Falling to Junk (General Motors going bankrupt)

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

[gogeo]

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..

I'm not claiming to be a math whiz, but I'd check your numbers.

[Fast1]

Here : "General Motors is going bankrupt for the same reason Social Security is going under: unfunded liabilities in the form of promised benefits to retirees"

[gogeo]

That number includes retiree benefits, which is what's really killing GM.

[quidnunc]

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

They're talking about the new Ponticac G6, but what they're saying is that it has been a flop.

[canadianally]

Let us not forget that southern Ontario has subsidized the auto sector to a highly valued position: southern Ontario now out-produces Michigan in auto production. The cruel irony is that as their dependence on American companies for jobs grow, the shrill anti-Americanism also grows.

[BurbankKarl]

GM is worth 27 billion...they have outstanding debt well in excess of 100 billion.


>>>>GM's pension obligation is $3 BILLION overfunded. They don't need to make a contribution through the end of the decade.

[nicollo]

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!

Wrong on the 40-hour week. (Right on corrupt.)

A standard 40hour week is a union creation that defies the historical reality of automotive production. The automotive business is both cyclical and seasonal. It was the New Deal that imposed 30, 35, 40-hour weeks upon the industry, which, in turn, created this idea of "over time," which never before existed. The industry tried and tried to explain to the morons of the "brain trust" that fewer hours in November plus extra hours in April added up to the same as even hours all year long.

Besides, auto factory workers regularly got extra pay for extra work, for that meant $$ for the factory. "Piece-work," which the New Deal outlawed, was an excellent moderator of work flow and wages, and it was the best way for smaller manufacturers to compete with the Big Three, which otherwise creamed the rest on scale and productivity. When FDR and the UAW imposed regularity on auto employment, they merely assured that there would be fewer automobile producers, and, thus, fewer overall workers.

Yes, unions have brought benefits to workers. But they've taken away more money from the workplace in general than they've given to those workers they represent.

Nicollo unmasked: Bromleyisms here

[apackof2]

They have done a lot of good over the yrs but now they are corrupt!

Yup the UAW has become what they organized to prevent
Contract is up in 2007
I only have a little over 2 years left and I am laid off right now myself

[xzins]

:>)

GM has a fleet of the same car...some more $ and some less $, but all the same with a different name.

If they come out with a 40 mpg SUV with 2/3 the power of a Yukon and a price in the low 20's and a warranty in the 100,000 range, then they'll move more vehicles than Japan, Korea, and Germany combined.

[gogeo]

Who would have thought that national health care would become a competitive advantage?

[SQUID]

I must say that I have had a tension filled relationship with "Da Unions". I live in a large city that has been traditionally very pro union.

My operational costs have gone up in ways that these union people do not understand. Simply adding a holiday translates into lost productivity and no billing. Yet these people always want more money. They recently got a 10% raise on top of other things and then complain about how we should have gotten some key jobs. sales takes the blame about 100% of the time.

The fact is, since I can't lower my price I try to do it faster and that is what these people don't want to hear. If it takes 4 days to do a job, management with some engineering tries to find ways of doing it in 3 days or less. Unions are very resistant to this because they want there time to be spread out and at their own pace. It's like dealing with welfare recipients.

Well, after so many years of this crap along comes a little nonunion shop and starts undercutting people like crazy. A job that costs me 150K costs them only 80k and then they get the work for obvious reasons.

I had to lay off people because of things like this. Now every time these people want a raise, I am forced to look for ways to cut costs.

The labor unions are forcing me out of the market and eventually themselves. PERIOD. They had their usefulness in improving work standards, safety, and improving working class living standards back in 1910 but now profit sharing is profit killing. It's greed.

If enough nonunion companies come into this market, I can't see how we can compete. End of story

[carl in alaska]

GM is in trouble in the long run. They make all their profits off of trucks, SUV's, luxury cars, and car financing. Their costs are totally uncompetitive in the mid-sized and small car market. Now the trucks, SUV's, and Cadillacs are selling poorly because of high gasoline prices. Gasoline prices will continue to rise in the next 10-20 years and GM is not going to be able to make any profits without some serious cost-cutting. They're in trouble and they can burn up most of that $35 billion in cash within five years. That said, I think they will be able to negotiate some cost reductions with their unions and salaried workers and they probably won't go bankrupt. But if their workers are obstinate, it could happen.

[ken21]

so sorry!

maybe gm will realize that their dealers don't treat their customers very well, and that a gm car isn't the equal of a toyota.

thank a union and gm management for this.

[carl in alaska]

Yep, a union shop can be just like letting the children run their school. The children lack the knowledge and judgement to run their school and that arrangement doesn't work well....lol

[ken5050]

GM losesmoney on every car they sell..Perioed..Buiyers arfe conditioned to wait for the rebates and the zero % financing..which costs huge $$$$..plus, they keep on making the cars, as the inventory piles up on dealers lots..GM books a "profit" when the car leaves the manufacturing facility..Also,as they cut prices..the residual value that GM assumes on its leases is pure fiction...and they will have to eat that very soon..It's a death spiral..

[LibertarianInExile]

I was wondering about that myself...maybe they'll just FEEL like they're a hundred? Baby Boomers are big on people only being as old as they feel, after all.

[carl in alaska]

Not quite. GM makes money on SUV's, trucks, and Cadillacs IF they sell enough of them to cover the fixed costs of making these vehicles. They also make a lot of money on car financing. But yes they do lose money on their small, mid-sized, and some full-sized cars.

[Pittsburg Phil]

The UAW is a parasite that is finally killing its host.

Then what will those beer-bellyed bums do for a living?

[Sam Cree]

"union shop can be just like letting the children run their school"

The unions probably see their interests as being different from that of the shareholders, though IMO, they should be the same.

[RippleFire]

bump