General Motors

[osprey]

I wonder what the future holds for this company ?? How did GM get in such a financial bind ?

 

[Av8r3400]

1.) Ineffective, short sighted management locked into outdated measures and requirements which are dictated to them by greedy shareholders (who are their real bosses)

2.) Extremely greedy (and out of control) unions who negotiated sweetheart deals (benefits and ridiculous retirement packages) over the last 30 years with management groups who suffer from the #1 reason.

These two reasons are why Detroit is floundering and the "imports" made in the US are flourishing. A simple answer to a complex matrix of issues, but, true never the less.

 

[HGM]

</font><font color="blue" class="small">( 1.) Ineffective, short sighted management locked into outdated measures and requirements which are dictated to them by greedy shareholders (who are their real bosses)

2.) Extremely greedy (and out of control) unions who negotiated sweetheart deals (benefits and ridiculous retirement packages) over the last 30 years with management groups who suffer from the #1 reason.

These two reasons are why Detroit is floundering and the "imports" made in the US are flourishing. A simple answer to a complex matrix of issues, but, true never the less. )</font>

That about sums it up..... But, I'd go a bit further than 30yrs.. Companies like GM have retired employees that have been collecting retirement benefits for 30yrs.. Add a new group of retirees each year.. More people on retirement benefits than working payroll... OOPS!! /forums/images/graemlins/blush.gif

 

[hudr]

Heard this on a news channel the other night (Don't remember which):
General Motors is a healthcare provider who happens to make cars as a sideline.

 

[rdln]

It started with the volkswagon beetle and pot smoking anti-american hippies in the sixties snowballed from there to the SUV crazed nineties where gas was relatively cheap and GM didnt seem to need an updated gas mizer carline and the hippies daughter, moonbeam graduates college with an accounting degree working for a firm handling american automotive retirees pensions but doesnt think her job is linked to automotive industry and sees her parents now have a lexus and thinks its cool to buy a scion. She gets laid off, gets po'd at corporate america and gov't, decides to hold a sign outside a ranch in Waco and starts the cycle all over again.

Americans need to be more tribal.

 

[ToadHill]

GM has no one to blame but GM for the mess they are in. When you negotiate a union contract you have to keep in mind that a union is a political body. They try to get what they can for their members so they can get elected again to that union job at which they don't have to work and get great perks. I spent 35 years negotiating union contracts for a living and I can tell you that it takes a company with a backbone to stand up for what is good for the company and not give in to the unions demands, especially if the company is making money. Many company negotiators never realized until recently that negotiations are a 2 way street. The union always has demands and not many companys go into negotiations with demands of their own. It's amazing how many times I talked to a client company and asked them what they needed out of the negotiation process and they had never thought of negotiations from that perspective. Companys started to wake up about 15 years ago, I guess GM is late to the party.

 

[osprey]

Do you think GM will survive ??

 

[EddieWalker]

I spent 8 years as a Union Shop Steward and it always amazed me when contract time came around. FOrsome reason I always expected more out of the company. I know our side was totally unprepaired for a strike or that we had any sort of backing, but the company negotiators were clueless. They said one thing, but did another. One time they said it would cost the company five million dollars to do what we wanted. They spend ten million fighting it and ended up giving us what we wanted anyway. We would ask for the moon, expect nothing and end up with almost everything we wanted. Each time it happened, we'd joke about it and have less respect for them. It's sad. That company has now been bought out by another one, but from what I've heard, they are just as bad with negotiating as before.

GM has been very public about their complaints against the expenses of the unions and their retirment packages. They are also the ones who negotiated those packages and agreed to the terms. Hard to feel sorry for a company that runs themselves into the ground and wont fix the problem. Management gets bonuses and raises for doing a poor job, but blames the workers for their problems.

I know a guy who works at the GM plant in Fremont, CA. He makes $30 an hour and jokes about how little he does. It's a game with some to see what they can get away with because the unions will protect them. Management wont do anything about it because it's not worth the headache to fight them, so it just gets worse.

From what I've heard, Toyota pays their employees similiar money, but without the unions. Their people are extremly productive. Here in their US facilities, they are making huge profits, while GM and Ford are losing billions of dollars. I don't think there's any one company that makes that much better of a vehicle than the other, but the cost to build one at GM versus the compition is pricing them out of business.

It's so bad now that the government will probably have to come in and give them a bunch of money that they will just waste, but it will postpone the problem. Look at United Airlines and there problems. United wants to cut salleries to emoployees and give raises to managment. That was huge news and all over the headlines. How are you gonna turn a company around like that?

I think GM will last awhile longer, but it's gonna cost all of us if the government gets involved. /forums/images/graemlins/mad.gif

Eddie

 

[slapshot]

What it really boils down to is they dont sell cars. Some of their competitors out sell them 4 or 5 to 1 in some vehicle catagories.
You can be lazy, inefficent and greedy all day long, but if your selling what people want you'll be fine. Many business do this every day and succed in spite of themselves. But when what your selling is not what anybody wants, you got problems.


-dave

 

[osprey]

Foreign car brands manufactured in the US.

 

[HGM]

Yep, pretty sad.....

 

[ByronBob]

GM is going to get leaner and survive. How it all shakes out is the question. But what were seeing now will be one of those life altering things to tell our kids when we get older.

 

[jmc]

There's plenty of blame on both sides.

Rick Wagoner, head honcho, just made sure that his golden parachute will survive any bankruptcy proceedings, even though one reason to seek bankruptcy is to weasel out of your pension commitments. So those commitments are just the ones to everyone else.

On the other side, NPR interviewed 2 workers at Delphi about the early retirement buyout. One of the guys hadn't heard about the $35,000 one time payment and was hoping for $60,000/yr for 8 years. When the interviewer told him it was only going to be $35K, he said "NO WAY!". I thought to myself that his entitlement attitude may cause him to drowned in the gravy train.

Even General Motors isn't a bottomless pit of money.

 

[JoeR]

Poor planning and greed. Too many American companies only have a 3 year plan. If a new design or product can generate a profit in 3 years they don't do it. The Japanese have 5 and 10 year plans, and their CEO's don't make 100 times more than their employees.

 

[Alan L.]

The imports are killing GM on reliability and resale values. I wouldn't hesitate to buy a GM car on the basis of reliability, but why buy a Malibu when you know an Accord will sell for alot more after you use it 3 or 5 years. Most of it is perception, and GM has not figured out how to correct this disparity.

GM will be around for a while anyway, the least little ripple in the economy would be devastating.

 

[osprey]

The health care industry is having an effect on the benfits being paid as well ,IE:higher insurance premiums.

Did anyone read Pat Buchanans article on NAFTA last week ? I thought it was a very good article. The Fruits of NAFTA

 

[MotorSeven]

Osprey,

Alot of good opinions & answers on the tech side. My thoughts are purely personel. I have always been a GM fan(i'm in the upper 40's). My observations of GM's decline started in the 80's. The big 3 were all turning out ho-hum vehs. When Ford and Chrysler began to change the look and styling and tech end of their stuff, it seemed to me that GM stayed in the same darn rut that they are still in today. Good lord, they just built a PT Cuiser copy....what, only 10 or so years AFTER the original PT /forums/images/graemlins/confused.gif !Now there is a regular brainstorm of a marketing coup(somewhere deep inside the GM design plant, two dork marketing designers gave theselves a high 5 /forums/images/graemlins/ooo.gif) ! This is just one of the disapointing examples of their lackluster styling. The "retro style move" has been going strong for many years, and yet GM has yet to give us poor slobbering muscle car fans one tiny morsel. Heck, i just thought for sure they would appeal to the family guy with a retro '55 chev 4dr, or a 40's Buick to counter the Chrysler 300......nope. How about a Camaro? and yes i have seen the '07 pic's and it looks nothing like a '60's Camaro(just an opinion). For me, GM just squandered a golden opportunity in the retro market, and continues to do so /forums/images/graemlins/crazy.gif.
It was almost like the GM designers quit and went to work for the other "2". I still like their trucks, but i can honestly say, nothing in the way of a GM car has peaked my interest in a very long time. And then we come to the price end where every time i shopped(trucks) it was GM-most, Ford-Middle, and Dodge-lowest. I have owned all 3, and i just don't see a 5K difference between the GM & Dodge. In the last few years the prices may have come closed together.
I wonder if we (the GM fans) could hire the same fellow that slapped Mr. Chryler into the 22'nd century to get a good running start and................. /forums/images/graemlins/blush.gif

ok....no more whinning /forums/images/graemlins/cool.gif!

RD

 

[Kub0ta]

Instead of coming out with a hybrid, GM is building more and more cars that get lower and lower gas mileage. Id watch out for Ford too, seems as if they are in trouble aswell.

 

[JJT]

Anyone read the article in News Week or Business Week last month that basically said Toyota will be the next GM? GM's health and pension liabilities amount to ~$2000/vehicle, Toyota's liability is ~$200. At one time GM made some nice vehicles, today they don't make a one that I would buy.

Went car shopping with a friend this week, she just had to have a Buick Lucerne, she only buys American and that's the way it's been for 30+ years. The test drive was ok, the price was right. Just by chance she took a Honda Accord for a ride, need I say more? The Buick is still sittng on the lot... The Honda was made here in the US. Insurance is cheaper, depreciation is much lower, it's better equiped, has more horsepower and it cost less. The only people buying GM cars today are folks that have not looked elsewhere.

 

[froggy]

Thanks for the link. It is an excellent column.