RICK WAGONER (GM CEO) RESPONDS TO NAYSAYERS

GM | 05.DE.05 | bullseye1911

[Paved Paradise]

No flame from me, brother. I agree with you and what some of this article says as well. I've been attacked myself on here for expressing some of these thoughts, which is a shame. The truth is that the unions ARE the reason for the higher wages, benefits and such that all of us enjoy. My blood boils when I read those dumb union rags (Solidarity - Ugh!), but like most things, there are good and bad and to throw the baby out with the bathwater seems very foolish and not in our best interests.

[boilerfan]

Probably the most obvious reason that GM and Ford is in trouble is that they are so inbread with legacy management.

Look who the CEO's are, home grown management types.

IMHO, GM and Ford need culture change. It's time they hire some non-Autmotive people to run the show.

It's broke time to fix it.

[38special]

What many people don't understand is the Japanese business practice of declaring economic warfare on the American manufacturers. That is one big reason I refuse to buy Japanese branded vehicles.

[Patriot Son]

You missed the REAL story.

GM is closing factories in the U.S. and laying off workers because it will sell us cars GM makes in China and engines it makes in Russia.

GM began making cars in China 20 years ago and already makes a fuel-cell model there now. Since 2001, GM has spent $3.5 Billion building manufacturing plants in China.

And our tax dollars pay for GM to build factories overseas. Forty percent of the GM/AvtoVAZ GM/Russian joint venture was financed by the European Bank for Reconstruction and Development (ERBD) which gets 10 percent of its capital from U.S. taxpayers.

In 1999, GM shut down the Buick City seemly plant in Flint, Michigan, saying it was because of "overproduction", then announced it was opening a Buick assembly plant in Begging, China.

GM began outsourcing production in Eastern Europe and Russia in the late 1980's. The outsourcing has been helped by our government's crazed support of NAFTA, GATT, and the WTO. In almost every outsourcing situation, the U.S. taxpayers' money -- Billions of $ -- is used to subsidize loans and provide loan guarantees; we're financing the exportation of our own jobs to other nations' workers.

The Export-Import Bank (EXimbank), set up in 1934 during the FDR administration to finance trade deals with the USSR's Stalin, currently finances $15.5 Billion in taxpayer-subsidized load or loan guarantees annually.

Since 1985, more Billions of $ are given by our government to the World Bank, the Asian Development Bank, and the International Monetary Fund.

GM has received over $500 Billion in direct loans and loan guarantees from the Export-Import bank and with what result? GM has reduced its U.S. workforce from 559,000 workers to 314,000.

While GM was closing plants in the U.S., with the help of federal subsidies, it was building factories in Eastern Europe and China.

So let's view this situation with an informed eye and then we can laugh at the "reasons" given for GM factory shutdowns and drastic cuts in jobs for U.S. workers. And let us not forget just WHO did this to us and continues to do this to us -- our Senators and Congressmen who continually vote to give our tax dollars as "loans" (do we ever get the capital back? NO) to international banks so they can "loan" it to other countries, then forgive the loans and "stick us" again.

Our elected officials also, under the liberal mantra (smokescreen) of "free trade", have refused to put import tariffs on goods entering this country to protect our manufacturing base. Think about it! There's no way we can pay our workers what we have to pay them and compete with the pittance third-world countries' workers receive for their labor. So the only thing we can do is protect our jobs, but our elected officials think it's better to let all our manufacturing jobs go to China. Since when do other countries' economic development take precedence over our own?

So just -when- will this house of cards fall down? And -when- will U.S. citizens vote out of office these elected idiots who have done this to us? When?

[staytrue]

And GM offers more models that get over 30 miles-per-gallon highway than any other automaker.

Useless statistic to help the CEO spin the facts.

Fact is And GM offers more models that get over 30 miles-per-gallon and also more models that get under 30 miles per gallon highway than any other automaker. They offer more models period. Their fleet avg. is higher than the foreign name plates and that is the stat that counts.

GM's small cars get really bad gas mileage for being small. Their large cars do get pretty good gas mileage hwy but they do it by having less hp than the competition.

[July 4th]

companies created a social contract with government and labor that raised America’s standard of living and provided much of the economic growth in the 20th century

But the customers never signed that contract. When buying a good-quality imported car became a lower cost option for many Americans, there was nothing to stop them from buying foreign. GM banked on an American customer base for way too long.

[S.O.L.]

The real problem is that we are all going to pay for GM's incompetance as we the taxpayers will have to pick up the tab for their high benefits when they go bankrupt.

[Logophile]

Hey, don't sugarcoat it—tell us what you really think.

Seriously, you make a strong case that GM is largely responsible for its own miseries—and that the company's leaders still are not facing up to the cause of their problems: their cars stink.

This is nothing new. Back in the 1980s, I had a conversation with some lawyers and economists about the troubles of the U.S. auto industry. They prattled on for some time about exchange rates, tariffs, labor law, and so forth. Finally, I blurted out what was on my mind, that maybe the industry's problems might be solved by making better cars. They looked at me (just an engineer) with a mixture of pity and disdain, and resumed their discussion of macroeconomics and law. The idea that the answer to a manufacturer's problems might lie in making a better product seemed too mundane for them.

[staytrue]

The truth is that the unions ARE the reason for the higher wages, benefits and such that all of us enjoy.

The truth is that you can never get more out than you put in. If you try to get more out than you put in, in the long run, you will go bankrupt.

This is what the unions did, short term gain for long term pain and GM and Ford are in pain because the unions got more out of them than the workers put in.

Here is the full truth, "The truth is that the unions ARE the reason for the higher wages, benefits and such that all of us enjoy and the price is bankruptcy of union companies, outsourcing of manufacturing, the end of US unionized companies."

[Ramcat]

I drove Chevys for 35 years, but am far more satisfied with my 2005 Hyundai.

Thankfully, I've reached the age where I can be reasonably sure that I will never have to own/drive a Korean made vehicle.

[sam_paine]

I watched my mom take her Chevy to the shop.... Ford lied about....

Ok. I've owned three late model Chevy's, two with no warranty work in 120,000 miles (sold one, still counting on one) and had one 30,000 warranty engine problem on the other, fixed in two days, loaner car, no problem.

So your in depth research sample is canceled out: point to Detroit.

[sam_paine]

Yikes. The murmer campaign is starting. "We don;t want a bailout....just a level playing field with the rest of the world where health care is paid for by the government!"

HILLARY/WAGONER-CARE 2008

[pikachu]

Ok. I've owned three late model Chevy's, two with no warranty work in 120,000 miles (sold one, still counting on one) and had one 30,000 warranty engine problem on the other, fixed in two days, loaner car, no problem.

I'm sure Chevy neevr noticed me not buying their products. But I can not be the only one avoiding their stuff. After the Vega (already rusted for you at the factory), the Citation (not the Edsel Citation), the Chevette (made buyers nostaligic for the Vega) and some others that were over hyped an under delivered, GM did it to itself.

Speaking of loaner cars, dealerships owned by AutoNation no longer provide loaner cars and are encouranging other dealerships to do the same.

[sam_paine]

visiting Honda in Ohio and Toyota in Kentucky. They can show you how companies headquartered in JAPAN do a far better job

Aside from the vitriol....how old are those plants, a few years? a decade? How many retirees from 1960's and 70's and 80's does JAPAN have in the US (hint: none)? JAPAN does not have the 50 year overhead of retirees to pay overhead on.

The baby-boomers busted Social Security, and they busted Generous Motors.

[sam_paine]

Vega, Citation and Chevette. These are your assessments of GM in 2005? Oooookay.

[sam_paine]

....there was nothing to stop them from buying foreign....GM banked on an American customer base for way too long.

That is a reasonable statement. Really, in the 60's they failed to look 40 years out. Just like congress and every other company in the US!

[Paved Paradise]

I won't argue with that. New blood is always good. But as for in-house, Ford is actual blood descendant and I don't see how you're going to get rid of him. Honestly, I think the worst thing that happened to Ford (well one of them) was Nasser.

Also, a concern, in general, that I have is we don't make anything anymore. We outsource so much of our manufacturing and this is NOT good.

[Paved Paradise]

I really can't argue with what you are saying. I think the unions were the best AND worst thing. The thugs running the unions were a lot of the problem. Also, a lot of people resent their dues going to political orgs that are in direct opposition with their personal religious or other beliefs. I always admire those who stand up to that stuff. I've seen the union recommendations at election campaigns and with rare (and I mean so rare, you might find 1 Repub endorsement out of 100 Dem)exception, it's all Dem endorsements. Now how can that BE? We KNOW a lot of union people vote republican. I know them. I know a lot of Christian people in unions and they did NOT vote for Kerry. Anyway, I'm "soapboxing again." Oy.

[razorback-bert]

No, but GM is haunted by a long list of bad cars.

After you get burned a few times, you get shy of promises.

[cpprfld]

This is what the unions did, short term gain for long term pain and GM and Ford are in pain because the unions got more out of them than the workers put in.

That is a good statement, I was looking for those exact words to describe the state of the American auto industry. But, I do not blame the unions that much for this, management is the one at fault, management did agree to these contracts, rather than face a potential strike. Secondly, for years management would rather spend money on producing vehicles that will bring in quick profits, such as SUV's verses planning for the future with hybrid vehicles or other types of technology.