ok what about it? why are you not understanding that GM could no longer afford to pay the high UAW costs? its pretty simple really.
what about the part that says GM executives make substantially more than executives at other car companies? $8.5 million a year to be a CEO? ... how many $65,000 a year jobs are that?
On the other hand, pretty much anyone with probably a days worth of training can bolt a tire onto a car. How many years of education and training does it take to get to the position where you can run one of the biggest companies in the world, even run it poorly?
ok what about it? why are you not understanding that GM could no longer afford to pay the high UAW costs? its pretty simple really.
what about the part that says GM executives make substantially more than executives at other car companies? $8.5 million a year to be a CEO? ... how many $65,000 a year jobs are that?
On the other hand, pretty much anyone with probably a days worth of training can bolt a tire onto a car. How many years of education and training does it take to get to the position where you can run one of the biggest companies in the world, even run it poorly?
uhhh ... granted their task is relatively simple - it isn't easy as far as being on your feet all day and having to suck in often toxic fumes ...
at the same time - you could give me the reigns of GM and I don't think i could do any worse than where they are at now ... i work for a large corporation and although our ceo makes a good salary - he knows he isn't so important that he's making 130 times our averge worker ...
labor costs didn't ruin GM, you're the only one I know of even suggesting that.
LOL I'm the only one huh?
Labor costs are one of many factors for its failure. to say its not is pure ignorance. as of their filing, GM had $173 Billion in debt and $82 Billion in assets. (that is not a good thing in case you dont know). the majority of their debt was to pay the Unions.
Far from the only one. Add me to the list of folks suggesting exactly that, and I'm typically considered a bleeding heart liberal that's all pro-universal health care and whatnot But labor costs are sinking major American industry.
'But General Motors continues to operate similar to the old Hyundai. In 2002, former GM CEO, Charles E. Wilson earned $652,156 a year, but was later replaced with Richard Wagner, who made a major priority huge pay increases for executives at GM. His salary was boosted to $8.5 million a year with all compensation figured in according to the reputable Forbes magazine. And many other executives also receive extremely high executive pay and compensation packages. And as bad as this is, Wagner is only the 141st highest paid executive in America, 140 other CEO's actually earn far more than the $8.5 million a year, limiting stockholder profits, dividends and company product development funds...
Executives at Toyota, Hyundai and other highly profitable companies have salaries far closer to the workers who build the automobiles, than American executives whose main goal of running the corporation appears to be for salary increase potential rather than the development and marketing of new products or the health of the corporation...
GM can survive their problems. But a better philosophy of executive commitment to the corporation's health and more concern for the worker's role as a vital link in the American economy, instead of merely a supply and demand commodity that can be easily be replaced with cheap foreign labor to enhance profits, as well a commitment to more reasonable executive salaries and more flexible and modern product development are all vital links. But unlike many successful foreign competitors, the American corporate vision is often short-sightedly based on the short term goal of extreme executive salaries. This has to change for the health of GM, which is equal to 1% of America's economy. And it should serve as a warning to other corporations of how to fail in a marketplace with far better managed foreign competitors.'
Labour costs? Not over-paid executives, and the love of short-term profit over sustainable development?
You have a point with that last one... there is far too much short-sightedness in American economics. I call it slash and burn economics. And yes, executives are overpaid. But the real problem as I see it is a combination of stock incentives and inflated labor costs.
A company makes a solid product and has a good year. Stock dividens go out. The next year, the company also turns a tidy profit, but because they reinvested some in the company, their profits are down and so are dividends. Despite a successful company setting itself up for the future, all stockholders see is their payout going down. So to them, the company is failing. It is not enough for a company to be profitable anymore, it must have constantly increasing profits to be safe and sound. This is unsustainable and absurd, but to short sighted get rich quick stockholders, that doesn't matter. We've convinced ourselves playing the market is a subsitute for real, hard work and if we just back the right horse we can strike gold and retire. It's a delusion.
The result is that management has absurd pressure to constantly increase profits. So a wise CEO with a conservative but sustainable plan will always be forced out in favor of a headhunter to come in and cut costs to make profits look better. Of course, this is only a temporary fix, and before long he is forced out (with golden parachute of course) for another guy to do the same thing.
Part of this equation though, is that labor costs in many jobs are artificially inflated. This means that it is an area that eats up huge portions of operating expenses and is usually the only option for making any significant cost reduction. Now sure, execs should take cuts with everyone else, but that's a drop in the bucket. The problem is we spend too much on this kind of basic compensation generally, worker or exec, and not enough on r&d and innovation.
Labour costs? Not over-paid executives, and the love of short-term profit over sustainable development?
You have a point with that last one... there is far too much short-sightedness in American economics. I call it slash and burn economics. And yes, executives are overpaid. But the real problem as I see it is a combination of stock incentives and inflated labor costs.
A company makes a solid product and has a good year. Stock dividens go out. The next year, the company also turns a tidy profit, but because they reinvested some in the company, their profits are down and so are dividends. Despite a successful company setting itself up for the future, all stockholders see is their payout going down. So to them, the company is failing. It is not enough for a company to be profitable anymore, it must have constantly increasing profits to be safe and sound. This is unsustainable and absurd, but to short sighted get rich quick stockholders, that doesn't matter. We've convinced ourselves playing the market is a subsitute for real, hard work and if we just back the right horse we can strike gold and retire. It's a delusion.
The result is that management has absurd pressure to constantly increase profits. So a wise CEO with a conservative but sustainable plan will always be forced out in favor of a headhunter to come in and cut costs to make profits look better. Of course, this is only a temporary fix, and before long he is forced out (with golden parachute of course) for another guy to do the same thing.
Part of this equation though, is that labor costs in many jobs are artificially inflated. This means that it is an area that eats up huge portions of operating expenses and is usually the only option for making any significant cost reduction. Now sure, execs should take cuts with everyone else, but that's a drop in the bucket. The problem is we spend too much on this kind of basic compensation generally, worker or exec, and not enough on r&d and innovation.
Fair do's. And what do you think of Michael Moore's comments on ecologically friendly/sustainable transport?
0
g under p
Surfing The far side of THE Sombrero Galaxy Posts: 18,200
On Democracy Now Ralph Nader chimes in the bankruptcy of GM
AMY GOODMAN: And the government taking it over, being the majority shareholder, what does that mean now? And what should the government do?
HARLEY SHAIKEN: Well, the government has, in effect, nationalized GM. And President Obama has said that it is a reluctant act. And that’s quite clearly what it is. But the government should not act as if it is a hedge fund. It should not be a reluctant shareholder. It clearly wants to see a viable competitive company at the end of the day, a world-class automaker that also meets some broader public standards on energy and the environment, as well as employment.
But the government, to do that, is going to need a broader set of policies that addresses those concerns as the route to viability and profitability for GM. That, in fact, is what virtually every other auto government in this sort of a situation is doing today. Whether it’s a Christian Democratic government in Canada, such as—I mean, in Germany, such as Angela Merkel, whether it’s the Canadian government, all other governments are raising these issues in terms of public funds for private restructuring. And I think that’s a central challenge for the US government, as well.
In many ways, it is a thin line. There are going to be a lot of conflicting political pressures. But ultimately, this is an opportunity to really have a world-class automaker and meet some broader goals of great value to the public at the same time.
AMY GOODMAN: Ralph Nader, your response?
RALPH NADER: Well, first, we have to recognize the total autocratic, secretive way this bankruptcy was initiated. Congress, which in 1979 had thorough public hearings on the Chrysler bailout and a few years later on the structuring of the Conrail system, completely abdicated its role to the White House, that then allocated the role to a secret task force run by Wall Streeters and overseen by Timothy Geithner, Secretary of Treasury, and Larry Summers. And this is the predictable result of an autocratic, secretive process.
The common shareholders who own GM have been wiped out. They had no voice in Congress to discuss it. The auto suppliers, the auto dealers, consumer groups had no voice to discuss it in Congress. Workers had no actual voice in Congress, other than to tell Congress to lay low while the UAW was negotiating this deal, again, in private. So, we have a process which is very similar to the Chrysler process, which is a White House fiat to a bankruptcy court fiat to Fiat in Italy, if I may have a little play on words. But the bankruptcy process itself is extremely autocratic. Under Chapter 11, the judge keeps pounding the gavel and denying the claimants interventions and appeals on behalf of the combined force of the Obama task force and top brass in GM.
Now, why is this going to turn out bad? Because Obama has made the American taxpayer responsible for saving GM, to a level which will eventually reach $70 billion, but then he makes his government irresponsible by saying he doesn’t want to run GM. Well, what if GM management continues to ship its production to China, which is the grand China strategy of GM from several years back, and unemployed workers and closed factories and, by consequence, closed dealers? Is Obama going to step aside?
So, you have so many questions, Amy, that aren’t being answered. For example, are the China assets and unrepatriated profits of GM going to be included in the bankruptcy procedure, or are they going to be excluded? What about the act of closing dealers? Dealers don’t cost manufacturers anything. The franchise agreement makes certain of that. So why are we further inconveniencing motorists, rupturing their relationship over the years with dealers that are closer to home and making them travel more and more? The answer is, the fewer dealers, the more likely the price of cars go up. So there are all kinds of reasons why this should go back to Congress for thorough House and Senate hearings, if Congress wanted to adhere to its constitutional duties.
Peace
*We CAN bomb the World to pieces, but we CAN'T bomb it into PEACE*...Michael Franti
*MUSIC IS the expression of EMOTION.....and that POLITICS IS merely the DECOY of PERCEPTION*
.....song_Music & Politics....Michael Franti
*The scientists of today think deeply instead of clearly. One must be sane to think clearly, but one can think deeply and be quite INSANE*....Nikola Tesla(a man who shaped our world of electricity with his futuristic inventions)
You have a point with that last one... there is far too much short-sightedness in American economics. I call it slash and burn economics. And yes, executives are overpaid. But the real problem as I see it is a combination of stock incentives and inflated labor costs.
A company makes a solid product and has a good year. Stock dividens go out. The next year, the company also turns a tidy profit, but because they reinvested some in the company, their profits are down and so are dividends. Despite a successful company setting itself up for the future, all stockholders see is their payout going down. So to them, the company is failing. It is not enough for a company to be profitable anymore, it must have constantly increasing profits to be safe and sound. This is unsustainable and absurd, but to short sighted get rich quick stockholders, that doesn't matter. We've convinced ourselves playing the market is a subsitute for real, hard work and if we just back the right horse we can strike gold and retire. It's a delusion.
The result is that management has absurd pressure to constantly increase profits. So a wise CEO with a conservative but sustainable plan will always be forced out in favor of a headhunter to come in and cut costs to make profits look better. Of course, this is only a temporary fix, and before long he is forced out (with golden parachute of course) for another guy to do the same thing.
Part of this equation though, is that labor costs in many jobs are artificially inflated. This means that it is an area that eats up huge portions of operating expenses and is usually the only option for making any significant cost reduction. Now sure, execs should take cuts with everyone else, but that's a drop in the bucket. The problem is we spend too much on this kind of basic compensation generally, worker or exec, and not enough on r&d and innovation.
Fair do's. And what do you think of Michael Moore's comments on ecologically friendly/sustainable transport?
I like it in concept, but I'm not convinced it's a solution to our problems. It's easy to convert to making tanks when you know the military and defense dept will be buying them. But there's no guarantee people will be buying hybrid cars or anything. And as much as I wish we had bullet trains, Japan is the size of a small state, and Americans love their cars. I don't know how cost-effective a bullet train would be.
You're wrong about this. Japan is deceptively huge. Japan is a big country. It's bigger than Germany. It's bigger than the U.K and Finland, Norway, Poland, and Vietnam.
Management makes the decisions. Unions did not decide to toss together the Vega to compete against the Honda Civic, Toyota Corollas and Volkswagen Golf (Rabbit). Management made the decision to go with oversized, gas guzzling truck based station wagons. And sure, the Unions negotiated their contracts... but, what about all of those free enterprise employees? Engineers, Human Resources, Data Services, etc...? They all got paid well and recieved medical and dental benefits, too... didn't they?
General Motors was a dinosaur that failed to evolve. Union assembly workers did not bring them down... it was their failure look to the future and make adjustments to survive. Both parties hold responsibility... management made promises they knew they could not keep. But, I feel the decisions made set the path that has lead GM where they are today. Blaming the Unions is like blaming the car, not the driver, for steering the car off the cliff. Sure, maybe the driving and braking systems weren't the best.. but, it is ultimately the driver that controls the car... not the other way around.
Allen Fieldhouse, home of the 2008 NCAA men's Basketball Champions! Go Jayhawks!
Hail, Hail!!!
Will the GM bankruptcy work?
Some believe GM has finally made the necessary changes to be competitive, but others say there are still plenty of doubts about GM's future.
NEW YORK (CNNMoney.com) -- By the time General Motors filed for bankruptcy protection Monday, few in the auto industry doubted that's where the troubled automaker belonged. Whether GM's plan for a quick trip through bankruptcy will be enough to turn around the company is still up for debate.
GM (GMGMQ) will use the bankruptcy process to eliminate $27 billion in debt held by bondholders. Instead, those bondholders will get stock in a reorganized company, as will a union-controlled trust fund that will take stock rather than the $20 billion in cash it had been owed to pay future retiree health care costs. Those 650,000 retirees will have their coverage reduced.
GM will also use bankruptcy to close more than a dozen factories, drop four of its U.S. brands and shut down up to 40% of its network of 6,000 dealerships.
These are hardly the first set of steep cuts at GM, which has already shed about half of its U.S. work force so far this decade. But experts think more work may need to be done to get GM back on track after decades of market share declines and years of financial losses.
0:00 /02:48GM CEO: We will get through this
"The changes we've seen up to this point have been evolutionary. This will be far more revolutionary," said Tom Libby, president of the Society of Automotive Analysts. "Are they where they need to be on dealers, on brands? No. But they made a major step."
Libby said GM's labor costs are now essentially equal to those of non-union plants operated by its Asian rivals. That's never been the case until now.
David Cole, chairman of the Center for Automotive Research, said GM should now be able to break even with industrywide U.S. sales of about 10 million, just a bit better than current sales levels.
"These sales are now down to Depression volumes," he said. "With break even down at that level, they'll become very profitable, very soon."
Still, some serious challenges remain that can keep GM from becoming profitable in a timely fashion.
The company will continue to pay its active hourly workers the same wages and benefits as guaranteed in the latest UAW contract.
GM will also hold onto two large underfunded pension funds, meaning it likely will be obligated to make additional contributions to those funds in the future.
In addition, GM will be hanging on to many of its less successful dealers until late next year. Even many of the plants slated for closure won't shut down until the end of 2010.
Skeptics say GM needed to make deeper cuts
Many bankruptcy and turnaround efforts argue the automaker should have taken a more aggressive cost-cutting stance in bankruptcy. GM could have asked the court to void the labor contract in order to cut the pay and benefits of hourly workers and slash its network of dealerships immediately.
"It looks more like business as usual than real cost cutting," said Richard Tilton, an analyst with credit research firm Covenant Review.
Tilton said GM should be able to emerge from bankruptcy quickly, as is planned. But he said it will still find itself in a difficult competitive position in a very weak market for auto sales overall, neither of which point to long-term success.
He's also worried that, despite vows from the Obama administration and GM officials to the contrary, more federal help will be required to get GM through this current downturn.
"Their real problem is not how deep their pockets are or the government's pockets. It's the American public's pockets. No one is buying cars right now."
May auto sales were better than expected for GM and the industry overall, although sales were still well below year-ago levels.
Jeffrey Manning, a managing director at investment banking firm Trenwith Securities, which specializes in bankruptcy and restructuring, said he's worried about both GM and Chrysler agreeing to keep their underfunded pension plans in place in order to get the United Auto Workers union to agree to the bankruptcy plan. Many companies use bankruptcy to get out from pension obligations.
GM's pension plans face a deficit of between $12 billion and $13 billion, he estimates.
"You've left these anchors on both businesses," he said. Pushing off financial problems further down the road "is how they got into trouble in the first place" he said.
Troy Clarke, president of GM's North American operations, said the company didn't have the option to push for every possible cost reduction because it needed to have a quick bankruptcy process that had the support of the union and other stakeholders in the company.
"The need for speed drove the thought process, not just how far you can go," he told a group of reporters in a conference call Monday.
Many experts also contended that the Treasury Department would not have been willing to fund a war with the union, workers and retirees. And with the current credit crunch drying up funding typically used by bankrupt companies, the government was the only source for the $50 billion that GM needed to fund its reorganization.
Will GM start making cars people want?
Beyond the difficulty of cutting costs, the biggest problem according to many experts is that GM's long-term decline in market share may be irreversible.
"The fundamental question is whether the demand for their product is going to change as part of this process," said Manning. "I don't think it will."
Even CEO Fritz Henderson conceded Monday that no automaker has achieved a turnaround in its fortunes without improving demand for its cars and trucks. He insisted that GM's vehicle pipeline is strong and will get stronger as the company puts its financial problems behind it.
But others expressed doubts about GM's competitive position, especially with the federal government raising fuel economy standards. GM lags behind its Asian competitors in the production of fuel-efficient vehicles.
"There's too much competition and I don't know if they're ready for this brave new world of 35 mpg," said Stephen Spivey, senior auto analyst for business consultant Frost & Sullivan "Toyota and Honda are already."
But Spivey doesn't have a lot of suggestions for what GM could have done differently in its bankruptcy filing.
"All the steps they took needed to be taken a while back," he said. "There were no good options for them to take today." To top of page
Management makes the decisions. Unions did not decide to toss together the Vega to compete against the Honda Civic, Toyota Corollas and Volkswagen Golf (Rabbit). Management made the decision to go with oversized, gas guzzling truck based station wagons. And sure, the Unions negotiated their contracts... but, what about all of those free enterprise employees? Engineers, Human Resources, Data Services, etc...? They all got paid well and recieved medical and dental benefits, too... didn't they?
General Motors was a dinosaur that failed to evolve. Union assembly workers did not bring them down... it was their failure look to the future and make adjustments to survive. Both parties hold responsibility... management made promises they knew they could not keep. But, I feel the decisions made set the path that has lead GM where they are today. Blaming the Unions is like blaming the car, not the driver, for steering the car off the cliff. Sure, maybe the driving and braking systems weren't the best.. but, it is ultimately the driver that controls the car... not the other way around.
yup ...
i would also like to voice my support for a high-speed train network ... i guarantee you a network in the eastern seaboard connecting boston - new york - philly - dc would do wonders ... i know the airlines aren't gonna like it but this is what true competition really is ... let all the options compete in a fair playing field and the most efficiently and sustainable option will win out ...
Management makes the decisions. Unions did not decide to toss together the Vega to compete against the Honda Civic, Toyota Corollas and Volkswagen Golf (Rabbit). Management made the decision to go with oversized, gas guzzling truck based station wagons. And sure, the Unions negotiated their contracts... but, what about all of those free enterprise employees? Engineers, Human Resources, Data Services, etc...? They all got paid well and recieved medical and dental benefits, too... didn't they?
General Motors was a dinosaur that failed to evolve. Union assembly workers did not bring them down... it was their failure look to the future and make adjustments to survive. Both parties hold responsibility... management made promises they knew they could not keep. But, I feel the decisions made set the path that has lead GM where they are today. Blaming the Unions is like blaming the car, not the driver, for steering the car off the cliff. Sure, maybe the driving and braking systems weren't the best.. but, it is ultimately the driver that controls the car... not the other way around.
GM could have been saved if the contracts were rewritten. although based on poor mgmt decisions, even that may not have helped, but it would have bought GM time to recover from its lack of innovation. those gas guzzlers are exactly what the American public was demanding. its not GMs fault for making them...where they failed was to have a back up plan if (and when) gas went to $4. they did not anticipate that and neither did the America consumer.
Management makes the decisions. Unions did not decide to toss together the Vega to compete against the Honda Civic, Toyota Corollas and Volkswagen Golf (Rabbit). Management made the decision to go with oversized, gas guzzling truck based station wagons. And sure, the Unions negotiated their contracts... but, what about all of those free enterprise employees? Engineers, Human Resources, Data Services, etc...? They all got paid well and recieved medical and dental benefits, too... didn't they?
General Motors was a dinosaur that failed to evolve. Union assembly workers did not bring them down... it was their failure look to the future and make adjustments to survive. Both parties hold responsibility... management made promises they knew they could not keep. But, I feel the decisions made set the path that has lead GM where they are today. Blaming the Unions is like blaming the car, not the driver, for steering the car off the cliff. Sure, maybe the driving and braking systems weren't the best.. but, it is ultimately the driver that controls the car... not the other way around.
GM could have been saved if the contracts were rewritten. although based on poor mgmt decisions, even that may not have helped, but it would have bought GM time to recover from its lack of innovation. those gas guzzlers are exactly what the American public was demanding. its not GMs fault for making them...where they failed was to have a back up plan if (and when) gas went to $4. they did not anticipate that and neither did the America consumer.
...
What good are contracts... if they can be re-written?
Let's say you work for a big coprporation. You work there for 30 years or so, loyal, hard working employee... retire to a fixed income. Then, 6 years into your retirement, the contract in 're-written' and you lose 80% of your medical benefits. You didn't plan for this because it was unforeseen. Your retirement was based upon this coverage. You're screwed because you can't afford to pay for the coverage on your pension.
And trust me... i work in a Union Shop. I am a Free Enterprise Employee who benefits from Union Negotiations regarding holidays and accrued Vacation time. I do not get the same retirement benefits the previous generations did. The company has slashed my benefits. I understand... it is part of survival in a competative market. But, they have also slashed retiree benefits, mostly due to the ungodly cost of health care.
Rewriting contracts would have been a band-aid applied to a gushing slashed carortid artery. GM was headed down this path for long... LONG time.
Allen Fieldhouse, home of the 2008 NCAA men's Basketball Champions! Go Jayhawks!
Hail, Hail!!!
Management makes the decisions. Unions did not decide to toss together the Vega to compete against the Honda Civic, Toyota Corollas and Volkswagen Golf (Rabbit). Management made the decision to go with oversized, gas guzzling truck based station wagons. And sure, the Unions negotiated their contracts... but, what about all of those free enterprise employees? Engineers, Human Resources, Data Services, etc...? They all got paid well and recieved medical and dental benefits, too... didn't they?
General Motors was a dinosaur that failed to evolve. Union assembly workers did not bring them down... it was their failure look to the future and make adjustments to survive. Both parties hold responsibility... management made promises they knew they could not keep. But, I feel the decisions made set the path that has lead GM where they are today. Blaming the Unions is like blaming the car, not the driver, for steering the car off the cliff. Sure, maybe the driving and braking systems weren't the best.. but, it is ultimately the driver that controls the car... not the other way around.
GM could have been saved if the contracts were rewritten. although based on poor mgmt decisions, even that may not have helped, but it would have bought GM time to recover from its lack of innovation. those gas guzzlers are exactly what the American public was demanding. its not GMs fault for making them...where they failed was to have a back up plan if (and when) gas went to $4. they did not anticipate that and neither did the America consumer.
...
What good are contracts... if they can be re-written?
Let's say you work for a big coprporation. You work there for 30 years or so, loyal, hard working employee... retire to a fixed income. Then, 6 years into your retirement, the contract in 're-written' and you lose 80% of your medical benefits. You didn't plan for this because it was unforeseen. Your retirement was based upon this coverage. You're screwed because you can't afford to pay for the coverage on your pension.
And trust me... i work in a Union Shop. I am a Free Enterprise Employee who benefits from Union Negotiations regarding holidays and accrued Vacation time. I do not get the same retirement benefits the previous generations did. The company has slashed my benefits. I understand... it is part of survival in a competative market. But, they have also slashed retiree benefits, mostly due to the ungodly cost of health care.
Rewriting contracts would have been a band-aid applied to a gushing slashed carortid artery. GM was headed down this path for long... LONG time.
[/quote]
what good are contracts if the company fails partly due their uncompetitive nature? sure it was just a band-aid. but instead of using a band-aid, they choose suicide.
what good are contracts if the company fails partly due their uncompetitive nature? sure it was just a band-aid. but instead of using a band-aid, they choose suicide.[/quote]
...
I agree. But, it is panning out where GM Management is trying to pin all of the blame on the Unions. Not the case. Sure, Unions played a part, but they are not the reason why they where they are today. Decisions are made in the non-union corporate offices, not down on the shop floor.
Toyota makes big SUVs and Tundras... but, they also offer Prius' and Camrys. GM and Chrysler decided to offer Hummers, Suburbans and Durangos and crappy little cars. People didn't buy their crappy little cars, so instead of trying to beef up their small cars lines... they stuck with marketing and selling the gas guzzlers. Like nothing was learned from the Oil Crisis on the 1970s.
If I were to lay blame.. it would be 40% on Unions... 60% on Management. And the Union folks are going to be the ones to feel the most pain. Management salaries and bonuses will allow them to be better off. They will probably have to sell that condo at Aspen and the beach house in Maui... which they perceive as 'sacrifice'.
Allen Fieldhouse, home of the 2008 NCAA men's Basketball Champions! Go Jayhawks!
Hail, Hail!!!
labor costs didn't ruin GM, you're the only one I know of even suggesting that.
LOL I'm the only one huh?
Labor costs are one of many factors for its failure. to say its not is pure ignorance. as of their filing, GM had $173 Billion in debt and $82 Billion in assets. (that is not a good thing in case you dont know). the majority of their debt was to pay the Unions.
Far from the only one. Add me to the list of folks suggesting exactly that, and I'm typically considered a bleeding heart liberal that's all pro-universal health care and whatnot But labor costs are sinking major American industry.
its not a list. its you and jlew. i was expecting some kind of link to a mainstream source suggesting labor costs ruined GM. from what i've been reading about the bankruptcy, (aside from a few opinions on this board) labor costs weren't responsible for failing to put out an electric alternative to Japan. Labor costs weren't responsible for marketing the giant SUV's to death, trying to force something on us that we didn't want. Labor didn't ship tens of thousands of jobs overseas, (management did), ensuring no one could afford the product. and so on. most of what brought down GM was attributed to management.
labor built GM, they sure as hell didn't bring it down.
what good are contracts if the company fails partly due their uncompetitive nature? sure it was just a band-aid. but instead of using a band-aid, they choose suicide.
...
I agree. But, it is panning out where GM Management is trying to pin all of the blame on the Unions. Not the case. Sure, Unions played a part, but they are not the reason why they where they are today. Decisions are made in the non-union corporate offices, not down on the shop floor.
Toyota makes big SUVs and Tundras... but, they also offer Prius' and Camrys. GM and Chrysler decided to offer Hummers, Suburbans and Durangos and crappy little cars. People didn't buy their crappy little cars, so instead of trying to beef up their small cars lines... they stuck with marketing and selling the gas guzzlers. Like nothing was learned from the Oil Crisis on the 1970s.
If I were to lay blame.. it would be 40% on Unions... 60% on Management. And the Union folks are going to be the ones to feel the most pain. Management salaries and bonuses will allow them to be better off. They will probably have to sell that condo at Aspen and the beach house in Maui... which they perceive as 'sacrifice'.
I agree with 40/60. maybe even more towards the mgmt side overall. in the end, bankruptcy will be the best thing for this company.
its not a list. its you and jlew. i was expecting some kind of link to a mainstream source suggesting labor costs ruined GM. from what i've been reading about the bankruptcy, (aside from a few opinions on this board) labor costs weren't responsible for failing to put out an electric alternative to Japan. Labor costs weren't responsible for marketing the giant SUV's to death, trying to force something on us that we didn't want. Labor didn't ship tens of thousands of jobs overseas, (management did), ensuring no one could afford the product. and so on. most of what brought down GM was attributed to management.
labor built GM, they sure as hell didn't bring it down.
try to grasp this concept...Labor costs were a FACTOR in the demise of GM. one of several factors. get it? please say yes and maybe you can start to understand why.
GM could no longer afford to pay its obligations to the UAW. and since the UAW was not willing to make the necessary cuts, GM was forced into bankruptcy to void the contracts
the problem with GM isn't that hey built SUV's - the reality is and JLew is right on this front - americans WERE buying SUV because americans have been spoiled by the low cost of gas - even when it skyrocketed - the price of gas in america was just what it was like for the rest of the world years ago ... america has always subsidized the car culture - from roads, gas, and such ...
the problem ultimately is that the model is based on people continuing to buy new cars every 4 or 5 years ... a model that extends beyond automobiles ... many retailers of all sorts are suffering - they don't have union workers either ... it is only because america has always funded the car in every way is it being bailed out now ...
the problem ultimately is that the model is based on people continuing to buy new cars every 4 or 5 years ... a model that extends beyond automobiles ... many retailers of all sorts are suffering - they don't have union workers either ... it is only because america has always funded the car in every way is it being bailed out now ...
Along with that model disappearing, also gone is the idea that a car consumer is a "GM Guy" or a "Ford Guy" where a young guy starting out will start out buying a Chevy and work his way up with the goal of eventually buying a Buick or a Cadillac. That kind of brand loyalty is totally gone with current generations (who will buy something that they like no matter who makes it, so you don't have those guaranteed sales just because of the brand name on the car. I bought a new car a few years ago and test drove a bunch of different manufacturers before I decided I wanted a Honda Fit. Next time I buy a car I will do the same thing, I won’t automatically stick with Honda just because my current car was a Honda.
the problem with GM isn't that hey built SUV's - the reality is and JLew is right on this front - americans WERE buying SUV because americans have been spoiled by the low cost of gas - even when it skyrocketed - the price of gas in america was just what it was like for the rest of the world years ago ... america has always subsidized the car culture - from roads, gas, and such ...
the problem ultimately is that the model is based on people continuing to buy new cars every 4 or 5 years ... a model that extends beyond automobiles ... many retailers of all sorts are suffering - they don't have union workers either ... it is only because america has always funded the car in every way is it being bailed out now ...
the market isn't decided by the consumer, not in todays' capitalism. the market is decided by the corporations.
they were selling us gas hogs and BIG trucks, right before gas prices got out of hand (no accident). every other car commercial was about some new giant truck or suv they were trying to shove at us.
but something rare happened, in this case, market principles actually crept into play, the market figured itself out. people slowly realized they didn't want the big giant trucks and gas guzzlers,, and started buying more fuel efficient cars, they couldn't afford the big fuckers anymore.
GM didn't care, they did what they always did, they spent more money on marketing. rather than offer a product worth buying they tried shape our opinions about their shitty ones already on the lot.
in this case the market is figuring itself out,which I think is rare in todays' capitalism.
its not a list. its you and jlew. i was expecting some kind of link to a mainstream source suggesting labor costs ruined GM. from what i've been reading about the bankruptcy, (aside from a few opinions on this board) labor costs weren't responsible for failing to put out an electric alternative to Japan. Labor costs weren't responsible for marketing the giant SUV's to death, trying to force something on us that we didn't want. Labor didn't ship tens of thousands of jobs overseas, (management did), ensuring no one could afford the product. and so on. most of what brought down GM was attributed to management.
labor built GM, they sure as hell didn't bring it down.
try to grasp this concept...Labor costs were a FACTOR in the demise of GM. one of several factors. get it? please say yes and maybe you can start to understand why.
GM could no longer afford to pay its obligations to the UAW. and since the UAW was not willing to make the necessary cuts, GM was forced into bankruptcy to void the contracts
you're point is labor has to be paid?
that's not a concept there buddy, that's the obvious part of running a business.
its not a list. its you and jlew. i was expecting some kind of link to a mainstream source suggesting labor costs ruined GM. from what i've been reading about the bankruptcy, (aside from a few opinions on this board) labor costs weren't responsible for failing to put out an electric alternative to Japan. Labor costs weren't responsible for marketing the giant SUV's to death, trying to force something on us that we didn't want. Labor didn't ship tens of thousands of jobs overseas, (management did), ensuring no one could afford the product. and so on. most of what brought down GM was attributed to management.
labor built GM, they sure as hell didn't bring it down.
try to grasp this concept...Labor costs were a FACTOR in the demise of GM. one of several factors. get it? please say yes and maybe you can start to understand why.
GM could no longer afford to pay its obligations to the UAW. and since the UAW was not willing to make the necessary cuts, GM was forced into bankruptcy to void the contracts
you're point is labor has to be paid?
that's not a concept there buddy, that's the obvious part of running a business.
I meant high labor costs. thought you might have been able to get that part. obviously not :roll:
Comments
if they start putting balding fat guys in their 60's in a calendar will be the day you join the dark side!
On the other hand, pretty much anyone with probably a days worth of training can bolt a tire onto a car. How many years of education and training does it take to get to the position where you can run one of the biggest companies in the world, even run it poorly?
uhhh ... granted their task is relatively simple - it isn't easy as far as being on your feet all day and having to suck in often toxic fumes ...
at the same time - you could give me the reigns of GM and I don't think i could do any worse than where they are at now ... i work for a large corporation and although our ceo makes a good salary - he knows he isn't so important that he's making 130 times our averge worker ...
Far from the only one. Add me to the list of folks suggesting exactly that, and I'm typically considered a bleeding heart liberal that's all pro-universal health care and whatnot
Labour costs? Not over-paid executives, and the love of short-term profit over sustainable development?
You're saying that it's the fault of the guys at the bottom, and not the guys at the top?
http://progressivevalues.blogspot.com/2 ... -myth.html
'But General Motors continues to operate similar to the old Hyundai. In 2002, former GM CEO, Charles E. Wilson earned $652,156 a year, but was later replaced with Richard Wagner, who made a major priority huge pay increases for executives at GM. His salary was boosted to $8.5 million a year with all compensation figured in according to the reputable Forbes magazine. And many other executives also receive extremely high executive pay and compensation packages. And as bad as this is, Wagner is only the 141st highest paid executive in America, 140 other CEO's actually earn far more than the $8.5 million a year, limiting stockholder profits, dividends and company product development funds...
Executives at Toyota, Hyundai and other highly profitable companies have salaries far closer to the workers who build the automobiles, than American executives whose main goal of running the corporation appears to be for salary increase potential rather than the development and marketing of new products or the health of the corporation...
GM can survive their problems. But a better philosophy of executive commitment to the corporation's health and more concern for the worker's role as a vital link in the American economy, instead of merely a supply and demand commodity that can be easily be replaced with cheap foreign labor to enhance profits, as well a commitment to more reasonable executive salaries and more flexible and modern product development are all vital links. But unlike many successful foreign competitors, the American corporate vision is often short-sightedly based on the short term goal of extreme executive salaries. This has to change for the health of GM, which is equal to 1% of America's economy. And it should serve as a warning to other corporations of how to fail in a marketplace with far better managed foreign competitors.'
You have a point with that last one... there is far too much short-sightedness in American economics. I call it slash and burn economics. And yes, executives are overpaid. But the real problem as I see it is a combination of stock incentives and inflated labor costs.
A company makes a solid product and has a good year. Stock dividens go out. The next year, the company also turns a tidy profit, but because they reinvested some in the company, their profits are down and so are dividends. Despite a successful company setting itself up for the future, all stockholders see is their payout going down. So to them, the company is failing. It is not enough for a company to be profitable anymore, it must have constantly increasing profits to be safe and sound. This is unsustainable and absurd, but to short sighted get rich quick stockholders, that doesn't matter. We've convinced ourselves playing the market is a subsitute for real, hard work and if we just back the right horse we can strike gold and retire. It's a delusion.
The result is that management has absurd pressure to constantly increase profits. So a wise CEO with a conservative but sustainable plan will always be forced out in favor of a headhunter to come in and cut costs to make profits look better. Of course, this is only a temporary fix, and before long he is forced out (with golden parachute of course) for another guy to do the same thing.
Part of this equation though, is that labor costs in many jobs are artificially inflated. This means that it is an area that eats up huge portions of operating expenses and is usually the only option for making any significant cost reduction. Now sure, execs should take cuts with everyone else, but that's a drop in the bucket. The problem is we spend too much on this kind of basic compensation generally, worker or exec, and not enough on r&d and innovation.
Fair do's. And what do you think of Michael Moore's comments on ecologically friendly/sustainable transport?
Look/Listen/Read here... http://www.democracynow.org/2009/6/2/ra ... sor_harley
Peace
*MUSIC IS the expression of EMOTION.....and that POLITICS IS merely the DECOY of PERCEPTION*
.....song_Music & Politics....Michael Franti
*The scientists of today think deeply instead of clearly. One must be sane to think clearly, but one can think deeply and be quite INSANE*....Nikola Tesla(a man who shaped our world of electricity with his futuristic inventions)
I like it in concept, but I'm not convinced it's a solution to our problems. It's easy to convert to making tanks when you know the military and defense dept will be buying them. But there's no guarantee people will be buying hybrid cars or anything. And as much as I wish we had bullet trains, Japan is the size of a small state, and Americans love their cars. I don't know how cost-effective a bullet train would be.
You're wrong about this. Japan is deceptively huge. Japan is a big country. It's bigger than Germany. It's bigger than the U.K and Finland, Norway, Poland, and Vietnam.
http://en.wikipedia.org/wiki/List_of_co ... es_by_area
The fact that Japan is situated next to China makes it looks small. It's spread out across a huge distance though.
Anyway, back to topic. :ugeek:
General Motors was a dinosaur that failed to evolve. Union assembly workers did not bring them down... it was their failure look to the future and make adjustments to survive. Both parties hold responsibility... management made promises they knew they could not keep. But, I feel the decisions made set the path that has lead GM where they are today. Blaming the Unions is like blaming the car, not the driver, for steering the car off the cliff. Sure, maybe the driving and braking systems weren't the best.. but, it is ultimately the driver that controls the car... not the other way around.
Hail, Hail!!!
http://money.cnn.com/2009/06/02/news/co ... 2009060304
Will the GM bankruptcy work?
Some believe GM has finally made the necessary changes to be competitive, but others say there are still plenty of doubts about GM's future.
NEW YORK (CNNMoney.com) -- By the time General Motors filed for bankruptcy protection Monday, few in the auto industry doubted that's where the troubled automaker belonged. Whether GM's plan for a quick trip through bankruptcy will be enough to turn around the company is still up for debate.
GM (GMGMQ) will use the bankruptcy process to eliminate $27 billion in debt held by bondholders. Instead, those bondholders will get stock in a reorganized company, as will a union-controlled trust fund that will take stock rather than the $20 billion in cash it had been owed to pay future retiree health care costs. Those 650,000 retirees will have their coverage reduced.
GM will also use bankruptcy to close more than a dozen factories, drop four of its U.S. brands and shut down up to 40% of its network of 6,000 dealerships.
These are hardly the first set of steep cuts at GM, which has already shed about half of its U.S. work force so far this decade. But experts think more work may need to be done to get GM back on track after decades of market share declines and years of financial losses.
0:00 /02:48GM CEO: We will get through this
"The changes we've seen up to this point have been evolutionary. This will be far more revolutionary," said Tom Libby, president of the Society of Automotive Analysts. "Are they where they need to be on dealers, on brands? No. But they made a major step."
Libby said GM's labor costs are now essentially equal to those of non-union plants operated by its Asian rivals. That's never been the case until now.
David Cole, chairman of the Center for Automotive Research, said GM should now be able to break even with industrywide U.S. sales of about 10 million, just a bit better than current sales levels.
"These sales are now down to Depression volumes," he said. "With break even down at that level, they'll become very profitable, very soon."
Still, some serious challenges remain that can keep GM from becoming profitable in a timely fashion.
The company will continue to pay its active hourly workers the same wages and benefits as guaranteed in the latest UAW contract.
GM will also hold onto two large underfunded pension funds, meaning it likely will be obligated to make additional contributions to those funds in the future.
In addition, GM will be hanging on to many of its less successful dealers until late next year. Even many of the plants slated for closure won't shut down until the end of 2010.
Skeptics say GM needed to make deeper cuts
Many bankruptcy and turnaround efforts argue the automaker should have taken a more aggressive cost-cutting stance in bankruptcy. GM could have asked the court to void the labor contract in order to cut the pay and benefits of hourly workers and slash its network of dealerships immediately.
"It looks more like business as usual than real cost cutting," said Richard Tilton, an analyst with credit research firm Covenant Review.
Tilton said GM should be able to emerge from bankruptcy quickly, as is planned. But he said it will still find itself in a difficult competitive position in a very weak market for auto sales overall, neither of which point to long-term success.
He's also worried that, despite vows from the Obama administration and GM officials to the contrary, more federal help will be required to get GM through this current downturn.
"Their real problem is not how deep their pockets are or the government's pockets. It's the American public's pockets. No one is buying cars right now."
May auto sales were better than expected for GM and the industry overall, although sales were still well below year-ago levels.
Jeffrey Manning, a managing director at investment banking firm Trenwith Securities, which specializes in bankruptcy and restructuring, said he's worried about both GM and Chrysler agreeing to keep their underfunded pension plans in place in order to get the United Auto Workers union to agree to the bankruptcy plan. Many companies use bankruptcy to get out from pension obligations.
GM's pension plans face a deficit of between $12 billion and $13 billion, he estimates.
"You've left these anchors on both businesses," he said. Pushing off financial problems further down the road "is how they got into trouble in the first place" he said.
Troy Clarke, president of GM's North American operations, said the company didn't have the option to push for every possible cost reduction because it needed to have a quick bankruptcy process that had the support of the union and other stakeholders in the company.
"The need for speed drove the thought process, not just how far you can go," he told a group of reporters in a conference call Monday.
Many experts also contended that the Treasury Department would not have been willing to fund a war with the union, workers and retirees. And with the current credit crunch drying up funding typically used by bankrupt companies, the government was the only source for the $50 billion that GM needed to fund its reorganization.
Will GM start making cars people want?
Beyond the difficulty of cutting costs, the biggest problem according to many experts is that GM's long-term decline in market share may be irreversible.
"The fundamental question is whether the demand for their product is going to change as part of this process," said Manning. "I don't think it will."
Even CEO Fritz Henderson conceded Monday that no automaker has achieved a turnaround in its fortunes without improving demand for its cars and trucks. He insisted that GM's vehicle pipeline is strong and will get stronger as the company puts its financial problems behind it.
But others expressed doubts about GM's competitive position, especially with the federal government raising fuel economy standards. GM lags behind its Asian competitors in the production of fuel-efficient vehicles.
"There's too much competition and I don't know if they're ready for this brave new world of 35 mpg," said Stephen Spivey, senior auto analyst for business consultant Frost & Sullivan "Toyota and Honda are already."
But Spivey doesn't have a lot of suggestions for what GM could have done differently in its bankruptcy filing.
"All the steps they took needed to be taken a while back," he said. "There were no good options for them to take today." To top of page
yup ...
i would also like to voice my support for a high-speed train network ... i guarantee you a network in the eastern seaboard connecting boston - new york - philly - dc would do wonders ... i know the airlines aren't gonna like it but this is what true competition really is ... let all the options compete in a fair playing field and the most efficiently and sustainable option will win out ...
GM could have been saved if the contracts were rewritten. although based on poor mgmt decisions, even that may not have helped, but it would have bought GM time to recover from its lack of innovation. those gas guzzlers are exactly what the American public was demanding. its not GMs fault for making them...where they failed was to have a back up plan if (and when) gas went to $4. they did not anticipate that and neither did the America consumer.
What good are contracts... if they can be re-written?
Let's say you work for a big coprporation. You work there for 30 years or so, loyal, hard working employee... retire to a fixed income. Then, 6 years into your retirement, the contract in 're-written' and you lose 80% of your medical benefits. You didn't plan for this because it was unforeseen. Your retirement was based upon this coverage. You're screwed because you can't afford to pay for the coverage on your pension.
And trust me... i work in a Union Shop. I am a Free Enterprise Employee who benefits from Union Negotiations regarding holidays and accrued Vacation time. I do not get the same retirement benefits the previous generations did. The company has slashed my benefits. I understand... it is part of survival in a competative market. But, they have also slashed retiree benefits, mostly due to the ungodly cost of health care.
Rewriting contracts would have been a band-aid applied to a gushing slashed carortid artery. GM was headed down this path for long... LONG time.
Hail, Hail!!!
[/quote]
what good are contracts if the company fails partly due their uncompetitive nature? sure it was just a band-aid. but instead of using a band-aid, they choose suicide.
...
I agree. But, it is panning out where GM Management is trying to pin all of the blame on the Unions. Not the case. Sure, Unions played a part, but they are not the reason why they where they are today. Decisions are made in the non-union corporate offices, not down on the shop floor.
Toyota makes big SUVs and Tundras... but, they also offer Prius' and Camrys. GM and Chrysler decided to offer Hummers, Suburbans and Durangos and crappy little cars. People didn't buy their crappy little cars, so instead of trying to beef up their small cars lines... they stuck with marketing and selling the gas guzzlers. Like nothing was learned from the Oil Crisis on the 1970s.
If I were to lay blame.. it would be 40% on Unions... 60% on Management. And the Union folks are going to be the ones to feel the most pain. Management salaries and bonuses will allow them to be better off. They will probably have to sell that condo at Aspen and the beach house in Maui... which they perceive as 'sacrifice'.
Hail, Hail!!!
its not a list. its you and jlew. i was expecting some kind of link to a mainstream source suggesting labor costs ruined GM. from what i've been reading about the bankruptcy, (aside from a few opinions on this board) labor costs weren't responsible for failing to put out an electric alternative to Japan. Labor costs weren't responsible for marketing the giant SUV's to death, trying to force something on us that we didn't want. Labor didn't ship tens of thousands of jobs overseas, (management did), ensuring no one could afford the product. and so on. most of what brought down GM was attributed to management.
labor built GM, they sure as hell didn't bring it down.
I agree with 40/60. maybe even more towards the mgmt side overall. in the end, bankruptcy will be the best thing for this company.
try to grasp this concept...Labor costs were a FACTOR in the demise of GM. one of several factors. get it? please say yes and maybe you can start to understand why.
GM could no longer afford to pay its obligations to the UAW. and since the UAW was not willing to make the necessary cuts, GM was forced into bankruptcy to void the contracts
the problem ultimately is that the model is based on people continuing to buy new cars every 4 or 5 years ... a model that extends beyond automobiles ... many retailers of all sorts are suffering - they don't have union workers either ... it is only because america has always funded the car in every way is it being bailed out now ...
Along with that model disappearing, also gone is the idea that a car consumer is a "GM Guy" or a "Ford Guy" where a young guy starting out will start out buying a Chevy and work his way up with the goal of eventually buying a Buick or a Cadillac. That kind of brand loyalty is totally gone with current generations (who will buy something that they like no matter who makes it, so you don't have those guaranteed sales just because of the brand name on the car. I bought a new car a few years ago and test drove a bunch of different manufacturers before I decided I wanted a Honda Fit. Next time I buy a car I will do the same thing, I won’t automatically stick with Honda just because my current car was a Honda.
they were selling us gas hogs and BIG trucks, right before gas prices got out of hand (no accident). every other car commercial was about some new giant truck or suv they were trying to shove at us.
but something rare happened, in this case, market principles actually crept into play, the market figured itself out. people slowly realized they didn't want the big giant trucks and gas guzzlers,, and started buying more fuel efficient cars, they couldn't afford the big fuckers anymore.
GM didn't care, they did what they always did, they spent more money on marketing. rather than offer a product worth buying they tried shape our opinions about their shitty ones already on the lot.
in this case the market is figuring itself out,which I think is rare in todays' capitalism.
you're point is labor has to be paid?
that's not a concept there buddy, that's the obvious part of running a business.
I meant high labor costs. thought you might have been able to get that part. obviously not :roll:
I think we just stopped buying cars...recession. Demand faded. This article is from a few months back.
http://www.usatoday.com/money/autos/2009-03-05-used-hybrids_N.htm