Detroit Free-press -- a MUST READ

[FenwickHockey65]

Originally Posted by fbodfather

Here's the REAL Problem: Too many journalists think they're Warren Buffett.......and too many people are not looking at all the facts --

And too many people think that they know all the complexities of the automotive industry when they really don't have the slightest clue about how it works. Can't tell you how many times I've shut down my friends' arguments against GM with that line.

[fbodfather]

Originally Posted by bobscogin

Agreed. Rather than just hand the money over to GM, the government should provide funding through a "pre-packaged bankruptcy" whereby the money is used to guarantee payment to vendors / suppliers. This would allow GM to re-negotiate all contracts including UAW while still providing some assurance to vendors and other creditors that they will be paid. Simply handing them cash which will be gone by the end of the 1st quarter of '09 is simply giving the junkie another fix instead of getting him off the needle.

Bob

OK...fact time:

The number one negotiated item will be that with the biggest cost (liability) -- and that is healthcare and pensions for all retirees --

Now -- very important that you understand that WHEN that gets negotiated under chapter 11 -- YOU -- and ME - the TAXPAYER will take over those liabilities -- which makes 30 billion look like chump change.

IT IS NOT AS SIMPLE AS MOST THINK.............

And -- as I said before -- we gave Washington a very detailed business plan with payback of the loan starting in 2012 as a 'downside' business plan ....

[2KZ28_For_Now]

Geez. About all's I can say is nearly everyone has agreed that the failure of the US Auto Industry could bring a "perfect storm" of related economy effects on the Country.

So what's the boggle? Approve the damn plan, and get it over with already.

Do they really think their glass houses could withstand the perfect storm?

Enough is enough.

Geez.

I'm gonna bow out of this before I really get fired up over it.

"Approve the damn plan, and get it over with already."

Please.

[Nexus6]

http://www.boycottalabamanow.com/

[fireresq157]

Everybody has to do their part from the mail room guy to the CEO The higher the wage the higher the percentage should be in sacrifice. I'm a Union member so is my wife, and we agree there's always a middle ground. Now I've been telling people for years we need to level the playing field. We import like crazy in this country yet when we export we get raped. We need to pass laws and have policies dealing with unfair trading partners. AND YES STOP BLAMING THE UNIONS FOR EVERYTHING,THIS IS NOT A ONE PARTY ISSUE. Yes our politicians Dem and Rep have all let us down Dems put us in this mess. The seeds were planted over a decade ago , so they were very eager to help wall street as if no one would figure out who caused it. Rep refuse to Lend money to Banks and rightfully so after what they've done with it, first thing Citibank did was buy another bank , then a month later the laid off 53 thousand people. That money was for lending, not buying other companies. But now Rep don't lend money that would otherwise been available by lenders to the auto industry so they could get by in the down times like they have dozens of times before. Yet Germany and Japan don't hesitate to help theirs out knowing what is at stake, for GOD sake Canada helping out. Nafta has made us all into one continent not a nation, we go they go. Congress needs their Heads out of their arss for a change. We need not elect extremist moderates function much better and get more done when its not us against them mentality.

[bobscogin]

Originally Posted by fbodfather

OK...fact time:
Now -- very important that you understand that WHEN that gets negotiated under chapter 11 -- YOU -- and ME - the TAXPAYER will take over those liabilities -- which makes 30 billion look like chump change.
....

True, but that would be a one time cost to cover existing legacy cost. Going forward, under a labor wages and benefits contract that's competitive with the Japanese brands manufacturing here, GM, Ford, and Chrysler should have no trouble being competitive and they won't be back at the table begging. My point is this: Let's spend the money in a way that cures the disease, rather than spend it to treat a re-occuring symptom.

Bob

[PieNsky]

Originally Posted by kylepo

what the hell are you talking about???

Gee, I colored it in with a red crayon for you so you will be able to see my response to 1camaro70, about the false 70+ an hour that the workers are making. It costs the Big 3 about 800 per vehicle more than the transplants not 1/3 or 20% of the vehicle's price, if the Big 3 could sell more, the price per vehicle would be reduced as some costs are fixed e.g. holidays, vacation etc.

Originally Posted by 1camaro70
I am going to be unpopular but, how can GM build cars for $72 per hour and the foreign manufacturers building in the USA at $48 per hour?

The search function would show you that no one is making 70+ an hour, that's number ($72) is including the ones who are already retired's insurance, it is more like 55 an hour when minus the retiree's cost but including such things as insurance, holiday pay, vacation pay etc. The hourly pay is similar to the transplants but the transplants have fewer holidays and lesser insurance and the transplants retirees's have much worse insurance for the few that have retired from the transplants so their costs are going to be lower just because that don't have 300,000 retirees.


If GM would go into bankruptcy and releave itself of a union contract that is putting them out of business in the first place, how much could they reduce the price on their cars and trucks, 1/3 ? what about 20% I will be buying a new Camaro, Z71 Truck and the Volt.

It is costing about 800 dollars a vehicle due to lower sales. If you hadn't noticed, Toyotas and Hondas already sell for a premium over the Big 3.

[80Zedder]

As a GM employee, myself and my family are dependant on the survival of GM "somewhat".

But i am not one of those who will defend everything GM does to the death.
I have seen blunders and dunders made by GM top management, wagoner, fritz, etc etc

I dont know what Scott's stand is on Wagoner, but I personally have never seen anyone been on the job for about 9 years now and lose billions and billions and billions of the companys money, marketshare and overall presitge. And to collect a yearly bonus, or ANY bonus pisses me off, not to mention all my borthers and sisters.

If this were a hockey team, he would have been out on his ass a LONG time ago and replaced with somone more competent. for someone who has all this expeience and knowledge of management, this is the biggest scene of mismanagemnt i have seen in a long time.

You know the running joke at any GM plant is? "GM has the right to mismanage"
Personally i dont see anything gettin gmuch better for any of us until Wagoner, Lutz and Fritz get their pink slip with no golden parachute. I would give up half a years pay just to see them escorted to their cars by security with their cradboard boxes of belongings.

One of the other facotrs of this problem. YOUR gov cant decided which pot to shit in. They give away billions to banks, with no plans or accountability. Big 3 which basically runs the nation. Oh no, your gonna get your pee pee's slapped if you come to us wanting more then $2 for a cup of coffee, which we will tax anyways and you cant even get one.

Its been covered in here and Scott made excellent points on it so i wont get into it.

What i will get into is this Union bashing and blaming the union.

How is any of this the unions fault really?

i can't speak directly for the UAW as that's a seperate union then mine "caw" but it all basically runs the same so i will give it a go.

ALOT of you say that the unions are crippling the company. Not so much. When the going got tough for GM, UAW made huge consessions. Teir 2 wage reductions, freeze on any raises, no short work weeks, no job bank, reduced vacation time "no we dont get 4 months paid vacation, we get regular vacation time like the rest of you" and reduced vacation pay "i bet you joe shmoes would be outraged if your job did that to you. They did all this to help out. ITS NOT THEIR FAULT that YOUR country does not have universal health care like the rest of us do. Therefore you have health benefit costs etc etc etc which "apparently" drive up vehicles costs into the hundreds of thousands it seems they way half of you talk.

in Canada here, we are the ONLY north american plant turning a profit right now. but we are aldo getting hit by YOUR gov failure to do anything about the industry, now, and years before when WE ALL saw it coming. Eliminate free trade, open up forign ports to us, tax or do something to the forign vehicles coming into north america. Yet nothing was done and look where we are now. Your corrupt gov officals are protecting forign owed auto plants in their state for what reason?? IF the big 3 go down, they are next. Then these douchbags will be at congress asking for bailout money themselves on behalf of jhonny nipper plant in their state so his statepeople can keep working. And you know what, he will probably get it because your gov is retarded. They would rather give money to the jap onwed manufacturing plants when they cost just as much to run and operate and are on par with american/canadian plants, yet they lets the backbone of the continent die.

BTW, for those of you arguing the fact that GM has more legacy costs, therefore driving up price. etc etc. Hogwash, GM and toyota re on level footing, but yes the legacy costs drive price up a tad more, but nothing to be any difference. Yet some people think it's the end all and be all and thats the way it is and tough luck you can't compete with ricky rickshaw.

Well for one, if your gov had universal healthcare, wouldent be an issue.

and two, and here is the biggest one i like.

Yes there is alot of big 3 retirees that have to be accounted for monetarily. These people built the country and did so much for the war effort and america/canada manufacturing base back in the day. Now they are a huge burden? so what if we have to pay and extra 100 or 200 or even a grand on a vehicle. They did so much for the effort, they deserve it.

PLUS when ricky rickshaw retires from toyota in lets say 20 more years along with hundreds of thousands of his fellow workers, because their 30 years will be up or close to up. What do you think you people will be bitching about then? oh Toyota's legacy costs are too high bitch bitch bitch, they should take a page from GM "as most of us will not be retireing in 20 years en masse as we will all be new workers with about 10 to 15 years in by that point" and we will ook like the good guys again.

It's a cycle and you have to see it for what it is.

Now lets hope someone gets some friggen money, new management, a set of balls, and lets get back to work and crush the "cancer"

[shadowed_Stranger]

Originally Posted by CWIweldace

That's a great read. Great post. Thanks Scott.

The biggest problem I see these days, not just this issue but government in general, is that our congressmen are more concerned with their own constituency and special interest groups. Whatever it takes to keep their voters on their side to keep their office. They no longer care about our government or our economy as a whole. They certainly care about their personal economy and keeping their own estates intact. Simple greed. If not for our polititions terrible decisions and lack of oversight in the banking and mortgage industry over the last several years, we would not even be talking about this.

They don't even care about that. Look up the re-election rate for our congress. It is like 98% for the house and anywhere from 85 to 98% senate. They can do whatever the hell they want, becuase they know that most likely, they will still be in office.

[ShnOmac]

This thread is kind of like a Mustang...... Its not getting anywhere fast

[rmyers]

Originally Posted by fbodfather

OK...fact time:

The number one negotiated item will be that with the biggest cost (liability) -- and that is healthcare and pensions for all retirees --

Now -- very important that you understand that WHEN that gets negotiated under chapter 11 -- YOU -- and ME - the TAXPAYER will take over those liabilities -- which makes 30 billion look like chump change.

IT IS NOT AS SIMPLE AS MOST THINK.............

And -- as I said before -- we gave Washington a very detailed business plan with payback of the loan starting in 2012 as a 'downside' business plan ....

OK so help me understand this. You are saying that if GM files bankruptcy, retirement and healthplans automatically become the responsibility of the Federal Government to cover? Where the heck is that written in our constitution and/or laws and who the hell approved it?

This a real question, I am not being sarcastic. Do you mean that those costs will be literally passed on to the federal government, or do you mean that when the retiree's loose their pensions and healthcare benefits, it will add additional burdens to the Federal goverment via indirect means? Please clarify?

[Mr. Wyndham]

Originally Posted by rmyers

OK so help me understand this. You are saying that if GM files bankruptcy, retirement and healthplans automatically become the responsibility of the Federal Government to cover? Where the heck is that written in our constitution and/or laws and who the hell approved it?

This a real question, I am not being sarcastic...

That's the Chapter 11 proceedings. GM will be assumed unable to pay its debts to the retirees, etc; and that will be turned over to gov't funding - aka tax money, because they can't very well say "screw you" to 1 million retirees. Bankruptcy isn't free like so many people think.

[Design1stCode2nd]

Still the question is how do you close 4-6 brands and 4,000 dealerships without a crap load of money, Chapter 11 or an equivalent?

Yes the market is bad and it’s hurting the domestics the most. The problem is Detroit depended on cheap gas and high profit BoF SUV’s. So no one said “Hey this gravy train won’t last forever. Let’s have a balanced portfolio of cars that don’t compete with each other while we make lots of money on trucks/SUV’s?” It’s called chasing the buck, worked for a company that had and owner like that, surprise, surprise they went out of business.

Manufacturers only need two brands, one main stream and one luxury. This has been proven, look at the failure of Toyota’s Scion brand and Mercury, no reason for either to exist. What point is there to Pontiac, GMC, Buick, Saab, Hummer and Saturn? What is it that they produce that Chevy or Cadillac could not?

Without the ability to shed brands and dealers due to Federal and state laws (and shouldn’t franchise holders be protected to some degree when they put up their life’s savings?) there isn’t really an option for GM other than chapter 11.

Ford needs to kill Mercury and revitalize Lincoln and Chrysler needs to die. Why should Chrysler get any money when their owners have money but are just unwilling to spend it? Gee maybe they know its good money after bad and maybe the banks know you can’t stay in business if you owe more than you make, a lot more.

All the credit crunch and economy did was accelerate what would have happened in a year ro so anyway.

[Mr. Wyndham]

Originally Posted by Design1stCode2nd

there isn’t really an option for GM other than chapter 11.

There are plenty of options. Chapter 11's just the easy way out, it involves less thinking. Just point and shoot once you're under the Chpt 11 umbrella. But even under protection there are tremendous risks, including a high probability of corporate death.

The most sensible, lowest-risk option that's come up so far, imo -- is bridging them to an improved economy. They have made all the low-hanging changes, and are waiting for some of the more significant ones to take effect shortly. But right now is NOT the time to take these drastic measures like Chapter 11...what we need, in every sector, is stability.

Additionally; don't you think dumping 1000s of dealerships and their employees, or cutting pay knee-jerk style is going to have a negative effect on the economy?? That's what we're trying to prevent. Bridging them over lets all this take place over a period of time, and presumably in circumstances that can accept massive layoffs.