Posted on 07/10/2008 4:59:45 AM PDT by Wally_Kalbacken
WHO shot General Motors? The company’s stock is at its lowest level in 50 years, and its market valuation has plunged to $5.9 billion, less than that of the Hershey candy-bar company. The automaker is weighing yet another round of layoffs — and maybe even a fire sale of venerable brands like Buick and Pontiac. General Motors once manufactured half the cars on the American road, but now it sells barely 2 in 10. Bankruptcy is not unthinkable for Detroit’s former king. The immediate cause of G.M.’s distress, of course, is the surging price of oil, which has put a chill on the sale of gas-guzzling sport utility vehicles and trucks. The company’s failure to invest early enough in hybrids is another culprit. Years of poor car design is another. But none of G.M.’s management miscues was so damaging to its long-term fate as the rich pensions and health care that robbed General Motors of its financial flexibility and, ultimately, of its cash.
(Excerpt) Read more at nytimes.com ...
And yet "the fate of many public-sector pension plans is even worse than G.M.’s."
Does that suggest something about the ability of government to provide social insurance? Maybe????
They keep claiming finanancial stress, yet they delve into the home mortgage market (Ditech) and purchased their headquarters building for hundreds of millions. I purchase GM cars, but not because I feel sorry for them.
The immediate cause of G.M.’s distress, of course, is the surging price of oil, which has put a chill on the sale of gas-guzzling sport utility vehicles and trucks. ......................... Wheeeew, atleast it isn’t the unions.
You pegged it. His statement that the self-destruction of GM “proves” that government should be providing health care is ridiculous on its face.
But he doesn’t care. All he cares about is getting socialized medicine. Like all socialists, that the system has failed everywhere it’s been tried matters less than the moral worthiness of trying.
Or something like that. This was an annoying read, reminding me once again why I normally avoid the NYT.
Is it true GM sold its hybrid technology to Toyota?
I remember the cartoons of Al Capp especially the Lil Abner shots at GM when he would say whats good for General Bullmoose is good for the USA.
That would be ironic, seeing that there’s another thread running this morning about Toyota’s planned hybrid plant in Mississippi.
What management should have done, in it's responsibility to their shareholders, would have been to tell the unions "Either you stop with your insane demands and your crazy work rules, or we will shut the company down tomorrow and liquidate all assets". But this would have meant that MANAGEMENT would have been out of jobs as well, so that never happened.
WHat happened instead was that management kept selling assets (and leasing them back) to cover operating expenses. They sold their planes, their gates, their buildings. Finally, there was nothing left to sell, and they went bust. The stockholders wound up with nothing, but management kept their salaries and bonuses to the end.
I see GM with similar problems. What management should have done was shut down in Michigan and move to a "right to work" state, but nobody in management wanted to deal with the fuss and risk of doing so. ANd now they are at the end of the line
When almost all of your marketing goes to the section of the market that bought SUVs and PUs, then you’re bound to hit a bad patch when that market collapses.
So your suggestions is that they continue to build cars that nobody wants to buy, but with non-union labor. And that would improve their picture how?
yup. but right now we’re just waiting alot of them out. if gm can hold on for another 10-15 years as many of the pensioners start dying off, they should be able to bounce back.
Good luck with that. I'm making sure that the Video Children in my immediate vicinity know that the government isn't their master.
more like it should’ve been done year ago.
and they need to make the cars people want. i won’t buy a gm because they have nothing that appeals to me any more. underpowered, ugly styling, uncomfortable, short lived, over priced.. its all ridiculous.
Exactly. And what do the unions have to do with that decision? Not too long ago GM was making billions in profits from cars built with a union workforce, because they were making cars that people wanted to buy. Their poor decisions on development, product, and quality are the fault of management and not the unions.
The article doesn’t remember the 70s and 80s when one was lucky to get an American car off the lot and to the house without something breaking, falling off, or just rattling. That’s when I purchased my first Japanese cars (240Z and later a Honda) and found out that whilst we were sleeping, their quality had far surpassed ours. Market share began to shrink, and the public began to learn that GM’s MBAs and corrupt unions cannot design or build cars, but Honda’s engineers could
not too long ago GM wasn’t paying workers AND a huge force of pensioners.
there’s plenty of blame to go around. no one thing did it. r&d failed miserably, unions negotiated terms that had far reaching consequences, management was spineless, competition rose.. its all of it. gm has plain and simply been mismanaged from every angle.
Exactly.Even the so-called "factory rats" on the floor knew that GM's designs were not keeping up with the times four or five years ago.
GM should offer to buy out Tesla Motors, I was going to buy an ‘09 Camaro but not if gas is going to keep going up, from an engineering view the Tesla Roadster is one hot item, I am facing reality, the days of the internal combustion engine are numbered.
Now if only the future Corvette was more advanced than the Roadster....
The national contracts GM and the rest of the big three have with the UAW require GM to accept the UAW as the representative of the employees no matter where in the country they are hired. Note Saturn in Tennessee.
Lest we forget. All GM decisions were made by GM management. GM management requires a thorough house cleaning before GM will move ahead. Think entrenched management. In this case the unions are not at fault. The chickens are flapping home to roost. The unfortunate part is that this country needs the GM manufacturing capability. Prognosis poor.IMHO
Time for American Motors II?
(The remnants of GM, Ford and Chrysler)
.
You’re exactly right. Toyota is going to build a new plant to build more Priuses — in Mississippi.
Ah, if only we had socialized medicine and government-provided pensions, GM would be in great shape today. Better yet, let’s just socialize GM and it would be going gangbusters.
Unions would still be extracting their pounds of flesh from corporations, even if there were socialized medicine and pensions.
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