Posted on 11/20/2005 2:57:23 PM PST by Angry Republican
The company is bleeding billions, but management is beginning to see the light. There are a few bold steps -- including the scrapping of one of its brands -- GM execs should take to keep the auto giant running.
According to some analysts on Wall Street, General Motors lost credibility last week when the company said that it would be restating 2001 earnings.
That’s what it took for GM’s management to lose credibility? How about years of mismanaging its production effort? Or refusing to aggressively streamline its product offerings, recklessly pursuing incentive strategies, failing to address ballooning health-care and pension liabilities?
In order for something to be lost you must have possessed it to begin with, and GM’s management team hasn’t had any credibility for years.
So now, as speculation mounts that General Motors will be forced into bankruptcy, are we really going to believe management when it says that it has no plans to file for bankruptcy protection? Of course not. Let’s at least hope management has begun to realize that it's a possibility.
Bleeding billions
General Motors is in a world of hurt. Even after the United Auto Workers announced Friday that it had ratified the deal to curb health-care costs, General Motors still faces a big uphill battle if it wants to avoid bankruptcy. One analyst has upped his odds for GM filing for bankruptcy protection within the next two years from 30% to 40%. Others have said it's almost a certainty.
Why all the pessimism? GM has been running through cash faster than Paris Hilton at a La Perla store. The company burned almost $10 billion over the past couple of years as the combination of high health care/pension costs, restructuring charges and soft sales slashed its cash horde by about a third.
(Excerpt) Read more at moneycentral.msn.com ...
How else are they going to get out from under their crushing insurance and pension costs that the unions have trapped them in?
I think back at the Roger Smith years and what he did to this company to satiate his own ego. Now they're paying the price of the rash actions of that megalomaniacal egotistical goon.
No mention of the real problem--the fact that the UAW has tied management's hands.
I thought the whole idea of management was being smart enough to work within existing reality and get results.
Yes, there are unions, but it is not in their interest for GM to go broke and for everyone to lose with pensions and health insurance.
They will BK out.
It may be their job, but history has shown that it's an impossible task, particularly when their competition is often not unionized.
While it is true that it's not in the best interest of the UAW to make GM go bust, they seem to be doing it anyway.
Exactly, bankruptcy is the way they lay off all their union pensions on the American public to pay.
When they do it, we should make GM go out of business by never buying another car from them, or any product from companies that do the same thing in bankruptcy.
They deserve to die if they don't get creative with their products.
Ding, ding, ding - we have a winnah!
No, but it is in GM's interest.
There's a huge potential market for a new, lost-cost high-quality domestic manufacturer. The massive pension, health, etc. libailities of Ford and GM have created a huge opening in the market.
There's nothing really wrong with GM's cars. They're just not quite up to snuff. I have a 2003 Saturn SL-1, but I only bought it because a relative offered me a good deal on it when he bought a Civic Hybrid.
Neither Ford nor GM produces any cars that I can really imagine anyone buying simply because they want one. My SL-1 is an ok car, but I can think of nothing to recommend it over any other car.
Chrysler has the right idea. They're producing cars which people actually covet which are fairly reasonably priced - the PT Crusier, the 300C, the Crossfire, and the new Dodge Charger being the most obvious examples.
What do Ford and GM have in their present-year models which is economically priced?
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JOE HIGGINS:
Driver-GM's Chevrolet Corvair based MULE military truck on a hilltop in Vietnam-1966
http://www.lzxray.com/guyer_set1.htm
(See 2nd Photo)
Platform Engineer-Development of Chevrolet SSR Sport Truck-2004
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Contract provisions may be just as onerous:
I remember when the Van Nuys plant (Camaro) closed
laid off workers were on "the payroll" for 2 more years @ 90% salary
Maybe GM should stop pouring billions into China until GM can stop the Chi-coms from stealing? Just a thought.
I don't think that the Chi-com's Chery Automobile Co is the only thief.
Yes, bankruptcy would be ideal. Pass those domestic employee expenses onto the backs of U.S. taxpayers -- doncha just hate the way government interferes with American capitalists?
Some government interference is good! More money for free tradin' transfer of technology, wealth, and production to the Chi-coms. Helps raise their boats -- and boy! do they have biggggggg boats. I've seen photos of the Chi-coms' boats.
That's why bankruptcy is probably the best way to save GM, otherwise they are still going to have the union problems looming to come back at just about any time.
(And don't even get me started on the UAW- the rats and MSM have my blood pressure high enough already today.)
The only problem is that bankruptcy won't necessarily get rid of the union contract. Law makes it difficult to get rid of union contracts.
I have heard that it may help GM do something with future benefits. Somebody needs to stand up to the UAW and let them know that it's not unrealistic for the Big Three to take all production overseas.
Unions were so successful in obtaining higher and higher wages for their members that they got all their people members outsourced to Mexico
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