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General Motors in trouble


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#1 RTH

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Posted 14 November 2005 - 11:21

Interesting interview last week in " Autocar " with General Motors boss 52 year old Rick Wagoner from Delaware.

A company that can trace it's origins back to the dawn of Motor car and a rich competition history, is it seems at a rather critical cross roads. At the end of this year Toyota will have delivered 9.2 million cars in the year which for the first time will make it the world's biggest car maker outselling GM's predicted 9.1 million sales.

The article says GM have currently the sort of debt levels which lead some people to ask if the company may opt for chapter 11 bankruptcy protection , but at present Wagoner believes he can avoid it. Mammouth employee liabitities which rivals don't have it seems here is key.

GM has 400,000 employees , yet because of well meant decicions 50 years ago to pay the medical costs of its retired workers is now responsable for medical bills of 1.1 million people. In a recent deal with United Auto Workers Union to cut the retiree legacy costs of £40 Billion by 20 % some pundits are saying this is not enough.

Recent fuel cost hikes have hit GM who are big in the 4X4 SUV full size pick-up trucks and people carrier sector hard and new models will be key on both sides of the Atlantic.

Despite monetary constraints more than ever before R&D is vital they are pushing ahead with a Chinese partnership with SAIC . Hybrids are the next big thing something Toyota and Honda already have a big lead in . Toyota launched the first Prius in 1997 ! Honda have a state of the art Hybrid Civic in the showrooms in January.

GM lost £4BN in the first 9 months of this year, that £600 per car sold.

Here in the UK this year we have seen the Rover group and all it's dozen historic car manufacturing brands sink without trace very quickly.

Big though it is, General Motors it seems has a very big mountain to climb, so it is reported here this week. No doubt some of our US friends will be able to fill in some of the companies history .

Tough times it seems are only just beginning for the worlds car makers.

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#2 jcbc3

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Posted 14 November 2005 - 12:04

Discussed this topic with an American friend yesterday. He is not into cars in any way or form.

But his comment was along the lines of: "GM can not go bankrupt". To which I replied that Enron and MCI did. And that I couldn't see why the same fate couldn't befall GM. He looked at me and said: "GM can not go bankrupt".

To me it seems that some Americans are in for a very rude awakening.

#3 Darren Galpin

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Posted 14 November 2005 - 12:07

GM has also announced that it will restate its accounts for 2001.

#4 Darren Galpin

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Posted 14 November 2005 - 12:09

General Motors also guarantees some of the pension fund for Delphi to the tune of $8 billion, as it used to be part of GM. Delphi sought chapter 11 bankruptcy for its American operations last month, so could force GM to cough up. Even harder times ahead. But then it hasn't helped itself, paying something like $2 billion to Fiat in 2004 so that it didn't have to take up its option to buy half the company.

#5 Peter Morley

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Posted 14 November 2005 - 12:43

What's their total turnover?

4 billion is a huge amount of money, but I suspect it is a relatively small amount - possibly like us losing a couple of quid.

Weren't Mitsubishi's losses of a similar size and they must be a much smaller company.

If GM have problems, they should see the VW importer's place near me - they keep buying more & more fields to store the cars they can't sell (their sales apparently dropped something like 40% in one year!).

#6 Darren Galpin

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Posted 14 November 2005 - 13:03

Third quarter revenue was $47 billion.

#7 Darren Galpin

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Posted 14 November 2005 - 13:04

Originally posted by Peter Morley
What's their total turnover?

4 billion is a huge amount of money, but I suspect it is a relatively small amount - possibly like us losing a couple of quid.

Weren't Mitsubishi's losses of a similar size and they must be a much smaller company.

If GM have problems, they should see the VW importer's place near me - they keep buying more & more fields to store the cars they can't sell (their sales apparently dropped something like 40% in one year!).


However, Mitsubishi were part owned by Daimler-Chrysler, and they refused to give extra cash to the company following this, which has caused problems. They are probably part of the Mitsubishi keiretsu, so have others to fall back upon.

#8 Peter Morley

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Posted 14 November 2005 - 17:14

Originally posted by Darren Galpin
Third quarter revenue was $47 billion.


If annual turnover is around 200 billion a year, the loss is around 3% which is better than a lot of companies manage (roughly equivalent to one of my PCs dying) - of course the real problem is it is no doubt increasing. But it does mean they are a long way from bankruptcy.

A sad effect in these days of free competition/markets etc seems to be that we are heading towards a situation where most activities are tending towards domination by a couple of extremely large companies with a number of small companies providing niche products for a very limited range of customers.

#9 EcosseF1

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Posted 14 November 2005 - 17:24

Originally posted by jcbc3
Discussed this topic with an American friend yesterday. He is not into cars in any way or form.

But his comment was along the lines of: "GM can not go bankrupt". To which I replied that Enron and MCI did. And that I couldn't see why the same fate couldn't befall GM. He looked at me and said: "GM can not go bankrupt".

To me it seems that some Americans are in for a very rude awakening.


He might have been alluding to the fact that should GM go bankrupt it would cause massive fallout for the party in power at the time. GM is such a big employer that there would be a lot of pressure on the government to prop it up somehow.

#10 Alan Lewis

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Posted 14 November 2005 - 19:22

As others have already alluded, GM will not go bankrupt. See also the major US airlines.

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#11 EcosseF1

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Posted 14 November 2005 - 20:18

UK members might not know that GM has had to resort to Employee Pricing (Discounts up to 50%) to move it's inventory recently. Yes, the sales have risen but at what cost?

#12 HDonaldCapps

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Posted 14 November 2005 - 20:25

Originally posted by RTH
GM has 400,000 employees , yet because of well meant decicions 50 years ago to pay the medical costs of its retired workers is now responsable for medical bills of 1.1 million people. In a recent deal with United Auto Workers Union to cut the retiree legacy costs of £40 Billion by 20 % some pundits are saying this is not enough.


Whenever I read stuff like this, which clearly implies that the workers are at the root of the problem -- never the management, and that reneging on promises and contractual agreements for retired workers is okay, the old Bolshie in me begins to simmer and boil.... :mad: The senior management at GM is well-compensated -- usually well of of proportion in relation as to what they actually do, which really isn't that much -- and few of them seem to be volunteering to forego any of their benefits and bonuses, but it is perfectly acceptable to screw the workers out of their retirement programs.

What you are seeing is GM moving towards the Wal Mart business model -- and all the consequences thereof, many of which, if not most, are negative -- as fast as it can. Today, American workers are generally in much the same boat they were about a century ago, only there is no Teddy Roosevelt to stand up to the Robber Barons or a much hope for a labor reform movement since to protest is open invitation for jobs to "out-sources" elsewhere. The productivity of the American worker is at record-breaking levels and yet the squeeze is almost put on them to make the sacrifices while executive compensation is beyond any level ever remotely contemplated with little linkage between that compensation and actual results. Indeed, a company can be an utter shambles and the executives still get healthy bonuses...

It makes me want to storm the Winter Palace.... and string up all the pundits along with all the exploiters of the workers...

#13 RTH

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Posted 15 November 2005 - 10:00

Some very good points there Don.
We know the losses for the first 3 quarters of this year, what I have not read anywhere , is just what GM's accumulated total debt is ?......And the ongoing annual liabilities ?

OK, so you have just been made head of GM with a completely free hand, what would you do from here to get the company out of debt and back to being a competitive auto maker ( without slashing the workforce, drastically)

Clearly it cannot just be left, some action will be needed, and quickly.

#14 Peter Morley

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Posted 15 November 2005 - 10:44

Originally posted by EcosseF1
UK members might not know that GM has had to resort to Employee Pricing (Discounts up to 50%) to move it's inventory recently. Yes, the sales have risen but at what cost?


That's not so unusual - apparently Mercedes biggest customer is Mercedes!
(I can't remember exactly what the headline was but I think that it was Daimler Chrysler's (e.g. the overall company) biggest customer is themselves).

Fleet discounts are very large, so they might not be losing much by selling to their employees rather than fleets (they are also cutting out any dealers commission).

What was their previous employee discount - given that diplomatic discounts etc can be upto 30% (including VAT) I assume the employees were always offered a good discount (not to mention cheap loans etc)?

#15 Peter Morley

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Posted 15 November 2005 - 11:01

Originally posted by HDonaldCapps


What you are seeing is GM moving towards the Wal Mart business model -- and all the consequences thereof, many of which, if not most, are negative -- as fast as it can. Today, American workers are generally in much the same boat they were about a century ago, only there is no Teddy Roosevelt to stand up to the Robber Barons or a much hope for a labor reform movement since to protest is open invitation for jobs to "out-sources" elsewhere. The productivity of the American worker is at record-breaking levels and yet the squeeze is almost put on them to make the sacrifices while executive compensation is beyond any level ever remotely contemplated with little linkage between that compensation and actual results. Indeed, a company can be an utter shambles and the executives still get healthy bonuses...


It could be far worse - at least they are still using American workers, rather than shipping production off to the Far East where they get far more productivity for their money, which is the short sighted trend in the UK for example.

Assuming they keep going, when the prices rise in the Far East (which they will do rather quickly) they will be in a far better position - Eastern prices are so low that even a small increase in costs is such a huge percentage that it will really hurt any business working on small percentage profit margins.
(e.g. you pay someone 1 dollar a day then an extra dollar a day is a 100% increase, whereas the extra dollar is only a 2% increase for someone on 50 dollars a day).

Of course they also have to produce something that the customer wants - and 30 years later than everyone else the US is starting to worry about fuel economy, so large inefficient cars (& probably more importantly pickup trucks, SUVs, RVs etc) are going to become harder to sell.

Obviously they have to make some changes but it is a relatively small loss.

#16 EcosseF1

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Posted 15 November 2005 - 14:08

Fleet discounts are very large, so they might not be losing much by selling to their employees rather than fleets (they are also cutting out any dealers commission).[/B]


The "Employee Discount" has been available for everyone. Joe Public has been paying the employee price for every vehicle sold (apart from Corvette and a few other high-end vehicles).

#17 Mallory Dan

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Posted 15 November 2005 - 14:25

The quicker the ridiculous and and utterly stupid RV/SUV craze comes to an end the better. Am I the only one who thinks these things quite appalling, and I should add I'm far from a Greenpeace loving, Save the World old lefty ...

#18 Arthur Anderson

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Posted 15 November 2005 - 19:44

Originally posted by HDonaldCapps


Whenever I read stuff like this, which clearly implies that the workers are at the root of the problem -- never the management, and that reneging on promises and contractual agreements for retired workers is okay, the old Bolshie in me begins to simmer and boil.... :mad: The senior management at GM is well-compensated -- usually well of of proportion in relation as to what they actually do, which really isn't that much -- and few of them seem to be volunteering to forego any of their benefits and bonuses, but it is perfectly acceptable to screw the workers out of their retirement programs.

What you are seeing is GM moving towards the Wal Mart business model -- and all the consequences thereof, many of which, if not most, are negative -- as fast as it can. Today, American workers are generally in much the same boat they were about a century ago, only there is no Teddy Roosevelt to stand up to the Robber Barons or a much hope for a labor reform movement since to protest is open invitation for jobs to "out-sources" elsewhere. The productivity of the American worker is at record-breaking levels and yet the squeeze is almost put on them to make the sacrifices while executive compensation is beyond any level ever remotely contemplated with little linkage between that compensation and actual results. Indeed, a company can be an utter shambles and the executives still get healthy bonuses...

It makes me want to storm the Winter Palace.... and string up all the pundits along with all the exploiters of the workers...


Don,

Executive compensation aside, what I see with GM is a manifestation of Santyana's thought: "Those who forget the lessons of history are bound to repeat them", and 42 years ago, we saw almost exactly what is happening to GM (and Ford, and to a lesser extent, Chrysler) at Studebaker, then the oldest, longest running manufacturing company in the United States (having been begun in 1852, as a wagon and buggy maker). Studebaker management, loath to antagonize the United Auto Workers in 1947 (still stinging from Studebaker's having existed for more years in receivership (1933-39) than any other major US industrial corporation) agreed quickly and willingly to union demands for pay increases (what the hell, we ALL like to see more money in our paychecks!), job security (Don't we ALL wish to have the ability to retain our employment without fear of being laid off?) and work rules (we can't have sweepers doing the work of highly skilled machinists or toolmakers, now can we?). This bought labor peace at a time when every US automaker was selling cars almost faster than they could be produced, Studebaker included--only a relative few visionaries could look forward clearly enough to see that those heady times couldn't last forever). the late Arch Brown, in an excellent feature about the 1953-55 Studebakers in Collectible Automobile Magazine, relates an interview with a Studebaker engineer, who in arriving from GM in '53, was shocked to discover that had Chevrolet been building those famed Loewy-styled cars, Chevy would have produced them for something like $300 less per car (in a day and age when a new Chevy could be had for a little over $2000, $300 ws a significant sum per car!). Studebaker barely made any money on the 53's, and by 1954, with the lamentable Ford vs Chevrolet all-out sales and production race in full swing, Studebaker, as much as any other independent automaker, suffered the fallout, to the point that no matter what, Studebaker could not see black ink on the P&L until 1959 and the introduction of the Lark, which they were able to repeat marginally in 1960, until the onslaught of Big Three compact cars, upon which, Studebaker slid into final oblivion as an automaker--gone after 1966. Through the years after 1947, Studebaker was virtually unable to gain control over labor costs, even factory staffing levels--either shut down, or have everyone on the clock. About the only way to achieve work force reductions was through attrition. And, when Studebaker shut down their South Bend and Los Angeles factories (Studebaker's successor company exists profitably to this day, but not in automobiles), a bigger problem arose: Never before in US history had so many workers seen not only their jobs disappear, but their pensions as well. Perfectly legally, Studebaker shut down their pension plans (pensions at that time existed solely out of the largess of the employer, owned by the employer, and paid benefits based on the ability of the employer to contribute funds to those plans, even their willingness). That was the event that sparked several years of political debate, resulting in ERISA, and the concept of government-guarranteed pension plans. But the bottom line at Studebaker was, simply, far-higher labor/production costs per car than those of any other US automaker.

The same troubles existed at Chrysler Corporation, stemming from a long (the longest in US auto industry history) strike in 1951. The resulting settlement of that strike created a cumulative situation at Chrysler, such that by 1980, the third-largest company in the industry faced bankruptcy, even outright liquidation. I won't go into how that was resolved, the history books are filled with the story). US railroads and the so-called "Legacy Airlines" faced, and are facing, the same issues.

Any comparison of GM or Ford to WalMart, indeed the entire "big-box" retail discount industry isn't quite valid, it seems to me. The auto industry has been facing intense price competition for most of its history, certainly since the great shakeouts of carmakers began in earnest in the 1920's. Also this is the same in retailing, and has been since almost the beginnings of the republic (a perusal of old-time advertising shows a strong preponderance of "cheaper", "low prices", "best deals in town" tag lines. It's nothing new.

GM, Ford, Chrysler and AMC all faced serious difficulties with the influx of import cars in the 1970's and 80's. Not only were they caught, flat-footed, by the almost overnight demand for fuel efficiency in the sudden oil embargoes of 1973, followed by another oil crisis in 1979, but rampant inflation at a time when they needed to redesign, retool almost overnight. The quality, not only of design, but more importantly manufacturing, never the strongest suit of mass-produced cars in the US, declined alarmingly as cost-cutting ran amock--not only against inflationary pressure, but the need to channel massive funds quickly into new, smaller cars, and the retooling needed to produce them. In short, American cars of the 1970's and early 1980's just weren't that good, certainly not in the face of intense Japanese competition. Perceptions, real or imagined, of poor quality and durability, once gained, are very difficult to erase--cars being the second largest purchases most people make in their lifetimes. It's been only in the last several months that the "lofty" publication Consumer Reports has been willing to admit that American makes now roughly equal, and in many instances exceed, the quality levels of imports. However, and understandably so, the UAW and its members are reluctant at the very least to rethink the situation as it exists. One ought to take into consideration that in the American Big Three, total labor costs now approach more than $80 per hour in pay and benefits. One must ask, I think, is a job on an assembly line in Detroit, Lansing, Flint, St. Louis, Louisville, Warren OH truly worth that much per hour? The answer all depends on which side of the counter one stands. I would also submit that the same question be asked regarding the executive ranks: Is anyone TRULY worth mulitiple millions of dollars in salary, perks, and compensation deferred until the retirement, either by age or involuntary by termination, of any one individual (of course, such executive deals are generally but a very small slice of the pie--but the impressions nonetheless are significant, and not lost on rank-and-file--perhaps that should be termed "ethics"?)

Something will have to give, somewhere, someplace, and relatively soon. Better that solutions are found and implemented in the field, in the private sector, as given the polarization entrenched in Congress, no overall equitable laws are likely. Sacrifices are inevitable, how equitably they are felt will be a matter for considerable discourse, naturally. So is inflation, particularly overseas inevitable--as the same pressures leading up to the labor cost situation as exists in the US and Europe are, and will continue to be, issues in the developing world. Just when, and how, any balance between these forces comes about is anybody's guess--but I think there's enough blame to go around: As one of my college professors observed, way back in the 1960's "We all like to see a little bit of inflation in our paychecks", and as the late cartoonist Walt Kelley's character Pogo spoke once, as he poled his little boat through Okeefenoke Swamp: "I have met the enemy, and they is us!".

Art

#19 HDonaldCapps

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Posted 16 November 2005 - 04:21

Actually, Pogo didn't say it, Churchy did....

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#20 RTH

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Posted 16 November 2005 - 12:06

Fascinating stuff Art, I have to say from this side of the atlantic, just like our own British car industry, I suspect the old established US makers will not be fast enough on their feet, will not make big enough changes in time.

I would expect plant closures, workforce reductions at a slowish pace but not the radical measures or product changes to really turn things around.

Here, we now have no British owned volume car makers, but we do have highly successful manufacturing facilities producing Toyotas, Nissans, Hondas, BMW (Mini and Engine plants ) Despite a high wage economy these factories all export 3/4 of their output have world level production efficiency and are profitable, though of course these profits are repatriated , nonetheless they do provide valuable employment for the time being.

We are very concious here that every day manufacturing (and indeed call centres, accounts departments, and a great deal more ) is rapidly being relocated to China, India, and the whole of the pacific basin area. If we go in to even a minor world recession, with so much of the economy geared to leisure and service, things here could get very nasty, very quickly.

Mainland continental Europe is probably potentially in even worse shape, tied as it now is to a single currency and a single interest rate and hide bound by restrictive EU rules on trade, employment and much else inefficiency and senseless red tape. As someone once said, interesting times ahead.

#21 ian senior

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Posted 16 November 2005 - 12:53

Thanks to Arthur for some fascinating insights - as Richard says, there are (sadly) many parallels with British car manufacturing too. I didn't realise that Studebaker had been in such dire straits - and I guess that merging with equally moribund Packard didn't help things either, nor would the alliance with Nash and Hudson, if that had ever come off.

Perhaps there is some hope. Take a look at the British motorcycle industry - Triumph, having started from scratch all over again, are now thriving and employing over 1000 workers in a new facility. That could be the way to do it - simply start again with a respected name. Brand loyalty counts for a lot, and hopefully some MG and Rover enthusiasts will one day be able to buy their favourite cars again (optimist that I am).

#22 Todd

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Posted 16 November 2005 - 15:49

Management points at labor, and labor points at management. In the case of GM, they are both right about the other, and wrong about themselves. The best thing that can happen is that GM implodes overnight. The worst thing would be for the rest of the country to be required to bail these fat cats out. Yes, I do consider anyone getting $65 an hour in compensation to perform unskilled labor badly to not be deserving of penny number 1 of assistance from taxpayers for whom productivity isn't an obscenity, and who aren't as absurdly overcompensated for being an obstacle to our economic competitiveness as a nation. As for GM management, fine them until they bleed. For too long these clowns have bartered the corporation's future in exchange for UAW compliance in producing short term profits to justify their ridiculous compensation levels. If ever two groups deserved each other, it is the UAW and US auto company management.

#23 RTH

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Posted 16 November 2005 - 19:48

Originally posted by ian senior
............. hopefully some MG and Rover enthusiasts will one day be able to buy their favourite cars again (optimist that I am).


I'm an optimist on this as well Ian, probably not Rover I suspect this word has been too badly damaged by the TV & print media..........but I do believe in some form the MG name will grace an all new car at some point in the future.........can't honestly see it any time soon , I rather hoped it would get in to the hands of Ford or Honda (Ford I think have done very good work with Aston Martin and Jaguar ) So that something really cutting edge and relevent with style and heritage made in Britain might emerge.....too much to hope for ?

GM in Europe is Vauxhall Opel and Saab. Car making in Luton ended some time ago, If the massive Airport expansion goes ahead.....all but certain, doubtless much of the land around it, still owned but under used by GM will be sold off for building.

Other news today both Renault and Peugeot are cutting back production on their smallest cars the Modus and 1007.......simply because they are not popular enough for predicted levels .

Really Toyota is the only bright spot in the world scene , simply because rightly the make has a reputation for very reliable vehicles.......as someone said earlier this week ' as reliable as a wood burning stove !

#24 HistoricMustang

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Posted 16 November 2005 - 21:51

Read recently that GM has an $1800 per vehicle disadvantage right off the assembly line because of retirement benefits.

When the market controls the selling price (I love capitalism) you are crap out of luck with that kind of baggage.

Henry

#25 Cris

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Posted 16 November 2005 - 22:11

Arthur, great read, thanks.

Cris

#26 sblick

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Posted 16 November 2005 - 22:51

An earlier post asked what GM's debt level was. According to an article in Detroit News it is close to 268 billion in bonds and loans. For others in Europe if GM decides to close a plant they have to pay those employees 95% of their salaries until 2007 when the UAW contract is up.
The Employee discount ended in Sept. and if you are on the ball it was cheaper to buy with rebates. I hate to think how much GM could accomplish if they spent 1000 dollars more per car on engineering than 3000 a car to sell it.
I agree with Don that executive compensation here is ridiculous although it is part of the American way. When will a Board of Directors stand up. Never. It is unfortunate that the Board of Directors is full of other CEO and they don't want to be treated like that.
The rising animosity between union and management is never going to solve the problem. It is the worst aspect of our union system here. The unions have no reason to trust management since they never know how healthy the company is. Why should a Union give up concessions when they look at the company through rose tinted glasses thinking everything is fine. GM finally opened up their books to the UAW so they could see that they were in trouble and got some health care concessions from it.
As of this moment Hedge companies and large stock holders in GM are "insuring" their stake in the company. The analysts for Bank of America have said that GM will declare bankruptcy in the next year. The fight between Delphi and its employees will make it a lot easier for GM to declare when Delphi goes on strike. Delphi gets over half their income from GM.
The ripple effect from this happening will be huge to the American economy. Think of all the suppliers that won't get paid or will be cut out. The Delphi bankruptcy allegedly is costing the state of Michigan 10 billion in lost tax revenue over the next few years. Imagine what will happen to all of GM's retirees when they pull the plug on a third of thier retirement. Ouch!!! I hate to think what will happen when GM says NO MAS. Ford and Chrysler will almost have to follow.

#27 HDonaldCapps

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Posted 17 November 2005 - 05:50

I would suggest that this is more a topic for the Paddock Club than TNF.

#28 RTH

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Posted 17 November 2005 - 11:39

Well this group of companies are as old as the motor car and the present prediciment is very much as a result of the history of models, management and work practices especially in the post WW2 period.

Having read some of the detailed history outlined by several of our North American friends above, I now get the feeling this is all a great deal more serious, could indeed come to a head quite quickly now with an economic outcome that could send a shock wave right across the western world and may have a catastrophic outcome for a great many people.

It may be a very big story about to unfold. Much can be learned from the history of others experience, yet so often it is ignored.

I have great admiration for Henry Ford and what he achieved in such a short period of time. When he said "History is Bunk " I have always wondered what he really meant by that and if it was taken out of context ? At face value it seems inconsistant even given he was a pioneer in new technology and changed the face of the world in the 20th century.

#29 ian senior

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Posted 17 November 2005 - 13:04

Dodgy management and dodgy unions have clearly played a major part in the serious trouble that many of the world's car manufacturers have found themselves in over the years. But you could probably stand a certain amount of this if you are turning out products that the public want to buy, and the inward cash flow continues. I can't help feeling that the reason some companies are in such dire straits is that they are diversifying too much into too many product areas, and are also simply producing too many models, let alone too many cars overall.

Take a look at the various types of cars that are on the market - let's say they fall into the following categories: city car, supermini, Focus-size, Mondeo-size, large saloon, 4x4, MPV and sports car. And the market itself - there are what you might call mainstream producers (Ford, Chevy, Renault), mid-market (BMW, Audi, Saab) and luxury (Bentley, Ferrari). Is there are any real reason why most companies presently seem to want to tilt at everything? Why not define your core market - mainstream, mid-market or whatever - and choose 3, 4 or 5 categories of car to produce to suit that market. Don't be a jack of all trades, be a master of some.

So we end up with people like VW producing a luxury saloon to rival the Jaguar XJ and BMW 7-series - and who wants a luxury car with a VW badge - and companies like Renault that do at least four MPVs, and a luxury saloon that no-one wants. I predict that VW may well be riding for a downfall if they continue with such a confusing array of models.

And no, I don't think this belongs in Paddock Club. This subject may be off the TNF remit, but the level of debate here is so much better.

#30 Mike Lawrence

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Posted 17 November 2005 - 18:36

Isn't part of the problem the discounting war which has gone on in America? Trying to compete on deals in the North American market is one of the root causes of Mitsubishi's present trouble. Another is that the Japanese have taken against the company because it covered up a serious problem on one of its trucks which resulted in the truck shedding a wheel which killed a young mother out with a baby and a toddler. I believe that at least 35 other fatalities have been connected to this fault and subsequent enquiries showed that Mitsubishi had covered up other defects rather than undergo a product recall.

Henry and The General have essentially become financial institutions. You buy a car and they sell you a hire purchase deal. The car is sold cheaply and becomes the reason for borrowing money. Ford is in hock to the tune of more than US$70 billion, but I wonder how well the finance subsidiary is doing..

Some years back President Bush I complained to the Japaense that they did not buy American cars. It was pointed out that Japan drives on the left and Detroit made no right hookers. Chrysler than woke up to the fact that about 50 other countries drive on the left and that it was missing out on 43% of its potential market outside of North America including India, Australia, the UK and South Africa. All those highly paid executives had missed this simple point.

In the UK Chrysler's Jeep range began to appear. There was an attempt to market the Neon saloon and the deal looked really good value, it had every extra as standard, a bit like Japanese cars when they really took hold in the UK market in the 1970s. The trouble was that the Neon was a terrible car without one redeeming feature (I had one on test for a week). Chrysler learned its lesson so has since sent us premium vehicles like the Crossfire and the PT Cruiser. The Crossfire did not receive rave reviews, but the Cruiser was well-liked. Chrysler has built a decent dealer network which is entirely independent of Mercedes-Benz.

The point has been made that Renault has too much overlap and this is ironic considering that the number of platforms helped bring Nissan to its knees and when Renault stepped in it rationalised the Nissan range.

Does anyone know what car President Chirac is driven in? France taxes cars according to capacity so anything above 3000cc is rare indeed. On the other hand, there is much prestige in supplying official cars and they have to be French.

Fiat is still in deep doo-doo. Time was when you rarely saw anything in Italy not made by one of Fiat's branches. Last time I was there, a couple of years ago, it seemed that the Toyota Yaris was the car of choice in Rome where parking is a huge problem. Audi has become the marque of choice among aggressive drivers. I have never seen a Ferrari, Maserati or Lamborghini in Italy unless a car meet was involved.

The General paid Fiat a huge amount to get out of a commitment to buy the company (I believe it owns 25%) and that has relieved Fiat's position in the short-term. I am not convinced that Fiat Auto has a long-term future. The joke used to be that in France the state owned the major car maker while in Italy...The ramifications if Fiat collapses do not bear thinking about.

The UK now makes make more cars than ever we did in the past, even if most are called Honda, Toyota, Nissan and Peugeot. Most of these firms source components locally so there is a British-owned automotive industry in the wider sense even though we no longer have a mass produced native marque. Japanese companies located here because the government offered inducements and because we were in the EU. I believe that the Nissan Micra was largely designed here so the benefit goes two ways. Fiat does not have the same advantages in the face of adversity.

#31 Ruairidh

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Posted 17 November 2005 - 18:57

Originally posted by sblick
An earlier post asked what GM's debt level was. According to an article in Detroit News it is close to 268 billion in bonds and loans.


But remember that, as Mike points out in a later post, all of the big automakers now have finance arms (sometimes with far larger economics than the car maker arm). It is in these finance arms we are told where, at least on paper, the profits are.

The point being that well over $200bn of that debt is under GMAC (GM's financing arm) i.e. money borrowed from the capital markets to then loan on to consumers to buy cars (and houses etc.).

So it is kinda different to the $20bn or so that GM the automaker arm carries to support the manufacturing arm of the group.

Don, the only problem with moving this to the Paddock club is that I'm not sure how many of the participants ever venture into those waters.

#32 A E Anderson

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Posted 17 November 2005 - 22:25

Originally posted by Mike Lawrence
Isn't part of the problem the discounting war which has gone on in America? Trying to compete on deals in the North American market is one of the root causes of Mitsubishi's present trouble. Another is that the Japanese have taken against the company because it covered up a serious problem on one of its trucks which resulted in the truck shedding a wheel which killed a young mother out with a baby and a toddler. I believe that at least 35 other fatalities have been connected to this fault and subsequent enquiries showed that Mitsubishi had covered up other defects rather than undergo a product recall.

Henry and The General have essentially become financial institutions. You buy a car and they sell you a hire purchase deal. The car is sold cheaply and becomes the reason for borrowing money. Ford is in hock to the tune of more than US$70 billion, but I wonder how well the finance subsidiary is doing..

Some years back President Bush I complained to the Japaense that they did not buy American cars. It was pointed out that Japan drives on the left and Detroit made no right hookers. Chrysler than woke up to the fact that about 50 other countries drive on the left and that it was missing out on 43% of its potential market outside of North America including India, Australia, the UK and South Africa. All those highly paid executives had missed this simple point.

In the UK Chrysler's Jeep range began to appear. There was an attempt to market the Neon saloon and the deal looked really good value, it had every extra as standard, a bit like Japanese cars when they really took hold in the UK market in the 1970s. The trouble was that the Neon was a terrible car without one redeeming feature (I had one on test for a week). Chrysler learned its lesson so has since sent us premium vehicles like the Crossfire and the PT Cruiser. The Crossfire did not receive rave reviews, but the Cruiser was well-liked. Chrysler has built a decent dealer network which is entirely independent of Mercedes-Benz.

The point has been made that Renault has too much overlap and this is ironic considering that the number of platforms helped bring Nissan to its knees and when Renault stepped in it rationalised the Nissan range.

Does anyone know what car President Chirac is driven in? France taxes cars according to capacity so anything above 3000cc is rare indeed. On the other hand, there is much prestige in supplying official cars and they have to be French.

Fiat is still in deep doo-doo. Time was when you rarely saw anything in Italy not made by one of Fiat's branches. Last time I was there, a couple of years ago, it seemed that the Toyota Yaris was the car of choice in Rome where parking is a huge problem. Audi has become the marque of choice among aggressive drivers. I have never seen a Ferrari, Maserati or Lamborghini in Italy unless a car meet was involved.

The General paid Fiat a huge amount to get out of a commitment to buy the company (I believe it owns 25%) and that has relieved Fiat's position in the short-term. I am not convinced that Fiat Auto has a long-term future. The joke used to be that in France the state owned the major car maker while in Italy...The ramifications if Fiat collapses do not bear thinking about.

The UK now makes make more cars than ever we did in the past, even if most are called Honda, Toyota, Nissan and Peugeot. Most of these firms source components locally so there is a British-owned automotive industry in the wider sense even though we no longer have a mass produced native marque. Japanese companies located here because the government offered inducements and because we were in the EU. I believe that the Nissan Micra was largely designed here so the benefit goes two ways. Fiat does not have the same advantages in the face of adversity.


Mike,

Claiming to have the lowest price, indeed working toward that, has been a part of the American economy since our independence as a nation began in 1776. It's borne of the Industrial Revolution and the subsequent embracing of mass production, which was adopted in the US rather far ahead of much of the rest of the world. The notion of selling goods (which cars are, by the way) at reduced pricing, to the consumer really got its start with none other than John Wanamaker and FW Woolworth (Woolworth is no longer around in most of the US, if at all, anymore).

Cars in the US have been sold on price successfully certainly from the beginning of the Model T Ford in 1908 (although others had attempted low priced cars earlier). From then on, there have been two tiers of automobile manufacture and marketing in the US--those built down to a price, and those built up to a higher level, either of performance, quality, or features. Most of the failed marques of cars in the US were those started to compete with Ford, and of those marques, Chevrolet was, and is, the most successful--and the only US marque that managed not only to survive, but succeed.

The concept of "installment payments" on money loaned for the purchase of consumer products didn't start with the auto industry (who by the way, were loathe to even think of such a thing, until about 1913 or so, at Ford!), but with the Singer Sewing Machine Company, in the mid-19th Century. Ford created their own financing arm, about 1913, in order to make it even easier for new car buyers to purchase and pay for a new Ford. As recently as 2000, Ford Motor Credit was the largest single consumer-loan operation in the US--but nearly every US manufacturer has their own financing unit--even Boeing Aerospace, who will gladly (upon sufficient credit rating) gladly finance a new Boeing airliner for you! GM, Daimler-Chrysler, IBM, General Electric are some of the other large corporations with in-house financing units. But, even small retail stores started extending credit to their customers--ever see an American western or frontier movie or TV show, where the line "would you put that on my bill?" crops up--same thing. Even today, all the larger retailers in the US, in addition to being willing to sign you up for a MasterCard, Visa or American Express Card (Discover Card was begun by none other than Sears Roebuck & Company in the early 1980's!), but will grant you their own store credit card as well--money extended to customers for the purchase of merchanise by the store(s) themselves. So this is not unusual in the US, in fact it's one of the ways business here is conducted.

Jeep vehicles have been marketed in most of Europe and the UK, since the beginning of the civilian CJ-2 right after WW-II, but of course, with the economies of those countries in terrible shambles after the war, sales were pretty poor. In addition, certainly with respect to such as Japan and Korea (both of which export a large percentage of their auto production to the US, BTW), local politics and taxing policies tend to keep imported goods out, especially cars. The same has been true at times in the UK, France, and I believe Italy. With the latter two, a lot is political is it not? Is not Renault still owned by the French Government (the result of punitive action following WW-II, and does not the Italian Government own at least a controlling interest in Fiat? In the US, other than for a brief period of time in the early 80's, when the US Government extended loan guarrantees to aid Chrysler--keep them up and running--I know of no US Government-owned automakers. Even with the various trade agreements, multilateral tariff agreements, WTO, the lowest importing costs due to tariff or taxation, are still in the US--which doesn't make for a particularly level field for US-based carmakers. However, cars purchased for US government use (or for that matter, for use by state and local goverments) almost universally are US-made, US-branded (although some of the transplant marques, such as Honda, Subaru, even BMW do see some governmental use in the local areas associated with their US plants). Certainly, it would not look good to the electorate for the President of the United States to be seen in a Rolls Royce or Mercedes Benz Limousine!. In that, we are no less provincial than others.


Just some thoughts to add to what is a fascinating subject.

Art

#33 CJE

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Posted 18 November 2005 - 00:03

I've lived in the heart of GM Country my entire life. I know many, many GM/UAW workers. Good guys, mostly, but highly overpaid. How about $30 per hour for the guy who mows the lawn in front of the factory for starters ..... then these guys retire at age 50 (15 years before the rest of us!!) with full pay :eek: They've been living in their own little makebelieve world for 4 decades. Whose fault? It's the UAW's for demanding these wages/benefits and management's for agreeing to them year after year.

That said, the HEART of the problem isn't health care or pension costs as management would like everyone to believe. It's simply PRODUCT. GM builds poorly designed, poorly built, overpriced cars (there're a few exceptions, so they ARE capable of building good cars). They've done it for years and it's finally caught up with them. Until they build cars the public wants at prices the public is willing to pay, they're toast.

#34 WGD706

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Posted 18 November 2005 - 00:09

Chrysler seems to be taking a different approach...DETROIT (AP) - DaimlerChrysler AG's Chrysler Group said Thursday it will give two years of free gas to customers who buy a 2005 or 2006 vehicle before Jan. 3, following announcements of new discounts by rivals General Motors Corp. and Ford Motor Co.
Chrysler will also kick in two years of free scheduled maintenance and increase the warranty on mechanical parts to five years or 60,000 miles. Chrysler now offers a three-year, 36,000-mile warranty. The offer, called the ``Miles of Freedom'' plan, begins Monday.
`The combination of free gasoline, free scheduled maintenance and a full warranty puts our customers' mind at ease and allows them to fully experience the joy of driving one of our vehicles,'' said Joe Eberhardt, Chrysler's executive vice president of global sales, marketing and service.
The company said the free gas will come in the form of a $2,400 debit card that can be used for anything. Alan Helfman, manager of River Oaks Chrysler Jeep in Houston, said the free maintenance is worth $200 to $300 and the extended warranty is worth $600 to $700.
``It's a great tool for marketing,'' Helfman said.
DaimlerChrysler shares rose $2.03, or 4.1 percent, to close at $51.18 Thursday on the New York Stock Exchange
For the rest of November, customers will be able to choose between the new incentive or cash-back plans already in place that expire Nov. 30. Helfman said some customers might still choose the cash, although the new plan could be a better deal. The 2006 Jeep Commander, which starts at $27,290, currently has a $1,500 rebate, Helfman said. Under the new plan, that would double.
Chrysler is excluding some of its hottest-selling vehicles from the plan, including the Dodge Viper, Chrysler 300, Dodge Magnum, Dodge Charger, Dodge Sprinter and SRT8.

Chrysler is the latest of the Big Three to announce new incentives to boost anemic sales. After a summer of heavily promoted employee-pricing discounts, the Big Three's sales fell a combined 17.6 percent in October, according to Autodata Corp. Chrysler fared better than GM and Ford, with flat sales compared to October 2004.
Automakers typically offer discounts over the holidays, but GM jump-started those promotions earlier than usual when it announced its ``Red Tag'' discount this week. GM's plan allows buyers to pay a fixed maximum price advertised on red tags at dealerships.
Ford's rebate offer has a similar no-haggle aspect. Under its ``Keep It Simple Plan,'' customers are given one consistent, maximum price that will be printed on vehicles' window stickers.
Chrysler isn't the first to offer free gas. Mitsubishi Corp. since September has been offering one year of free gas for customers who buy a 2005 vehicle.
U.S. automakers have a love-hate relationship with incentives, which boost sales but can cheapen a brand's image. Asian automakers also use incentives, but they're generally much lower.
GM, Ford and Chrysler have all tried to pull back on incentives but returned to them when sales slowed. As soon as October sales were released, Chrysler slapped a $1,000 discount on all 2005 and 2006 vehicles.
Chrysler had the highest incentives of any major automaker in October at $3,075 per vehicle, according to Autodata. Honda Motor Co. spent the least, at $618 per vehicle.

#35 RTH

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Posted 18 November 2005 - 12:50

The really scarry thing about the British economy and I believe it also applies to the US to a slightly lesser degree is this "must have now " culture which has ramped up personal debt to such a staggeringly unprecedented level.

Debt on houses (UK house prices have doubled, - from a high base, in 6 years ) its by no means unusual now for some people to have mortgages of half a million pounds !
Debt on cars, I was talking to a UK Ford Dealership Sales Manager just recently, who said he now spends his entire day saying "X pounds a month " literally no one buys a new car now with cash or cheque its all hire purchase in some form.

Debt on consumer goods, general debt on just living expenses, and despite what we are told here is now effectively full employment and a high wage economy which is now uncompetitive for multinationals , people far from paying down these debts, see them just further increasing off to the horizon. This year personal consumer debt passed the one trillion pound mark gathering pace, in a country of less than 60 million people and even that doesn't tell the whole story. People have stopped saving money and many stopped pension scheme payments

We only need small interest rate rises of 1 or 2 percent, or some unemployment, or some natural disaster, national illness, the poping of the ludicrous housing price spiral bubble, to bring down the whole house of cards. Then I think these big car makers who have been on borrowed time for years would drop like flies in very short order.

#36 Mike Lawrence

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Posted 18 November 2005 - 15:50

Just to add a few points to the general process and with special thanks to those who have contributed, this thread has been a lode seam of information..

In the UK about three quarters of new cars go to fleets, whether they are hire firms or companies. The company car is a major perk. I don't know if it still applies, but people knew the subtle difference between a Ford Sierra 2.0L and a Sierra 1.6GLX. It was a shade lost on most of us, but there was once a very good TV documentary series on British telly which explored the relationship people had with their cars. A salesman had a Vauxhall Cavalier 2.0i. The 'i' stood for 'injection', but a salesman said, "I'll tell you what the 'i' stands for, it stands for 'important'." He then went on to explain why he was more important than a sales rep who drove a 2-litre Cavalier with carburettors. He did not mention the Vauxhall Senator which then was the executive car.

Vauxhall (Opel in most markets) made serious inroads into Henry's dominance of the British company car market by fitting a sun roof as standard on the Cavalier. It was just a simple tilt device, and I have never understood the lure of the sunroof in the UK, but sales reps loved them.

With most of their output going to fleets, car makers in the UK add a hefty premium for private sales, and then make a big fuss about special discounts. I doubt whether the private customer ever comes close to the rate obtained by the fleet buyer. The inflated forecourt price benefits the fleet buyer when they become the seller. The best buy in Britain, however, remains the low-mileage ex-fleet car about three years old. As a fleet car it will have been properly serviced and maintained, it is also likely to be 25-50% of the cost of buying new. You can have some really good holidays on the difference.

Hire purchase for the masses took off in the UK in the late 1950s when the government eased certain restrictions. The Upper Crust had long survived on credit, some thought it an affront to pay their tailor. Limited credit was widely available, there were loads of pawnshops and many shops and pubs extended credit to those they thought would pay, but it was around 1959 that you could take out a serious loan for something like a car. You have to remember that, 1945-52 you had to apply to a civil service department to even buy a new car in the UK and then you had to sign a covenant agreeing not to sell it for an agreed term, which varied between 12 and 24 months.

For some reason, every member of the House of Lords was deemed a priority case.

Followers of F1 will recall that in 1960 there were teams sponsored by UDT and Bowmaker Yeoman, which were both credit companies specialising in the new thirst for buying cars on the 'never never'. In 1959 there came the Triumph Herald, Morris/Austin Mini-Minor/Se7en, and the 105E Ford Anglia. At last there were cars worth buying.

#37 A E Anderson

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Posted 18 November 2005 - 16:06

Originally posted by CJE
I've lived in the heart of GM Country my entire life. I know many, many GM/UAW workers. Good guys, mostly, but highly overpaid. How about $30 per hour for the guy who mows the lawn in front of the factory for starters ..... then these guys retire at age 50 (15 years before the rest of us!!) with full pay :eek: They've been living in their own little makebelieve world for 4 decades. Whose fault? It's the UAW's for demanding these wages/benefits and management's for agreeing to them year after year.

That said, the HEART of the problem isn't health care or pension costs as management would like everyone to believe. It's simply PRODUCT. GM builds poorly designed, poorly built, overpriced cars (there're a few exceptions, so they ARE capable of building good cars). They've done it for years and it's finally caught up with them. Until they build cars the public wants at prices the public is willing to pay, they're toast.


CJE,

well said about wage rates--but let's not forget the other costs associated with one's punching in on the timeclock at GM, Ford, Chrysler: Benefits, such as health care insurance (not just for working employees, but their spouses, children to age 22, and the same insurance package for all retirees!), pension contributions and Lord knows what else, all conspire to raise that $30/hr wage to more than $75/hour total compensation.

As for GM's building poorly designed, poorly built cars, I would point you to RL Polk, even that bastion of anti-American cars, Consumer Reports, both of whom, in their quality and customer satisfaction surveys have suddenly found GM cars to have as high, if not higher, ratings in these areas for numerous models, than most others, INCLUDING the once-vaunted Japanese marques.

Art

#38 Darren Galpin

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Posted 18 November 2005 - 16:19

Here in the UK, in the latest Top Gear Survey (I believe done by JDPower), Vauxhall came 27th out of 36 manufacturers. They did beat Mercedes though (came in at 32nd).

#39 dretceterini

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Posted 18 November 2005 - 16:31

This forum is about the only place left that people actually discuss automotive history. Even on the Alfa and Ferrari forums, 90% of the discussion is about current events.

Even Ferrari is turning into Walmart. They are opening a theme park in the UAE (financed by a company who has bought into Ferrari corportae ownership), and are actually planning to build 50 stores to sell Ferrari branded merchandise.

This may help their bottom line, but in my opinion has a serious negative effect on the hsitorical aspects of the company. It used to be owning a Ferrari was a symbol of automotive knowledge and social rank. It's now nothing more than a pretentious symbol of having money.

The attitude of Ferrari may have been elitists, but at least that stance provided a rich and important history. Enzo would have personally refused to allow a Ferrari to be sold to a bimbo like Paris Hilton :)

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#40 WGD706

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Posted 19 November 2005 - 21:15

The latest move by Ford to head off the financial crisis that has battered GM.......
Ford Motor Co. will cut about 10%, or 4,000, of its white-collar jobs in North America next year, mostly through involuntary layoffs, as part of a sweeping cost-cutting plan to be unveiled in January, the company told workers in an e-mail sent Friday.

The planned cutbacks are the latest blow to Michigan's already suffering economy and deal another setback to an auto industry still reeling from the October bankruptcy of Delphi Corp., the state's fourth-largest company, and massive losses at General Motors Corp.

The job cuts, which will include salaried and contract employees as well as workers hired from employment firms, are the latest move by Ford to head off the financial crisis that has battered GM. They are in addition to a plan to cut 2,750 white-collar jobs this year in North America.

One worker said the job cuts will not only hurt employee morale, but also the Michigan economy.

"Why should we be loyal to the company when they are not loyal to us?" said one worker, who has been with Ford for more than 30 years. "People like me are not going to spend money if they don't know if they're going to have a job next week. It's a trickle-down effect."
http://www.freep.com...D=2005511190321

.

#41 FredF1

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Posted 20 November 2005 - 10:01

Originally posted by dretceterini
....

The attitude of Ferrari may have been elitists, but at least that stance provided a rich and important history. Enzo would have personally refused to allow a Ferrari to be sold to a bimbo like Paris Hilton :)



Nevermind Ferraris, she's having enough problems with Volkswagens  ;)

#42 zakeriath

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Posted 21 November 2005 - 17:17

Well the General is beginning to fight back


http://news.bbc.co.u...ess/4457038.stm


30,000 jobs and at least 5 plants, expect this to ripple down to all forms of motor sport where GM is involved.

#43 Frank S

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Posted 21 November 2005 - 20:36

Be a real shame if Brat Earnhardt found himself out of a job.

#44 oldtimer

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Posted 21 November 2005 - 23:36

There are several informative analyses in this thread about troubles in GM's auto business, but apart from an early sentence in the opening post, none have pointed at the real problem.

It is declining market share

The newly announced plant closures and lay-offs can be seen as an attempt to align production with sales, rather than a move to propel GM onward and upward. Onward maybe, in terms of surviving at a new level of reality.

Whatever the intricasies of over compensation at the board, or shop-floor level, or unduly high health care costs, the fact is that The Big Three are no longer the big three on sales volume.

I don't know how it is in the U.S, but here in Canada, the Japanese winners of market share are most certainly not winning on sale price. Whatever is going on inside the Big Three, people prefer other manufacturer's products, and are prepared to even pay a premium for them.

Maybe it has something to do with the product...

A comment about a current Big Three product. The new Dodge Charger is a styling success by some accounts. It seems that Chrysler have found that the squashed humvee look is appealing. The Charger has a cut-off rear end with a narrow rear window. The cut-off rear end rapidly gets covered by road dirt. So Chysler. of course, fit a rear wiper. In the middle of the window. But the window is narrow, so the wiper is small and so is its area of effectiveness. Consequently, the driver's side of the rear window is completely untouched by the sweep of the wiper.

Now my thought is, "Who let that leave the production line?" It obviously needs two wipers, and I'm not an automotive engineer. But I do wonder about the battle in Chrysler about making do with one measly wiper.

#45 Todd

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Posted 22 November 2005 - 00:10

Originally posted by zakeriath
Well the General is beginning to fight back
http://news.bbc.co.u...ess/4457038.stm
30,000 jobs and at least 5 plants, expect this to ripple down to all forms of motor sport where GM is involved.


Hardly. GM is firing all the worthwhile, productive, quality oriented employees, because these aren't union shops. Looks more like another suicidal move.

#46 Todd

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Posted 22 November 2005 - 00:11

Originally posted by Frank S
Be a real shame if Brat Earnhardt found himself out of a job.


What evidence do you have that Dale Jr is a brat? He has always conducted himself well in public. Do you just have a problem with widely admired public figures?

#47 ralt12

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Posted 22 November 2005 - 01:37

All the facilities involved, whether in the U.S. or Canada, are union shops, either the UAW or the CAW. 30,000 in total, 3900 of which are Canadian.

#48 CJE

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Posted 22 November 2005 - 02:38

I doubt there will be much negative effect on their motorsport programs. I toured the Pratt & Miller race shop last weekend. This is where they build the Corvettes for LeMans, the Cadillac CTS-V's for the Speed World Challenge and the new GTO's for the Rolex GT series (a VERY impressive facility, BTW). Dave Spitzer, GM's Race Program Manager, guided the tour (interestingly, he made several negative comments regardng the low-tech NASCAR series!). The question of GM's money woes came up at the end and he was tight-lipped, but basically indicated that he didn't see any cutbacks in motorsport. That only makes sense. One of GM's big problems is a negative public perception. Racing and winning is a great way to combat this perception problem.

#49 Todd

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Posted 23 November 2005 - 00:21

Originally posted by ralt12
All the facilities involved, whether in the U.S. or Canada, are union shops, either the UAW or the CAW. 30,000 in total, 3900 of which are Canadian.


Thanks. I checked on this thread after finding out that the plants involved had organized. Good for GM, provided they won't just be paying these people full salaries to do nothing at home instead of for some of a work week on a production line. :up:

#50 RTH

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Posted 23 November 2005 - 14:35

Our local Vauxhall (GM) dealer for East Hertfordshire went Bankrupt suddenly last week , very old established firm with 5 very large sites everyone got the sack on the spot.

So it's not a bundle of laughs retailing at present either.