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

[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

[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.

[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.

[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.

[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.

[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.

[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.