2?

11/11/2008 11:04:02 PM

adding:

http://business2press.com/2008/11/11/gm-is-a-mess-but-we-still-need-to-bail-gm-out-now/

Quote :

"GM needs to cut costs and move vehicles, but the question now is: why would you consider buying a GM vehicle? No rational buyer should buy a GM car right now. The company is too volatile and it is no longer an innovator because it has discontinued R&D expenditure therefore quality will further diminish. Also, how will a company that goes under service your vehicle?"

I don't doubt that GM has sunk a lot of money into R&D in the past and that that investment has value. However, there are a number of reasons why this is not a strong argument for buying their stock.

One aspect of why they were failing in the first place is because they just kept making the same kind of car, and eventually fell into a pitfall. They failed to innovate before, and now the Chevy Volt has people screaming BUT THEY'RE JUST ABOUT TO INNOVATE NOW! No, realistically, they probably are not. Not to mention, I'm really just not convinced how efficiently their R&D spending was spent when nothing else in the company was (or is) operating efficiently.

I'm not married to these ideas, and I'll admit I'm ignorant to a lot of how the big 3 have operated, just my impressions.
[/2 cents]

11/12/2008 10:17:03 AM

^Yeah, your viewpoint is a bit dated. Sure, they were making a lot of boring, unreliable cars throughout the 90's, and a lot of those cars are still on the road. Most people judge GM by the memory of older cars from the last 20 years or so, which are kinda crappy. However, the culture at GM changed quite a bit when Bob Lutz came on board, and you can see the results of forward thinking and R&D spending in a lot of the newer designs. The newest Vettes, Malibu and CTS are all rated near the top of their class for both quality and value, and as stated GM is doing pretty well overseas with Opel, Holden, Vauxhall and high sales in China.

They are running uphill and against the wind, however, due to the poor reputation they built over the last few decades and the huge pension system they agreed upon with UAW back in the 80's.

11/12/2008 10:43:37 AM

^agreed. The cars they build now are much better and interesting and desirable than in decades past. The resurgence of Cadillac has been a huge success. Cadillac and Lincoln both sucked balls back in the mid-90s. Lincoln is still there if you care to notice, but Cadillacs are desirable, fashionable, and in some cases performance minded.

If anyone's interested I'm working on drafting a letter to the government (house, senate, etc) urging them NOT to give the automakers bail out money. If anyone would like to help edit the letter I'm all for it. It will be general enough that whoever wants it can copy it and send it.

11/12/2008 11:55:37 AM

this is anecdotal, but people overseas love American cars. the units sold there are obviously built for the European & Asian market -- usually small & energy efficient

11/12/2008 12:15:49 PM

Quote :

"“We have to subsidize Detroit so that it will innovate? What business were you people in other than innovation?” If we give you another $25 billion, will you also do accounting?"

Good ole' Thomas Friedman

http://www.nytimes.com/2008/11/12/opinion/12friedman.html?_r=1&ref=opinion&oref=slogin

He suggests that the bail out be more of a temporary take-over. It's hard to argue against it-- what other guarantee will we have that they won't just piss away our money like they did with theirs?

11/12/2008 12:33:40 PM

^ Easy, don't give them any money and they won't piss it away. There is no good reason why tax payers should pay to keep GM out of bankruptcy. If you have flown on an airline recently then most likely you know that bankruptcy is a long way from shutting down. GM workers will most likely not even miss a single day of work. All it will cost is GM stock owners the last $3 of their stock (they've already lost $80+) and GM employees their scandalous contracts. I think even if GM was not on the verge of bankruptcy that the union should be busted, but as Noen has pointed out, bankruptcy is the quickest and easiest way to obtain a just outcome.

11/12/2008 12:50:47 PM

http://blog.tomevslin.com/2008/11/saving-us-auto.html

Quote :

"If people don't buy cars, there is no amount of bailout that will save the millions of US jobs in and related to car manufacturing. If they're not making cars, the manufacturers won't recall workers or order from their suppliers. It's as simple as that. But there's a pretty simple solution as well. The US government should order a complete replacement for its vehicle fleet to be delivered over the next four years. The new vehicles must be either plugin electric hybrid, pure electric, or possibly natural gas. Obviously retooling both at the manufacturers and suppliers is required to deliver this order so the government should be willing to prepay a significant part of it as it does for new weapons systems. That gets money into the system fast and creates/saves jobs almost immediately. It lets the suppliers retool as well as the final assemblers."

11/12/2008 3:37:35 PM

^if the unions are still involved it still won't solve the problem. That being said, thats a much better idea than just giving them the money (helps with energy use as well).

11/12/2008 4:47:54 PM

no doubt burdensome unions are a problem, but this doesn't help any:

Quote :

"When Toyota established its business and factories in America, its senior executives lunched in the employee cafeteria. At the same time, the Ford Motor Company had five grades of executive dining room. This was called corporate culture."

http://tinyurl.com/68art3


but all this is just beating around the bush -- the big 3 got out engineered and out-competed, plain and simple

11/12/2008 5:14:33 PM

Let's borrow more money to pay off this huge debt. Surely that won't affect our credit, right?

http://www.cnbc.com//id/27641538

11/12/2008 5:18:32 PM

Quote :

"^Yeah, your viewpoint is a bit dated. Sure, they were making a lot of boring, unreliable cars throughout the 90's, and a lot of those cars are still on the road. Most people judge GM by the memory of older cars from the last 20 years or so, which are kinda crappy. However, the culture at GM changed quite a bit when Bob Lutz came on board, and you can see the results of forward thinking and R&D spending in a lot of the newer designs. The newest Vettes, Malibu and CTS are all rated near the top of their class for both quality and value, and as stated GM is doing pretty well overseas with Opel, Holden, Vauxhall and high sales in China."

I'll concur with this: the overseas success of our auto companies is under appreciated by most Americans. That's something I have heard from other sources. And the quality of their cars probably did get better, I wouldn't be surprised. That's not the point I'm focusing on.

I think that at a point, our car companies focused too much on selling image. From my observation point, I can say that at one point the car commercials on TV got silly, downright silly. They wanted us to focus on the car as a status symbol and wasted too much effort on that. At the same time, maybe this helped them flourished overseas a bit as they sold the American way of life or something.

Maybe.

Quote :

"If anyone's interested I'm working on drafting a letter to the government (house, senate, etc) urging them NOT to give the automakers bail out money. If anyone would like to help edit the letter I'm all for it. It will be general enough that whoever wants it can copy it and send it."

I'm a insecure looser hiding behind my computer, so I'm not going to help, but I completely support this. We shouldn't be bailing them out.

Another blog read:
http://meganmcardle.theatlantic.com/archives/2008/11/labors_love_lost.php

Quote :

"No one seriously believes a bailout will ultimately save General Motors (GM)."

To summarize the counter points for such legislation,
1 - This is a transfer of resources from one sector to another, that in principle should be strongly avoided by the government
2 - It probably won't help that economy that much, and even if it does...
3 - GM will probably still fail. Its debt is too great, and it's problems that got it where it is are institutional - meaning that even if you could somehow magically drag it out of the hole it's currently in, it will want to jump right back in.

11/12/2008 5:25:02 PM

GM has historically been a terribly inefficient, wasteful company. i dont know if theyve gotten better recently or not.

Ford has done a good job following Toyota's lead in leaning out their manufacturing processes

11/12/2008 5:50:11 PM

Firstly, I'd like to say how refreshing it is to see everyone (just about) agreeing on something in here.

I think the government bailing any company is a bad idea, especially a company in the retail industry. I also feel like the unions are a big part of these car companies' problems, as well as corporate mismanagement. How can you expect a company to survive when they are paying an average of ~$70/hr for work that other auto makers can pay ~$40's/hr for? Do away with the current union contracts, bring the pay grades back to normal, and that will help greatly with the "big 3" staying afloat i think.

I heard on boortz this morning that GM purchased (through healthcare of course) around $17 million worth of Viagra last year. Tell me, is this really necessary to have the company pay for, especially on the brink of bankruptcy? I think not.

On a side note as well, I got into a bailout discussion with my roomate last night (a "southern democrat" as he claims), and he called my way of thinking "elitist" because I didn't support the uaw. He claims that fixing the tax policy behind the "free" trade of the auto industry will fix most of the current problem, and that it is in no way a fault of the unions....

11/13/2008 1:32:28 AM

wait, what?

GM may have faults, but you can't SERIOUSLY be griefing a company for providing healthcare to their employees?

employers can't arbitrarily decide what medication to cover and what not to. most healthcare will cover viagra as prescribed by a doc.

sorry you don't approve of it, but that's the way healthcare works, son.

11/13/2008 3:57:35 AM

^because the uaw have fucking retarded coverage policies. They have zero incentive to seek the best care, or to same money. Instead they just bleed the employer dry.

11/13/2008 5:22:45 AM

It doesn't matter what we think, the government will do what ever the hell they want and unfortunately bail them out anyway.

Bailing people out doesn't teach anyone a lesson and just prolongs the inevitable.

11/13/2008 6:45:15 AM

Quote :

"employers can't arbitrarily decide what medication to cover and what not to. most healthcare will cover viagra as prescribed by a doc."

all im saying is that if a company is about to go bankrupt, they can revise their healthcare policy to include only medications that directly a patient's health. i happen to think that viagra is not one of them. gm has the ability to change their policy, but i doubt the uaw would stand for it

11/13/2008 9:08:46 AM

And after the company fails and none of them have health care at all, we'll look back and still be proud that we did it the right way - providing union sanctioned health care to the employees. And the details of the policies, that's the way the system works. We should certainly continue exactly the way we do things now.

Bankrupting the country with health care costs is certainly preferable than any of the alternatives that encourage people to live healthy and not get pills they don't need.

11/13/2008 12:01:21 PM

^^ if you ever lose the ability to get it up, i bet your opinion changes.

11/13/2008 12:12:53 PM

it was viagra. viagra is why gm is going down.

11/13/2008 12:25:03 PM

^^ it doesn't matter what my opinion is in that case. The point is, is that a man's ability to get it up is not a life threatening situation, whereas medicine's that lower cholesterol or treat illnesses are.

And nowhere in anything I said did I state that viagra is sinking gm. I merely pointed out a flaw in the uaw/gm contract. $17 million wont save them from bankruptcy, but things like that that can be cut back could certainly help out a great bit.

11/13/2008 1:46:59 PM

Quote :

"Auto Industry Insider Says: November 11th, 2008 at 6:15 am I don’t work for GM, but am in my final days at a supplier (non-union) and I do know how the numbers shake out in the car business. Since I can’t give them away, all I can do is draw on some public examples. At least a little raw data should help. Based on the 2007 numbers found here, it takes between 30 and 34 man hours of labor to build a car. (http://www.mlive.com/business/index.ssf/2008/06/harbour_report_detroit_3_erasi.html) Now, SaneInSF thinks there is a “$3K-$4K cost disadvantage per vehicle thanks to Union obligations” According to 2007 figures given here (http://www.autoobserver.com/2007/09/gm-uaw-strike-a-deal.html) “GM’s current labor costs are $73.26 per hour” and “The cost is $25 to $30 per hour more than the labor costs of Asian rivals such as Toyota and Honda that have plants in the U.S. The creation of the VEBA could eliminate as much as one-half to two-thirds of the gap virtually overnight.” To be wild and crazy, take the $30/hr difference, cut it in half (because the VEBA was agreed to), and you have $15/hr * $34 Hr/car = $510/car max. Not thousands. Are people actually expecting that breaking the UAW or moving a plant south would suddenly turn a $23k car into a $19k car? As much as the UAW has made my life difficult at times, some honesty is due in the discussion. I would love to spout off on all of the urban legends of this business, like quality differences (1 - Who do these people think makes all those parts you touch when you sit in the vehicle? - hint: it isn’t the company whose logo is on the outside of the car. 2- How many of those companies would people guess there are out there who do this work? hint: not nearly as many as there are car companies) but that is all for another day. Marketing has won emotion over truth on that one. Why are people still surprised to learn that GM actually shares a vehicle and an assembly plant with Toyota? I want to draw the best comparison I can for the people who complain about product mix. If this was like trading; in the typical car business, you can only change 10% of your holdings per year, positions have to be held for 5 years each (no more, no less) and from the day you call your broker, the money is gone and it is a market order that takes the broker at least 4 years to execute. At three years into launch, if the market isn’t going your way, there would be a tremendous incentive to have people post position pieces in public places like your blog. Let’s say you and I had decided that there is profit in the market for a “healthcare special mobile” focused on the soon to be old boomers, complete with O2 tank holders and storage in the doors for folding walkers. We’ve spent the last year crafting plans for 72 units/hr production (~126k units) of the Nuclear Fusion Grandfather (NFG) Edition that is factory fueled for life. No gas, no maintence, no emissions, and you don’t have to worry about forgetting to stop for gas on the way to Florida. We have already hand built one, the design is complete, and we know that it meets gov’t regs. If we commit to it tonight, the earliest we could possibly put it on sale is 2013 and each one will have to sell at our target average of $x until the end of 2017. No turning back. The point is, even when you know how the business works, it takes big brass balls to steer a car company (obviously bigger than a certain soon to be failed, in-over-their-heads, financial brain trust has), and this post has been little more than bait for the arm chair QB’s who thought the *specifically targeted* (can only be used for meeting new regs yet to be decided) $25B had already been funded. At least someone corrected that clown. You have a great blog because you present the facts and call out the position pushers like the NAR. The car business is full of these clowns and Jim Press (especially before last year) and Rob Lache are the NAR equivilents. Don’t be fooled, the data is out there, the domestics are hurting, but not for the reasons most people have been told to think. When people post off-base stuff in response to your regular topics, you usually step in to add a correction. It would be nice if you did the same when you post about the auto business then it attracts the “finger snap solution”, the “my 2004 Corolla is built better than your 1986 Delta 88?, and the tinfoil hat 300 mpg carb crowd. Thanks for your time."

11/13/2008 2:07:01 PM

The oppressive union contracts are about more than just a flat wage increase. Retirement and medical packages are way overboard too. Frankly, I'm all for workers negotiating whatever they can get. They need to be prepared for the fact that they may have priced themselves out of a job, though.

11/13/2008 2:26:24 PM

Quote :

"it was viagra. viagra is why gm is going down."

yeah, no shit.

i swear some of these people here have absolutely no connection to reality.

because it couldnt have anythign to do with flawed designs, poor marketing forecasts, and production processes rife with waste.

no, hell no. its fucking viagra

11/13/2008 3:23:23 PM

The ironic thing is how much GM was probably spending on their designs, marketing forecasts, and improving production processes.

In other words, I'm sure this problem can be solved with more money. Therefore we should use our government to throw money at it.

11/13/2008 4:26:33 PM

minor point: they were spending money on it, but not to improve it. they were just feeding the beast.

for people who are interested in how Toyota has dominated the auto industry, how Ford has finally started to catch up, and how GM has failed miserably to recognize the paradigm shift:

http://www.amazon.com/Machine-That-Changed-World-Production/dp/0060974176

11/13/2008 4:30:22 PM

And you all hear about this, right?

Detroit City Council wants $10 billion bailout for city

http://www.detnews.com/apps/pbcs.dll/article?AID=/20081112/METRO/811120455/1361

Among others:

L.A. among big cities asking for a piece of Wall Street bailout pie

Quote :

"Los Angeles Mayor Antonio Villaraigosa wrote to Paulson along with New York Mayor Michael Bloomberg, San Francisco Mayor Gavin Newsom, Phoenix Mayor Phil Gordon, Chicago Mayor Richard Daley and Philadelphia Mayor Michael Nutter. They are asking Paulson to use the bailout funds to provide $50 billion for cities to invest in construction and public works projects. They also want bailout money to deal with cash flow and pension fund issues."

http://www.bizjournals.com/losangeles/stories/2008/11/10/daily23.html

Sweet Jesus--where will it end?

11/13/2008 4:49:16 PM

Quote :

"According to 2007 figures given here (http://www.autoobserver.com/2007/09/gm-uaw-strike-a-deal.html) “GM’s current labor costs are $73.26 per hour” and “The cost is $25 to $30 per hour more than the labor costs of Asian rivals such as Toyota and Honda that have plants in the U.S. The creation of the VEBA could eliminate as much as one-half to two-thirds of the gap virtually overnight.”"

Sigh, if only employee wages were the only cost incurred in building a car on union work, they might have a point.

11/13/2008 5:44:31 PM

haha, detriot. A glimpse of dem policies gone wild.

11/13/2008 5:53:03 PM

Here's a question I have...

If low taxes are suppose to lead to low unemployment, how is it that under the current record low taxes from Bush's policy, we're having the highest unemployment since 9/11 (or longer, by other accounts)?

Is high unemployment and low consumer spending a glimpse of republican policies?

11/13/2008 5:59:54 PM

Quote :

"Is high unemployment and low consumer spending a glimpse of republican policies?"

No.

It's a glimpse of an intertwined housing and financial crisis and it's propagation through the economy.

Were the housing or financial crises caused by low taxes?

[Edited on November 13, 2008 at 6:03 PM. Reason : 2]

11/13/2008 6:02:16 PM

Quote :

"Sigh, if only employee wages were the only cost incurred in building a car on union work, they might have a point."

Enlighten us mister know it all. What other costs are incurred in building a car on union work?

11/13/2008 6:11:38 PM

I'm gonna go out on a limb and guess that rich pensions and health care coverage for retirees, many of whom retired early, are a substantial cost to the American automakers that foreign car companies don't have to pay.

http://www.washingtonpost.com/wp-dyn/articles/A64599-2005Apr18.html

11/13/2008 6:30:26 PM

That isn't rolled into the hourly rate figure?

11/13/2008 6:34:56 PM

I don't believe so.

Quote :

"G.M. acknowledged in its most recent annual report that from 1993 to 2007 it spent $103 billion “to fund legacy pensions and retiree health care — an average of about $7 billion a year — a dramatic competitive and cash-flow disadvantage.” During those 15 years, G.M. paid only $13 billion or so in shareholder dividends. The company has been sending far more money to its retirees than to its owners. "

11/13/2008 6:51:26 PM

Quote :

"Who do these people think makes all those parts you touch when you sit in the vehicle? - hint: it isn’t the company whose logo is on the outside of the car. 2- How many of those companies would people guess there are out there who do this work? hint: not nearly as many as there are car companies"

OMG NO WAY! This guy thinks he has it all figured out and didn't even mention healthcare or pension (as ^you mentioned).

11/13/2008 8:19:09 PM

Quote :

"This guy thinks he has it all figured out and didn't even mention healthcare"

Healthcare is most certainly included in the 73hr figure. What I was wondering was if the pension was somehow rolled up in it. Prawn points out that it wasn't, but I get the impression from the insider that it somehow is.

Look at this

http://news.thomasnet.com/IMT/archives/2007/10/highlights_lowlights_general_motors_uaw_tentative_contract.html

Quote :

"Perhaps the biggest bone of contention between the union and the automaker has been the issue of health care costs, especially for retirees. "Our retirees will be protected under this Voluntary Employee Beneficiary Association (VEBA)," UAW President Ron Gettelfinger said in a statement. "

And he claims the hourly will get cut in half with this new VEBA or whatever. I also love it when people on this board somehow think they know more than an industry insider and feel they can just dismiss his comments with 1 sentence.

There, showed that clown, he left out health care. What an idiot.

Edit

Again

http://www.labornotes.org/node/1423

Quote :

"The vehicle for doing this is the Voluntary Employees Beneficiary Association (VEBA), a new plan to be implemented in January 2010. GM had argued previously that they owed the equivalent of $50 billion for retirees’ health care, a sum used to demonstrate GM's high overall labor costs."

I get the impression that 75hr is the total cost per worker per hour to produce a car for them, including all liabilities and obligations.

[Edited on November 13, 2008 at 8:45 PM. Reason : .]

11/13/2008 8:39:13 PM

perhaps it is, but it was not clearly stated. And I find it very arrogant of the "insider" to make assumptions about people not knowing who makes the interior materials or how many companies there are.

11/13/2008 11:37:53 PM

yep, only thing worse than paying $73 per hour is... not paying it all.

And having to pay half of it later. When you're about bankrupt.

11/14/2008 11:12:53 AM

The soon-to-be-in-complete control left is not interested in bailing out GM, they want to protect the UAW's contracts. This is simply payback for the unions support.

Capitalism requires bankruptcy in certain situations. It is how companies are streamlined or replaced with more efficient ones.

The best thing for GM is to go chapter 11, get shed of those union contracts, and become smaller and more efficient.

11/14/2008 12:16:38 PM

if i was the gubment, i'd propose this:

- if bankruptcy is the only way the big 3 can break the union's grip on the business, have the them declare it. the renegotiation of the unions' contracts becomes a state of Michigan and/or US government problem - at which stage more reasonable terms should be mandated.

- the bailout then kicks in with the taxpayers getting the following:
--senior/nonsubordinated debt that is convertible into preferred equity with high dividends or a large number of common equity with voting rights.

- board seats with the intention of hiring the right executives and seeing that they are paid for performance. {anyone remember back when some tech CEOs like Jeff Bezos went a year without salary in order to fix their business during the bot com bust? -- that precedent needs to be invoked}

- a tax break scheme that highly rewards fuel efficiency

- a tax break scheme that helps offset the costs of pensions and other entitlements.

i think i bailout can work, and this crisis can be used as an opportunity to make the US auto industry competitive again.

as idealogically sound as the anti-bailout argument seems, it makes no sense where the AIGs of the world get $100 billion plus so that they can continue to make paper, while there's nothing but cake to eat for an industry that makes real stuff and employs a lot of people through the whole supply chain (i.e. Borg Warner, Calahan Brake Pads, etc.).

Chrysler was bailed out in the 70s through a one time event, and it turned that into a 40 year lifeline and continued to provide jobs. Maybe this time around GM and Ford get one time events, and you let Chrysler get acquired/merged into the other big 2.

Further more, this opportunity can be used to transform how the US consumer uses energy. Changing the manner in which auto engines consume energy can be one of the few silver bullets to the long term energy dilema.


next up - Airlines - but that's a thread for later.

11/14/2008 12:20:58 PM

Can we get someone in TSB with a basic understanding of the economy please?

-First and foremost, US buyers and global buyers are most likely NOT going to buy a $20000 dollar product from a company that filed for bankruptcy. Thats the absolute last option for these guys.

-Secondly, if the Auto industry fails, the US economy drops into a deep and prolonged recession. I love the Ayn Rand philosophy flying around this thread and I'm sure to your politically immature world views, the hard line libertarian philosophy sounds good but in practice we all will get affected by such a major industrial failure. There are quite a few side industries associated with the Auto industry and whole economic ecosystem that relies on these three manufacturers. Furthermore, the US manufactures very few major products in this day and age, cars being a large percentage of them. Destruction of that industry will pretty much end American manufacturing in its current form and all associated industries and there would have to be a massive realignment of the US economy to compensate.

-Third, this isn't the fault of the UAW, auto workers, or 'lib democrats.' This is the fault of shitty management by GM, Ford and Chrysler running their perspective companies without any vision while agreeing to unbalanced work contracts during boom cycles. When they had money, the signed the dotted line on anything the UAW wanted. They didn't have to, but they did. They also never bothered making compelling products that were attractive on a global scale or investing in a diversified product pipeline.

-GM's in trouble because of GMAC. Why does a car company have a major bank which provides loans on everything from cars to real estate?

Letting these guys fail or get bought out one at a time is fine, but all at once would produce an economic shock that could have epic fallout.

11/14/2008 12:30:05 PM

Quote :

"US buyers and global buyers are most likely NOT going to buy a $20000 dollar product from a company that filed for bankruptcy. "

this statement makes no sense to me whatsoever.


you're mostly right about the other stuff.

11/14/2008 12:41:35 PM

That statement makes a lot of sense to me:

Quote :

"Buyers would bail. When airlines like United, Delta, and Northwest declared bankruptcy, most fliers stuck with them. That's because it was clear those airlines would stay in business at least long enough to honor their tickets. But it wouldn't work that way for an automaker. Most people who buy airline tickets plan to use them within weeks. But consumers spend way more on a car than an airline ticket, and commit to the product for years. It's kind of important that the company selling the product be around to make good on a 60,000-mile warranty, service the car, and supply parts. Simply declaring bankruptcy would be a disaster for an automaker, even if the company seemed likely to ultimately survive. In a survey conducted by CNW Marketing Research, 80 percent of people close to buying a new car said they would abandon an automaker if it were to file for bankruptcy. Not surprisingly, the numbers were higher for the Detroit 3, and lower for most foreign makes. An automaker could forestall the doom somewhat by offering fire sale prices—but selling cars at a loss would only perpetuate underlying profitability problems. "In today's marketplace, bankruptcy for General Motors (or any major automaker) is a death knell," CNW concluded in a recent newsletter. "

http://www.usnews.com/blogs/flowchart/2008/8/22/how-bankruptcy-would-wreck-gm-and-chrysler.html

11/14/2008 1:34:52 PM

Quote :

"-Third, this isn't the fault of the UAW, auto workers, or 'lib democrats.' This is the fault of shitty management by GM, Ford and Chrysler running their perspective companies without any vision while agreeing to unbalanced work contracts during boom cycles. When they had money, the signed the dotted line on anything the UAW wanted. They didn't have to, but they did. They also never bothered making compelling products that were attractive on a global scale or investing in a diversified product pipeline."

While I do agree that it is not soley the UAW's fault, the Big Three will NEVER succeed as long as they're hampered by the unions. You can't compete against companies that don't use unions. Its impossible.

11/14/2008 3:12:06 PM

Not at all. German unions are quite well compensated too.

Don't quite thing Diamler and BMW are teetering on the edge of bankruptcy.

Also, lets all make sure we note that Ford is not in as bad shape as the other two with a very successful European presence and successful brands like Volvo and Mazda that it can sell off.

In fact, Ford really isn't in danger of bankruptcy at all, but quietly is going along with this for the free money.

Chrysler, in my opinion, is as good as dead anyway.

The real problem here is GM and that mainly because of GMAC.

[Edited on November 14, 2008 at 4:18 PM. Reason : >.<]

11/14/2008 4:17:54 PM

If you want to say that the unions were not to blame because they were acting in their own interests (doing their job), then sure. But honestly, don't the unions have a bit higher moral obligation when they've gotten so big that they can pose and existentialist threat to the company?

it's like if a regulatory body destroys a manufacturing sector in the nation. It was never in their mandate to consider the health of the industry while writing regulations. That was supposed to be someone else's responsibility. Well... no one was taking responsibility and you still killed it.

11/14/2008 4:18:13 PM

Read this article:

http://www.slate.com/id/2204582/

11/14/2008 4:21:31 PM

^^^The Germans also charge a lot more for their cars. They also live in more socialized countries where healthcare is provided by the government rather than the employer.

11/14/2008 5:30:13 PM