A Eulogy for General Motors - Tilted Forum Project Discussion Community

QuasiMondo · 11-07-2008, 10:36 AM

GM: Almost Out of Cash click to show

* GM posted a quarterly loss of $4.2B
* GM burned through $6.9B during this same quarter
* GM now reports that "will approach the minimum amount necessary to operate its business"

I have been in denial about this but it has become crystal clear that GM could be out of business by the end of this year. This is shocking as it is depressing as it has been long in the making.

The why's and how's of GM's long and painful fall from grace are known (for those who wish to go even further in-depth, The Truth About Cars has it laid out in detail). Some may say that the current economic crisis is what's done GM in, but they would be in denial just as I was. Shoddy quality, over-reliance on SUV's, a refusal to develop their small and midsized cars to be competitive against the Camry's, Corollas, Civics, and Accords of the world are what did GM in.

If you can remove yourself from the horrors of owning that old Cavalier, you will find it sad that this once proud symbol of American industrial strength now appears to be heading the way of the wolly mammoth. Darker days are certainly on the horizon.

Baraka_Guru · 11-07-2008, 10:48 AM

Quote:

Originally Posted by QuasiMondo

Shoddy quality, over-reliance on SUV's, a refusal to develop their small and midsized cars to be competitive against the Camry's, Corollas, Civics, and Accords of the world are what did GM in.

Not to mention the $6,000 Chinese imports on the horizon.

Everywhere I go, Japanese cars are everywhere. GM products seem out of place now. But do you really think this is the end for GM?

shakran · 11-07-2008, 11:13 AM

No. They'll get a bailout, just like Chrysler did, twice.

QuasiMondo · 11-07-2008, 11:14 AM

At this point, the $25 billion bailout package they're trying to get will only delay the inevitable. Rick Wagoner has never issued a turnaround plan to help get GM back in the black, much less regain any lost market share, and the board of directors is strangely complicit in his poor leadership.

Since Wagoner has taken the reins over 8 years ago, GM's stock has fallen over 80-percent. Their global market share has dropped in half. They've lost their position as sales leader in the U.S. and worldwide to Toyota, and the board of directors still think he can do the job, which is very clear that he cannot.

Their vehicle portfolio is a few good cars (Malibu, CTS, G8) scattered across a sea of mediocre offerings that customers no longer have any interest in looking at since everybody else has raised the bar. Drastic actions are required, and these actions still may not be enough.
-----Added 7/11/2008 at 02 : 15 : 41-----

Quote:

Originally Posted by shakran

No. They'll get a bailout, just like Chrysler did, twice.

To Chrysler's credit, they repaid those bailout loans. I don't think GM's in such a healthy position to do so.

Fotzlid · 11-07-2008, 11:57 AM

I think the UAW has to take some of the credit for the current state of GM's finances. They have had their teeth locked onto GM's neck for quite some time now.

guyy · 11-07-2008, 12:27 PM

Quote:

Originally Posted by Fotzlid

I think the UAW has to take some of the credit for the current state of GM's finances. They have had their teeth locked onto GM's neck for quite some time now.

Sure, you could pay those guys $7.40/hr (Michigan minimum wage), but then who's going to buy a GM product? Walmart workers?

QuasiMondo · 11-07-2008, 12:36 PM

Quote:

Originally Posted by Fotzlid

I think the UAW has to take some of the credit for the current state of GM's finances. They have had their teeth locked onto GM's neck for quite some time now.

Blaming the UAW is a red herring. The bottom line is that GM failed to sell cars. They failed to sell cars because they had nothing to offer that was better than what was coming in from Europe or Japan.

When you can't sell cars, it doesn't matter if the UAW agrees to work for free with no benefits. GM forgot their business was making cars, not money.

cj2112 · 11-07-2008, 01:13 PM

I'm a 40 year old male. I drive by the local GM lot 5 days a week, and the Chevy lot at least once week. General Motors doesn't produce a single vehicle that I am even slightly interested in. That is why GM is in trouble.

Fotzlid · 11-07-2008, 01:26 PM

And the amount of money GM pays out for full benefits to all employees, past and present, has no effect on their cash flow.

Quote:

Among the topics discussed were a $25 billion loan to fund union-controlled trust funds that would be set up in the coming year to cover the health care costs of retirees and their family members. Shifting about $100 billion of those costs from the automakers' balance sheet to the trust funds was a key concession the companies won from the UAW in the 2007 labor deals.

Thats a lot of money. How many cars would they have to sell just to equal that amount?

shakran · 11-07-2008, 02:25 PM

Quote:

Originally Posted by QuasiMondo

To Chrysler's credit, they repaid those bailout loans. I don't think GM's in such a healthy position to do so.

Neither was Chrysler, at the time of the loan

The bottom line is simple. If you make shit, and everyone else is making better-than-shit, and your cars aren't priced significantly lower, you're gonna lose.

The Geo Metro was a shit car but you could get one for a song, so they were all over.

The Honda Civic is expensive as hell ($24,000 for a compact?!?!) but its quality is bulletproof and people know that so they're willing to pay it.

Meanwhile GM is making suburbans that cost freakin' 50 thousand dollars despite being made by one of the worst-quality car makers available in the domestic market, and despite the fact that people have finally figured out that gas guzzlers are bad, and they're scratching their butts wondering why in hell they aren't getting sales.

They made utter shit in the 80's and 90's from a quality perspective, to the point that a few years ago they sent a letter to customers apologizing for making crap and begging people to give them another try.

Well, that only works if 1) you actually stop making the crap, which they've not done, and 2) those customers haven't already found others (Honda, Toyota, even Kia) that they like very much and that have already proven their reliability.

Even assuming every car coming out of GM right now is top notch in quality (not by a longshot) the designs are so uninspired as to make people look elsewhere. Why get a crappy cavalier or the boring Malibu when you can get an Accord - the current design of which is pretty damned sporty for a sedan (especially the 2 door in that electron blue. . but I digress). Why get a gallons-per-mile suburban that costs as much as a Corvette when you can get Pilot for less, that uses less gas, and that will last at least twice as long, AND that will have a markedly higher resale value, all while having better fit and finish than any GM on the lot?

I knew the auto industry was in trouble when they started campaigning on that "buy american" crap. "be patriotic, buy AMERICAN," was the argument, when the argument should have been "Buy American because we make the best products, hands down." Of course, that couldn't be the argument because there are truth in advertising laws.

The bottom line is that GM is merely a symptom of this country as it has been since the Regan administration. We all want something for nothing. Given the choice between a steady business model that will make you a steady $100,000 a year for the rest of your life, and a fly by night model that will make you a million overnight and then crumble due to crappiness of product, most Americans would choose the latter. Americans are lazy, and voluntarily inept, when they don't have to be. GM is simply the proverbial jewel in that crown. There is no reason why Japan should be beating us in the auto industry. We have the raw materials. We have the brains. We have the workforce. What we lack, is the desire for excellence. Selling crap for big profits works short term but as GM and Ford are discovering, it bites you, hard, in the end. Meanwhile, while GM's sales went down by nearly 50% last quarter, Toyota only lost just under 1/4 of its sales. It's still doing fine, while GM wallows in the muck that it created for itself.

ChrisJericho · 11-07-2008, 05:04 PM

I have to agree with much of the opinions stated here. Personally, everyone I know who has bought cars in the last 3 years have been purchasing Toyotas, Mazdas, Nissans, and Subarus.

When I was in the process of purchasing a car in 2006 I was astounded by how poorly most of the American cars did in crash tests, many did not even come with side airbags. I bought a Subaru wrx because I actually wanted to survive a car crash.

Additionally I think Ford and GM have the problem that they make the same undesirable vehicle three times over. For example the Ford Fusion = Mercury Milan = Lincoln MKZ. None of these renditions of the car are attractive, why are they being made in triplicate? At the very least eliminate the Mercury brand.

Unfortunately I believe the domestic automakers will get some sort of loan from our government. Not only would the job loss from the companies and their suppliers be astonishing, but their corporate bonds/credit are sloshing around everywhere in the markets.

The question is, how long could we as taxpayers afford to keep companies alive that lose billions of dollars a month?

highthief · 11-07-2008, 05:59 PM

Why fight the inevitable? Why should the government sink untold billions into a sinking ship? GM has proven it can't make cars that will either compete in quality with the big Japanese and even Korean manufacturers, and when China and India get in on the action, they won;t be able to compete on price for lower quality autos either.

Yeah, it'll hurt short term, but I don't favour government bail outs of such a long term sickie as GM.

Bailouts should be reserve for industries and companies which are in short term difficulty but who will likely turn things around. That's not GM.

laconic1 · 11-09-2008, 01:55 PM

Quote:

Originally Posted by ChrisJericho

Additionally I think Ford and GM have the problem that they make the same undesirable vehicle three times over. For example the Ford Fusion = Mercury Milan = Lincoln MKZ. None of these renditions of the car are attractive, why are they being made in triplicate? At the very least eliminate the Mercury brand.

I think this is one of the biggest problems GM is facing. They have too many brands and far too many dealers. All they really need is Chevy and Cadillac, If they didn't have to badge engineer vehicles for Buick, Pontiac, GMC, Saturn, Saab, and Hummer they could put more resources into the handful of vehicles they do make. I read GM has a total of about 7,000 dealers in the U.S. Toyota has about 1,600. Earlier this year GM had about 21% market share, Toyota had 17%. They have more than 4x as many dealers selling 20% more product. And yet GM can't just yank franchises under most states franchise laws, they either have to buy out the franchise or hope the dealer goes under on its own. Getting rid of Oldsmobile cost GM billions just in legal fees and buying out franchises. They need to trim down their dealer base but it is almost impossible.

powerclown · 11-20-2008, 05:08 PM

Apparently they're going to get their loan, whether its $25 or $50 billion, and I am conflicted about it. On the one hand I understand that times are tough, circumstances unusual; that an already weakened country can't afford the additional stress of a failed auto industry. But the incompetence of the manufacturers really pisses me off, and I can't understand how it got to this point. I can't believe there is something magical about building decent midrange cars, at the very least and for the sake of the survival of their companies why can't they copy the assembly and layout of other more successful cars like the Honda Accord or Toyota Camry. I know they know exactly what makes the import cars so successful on a mechanical level, they can't not know. They must have taken apart plenty of Accords, Camrys and other successful cars to see what makes them tick. I have a feeling cost is the issue; it would cost them too much to engineer a decent car from scratch, what else can explain it given the level of knowledge and sophistication of American engineers - who can send men to the moon and back in spaceships but can't apparently for the life of the company build a simple, reliable, affordable car.

Maybe they should be allowed to go into banckruptcy, but maybe the strain would be too much for too many people. The historical precendent of Chrysler taking on a government loan and paying it back 7 years early thanks to competent leadership says to me that loans might work in 2008, but what if they don't?

inBOIL · 11-20-2008, 07:16 PM

Quote:

Originally Posted by powerclown

I can't believe there is something magical about building decent midrange cars, at the very least and for the sake of the survival of their companies why can't they copy the assembly and layout of other more successful cars like the Honda Accord or Toyota Camry. I know they know exactly what makes the import cars so successful on a mechanical level, they can't not know.

Patents will prevent this. You can't just copy someone else's invention and make money off it (recent changes to patent law notwithstanding). However, GM should have been developing similar technology all these years so that they could efectively compete in the economy car market. Instead, they declined to diversify, and when the market changed they found themselves unable to survive. I hope that if congress grants this loan eventually, they'll attach some strings so that the money isn't wasted on things like executive retreats or developing the biggest, newest SUV.

Tully Mars · 11-20-2008, 07:17 PM

What a clusterfuck. This is one of those all too often situation where all I know is that I do not know the solution. Some random thoughts-

What does the average CEO and upper management of these auto makers earn per year?

What's the average employee make?

What's the average tax payer make?

Why should the average tax payer bail out a company or group of companies that have repeatedly shown they can not earn a profit?

What happens if the auto industry fails?

powerclown · 11-20-2008, 07:44 PM

Quote:

Originally Posted by inBOIL

Patents will prevent this. You can't just copy someone else's invention and make money off it (recent changes to patent law notwithstanding). However, GM should have been developing similar technology all these years so that they could efectively compete in the economy car market. Instead, they declined to diversify, and when the market changed they found themselves unable to survive. I hope that if congress grants this loan eventually, they'll attach some strings so that the money isn't wasted on things like executive retreats or developing the biggest, newest SUV.

Patents...good point forgot about the prohibitive legal aspect of that type of thing. A close approximation then. If GM can build a CTS, Malibu or Corvette ZR1 they shhould be able to build something to compete with Accord. I don't think its necessary to ban foreign car companies from operating here, there just needs to be decent Americans cars being made.

I've heard the loans do have strict guidelines attached to them, many that will benefit employees. Still I'm worried all that money will be squandered, given the car companies' track record with money lately. Then the situation will be worse than when it started. It was satisfying to see the car and UAW CEOs getting reamed out by Congress for flying into Washington on fancy private jets, those clueless bastards. Where is Lee Iacocca v2.0 when you need him?

Craven Morehead · 11-20-2008, 07:49 PM

I assume the validity of this is legit, someone has put a hell of a lot work into it. The blog does have link to all the underlying data.

If this is even close to be correct, then its really beyond hope, without major restructuring. Let GM and the others go tits up. The shockwaves will be horrendous. The shareholders will lose so will their creditors and union contracts would be renegotiated. Everyone loses, for a while. However, if it stays the same, throwing a ton of cash at them just to keep the afloat is not fixing anything. And they'll end up right back in the same place it is now.

Both labor and managment are crying that because the banks are getting bailed out, the auto industry should as well. There's a difference. A huge one. The days of easy credit are over. Bankers are never going that route again. Can the Big Three also make the same claims that they are reformed?

ngdawg · 11-20-2008, 07:56 PM

They won't fail, they'll just have to start over.

It would seem their begging might go unrewarded when all three CEO's arrived in DC aboard private corporate jets.
Their excuses? Safety ( yet more private planes crash each year than any commercial flights) and "protocol", read: Hey, we always did this.
When asked if any were willing to give up their multi-million dollar salaries for one dollar a year, only one, Chrysler CEO Nardelli, answered yes. Of course, he was already sitting pretty when ousted from Home Depot...
Source

Tully Mars · 11-20-2008, 08:35 PM

Quote:

Originally Posted by Craven Morehead

I assume the validity of this is legit, someone has put a hell of a lot work into it. The blog does have link to all the underlying data.

If this is even close to be correct, then its really beyond hope, without major restructuring. Let GM and the others go tits up. The shockwaves will be horrendous. The shareholders will lose so will their creditors and union contracts would be renegotiated. Everyone loses, for a while. However, if it stays the same, throwing a ton of cash at them just to keep the afloat is not fixing anything. And they'll end up right back in the same place it is now.

Both labor and managment are crying that because the banks are getting bailed out, the auto industry should as well. There's a difference. A huge one. The days of easy credit are over. Bankers are never going that route again. Can the Big Three also make the same claims that they are reformed?

I don't understand why the average tax payer should be bailing out folks that make a shit load more money then they do.

Several years ago, I'm guessing 12, I met a guy standing in a pool in Hawaii. Nice guy, I remember him well. He had a stutter and he and his wife had just bought their fourth week at the time share I was staying in. I asked him what he did and he told me he worked for (insert some big 3 auto co. here because I can't remember which one) as fender guy. In talking with him over several drinks he told me he work "the floor" installing new fender on trucks. He said with overtime each year he had no problem bringing in 225K+ a year. I asked if he was management and he said "God, no those guys make real money." At the time I made 1/2 that but worked two jobs to do it. Not long ago I read a story where one of the major car makers bought out some workers. In that story several were going to use their buy out money to take a few years off and attend Ivy league schools to "retrain for another career."

I have no problem with people who make good money, more power to them. But if they're simply being paid good money by companies that lose money then turn to the tax payers to prop them up... This whole thing smells bad to me. Why do more of my tax dollars have to go to keep people in jobs making money for companies that lose money?

Look at the chart Mr. Craven posted. How come Toyota can make a better car for less? Do the people working at Toyota get paid like Wal-Mart greeters? I'm guessing not. Chances are most, maybe not all but most, people on here would be more then happy with the average Toyota factory salary.

If the US economy keeps tanking many of us may be more then happy with that Wal-Mart greeter pay.

guyy · 11-20-2008, 11:50 PM

Quote:

Originally Posted by Tully Mars

Several years ago, I'm guessing 12, I met a guy standing in a pool in Hawaii. Nice guy, I remember him well. He had a stutter and he and his wife had just bought their fourth week at the time share I was staying in. I asked him what he did and he told me he worked for (insert some big 3 auto co. here because I can't remember which one) as fender guy. In talking with him over several drinks he told me he work "the floor" installing new fender on trucks. He said with overtime each year he had no problem bringing in 225K+ a year. I asked if he was management and he said "God, no those guys make real money." At the time I made 1/2 that but worked two jobs to do it. Not long ago I read a story where one of the major car makers bought out some workers. In that story several were going to use their buy out money to take a few years off and attend Ivy league schools to "retrain for another career."

I have no problem with people who make good money, more power to them. But if they're simply being paid good money by companies that lose money then turn to the tax payers to prop them up... This whole thing smells bad to me. Why do more of my tax dollars have to go to keep people in jobs making money for companies that lose money?

Look at the chart Mr. Craven posted. How come Toyota can make a better car for less? Do the people working at Toyota get paid like Wal-Mart greeters? I'm guessing not. Chances are most, maybe not all but most, people on here would be more then happy with the average Toyota factory salary.

If the US economy keeps tanking many of us may be more then happy with that Wal-Mart greeter pay.

One of our neighbours worked at GM in Janesville for many years. He made nowhere near 225K. He vacationed on his porch, not in Hawai'i and never went to Harvard or Yale. He and his wife even had the grace to die young so that GM would not pay out much in pensions or health care. So there. Dueling anecdotes.

First off, the chart is deceptive because it breaks down labour costs for Toyota but not for Detroit. By all accounts, Japan is more egalitarian than the US (Gini coefficients: US > 40 Japan: low thirties). What are corporate bureaucrats in Detroit making? We don't know. (And why is that not an issue?) What part of Detroit's costs are corporate welfare costs? In Japan, workers and ex-workers are more likely to be covered by the public system.

Secondly, everyone knows that today "cost-cutting" means offshore outsourcing & automation. Through outsourcing (much of it to China, a big fave of cheap labour conservaties) and automation, Toyota have eliminated about 30,000 jobs since the 1970s. The Big 3 could do something similar, but the net effect for everyone other than Big 3 management & stockholders would be negative. If "cost-cutting" is a pre-condition of gov. aid, that means gov. aid is for GM & Ford stockholders & Cerebrus. Basically, you're arguing for another bank bailout type arrangement whereby the gov. throws money at people who make even more money than you do.

Toyota keeps cost low by squeezing workers & suppliers in classical and creative fashions. Toyota is a shitty place to work. (See Kamata Satoshi's _Japan in the passing lane_. It's old, but the basic strategies have not changed.) Norms are raised, jobs eliminated, the line quickened until people dropped out. The idea is not to have people hang around. And they don't. If you can churn the work force, you don't have the workers on corporate welfare, you're not paying the bonuses, and they don't accrue seniority. Welfare costs can be offloaded onto the public systems. That's not such a big deal in my book, but in the US, there are serious gaps in the public system.

Of course the dilemma is that you do need some of those pesky & parasitic beings known as workers. This is thorny problem has given Toyota an opportunity for innovation. These days Toyota hire "trainees" from Brazil, Vietnam, the Phillipines and other places through a loophole in Japanese immigration law. In 2006 "Trainees" were making about JPY650/hr. Trainees can't even quit and go home because their passports are taken when they arrive in Japan. Maybe you folks can encourage your employers to develop similar programmes in the name of cost-cutting and efficiency.

Tully Mars · 11-21-2008, 05:37 AM

Quote:

Originally Posted by guyy

One of our neighbours worked at GM in Janesville for many years. He made nowhere near 225K. He vacationed on his porch, not in Hawai'i and never went to Harvard or Yale. He and his wife even had the grace to die young so that GM would not pay out much in pensions or health care. So there. Dueling anecdotes.

I can't do dueling anecdotes with you as that's the one UAW guy I ever spoke with, least that I remember. Maybe he was blowing smoke up my ass. I do know most stories I read talk about the UAW wage agreements and labor contracts providing generous wage and benefits to it's workers.

Like this one-

http://www.eons.com/money/feature/growthenestegg/11309

Quote:

Contracts expire between the United Auto Workers and the Big Three in 2007, and some argue union concessions are the only way the Big Three can compete with Toyota Motor Corp. and Honda Motor Co.

"Because Michigan has such a huge concentration of these unionized auto jobs, they dominate the economy," said Donald Grimes, an economist at the University of Michigan's Institute for Labor and Industrial Relations.

"The governor is trying to do a lot of good things, so are foundations, but they're small potatoes, in scale, compared to the auto industry," he said. "Nothing is going to overshadow those auto contract negotiations. ... That determines Michigan's future."

He added, "If people realized how generous the labor agreements were, I think they'd be astounded."

Auto workers, who can make $60,000 a year without overtime, and more than $100,000 with it, "know they're never going to make this kind of money again," said Denise Brooks, who has worked for 13 1/2 years at the Brownstown Ford plant. The money, for a family with only one wage earner, isn't as rich as it sounds, she said, but no auto worker starting a new career from the bottom will be able to match it.

"No matter how dirty, or greasy, or poorly they feel they've been treated, when they drive out of the plant in their brand-new Ford, they're a citizen of the world," she said. "They've got a good credit rating. They're used to buying what they want for their children and not having to worry about it."

Brooks, 50, took a package that will give her half her pay, health insurance and up to $15,000 tuition reimbursement for four years while she gets a Ph.D. in psychology.

She went to a retirement party a couple weeks ago, looked around, and started to cry. The current generation of workers, the ones with cottages up north, boats, annual hunting trips, would be the last, she realized.

"It was a retirement party for a whole way of life," she said.

The UAW's critics say union work rules make it nearly impossible to fire a bad worker. A 2 1/2 hour lunch for a union worker at one of the bars near a plant wasn't unheard of. And union workers didn't pay a penny for health insurance until last year; now a family pays only $700 a year, Grimes said.

Now this article doesn't talk about anyone making 225k a year. But I'd think you could take a trip to Hawaii, if you wanted, on 60K a year. You clearly wouldn't have to vacation on your porch unless you preferred your porch.

And 4 years of 1/2 your pay, health ins and 15K a year for school sounds pretty good to me, though it doesn't sound Ivy League good. I'd also like to know where you get a Ph.D. in 4 years. I can only guess the person in question already has some paper hanging on the wall.

And 2 1/2 hrs. lunches?

The article also speaks to some of the down side as well-

Quote:

Auto workers counter that it's punishing work.

Cynthia Allison was a single mother raising a daughter, Donielle, and getting welfare before she got a job at Ford's Dearborn Truck plant. A cousin working for Ford in Illinois got her on a waiting list for a job; she waited two years to get it. Nothing had prepared her for how physically punishing it would be.

Her first day, "I kept saying, 'The money, Cindy, the money. A future for you and for Donny.' When I got off that 4 a.m. shift, each step I took, my head said, 'Boom. Boom. Boom.'"

She's stayed at Ford 12 more years. Auto plant equipment is designed to be ergonomically correct, but Allison is 5'2" and it's not ergonomically correct for her.

She comes home with bruises and has no idea how she got them. She's popped her knee, she's popped her back, she cut herself, she got hit in the head with a Mustang. She's on a first-name basis with the plant's nurse, Kathleen, who gets her through some shifts by giving her Biofreeze gel for sore muscles. Allison, 41, describes it as "the street version of Bengay."

Allison, who also raised one of her nieces, is taking the $100,000 buyout.

As I said in my first post on the issue I know I don't know regarding a solution. Personally I'd like good paying jobs for everyone. I think it would be great if well paying jobs were plentiful. I'd like to see more US workers able to take regular vacations and send their kids to college. I just don't think that possible if the companies they work for are losing money by trying to sell products that people don't want. I really don't think it's up to the tax payers to bail them out of the hole they dug. And I think management and the labor unions both had hands on the shovel.

Craven Morehead · 11-21-2008, 08:32 AM

I almost posted more from the blog the chart came from. Click here to read more on a wide variety of economic issues, but several that pertain to this thread. The underlying data for the chart I posted is here. The blogger is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Lots of interesting reading.

What's interesting as shown in this blog is that the cost to own a new car is dropping both in relative and absolute terms. This means less money per sale for the automakers at a time when they need to increase revenue. An interesting dilemma.

shakran · 11-21-2008, 09:41 AM

As I hinted at before, it's not the fantastic union wages/benefits that's killing GM. They could still pay that out if they bothered to make a decent product, because people are willing to pay for quality. Honda and Toyota both cost more than GM, yet they're doing fine because unlike GM their cars are put together well, the fit and finish is good, and they'll last until long after you're tired of them.

Craven Morehead · 11-21-2008, 11:17 AM

Actually the imports are feeling the pinch as well

A Sea of Unwanted Imports

Long Beach shipyards

Tully Mars · 11-21-2008, 11:25 AM

Yeah, it's definitely a buyer market. Probably going to be for a while. If you have the cash and need a car...
-----Added 21/11/2008 at 03 : 04 : 01-----

Quote:

Originally Posted by shakran

As I hinted at before, it's not the fantastic union wages/benefits that's killing GM. They could still pay that out if they bothered to make a decent product, because people are willing to pay for quality. Honda and Toyota both cost more than GM, yet they're doing fine because unlike GM their cars are put together well, the fit and finish is good, and they'll last until long after you're tired of them.

Before moving to Mexico I bought a new Ford truck. Had 17 miles on it when I drove it off the lot. Didn't even make it home (70 miles) and it started having problems. There was a shake in the front end and the gas gauge would suddenly read full or empty at any given moment. The CD player won't play CD's. After returning it three times and leaving it, twice for several days, they managed to fix the gas gauge. They told me there nothing wrong with the front end. The mechanic and I went for a test drive and he said "that's just the wind, have you ever driven a truck before?" "Yes, almost all my life. I have a CDL and drove commercial long haul for a while." "Well there's a lot of bumps on this road too." I ended up taking it to a local tire shop and they were able to show me the tires on the truck weren't even round. They told me these are about the cheapest tires on the market. I went home did some research and found out they were right. Absolute POS tires. $1200 later and the front end didn't shake any more.

The CD player still doesn't play CD's. I had them replaced it three times. The shop manger told me the unit isn't designed to play CD's burned on the computer, really it's made to play store bought CD's only. I found that odd since it has an MP3 label on the front of it. Do major music labels even release CD's in MP3 format? I have a less then 50% chance any disc I burn on my laptop will play in my truck. If it does it won't necessarily always play. The cheap, $25, CD player I bought at Wal-Mart to listen to out by the pool plays all my CD's.

I had about 12K on it and one of the spark plug wires blew out. The front passenger seat is coming unraveled. The rear window started leaking recently. Man the list goes on and on and on. Bottom line is I wanted to buy American, I bought American and I wish I'd have bought a Toyota.

My Ex had a 1995 Toyota 4-Runner. We bought it new. Other standard maintenance the only major issue it ever had was the exhaust system and Cat. Converter needed replaced at about 195K.

I just don't think the big 3 have been in the business of making good cars. They've been in the business of making cars they can get the most profit on. That why they put POS tires on them, stereos that don't work and seats that have little or no quality to them. They're cheap. There's no vision for the long haul and they've counted on people like me who want to buy American made. People like me are closing our wallets and when we open them again more of us will be looking at imports.

shakran · 11-21-2008, 12:56 PM

Quote:

Originally Posted by Craven Morehead

Actually the imports are feeling the pinch as well

I didn't say they're not feeling a pinch - when the economy nosedives everyone feels the pinch, whether they make good stuff or not.

But you don't see the import CEO's running around begging for handouts from government either.

You see, while domestics (and to be charitable, Chrysler doesn't /really/ count here 'cause they're still getting out from under the Daimler messups, so their current issues can't really be entirely traced to the "domestics are crap" argument) were busy losing money before the collapse, the imports weren't. The collapse has just exacerbated the domestics' problems to the point that they're in real trouble a bit earlier than they would ordinarily have been.

guyy · 11-21-2008, 02:19 PM

This is now a crisis of demand. Cutting "labour costs" means cutting demand. Henry Ford knew that much.

Tully Mars · 11-21-2008, 02:57 PM

Quote:

Originally Posted by guyy

This is now a crisis of demand. Cutting "labour costs" means cutting demand. Henry Ford knew that much.

I think I get your point but just to be sure could you expand a little?

james t kirk · 11-23-2008, 07:24 PM

Quote:

Originally Posted by shakran

As I hinted at before, it's not the fantastic union wages/benefits that's killing GM. They could still pay that out if they bothered to make a decent product, because people are willing to pay for quality. Honda and Toyota both cost more than GM, yet they're doing fine because unlike GM their cars are put together well, the fit and finish is good, and they'll last until long after you're tired of them.

That's the truth.

This figure of 73 bucks an hour is not what the guys on the line are making, it includes all legacy costs, pensions, etc. Your average line guy is making 28 to 32 bucks an hour which is pretty good for what amounts to unskilled labour. Say 30 bucks an hour. Based on 52 weeks per year at 40 hours per week, that = 2080 hours x 30 = $62,400 per year. Add in some overtime and what not and you're up to 70 grand a year, maybe 80. Like I said, not bad, but hardly 250k per year. (I think someone was funnin ya there.)

BTW, the Japanese Auto Workers in North America make about the same, however, since they are a younger orgnization, they are not saddled with the same pension / legacy costs.

One last point. The CEO of Toyota made 1 million last year. Toyota made a profit of 7 billion or so last year. Rick Wagoner, the idiot who is the CEO of GM made 15 million bucks last year and his company is all but broke. (That's about 200 times what the average guy on the line made last year. Do you think Harley Early made 200 times what your average line worker made back in the glory days of GM? Never.)

Bottom line, if GM built quality cars, people would buy them. The only problem is that even if GM started building quality cars, which isn't going to happen, people would still not buy them since their reputation is so bad, it's a done deal.

The problem with all of this is that hundreds of thousands of families depend on work at the Big 3 to keep them in house and home. All of these people have hopes and dreams, mortgages, kids and bills. It's not a good thing to be going to bed at night with this sort of thing hanging over your head. The death of the NA Auto Industry is going to affect us all. It's sad because it didn't have to be this way.
-----Added 23/11/2008 at 10 : 31 : 44-----

Quote:

Originally Posted by Tully Mars

Yeah, it's definitely a buyer market. Probably going to be for a while. If you have the cash and need a car...
-----Added 21/11/2008 at 03 : 04 : 01-----

Before moving to Mexico I bought a new Ford truck. Had 17 miles on it when I drove it off the lot. Didn't even make it home (70 miles) and it started having problems. There was a shake in the front end and the gas gauge would suddenly read full or empty at any given moment. The CD player won't play CD's. After returning it three times and leaving it, twice for several days, they managed to fix the gas gauge. They told me there nothing wrong with the front end. The mechanic and I went for a test drive and he said "that's just the wind, have you ever driven a truck before?" "Yes, almost all my life. I have a CDL and drove commercial long haul for a while." "Well there's a lot of bumps on this road too." I ended up taking it to a local tire shop and they were able to show me the tires on the truck weren't even round. They told me these are about the cheapest tires on the market. I went home did some research and found out they were right. Absolute POS tires. $1200 later and the front end didn't shake any more.

The CD player still doesn't play CD's. I had them replaced it three times. The shop manger told me the unit isn't designed to play CD's burned on the computer, really it's made to play store bought CD's only. I found that odd since it has an MP3 label on the front of it. Do major music labels even release CD's in MP3 format? I have a less then 50% chance any disc I burn on my laptop will play in my truck. If it does it won't necessarily always play. The cheap, $25, CD player I bought at Wal-Mart to listen to out by the pool plays all my CD's.

I had about 12K on it and one of the spark plug wires blew out. The front passenger seat is coming unraveled. The rear window started leaking recently. Man the list goes on and on and on. Bottom line is I wanted to buy American, I bought American and I wish I'd have bought a Toyota.

My Ex had a 1995 Toyota 4-Runner. We bought it new. Other standard maintenance the only major issue it ever had was the exhaust system and Cat. Converter needed replaced at about 195K.

I just don't think the big 3 have been in the business of making good cars. They've been in the business of making cars they can get the most profit on. That why they put POS tires on them, stereos that don't work and seats that have little or no quality to them. They're cheap. There's no vision for the long haul and they've counted on people like me who want to buy American made. People like me are closing our wallets and when we open them again more of us will be looking at imports.

I have a 2005 Infiniti G35x bought brand new.

It's hardly perfect.

List of "issues"

1. Air Bag Light blinking - took 5 times to the dealer to fix before they replaced the spiral cable which sorted things out.

2. Creak in the front end - took 5 separate trips to the dealer (5 times is a charm) to replace the compression rods before the problem was sorted out.

3. Fuel gage won't read full no matter what - 2 times to dealer.

4. Drivers seat frame broke - I'm waiting for the part right now - 7 to 10 working days. Seriously, the farking seat is broken.

5. Engine appears to be using oil. Last oil change I noticed that the dipstick showed low by about a litre. I assumed that they just didn't top it off after the last oil change. Did an oil change. Now after 3,000 km, it shows 0.5 litres low. Something is up with that.

That said, compared to the POS Buick Park Avenue I had, it's a dream come true.

But don't kid yourself, the Jap stuff has its share of problems too. They're all shit boxes in the end.

Tully Mars · 11-24-2008, 09:35 AM

Quote:

Originally Posted by james t kirk

I have a 2005 Infiniti G35x bought brand new.

It's hardly perfect.

List of "issues"

1. Air Bag Light blinking - took 5 times to the dealer to fix before they replaced the spiral cable which sorted things out.

2. Creak in the front end - took 5 separate trips to the dealer (5 times is a charm) to replace the compression rods before the problem was sorted out.

3. Fuel gage won't read full no matter what - 2 times to dealer.

4. Drivers seat frame broke - I'm waiting for the part right now - 7 to 10 working days. Seriously, the farking seat is broken.

5. Engine appears to be using oil. Last oil change I noticed that the dipstick showed low by about a litre. I assumed that they just didn't top it off after the last oil change. Did an oil change. Now after 3,000 km, it shows 0.5 litres low. Something is up with that.

That said, compared to the POS Buick Park Avenue I had, it's a dream come true.

But don't kid yourself, the Jap stuff has its share of problems too. They're all shit boxes in the end.

Well compared to the two US vehicles I've bought brand new the two Subaru, a Nissan and the Toyota were nearly trouble free. That 4-Runner my Ex owned was in fact trouble free IMO. The muffler and the cat. convert. went out but not until it had a bunch of miles on it. Stuff like that goes out. But when you drive a vehicle off the lot and it doesn't work right and they can't make it work right how can they expect to sell them? Seriously 3 CD units, still doesn't work. Crappy tires, just had to pay out of pocket to get good ones. If they spent a few more bucks on such items they'd have a repeat customer and they wouldn't have someone out there expressing they thought they bought a POS from them.

I did a little research and I think you're right the 225k+ figure was BS. The guys on the line make about what you're saying. So if the main problem relating to labor cost is the legacy and pension issues do you have any idea how to make these companies more viable? As a tax payer I'm torn. I hate to see these companies go under. I think it would be a devastating hit to the economy. But at the same time I'm really not in favor of throwing good money for bad.

laconic1 · 11-24-2008, 04:08 PM

Quote:

Originally Posted by Tully Mars

So if the main problem relating to labor cost is the legacy and pension issues do you have any idea how to make these companies more viable? As a tax payer I'm torn. I hate to see these companies go under. I think it would be a devastating hit to the economy. But at the same time I'm really not in favor of throwing good money for bad.

I'm torn about this too. I see the unions making concessions on new hires and getting the new people back down to reasonable wages and benefits and that is good, but there is still the legacy issue. And how do you fix it? I don't think it is fair to tell somebody what pension they will get for 30+ years and then yank the rug out when times get tough, but what is the answer? I do think the country needs a manufacturing base, I don't think any industrialized nation can survive on the retail and service sectors alone.

I grew up loving GM vehicles. I lusted after Camaro's from the time I was 8 years old. When I was 18 I got a job at a Chevy dealer which was a dream come true for me. I drive a Chevy now.

I don't want GM to go under. It pisses me off that there are many people actively cheering for GM's demise. It pisses me off that Rick Wagoner has been CEO of GM for almost 9 years now, with all the mistakes he has made, and the board still won't can his ass. It frustrates me to know that there is good product in the pipeline that may never see the light of day. It annoys me that the government has shoveled almost a trillion dollars into the banking industry without hardly batting an eye or attaching any strings while giving a big Fuck You to the auto industry in their moment of need.

At the same time I can't blame people for being hesitant to buy from an American brand after hearing the American brands talk the talk about quality for years without backing it up. I can't help but think that perhaps a loan might be a waste if the companies don't complete the restructuring they have restarted and have to come back for another loan next year. I wish I knew the answer.

Tully Mars · 11-24-2008, 08:44 PM

Quote:

Originally Posted by laconic1

I'm torn about this too. I see the unions making concessions on new hires and getting the new people back down to reasonable wages and benefits and that is good, but there is still the legacy issue. And how do you fix it? I don't think it is fair to tell somebody what pension they will get for 30+ years and then yank the rug out when times get tough, but what is the answer? I do think the country needs a manufacturing base, I don't think any industrialized nation can survive on the retail and service sectors alone.

I grew up loving GM vehicles. I lusted after Camaro's from the time I was 8 years old. When I was 18 I got a job at a Chevy dealer which was a dream come true for me. I drive a Chevy now.

I don't want GM to go under. It pisses me off that there are many people actively cheering for GM's demise. It pisses me off that Rick Wagoner has been CEO of GM for almost 9 years now, with all the mistakes he has made, and the board still won't can his ass. It frustrates me to know that there is good product in the pipeline that may never see the light of day. It annoys me that the government has shoveled almost a trillion dollars into the banking industry without hardly batting an eye or attaching any strings while giving a big Fuck You to the auto industry in their moment of need.

At the same time I can't blame people for being hesitant to buy from an American brand after hearing the American brands talk the talk about quality for years without backing it up. I can't help but think that perhaps a loan might be a waste if the companies don't complete the restructuring they have restarted and have to come back for another loan next year. I wish I knew the answer.

Yeah, pretty much what you said. Except I've always leaned toward Ford trucks. This is my second. My first new Ford was a 97 F-150. I can't even remember the number of recalls on it. Everything from lug nuts to some fuel line issue that was causing some units to burst into flames. That'll ruin your day I'd guess. Was going to buy a new GM when I got this one but a good friend of mine had just bought a new GM, the lifter(s?) were knocking. I thought it was diesel the first time I heard it. He took it in right after it started making the noise and the dealers reaction was "noise? what noise?" He spent months trying to get something done about it. I never cared for Dodges that much so I bought another new Ford. Like I said driving it home I could feel the front end shake. I took it back and got "shake? what shake?" Seriously do you really think anyone that stupid?

I wish I knew the answer(s) too. What I do know is what they're doing now is absolutely not the answer. I find it just fucking sad that they (the big 3 CEO's) showed up in DC looking for a multi-billion dollar loan without even having a plan. You can't get a loan to open a Subway sandwich shop without a business plan. Their plan seemed to be show and tell congress "give us money or we'll fail." Don't look now fellas... you are failing.

Vaultboy · 11-27-2008, 07:32 AM

Do you guys expect Euro manafacturers to scramble for Opel? - who I regard as probably the only competent part of the GM family. Their cars have always had crappy interiors, but are true driver's cars.

james t kirk · 11-29-2008, 11:55 AM

Quote:

Originally Posted by Tully Mars

So if the main problem relating to labor cost is the legacy and pension issues do you have any idea how to make these companies more viable? As a tax payer I'm torn. I hate to see these companies go under. I think it would be a devastating hit to the economy. But at the same time I'm really not in favor of throwing good money for bad.

North American cars are already much cheaper than their Japanese counterparts and people STILL don't buy them because they are largely associated with shitty quality.

Bottom line, there's too many cars chasing too few buyers. North Americans have gone the cheap throw away car route for the most part.

I work for a company of 42,000 people world wide. WE have no pension plan. We're not going to get one either. We get 2% of our salary put into an RRSP by the company provided we put in 2% of our own money.

When we retire, whatever is in that account is supposed to sustain us till we buy the farm.

It sucks, but that's the way it is and it aint gonna change.

I don't know why autoworkers think that htey are entitled to a pension.

Obviously, the solution would be for the manufacturers to institute a similar program, however, the unions would never accept it.

So, what will happen is that GM, and Ford will go chapter 11.

They will reorganize, and the union will be kicked out. They will close half or more of their plants, eliminate 2 thirds of their vehicles and they will derail all pension plans.

Then they will emerge from bankruptcy, hopefully put out some decent cars that people will want to buy and be back in business and competative with the Japanese.

Lucifer · 12-18-2008, 03:18 AM

A friend posted this on her facebook page. I thought it was appropriate for this discussion:

n613566390_2174317_7309.jpg

Deltona Couple · 01-15-2009, 02:49 PM

The one thing that seems pretty common here that I think is so funny, is so many people saying "Let GM die! It will only be a short term loss."....Um...Short term loss for WHO? I WORK for GM. Now lets say they go belly up and get sold off. I am out of a job....as well as about a million OTHER people who are employed directly at the factories, or the dealerships like I am.... You think unemployment is bad NOW? Do you REALLY think that we all can just up and go get a job at the local Toyota dealerships? or Mazda? Hell nobody could rehire all the people that would be out of work. There just isn't that much work at the other manufacturers to hire us all. So before you go thinking that the government is throwing good money after bad, remember that PART of the reason for doing the bailout is to keep the millions of GM and Ford employees hopefully OUT of the unemployment line, and not collecting food stamps and welfare....Remember, behind those mega-car corps are regular blue-collar working guys like me trying to make a living.

Tully Mars · 01-15-2009, 03:00 PM

Quote:

Originally Posted by Deltona Couple

The one thing that seems pretty common here that I think is so funny, is so many people saying "Let GM die! It will only be a short term loss."....Um...Short term loss for WHO? I WORK for GM. Now lets say they go belly up and get sold off. I am out of a job....as well as about a million OTHER people who are employed directly at the factories, or the dealerships like I am.... You think unemployment is bad NOW? Do you REALLY think that we all can just up and go get a job at the local Toyota dealerships? or Mazda? Hell nobody could rehire all the people that would be out of work. There just isn't that much work at the other manufacturers to hire us all. So before you go thinking that the government is throwing good money after bad, remember that PART of the reason for doing the bailout is to keep the millions of GM and Ford employees hopefully OUT of the unemployment line, and not collecting food stamps and welfare....Remember, behind those mega-car corps are regular blue-collar working guys like me trying to make a living.

Didn't Ford opt out of the bail out?

streak_56 · 01-15-2009, 08:16 PM

Personally, I think this all comes back to propaganda. Follow me for a second...
The American government throws billions of dollars into a failing industry to try to kick start it. (Again)
If people see that the government has confidence in industry, then maybe they'll invest money back into the economy.
The big 3/Auto Industry could be the cornerstone to people believe in the economy. (Ideally)

Realistically, as Deltona Couple said above, there are people behind those companies. Think of the cost of all of those people getting laid off, collecting welfare and out of work? Is the Billions of dollars given to bail them out worth it? Especially since you don't know how long the auto industry could get back on its feet.

Its just a bunch of bull to me, simple economics... you build bad products, you don't stay in business. Although I live north of the border, the gov't is thinking bailout too for auto companies to keep workers here. I'm trying to work my ass off to get myself ahead and finish my apprenticeship. Skilled labour... thats how Canada, and the US are going to rebuild their economies. Same principles that people believe that both our countries are built upon, honest, hard working people at the base of a business and good leadership at the top.

Tully Mars · 01-16-2009, 08:18 AM

Quote:

Originally Posted by streak_56

Personally, I think this all comes back to propaganda. Follow me for a second...
The American government throws billions of dollars into a failing industry to try to kick start it. (Again)
If people see that the government has confidence in industry, then maybe they'll invest money back into the economy.
The big 3/Auto Industry could be the cornerstone to people believe in the economy. (Ideally)

Realistically, as Deltona Couple said above, there are people behind those companies. Think of the cost of all of those people getting laid off, collecting welfare and out of work? Is the Billions of dollars given to bail them out worth it? Especially since you don't know how long the auto industry could get back on its feet.

Its just a bunch of bull to me, simple economics... you build bad products, you don't stay in business. Although I live north of the border, the gov't is thinking bailout too for auto companies to keep workers here. I'm trying to work my ass off to get myself ahead and finish my apprenticeship. Skilled labour... thats how Canada, and the US are going to rebuild their economies. Same principles that people believe that both our countries are built upon, honest, hard working people at the base of a business and good leadership at the top.

Well the American tax payers threw money into Chrysler back in the 80's and that seemed to work out alright- least for a 1/4 century or so. I think it all goes back to making products people want to buy. IMO, folks like DC above (who I assume works at a dealership,) have been getting screwed by management for years. The whole business model appears to have been "what ever we build they'll buy." Hasn't really worked out so well. Now dealers are closing their doors and production lines are closing down. The people working those lines and at those dealers didn't decide to build vehicles few people wanted.

11-07-2008, 10:36 AM	#1 (permalink)
QuasiMondo Wise-ass Latino Location: Pretoria (Tshwane), RSA	A Eulogy for General Motors GM: Almost Out of Cash click to show NEW YORK (CNNMoney.com) -- General Motors shook an already embattled auto industry Friday as it reported a huge quarterly loss that was much worse than expected and warned it is in danger of running out of cash in the coming months. GM, the nation's largest automaker, reported it lost $4.2 billion, or $7.35 a share, excluding special items. That's up from the loss $1.6 billion or $2.86 a share it reported a year earlier and was far worse than the forecast of analysts surveyed by earnings tracker Thomson Reuters, which had forecast a loss of $3.70 a share. But the most shocking news came in its statements about its cash position. GM said it had burned through $6.9 billion during the quarter and warned that it "will approach the minimum amount necessary to operate its business" during the current quarter. In addition, the company said that in the first half of next year its "estimated liquidity will fall significantly short" of what it needs to continue operating. It said the only thing that would save it would be a significant improvement in economic and automotive industry conditions, help from the federal government, better access to capital markets or some combination of those options. The report was by far the most grim assessment by a company that has insisted it is not considering filing for bankruptcy court protection. While the release did not mention the threat of bankruptcy, the outlook appeared to raise the possibility of such a dramatic step. Dave Cole, chairman of Michigan think-tank the Center for Automotive Research, said the chances that GM would be forced to file for bankruptcy were high unless Congress takes almost immediate action to bail out the industry. "This is not something that can go on and be dealt with in the next year, it needs to be dealt with in the next few weeks," said Cole. "When your cash is gone, you're gone." One possible scenario reported recently involved a corporate tie-up between GM and Chrysler. GM Chief Executive Rick Wagoner, without mentioning Chrysler by name, said on a conference call that GM had ended talks about a possible merger with a Detroit rival to concentrate on the cash crisis it now faces. GM announced a series of steps Friday designed to help it improve its cash reserves by $5 billion. Those steps included cutting another 10% of salaried employment costs, on top of the 20% cut in those costs already planned. In addition to expected staffing reductions, those white collar workers will not get their typical incentive pay next year. GM will also cut capital spending plans by $2.4 billion in 2009, pushing back development plans for some new models. But it warned that even those steps would not be enough unless conditions improve. It did not announce any plans for additional plant closings or hourly staff cuts in its statement, however. The company is clearly pinning much of its hopes of weathering the current downturn on the Congress approving some kind of bailout for the industry. "The company has engaged in discussions with various U.S. federal government agencies and congressional leaders about the ... the need for immediate government funding support given the economic and credit crisis and its impact on the industry, including consumers, dealers, suppliers and manufacturers," according to a company announcement. Wagoner joined the chief executives of Ford Motor (F, Fortune 500), privately-held Chrysler LLC, as well as the president of the United Auto Workers union Thursday afternoon in meetings with House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., to seek support for a wide-ranging bailout package. Both congressional leaders voiced support for additional help for the sector following their meetings. Among the topics discussed were a $25 billion loan to fund union-controlled trust funds that would be set up in the coming year to cover the health care costs of retirees and their family members. Shifting about $100 billion of those costs from the automakers' balance sheet to the trust funds was a key concession the companies won from the UAW in the 2007 labor deals. The discussions also touched on whether the government would allow the automakers to tap the $700 billion bailout of Wall Street firms and banks that was enacted last month. Treasury has so far rejected auto industry inquiries about accessing that pool of money. The automakers also renewed their pre-election request to double the $25 billion low-interest loan program approved by Congress to help automakers convert operations to make more fuel-efficient vehicles and meet the demands of car buyers and new federal rules. Shares of GM (GM, Fortune 500), whose trading was halted ahead of the announcement, fell 16% after they resumed. The company's problems have been building for many years. It has not made money on its core North American auto operations since 2004, and since that time it has run up $72 billion in net losses, including this latest period. The company did see a one-time $1.7 billion gain from a change in accounting for its obligation to pay for health care for retirees and their family. That allowed it to post a net loss of $2.5 billion, or $4.45 a share, an improvement from the net loss of $42.5 billion, or $75.12 a share a year ago when it was hit by huge special charges. Much of the net losses in recent years have been due to non-cash charges, such as the ones a year ago. But even excluding those kinds of special charges, GM's core auto operations in North America have lost nearly $18 billion over the course of the last 15 quarters. GM's announcement came on the same day that Ford Motor reported a $3 billion loss in the period, excluding special items. Even Japanese rival Toyota Motor (TM), which has a much better cash position coming into this crisis, announced Thursday that its third quarter earnings had plunged nearly 70%, as it slashed its full fiscal-year outlook by 50%. * GM posted a quarterly loss of $4.2B * GM burned through $6.9B during this same quarter * GM now reports that "will approach the minimum amount necessary to operate its business" I have been in denial about this but it has become crystal clear that GM could be out of business by the end of this year. This is shocking as it is depressing as it has been long in the making. The why's and how's of GM's long and painful fall from grace are known (for those who wish to go even further in-depth, The Truth About Cars has it laid out in detail). Some may say that the current economic crisis is what's done GM in, but they would be in denial just as I was. Shoddy quality, over-reliance on SUV's, a refusal to develop their small and midsized cars to be competitive against the Camry's, Corollas, Civics, and Accords of the world are what did GM in. If you can remove yourself from the horrors of owning that old Cavalier, you will find it sad that this once proud symbol of American industrial strength now appears to be heading the way of the wolly mammoth. Darker days are certainly on the horizon. __________________ Cameron originally envisioned the Terminator as a small, unremarkable man, giving it the ability to blend in more easily. As a result, his first choice for the part was Lance Henriksen. O. J. Simpson was on the shortlist but Cameron did not think that such a nice guy could be a ruthless killer. -From the Collector's Edition DVD of The Terminator

11-07-2008, 05:04 PM	#11 (permalink)
ChrisJericho eat more fruit Location: Seattle	I have to agree with much of the opinions stated here. Personally, everyone I know who has bought cars in the last 3 years have been purchasing Toyotas, Mazdas, Nissans, and Subarus. When I was in the process of purchasing a car in 2006 I was astounded by how poorly most of the American cars did in crash tests, many did not even come with side airbags. I bought a Subaru wrx because I actually wanted to survive a car crash. Additionally I think Ford and GM have the problem that they make the same undesirable vehicle three times over. For example the Ford Fusion = Mercury Milan = Lincoln MKZ. None of these renditions of the car are attractive, why are they being made in triplicate? At the very least eliminate the Mercury brand. Unfortunately I believe the domestic automakers will get some sort of loan from our government. Not only would the job loss from the companies and their suppliers be astonishing, but their corporate bonds/credit are sloshing around everywhere in the markets. The question is, how long could we as taxpayers afford to keep companies alive that lose billions of dollars a month? __________________ "A casual stroll through the lunatic asylum shows us that faith proves nothing." - Friedrich Nietzsche

11-07-2008, 05:59 PM	#12 (permalink)
highthief Junkie Location: Ontario, Canada	Why fight the inevitable? Why should the government sink untold billions into a sinking ship? GM has proven it can't make cars that will either compete in quality with the big Japanese and even Korean manufacturers, and when China and India get in on the action, they won;t be able to compete on price for lower quality autos either. Yeah, it'll hurt short term, but I don't favour government bail outs of such a long term sickie as GM. Bailouts should be reserve for industries and companies which are in short term difficulty but who will likely turn things around. That's not GM. __________________ Si vis pacem parabellum.

11-20-2008, 07:17 PM	#16 (permalink)
Tully Mars Living in a Warmer Insanity Super Moderator Location: Yucatan, Mexico	What a clusterfuck. This is one of those all too often situation where all I know is that I do not know the solution. Some random thoughts- What does the average CEO and upper management of these auto makers earn per year? What's the average employee make? What's the average tax payer make? Why should the average tax payer bail out a company or group of companies that have repeatedly shown they can not earn a profit? What happens if the auto industry fails? __________________ I used to drink to drown my sorrows, but the damned things have learned how to swim- Frida Kahlo Vice President Starkizzer Fan Club

11-20-2008, 07:56 PM	#19 (permalink)
ngdawg peekaboo Location: on the back, bitch	They won't fail, they'll just have to start over. It would seem their begging might go unrewarded when all three CEO's arrived in DC aboard private corporate jets. Their excuses? Safety ( yet more private planes crash each year than any commercial flights) and "protocol", read: Hey, we always did this. When asked if any were willing to give up their multi-million dollar salaries for one dollar a year, only one, Chrysler CEO Nardelli, answered yes. Of course, he was already sitting pretty when ousted from Home Depot... Source __________________ Don't blame me. I didn't vote for either of'em.

11-07-2008, 11:13 AM	#3 (permalink)
shakran Tone.	No. They'll get a bailout, just like Chrysler did, twice.

11-07-2008, 11:57 AM	#5 (permalink)
Fotzlid Junkie Location: Greater Boston area	I think the UAW has to take some of the credit for the current state of GM's finances. They have had their teeth locked onto GM's neck for quite some time now.

11-07-2008, 01:13 PM	#8 (permalink)
cj2112 Unbelievable Location: Grants Pass OR	I'm a 40 year old male. I drive by the local GM lot 5 days a week, and the Chevy lot at least once week. General Motors doesn't produce a single vehicle that I am even slightly interested in. That is why GM is in trouble.

11-20-2008, 05:08 PM	#14 (permalink)
powerclown Junkie Location: Detroit, MI	Apparently they're going to get their loan, whether its $25 or $50 billion, and I am conflicted about it. On the one hand I understand that times are tough, circumstances unusual; that an already weakened country can't afford the additional stress of a failed auto industry. But the incompetence of the manufacturers really pisses me off, and I can't understand how it got to this point. I can't believe there is something magical about building decent midrange cars, at the very least and for the sake of the survival of their companies why can't they copy the assembly and layout of other more successful cars like the Honda Accord or Toyota Camry. I know they know exactly what makes the import cars so successful on a mechanical level, they can't not know. They must have taken apart plenty of Accords, Camrys and other successful cars to see what makes them tick. I have a feeling cost is the issue; it would cost them too much to engineer a decent car from scratch, what else can explain it given the level of knowledge and sophistication of American engineers - who can send men to the moon and back in spaceships but can't apparently for the life of the company build a simple, reliable, affordable car. Maybe they should be allowed to go into banckruptcy, but maybe the strain would be too much for too many people. The historical precendent of Chrysler taking on a government loan and paying it back 7 years early thanks to competent leadership says to me that loans might work in 2008, but what if they don't?

11-20-2008, 07:49 PM	#18 (permalink)
Craven Morehead Custom User Title	I assume the validity of this is legit, someone has put a hell of a lot work into it. The blog does have link to all the underlying data. If this is even close to be correct, then its really beyond hope, without major restructuring. Let GM and the others go tits up. The shockwaves will be horrendous. The shareholders will lose so will their creditors and union contracts would be renegotiated. Everyone loses, for a while. However, if it stays the same, throwing a ton of cash at them just to keep the afloat is not fixing anything. And they'll end up right back in the same place it is now. Both labor and managment are crying that because the banks are getting bailed out, the auto industry should as well. There's a difference. A huge one. The days of easy credit are over. Bankers are never going that route again. Can the Big Three also make the same claims that they are reformed?

11-21-2008, 08:32 AM	#23 (permalink)
Craven Morehead Custom User Title	I almost posted more from the blog the chart came from. Click here to read more on a wide variety of economic issues, but several that pertain to this thread. The underlying data for the chart I posted is here. The blogger is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Lots of interesting reading. What's interesting as shown in this blog is that the cost to own a new car is dropping both in relative and absolute terms. This means less money per sale for the automakers at a time when they need to increase revenue. An interesting dilemma.

11-21-2008, 09:41 AM	#24 (permalink)
shakran Tone.	As I hinted at before, it's not the fantastic union wages/benefits that's killing GM. They could still pay that out if they bothered to make a decent product, because people are willing to pay for quality. Honda and Toyota both cost more than GM, yet they're doing fine because unlike GM their cars are put together well, the fit and finish is good, and they'll last until long after you're tired of them.

11-21-2008, 11:17 AM	#25 (permalink)
Craven Morehead Custom User Title	Actually the imports are feeling the pinch as well A Sea of Unwanted Imports Long Beach shipyards

11-21-2008, 02:19 PM	#28 (permalink)
guyy Addict Location: Cottage Grove, Wisconsin	This is now a crisis of demand. Cutting "labour costs" means cutting demand. Henry Ford knew that much.

11-27-2008, 07:32 AM	#34 (permalink)
Vaultboy Addict Location: Third World	Do you guys expect Euro manafacturers to scramble for Opel? - who I regard as probably the only competent part of the GM family. Their cars have always had crappy interiors, but are true driver's cars. __________________ "Failing tastes of bile and dog vomit. Pity any man that gets used to that taste."

12-18-2008, 03:18 AM	#36 (permalink)
Lucifer Husband of Seamaiden Location: Nova Scotia	A friend posted this on her facebook page. I thought it was appropriate for this discussion: n613566390_2174317_7309.jpg __________________ I am a brother to dragons, and a companion to owls. - Job 30:29 1123, 6536, 5321

01-15-2009, 02:49 PM	#37 (permalink)
Deltona Couple Addict Location: Spring, Texas	The one thing that seems pretty common here that I think is so funny, is so many people saying "Let GM die! It will only be a short term loss."....Um...Short term loss for WHO? I WORK for GM. Now lets say they go belly up and get sold off. I am out of a job....as well as about a million OTHER people who are employed directly at the factories, or the dealerships like I am.... You think unemployment is bad NOW? Do you REALLY think that we all can just up and go get a job at the local Toyota dealerships? or Mazda? Hell nobody could rehire all the people that would be out of work. There just isn't that much work at the other manufacturers to hire us all. So before you go thinking that the government is throwing good money after bad, remember that PART of the reason for doing the bailout is to keep the millions of GM and Ford employees hopefully OUT of the unemployment line, and not collecting food stamps and welfare....Remember, behind those mega-car corps are regular blue-collar working guys like me trying to make a living. __________________ "It is not that I have failed, but that I have found 10,000 ways that it DOESN'T work!" --Thomas Edison

01-15-2009, 08:16 PM	#39 (permalink)
streak_56 who ever said streaking was a bad thing? Location: Calgary	Personally, I think this all comes back to propaganda. Follow me for a second... The American government throws billions of dollars into a failing industry to try to kick start it. (Again) If people see that the government has confidence in industry, then maybe they'll invest money back into the economy. The big 3/Auto Industry could be the cornerstone to people believe in the economy. (Ideally) Realistically, as Deltona Couple said above, there are people behind those companies. Think of the cost of all of those people getting laid off, collecting welfare and out of work? Is the Billions of dollars given to bail them out worth it? Especially since you don't know how long the auto industry could get back on its feet. Its just a bunch of bull to me, simple economics... you build bad products, you don't stay in business. Although I live north of the border, the gov't is thinking bailout too for auto companies to keep workers here. I'm trying to work my ass off to get myself ahead and finish my apprenticeship. Skilled labour... thats how Canada, and the US are going to rebuild their economies. Same principles that people believe that both our countries are built upon, honest, hard working people at the base of a business and good leadership at the top.