Is GM finished?

[Just thinking]

Thank you.

You're welcome.

I agree with some of this. However, I don't generally regard anything as a punishment or a reward per se unless it is administered in direct response to some behaviour. If gasoline cost $9 at the pump and diesel cost $3, I would most certainly prefer to drive a diesel, and the question of whether doing so were a punishment or a reward would never even enter my mind. Likewise with pretty much any purchasing decision I make. Are you suggesting that if that were the case, lot's of people would continue to buy gasoline vehicles just because they don't like being "punished"?

They may very well avoid the punishment, but that does not make going to diesel a reward. They may keep the gasoline vehicle for specific tasks and use the diesel when viable --- but only to save money. This is not suppose to be the goal. The goal is to make the diesel vehicle the vehicle of choice on its own merit. Remember, you want to improve the situation for people, not make them choose between the lesser of two evils --- one being a vehicle that doesn't perform as they would like vs. one that's artificially become too expensive to use every day.

 

[Just thinking]

They weren't offering them because no one was buying them.

Is it too much to ask that automotive companies try and produce vehicles that they can make better than the competition? .... and not try and manufacture every facet of vehicle type under the sun? (Of course, I'm speaking of vehicles that are in demand.)

 

[joobz]

They weren't offering them because no one was buying them.

No one was buying them because they had put all their design and marketing efforts into SUVs. Not because there is a lack of market.

Shrinking thier vehicle portfolio to simply selling more varieties of SUVs was simply stupid.

There is the Chevy Uplander, which you can argue is or isn't a minivan.

Um. nope. It's only produced for commercial fleets and not available to the general public.

I know this because I wanted to buy a GM van and couldn't.

 

[Prometheus]

You're welcome.



They may very well avoid the punishment, but that does not make going to diesel a reward. They may keep the gasoline vehicle for specific tasks and use the diesel when viable --- but only to save money. This is not suppose to be the goal. The goal is to make the diesel vehicle the vehicle of choice on its own merit. Remember, you want to improve the situation for people, not make them choose between the lesser of two evils --- one being a vehicle that doesn't perform as they would like vs. one that's artificially become too expensive to use every day.

Put that way, I agree with you completely.

Is it too much to ask that automotive companies try and produce vehicles that they can make better than the competition? .... and not try and manufacture every facet of vehicle type under the sun? (Of course, I'm speaking of vehicles that are in demand.)

This is particularly true for GM, I think, in that they should differentiate their brands a lot more than they do, instead of just putting different trim packages on the same platforms all the time.

 

[a_unique_person]

So I take it, the question's settled now. GM is finished. Even with a bail out, the fear of not having a company to honour it's warranty is going to mean sales can't ever recover.

 

[FarmallMTA]

This is particularly true for GM, I think, in that they should differentiate their brands a lot more than they do, instead of just putting different trim packages on the same platforms all the time.

This has been reflected upon for a long time now.

Badge engineering, the term for a single basic car with minor gee-gaws to con the buyers into thinking the brands were distinct, became all the rage at GM in the late 70's, although the drift in that direction had accelerated from back in the '60's as the bean counters and marketing/advertising MBA's ascended into control of the corporation.

It's interesting to note how different GM's brands were up into the early '50's. in 1950, GM offered Cadillac (its own distinct OHV V8 with open driveshaft drivetrain), Buick (Flathead I8 with Torque tube drivetrain), Olds (its own distinct OHV V8 with open driveshaft drivetrain), Pontiac (Flathead I8, I6 with open driveshaft drivetrain), Chevrolet (OHV I6 with torque tube drivetrain), and GMC (its own distinct OHV I6 with torque tube drivetrain)

While it's true that some designs may be more "efficient" than others, each design had it's advantages and adherents. ALL GM cars were equally well designed, but each brand had different engineering philosophy. This was nurtured and promoted by far-seeing upper management who understood the hazard of saying one thing (BUICK: the best car ever!) and delivering another thing (BUICK: A tarted-up Chevrolet you're going to pay a lot more money to a Chevrolet dealer for!) GM substituted cheap plastic junk and advertising/marketing flim-flam for honest differentiation and quality. And everybody found out about it and rejected the company's products in droves.

Yes, the brands need to either reflect completely different engineering philosophies again, or they need to eliminate "Brand" as yet another GM point of untruth.

But it's too late. The trust the public had in GM is long gone and, like that for an unfaithful spouse, it will never return.

 

[davefoc]

I thought I had linked to this story earlier, but perhaps I didn't save the post:

http://news.yahoo.com/s/ap/20081218/ap_on_bi_ge/meltdown_autos

This looks like important, encouraging news to me. The Bush administration, at least, seems to have realized that this is not a problem that can be solved by throwing money at it.

The unions and management say that it won't work. If there was ever self serving BS in this world that is it. The unions and management envision a world where they can keep plowing through capital without ever having to make a profit. Nice. GM and Chrysler are shutting down production at least for a month and yet both of these organizations are required to keep the Union work force fully paid during this time. I wonder if Mr. Waggoner is going to reduce his salary during this period. I doubt it. I just don't see anybody running GM that has an interest beyond securing what they can out of the carcass before the government provides another infusion of cash to satisfy their greed.

I don't see how an organization where procedures and attitudes like this have become so deeply ingrained can be saved. All over the US businesses are scrambling to survive in this recession and the union enforces a contract which guarantees the bankruptcy of GM. Nothing wrong with that I suppose if the union was prepared to assume control of what it already owns, GM. But that isn't what it proposes. It proposes to go forward with business as usual except now it proposes to use the US treasury as its source of funds instead of the GM shareholders.

This is just a very sick situation with no happy resolution I am afraid. The best that can be hoped for is that the people representing the US taxpayer aren't on the take from the various interests fighting to keep alive their gravy train with other people's money and that a genuine concerted effort is made to create a viable GM out of what is left of value in the organization.

 

[davefoc]

duplicate post removed

 

[Furcifer]

I thought I had linked to this story earlier, but perhaps I didn't save the post:

http://news.yahoo.com/s/ap/20081218/ap_on_bi_ge/meltdown_autos

This looks like important, encouraging news to me. The Bush administration, at least, seems to have realized that this is not a problem that can be solved by throwing money at it.

The unions and management say that it won't work. If there was ever self serving BS in this world that is it. The unions and management envision a world where they can keep plowing through capital without ever having to make a profit. Nice. GM and Chrysler are shutting down production at least for a month and yet both of these organizations are required to keep the Union work force fully paid during this time. I wonder if Mr. Waggoner is going to reduce his salary during this period. I doubt it. I just don't see anybody running GM that has an interest beyond securing what they can out of the carcass before the government provides another infusion of cash to satisfy their greed.

I don't see how an organization where procedures and attitudes like this have become so deeply ingrained can be saved. All over the US businesses are scrambling to survive in this recession and the union enforces a contract which guarantees the bankruptcy of GM. Nothing wrong with that I suppose if the union was prepared to assume control of what it already owns, GM. But that isn't what it proposes. It proposes to go forward with business as usual except now it proposes to use the US treasury as its source of funds instead of the GM shareholders.

This is just a very sick situation with no happy resolution I am afraid. The best that can be hoped for is that the people representing the US taxpayer aren't on the take from the various interests fighting to keep alive their gravy train with other people's money and that a genuine concerted effort is made to create a viable GM out of what is left of value in the organization.

Contract law is contract law. What your suggesting should be done is in violation of the law. While it may be prudent, it's not really possible. You either have a contract or you don't. If you have a contract you follow it. If GM as a company is going to fail then so be it, the workers should reap any and all benefits they can from a sinking ship.

If you think the Union and its members are greedy for trying to make a living wage while all this is happeneing so be it. I just thinks this pales in comparison to things like the Ponzi scheme. To me that's greed.

 

[Roadtoad]

Contract law is contract law. What your suggesting should be done is in violation of the law. While it may be prudent, it's not really possible. You either have a contract or you don't. If you have a contract you follow it. If GM as a company is going to fail then so be it, the workers should reap any and all benefits they can from a sinking ship.

If you think the Union and its members are greedy for trying to make a living wage while all this is happeneing so be it. I just thinks this pales in comparison to things like the Ponzi scheme. To me that's greed.

Nice try, but you fail.

The unions members are being paid to do nothing. In many cases, they sit idle, still collecting a paycheck and depleting GM's rapidly dwindling reserves. Yes, a Ponzi Scheme is greed, but so is collecting pay for work you aren't doing. And both are wrong.

 

[Furcifer]

Nice try, but you fail.

The unions members are being paid to do nothing. In many cases, they sit idle, still collecting a paycheck and depleting GM's rapidly dwindling reserves. Yes, a Ponzi Scheme is greed, but so is collecting pay for work you aren't doing. And both are wrong.

BS. By the same rationale insurance is greed, as you collect for doing nothing? You have no idea what was given up in the past in order to ensure this payment continues. I know that all of this, including the Job Bank and S.U.B. was factored into the wages they have earned or will earn.

The Job Bank and S.U.B. are an insurance policies negotiated by the Union and paid for by the members. (and to some extent the company itself, but they pay the employees who in turn pay for the privledge)

Quit making it out as something it isn't and try to grasp the concept of insurance. Just try to remember, There is no such thing as a free lunch.

I mean this with all due respect, but come on do you really think that this is some gift the company bestowed on employees? It is a form of insurance, just like any other.

 

[davefoc]

duplicate post, sorry

 

[davefoc]

Contract law is contract law. What your suggesting should be done is in violation of the law. While it may be prudent, it's not really possible. You either have a contract or you don't. If you have a contract you follow it. If GM as a company is going to fail then so be it, the workers should reap any and all benefits they can from a sinking ship.

If you think the Union and its members are greedy for trying to make a living wage while all this is happeneing so be it. I just thinks this pales in comparison to things like the Ponzi scheme. To me that's greed.

Almost complete nonsense.

You're in a boat that's sinking and you have a contract that says you're a passenger and you don't have to help bail. Cool, don't bail and drown like everybody else.

Your post made my point in spades. GM has a sick, dysfunctional relationship with its management and its work force. The connection between profit and employment has become completely disconnected. GM is going down fast and the union says its not going to help bail. That is fine and that appears to be their contractual right, but trying to save a company with that kind of entrenched greed and stupidity looks to be hopeless. That is what bankruptcy is for.

A lot of people thought that the Enron bankruptcy was a black mark on capitalism. I thought it was a shining moment. In the end the measure of whether you can stay in business is whether you can produce something that society wants or not. Enron couldn't and neither can GM when it is dominated by this kind of irrationality.

I think it is more likely than ever that the only solution is bankruptcy for GM and I am less convinced that some sort of orderly chapter 11 bankruptcy is possible. This thing needs to be whacked badly before sense can be made out of what is left.

 

[davefoc]

...

@davefoc One thing that is abundantly clear also, is that the huge changes at GM have totally been missed by everyone. Do you think a 45% reduction in executives since 2000 is a good step to becoming more efficient? How about the closing of so many facilities to get capacity in line with demand? While there is more work to do, that is exactly what GM was striving for when the economic crisis hit.

I meant to respond to this earlier, but I forgot until I was looking this thread over again.

I think you're right and it is true that I, for one, haven't acknowledged this. GM has tried and they are making changes that might have saved them. This is one of the things that makes the possibility of the complete failure of GM even sadder. But it could also probably be said of most failed companies. Near the end they began to do the things that might have saved them if they had more time.

I will be sad if GM goes out of business. I have known of them most of my life and looked forward to seeing what they would do in the future. But thien I'm sad when anybody goes out of business. I was sad about Mervyn's going out of business and I think the only time I was ever in a Mervyn's was when they were closing down and I wanted to see what they had looked like.

In GM's case though the fixes don't seem to be keeping pace with the problems. I just don't see anyway this company can be fixed without the power that a bankruptcy court can bring to bear. 3bodyproblem's posts have made me believe this even a little more than when this thread started.

 

[Furcifer]

Almost complete nonsense.

You're in a boat that's sinking and you have a contract that says you're a passenger and you don't have to help bail. Cool, don't bail and drown like everybody else.

Your post made my point in spades. GM has a sick, dysfunctional relationship with its management and its work force. The connection between profit and employment has become completely disconnected. GM is going down fast and the union says its not going to help bail. That is fine and that appears to be their contractual right, but trying to save a company with that kind of entrenched greed and stupidity looks to be hopeless. That is what bankruptcy is for.

A lot of people thought that the Enron bankruptcy was a black mark on capitalism. I thought it was a shining moment. In the end the measure of whether you can stay in business is whether you can produce something that society wants or not. Enron couldn't and neither can GM when it is dominated by this kind of irrationality.

I think it is more likely than ever that the only solution is bankruptcy for GM and I am less convinced that some sort of orderly chapter 11 bankruptcy is possible. This thing needs to be whacked badly before sense can be made out of what is left.

Nonsense to negotiate an insurance policy into your contract then stick to it? What planet do you live on? To agree to consessions to a point is one thing, to throw out contract law is another.

The US economy isn't doing so well, why don't you send any surplus you have back to the Government and quit whining? Save the deficit, forgoe your pension. The Fed's are running a deficit, so no health care or pension for anyone till that's fixed?

You give to a point where it's in your best interest and then you say, "Screw this, I'm getting what I can, that Stapler is mine

Still it scares me, so much information abounds and still so many without a clue what this industry means to the US and NA economy. Plainly ignorant. Give up an industry you built for faith in the non-existent Free Market? So you gave away $335 Billion to something you know nothing about, big deal. lol, at least the Romans had no clue what lead could do. You all have Google, no excuses for the fall of the American Empire

 

[davefoc]

Nonsense to negotiate an insurance policy into your contract then stick to it? What planet do you live on? To agree to concessions to a point is one thing, to throw out contract law is another.

...

OK, this is the second time you've said something like this. I guess you believe it even if it's nonsense.

There is no law that says that a contract must be enforced when the parties don't want it enforced. So if the unions want to make concessions all they need to do is ask GM to agree to those concessions and they can make them and the sanctity of contract law is retained.

As a practical matter the union has the contract with itself and the bond holders. Management and the shareholders don't have a significant stake left in GM. Management looks to be skimming what it can off the carcass before they're kicked out.

The only reason the union hasn't made any concessions up to now is that the union thinks that with the appropriate political pressure it can get the government to fund what has previously been funded with GM capital. And the truth is they might succeed at that, except that ridiculous work rules and wage rates are far from all of GM's problems and transferring tax payer dollars to the union at this time to fix that problem is likely to only keep GM out of bankruptcy for a very short time if other core problems aren't dealt with.

The problem that the union faces is that the other significant stake holders are not going to cooperate with it in bankruptcy court without major concessions. Bond holders might get 10 cents on the dollar when GM collapses but that's 10 cents more than they'll get if GM continues to be operated in an unsustainable way.

What I find annoying about your views 3bodyproblem is how you propose to give the GM and management a pass at this time when people all over this country are experiencing exactly the same kind of problem and they are having to deal with their situation by making difficult choices, by working harder, by working for less and by scrambling to figure out what works. GM just keeps draining away its resources hoping that the government will make a special case of it and give it money before it needs to deal with reality. I don't have any sympathy for the guy that's in the sinking boat and refuses to bail. And I don't have any sympathy for GM or its unions that propose to take a portion of my money so they don't have to bail.

 

[Toke]

Why do you want the workers to give their pay to GM?
Why not ask the shareholders to pich in?

If GM is really able to survive if it just get a litle extra cash they could save their investment that way. There might even be a name for it, stock expansion or something.

Instead of complaining of greedy workers you could have of misery stockholders.

Stockholders are expected to be better at evaluation a company than workers, and they are not lining up to put more money in. Why should the workers?

 

[WildCat]

Why do you want the workers to give their pay to GM?
Why not ask the shareholders to pich in?

If GM is really able to survive if it just get a litle extra cash they could save their investment that way. There might even be a name for it, stock expansion or something.

Instead of complaining of greedy workers you could have of misery stockholders.

Stockholders are expected to be better at evaluation a company than workers, and they are not lining up to put more money in. Why should the workers?

In case you haven't noticed, the stockholders have already lost nearly the entire value of the stock.

There is no longer any "stock" to hold.

 

[davefoc]

In case you haven't noticed, the stockholders have already lost nearly the entire value of the stock.

There is no longer any "stock" to hold.

That seems right. I suspect that the only reason that GM has any share value left is the hope that the government might throw some money at them. I noticed that the stock took a major dive after Bush said the government might at least hold off its money throwing until after GM had entered bankruptcy. That will significantly reduce what little benefit the stockholders were likely to get from government money throwing.

One solution that I had suggested earlier was to just face up to reality. There is no significant stock holder equity left. The company belongs to the unions, the retired employees with their medical benefits and the bondholders. The government should stop negotiating with people who don't hold a stake in the company and start negotiating with the people that do.

 

[Toke]

In case you haven't noticed, the stockholders have already lost nearly the entire value of the stock.

There is no longer any "stock" to hold.

There is plenty of stock, it just happens to be worthless at the moment.

And that is because those misery stockholders cant look out over their noses and contribute some money to save the company.
As good investers it should be obvius to them that with all the changes GM have made over the last 3 years it is only a question of throwing a bit of good money at it to recoop their investment.

So stop bothering the workers and direct your attention at the stockholders.