Posted on 12/06/2005 10:34:55 AM PST by Sonny M
DETROIT--Since mid-October, General Motors has announced plans to cease production at 12 North American manufacturing facilities and eliminate 30,000 jobs by 2008; trim $1 billion in net material costs in 2006; and, in cooperation with the United Automobile Workers, reduce GM's retiree health-care liabilities by $15 billion, or about 25%, for an annualized expense reduction of $3 billion.
The reason for these dramatic actions is no secret: GM has lost a lot of money in 2005, due to rapidly increasing health-care and raw-material costs, lower sales volumes and a weaker sales mix--essentially, we've sold fewer high-profit SUVs and more lower-profit cars. What is less clear is why things turned sour so fast for GM, as well as for other American auto makers and suppliers. To put it another way, why are so many foreign auto makers and suppliers doing well in the United States, while so many U.S.-based auto companies are not?
Despite public perception, the answer is not that foreign auto makers are more productive or offer better-quality or more fuel-efficient vehicles. In this year's Harbour Report, which measures manufacturing productivity, GM plants took three of the top five spots in North America, including first and second place. In the latest J.D. Power Initial Quality Study, GM's Buick and Cadillac ranked among the top five vehicle brands sold in America, ahead of nameplates like Toyota, Honda, Acura, Nissan, Infiniti and Mercedes-Benz. And GM offers more models that get over 30 miles per gallon (highway) than any other auto maker.
Mr. Wagoner is chairman and CEO of the General Motors Corp.
(Excerpt) Read more at opinionjournal.com ...
This idiot wants taxpayers to foot the bill for the stupid contracts his company made years ago.
Well, I never put my name to any "social contract", so I ain't paying for his "generosity".
To top it off, he wants some kind of protection so that he can pass his costs on to consumers, one way or the other.
What gall!
And have taxpayers pay him bonuses even when the company is losing money.
Whether the bailout is directly paid in cash or is paid indirectly is immaterial.
Go beg somewhere else, Wagoner.
It's all buggy whips, isn't it? Aren't cars pretty much obsolete?
I second that. Free market blues, man, or in other words: that's showbiz! GM makes clunky unattractive cars that not enough people want to buy, however highly the "experts" may rate them. Go build a better mousetrap and don't ask the government to be "nice" to you.
Yes, there are cheaper and more competitive means of transportation:
I guess you are one those people that don't think industry is over-regulated?
His appeal for curbing lawsuit abuse makes sense as it drives the cost of products both through higher medical costs and higher liability costs.
Of course, like immigration reform, no one in congress has the guts to do anything about it.
My advice to GM and Ford is to quit worrying about Japan and start worrying about China. In 20 years you'll be buying quality Chinese cars at Wal-Mart and then the show's really over.
Not that I have a problem with it. US automakers made a deal with the devil when they signed production over to the UAW and now the chickens have come home to roost.
Businesses that don't make money go bankrupt. That's the American way. We shouldn't coddle failure. If he wants endless corporate welfare he should relocate to France where they subsidize their failing industries.
GM's are, for sure.
U.S. auto makers are a failing industry? Perhaps if you read the entire article you would see where he doesn't want a bailout he just wants the playing field leveled. Competing with countries like Japan and Korea, who actually do subsidize their auto manufacturers, is almost impossible. Yet, every year they make and sell million of cars here in the U.S. How is that a failure?
I guess seeing American manufacturing disappear is a good thing to you?
Well, I never put my name to any "social contract", so I ain't paying for his "generosity".
To top it off, he wants some kind of protection so that he can pass his costs on to consumers, one way or the other.
The nerve of him--expecting us to pay extra because his workers don't want to live in huts and eat rice all day!
Then consumers will choose whomever passes along the lowest costs.
That said, GM has been one of the royal pains in fighting tax reform, so I have even more of a gripe with them.
Wagoner wants government run healthcare. I understand the unions have helped to kill GM and other American auto manufacturers, but I still believe the reason the American cars don't sell as well as those with foreign names is a perception issue. People intuitively believe foreign cars are better cars, and that's going to be a tough nut to crack.
Particularly when you're alienating people by recommending government run healthcare.
I think the auto-industry is over regulated and over litigated.
But other companies are still doing fine, including the japanese, especially the ones who actually build their cars in the United States.
I'd have more sympathy for GM if they weren't such trouble makers in fighting against tax reform, while playing the role of a mute when it comes to regulations (GM has no problems with the regulations, they view it as a barrier of entry for competitors), and they have really slacked off when it comes to tort reform by backing everyone who opposes tort reform.
Absolutly.
Imagine collecting his bonus and fat paychecks and wanting me to pay his workers.
If you want to pay them, go right ahead, I ain't paying for his stupidity (and greed).
My aunt has a lil' white Toyota.
runs fine, does what it is asked to do.
At Thanksgiving my cousin asked here about it and we discovered that all she has done in 4 years is add gas! No oil change, nothing...
Meanwhile my Pontiac throws some kind of fit every 6 months despite being babied. I swear that car will drive me insane.
on the other hand I have my old '73 VW Beetle that will drive from here to Alaska, though you'll freeze to death on the way.
I just wish we could still buy reliable cars at decent prices.
We have a long steep driveway in the lake effect snow belt. The GM car we bought, a small version of a SUV, just couldn't make it up the driveway. My husband has Parkinson's and walking up and down the driveway is not realistic in terrible weather, with all the ice and snow.
We bought a Toyota Matrix. It is handling the driveway, deep snow and ice underneath effortlessly. There is plenty of room in the cargo area for our groceries, and our dogs. We get good gas mileage, and it handles very well.
If and when GM makes a good small car with the ability to handle snow and ice, we will consider it. Surely they can understand that we want modest price, low gas mileage and bad weather handling all in the same vehicle.
They are not climbing the same ladder. We revolutionized industry in this country. Everyone else is borrowing our technology.
I remember in the late '60s when U.S.Steel invited engineers from Japan, Switzerland, and Germany here to witness the continuos cast process of making steel. Granted, the U.S. companies didn't keep up but they let those countries have the knowledge and technology. Now look. The U.S. relies on foreign countries for most of it's steel. The same will happen in other industries. They are not developing those industries supposed American companies are sending them over there.
We can't compete with low wages and the lack of environmental rules in foreign nations like China and Indonesia.
Letting them have the industry and saying "Let them make some pollution for a change" is detrimental to everyone. We reduce our indedpendence here and allow them to pollute the world. We have the cleanest industry in the world and yet every year more regulations are added.
Why do you see our loss of industrial independence as a positive thing?
Do you think America has to remain a manufacturing leader to remain strong or in a leadership role?
Of course. Can you imagine if we completely denude our industrial base and then have to buy more and more material from foreign countries when all of a sudden we are forced to go to war. Imagine too, if those countries take the side of our enemy. How do you propose to fight the war when we have been cut off from our supplies?
Wrong. They know they wanted to buy 20 percent of Fiat for $2 billion, then spend another $2 billion to not buy 20 percent of Fiat. That's $4 billion dollars for nothing.
Release capital, labor, talent to winners.
Not sure what your response has to do with my post. Could you explain?
There is no such thing as a "U.S. auto maker" anymore.
The Big Five (GM, Ford, DCX, Toyota, VW) are all global.
Perhaps if you read the entire article you would see where he doesn't want a bailout he just wants the playing field leveled.
By "leveled", this double-talking shill means obliteration of our national borders.
IOW, he would like to see Big Government absorb the health care and pension costs.
But don't expect the hypocrit to ask for a tax on imports. They need those to help squeeze the lifeblood out of their domestic suppliers.
I do not care what the workers of IBM, GE, or Magnavox want, why should I care what the workers of GM want?
live in huts and eat rice all day!
American workers would not live in such conditions, because the costs to import a foreign-built car allow for much higher wages for US workers. And even if it did not, there is no right to that job, nor are they required to stay there if it pays too little. They are FREE to find something more to their liking.
They should concentrate on their own house for sure. I am fond of GM trucks but I believe they priced themselves out of the market. They don't build em like they used to...thats for sure.
No, but ownership may be.
I have no sympathy for GM. The C.E.O.'s letter is a bunch of bull. The simple truth is that GM no longer builds quality cars at a reasonable price, and there are other companies for buyers to consider.
My poor opinion of GM took years to develop. As a kid, I dreamed of having a '57 Chevy, a '69 Camaro, or almost any Corvette. By the time I could afford my first new car, I made what I thought was a more practical choice, and bought a new 1986 K-5 Blazer. It was a disaster. It's a long story, but I was not happy with GM's quality or customer service. Though I still dream of a '69 Camaro, I will never buy another new vehicle from GM.
I just bought a Honda Accord. It was made in Ohio, reportedly with 85% US materials, and I think it's a great car. It proves that somebody can still make a good car in the US. But that "somebody" is not GM.
I own a 2001 4 WD Sierra. Touble free for 65,000 miles. I paid $12,000 less than sticker and got a free bed liner and cover. Its hard to understand how they made much on my sale.
I have several questions. I take that you purchased it new and I work from that premise.
How many miles were on it when you bought it?
Is this a conversion truck or a base model with only factory options?
Is it a 1/2 ton 3/4 or 1 ton?
What is the date of production and when did you buy it?
Did you search the VIN # thru GM to find out if that truck had been damaged and repaired prior to the sale to you?
Did you pay cash for it?
Did you make a trade in?
A bed liner and bed cover (soft) at the most cost them 150 bucks. A selling point they like to hook people with thinking they are giving you SOOooooooo much.
All these questions matter when discussing what you got off of the sticker price.
A couple of years ago, it looked like GM was changing its business model.
Looks like they went away from that direction.
They have the human capital, the money, and the resources, along with the built in infrastructure, to transform the company into another field less competitive where they could succeed.
But alas, the company is run by idiots who make nice bonuses while shaking tin cups at me for more money.
No. It was a new truck, 1/2 ton. I would've bought a Studebaker at this discount. As with most things, timing is everything.
It was a new truck, but it was still a model year old (being sold to you in August). That is just a simple fact there partner. To you it was indeed a brand new truck, to them it was a model year old truck.
I do not dispute the price reduction that you got,although 12 grand from sticker is a bit much. I think more issues are at play here. Like possible damage that was repaired or maybe it had 50 or 100 miles on it, meaning that it was used often as a test drive vehicle. If it was a conversion truck then the 'sticker' price was augmented to begin with. As for trade in that matters alot too.
What I dispute is that you purchased that truck and that GM didn't make any profit or made very little profit. Trust me, GM made profit, the salesman made profit, and the owner of the dealership made profit. Also, there may have been factory incentives to the dealer/salesman that you never saw. This angle comes from the fact you said they had many in stock and had even more coming. Often times 'bonuses' are offered for volume. Any way you cut it they still made a hefty profit. Even if they claim to you otherwise.
I was thinking more consumer electronics.
American Airlines?
If your referring to the Union that basically runs AA (they have several seats on the board of director and pick the CEO, negotations must be fun), no that would be a bad model.
When you have equipment, factories, money and employees, and you can't compete in one market, then go and look for a new market.
The playing field is already unfairly tilted against the Japanese and European automakers here in America, yet despite tarriffs and import quotas GM is still losing money. Losing money=failure.
I guess seeing American manufacturing disappear is a good thing to you?
If that industry is not profitable then it is a very good thing for America when it disappears. Unprofitable industries are a drain on the economy.
In my reference to American Airlines, I was pointing to the fact that exec's take bonuses while they wrangle all kinds of federal tax breaks in conjunction with outright payments of tax dollar funded dollar 'bailouts'.
Yoou made an excelent choice to listen to your gut when you got spooked by brand new tires, especially with only 4000 miles. Many people think new tires are a good thing, and they are...unless they hide other problems. Often times they do so.
I agree it doesn't matter as to use that it was a 2001. You directly benefitted from buying a truck that was a model year old, yet it was new to you. To be honest I would rather have my 1980 3/4 ton Chevy (with a 1987 body) over any brand new truck.
In 1989 I bought a brand new truck and the first three months I owned it the chevrolet dealership had it more than I did. (emissions system troubles, hence my service engine soon post earlier on) That truck was painted on 6 times in 2 and a half years before 3/4 of the paint hit the walls at the car wash....needless to say GM chose to blame dealerships (2 seperate ones painted on it) and dealerships chose to blame GM because they would not pay the dealerships to fix it.
GM and its affiliated dealerships took a customer for granted. A customer that had a grandfather that spent three decades working for them in an assembly plant. I will never buy a new GM vehicle ever again. I like chevy trucks the best but service and performance matter. That is where GM lost its customer base. I am far from alone with stories like this one. I would offer that many people have experiences like yours. Problem is WAY to many have had experiences like mine. GM has done that to themselves.
Excellent point.
America Airlines creates its own mess, then expects everyone else to pick up the tab.
I still find it interesting that former treasury secretary Rubin wanted the Bush administration to bail out enron, and no one blinked an eye.
Or that Spitzer even told reporters that Arthur Anderson should have been bailed out instead of being bankrupted and terminated.
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