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.
Thats what it took for GMs 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 GMs management team hasnt 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. Lets 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 ...
Seems like you know Phil...
"Officer there is a man In A Major Domo Outfit and he is Farting".
Good Luck on the engine swap.
An LS6 guy, check out this application below!
www.v8seabee.com
But why don't you ask the question why? The UAW has a lot of influence over who the managers are. They want guys who are easy to deal with. And that means they don't want the smartest knives in the drawer.
FYI, you can now buy a brand new '69 convertible Camaro bare body.
Enjoy !
No I don't.
I am just waiting for the hammer to drop on Western "useful idiots" when the Chi-coms take Western property just as happened with the original New Economic Plan (Lenin's) that Deng copied years ago.
Only those Chi-coms are not quite so heavy handed as the old Soviet ideologues were. Some believe that the Chi-coms will just continue stealing intellectual property and drive the useful idiots out of business domestically in China and internationally.
There's a reason Lenin called Western capitalists, useful idiots.
Bingo. Management and union negotiators were and are just as capable as politicians when it comes to kicking the can down the road. Trouble is, the road has now come to a cul-de-sac.
Labor's Magna Carta: FDR Signs the Wagner ActDon C wrote:
Companies never...repeat never..sign union contracts that they don't think they can live with. Hence..STRIKES occur. Yes.. some of these contracts in hindsight seem to be in bad judgement but at the time they were executed management felt that they could handle the provisions.Tell that to Alfred Sloan. The Governor of Michigan and the President of the United States of America forced the first of these "contracts" upon GM in 1935 and 1937.
From 1955 to 1960 you could tell the make of a car in the dark at 100 yards by the shape of the tail lights. Now, with a few recent exceptions, you can't tell one car from another in broad daylight unless you're close enough to read the fine print. Plus, they are all gray.
LOL!! Ever hear of the "K-Car?"
During the Depression, the top selling margue in the mid-30's was the value-priced Plymouths.No. While Plymouth was the best selling Chrysler product of the 1930s it was never the best selling automobile. Nevertheless, your point remains in that the Plymouth was a new invention of the late 1920s that importantly served to bolster the overall position of Chrysler. The 1930s were marked by such branding schemes, some of which worked and others that flopped.
Above all, it was politics that killed off competition in the 1930s and not the business environment. Taxes, price controls and the NRA and its successor, the Wagner Act, bolstered the strong and killed off the weak, who might have had a chance, otherwise.
The sad irony of the GM story is that the company profited from the Government's 1930s/40s/early 50s interventions that hindered competition, but at the same time set the foundation in these labor agreements for today's mess.
Just because it isn't in their interest to do so doesn't mean they won't. After all, the Eastern Airlines mechanics really showed management who was boss, didn't they.
"These union leaders are economic terrorists."
If this is true, then the GM management has been a willing collaborator.
My problem with this is that in bankruptcy the company will lay off pension and health care costs to the American taxpayer. If I tried to declare bankruptcy I could do nothing of the kind. The companies and people I shafted would just be shafted, no bailout for them. And the court would take away all my assets and impose a payment schedule instead of keeping me running at the same level.
GM will go bankrupt. But when they do, the government should insist on taking them apart and selling them off to the highest bidder in order to cover their pensions. It won't. We'll suck that up, too. It's how bidness is done in DC and in the fatcat world.
Just a matter of time.
The Congress has passed laws that pretty much put the union in charge. If you really want to get down to it, it's the fault of Congress.
Either someone didn't spellcheck or they confused GM with those Vikings from the Capital One commercials.
What GM needs to do is build a new Camaro SS with a 450hp detuned LS7 Z06 engine for $35k.
The union had to be kept on contract as it stood and the company had to negotiate in good faith. The company's other option was to shut down. Instead, they did the equivalent of what Congress has done, putting off hard decisions on future management, exacerbating the problem.
I'm not saying Congress doesn't suck. I'm not saying UNIONS don't suck. But anyone procrastinating the hard decisions to others' detriment doesn't deserve to get off scot free, and it seems to me the ONLY party that doesn't take a real hit here, a hit that deserves to be cutting to the bone, is the weasels in management who knew this day would come and made the pension deals, anyway.
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