I’m from Michigan and this is a very scary thing. My dad has worked for the car industry his whole life and has given me and my sister a great life and education. I’m afraid that the car industry in the U.S. is going to die and Michigan along with it.
I guess I’m just wondering how people feel about this. Can this be a good thing for GM, or does it spell greater trouble down the line? How do the different sides of the political spectrum feel about this?
Thanks guys.
Hey Kevin–
Our prayers are with you and your family. I used to live in Michigan and follow what happens there. The unemployment rate is 7.2%, nationwide its 5.1%. I knew when Granholm got elected (because of her looks) that the state would be in trouble. For those who don’t know: she eliminated funding for the colleges. Now that’s the way to attract new business into the state (sarcasm intended!!).
If you can, move out of there. It’ll be like Vermont in 20 years; nice to visit but one big forest!
I hate to say it but GM makes some garbage cars… If they close it is their own fault… Sorry that it impacts your family… We have a newer cavalier and after this we will never own another GM.
[quote]KevinKovach wrote:
I’m from Michigan and this is a very scary thing. My dad has worked for the car industry his whole life and has given me and my sister a great life and education. I’m afraid that the car industry in the U.S. is going to die and Michigan along with it.
I guess I’m just wondering how people feel about this. Can this be a good thing for GM, or does it spell greater trouble down the line? How do the different sides of the political spectrum feel about this?
Thanks guys.[/quote]
Unfortunately Kevin the government and the media spun a good tale of how well the economy was doing over the past few years and people completely bought into it.
Notice the bankruptcy bill passed before the average Joe realizes the economy is actually in the shitter and not the rosy illusion that was sold to the public - they wanted to set everything in their favor when the rug gets pulled.
The car industry and manufacturing is (was) the backbone of America but offshoring put an end to that. We don’t make anything here anymore because every company has to outsource to stay competitive - most people were sold the idea that offshoring was good for us.
The condition of GM and the automotive industry in general has always been considered the mirror of the economy. GM and Ford are at “junk status” right now and the government just gave Chrysler a big contract (gift) for 25,000 MINI-VANS to transport our troops in Iraq (if you think Hummers aren’t protective).
Sad to say but our current government is devoted and servant ENTIRELY to the corporate entity. Unfortunately most people ignored the urgent warnings as “conspiracy theory”.
Some folks like to get all bent out of shape if you question what really happened on 9/11 and was the government involved. So where’s bin Laden? Where were the WMD’s? What did Iraq have to do with 9/11? Who REALLY benefitted from 9/11?
9/11 was an illusion - just like the “booming” economy.
US bankruptcies ‘to surge’ amid junk bond deluge
The Sunday Times
THE US is heading for a surge in bankruptcies and a dramatic increase in corporate debt default as the number of companies with bonds rated at the lowest end of the junk bond scale reaches record levels.
Why Did the Trade Center Skyscrapers Collapse?
http://www.lewrockwell.com/reynolds/reynolds12.html
[quote]Todd S. wrote:
I hate to say it but GM makes some garbage cars… If they close it is their own fault… Sorry that it impacts your family… We have a newer cavalier and after this we will never own another GM. [/quote]
You rate GM based on its lowest quality car, the cavalier. You also state that it is GM’s fault that they are in financial trouble.
Let me teach you something. Manufacturing in this country is extremely difficult due to the high labor rates. Of course GM could spend more on engineering if they were paying their workers 5/hr instead of 15/hr or whatever they get.
What we need is more AMERICANS buying AMERICAN cars. If you go to Japan, you dont see many Chevys.
In my opinion the UAW has done it to themselves. These guys have abused every ounce of power that they have and it is pathetic that GM has let them get away with it for so long. I know of UAW Committee Men who get paid 70-100k per year to sit on thier ass at the union hall waiting for another UAW worker to call them into the shop when a higher up salary employee even speaks to them or looks at them wrong and that is no exagerration.
I know guys who have their buddies punch them in and out while they go to the local bar and drink for 4 hours and then maybe they will come back to work and when they get caught the UAW steps in and vouches for them and they do the same shit over and over again. These aren’t just a couple of bad apples it is a lot of them and it is a big joke around here that a skilled trades guy can sleep for 7 hours out of a 8 hour day and get paid $30/hour. They have abused the system and now it is all caving in on them and it sucks because I live in a town that relies heavily on GM and Delphi.
Thank God they aren’t my employer but the problem is that I have several family members who are current employees and retirees who are at risk of losing their pensions, health care or their jobs. Why GM repeatedly renewed contract after contract is beyond me.
RK
[quote]got_beer? wrote:
Let me teach you something. Manufacturing in this country is extremely difficult due to the high labor rates. Of course GM could spend more on engineering if they were paying their workers 5/hr instead of 15/hr or whatever they get.
[/quote]
Worker wages are only part of the story. GM claims it expects to spend $5.6 billion this year on health benefits for workers and retirees – more than it spends on steel for its vehicles. That translates to $1,500 for every car and truck it produces.
If we want to improve our ability to compete with other countries, we better do something about our current healthcare system. Companies (and individuals) cannot afford the status quo for much longer.
Give a big old thanks to the UAW. JTF can blame this on the President, but unions have been sucking the life out of this country for the last 30 years.
I feel sorry for the workers, but how stupid was GM to basically put all its eggs in the monster gas-guzzling high priced SUV market? Ecologically criminal and fucking retarded business planning at the same time.
[quote]TeeVee69 wrote:
got_beer? wrote:
Let me teach you something. Manufacturing in this country is extremely difficult due to the high labor rates. Of course GM could spend more on engineering if they were paying their workers 5/hr instead of 15/hr or whatever they get.
Worker wages are only part of the story. GM claims it expects to spend $5.6 billion this year on health benefits for workers and retirees – more than it spends on steel for its vehicles. That translates to $1,500 for every car and truck it produces.
If we want to improve our ability to compete with other countries, we better do something about our current healthcare system. Companies (and individuals) cannot afford the status quo for much longer.[/quote]
THis is more of the key than anything. Between their antiquated defined-benefits pension plan, their health-care costs and the union contracts, how would they compete with businesses that hadn’t backed themselves into similar corners?
All those costs are fixed – they have nothing to do with how well the business of the company is doing, so even a slight downturn in sales and capital inflows can put the company in huge trouble – and since they are disallowed via regulations and previous bad contracts from trying to fix those bad situations, they cut the only costs they can, which are current salaries and operating expenses.
Welcome to the German (and more broadly, old Europe, though that’s an admittedly overbroad generalization) economy, writ small (though they have much less freedom even with current expenses, what with their “stakeholder” regulations concerning board of director composition and duties).
However, GM has a possible out on its defined-benefit pension (Does that sound like a familiar system? It should – it’s also the model for our antiquated Social Security system), which the airline industry has discovered. There’s a quasi-governmental unit – I can’t remember what it’s called at the moment, but it’s the Pensions Benefits Guarantee Corporation or something like that – and it will go on the hook if GM declares bankruptcy, which it very well could do (Chapter 11, not Chapter 7). This would put taxpayers on the hook, since the Pension Guarantee unit is pretty well universally acknowledged to be underfunded.
These old-line industries that JTF likens to the backbone of the economy are economically crippled from all the quasi-socialist requirements that were piled on them in the 20th century – no wonder they want to outsource all the jobs… (I of course think outsourcing is a great thing overall, because it is directly correlated to insourcing, but I admit that is for the overall economy – certain industries are hurt and others are helped, and this plays out as certain geographic areas benefiting vs. others, at least in the short and medium terms).
[quote]rainjack wrote:
Give a big old thanks to the UAW. JTF can blame this on the President, but unions have been sucking the life out of this country for the last 30 years. [/quote]
I happen to agree with you. While the premise is sound, they got way too greedy. That’s what drove struggling Caterpillar Tractor out of PA. Basically the union wanted more and the company said no - so Caterpillar said, “so long”.
The 20yr, $25/hr sweeper driver with 100% paid medical/dental, 2 months vacation and a high school education needed more guaranteed overtime.
[quote]got_beer? wrote:
Todd S. wrote:
I hate to say it but GM makes some garbage cars… If they close it is their own fault… Sorry that it impacts your family… We have a newer cavalier and after this we will never own another GM.
You rate GM based on its lowest quality car, the cavalier. You also state that it is GM’s fault that they are in financial trouble.
Let me teach you something. Manufacturing in this country is extremely difficult due to the high labor rates. Of course GM could spend more on engineering if they were paying their workers 5/hr instead of 15/hr or whatever they get.
What we need is more AMERICANS buying AMERICAN cars. If you go to Japan, you dont see many Chevys.
[/quote]
I have seen other GM cars have similar trouble. Blazers are another example. The wiring in them is just junk, weather it is it’s lowest end car or not it should still be quality. I can buy a foreign car for the same price and it will last, Our Chevy is a loaded Z24, still a cheaper car but hardly the cheapest. Both power windows have issues where they work some times. The Main Transmission harness has all the insulation “wore” off (with 36,000 miles) and it shorted out the ecu, the tail light goes through bulbs about every two months. The drivers seat feels broken. It is many things… I do blame GM for its situation. They killed the Camaro because it was Junk, no one wanted it.
I can’t say that I want GM to have trouble, just that I can see why they are. Perhaps offering better warranties would be a start to bring things around. The new Cobalt is a promising car if it is better than past cars.
GM is a volatile company. That volatility has not been good for the average worker at GM. It’s been in a steady decline.
The unions are to blame for much of the problem, however, the unions could cave in on just about everything and GM would still be in trouble. They would have to go away completely for GM to make money. Not likely to happen.
Management is also not blameless. A series of errors going back to the 70’s have crippled GM. As of late the unions have worked with the company but to no avail. GM still has quality control and design issues that hamper them.
I think the ultimate answer for GM is disvestiture of certain divisions. Let them stand alone. Clearly they would react quicker. Obviously they are receiving little benefit from being part of the GM juggernaut. They also need to quit talking about full automation and move towards it. This will reduce the current workforce but will keep thousands employed. That will be hard on the workers but it has to happen or you lose the company.
GM can save itself. How about a hybrid? Maybe some fuel cell technology. It can all be done. It’s the will and leadership they are lacking from management and the unions.
As to the pension and retiree benefits, you are only seeing the tip of the iceberg. It’s SS without the safety net of raising tax’s. My guess is that ALL of the fortune 500 who have a defined benefit plan will let the PBGC pick up the liability.
Maryann Keller is an expert on GM. Read any of her books on the subject. She has them pegged 100%.
I think 25,000 by the end of 2008 can be done by nothing more than normal attrition. Seems hard to believe that with around 150,000 employees, that at least 25,000 won’t quit, retire, die, etc. over the next 2.5 years.
So in that regard it’s kind of a non-event, really. It’s more like GM isn’t going to be hiring 25,000 new UAW workers over the next two and a half years.
How pitiful is their recent “Employee Discount” ad campaign? It’s like their on their knees, begging for us to purchase their product.
[quote]got_beer? wrote:
Todd S. wrote:
I hate to say it but GM makes some garbage cars… If they close it is their own fault… Sorry that it impacts your family… We have a newer cavalier and after this we will never own another GM.
You rate GM based on its lowest quality car, the cavalier. You also state that it is GM’s fault that they are in financial trouble.
Let me teach you something. Manufacturing in this country is extremely difficult due to the high labor rates. Of course GM could spend more on engineering if they were paying their workers 5/hr instead of 15/hr or whatever they get.
What we need is more AMERICANS buying AMERICAN cars. If you go to Japan, you dont see many Chevys.
[/quote]
GM does make low quality cars and as far as the $5 Vs. $15/hr it is the cost of living in this country. So it is GM’s fault. By the way would you work for $5/hr? I work for a large company like GM and they are hiring not laying off. Look to the idiots in upper management there is the problem.
You know, I usually just lurk around here because I find so much usefull information, but it just so happened I saw this thread and had to respond. And yes, I work for GM, and yes, I am a union member. It just amazes me how many people regurgitate info without having any kind of substance to back it up - or without seriously considering the comment that they make. GM’s current situation is the UAW’s fault?
Please. The UAW was in place as GM rose to be the number one company (both in terms of employment and revenue) in THE WORLD - was that the UAW’s doing? Do they get credit for that? Of course not, because they were just merely a component of a very large corp. operating under some favorable circumstances in a favorable time (late industrial revolution) with growing demand and technology. And sure, there are some poor examples of union employees, but aren’t there everywhere? Just go to your insurance agent and try to find them in the office (usually the secretary is running the office). Go to any downtown pub or bar and look at all the “suits” that are there during the 9 to 5. The term “3 martini lunch” was not coined on behalf of the UAW. No - bankers, lawyers, accountants, CEO’s - thank them. Go to just about any internet forum and look how many people are participating during working hours. I can tell you stories about bottom level supervisors pissing away more money in 5 minutes than you and I could make in a year until you are tired of listening. Do you wanna guess how much money upper mgmt pisses away? I have actually witnessed a foreman “garbage can” more than $50,000, and then penalize one of his employees for being 2 minutes late coming back for lunch because they were “stealing from the company”. I’ve got more first hand knowledge and more stories of how a great company has been run into the ground than you have years left to listen to them. You see, GM quit being a car company along time ago, and started focusing on accounting practices and ways to shuffle money around. Come on, not too long ago they were making a profit of more than $1 billion a QUARTER! Not sales, but profit. Where was the pissing and moaning about benefit costs then? $4B is lotsa money, but the company and the business was suffering - just nobody knew it. Face it, when was the last time that GM put out a car that you REALLY wanted? I mean I have a Suburban, and I like it and all, but the radio is broke, one headlight is perpetually burned out (seen that one?), one of the front axles broke, the rear U-joint went out at 25k miles, the speedometer sometimes is 30 mph off, the gas gauge sometimes reads empty right after I fill it up, when on cruise it will randomly accelerate under full throttle, it’s had two recalls, and burns oil. Oh yeah, it’s a 2003. When was the last time GM offered something like the new Ford Mustang, or the Chrysler 300? Something that you wanted, not just would settle for? Come on - they got how many different brands? Don’t you think they could design just one thing that you wanted to buy? And have you noticed what they spend in recalls every year? Oh - it’s not manufactured or assembly related, either. Nope - it’s design or supplier related. UAW’s fault again?
I could rant on this all day, but I guess my point is, it’s really all to easy to point at just one thing and call it the reason for whatever. GM is far too big and complex for any one thing to be the cause of their current situation. But you know, if GM was gaining or even maintaining market share, instead of losing it, all their problems that are plastered all over the papers would be moot. GM’s biggest problem is sales - or lack thereof. It’s not quality (GM recently won kudos for their quality, beating everybody but Toyota). But their shit is just really boring and/or ugly. I wish that the mgmt would pay as much attention to making the company profitable as they do to negotiating their next bonus, or their stock options, or their golden parachute (look at what that dude at Chrysler got when he sold out to Mercedes). I just hope they get things turned around - I would like to retire from there one day.
Oh, and for the guy who spoke of union workers being uneducated - I’ll bet I have more college credit hours than you - significantly more. Wanna compare transcripts? (that’s the thing with all your classes and grades)
MO
GM Death watch has been news for a while now. Like posters have said, It’s several things.
Yeah we should buy american, but i refuse to if I feel the company has F-upped and if they don’t have a car I want. Also, the american short sighted fixation (consumer & manufacturer) on SUVs and mega pick ups trucks makes my blood boil.
[quote]JustTheFacts wrote:
Some folks like to get all bent out of shape if you question what really happened on 9/11 and was the government involved. So where’s bin Laden? Where were the WMD’s? What did Iraq have to do with 9/11? Who REALLY benefitted from 9/11?
9/11 was an illusion - just like the
Why Did the Trade Center Skyscrapers Collapse?
http://www.lewrockwell.com/reynolds/reynolds12.html[/quote]
Wow. I’m not sure what this has to do with a thread on GM layoffs. Do you honestly believe that an article detailing the structural analysis of the WTC collapse - written by an economist - and posted to an admitted anti-government website contains “JustTheFacts”?
Sorry for the hijack (no pun intended)
MO
That was a good post. Glad to hear somebody from the inside with good info. To be honest we are all speculating.
I posted earlier and pinned partial blame on the unions but my feeling, and the general consensus, seems to be management is not doing well.
GM is such a large part of the economy that you will always have a large number of people who share in the pain that GM puts itself thru every 5 years or so.