[jonKranked]

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

Are they really going to run out of money by March?

Do you think the gov't will bail them out? Do they deserve to be bailed out?


Frankly, although GM has long been associated with American Industry, they are too much a part of the old way of doing things. They're no longer true innovators, they're playing catch up with all the other companies. They're far too entrenched in their way of doing things to be saved at this point.

 

[splat]

Yes I think the Government will bail them out, do they deserve it ? -- No -- Neither Does Ford. the problem is if the Us Auto industry fails the domino effect it will have will be staggering.

 

[MMike]

I agree with Newt Gingrich. Let them fail.

 

[dan-o]

GMs real problem isn't the product they produce, it's the massive pension/benefit burdens they owe to past workers. Something like $4.6b in 2007 alone. While they've made their share of mistakes, they have lots of forward thinking products on the horizon that are market-correct.

I was raised in an auto industry family so I'm biased but, IMO, preserving the engineering and manufacturing capability of GM is more important protecting wall street from its greed. If anything, this country needs to rebuild and protect its manufacturing much like countries in the EU do.

 

[$tinkle]

GMs real problem isn't the product they produce, it's the massive pension/benefit burdens they owe to past workers. .

and this is the only problem i have w/ letting them fail. nothing piss me off more than workers fulfilling the terms of their contract only to have it "renegotiated" afterwards.

 

[Cant Climb]

They have to be bailed out.

This economic crisis is just get warmed up......GM falling would be a disaster.

 

[Samirol]

GM failing simply isn't an option, they hire too many people. If they fail, the unemployment situation only gets worse. Giving GM money is an investment in our economy, not a bailout.

 

[X3pilot]

Did they think to ask the all mighty union to consider temporary pay cuts? Would it be better to work for less money for a while or not work at all?

 

[$tinkle]

GM failing simply isn't an option, they hire too many people. If they fail, the unemployment situation only gets worse.

it's only bad for 6 months, then they're taken off the books, and we're back to what we have now: statistical 100% employment

a buddy of mine up in littleton has fallen on very hard times, and has had to take a job delivering pizzas (he was an exec at his own start up this time last year). he was let go after only a week b/c no one's ordering pies. i think there will be a lot more like him & more than a few hoovervilles across the land

 

[Cant Climb]

Did they think to ask the all mighty union to consider temporary pay cuts? Would it be better to work for less money for a while or not work at all?

Good point.

 

[IH8Rice]

of course they will bail them out...and ford too. i believe that the money is already in place for the government to give to the big three, but when itll happen who knows.
and yes youre right....GM is trying to catch up with Toyota, Honda and the VW group....once Porsche buys out VW completely, they will be even bigger threat to the American industry.
with GM spending $13bil every month to keep the doors open, you know that cant be good..and that doesnt include the UAW contributions

 

[dante]

^^^^ That's my fear, that they've already gotten 25b in subsidies a few months ago, and now GM is on the verge of bankruptcy. So they get another 25b, and then what happens when that's gone too? Spending money to save them is one thing, tossing good money after bad is something I'm not really that comfortable with...

 

[dan-o]

I think I read in the NYT that Obama wanted a contingency on a bailout requiring aggressive product development geared towards eliminating dependence of foreign oil.

The Increasingly Small Three has a much higher capability of making this happen compared to the companies featured in the Alternative Transportation thread. IMO, this is a great opportunity to not only revamp our transportation but also emerge as a world leader in green vehicles.

 

[Westy]

 

[IH8Rice]

^^^^ That's My Fear, That They've Already Gotten 25b In Subsidies A Few Months Ago, And Now Gm Is On The Verge Of Bankruptcy. So They Get Another 25b, And Then What Happens When That's Gone Too? Spending Money To Save Them Is One Thing, Tossing Good Money After Bad Is Something I'm Not Really That Comfortable With...

Bingo

 

[ohio]

GM failing simply isn't an option, they hire too many people. If they fail, the unemployment situation only gets worse. Giving GM money is an investment in our economy, not a bailout.

As an investor, I would not give GM a penny without letting bankruptcy facilitate a renegotiation of pension, a major reorganization and nary an exec left standing. I would poach the best of the best from other automakers and other industries, and I would start fresh with brand new union contracts. Unless the federal government can do that, I say let them go bankrupt and get bought up by another automaker or private equity group.

 

[johnbryanpeters]

and this is the only problem i have w/ letting them fail. nothing piss me off more than workers fulfilling the terms of their contract only to have it "renegotiated" afterwards.

A real conundrum.

 

[Toshi]

I think I read in the NYT that Obama wanted a contingency on a bailout requiring aggressive product development geared towards eliminating dependence of foreign oil.

The Increasingly Small Three has a much higher capability of making this happen compared to the companies featured in the Alternative Transportation thread. IMO, this is a great opportunity to not only revamp our transportation but also emerge as a world leader in green vehicles.

i agree with this in theory, but the proof is in the pudding, ie the actual shipment of production Chevy Volts...

 

[JustMtnB44]

Did they think to ask the all mighty union to consider temporary pay cuts? Would it be better to work for less money for a while or not work at all?

I've said the same thing before as that makes sense to most people, but apparently you haven't met anyone in the UAW. They are completely opposed to those sort of changes. Delphi tried to do it, but they had to go bankrupt first to make it happen. I worked at an American Axle plant as a co-op, and they tried to do it, and ended up closing the plant. I mean yeah, it would suck to take a pay or benefits cut, but most of those people have a high school education and have been doing the same manufacturing job for 15+ years, which means there aren't that many other jobs they could just jump in to. Not to mention they are all ridiculously overpaid to begin with, I mean $35/hr to push buttons all day, come on now that's more than a lot of the engineers.

I really want to see GM go under, because even if they declare bankruptcy they don't have to go out of business. They just have been doing everything wrong for so long, that throwing more money at the problem now won't fix it. They need to step back, and completely overhaul the way they do business and their product lines. I don't understand how a company that has been building cars for 100 years can still make such shoddy, under performing products, you'd think they would have it figured out by now. I also don't understand the American auto mentality of trying to produce as many vehicles as possible all the time, then offering huge rebates and therefore losing profits in order to sell them. Apparently they have not taken Economics 101 to learn about supply and demand. For the record I currently drive a GM car and the experience has been enough that I would probably not ever buy another GM car, except for maybe the Corvette since that is only car they got mostly right.

 

[dan-o]

Whoa, what's not innovative about a theft-resistant car?

Pontiac also offered accessories that covert it into a tent, making the Aztec the perfect vehicle for newly foreclosed families (assuming they can land 0% financing).

 

[dan-o]

I also don't understand the American auto mentality of trying to produce as many vehicles as possible all the time, then offering huge rebates and therefore losing profits in order to sell them.

I'll give you a hint. It starts with UAW.

 

[MMike]

SOmeone here said the other day that no company should be allowed to get so large, that its failure by itself would doom the economy.

Too many eggs in the basket.

Let it burn.

 

[$tinkle]

http://www.ridemonkey.com/forums/showpost.php?p=3086002&postcount=2

 

[IH8Rice]

heres something that GM should read:

 

[IH8Rice]

SOmeone here said the other day that no company should be allowed to get so large, that its failure by itself would doom the economy.

Too many eggs in the basket.

Let it burn.

umm...microsoft? walmart? exxon?
they seem to be doing swell and they are pretty big...right?

 

[MMike]

heres something that GM should read:

I also have this book on my shelf.

 

[MMike]

umm...microsoft? walmart? exxon?
they seem to be doing swell and they are pretty big...right?

Yeah...and Boeing etc.....

If they eff-up, the region is screwed.

They should still be part of the free market.

 

[kidwoo]

As an investor, I would not give GM a penny without letting bankruptcy facilitate a renegotiation of pension, a major reorganization and nary an exec left standing. I would poach the best of the best from other automakers and other industries, and I would start fresh with brand new union contracts. Unless the federal government can do that, I say let them go bankrupt and get bought up by another automaker or private equity group.

You thinking what I'm thinking?

 

[IH8Rice]

I also have this book on my shelf.

well so far, you are doing better than GM

Yeah...and Boeing etc.....

If they eff-up, the region is screwed.

yep.
DHL is giving them self the axe in the US....there 9500 jobs down the drain and 7000 people in Wilmington, Ohio are now screwed...especially when the town is only 12000 strong.

 

[MMike]

But that's the free market isn't it? Good with the bad and all that....

 

[ohio]

You thinking what I'm thinking?

Yeah, Brain, but were are we going to get rubber pants in our size?

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

Break them up. It worked with Ma Bell. It will damn well work with a company that makes 4 of the same car and slaps a different badge on the front.

If we do give them a bailout, we should give it to one brand and make them death-match for it.

 

[narlus]

i think there will be a lot more like him & more than a few hoovervilles across the land

so it's not just an Elvis Costello song title.

rep give.

 

[blue]

I really want to see GM go under, because even if they declare bankruptcy they don't have to go out of business.

Uh, not if they go Chap 7 and liquidate.

Break them up. It worked with Ma Bell. It will damn well work with a company that makes 4 of the same car and slaps a different badge on the front.

If we do give them a bailout, we should give it to one brand and make them death-match for it.

There's way too much platform sharing and singular supply lines for GM to be "broken up". Realistically there's only two "divisions" of GM, cars and trucks (if you're not counting Holden).

If the US had universal healthcare, the burden the UAW puts on GM would be vastly reduced. Just saying.

To answer the question the OP posed. Yes. GM is fvcked as fvcked can be. IMO there are two options on the table - nationalize or chap 7.

 

[ohio]

There's way too much platform sharing and singular supply lines for GM to be "broken up". Realistically there's only two "divisions" of GM, cars and trucks (if you're not counting Holden).

GM is not just a manufacturing organization. It's a marketing, sales and logistics organization too. Also just because there's platform sharing doesn't mean there has to be. You could break up the brands and bid out the manufacturing plants to them. Several platforms are built out of more than one plant.

I'm not saying it's a simple problem, but using their current processes as an excuse for not breaking them up is a real circular way to pound yourself in the nuts with a hammer.

Chap 11, not Chap 7.

 

[ohio]

Liberals and Conservatives agree, let 'em burn.

edit: clif notes:

But just what calamity are we trying to avoid by subsidizing loans to Detroit? That we'll all be sentenced to the indignities of driving Hondas, Mazdas or BMWs? Toyota and Honda, the current leaders in hybrids and alternative-fuel technology, did their research and development on their own dimes.

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

 

[blue]

GM is not just a manufacturing organization. It's a marketing, sales and logistics organization too. Also just because there's platform sharing doesn't mean there has to be. You could break up the brands and bid out the manufacturing plants to them. Several platforms are built out of more than one plant.

I'm not saying it's a simple problem, but using their current processes as an excuse for not breaking them up is a real circular way to pound yourself in the nuts with a hammer.

Chap 11, not Chap 7.

GMAC is already spun off...beyond cars, GM ain't got much. The impotent and bloated dealer network is worthless and about to be whittled down to the size of nothing.

Chevy/Pontiac/Buick/Saab all share nearly identical platforms, powertrains, and electronics in their bread and butter models. There really aren't separate brands here, just separate badges.

If they were to be broken up (this if GM went under chap 11 protection), I would go like this:

-Chevy/Cadillac

-Saturn/Opel/Vauxhall/Holden - consolidate Opel/Vauxhall/Saturn into one transatlantic brand (perhaps just Holden), market as new global automaker. Give them a version of the Volt.

Sell Saab brand to private investors in Europe. Sell Buick brand/manufacturing to a Chinese automaker for sales in China. Axe Hummer, Pontiac, and GMC nameplates.

Butcher dealer network - you don't really have a choice. Cut off underperformers. Cut back high-volume fleet sales. Redirect 90% of resources to small car and hybrid/electric development. End promulgation of countless SUV/CUVs in the Chevy/Caddy brand. Sever relations with UAW (def. need uni healthcare for this).

 

[ohio]

errr, exactly. Although you're still missing my point that just because they all currently share platforms doesn't mean they have to. You can rip apart the conjoined twins, even Cadillac and Chevy. In cases where a single platform is being run out of more than one plant, you could split the plants and let them evolve the platforms divergently. ****, as long as you don't Chap 11/7 their supplier network, they'd still have access to the same parts bin.

 

[IH8Rice]

maybe this suit can help:
http://www.autoblog.com/2008/11/12/georgetown-professor-could-land-position-as-car-czar-in-obama/

 

[SkaredShtles]

Let 'em burn.

 

[Defenestrated]

Agreed, if there is a bailout, it should be a bailout for the workers who are going to lose their jobs and not a bailout to save the executives and shareholders.