Hondax
Nitrous
....yes Father....
General Motors Woes...
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....yes Father....
They have far too high "legacy" costs compared to foriegn car companies...........they did it to themselves from robbing Peter today to pay Paul 2morrow. The bill is now due.......so they need to lay off workers, make more efficient use of their production capacity and modernise with robots to compete. If they want..........i can run the company for them for half what they pay the genious there now
Pig9r
Living Legend
What seems to be killing them is the poor management of the pension and benefits for the retirees. They have somewhere around 750,000 living retirees. The amount retirement benefits costs GM was broken down into how much it profit it takes from each vehicle sold and it was well over $1000.
Pig9r wrote,
What seems to be killing them is the poor management of the pension and benefits for the retirees. They have somewhere around 750,000 living retirees. The amount retirement benefits costs GM was broken down into how much it profit it takes from each vehicle sold and it was well over $1000
Yes.................these retirement costs are refered to as "legacy" costs.
They eneded up with these because instead of a raise to the unions...........they would promise to give more into the pension or future retirement fund. Now they are stuck with a huge bill they shifted into the future................the future is NOW!
What seems to be killing them is the poor management of the pension and benefits for the retirees. They have somewhere around 750,000 living retirees. The amount retirement benefits costs GM was broken down into how much it profit it takes from each vehicle sold and it was well over $1000
Yes.................these retirement costs are refered to as "legacy" costs.
They eneded up with these because instead of a raise to the unions...........they would promise to give more into the pension or future retirement fund. Now they are stuck with a huge bill they shifted into the future................the future is NOW!
Jamie
Living Legend
Let's not be simplistic
Honda, BMW, Mercedes (the latter two for their SUV's) and, I suppose, other car makers have opened brand new plants in the US of A, often with local or state-provided tax breaks, generally without any UAW presence , and, in any case, without evidently inheriting such "legacy costs" as an admittedly enormous, historically accrued pension burden, during the last decade. Whether that pension burden has been efficiently managed or not is almost a moot point at this juncture. Ditto with regards to the UAW role. In other words, the extra USD 1'200 to 1'600 you pour into someone else' s pension benefits whenever you buy a GM or Ford car is a real cost to both companies... and a real dividend income penalty to their shareholders... and a structural competitive disadvantage that the above-mentioned newcomers won't start experiencing for another 20 or 30 years.
If the American buying public does not accept my story, it should rush to the nearest Hyundai dealership whenever it needs new wheels. And leave hundreds of thousands of elderly "Big Three's" retirees on welfare or in hopeless poverty.
It's one of the very foundations of "the American way of life" that's at stake, I am afraid, my friends
Honda, BMW, Mercedes (the latter two for their SUV's) and, I suppose, other car makers have opened brand new plants in the US of A, often with local or state-provided tax breaks, generally without any UAW presence , and, in any case, without evidently inheriting such "legacy costs" as an admittedly enormous, historically accrued pension burden, during the last decade. Whether that pension burden has been efficiently managed or not is almost a moot point at this juncture. Ditto with regards to the UAW role. In other words, the extra USD 1'200 to 1'600 you pour into someone else' s pension benefits whenever you buy a GM or Ford car is a real cost to both companies... and a real dividend income penalty to their shareholders... and a structural competitive disadvantage that the above-mentioned newcomers won't start experiencing for another 20 or 30 years.
If the American buying public does not accept my story, it should rush to the nearest Hyundai dealership whenever it needs new wheels. And leave hundreds of thousands of elderly "Big Three's" retirees on welfare or in hopeless poverty.
It's one of the very foundations of "the American way of life" that's at stake, I am afraid, my friends
Well Jamie.........................I will only comment this one last time on this. The unions did it to themselves...............as far as welfare......................what do you call buying an overpriced peice of junk, just to make sure someone gets their check? I work hard for my money....I will not spend it because some company screwed the pooch as far as planning. Sure, these other companies will not start with these costs, and if they robotocise enough, they can keep costs low. Do you honestly think GM is not planning the exact same thing? I have had a lot of people tell me they are retired GM employees. I live in Florida, I used to think they were white collar from the lifstyle they had....................after some digging ya find out they put lugnuts on a car for rediculous money. I am all for getting everything you can from your talents, but after you bleed your company dry, then cry because you have no job............well, it's somewhat analagous to the son who killed his parents throwing himself on the mercy of the court because he is an orphan.
P.S. sorry if this is too simplistic for you.
P.S. sorry if this is too simplistic for you.
Hondax
Nitrous
Well Tomo, This GM thread is certainly emotion packed to say the least. Even though I had planned on taking this thread to the "rant" section, as you advised, it seems moot to do so, now that it's so well established here. Besides Tomo it's good for business if you know what I mean. But I understand if you choose to move it to a more proper category.
Most of this was covered so please excuse any redundancy.
GM corporation during the great years in the 60's conceded to union demands in an unprecedented nature. One would think judging by the bloated and gratuitous attitude of GM to the UAW, some collusion was at play. Can you say "kick backs" and Corporate treachery. I would not doubt in the least if political pressure was hard at work in the mix, this mess stinks so bad.
With the "BIG Three" running the show, all must have seemed so good back in the 60's. Sales up, profits up, and no ceiling in sight. Sure GM knew big pay outs to retirees loomed in the future, but hey, with such a young work force and profits thru the roof, it would take decades for any concern. Kind of reminds me of what's in store for us with Social Security bankruptcy down the road. Same stink, different decay!!
I'm not excusing the Union leaders cuz their accountants knew things could very well get ugly years down the road. They didn't give a wit cuz their pockets are deep, work force happy, and money pouring in. Besides they were "mob" run weren't they!?!? We all know ex-UAW workers who made dizzying wages working or not, with benefits never stopping. Gosh what a scam.......
When the Japanese started figuring out how to make and market cars to the US, they were still hampered by the large tariff's placed on most imports which of course helped the Big Three and was no doubt politically motivated. The arguable turning point occurred when the Japanese and other companies establishing manufacturing facilities in the US creating a gigantic competitive market against the Big Three. As if this wasn't bad enough, the glutenous UAW pensions and benefits were all coming due.
As many of you probably know, Ford Corp is not far behind GM, but Daimler Chrysler is an example of how to postpone and maybe prevent the inevitable by offering a product people want. I've heard the argument, that if GM made cars people wanted they wouldn't be in the mess they are in today. I believe this to be true to a point, but eventually reliability and price will win the day, especially with an automotive press that seems to be pro-import and for good reason.
Yes the worm has turned and the future could get real ugly for GM and the US economy if GM can't dig there way out,......Real ugly!!!
But I understand if you choose to move it to a more proper category. Most of this was covered so please excuse any redundancy.
GM corporation during the great years in the 60's conceded to union demands in an unprecedented nature. One would think judging by the bloated and gratuitous attitude of GM to the UAW, some collusion was at play. Can you say "kick backs" and Corporate treachery. I would not doubt in the least if political pressure was hard at work in the mix, this mess stinks so bad.
With the "BIG Three" running the show, all must have seemed so good back in the 60's. Sales up, profits up, and no ceiling in sight. Sure GM knew big pay outs to retirees loomed in the future, but hey, with such a young work force and profits thru the roof, it would take decades for any concern. Kind of reminds me of what's in store for us with Social Security bankruptcy down the road. Same stink, different decay!!
I'm not excusing the Union leaders cuz their accountants knew things could very well get ugly years down the road. They didn't give a wit cuz their pockets are deep, work force happy, and money pouring in. Besides they were "mob" run weren't they!?!? We all know ex-UAW workers who made dizzying wages working or not, with benefits never stopping. Gosh what a scam.......
When the Japanese started figuring out how to make and market cars to the US, they were still hampered by the large tariff's placed on most imports which of course helped the Big Three and was no doubt politically motivated. The arguable turning point occurred when the Japanese and other companies establishing manufacturing facilities in the US creating a gigantic competitive market against the Big Three. As if this wasn't bad enough, the glutenous UAW pensions and benefits were all coming due.
As many of you probably know, Ford Corp is not far behind GM, but Daimler Chrysler is an example of how to postpone and maybe prevent the inevitable by offering a product people want. I've heard the argument, that if GM made cars people wanted they wouldn't be in the mess they are in today. I believe this to be true to a point, but eventually reliability and price will win the day, especially with an automotive press that seems to be pro-import and for good reason.
Yes the worm has turned and the future could get real ugly for GM and the US economy if GM can't dig there way out,......Real ugly!!!
Toystoretom
Living Legend
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I think you are right, Hondax... Its too good of a thread to split up. I have other ideas for rants anyway...
As far as GM goes... from a real simplistic veiwpoint (mine)..they got caught with their pants down, so to speak. They had a major redesign that flopped, a recession that set in post 9-11, and all these expenses that are coming due. The wheels won't come off of it... we'll bail them out if it comes to that.
My real worry is the rolling roof over Arrowhead.... http://www.kcchiefs.com/news/2006/02/23/campaign_to_save_our_stadiums_kicks_off_today/
As far as GM goes... from a real simplistic veiwpoint (mine)..they got caught with their pants down, so to speak. They had a major redesign that flopped, a recession that set in post 9-11, and all these expenses that are coming due. The wheels won't come off of it... we'll bail them out if it comes to that.
My real worry is the rolling roof over Arrowhead.... http://www.kcchiefs.com/news/2006/02/23/campaign_to_save_our_stadiums_kicks_off_today/
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Pig9r
Living Legend
My neighbor is a union pipefitter. He was looking to buy a new truck. I suggested he look at the new Toyota Tundras and that it will probably be my next. He laughed and said he had to buy an American built truck so he could park in the lot at the union hall. A few days later he came home with a new Dodge truck. I promptly pointed out that he must of changed his mind on buying the foriegn truck. He didn't quite get it until I reminded him Dodge is now a German company and his truck was assembled in Mexico. At least if he bought the Toyota it would have been assembled in the US.
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