Looks like GM is toast...

[Okla-homey]

now they're saying that unless sales improve, no amount of bail-out-age will save the company. Wish we had that money back we wasted on 'em trying to prop up the house of cards.

And, for the record, it was their absurd UAW contracts that caused the company's death. That, and GM execs who were afraid to tell the union goons to f-off!

http://www.ft.com/cms/s/0/7477766c-097f-11de-add8-0000779fd2ac.html?ftcamp=rss

[OhU1]

I didn't want GM to get the bail out money in the first place because I figured it would only put off the inevitable. I just didn't expect that day to come only 2 damn months later (if it's been that long).

[Jerk]

but....but...I wanted to be paid $75 an hour to be a hub-cap-putter-onner.

[Vaevictis]

And, for the record, it was their absurd UAW contracts that caused the company's death. That, and GM execs who were afraid to tell the union goons to f-off!

I just place it all at inept management. Yes, the UAW contracts were a problem, but it's just bad management decisions all around:

(1) They don't need that many car brands.
(2) You need to let people strike if their demands are too much.
(3) Instead of learning their lesson in the 70s when Toyota ate their lunch, they went right back to relying on gas guzzlers.
(4) Quality was always lower than Toyota's.*
(5) Value was always lower than Toyota's.*
(6) Massive leverage and other liabilities.

Laying it all at the union's feet is just silly; the union contracts are just one of the many examples of poor management decisions. This company has had horrible management for almost 40 years and the fact that it's still around at all is amazing.

* Starting from the mid-late 70's.

[OhU1]

Holy crap! I just thought of something, what will happen to Jimmie Johnson, Tony Stewart, Jeff Gordon, and NASCAR! We can't let Kyle Busch and the Japs win NASCAR! We can't have the Calvin cartoon character peeing on Ford window sticker being peeling off Chevy pick-ups. That just aint right.

[TMcGee86]

My last year in business school I presented a project on the future of Cadillac and how GM needed to change in the new Century.

My vision was that Cadillac becomes the most fuel efficient cars on the planet, getting up to 100 miles per gallon. Pour all available funds into R&D to make it happen, and then promote Cadillac as always being the biggest and the best, but now that biggest isn't the best, they become the most efficient. I also had a commercial about old people (their base at the time) and how you could spin the MPG argument into a safety argument and the added convenience of stopping for gas over four times less than you did before.

Now, it's important to note that this was back when oil was 9$ a barrel and gas was .85 a gal.

The car rep we pitched it to literally laughed at it. Said that "fuel affinity" wasn't something that American car buyers cared about, and never would.


guess... I was right.

[TMcGee86]

GM’s filing repeatedly raises the spectre of a possible bankruptcy filing, in spite of warnings that such a move would be costly and could do irreparable harm to its image in the marketplace.

:rolleyes: yeah, cause your image is just golden right now, wouldn't want to tarnish that would ya?

[Crucifax Autumn]

I likes me some butter on my toast...

http://img.photobucket.com/albums/v153/ulijon/Toast.jpg

[badger]

It is really unfortunate that considering how many people drive cars in this country and across the world that a company here in the land of "every family owns 2-3...20 cars" couldn't be profitable.

It's time to re-think business models. Here's what I'd like to see happen:

1- Don't think of them as auto manufacturers, but rather, transportation manufacturers. Have these workers focus on our country's crumbling infrastructure. Railways used to take people from New York to California. Why can't they stop everywhere inbetween?

2- Don't cut employment, but cut wages: Cutting 25,000 jobs will not include productivity, but rather, just decrease staff morale. Make a compromise with the unions that instead of sending able bodied workers to the curb, you are going to lower wages to be able to turn a profit. Make the wage cuts across the board and emphasize that your CEO's and managers that make six, seven figures will have the biggest percentage cuts to make the assembly line workers feel better about the pay cuts.

Any other ideas?

[BillyBall]

And, for the record, it was their absurd UAW contracts that caused the company's death. That, and GM execs who were afraid to tell the union goons to f-off!

You're right, the bailout was just a band aid on a tumor. I didn't want them to get a bailout either, but I am also worried about unemployment hitting the 10% mark. I think we will see 10% anyway though now...

[badger]

I'm sorry, while the Republican in me would like to place full blame on unions alone in this scenario, I simply cannot excuse GM being enablers in this. They should have said "NO" long before this became a company sinking problem. By giving into union demands for so long, they were enabling unions to continue bad employee management practices, like that stupid jobs bank that left unused workers feeling under appreciated and useless. Sure they got their full pay and benefits, but to do what? NOTHING! Isn't this what Japanese do when an employee makes a huge mistake - keep them in their offices and make them feel like failures by taking away all of their responsibilities and leadership positions?

[BillyBall]

Isn't this what Japanese do when an employee makes a huge mistake - keep them in their offices and make them feel like failures by taking away all of their responsibilities and leadership positions?

The Isiah Thomas treatment

[badger]

I was actually thinking the Gumpei Yokoi treatment.

The dude was the inventor of the best handheld game system ever, the Nintendo Game Boy. He also had ties to the Metroid series.

Then, came the biggest console blunder in the history of Nintendo, the Virtual Boy. If you haven't heard of it, there's a good reason why - utter suckitude. When the legendary Game Boy inventor came out with this piece of crap, Nintendo camped him in his office (with a Virtual Boy in front of his desk, of course) and gave him nothing to do. Outcast treatment, pretty much.

The UAW Jobs Bank is the equivalent of that - a daily reminder that your skills are no longer needed by the company.

[JohnnyMack]

They'll likely go through bankruptcy and come out the other end a much smaller company, but I don't think it's THE END.

[OU4LIFE]

I'd just like to point out that Ford saw this coming, they restructured and mortgaged almost all of its assets in 2006 to raise $24.5 billion, putting itself in a much better position that GM... they also sold Jaguar, Land Rover and Aston Martin to help themselves.

FU GM.

[OUDoc]

I'd just like to point out that Ford saw this coming, they restructured and mortgaged almost all of its assets in 2006 to raise $24.5 billion, putting itself in a much better position that GM... they also sold Jaguar, Land Rover and Aston Martin to help themselves.

FU GM.

Ford is still in a giant hole too. They have huge lines of credit available because of what they did. It's not like they're showing a profit either.

[OU4LIFE]

they are also the only one trying to get out of it on their own. I think that counts for something.

[NormanPride]

It probably counts for a few more years than GM. ;)

[Frozen Sooner]

I love the knee-jerk "Blame the unions!"

The UAW made huge concessions on pay a couple of years ago. It's the dealer contracts that're killing GM, not the union contracts.

[Tulsa_Fireman]

I love the knee-jerk "Blame the unions!"

The UAW made huge concessions on pay a couple of years ago. It's the dealer contracts that're killing GM, not the union contracts.

And those pay tiers are still at levels of insanity. And don't forget the bennies alone that are punching three grand onto the price of every car that rolls off the line.

AKA, "blame the unions". Throw "Blame GM management" in there, too. The whole damn thing is crap. You can't do 'either/or' either way.

[Vaevictis]

If your boss agrees to pay you more than you're worth, are you to blame, or is your boss?

[Okla-homey]

I love the knee-jerk "Blame the unions!"

The UAW made huge concessions on pay a couple of years ago. It's the dealer contracts that're killing GM, not the union contracts.

There you go again. Must'nt blame the confiscatory wages and absurdly generous benefits paid the hub-cap installers that the UAW extorted out of the company. Instead, blow smoke about the thousands of individual entrepreneurs around the country who do their best to retail GM products to the public, while creating local jobs and paying all manner of taxes.

[Okla-homey]

If your boss agrees to pay you more than you're worth, are you to blame, or is your boss?

If he agrees to pay you more than you're worth because some shady character is figuratively pointing a gun at his head when he does so, I'd say its not all his fault.

[Scott D]

I'd just like to point out that like on any matter involving the Auto Manufacturers, you know a lot less than you are trying to take credit for homey.

Besides, I don't hear any of you people talking about the fact that Toyota..yes TOYOTA has asked the Japanese Government for essentially a bailout.

Yeah I thought so.

[Frozen Sooner]

There you go again. Must'nt blame the confiscatory wages and absurdly generous benefits paid the hub-cap installers that the UAW extorted out of the company. Instead, blow smoke about the thousands of individual entrepreneurs around the country who do their best to retail GM products to the public, while creating local jobs and paying all manner of taxes.

"Confiscatory wages and absurdly generous benefits?" You mean the ones that were negotiated between the union and the company? The ones that the unions took concessions on in order to keep the place going as long as it has? The figure you like to throw around is the $70/hour hubcap installer. I suppose it's an amusing picture, but it DOESN'T EXIST. The average cost of hourly labor at a GM plant is $69/hour and that includes pension and medical benefits for retirees-the average WAGE is under $30 per hour. You better bet you sweet fanny that there isn't a "hubcap installer" that is making anywhere near that $69/hour figure.

"Thousands of individual entrepeneurs..." You mean the thousands of Pontiac, Buick, GMC, Chevy, etc, etc, etc? First of all, I wasn't blaming the sacrosanct "entrepeneurs" I was pointing out that the contracts GM has signed with those self-same dealerships are insane simply because GM has TOO DAMN MANY of them, particularly because they have too damn many nameplates.

Do you think that the workers at the GM plants don't pay taxes? Do you think that they don't support local businesses in their communities? Who the hell do you think BUYS stuff?

I'm constantly amused by the view of some that to limit someone's income is wrong-unless they belong to a union, because those guys make too much. Who are YOU to say someone makes too much money?

Oh, right. They neogtiated "at the point of a gun" because they threaten to walk off the job en masse if their demands aren't met. God forbid labor should actually have some sort of equality in the bargaining process-where the business owner has ALWAYS negotiated "at the point of a gun" by being able to say "Nope, in fact, I'll just fire you and replace you with someone cheaper."

[Scott D]

Froz, you are double shady...a banker who is expressing an interest in being a lawyer. Therefore your argument is invalid in the creepy little box world that these folks live in. ;)

[Okla-homey]

Froz, Scott,

You have to be realistic about this. It is simply indisputable that the onrush of technology has driven the gradual development of a two-tiered labor market in the United States in which those in the bottom tier lack the education and professional/technical skillz of those in the top tier.

More and more, they fail to get comparable pay raises, health insurance, and other bennies in every industry -- except car-making. Can you name another gig in which a kid can graduate from high school and start punching a clock for the kind of total compensation package UAW members receive? Even after all the concessions? Of course you can't.

Since about 1975, practically all the gains in household income have gone to the top-tier households -- again, except for car-makers. Quoting the Rev. Wright, "the chickens have come home to roost." The party is over.

And no amount of government meddling short of outright nationalization of the car industry can fix it. It's positively Darwinian in that people must adapt to new realities or be content with the bottom tier of the labor market.

Nowadays, you either invest the time and money to educate yourself beyond high school; whether you learn a skilled trade or pursue conventional higher education, or your options are severely limited.

Its too bad, and lamentable, but brothers, that's the way it is.

Now, if we, as a people, decide we're going to go the Western-European route and force most everyone into the same take-home wage tier through taxation, while providing myriad government benefits presumably paid for by those taxes, then as a loyal American, if that becomes the law of the land, I'm down with it. However, I believe in my heart that is a recipe for disaster.

I remain fearful, and am increasingly convinced, that is precisely the goal of this administration. That is not "change [I] believe in."

[Mixer!]

Y'all use your mouths purtier than a $20 whore! ;)

[RUSH LIMBAUGH is my clone!]

If he agrees to pay you more than you're worth because some shady character is figuratively pointing a gun at his head when he does so, I'd say its not all his fault.Our board lefties somehow forget about the heavy-handedness of the unions.

[RUSH LIMBAUGH is my clone!]

[QUOTE=Frozen Sooner;2587825
...the business owner has ALWAYS negotiated "at the point of a gun" by being able to say "Nope, in fact, I'll just fire you and replace you with someone cheaper."[/QUOTE]haha, like it's not his company. A person starts a company and owns it to MAKE MONEY, Mike.

[Scott D]

Froz, Scott,

You have to be realistic about this. It is simply indisputable that the onrush of technology has driven the gradual development of a two-tiered labor market in the United States in which those in the bottom tier lack the education and professional/technical skillz of those in the top tier.

More and more, they fail to get comparable pay raises, health insurance, and other bennies in every industry -- except car-making. Can you name another gig in which a kid can graduate from high school and start punching a clock for the kind of total compensation package UAW members receive? Even after all the concessions? Of course you can't.

Since about 1975, practically all the gains in household income have gone to the top-tier households -- again, except for car-makers. Quoting the Rev. Wright, "the chickens have come home to roost." The party is over.

And no amount of government meddling short of outright nationalization of the car industry can fix it. It's positively Darwinian in that people must adapt to new realities or be content with the bottom tier of the labor market.

Nowadays, you either invest the time and money to educate yourself beyond high school; whether you learn a skilled trade or pursue conventional higher education, or your options are severely limited.

Its too bad, and lamentable, but brothers, that's the way it is.

Now, if we, as a people, decide we're going to go the Western-European route and force most everyone into the same take-home wage tier through taxation, while providing myriad government benefits presumably paid for by those taxes, then as a loyal American, if that becomes the law of the land, I'm down with it. However, I believe in my heart that is a recipe for disaster.

I remain fearful, and am increasingly convinced, that is precisely the goal of this administration. That is not "change [I] believe in."

I can't speak for other parts of the country, but I'd wager it's a hell of a lot harder to get a job with the auto makers up here (well before the current problems) than in other parts of the country. People generally don't get in there right away, and I know people who had to be very persistent for multiple years before they were able to get in. And that was with knowing people.

Regardless, both Mike and I were objecting to the nonsensical $75/hr that people like to throw out.

Are people going to quit going to pick up their medications because on average a Pharmacist (using the same heavy handed compensation scale that anti-union types use to demonize unions) is making nearly $100/hr including their benefits? I mean clearly Pharmacists are getting over compensated in the same way that people who build cars do.

Quite truthfully the death knell for the manufacturing sector in this country (and a huge reason we've hit the current crisis) began when pen was put to paper on December 8th, 1993 taking effect January 1st, 1994.

[Harry Beanbag]

Don't pharmacists have a medical degree? I doubt the $75 an hour Joe putting on hubcaps went to medical school.

[Frozen Sooner]

No. Pharmacists only need a bachelor's degree. It's a pretty tough degree, though.

[Okla-homey]

No. Pharmacists only need a bachelor's degree. It's a pretty tough degree, though.

Don't most of them take a graduate degree in Pharmacy following their undergrad? WTF is a Pharm.D.? Or is it possible to get a pharmacy bachelors, pass the state exam and be a pharmacist?

[Okla-homey]

Quite truthfully the death knell for the manufacturing sector in this country (and a huge reason we've hit the current crisis) began when pen was put to paper on December 8th, 1993 taking effect January 1st, 1994. NAFTA? That was a Billy C. dealio was it not?

[Frozen Sooner]

Don't most of them take a graduate degree in Pharmacy following their undergrad? WTF is a Pharm.D.? Or is it possible to get a pharmacy bachelors, pass the state exam and be a pharmacist?

I don't have any idea what percentage get a graduate degree. A Pharm.D. is exactly what it sounds like. Yes, it is possible to get a bachelor's degree, pass the exam, and be a pharmacist. Some states don't even require the bachelor's, it appears.

[Scott D]

Bachelor degree not mandatory, but generally speaking they need 2 years of education.

You act as if there is absolutely no training that takes place prior to someone setting foot on the line. They have to go through a lot of training before they're let on the line, not to mention the inclusion of certification before they can do certain aspects of the job.

And yes, I am saying that NAFTA was the beginning of the end. I certainly am no Clinton apologist, but that was by far the worst thing he did while in office. And yes, I mean worse than his perjury.

[Scott D]

Don't pharmacists have a medical degree? I doubt the $75 an hour Joe putting on hubcaps went to medical school.


A licensed pharmacist holds a Doctor of Pharmacy degree. The qualification, which has replaced the bachelor's degree in Pharmacy, is much more accessible than a medical or doctoral degree. It begins with the standard two-year undergraduate core curriculum, followed by four academic years (or three calendar years) of professional pharmacy career training. About a quarter of the Pharm.D. program is dedicated to hands-on training in a clinical setting. If six years of college education seems daunting, consider embarking on a pharmacy technician career with a two-year associate's degree, and pursuing your Pharm.D. online while you work.

btw, that "Doctor of Pharmacy" degree, you can get that from the University of Phoenix.

And if anyone seriously believes that people get paid to put hubcaps on cars, they're deluded. Machines put hubcaps on, people would be putting the tires on.

[Okla-homey]

And if anyone seriously believes that people get paid to put hubcaps on cars, they're deluded. Machines put hubcaps on, people would be putting the tires on.

Would those UAW tire mounters make more, or less, than Cletus down at the Walmarts auto service center?;)

[NYC Poke]

What cars have hubcaps any more?

In a book by Fareed Zakaria, I read that Ontario now produces more cars than the state of Michigan. The reason is that they have similarly skilled workers (who are also unionized), but healthcare per worker runs about $600/year in Canada versus $6500 in the US. The cost of healthcare adds a couple of thousand dollars to the cost to produce a car in the US, both only around $85 in Japan.

And the reason GM is struggling is not because it is horribly mismanaged, though it undoubtedly has made some poor decisions. The reason they are hurting is because a steep decline in industry demand, in a capital-intesive industry with high fixed costs. I think their cash burn rate is something along the lines of $2 billion/month. And nobody's lending money now to help them through lean times, particularly to that industry and even more particularly to GM.

[Okla-homey]

So, might we extrapolate from the above and conclude that if we had government healthcare, Detroit could survive? Given such a development would obviate and make redundant health care benefits car workers now have pursuant to UAW contracts with the car companies of course.

[bonkuba]

First....I am GM Owner....love the trucks....and cars.....but I have to say they are the most ignorant SOBs I have ever seen.

Anyone with any management skill could see this coming a long time ago.....meaning first MPG, smaller, etc,etc....next the utter tools that any and all Unions are. These unions dont exist for the employee they are are a money wheel for the union management (etc, etc). Now, they more often than not help the employee out of a job (may take a while but it will almost always happen). The "negotiating" tends to be......"Give us what we want or we will walk". I wish there was a way GM could have said....FU.......walk!

My best experience with a Union was when I first started my first programming gig in Dallas right after school. There was a side of the business that was Distribution. There were I believe 500 (approx) employees in the Dist Center. Of course a Union rep comes in and promises all these guys more money, blah.....blah. The company owner responded by having a company wide meeting stating that if the warehouse votes to go Union he will layoff each and every one of them. Well, the vote for union passed.....and yep the owner layed every one of em off......hiring a whole new crew within a month. That man knew how to handle the situation.

Again, I am not blaming Unions entirely for the GM meltdown.....but they had a HUGE hand in it.

And yes......that company is still going strong while others in the same biz (yep had unions) went under.

[NYC Poke]

I don't know whether they'd survive or not given their immense legacy costs, which as Fro noted, were the product of negotiations, but it would immensely decrease their cash burn rate. And I'm certainly not making the argument for or against universal healthcare (though I think it's only a matter of time before we get there for this very reason -- it won't be the liberals driving the process, it will be businesses who feel they can no longer compete internationally while they're bearing these costs).

And the "more cars made in Ontario than Michigan" may be a little misleading. I don't know if their actually rolling off assembly lines in Canada. Most parts, like dashboards and gearshift boxs and convertable tops, our outsourced to Tier 1 suppliers like Delphi (who in turn also outsource a lot) and it way well be that more of this kind of stuff is built in Canada, employing more people than in Michigan.*


*I've been working on a case for a couple of years involving a guy who used to run one of the Tier 1s. I've learned way more about to automotive industry than I ever wanted to know. Or I should say I know about the automotive industry up to May 2005, when his company went bankrupt.

[bonkuba]

I don't know whether they'd survive or not given their immense legacy costs, which as Fro noted, were the product of negotiations, but it would immensely decrease their cash burn rate. And I'm certainly not making the argument for or against universal healthcare (though I think it's only a matter of time before we get there for this very reason -- it won't be the liberals driving the process, it will be businesses who feel they can no longer compete internationally while they're bearing these costs).

And the "more cars made in Ontario than Michigan" may be a little misleading. I don't know if their actually rolling off assembly lines in Canada. Most parts, like dashboards and gearshift boxs and convertable tops, our outsourced to Tier 1 suppliers like Delphi (who in turn also outsource a lot) and it way well be that more of this kind of stuff is built in Canada, employing more people than in Michigan.*


*I've been working on a case for a couple of years involving a guy who used to run one of the Tier 1s. I've learned way more about to automotive industry than I ever wanted to know. Or I should say I know about the automotive industry up to May 2005, when his company went bankrupt.


***

Good point....True regarding the legacy costs. Just more of that crap that was negotiated in good faith (or we will walk...haha!). There is no way out of the crap....I would hate to see any of those folks that worked 40 years expecting to have it....then not have it. But a line needs to be drawn somewhere.....but where is the million (sorry multi-billion) dollar question.

[Scott D]

So, might we extrapolate from the above and conclude that if we had government healthcare, Detroit could survive? Given such a development would obviate and make redundant health care benefits car workers now have pursuant to UAW contracts with the car companies of course.

That was enough of a speculation up here that the Free Press ran a story on it in the Sunday paper (yesterday). Conceptually, it would take GM off the hook for a huge chunk of the health benefits, not to mention the more costly retirees health benefits. It would also, (shocker here) put GM (and the rest of the big 3) in more than just a "competitive balance" with the Asian car makers.

[Scott D]

Would those UAW tire mounters make more, or less, than Cletus down at the Walmarts auto service center?;)

Cletus down at the Walmarts auto service center makes a bit more than Bobby Jo working the register ;)

But, to a more honest sense of things. My wife dealt with plenty of rank and file UAW people a few years back with a short term job she had. Despite the bad rap that they get as a collective because they are in a union. Most of them are very hard working, and make enough to either get by or be slightly comfortable. Most of the jobs on the line are still dangerous enough to take a life if they're not careful.

Sure, all anyone hears about are the lazy asses and blowhards, but that can be said for a lot of non unionized places of employments also. That's more a reflection of the negative aspect of society in general.

[Okla-homey]

That was enough of a speculation up here that the Free Press ran a story on it in the Sunday paper (yesterday). Conceptually, it would take GM off the hook for a huge chunk of the health benefits, not to mention the more costly retirees health benefits. It would also, (shocker here) put GM (and the rest of the big 3) in more than just a "competitive balance" with the Asian car makers.

Fair enough. But, I have read one of the most onerous and expensive aspects of GM's labor costs is their obligation to pay darn near 100% of UAW retirees' healthcare costs -- despite these claimants being Medicare eligible. If that is in fact happening, I'm unconvinced the advent of single-payor government healthcare would make any difference.

[Harry Beanbag]

Fair enough. But, I have read one of the most onerous and expensive aspects of GM's labor costs is their obligation to pay darn near 100% of UAW retirees' healthcare costs -- despite these claimants being Medicare eligible. If that is in fact happening, I'm unconvinced the advent of single-payor government healthcare would make any difference.

On of the order of around $1 billion a year is what I've heard. I wonder how many years it takes for the evil executives' bonuses to total up to that figure.

[Vaevictis]

GM's top four executives made $34 million between them for FY2007.

Broadening it to all executives (GM lists about 50), we don't really know what their salaries would be -- but we know from the 10-K that GM's Executive Compensation Committee generated charges of $136 million in FY2007 from stock grants.

Really, with 50 people making executive pay grade, I might expect total executive compensation to be in the $150-$175 million range given the charges listed for the stock grants.

[badger]

I know executive pay can be a target in this type of discussion, but on the football board (and every media story out there) whenever there's a mention of Bob Stoops making $6 million last year and being the highest paid state employee, we have to fend off those arguments with things like "performance bonus" and "competitive salary" and "half of that was a stay bonus that OU paid toward for several years" and "worth every penny" and "state doesn't pay his salary anyway."

Could this same argument be used for CEOs, that their pay is not going to union workers regardless because it's funded through a different manner, that their pay is just relative to what other executives make in similar industries or even more plausible, that they are due incredibly high firing bonuses, should their contracts be terminated prematurely?

[Vaevictis]

Could this same argument be used for CEOs, that their pay is not going to union workers regardless because it's funded through a different manner

It all comes out of net income or share holder equity, one way or another.


that their pay is just relative to what other executives make in similar industries

You hear this argument a lot. I really don't like the argument given that (1) the Board of Directors sets this compensation and (2) Boards often cross-pollinate.

That is to say, you'll see the CEO of Company A on Company B's board, and vice versa. What do you bet that they vote each other high salaries?


or even more plausible, that they are due incredibly high firing bonuses, should their contracts be terminated prematurely?

In GM's case, we're not even there yet. But yes, sometimes the golden parachute causes outrage.

----------------------------------------------

And regarding Bob Stoops, yeah, he gets paid a ton of money. But he also outperforms his peers by a considerable margin and brings in reams of cash. He deserves his pay.

GM's executives? Not so much.

[Lott's Bandana]

This all reminds me of the second season of The Wire.

Union Boss Frank Sobotka rationalizing his criminal acts because of the sense of entitlement he feels because he is a 50th generation longshoreman and by-golly he and his union deserve ships coming all the way to Baltimore (passing several other ports in Cheasy Bay) so they can load/unload them (and steal a few cases of vodka or televisions).

Simple analogy, yes...but a good one - at least for this simple mind.

[badger]

Thanks V. I just wanted to make sure that people remember that we're arguing for Bob Stoops to make $3 million-plus per year on another forum at the same time as bring up these CEO's salaries. Like our arguments for Stoops, there are other reasons why people make insane amounts of money while others are cut.

They just sometimes don't make as much sense as OU football, though :(

:D Why can't everything make as much sense as OU football?

[Scott D]

Yeah but Bob's salary is driven by two things.

1. Production on the field (even if the BCS Bowls are a blight on that)
2. Revenue brought into the University of Oklahoma.

That's part of the reason I enjoyed Jim Calhoun's rant at that one faux media member in that press conference a few weeks back.

Problem is there are plenty of CEO's (and even a few former CEO's, since some of them just pop up in charge of other companies after they get that nice little buyout) who during the entire time of their tenure may introduce new/radical ideas, but end up costing the company far more in revenue than they should. That forces said company to fire/lay off "peon level" workers, meanwhile "not very good" CEO gets $4.2 Mil in salary, and $9.3 Mil in bonuses (some as stock options, usually on the CEO's choice).

[Scott D]

Fair enough. But, I have read one of the most onerous and expensive aspects of GM's labor costs is their obligation to pay darn near 100% of UAW retirees' healthcare costs -- despite these claimants being Medicare eligible. If that is in fact happening, I'm unconvinced the advent of single-payor government healthcare would make any difference.

that's been a bone of contention for quite awhile. From the retirees side of things, Medicare is a relatively big downgrade from the health plans offered up via the UAW. And, since retirees still have a voice inside the UAW they're not likely to get the short end of the stick very often in the internal negotiations within the Union itself.

At least within the last two renegotiations between the UAW and the Big 3 (since each company negotiates different contracts, and then those are still subject to approval by every branch whether or not the governing body agrees to them or not.) More and more of the cost of retiree health benefits has been shifting from the Automakers to the UAW.

In that regard, the shift to potentially a single-payor government system wouldn't be as large a jump as a lot of people think. Especially if it was enacted as an across the board thing stretching into other industries as well. It would come back to how the system would be enacted, and how much pressure the Fed. would put on the unions to go with that system.

[Okla-homey]

that's been a bone of contention for quite awhile. From the retirees side of things, Medicare is a relatively big downgrade from the health plans offered up via the UAW. And, since retirees still have a voice inside the UAW they're not likely to get the short end of the stick very often in the internal negotiations within the Union itself.

At least within the last two renegotiations between the UAW and the Big 3 (since each company negotiates different contracts, and then those are still subject to approval by every branch whether or not the governing body agrees to them or not.) More and more of the cost of retiree health benefits has been shifting from the Automakers to the UAW.

In that regard, the shift to potentially a single-payor government system wouldn't be as large a jump as a lot of people think. Especially if it was enacted as an across the board thing stretching into other industries as well. It would come back to how the system would be enacted, and how much pressure the Fed. would put on the unions to go with that system.

Based on the UAW pensioners understandable reluctance to be at the mercy of Medicare, I strongly suspect they would be equally reluctant to give up the sweet deal they have through UAW for a one-size-fits-all government single-payor program. In all candor, that's the what scares me the most about "universal healthcare" schemes. For them to work, the government pretty much has to put the smackdown on peoples' ability to seek care through privately administered systems. I may be wrong, but I believe thats the way things stand in Canada. And the problem with that is, the folks become totally at the mercy of a ginormous bureacracy that has to engage in quite a bit of triage in order to prioritize who gets seen for what.

[Vaevictis]

For them to work, the government pretty much has to put the smackdown on peoples' ability to seek care through privately administered systems. I may be wrong, but I believe thats the way things stand in Canada.

It is the way it works in Canada, but it is not the only way it can work. There are plenty of Commonwealth countries that have universal health care coverage but have public and private systems alongside each other.

Canada's reason for doing it the way they do it has more to do with egalitarian idealism than it being necessary. EVERYONE SHOULD BE EQUAL, AND WE WILL MAKE IT SO.

Take a look at the way other Commonwealth countries do it -- UK, Bahamas, for example -- you have the public system which may not do exactly what you want when you want it but will almost always cover what you need when you need it, and you have a private system alongside it that you can pay to play, so to speak.

I dislike the Canadian model and rather like the British and Bahamian model because the Canadian model permits no outlet if government services aren't giving you what you want -- where as, the British and Bahamian models do.

[badger]

So, might we extrapolate from the above and conclude that if we had government healthcare, Detroit could survive?

I honestly don't think so. I think the difference in cost overall may still lead to labor being outsourced.

The problem is that they haven't outsourced enough customers to make up for their lack of customers here.

[Okla-homey]

It is the way it works in Canada, but it is not the only way it can work. There are plenty of Commonwealth countries that have universal health care coverage but have public and private systems alongside each other.

Canada's reason for doing it the way they do it has more to do with egalitarian idealism than it being necessary. EVERYONE SHOULD BE EQUAL, AND WE WILL MAKE IT SO.

Take a look at the way other Commonwealth countries do it -- UK, Bahamas, for example -- you have the public system which may not do exactly what you want when you want it but will almost always cover what you need when you need it, and you have a private system alongside it that you can pay to play, so to speak.

I dislike the Canadian model and rather like the British and Bahamian model because the Canadian model permits no outlet if government services aren't giving you what you want -- where as, the British and Bahamian models do.

Lucky for the Canadians that 90% of them live within 160km of the US border. That way, they can slip over here for care when their system hoses them or is otherwise incapable of meeting their needs.

I just don't see how we could possibly hope to make healthcare available at little or no cost to 304 million citizens, plus another 20 million or so people who are here illegally, and also retain a viable private system alongside as you say they have in Britain. It seems to me we'd have to have the "no private contracts allowed" Canadian thingy in order to ensure there are enough healthcare providers to go around.

Mind you, the UK is slightly smaller than the state of Oregon in terms of land mass, and at last count, its population is only 61 million. A fair number of folks, but they're all crammed in where several massive health centres can serve most of them. As you know, we're spread "from sea to shining sea" in the third largest (by size) country in the world.

Bahamas? Only 307,000 folks my friend. That's smaller than Tulsa.

[Frozen Sooner]

By the way, those evil corporation-killing UAW workers agreed to make wage and hour concessions to FoMoCo today in the interest of helping them weather the storm.

[RUSH LIMBAUGH is my clone!]

By the way, those evil corporation-killing UAW workers agreed to make wage and hour concessions to FoMoCo today in the interest of helping them weather the storm.Finally, a little bit of a survival instinct from those people. I hope for all's sake that they made enough concessions to encourage the public's trust in their ability and products.

[Vaevictis]

Lucky for the Canadians that 90% of them live within 160km of the US border. That way, they can slip over here for care when their system hoses them or is otherwise incapable of meeting their needs.

Which is why I don't like the Canadian model. A bunch of ideologues got their hooks into the system and drove private practice out in the name of some egalitarian ideal, but use the US as a private outlet for when the public system is insufficient. (And again, why I like the British and Bahamian model.)

And yes, I know there are population differences between Britain, the Bahamas and the US. My main point here is that a lot of people automatically assume that nationalized health care has to be whole hog, private industry outlawed.

It doesn't.

There are other flavors. One of the economics professors at OU believes that there is a class of medical care for which a free market cannot properly function in an efficient manner -- I've mentioned this before -- because of the pressing need associated with them. If you get shot and go into a hospital and don't like their fee schedule, it's not like you're going to say to the ambulance driver, "Next hospital please."

For this class of medical care, he suggests that government can more efficiently address the market issues than a free market can because the government can induce controls that reduce the distortion introduced by the pay or die nature of the care. A free market, on the other hand, will charge as much as the patient will bear -- which often means, in a pay or die case, everything the patient has.

For everything else, you leave it to the free market.

I rather like this notion, and think it would actually be workable and improve the efficiency of the system -- which is all I'm really interested in. How can we maximize the use of the resources we allocate to health care? I'm really not ideologically bound to any one solution. Give me something that works, and if your idea is better, hey, let's run with that.

But what I know is that, thanks to the pay or die issue, it's pretty obvious that a blanket free market solution is going to be incredibly inefficient.

[Scott D]

By the way, those evil corporation-killing UAW workers agreed to make wage and hour concessions to FoMoCo today in the interest of helping them weather the storm.

That'd actually be the 3rd or 4th time they've made some significant sort of concession in negotiations over the last 5 years.

[StoopTroup]

Maybe the Re-organized GM will be able to make a decent car or truck.

Many folks I know have watched their GM vehicles slowly fall apart. Not that they still can't drive them...things like a speedometer or tach failing and the new part is 400-800 bucks and isn't any better than the one they should have never had to replace. Waterpumps? I can understand needing one around 100,000 miles or better but at 40,000 or less?

Having your vehicle in the shop under warranty time and time again.

Sad what has happened to our car companies.

Workers may be to blame somewhat...but these Corporations are just as much or more to blame for designing Pieces OS.

[badger]

I really wish that assembly line workers and all workers could get $70/hour, but I just don't see how that type of wage with that type of business would work on a competitive level internationally. If we didn't allow cars to get imported from foreign companies or if there were extreme tariffs on imported cars, this might work.

However, foreign companies have foreign cheap labor at their disposal. Basically, it's like Ma and Pa's General Store, that gives healthcare and working wages to all of their cashiers competing with Wal-Mart, who pays their cashiers minimum wage without benefits.

[OUDoc]

Maybe the Re-organized GM will be able to make a decent car or truck.

Many folks I know have watched their GM vehicles slowly fall apart. Not that they still can't drive them...things like a speedometer or tach failing and the new part is 400-800 bucks and isn't any better than the one they should have never had to replace. Waterpumps? I can understand needing one around 100,000 miles or better but at 40,000 or less?

Having your vehicle in the shop under warranty time and time again.

Sad what has happened to our car companies.

Workers may be to blame somewhat...but these Corporations are just as much or more to blame for designing Pieces OS.
Most American cars are now as reliable or more reliable than the imports at the same price point. However, the average person doesn't believe this.

http://www.jdpower.com/autos/ratings/dependability-ratings-by-brand

http://www.jdpower.com/autos/ratings/quality-ratings-by-brand

[JohnnyMack]

GM makes too many cars. They've lost market share but failed to reduce the number of widgets they produce. Why? Probably because they have too many people on the tit and couldn't find a way to trim the fat.

[NYC Poke]

Consumer demand for GM cars is 50% of what it was at this time last year. GM cars didn't get 50% crappier over the course of the year, meaning that the problem is probably macroeconomic. And when you've got fixed cost like GM, a precipitous decline in demand is fatal.

[OU4LIFE]

GM makes too many cars. They've lost market share but failed to reduce the number of widgets they produce. Why? Probably because they have too many people on the tit and couldn't find a way to trim the fat.

did you just say 'tit fat'?

[JohnnyMack]

did you just say 'tit fat'?

Maybe. I turn you on?

[OU4LIFE]

no.

now if you had said 'fat tits' then maybe

[Okla-homey]

Workers may be to blame somewhat...but these Corporations are just as much or more to blame for designing Pieces OS.

You know, there's another factor that the UAW does induce, as to discouraging product improvements in the form of redesigns. I understand that in order to make significant changes to a model in production, a dramatic and very lengthy retool and reboot of virtually the entire production system is required, and there are significant contractual labor costs associated with same. Futher, the whole dealio takes literally months to accomplish under the UAW contract.

OTOH, Asian car makers, including those building cars w/non-UAW labor in the US, are agile enough to do the same thing in a couple days while hardly skipping a beat.

If the above is accurate, perhaps it helps explain why US carmakers keep turds in production a lot longer than they should. And why there are still a lot of brand-new '07's still for sale at GM dealerships nationwide.

[olevetonahill]

My 99 Chvey truck has 150k on it
Ive replace the fuel pump 400 bucks my cost , changed the brakes once
Both front wheel bearing assemblies Maybe 400 bucks again.
The battery, shocks,brakes
All in all its been a dayum good truck
My sons 2000 Z71 has 350k on it .
Most major thing hes done is have the Trans rebuilt
about 1000 My cost , course he goes thru Brakes a lot faster than I do . But all in all its Just been Normal wear and tear on em .

I wont ever Buy New again , but if I did it would be a Chevy
jes sayin

[Scott D]

You know, there's another factor that the UAW does induce, as to discouraging product improvements in the form of redesigns. I understand that in order to make significant changes to a model in production, a dramatic and very lengthy retool and reboot of virtually the entire production system is required, and there are significant contractual labor costs associated with same. Futher, the whole dealio takes literally months to accomplish under the UAW contract.

OTOH, Asian car makers, including those building cars w/non-UAW labor in the US, are agile enough to do the same thing in a couple days while hardly skipping a beat.

If the above is accurate, perhaps it helps explain why US carmakers keep turds in production a lot longer than they should. And why there are still a lot of brand-new '07's still for sale at GM dealerships nationwide.

I'd say that's not likely seeing as you'd have more resistance from suppliers than you would from the UAW itself.

The reason there are a lot of brand-new '07's still for sale at dealerships are because a) there are too many GM dealerships, and b) there have to be a certain amount of models at each of those dealerships.

GM has already cut production this year by a lot, and model types nearly every year. The most widely continued models that tend to seemingly never change are the ones that are mass purchased by private and governmental entities.

Also, most of the time when new models are released, or certain "retired" models are re-introduced they are either boom or bust in regards to public fanfare.

Bad remakes...the reintroduction of the Nova and the more recent reintroduction of the Monte Carlo.

Good remakes...the new Camaro that nobody can apparently afford to buy.

[OUDoc]

Hopefully they'll stick around. I'd like to see them make this.

http://www.blogcdn.com/www.autoblog.com/media/2009/01/cadillacconverjdd_09_opt.jpg

http://www.autoblog.com/2009/01/11/detroit-2009-cadillac-converj-with-video/

[yermom]

ugh. so ugly.

i hate Cadillac styling. if that looked more like a Malibu or Impala it would be cool

[OUDoc]

I don't like most of Caddy's styling, but that is a cool car.

Subaru fans. :rolleyes:


:D

Plus, that's an electric car, if that helps any.

[yermom]

i read the link :D

sounds like a neat car

i just really hate all the weird angles and hard lines in Cadillacs

that and the premium prices...

[NYC Poke]

You know, there's another factor that the UAW does induce, as to discouraging product improvements in the form of redesigns. I understand that in order to make significant changes to a model in production, a dramatic and very lengthy retool and reboot of virtually the entire production system is required, and there are significant contractual labor costs associated with same. Futher, the whole dealio takes literally months to accomplish under the UAW contract.

OTOH, Asian car makers, including those building cars w/non-UAW labor in the US, are agile enough to do the same thing in a couple days while hardly skipping a beat.

If the above is accurate, perhaps it helps explain why US carmakers keep turds in production a lot longer than they should. And why there are still a lot of brand-new '07's still for sale at GM dealerships nationwide.


I'm not quite so sure this is an issue. Most tooling (which is incredibly expensive, often running into tens of millions of dollars) is outsourced. Most tooling contracts allow for progress payments upon a completion of a specified percentage of the work, though there are continual discussions about just when that completion percentage is met. In the meantime, the Tier 1 suppliers are carrying the tremendous costs of developing the tooling, and usually only receive payment from GM, Chrysler, etc. (knowns as OEMs or orginal equipment manufacturers) only when the Tier 1s' suppliers threaten to cut them off because of lack of payment.

To receive final payment, the Tier 1s have to go through what's known as a Parts Production Approval Process, or PPAP. This is a lengthy procedure involving tooling audits and the like to make sure things fall within certain specifications, down to color match. The OEMs will often drag this process out a couple of years before giving final PPAP approval, often after the tool is on the factory floor and the cars are out on the highway. It's a complicated and bureaucratic process, but it's the same for Honda and Toyota. It's not just the US OEMs, and I doubt the UAW has much say in the process.

As for the assembly line workers, they're not just slapping on hubcaps. A lot of those guys are pretty skilled machinists and technicians who are there to keep the robots working.

[NYC Poke]

Also, someone had mentioned before that the US OEMs make too many models (I'd go even further and say they offer too many options on each model). He's a little something for comparison. This is as of 2005:

Total number of nameplates per manufacturer:

Honda - 9
Toyota - 10
Nissan - 15
Chrysler - 29
Ford - 39
GM - 66

Given the huge start-up costs like tooling and engineering & design, the number of models offered by the US manufacturers seems excessive.

[yermom]

i've never understood all the goofy GM models

[Frozen Sooner]

Also, someone had mentioned before that the US OEMs make too many models (I'd go even further and say they offer too many options on each model). He's a little something for comparison. This is as of 2005:

Total number of nameplates per manufacturer:

Honda - 9
Toyota - 10
Nissan - 15
Chrysler - 29
Ford - 39
GM - 66

Given the huge start-up costs like tooling and engineering & design, the number of models offered by the US manufacturers seems excessive.

That was me (and probably someone else). That's exactly what I'm getting at with the insane dealer contracts. You have to produce a certain number of Pontiacs because you have all these Pontiac dealers who need something to sell. You have to produce Buicks because of the same.

Part of this has to do with the consolidation of the US Auto Industry in the 70s, I think.

I'm not going to hold myself out as an expert, but it seems that when the automakers started buying each other out, they kept all of the dealer contracts as part of the deal. Thus you have the situation in Anchorage where you have three different dealerships offering Chrysler-owned models in a city of barely 300,000.

[royalfan5]

That was me (and probably someone else). That's exactly what I'm getting at with the insane dealer contracts. You have to produce a certain number of Pontiacs because you have all these Pontiac dealers who need something to sell. You have to produce Buicks because of the same.

Part of this has to do with the consolidation of the US Auto Industry in the 70s, I think.

I'm not going to hold myself out as an expert, but it seems that when the automakers started buying each other out, they kept all of the dealer contracts as part of the deal. Thus you have the situation in Anchorage where you have three different dealerships offering Chrysler-owned models in a city of barely 300,000.

The dealer lobby is very strong and has basically made it impossible for the Big 3 to make brands go away via any legal method, short of a bankruptcy. It cost GM 1 billion to pay off Oldsmobile dealers, and one of the key reasons that Olds got the hook is that they had the fewest number of stand alone dealerships. Killing Plymouth was less of a cluster****, but mostly because there were a but a handful of Plymouth only dealers. Ford could probably kill Mercury because there are no standalone Mercury dealers anymore. Isuzu basically starved via gradual pullout instead of trying to up and quit at once.

[NYC Poke]

I can kind of see why GM would want to create the illusion of product diversity back when the US car market was dominated by 3 manufacturers. It doesn't really make too much sense when there's greater competition and genuine poduct diversity.

My case deals with the supplier side of the industry, so I really don't know anything about the retail end, let alone dealer contracts. As for the number of dealers, I think there were a series of antitrust cases that dealt a blow to how much exlusivity the manufacturers could grant, and how much the dealers could claim.

[royalfan5]

I can kind of see why GM would want to create the illusion of product diversity back when the US car market was dominated by 3 manufacturers. It doesn't really make too much sense when there's greater competition and genuine poduct diversity.

My case deals with the supplier side of the industry, so I really don't know anything about the retail end, let alone dealer contracts. As for the number of dealers, I think there were a series of antitrust cases that dealt a blow to how much exlusivity the manufacturers could grant, and how much the dealers could claim.

Well Originally all the divisions of GM where pretty much one Product. There was a Chevy, Pontiac(Oakland), Oldsmobile, Buick, LaSalle, and Cadilliac. You where supposed to work your way up the ladder. Plus, you could only sell one make per dealer. Then dealers got to sell multiple makes and then they started complaining to corporate that they need something to compete with the other guy who had mulitple offerings. Then they realized it was way cheaper to badge engineer that to engineer disparate products. So we ended up with the cluster**** we have today from a branding perspective. It was once a big deal when GM got busted sticking Chevy motors in Oldsmobiles because of the perception that the Olds rocket motors where a cut above the Chevy motors, and people where willing to pay that premium.