Is GM going bankrupt?

[pchang]

And they never will because just artificially increasing wages leads to a cycle of every increasing inflation. Commies just don't understand that you can't make something from nothing.

[JohnT]

Che's on the boards, but he hasn't answered my question. I'm sure he's doing his research, crunching numbers, and will have an answer for us shortly.

[Japher]

Here's an assignment to show you what would be helpful, more helpful than blanket insults: I made a comment earlier about GM's labor costs being $74/hour. Explain to us, using Communist financial theory (if such a thing exists), how that isn't enough and how you expect GM to continue paying it, while supporting new car development for an ever-changing market, increased debt carrying costs, and, of course, your basic COGS - after all, you need steel, iron, copper, electronics, upholstery, stamping dies, welding machines, thousands of miles of conveyor belts, and thousands and thousands of additional items in order to build a car, and all that stuff has to be paid for.

To give you an idea how how much material is needed to build cars, GM's COGS for their worldwide automotive divisions, less direct labor costs, was $138 billion ($161b in gross sales, COGS of $159.5, worldwide direct labor costs of $21.5).

$74/hour? That's some overhead... Didn't that sink United Airlines as well; paying more than anyone else instead of sticking with the times...?

I think American companies that don't adopt Japanesse statistical approach to manufacturing will suffer. Granted most car companies have gone the way of Lean manufacturing, appling Toyata type principles to their manufacturing lines (Kaizan, 5S, poke-a-yoke, etc.) they are decades behind their competition. They need to improve on these principles and not just follow. The followers will just continue to fall behind until they are so far gone, they end up in this type of predicament.

Also, IMO, I think many companies who apply Lean and Six Sigma to their manufacturing lines do so in error, or without a full sight on their process and can, inevitablly, lead to inefficiencies instead of improvements. I have heard people complain about these approaches saying that they create more paper work, or slow the process down, in those cases those who have implimented the system have failed.

In short; GM fail behind because they were unable to improve their manufacturing process to a level of their competition even though they did the same thing... Sometimes it is not IF you do something or even HOW you do it, but WHY you do it.

[chequita guevara]

Originally posted by JohnT
Here's an assignment to show you what would be helpful,

Answer my question first. Explain how profitability can grow when you keep attacking the pay of consumers.

[Ned]

Originally posted by Kidicious


Ummm. Because they don't have enough money?

To do what?

Kid, let me ask you in return why a worker in the Far East can earn 1/10th of the US worker, but live better? (This is just a hypo, and does not suggest that these numbers are "real.")

[Ned]

Originally posted by chegitz guevara


Answer my question first. Explain how profitability can grow when you keep attacking the pay of consumers.

Pay of "consumers." We were talking about the wages of workers of a particular company. However, if this is pandemic, what do you think would happen if Congress suddenly gave all workers a 100% raise by operation of law. (Hint, would the companies raise prices?)

[Dinner]

Originally posted by JohnT
In case y'all are interested in the long-term debt structure, here are some numbers: $38 billion of GM's debt is due in 2006, $24 billion due in 2007, $11 billion in 2008, $9.6 billion in 2009, and 2010-and-after $91 billion is due, with the weighted interest rate of all debt payable from 2006 onwards being 4.9%.

So basically bankruptcy with in five year unless they can restore their credit rating? If they could ditch pension liabilities or medical costs as well as slash there debt then Bankruptcy might be a good option for them.

[pchang]

Originally posted by chegitz guevara
Answer my question first. Explain how profitability can grow when you keep attacking the pay of consumers.

If what you buy gets cheaper to make and purchase, do you really need a raise?

[Dinner]

If you slash your costs faster then other people slash their costs then you are ahead. Also other companies are doing well and if more people enter the job market, even at low wage, then the over all market is up.

[pchang]

Oerdin - I release you from my mind control

[Kidlicious]

Originally posted by pchang


If what you buy gets cheaper to make and purchase, do you really need a raise?

Because the **** I buy gets cheaper everyday, NOT!

[Kidlicious]

Originally posted by Oerdin
If you slash your costs faster then other people slash their costs then you are ahead. Also other companies are doing well and if more people enter the job market, even at low wage, then the over all market is up.

Finish it. Then the capitalists start firing people. Wages go back down.

[Kidlicious]

Originally posted by Ned


To do what?

To buy the machines that are used to exploit them, so that they can consume all the stuff they make instead of just a portion of it.

Kid, let me ask you in return why a worker in the Far East can earn 1/10th of the US worker, but live better? (This is just a hypo, and does not suggest that these numbers are "real.")

You tell me.

[Kidlicious]

Originally posted by pchang
And they never will because just artificially increasing wages leads to a cycle of every increasing inflation. Commies just don't understand that you can't make something from nothing.

You sure can make something for no profit. You just don't.

[Kidlicious]

Originally posted by JohnT
Here's an assignment to show you what would be helpful, more helpful than blanket insults: I made a comment earlier about GM's labor costs being $74/hour. Explain to us, using Communist financial theory (if such a thing exists), how that isn't enough and how you expect GM to continue paying it, while supporting new car development for an ever-changing market, increased debt carrying costs, and, of course, your basic COGS - after all, you need steel, iron, copper, electronics, upholstery, stamping dies, welding machines, thousands of miles of conveyor belts, and thousands and thousands of additional items in order to build a car, and all that stuff has to be paid for.

To give you an idea how how much material is needed to build cars, GM's COGS for their worldwide automotive divisions, less direct labor costs, was $138 billion ($161b in gross sales, COGS of $159.5, worldwide direct labor costs of $21.5).

Please, we're fascinated in how you'd fix this.

Nationalize. Don't give the shareholders or creditors a dime for it.