Falling to Junk (General Motors going bankrupt)

The New York Sun ^ | March 22, 2005 | Editorial

[finnman69]

Watch the coming bankruptcy of GM to bust the pensions and health care costs.

[queenkathy]

I think the contract is up this yr. My husband worked for GM and then Delphi bought the Parts Division and he "became" a Delphi employee. When he retired ater 30 yrs people wanted to be sure they retired from GM because Delphi wouldn't have the better benefits as they thought GM would. I guess the joke is on them.

Seriously though, unions set the pace for a lot of other industries. It's just that it got taken over by thugs, sorry to say. It was the union that put a stop to workers being forced to work over 40 hrs without o/t. They have done a lot of good over the yrs but now they are corrupt!

[Rutles4Ever]

I guess what it boils down to is this: Bond rating houses are not going to call "junk" on GM unless there's a serious reason to believe they have take on sizable risk. The rating could improve, but if the crux of the issue is healthcare subsidies, they're in trouble, because as far as I can tell, they can't make those go away.

The auto industry took a calculated gamble by shifting their business models from making profits on cars to making profits on their financing divisions. Automakers are essentially loan offices that sell cars, not autosellers who give loans.

[queenkathy]

It's getting late? It's only a little ofter 6.

[rellimpank]

--yep--that's usual behavior--although I consider it stupid on the part of an employer to submit to unionization after only a card-check--that's about like believing a Newsweek poll---

[longtermmemmory]

the UAW does not care.

Remember Easter Airlines? Their union talked the airline tough into oblivion.

Does the UAW think they will be better off working for a non-USA corporation?

[Drammach]

The article seems to be as much about social security as it is the GM pension liabilities..
It's an attempt to show the parrallels between the two, and to "prove" the impending failure of social security..

By 2018, the Social Security system will be in deficit, paying more in benefits than it collects in taxes. The "trust fund" will run out of assets in 2042 and face increasing shortfalls.

The article fails to point out that the last of the "baby boomers" i.e., those born in 1964, will be 100 years old in 2042..
Those that are still alive, that is..

While social security is in dire need of restructure, and protections from congressional financial shenanigans, ( virtual embezzlement ) such mis-representation and scare tactics are inexcusable..

[Maria S]

"It means about $30 billion. "e9" is scientific notation for "times 10 to the 9th power"; 10 to the 9th power is 1 billion."

Well, color me informed!! I thought I was just being funny because someone had a typo. See! A math-challenged senior citizen CAN learn something new.

Thanks, MS

[GaltMeister]

Watch the coming bankruptcy of GM to bust the pensions and health care costs.

You can probably apply that to several large airlines as well.

[DTogo]

Filing for Chapter 11 and emerging from a reorganization might just be what the doctor ordered for GM.

[patton]

I work over 40 w/o o/t all the time.

I am salaried.

MY company has AN ENTIRE YEARS revenue, in the bank, cash.

And I am an employee-owner.

No union.

[OneTimeLurker]

"Always look for the union label... then buy something without it."

You prefer "MADE IN CHINA"?

[patton]

You, um, studied new math, right?

[Maria S]

"It's getting late? It's only a little ofter 6."

If you've been up since 2 a.m., it's late...believe me.

[yellowhammer]

Does this mean Dale Jr. will start driving Fords now?

[Fast1]

Time to cut Payroll!

[So Cal Rocket]

The health-care costs — about $5.5 billion a year and growing

Something doesn't look right here... GM has 324,000 employees... so this works out to be almost $17,000/year/employee in Health Care costs.

I work at a manufacturing company... we are working to drive down our health care costs at our division because we are WELL ABOVE the national average in heath care cost/employee at around $7,000/employee. National average IIRC is around $4,500/employee.

[xzins]

All this, and they don't have a single car that everyone is talking about.

[hunter112]

The coming health care crisis is going to hit more than just the uninsured, the poorly-run companies are going to see problems first. In five or ten years, the rest of the system goes into full collapse.