GM Bailout Plan

[BigFish]

Its been reported this morning that GM's bailout plan includes laying off 30,000 jobs and closing 1,750 dealerships.......and this is WITH the bailout! So if you think its gonna get better anytime soon......you might want to rub the sleep from your eyes. Mind you this is JUST the GM plan......you can look for similar layoffs from the other companies. I see the stock market tanking huge today when the realities of these plans are divulged......hang on to your hats!

[rwilhelm]

Yup the restructuring is going to be long and painful! Hopefully after all is said and done our auto industry can be profitable.

[eastendlu]

30,000 jobs i wonder how many at the top are going to get the ax.and how are the unions going to take this?In my opinion they are better off declaring bankruptcy and restructuring and renegotiating new contracts with the unions to make them more competitive.my .02

[Uncle Matt]

The automakers bailout is now at $34,000,000,000 in "LOANS." They say the delay by congress is causing the $9,000,000,000 increase. Amazing.

Oh wait. I just heard on the news that the executives have ditched their personal jets and are in agreement that they need to do more research on hybrid type vehicles. OK everythings better now.

[Back Beach]

Originally Posted by rwilhelm

Yup the restructuring is going to be long and painful! Hopefully after all is said and done our auto industry can be profitable.

If the unions don't make deeper concessions, the american auto companies are going out of business, period. In the long term its probably a good thing as these companies have been losing share since the mid 90's. Their labor costs are just too high and their products are lacking in quality and innovation. Just look at their stock performance for a general consensus on how these companies are perceived. Consumer demand is down across all facets of the economy right now and its killing everyone, not just auto makers.

No matter how bad it seems now, the cash infusions are simply there to quell the labor groups immediate needs. Turning companies the size of our big three around takes more than a few billion bucks over a few months.

My prediction is chapter 11....bust up the unions....restructure by downsizing and cutting out unprofitable lines of business....employ much cheaper labor which means maybe going overseas. GM has a huge presence outside of the US.

As for the unions, I don't blame them for holding their ground as any concessions they make now will open the door for more concessions in the future. Problem is there will be no future for them if they don't drop their pants now and go into survival mode.
The best way, IMO, to guage your perception of these companies as viable entities is to ask yourself....."would I buy their stock"?

Well......would you punk?

[Backbeach Jake]

By sending work overseas and south of the border and busting unions aren't they also ruining their customer demographic? The well paid worker? Or are they really in the used car business through rental companies and leases? People who are laid off or have had their incomes cut are very likely to buy a car in my opinion.

[The Dad Fisherman]

Originally Posted by Back Beach

employ much cheaper labor which means maybe going overseas.

Don't think you need to go overseas for that.....if they file for bankruptcy and terminate the union contract they can still get quality labor at a quality wage right here.

no reason they couldn't hire new workers at a rate thats competitive and keep the jobs here.

Lose the Job bank.....getting paid while not working is rediculous

Give Executives profit based salaries.....none of this "millions for being in the red" crap.

[rwilhelm]

"If the unions don't make deeper concessions, the american auto companies are going out of business, period."

I agree that is the heart of the problem, costs are too high for them to be profitable.

[PaulS]

It was reported that Chrysler hired a bankrupcy firm (jones day??) a few weeks ago. There the firm that took Dana corp. into bankrupcy a while back.

[Back Beach]

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[Back Beach]

Originally Posted by The Dad Fisherman

Don't think you need to go overseas for that.....if they file for bankruptcy and terminate the union contract they can still get quality labor at a quality wage right here.

no reason they couldn't hire new workers at a rate thats competitive and keep the jobs here.

Manufacturing in general, not just autos, is a dying industry in the US. Latest GDP puts manufacturing around 12%, I believe. Back in the "day" 1950's it was closer to 30%.
A market economy will eventually correct the labor issue on its own. Cheaper goods made at higher quality(Toyota) will eventually command the lion's share of manufacturing dollars, whether the stuff is made here or abroad. Companies that don't adapt to cost cutting and turning profits are obviously going down. The trend seems to be going abroad for everything. The feds throwing money at it is more of a "feel good" thing than a solution for our lost competitive edge.

United States to me is more about innovation/technology and providing services versus "making" things. Pretty sure these numbers fetch close to 80% of our GDP right now too.

I predict the new administration will throw large sums of money at the big three, only to watch them go bankrupt by mid summer. Long term its probably a good thing as it forces us to innovate and become more competitive. Short term many good people will be out of jobs. That's a free market system for you.

It takes considerable time to implment any meaningful change to companies of this size. Don't forget we're in a period of low consumer demand, meaning there's nobody ready to step up and buy these products even if changes are made for the better. I think the hour glass is empty for these companies.

[Mr. Sandman]

I am normally not a fan of bail outs...but, They paid something like 150 bil in taxes last year, so I don't see a loan of 34 bil (or even 300 bil) much of a problem. If they go bust, the taxes they turn over back to the gov will be zero and the gov will have to PAY more than 34 bil to the workers in form of some kind of aid.

Jeeeez they gave AIG 700 bil and didn't bat an eye, most people in this country could not tell me who AIG was but I bet they know who GM is.

I think the reasons for the collapse of the auto industry is being morphed into something that it really isn't. Yeah they ain't selling cars but it is not because people don't like the cars they are producing as congress is saying, it is paying for them that is the problem. If you are worried about loosing your job the last thing you do is buy a new car. IMO a lot of people were leveraging their homes to buy a car, this got out of hand and when the homes caved they stopped buying cars. It is not because of fuel prices (if so they would be buying now)

IMO the quality of similar priced cars is roughly the same these days. I am 52 and owned both Fords (3 explorers), a few GMs (chevy(3), cadi(3), GMC yukon xl(2)) toyotas (land cruiser(3), seinna(3) minivans), volvos(2), saabs(1) and a mg (1). IMO in general quality has improved nearly every year some more than others but in general they are all very reliable and far better than in the 70's. In my experience it is more expensive to repair foreign cars than domestic and I have had slightly more problems with foreign cars but the worst being volvo (pre ford), but never had any super-major problems with any of them.

[Back Beach]

Originally Posted by Mr. Sandman

I think the reasons for the collapse of the auto industry is being morphed into something that it really isn't. Yeah they ain't selling cars but it is not because people don't like the cars they are producing as congress is saying, it is paying for them that is the problem. .

Kind of what I was saying(consumer demand is down), but to remain competitive they need to make drastic changes and I'm not sure they have enough time to do this prior to the cash being burned off. Hell, my last six vehicles have been fords and I'm not complaining about the quality.
These companies, though, have been sliding downward for over a decade and now suddenly there's a crisis when there's free money to be had.
I'd have less of a problem if the gov't got collateral as opposed to "we'll pay you pack when things improve."
AIG still has a vibrant insurance business too don't forget. Gov't at least has an ownership stake in a viable entity that will presumably increase in value when things straighten out. Not sure about GM.

[Backbeach Jake]

Why don't the Big 3 go to the Banks for their loans? Didn't we just give the Banks nearly a trillion bucks ?

[Duke41]

Originally Posted by eastendlu

30,000 jobs i wonder how many at the top are going to get the ax.and how are the unions going to take this?In my opinion they are better off declaring bankruptcy and restructuring and renegotiating new contracts with the unions to make them more competitive.my .02

I am with you. Most of the bailout dough is going to go to pension stabilzation, which is already insured by the feds. this is

[Duke41]

Originally Posted by Mr. Sandman

IMO the quality of similar priced cars is roughly the same these days. I am 52 and owned both Fords (3 explorers), a few GMs (chevy(3), cadi(3), GMC yukon xl(2)) toyotas (land cruiser(3), seinna(3) minivans), volvos(2), saabs(1) and a mg (1). IMO in general quality has improved nearly every year some more than others but in general they are all very reliable and far better than in the 70's. In my experience it is more expensive to repair foreign cars than domestic and I have had slightly more problems with foreign cars but the worst being volvo (pre ford), but never had any super-major problems with any of them.

Holy cow I am 47 and am on my 4th car in 22 years.

[Swimmer]

Originally Posted by Duke41

Holy cow I am 47 and am on my 4th car in 22 years.

I'm 57 and have had four cars since I was 24. One vette, it sucked. One GM van, what a fishing wagon. One f-250, what a tank, and a ranger. Sandman must be on more mailing lists than Carter has liver pills. A good resource though.

[Joe]

Had a used 78 Grenada - worst car ever. Died of engine failure. Never would buy an American car after that. One time, I went out once with this bitchy girl who told me that my car, "Made a statement about me." I told her her fat as_ made one about her.

Had a used 78 Toyoata Corrolla that I bought for $500. Good car. I had that from 1986-1990, sold it to an immigrant with 120,000 miles on it and would see it on the road as late as 1998

Had a 89 Toyota Standard (what they called the Tacoma later on) Pick Up - that I bought as a leftover, new in 1990, for $8,000
I had that until until 2003 - it had 217,000 miles on it when I sold it. Great truck.

I have a Honda Element now - but I don't go anywhere.

[TheSpecialist]

As for the unions, I don't blame them for holding their ground as any concessions they make now will open the door for more concessions in the future. Problem is there will be no future for them if they don't drop their pants now and go into survival mode.

SO what are the CEO, Cfo, and every other management type going to concede?

It seems to me that without the autoworker you have no product to sell.

Who needs all the upper, and midlevel management?

What they need to do is structure new contracts to get away from pensions funded by the company, and go to soley 401k's with corporate match for any new employee, and give a cashout incentive to current employees to leave the pension now.

Why does everyone want to stick it to the working people all of the time? They didn't ruin the company, the people at the top did, they agreed to everything the unions asked for.

While the companies' efforts are aimed primarily at appeasing lawmakers and overcoming bailout fatigue among many Republicans and some Democrats, the managers are also sending a signal to the United Auto Workers union. UAW President Ron Gettelfinger said recently that the union would consider new concessions to save the industry but only if other parties share in the sacrifices.

It seems that the Union is willing to make some concessions as long as management does the same..



http://detnews.com/apps/pbcs.dll/art...TO01/812040373


Here is some interesting stuff to chew on..

http://www.uaw.org/auto/12_02_08auto1.cfm

[Mr. Sandman]

I am including my wife's vehicles too. I also had a live in nanny for 10 years when the kids were young and had to buy them a car and leased that thing for 2.5-3 years. (minivans).

[Back Beach]

Originally Posted by TheSpecialist

SO what are the CEO, Cfo, and every other management type going to concede?

It seems to me that without the autoworker you have no product to sell.

Who needs all the upper, and midlevel management?

They should be the first to go, IMO. Its proven they can't run the company.
Ford did get a bit ahead of the curve by selling off some assets and raising cash in anticipation of tightening competition and slowing economy.They seem to be in the best shape of the three.
GM, heretofore known as "THE BLOB", did what blobs do best....nothing.

You want to read a good story about large scale corporate turnarounds, get "Who says elephants can't dance" by Lou Gerstner. Its about another "BLOB"(IBM) that got its head out of its ass and changed for the better. Should be required reading for the fools in management at the big three.

[justplugit]

Originally Posted by Backbeach Jake

Why don't the Big 3 go to the Banks for their loans? Didn't we just give the Banks nearly a trillion bucks ?

There you go again Fred, using common sense.

Too bad the politicians didn't use their heads and making the monies avaiable on the basis of using the money to be used for loans only, rather then allowing the banks using it to buy banks in China.

Something like giving everybody $3000 in cash after Katrina.

All of our money well spent.

[Flaptail]

F()ck GM, Ford and Chrysler. If the management really wanted to stay on top they should have had the foresight to see what was coming on the horizon 10 yrs ago and started making reliable vehicles with better mileage and should have explored much sooner alternate fuel technologies.

The american auto industry was in bed with the oil companies and thier lobby people. Also a great part of the american public is also to blame with thier cavalier attitude towards what they drive and how much it cost. Tahoes, Hummers, Expeditions, Escalades and large pick ups. Look at me! I drive an Suv even though I never go off road and or even on a dirt road. I'M BETTER THAN YOU IN YOUR HONDA!!!

f()CK THEM! The american way of thinking about automobiles and the industry need a huge wake-up, dope slap, this is it.

Screw them!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Whatever rises from the ashes will be better. And don't giove me any crap about people out of work, The UAW brothers and sisters are way overpaid, especially thier benefit packages, tell the Union president to go F()ck himself too, he and his union are just as much at fault.

[The Dad Fisherman]

Originally Posted by Backbeach Jake

Why don't the Big 3 go to the Banks for their loans? Didn't we just give the Banks nearly a trillion bucks ?

Because they Got burned giving out Bad Loans before....they don't want to get burned again

[Tagger]

You want to be able to afford your own house someday ? You want a retirement program ,medical,, dental ? Never get rich, but just raise your family in say Brockton . Always slam the union worker first thing in these threads . What about pleasing the shareholders being #1 . Does that make these companys want to explore new cocepts in building ? Oil companys do rule the world ,, Lets say we do start some alterntive energy sources like Wind power down the cape ? No, rich bazdards driving thier jap cars don't want it . So round and round we go . I drive into boston and down 128 daily in an american car. I manage to get around fine . Do you really want to lower your standard of living in this country overall to compete with foreign companys or just your neighbors ? These American car companys have to please the American driving public #1 ,, Not Wallstreet .. Even though gas is cheap again, we have to get ourselves off foreign oil and in turn stop funding terrorism . We have to get the drugs out of this country and as parents raise productive human beings .. There is plenty of sin to go around . Heaping it all on the small percentage of workers that are union is wrong ..Current trends, there will be no unions in the future and god help you then .. My 2 cents without 1 F bomb ..

[Joe]

Its too late now anyway - moot point. The money they give now will be wasted. Washington at its finest: too little, too late.
If they had moved quickly after they first asked for the money it might have had a chance. But they've been teetering so long, I can't see the public embracing them. People are not going to buy a new car that may or may not have a warranty in three months. Nothing will rise from the ashes because the suppliers will fold with them.

[Swimmer]

What all this is saying, is that if you don't have any money by your late 30's early 40's, in other words now, you might never have any. This recession is going to hurt more people than the last one because there are more people here now than then. It will probably go on until some other sharpie devises another scheme/program to hand out mortgages to people that shouldn't get them to get all the reposessed/forecloses houses off the rolls. It will keep occuring and getting deeper until all the MADOFFS of the world are discovered and handled also. One guy screws with 17 or 18 billions dollars and he has to tell everyone, in otherwords admit his wrongdoing, because no one who should of known did know, including his employees. The FBI goes to his apartment and asked him if what he said was true and he replies yes, and I fully expect to go to jail. Investigation starts at this point. Goodnight Irene!

[Joe]

People's retirements have been seriously compromised - if you are 40's 50's and still in equities, and you rode it to the bottom, assuming we're there yet, you're screwed.