 9:

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aTmZMKNq0G5M&refer=home

One of them is a Saturn plant. This just sucks...

 

[skip0110]

Again, you make the statement "if they were good cars". That's all subjective. A car you would consider good, I might think is bad and vice versa.

There are clearly some cars that do some things well, and while I may not like them, they still manage to sell well by these virtues. GM manages to make car after car that does nothing exceptionally well. Average cars are good as rentals, but anyone in the buying market is looking for something, and a GM never is top by any one criterion (with some exceptions, I am generalizing).

The part about making the right cars is true. If GM's cars/trucks were designed with fuel efficiency in mind, their sales would increase.

But they do have cars with good efficiency. All their cars have pretty good gas mileage. Thing is, none of them have "exceptional" milage...so noone thinks of a GM brand when they think of economy.

How many people do you think walk into a Toyota dealership thinking they want a Prius for the economy, and end up leaving having bought a Camry with a nice bevy of options (leaving Toyota with a nice profit instead of the loss that they sell Priuses at)?

Ford knows the trick too. Margins are probably slim on the Mustang Cobra, but they sell 1 Cobra to every 10 V6 Mustangs (guessing on the numbers). But most people go in to the dealer wanting a Mustang because of the Cobra, even if they buy a V6.

"Halo cars." GM needs them badly. That is what makes the Cadillac brand appealing (and the only shining star in GM)--the V-series line.

 

[neanderthal]

YW

you have no clue what youre talking about. how about you shut your trap and save us all the trouble

so what if the 3 series is the number one selling executive. i can think of probably ten nameplates that are non executive that sell in higher quantities than the 3 series.

GMs problems lie mostly in the UAW and the perception of its products. GMs vehicles are certainly competitive with pretty much anything in thier respective sectors but thier perceieved quality is lacking relative to thier competitors mostly the asian ones.
it doesnt help when they use that grey faux mouse fur cloth and that cheap shiny hard plastic for thier interiors. but the legacy payments for past UAW contracts means that GM pays about $2000 in health care costs for its PAST employees and thier families, and another $2-3000 on top of that for thier pensions. for each car sold

toyota does not have that burden. that money goes straight into their coffers. so GM is at a competitive disadvantage over a contract that some dumb CEO signed back when they were making money hand over fist. not toyotas fault. not posrches fault.

incidentally, porsche very nearly went under in the 80s/ early nineties. after making a replacement (928) that was larger, had better handling, more room, more trunk space etc for their vaunted 911 they nearly went bankrupt when people didnt buy it and continued to buy the 911, albeit at lower and lower volumes. they had to keep reengineering it and refining it while they thought of a suitable replacement or substitute. that substitute/ alternative was the boxster. they did save a lot of money by using a lot of the same components (suspension, switches, gauges, headlights) and that is their #1 volume seller now. that they were able to make it a lower price meant it would be the volume car, but using teh same components on the more expensive car meant that its profits were much higher.
the cayenne was simply a manouvre to reduce "thier reliance on sports cars, which are a luxury commodity, and whose sales decline in recessions and so on."

 

[Joey D]

Oh for Chirst sakes GM isn't going to go under, quit saying that. They are streamlining the company to make it run better because there are a lot of rough edges strewing about. The UAW is 90% of the problem, I've seen it first hand. Why any of those guys have a job is beyond me, I know its going to sound bad but a robot can do the job better, fast, and won't complain about doing it. There was a time for unions, now there is no need for them because they are only abused.

GM builds some crappy cars, they build mostly decent cars, and they have quite a few good cars. Every car company is the same way, I can name a crappy, decent, and great Toyota. Same for any...well almost any company you throw at me.

So yes GM is just going through a phase and it will work its self out shortly.

 

[Zardoz]

...So yes GM is just going through a phase and it will work itself out shortly.

I sincerely hope that you're completely right.

 

[Joey D]

There is no way on God's Green Earth that the biggest automotive company in the world will go under...it would be like Microsoft going under.

**They might....errr they will lose the number one spot though, for at least a while.

 

[niky]

One hopes.

Y'know, the employee compensation packages almost crippled Japanese industry a while back (their demographic is even more skewed than in the US). I'm not sure which other companies had the problem, but I know Nissan did.

 

[Joey D]

One would think that the UAW would see their actions are only going to hurt them later on, if GM goes under (which they won't but hypothetically) they would be out everything.

 

[Zardoz]

One would think that the UAW would see their actions are only going to hurt them later on...

Yes, certainly one would think, but knowing their history...

 

[MrktMkr1986]

The UAW is 90% of the problem, I've seen it first hand. Why any of those guys have a job is beyond me, I know its going to sound bad but a robot can do the job better, fast, and won't complain about doing it. There was a time for unions, now there is no need for them because they are only abused.

Unions keep corporations in check. Management is 90% of the problem.

 

[niky]

Sad... there was a Food Plant near my house (Nestle) that had workers at twice the rates of everyone else, with housing, food, educational and medical benefits. The workers were living like white collar employees, even though they were mostly truckers and machine operators. The union comes in and *BAM*, one year later, they're all unemployed and selling their nice new houses, cars and appliances... sad thing, really.

I'm glad the union hasn't penetrated our business here (knocks on wood).

 

[MrktMkr1986]

Sad... there was a Food Plant near my house (Nestle) that had workers at twice the rates of everyone else, with housing, food, educational and medical benefits. The workers were living like white collar employees, even though they were mostly truckers and machine operators. The union comes in and *BAM*, one year later, they're all unemployed and selling their nice new houses, cars and appliances... sad thing, really.

I'm glad the union hasn't penetrated our business here (knocks on wood).

Explain how this is the fault of the union.

 

[Joey D]

Are you kidding me? I would like you to spend one day working with the UAW and see how they act. They skip work and demand pay for it. They break things and blame in on others. They are scum and they mess up a good company.

 

[skip0110]

Are you kidding me? I would like you to spend one day working with the UAW and see how they act. They skip work and demand pay for it. They break things and blame in on others. They are scum and they mess up a good company.

Possibly this is because GM upper management moved many of their jobs out of the country in the mid-80s/early-90s (not sure on the years) for no good reason and the resentment still exists?

 

[niky]

Explain how this is the fault of the union.

Sorry, that was the short version. Long version.

Those Nestle workers were already getting two to three times the going rate for technical-level (not college level, mind you) labor. They were getting full compensation and benefits package. The union came in (KMU, translated, the "May 1 Movement") and started trouble, made them demand better working hours, more time off, and HIGHER pay (never mind they were the highest paid blue collars of the time in this country). The management knows it's giving more than enough, and politely says "no". The workers go on strike. The factory starts losing money. The union keeps the factory from hiring other workers. The factory closes. *BAM* Workers who'd gotten rich enough to buy new houses and cars (and not many blue collars in this country can afford even a secondhand car) are suddenly poor as ****.

This is secondhand from one of those ex-workers, mind you.

Unions were originally conceived to protect worker's rights. Nowadays, all they do is rake everyone (employers AND employees) for everything they can get.

 

[neanderthal]

im in a union, and im pro union, but theres a place and a time. the UAW has GM by the short and curlys with some of the compensation packages and so on. someone who is building a car should not be making 100 grand a year for less than a full work week.

there was an article in forbes or business news or something a few months ago about a plant that GM had shut down, but GM was still obligated to pay the workers according to thier contract, even though they werent doing anything. the choice for the workers was take early retirement (and get 80%of your annual income for the rest of your life as a pension) or volunteer with local groups lke the bous and girls club or come in to do light maintenance (sweep the now disused factory) to still get full pay and you would still be eligible for full benefits when the time came.

thats a few hundred to a few thousand people getting paid over $50000 annually to do nothing that adds to GMs bottom line.

now im not completely absolving GM of this mess. who in their right mind would willingly sign a contract like that. or get in a situation that they have to sign a contract like that? nobody forced GM to make the bad decisions that led to this. if i was forced to sign something like that, i would not, i would shut the plant down and move the presses and robots to another and start paying people there overtime. expensive, yes, especially is most of your company is unionised and would probably show solidarity for thier brethren. but this is turning out to be more expensive dont you think.

the old saying goes "a stitch in time,......"
another says "dont put off to tomorrow what you should do today." well, they shoulda grown some balls back then. too late now.

 

[niky]

Same thing Fiat did to GM. You've got to wonder who in their right mind would sign those things.

Sorry about being anti-union, but most of the unions here are back by the Communist Party. They're supposedly to protect worker's rights, but they overtly attack any multinational corporation, regardless of labor practices. I agree to labor representation, but when the union becomes too powerful, bad things happen.

 

[Wolfe]

The reason why GM loses so much money ---> UAW

The reason why GM can't make more money ---> Its "bland," "boring," "nothing-special" image, and the fact that until recently it was building some seriously outdated cars that were easily outclassed by their rivals.

 

[Joey D]

The reason GM moved jobs out of the country...money, you pay people in other countries far less then what you can pay an American, but I still say robots are better.

Also the reason GM signed the contract, when they did they were flush with money, now its coming back to bite them in the ass. I'm not saying the UAW is a 100% at fault but they are mostly at fault.

 

[VIPFREAK]

From the news this early morning it looks grim... and it's starting to happen at Ford too.

 

[Duke]

Unions keep corporations in check. Management is 90% of the problem.

Do you know anything about this subject, or is this your typical anti-corporate knee-jerk?

GM has numerous plants that are actually cheaper to continue running at a dead loss than it would be to close them, because the UAW has huge guaranteed closure payouts that will go to the employees in the event the plant closes. It's literally not feasible for GM to close those plants due to the huge liquid cash requirements it would take to do so, so the loser plants continue to drain the profitable ones dry.

I'd like to see you show some numbers that prove that over-high management salaries are 90% of the problem.

 

[MrktMkr1986]

Do you know anything about this subject, or is this your typical anti-corporate knee-jerk?

As usual you have judged me correctly.

GM has numerous plants that are actually cheaper to continue running at a dead loss than it would be to close them, because the UAW has huge guaranteed closure payouts that will go to the employees in the event the plant closes. It's literally not feasible for GM to close those plants due to the huge liquid cash requirements it would take to do so, so the loser plants continue to drain the profitable ones dry.

I'd like to see you show some numbers that prove that over-high management salaries are 90% of the problem.

That is not what I said.

Are you kidding me? I would like you to spend one day working with the UAW and see how they act. They skip work and demand pay for it. They break things and blame in on others. They are scum and they mess up a good company.

J says: unions are bad... there's no need for them today
B says: Unions keep corporations in check
J says: You try spending a day with the UAW...

The UAW is not the only union in the country. I'm talking about unions in general, not the UAW in particular.

 

[Duke]

That is not what I said.

This is what bothers me about corporations and their "leaders". They can slash jobs and slash plants. But will they slash their bonuses and executive compensation?

Here's my list:

"Pesky" unions demanding "high" wages

Unjustified executive compensation (no one has the right to lose $1.1 billion in one quarter and still expect to get paid)

Unions keep corporations in check. Management is 90% of the problem.

Clearly you think that the UAW are justified in their demands, and the management does not deserve their salaries.

 

[MrktMkr1986]

Clearly you think that the UAW are justified in their demands, and the management does not deserve their salaries.

Yes, this is correct -- though it has nothing to do with being anti-corporate. If management's sole responsibility is to produce profits, then their salaries should reflect their performance.

This is what bothers me about corporations and their "leaders". They can slash jobs and slash plants. But will they slash their bonuses and executive compensation?

...and...

Unjustified executive compensation (no one has the right to lose $1.1 billion in one quarter and still expect to get paid)

...and...

They [UAW members] skip work and demand pay for it.

It goes both ways. If UAW members skip work, then their salaries should reflect it. If management does not do their jobs (produce profits), their salaries should reflect it.

 

[Young_Warrior]

YW

you have no clue what youre talking about. how about you shut your trap and save us all the trouble

so what if the 3 series is the number one selling executive. i can think of probably ten nameplates that are non executive that sell in higher quantities than the 3 series.

GMs problems lie mostly in the UAW and the perception of its products. GMs vehicles are certainly competitive with pretty much anything in thier respective sectors but thier perceieved quality is lacking relative to thier competitors mostly the asian ones.
i but the legacy payments for past UAW contracts means that GM pays about $2000 in health care costs for its PAST employees and thier families, and another $2-3000 on top of that for thier pensions. for each car sold

toyota does not have that burden. that money goes straight into their coffers. so GM is at a competitive disadvantage over a contract that some dumb CEO signed back when they were making money hand over fist. not toyotas fault. not posrches fault.

incidentally, porsche very nearly went under in the 80s/ early nineties. after making a replacement (928) that was larger, had better handling, more room, more trunk space etc for their vaunted 911 they nearly went bankrupt when people didnt buy it and continued to buy the 911, albeit at lower and lower volumes. they had to keep reengineering it and refining it while they thought of a suitable replacement or substitute. that substitute/ alternative was the boxster. they did save a lot of money by using a lot of the same components (suspension, switches, gauges, headlights) and that is their #1 volume seller now. that they were able to make it a lower price meant it would be the volume car, but using teh same components on the more expensive car meant that its profits were much higher.
the cayenne was simply a manouvre to reduce "thier reliance on sports cars, which are a luxury commodity, and whose sales decline in recessions and so on."

No need to take it personal

so what if the 3 series is the number one selling executive. i can think of probably ten nameplates that are non executive that sell in higher quantities than the 3 series.

Flawed argument. Executives are expensive saloons... The 3 series outsold the mondeo, vectra, A4, passat, C-class and any other saloon out there. And a 3 series is something that most people cant afford.... That should really tell you just how good the car is.

As for the 928 the engine was in the front and not as pretty as a 911. No wonder that it never really sold. Might have been better but it missed a major marketing point of its sector... Looks.

it doesnt help when they use that grey faux mouse fur cloth and that cheap shiny hard plastic for thier interiors.

And whose fault is that?

UAW contracts means that GM pays about $2000 in health care costs for its PAST employees and thier families, and another $2-3000 on top of that for thier pensions. for each car sold

Dental maybe but pensions? Which car company doesnt offer its employess a pension but I seriously doubt the figure is this high. I mean when was the contract signed? Sometime in the 80's or 90's? Back then was a whole lot of money.

Gonna need some evidence for that.