Is GM finished?

[balrog666]

[snip]

Nah. Companies shift from DB to DC because investment risk, inflation risk and longevity risk are all transferred from the company to the employee. It is not an altruistic act. And seen that way, it is more a move from collectivism to individualism than the other way around (just without the choice on the part of the individual).

Oh, yes, it benefits the company in many ways. But at the same time the employee sheds the risk of the company playing games with pension assets or of teh company going broke.

Apart from closing DB schemes, employers (outside juristictions like Argentina ) do not have the ability to renege on former promised benefits. They can merely stop indemnifying pension benefits which are yet to be earned. I don't know how early on GM did this, or if it has done it. Once unions get wind of this, they tend to overwhelmingly push for preservation of DB over DC, and it's pretty obvious why. I have a DB pension from a previous job. Pretty small, but I have spurned repeated offers from the company I used to work for to trade it in for a transfer value that will (from here on) be all at my risk. I have plenty enough market risk; my previous employer is welcome to continue to wear it

In the US, a company can shed DB pension liabilities to the US PBGC via bankruptcy. Employees collecting will get something, just not very much.

If you were here, I'd suggest you take the money and run while you still can.

 

[Furcifer]

Blaming customers for buying what they want is rather silly. Blaming GM for selling it to them is even worse.

And it's funny how GM management has missed the last 50 years of automobile testing and reliability tracking that has documented their substandard engineering and poor manufacturing processes.

And, after all this posting, I have yet to see you lay any blame at the feet of the reviled UAW. Why is that?

.

So much to say and a very poor "borrowed" internet connection right now so bare with me.

I beg to differ, JD Power and Ass. regarded Buick as one of the best in it's class and yet the rival Japanese sold better. Actual tracked data shows the Big 3 have closed the gap over the last 10 years. The fact of the matter is past poor experience with any brand or model "lingers" in customers minds. Statistically you're more likely to know someone who had a Big 3 product with problems in the past, so you're more likely to hear about it over and over again. People speak more freely or their "bad" US car and are less likely to speak the same way of their import. I think you also have to consider the sour grapes effect, people jealous of the wages and benefits automotive workers recieve. They are also more likely to bad mouth the Big 3. Many people believe that auto workers "clock in" do nothing, get paid well and go home. These stories linger in the minds of people more so than the stories of injuries recieved from repetative stress. What I'm saying is many of the stories you hear are prejudiced. You have to take this into account.

You may have missed my previous post where I noted I'm not a fan of the UAW, or CAW. They have crippled the automotive industry by protecting the worst of the worst. The hundreds of thousands of dollars I lost on my line due to down time could be attributed to less than 5% of my workers. The Union was usually only their to represent them and their woes. "Union brother" is such and appropriate saying, as much like family, their impossible to get rid of. Their was a time, long ago, when their was a need for the Union. Current worker rights gauranteed by legislation are more than sufficient these days.

 

[Furcifer]

I'm finding it strange that on a skeptical web site a lot of people stating things as fact based on their limited pool to sample from. Yes, the big three make lemons, but so do the others. Personal experience aside, I think the data gathered over the last 10 years may be eye opening. I'm confident you can find a comparably priced NA model to compete with any Foreign model, based on customer satisfaction, operating costs, fit/finish, recalls etc. I know JD power tracks this data, I'm not sure who else? I think it would be more interesting to provide supported data than "I had a crappy Chevette, wanh, wanh, wanh" Sure I know people with crappy Cavaliers that are more than willing to bad mouth them, but I alo know of people with "1997 Camry, never had a problem with it except for the two engine rebuilds, valves were shot" or "A great 1994 VW Golf that shuts off when it rains and you turn on the wipe shield wipers, brought it back to VW and they refused to fix it

 

[Furcifer]

doh

 

[Furcifer]

And as I understand it they have so many retirees because the only way the UAW would agree to workforce cuts was for them to get early retirement.

Short-sighted and stupid. Screw 'em.

? I was told that it's because they've been in the business for that much longer. It only stands to reason if I have a plant that was opened up 45 years ago and you have a plant that was opened 10, I'm going to have to carry more retirees.

I think you're speaking to more recent events.

 

[Furcifer]

One last thing to stir up the pot. If you consider the taxi business, a business that relies on their cars to be reliable and cheap to maintain you will find imports to be suspiciously absent. I had chance to drive cab for a year, it was a 1996? Chevy Caprice Classic, ZR1 engine converted to propane. 800K and never a problem. Never needed oil and it was always clean (due to propane) Rotors were $15, calipers $19, a set of pads $22 and it only took the time to take the tire off to change any one of them. Now trunk space is a consideration in a cab, so the imports are at a disadvantage there I'll admit. But, the fact of the matter is if the imports offered any advantage they would have been used extensively. I will admit there were a few imports in the fleet, several Prius and a single Avalon. The Prius guys raked up on mileage savings, but dreaded the idea of replacing a tranny (at the time the tranny was $5000 if it blew, I'm not sure what it is now) On a side note, a Vancouver Prius was bought back by Toyota with 750K on it in 2002? so Toyota could take it apart. Not bad. The Avalon did pretty well and required a few repairs that were relatively pricey, from what I remember it was a wash, the price of the repairs negated the gas mileage savings. So, what then? I mean these guys monitor their expenses to the dollar on a daily basis and drive 300 KM per day. Why the disproportionate amount of American muscle to import?

 

[Just thinking]

... It seemed every few months I had to make repairs on the damned thing, and wondered if it would be best just to get rid of it. And then a miracle happened - a truck turning into my alley had snagged it making the turn, mashing up the driver's side real good. The insurance company gave me a check for $1900! w00t! I couldn't have sold the thing for more than a few hundred.

And they say there is no God.

Anyway, this reminds me of my dad who was a lifelong Chrysler patron all his adult life. Until, that is, I got him to drive a Toyota Cressida. His cousin, a Lincoln fan, said it rode better than his car. This was in the early '80's. When my brother needed a car he gave him the Cressida and bought ... another Cressida. Well, he's no longer with us, but before he died he saw to it that my mom (still driving) got a new Honda Accord. Believe me when I tell you this was someone who swore he'd never own Japanese junk.

 

[ZirconBlue]

One last thing to stir up the pot. If you consider the taxi business, a business that relies on their cars to be reliable and cheap to maintain you will find imports to be suspiciously absent. I had chance to drive cab for a year, it was a 1996? Chevy Caprice Classic, ZR1 engine converted to propane. 800K and never a problem. Never needed oil and it was always clean (due to propane) Rotors were $15, calipers $19, a set of pads $22 and it only took the time to take the tire off to change any one of them. Now trunk space is a consideration in a cab, so the imports are at a disadvantage there I'll admit. But, the fact of the matter is if the imports offered any advantage they would have been used extensively. I will admit there were a few imports in the fleet, several Prius and a single Avalon. The Prius guys raked up on mileage savings, but dreaded the idea of replacing a tranny (at the time the tranny was $5000 if it blew, I'm not sure what it is now) On a side note, a Vancouver Prius was bought back by Toyota with 750K on it in 2002? so Toyota could take it apart. Not bad. The Avalon did pretty well and required a few repairs that were relatively pricey, from what I remember it was a wash, the price of the repairs negated the gas mileage savings. So, what then? I mean these guys monitor their expenses to the dollar on a daily basis and drive 300 KM per day. Why the disproportionate amount of American muscle to import?

Um, because, as a rule, American companies make bigger cars?

 

[balrog666]

So much to say and a very poor "borrowed" internet connection right now so bare with me.

No problem. I'm just dumping on you because you seem to take the insane UAW line. See the UAW press release this morning for a dose of reality from the Bizarro-World the UAW leadership inhabits (but of course, they won't ever be out of a job...).

I beg to differ, JD Power and Ass. regarded Buick as one of the best in it's class and yet the rival Japanese sold better. Actual tracked data shows the Big 3 have closed the gap over the last 10 years.

One model, in one product line, in one year establishes nothing. Which GM should have learned properly 75 years ago. Or at least remembered sometime in the last 50 years.

The fact of the matter is past poor experience with any brand or model "lingers" in customers minds. Statistically you're more likely to know someone who had a Big 3 product with problems in the past, so you're more likely to hear about it over and over again. People speak more freely or their "bad" US car and are less likely to speak the same way of their import.

People have been expressing this for decades. Not years, decades. Ditto with automotive reviewers.

And so only in the last ten years has GM tried to do a good job? AND failed ... what does that tell you?

I think you also have to consider the sour grapes effect, people jealous of the wages and benefits automotive workers recieve. They are also more likely to bad mouth the Big 3.

Jealous? What loser yearns to spend 30 years on an assembly line unless they get paid well for such a mind-numbing waste of time? The only comparably bad job I can think of is being a prison guard in California (or so I've heard ).

Many people believe that auto workers "clock in" do nothing, get paid well and go home. These stories linger in the minds of people more so than the stories of injuries recieved from repetative stress. What I'm saying is many of the stories you hear are prejudiced. You have to take this into account.

Gee, are you the only one here who has never heard of the UAW-contractual "Jobs Bank" workers who clock in and play solitaire for 8 hours a day? Remember when some volunteered to mow the lawn at GM Headquarters just for something to do?

And, yes, paying UAW workers big bucks to do jobs a chimp could perform well enough with a little training does seem rather extravagant to people who pick lettuce or shovel manure or dig ditches or work in the average 7-11. And especially to people who employ those other people.

And stories? Oh, gosh, I guess all my years in Michigan associating with auto- and steel-workers union members counts for nothing. Or should I say ex-union members.

You may have missed my previous post where I noted I'm not a fan of the UAW, or CAW. They have crippled the automotive industry by protecting the worst of the worst. The hundreds of thousands of dollars I lost on my line due to down time could be attributed to less than 5% of my workers. The Union was usually only their to represent them and their woes. "Union brother" is such and appropriate saying, as much like family, their impossible to get rid of. Their was a time, long ago, when their was a need for the Union. Current worker rights gauranteed by legislation are more than sufficient these days.

A good description. So fire the UAW and keep only the productive workers.

In my businesses I would shut the doors if I couldn't hire and fire whomever I wanted. I expect the managers running things at important companies to do no less.


.

 

[WildCat]

? I was told that it's because they've been in the business for that much longer. It only stands to reason if I have a plant that was opened up 45 years ago and you have a plant that was opened 10, I'm going to have to carry more retirees.

I think you're speaking to more recent events.

Wouldn't make a damn bit of difference how many retirees they had if they hadn't caved in to ridiculously expensive retirement benefits. And they do have a lot because of early retirement:

General Motors yesterday reported a $38.7 billion loss for 2007, its largest ever, and said it would offer its unionized workers a fresh round of buyouts meant to remove more high-cost veteran employees from its payroll.
GM, essentially tied with Toyota after nearly 80 years as the world's top automaker, coaxed about 30,000 workers into leaving the company in 2006 through a combination of early retirement incentives and buyouts.

Company officials did not disclose how many employees they hope will accept the company's latest offer and either quit or retire early. GM has about 74,000 unionized employees eligible for the program.

United Auto Workers President Ron Gettelfinger said, however, he thought the number would be fewer than 20,000. The company's latest buyout offer, he said, was expected and in keeping with a landmark labor contract that the union and company struck last year.

Source: http://www.washingtonpost.com/wp-dyn/content/article/2008/02/12/AR2008021200656.html
When you have nearly 50,000 workers coaxed into early retirement out of a workforce of 100,000 that tends to boost your retirees quite a bit, no? Now, not all of them took early retirement, some accepted cash payments of $70,000 to $140,000 but that's a big chunk of change also.

And don't tell me about how GM is really better now than it was 20 years ago, or how it's just anecdotal evidence. When the paint was peeling off my mother's car I noticed the same damn thing happening to other late-model GM cars all over the place. It wasn't a fluke, it was a systemic manufacturing failure affecting probably tens of thousands of vehicles at least. And GM basically said screw you, we don't care. How many of those people who bought those cars do you think were willing to give GM another chance? And why the hell should they?

 

[Furcifer]

No problem. I'm just dumping on you because you seem to take the insane UAW line. See the UAW press release this morning for a dose of reality from the Bizarro-World the UAW leadership inhabits (but of course, they won't ever be out of a job...).




One model, in one product line, in one year establishes nothing. Which GM should have learned properly 75 years ago. Or at least remembered sometime in the last 50 years.




People have been expressing this for decades. Not years, decades. Ditto with automotive reviewers.

And so only in the last ten years has GM tried to do a good job? AND failed ... what does that tell you?




Jealous? What loser yearns to spend 30 years on an assembly line unless they get paid well for such a mind-numbing waste of time? The only comparably bad job I can think of is being a prison guard in California (or so I've heard ).




Gee, are you the only one here who has never heard of the UAW-contractual "Jobs Bank" workers who clock in and play solitaire for 8 hours a day? Remember when some volunteered to mow the lawn at GM Headquarters just for something to do?

And, yes, paying UAW workers big bucks to do jobs a chimp could perform well enough with a little training does seem rather extravagant to people who pick lettuce or shovel manure or dig ditches or work in the average 7-11. And especially to people who employ those other people.

And stories? Oh, gosh, I guess all my years in Michigan associating with auto- and steel-workers union members counts for nothing. Or should I say ex-union members.




A good description. So fire the UAW and keep only the productive workers.

In my businesses I would shut the doors if I couldn't hire and fire whomever I wanted. I expect the managers running things at important companies to do no less.


.

Oh God no, please don't say that. I shake my head every time I see a new headline from the UAW. No consessions? They continue to talk like they have a choice in the matter. I'm confused as always by their "stance" in the situation. Make no mistake, I think the UAW has a lot to account for the current situation, just as much as the companies. They did their best to try and share the wealth when there was profit to be made, they need to do the same now that the industry is in the red.

As far a jealousy, yes there is some. There are a lot of people that believe the autoworkers don't earn their money. If we were to break down earnings to work done, I don't believe autoworkers rank any higher or lower than any other profession. I don't want to get into a debate over who gets paid too little and who gets paid too much or what they do. I'm saying their is a general sentiment towards auto workers that gets generated by unfounded stories of clocking in an going home only to get paid for the entire day. I see this in much the same way as people who gamble and win are only too happy to report their winnings, never their loses. As I recall, my favourite day on the line was when it went down for 6 hours and I got paid for 8. My other 480 days on the line saw me doing a 45 second cycle time job on a 48 second cycle time line. This may make no sense to most readers but the few auto workers reading this will know all too well.

 

[WildCat]

BTW, just so you know it's not just anecdotal evidence that GM had a severe problem with peeling paint from that time period: http://www.autosafety.org/gm-paint-release

and: http://www.autosafety.org/chevrolet-beretta

Took them 6 years to admit there was a problem! By that time my mother, and I'm sure many other GM customers, had had enough of GM and weren't going back no matter what. And notice how they tried to place blame on the owners for the problem with their cute little "owner care and maintenance also are factors in the appearance and durability of exterior finishes".

Screw 'em.

 

[Furcifer]

Wouldn't make a damn bit of difference how many retirees they had if they hadn't caved in to ridiculously expensive retirement benefits. And they do have a lot because of early retirement:

Source: http://www.washingtonpost.com/wp-dyn/content/article/2008/02/12/AR2008021200656.html
When you have nearly 50,000 workers coaxed into early retirement out of a workforce of 100,000 that tends to boost your retirees quite a bit, no? Now, not all of them took early retirement, some accepted cash payments of $70,000 to $140,000 but that's a big chunk of change also.

And don't tell me about how GM is really better now than it was 20 years ago, or how it's just anecdotal evidence. When the paint was peeling off my mother's car I noticed the same damn thing happening to other late-model GM cars all over the place. It wasn't a fluke, it was a systemic manufacturing failure affecting probably tens of thousands of vehicles at least. And GM basically said screw you, we don't care. How many of those people who bought those cars do you think were willing to give GM another chance? And why the hell should they?

I'm not going to make friends by saying this, but if I recall correctly the Baby Boomers are responsible for that. They all got old and lazy at the same time and refused to accept mandatory retirement. Keep the work force fresh and competitive, mandatory retirement at 50. Now they want to hang around and do nothing while making good money. There are tons of younger, eager prospective employees waiting to be hired and go on lower seniority jobs, it's just that legislation prevents the company from letting the older ones go.


As far as th paint goes, I understand what you're saying. Even though you haven't provided evidence of your claim, I know this has happened in other cases. The Dodge van went through several years where the paint and clear coat bubbled and oxidized prematurely. Subsequent investigation revealed that the workers sweat and deodorant was responsible. Apparently the aluminum in the deodorant mixed with the paint and caused the condition. My point is the lesson was learned and corrected at the NA manufacturers expense. It's also my experience that the imports are less likely to do or admit recalls while benefiting at the Big 3's expense.

 

[Furcifer]

BTW, just so you know it's not just anecdotal evidence that GM had a severe problem with peeling paint from that time period: http://www.autosafety.org/gm-paint-release

and: http://www.autosafety.org/chevrolet-beretta

Took them 6 years to admit there was a problem! By that time my mother, and I'm sure many other GM customers, had had enough of GM and weren't going back no matter what. And notice how they tried to place blame on the owners for the problem with their cute little "owner care and maintenance also are factors in the appearance and durability of exterior finishes".

Screw 'em.

Lol, I retract my earlier statement about not providing evidence. Sorry WC.

 

[Roadtoad]

Latest word: Deal may not happen. Bush wants congress to use the $25 Billion they already appropriated for low emission vehicles to save the Big Three.

Good luck with that.

 

[FreshHat]

The Dodge van went through several years where the paint and clear coat bubbled and oxidized prematurely. Subsequent investigation revealed that the workers sweat and deodorant was responsible. Apparently the aluminum in the deodorant mixed with the paint and caused the condition.

I guess that's why those imports made by them smelly foreigners look so darned good!

 

[balrog666]

I'm not going to make friends by saying this, but if I recall correctly the Baby Boomers are responsible for that. They all got old and lazy at the same time and refused to accept mandatory retirement. Keep the work force fresh and competitive, mandatory retirement at 50. Now they want to hang around and do nothing while making good money. There are tons of younger, eager prospective employees waiting to be hired and go on lower seniority jobs, it's just that legislation prevents the company from letting the older ones go.

[snip]

Whoa, whoa, there! Mandatory retirement at 50? Very,very few professions qualify for that and auto production certainly isn't one of them. And even those who retire don't necessarily qualify for immediate payment of retirement benefits and medical coverage so they have to get another job anyway. And they certainly don't qualify for any Social Security/Medicare coverage until at least age 62 or more likely, age 67.

And of course the hordes of new retirees at 50 would bankrupt any current retirement plan.

So why would anyone choose to give up their big, fat paychecks, medical benefits, maximum retirement benefits in the first place after sinking 20 or 30 years into their job?

As for the firing older workers and hiring of younger, cheaper replacements, that is illegal under the EEOC age-discrimination rules. The real problem there is that the companies are overpaying older experienced (UAW) workers to do a job where years of experience add little to actual performance.

.

 

[balrog666]

George Will's take on the GM mess

"Nothing," said a General Motors spokesman last week, "has changed relative to the GM board's support for the GM management team during this historically difficult economic period for the U.S. auto industry." Nothing? Not even the evaporation of almost all shareholder value?

GM's statement comes as the mendicant company is threatening to collapse and make a mess unless Washington, which has already voted $25 billion for GM, Ford and Chrysler, provides up to $50 billion more -- the last subsidy until the next one. The statement uses the 11 words after "team" to suggest that the company's parlous condition has been caused by events since mid-September. That is as ludicrous as the mantra that GM is "too big to fail." It has failed; the question is what to do about that.

The answer? Do nothing that will delay bankrupt companies from filing for bankruptcy protection, so that improvident labor contracts can be unraveled, allowing the companies to try to devise plausible business models.

.

 

[Furcifer]

Whoa, whoa, there! Mandatory retirement at 50? Very,very few professions qualify for that and auto production certainly isn't one of them. And even those who retire don't necessarily qualify for immediate payment of retirement benefits and medical coverage so they have to get another job anyway. And they certainly don't qualify for any Social Security/Medicare coverage until at least age 62 or more likely, age 67.

And of course the hordes of new retirees at 50 would bankrupt any current retirement plan.

So why would anyone choose to give up their big, fat paychecks, medical benefits, maximum retirement benefits in the first place after sinking 20 or 30 years into their job?

As for the firing older workers and hiring of younger, cheaper replacements, that is illegal under the EEOC age-discrimination rules. The real problem there is that the companies are overpaying older experienced (UAW) workers to do a job where years of experience add little to actual performance.

.

In order to remain competitive in the global economy it's something we need to consider. The fact of the matter is most older employees cannot continue to operate at the cycle times required to keep the NA market competitive. The Union is fighting to keep high seniority jobs for older employees, which I understand, but at what cost? If we have to compete against a Chinese or Taiwanese work force that is willing to forgo not only wages, but safety, to produce a product, in the Free Market, what can be done? I'm not willing to forgo safety, so my only recourse is to ensure faster cycles times at all of my work stations. This allows me to reduce the number of workers in any given plant and keep productions times competitive. I'm not saying that age would be the determining factor, I'm saying ability would be a determining factor. The next generation of autoworkers needs to be athletes. They need to be in constant training to keep competitive and keep their position. If they fail to do so, they should be eliminated. The Union has fought tooth and nail for too long to keep these high seniority jobs for older lazy workers. The problem is two fold, not only does it hinder production, it creates resentment in productive workers as they realize they are responsible for picking up the slack. Line workers have an uncanny ability to remain constantly aware of exactly how much work any other employees is doing.

 

[Furcifer]

George Will's take on the GM mess

.

Sure India and China may represent huge markets that could save the Big 3, but will they remain open to NA manufacturers? My guess is they will retain their own "oligopoly" and keep the NA manufacturers out. No use making the same mistakes we already made in this industry...