GM Loses Another $16 Billion -- Bankrupt?

[Asher]

Originally posted by Vanguard

GM has been paying the same wages for some years now. If the wages were what is driving them to bankruptcy, how come they weren't bankrupt ten years ago?

GM's financing arm made a killing off of dumb Americans like yourself.

[KrazyHorse]

If this is your idea of economic reasoning, you should not be calling anyone else a "'****".

You are a ****. **** **** ****.

So you contend that Toyoto somehow, magically determines the exact minimum amount to pay its workers to get the needed skills, do you?

You are an illiterate ****.

Toyota pays its workers at least the compensation required to get the necessary amount of labour with the necessary skill profile

An inequality is not the same as an equality.

If the free market has somehow imposed the exactly correct price for labor on Toyota

Already dealt with. Toyota and GM both pay at least the amount necessary to have enough labour with the right skill profile in order to build the amount of cars they need to. Toyota pays its workers less than GM. Therefore Toyota is closer to the market-clearing wage than GM is. M < T < G

GM has been paying the same wages for some years now. If the wages were what is driving them to bankruptcy, how come they weren't bankrupt ten years ago?

Because the demise of a giant like GM takes time. Toyota et al have been slowly increasing their market share in the US for over 30 years. You ****. To put it in slightly more sophisticated language for people who might be reading this and who aren't as retarded as you, the Detroit 3 were extracting rents from their market position. Since the union imposed approximate wage equality through these companies much of their cost structure was identical and competition in this area was limited to new entrants (which in an industry as capital intensive and with the as much economy of scale as car manufacturing will take a lot of time to develop). The rents being extracted by the Detroit 3 and being passed on to their employees were paid by car consumers (until lower cost, better quality alternatives became available). The days of rent extraction are now over. Bye bye, GM.

[KrazyHorse]

Edited in by Vanguard after reply:

Even assuming that Toyota's wages are closer to minimum than GM's are, how do you know that the amount it pays on capital are also the minimum? If paying too much for wages is economically bad, paying "too much" to capital must be equally bad. Mustn't it?

Money is fungible and capital markets are liquid. Duh.

[Vanguard]

Originally posted by Asher

GM's financing arm made a killing off of dumb Americans like yourself.

I dunno. That SLS was nice. 0-60 in seven seconds. Most comfortable seats I've ever had in a car. And the seat heater was hawt!

On the other hand, the lease rates nowadays are, I have to admit, way too much.

[Vanguard]

Originally posted by KrazyHorse
Edited in by Vanguard after reply:

Even assuming that Toyota's wages are closer to minimum than GM's are, how do you know that the amount it pays on capital are also the minimum? If paying too much for wages is economically bad, paying "too much" to capital must be equally bad. Mustn't it?

Money is fungible and capital markets are liquid. Duh.

Ok, then why was Citibank worth $70 billion last year?

Gotta get back to work, btw. Don't expect early replies.

[Asher]

Originally posted by Vanguard


I dunno. That SLS was nice. 0-60 in seven seconds. Most comfortable seats I've ever had in a car. And the seat heater was hawt!

On the other hand, the lease rates nowadays are, I have to admit, way too much.

That's the problem -- you guys focus on things like 0-60 like it makes you a man. It doesn't.

You guys were paying too much money for shoddy merchandise and everyone was leasing their cars, which in turn made GM a killing. Your collective stupidity has kept GM viable longer than it should've been.

I've railed on the Big Three for years, and it's no surprise for me to see them all in trouble. Especially as people need to start looking for WISE investments rather than "what will compensate me for my small penis" investments like an SLS that goes 0-60 in 7 seconds (which actually isn't very good, if you knew anything about cars?)

[KrazyHorse]

You have exactly the same vote for the quality/price point of GM cars that everybody else who can afford a car does.

While you might think that GM cars are great, the vote isn't going so well for them with the public as a whole.

Why is it that you think your judgment is so much better than everybody else's?

[KrazyHorse]

Originally posted by Vanguard


Ok, then why was Citibank worth $70 billion last year?

Too bad you have absolutely no clue what I just said. Nobody claimed that the market was prescient. Just the best guess we have.

Gotta get back to work, btw. Don't expect early replies.

Guess coffee break at the GM plant was over.

[Vanguard]

Originally posted by Asher
like an SLS that goes 0-60 in 7 seconds (which actually isn't very good, if you knew anything about cars?)

It's not bad for a sedan. It was certainly much faster than my RX330.

Originally posted by KrazyHorse
Nobody claimed that the market was prescient.

But that is what you are claiming. Otherwise how do you know that the unions haven't gotten the highest price for labor that profits will allow, instead of Toyota getting the lowest price that labor availability will allow? Why is one price more correct than the other?

It is you who are making a value judgement about labor costs vs car profits, not me.

Originally posted by KrazyHorse
The Broken Window Fallacy

I have a certain sympathy for Broken Window arguments, but this is the exact opposite of a Broken Window situation.

Paying people to produce cars in an economic crisis is not the same thing as breaking windows so they will have something to replace. Cars are useful. People like them. Producing them increases utility. It does not destroy useful stuff simply in order to replace it.

Nor does the Broken Window argument address the actual point I raised. I pointed out that if GM lays off auto workers, then the market for cars will decrease.

But this is obviously true, at least in the short run. Those workers are not going to get higher paying jobs soon, are they? So they will buy fewer automobiles, right?

If something is true, then it cannot be fallacious.

Because the demise of a giant like GM takes time.

GM is not bankrupt because ... they had a lot of extra capital left over

And why do they have a lot of capital left over? Because they were making big profits not long ago.

So how can you assume that their business model is total trash? And if they were making profits with the labor rates they have now, then how can you assume that the price of labor is too high?

Union contracts have similar effects on labor pricing as monopolies do on goods pricing

Certain labor contracts have some of the same effects. But, on the other hand, not having unions almost certainly results in companies having too much market power. Which results in labor prices being too low.

Why should we prefer one set of circumstances to the other?

Toyota et al have been slowly increasing their market share in the US for over 30 years. You ****. To put it in slightly more sophisticated language for people who might be reading this and who aren't as retarded as you, the Detroit 3 were extracting rents from their market position. Since the union imposed approximate wage equality through these companies much of their cost structure was identical and competition in this area was limited to new entrants (which in an industry as capital intensive and with the as much economy of scale as car manufacturing will take a lot of time to develop). The rents being extracted by the Detroit 3 and being passed on to their employees were paid by car consumers (until lower cost, better quality alternatives became available). The days of rent extraction are now over. Bye bye, GM.

Excess rents really can only be extracted when you have a monopoly, cartel or other market power. The very fact that they are called the "Big Three" basically blows this theory out of the water.

Even so, I will say that there was probably some truth to this accusation.... in the 1970s. But as you yourself say, Japanese automakers have been increasing market share for thirty years. How could the Big Three make huge profits in the 1990s from excess rents when there was a Toyota dealer on every street corner? They couldn't.

So where did the huge profits come from that they are now spending down?

[Asher]

Originally posted by Vanguard


It's not bad for a sedan. It was certainly much faster than my RX330.

You're comparing a sedan to an SUV?

And the SUV is almost as fast: 7.8 seconds: http://www.motortrend.com/roadtests/...330/index.html

[KrazyHorse]

I'm not going to bother responding to the rest of your retardedness, but:

Excess rents really can only be extracted when you have a monopoly, cartel or other market power. The very fact that they are called the "Big Three" basically blows this theory out of the water.

You ****ing hare-brained gimp.

Since the union imposed approximate wage equality through these companies much of their cost structure was identical

Is it that you make a profession of being a ****ing moron?

[KrazyHorse]

Vanguard, you are now competing at Kidicious levels of retarded. Welcome to my ignore list, you ****ing worthless piece of moronic trash.

[KrazyHorse]

While adding him to my ignore list I note the following:

Vanguard has 1 buddies
(first 9 shown)


Vanguard

[notyoueither]

Originally posted by KrazyHorse
Vanguard, you are now competing at Kidicious levels of retarded. Welcome to my ignore list, you ****ing worthless piece of moronic trash.

That certainly added to the discussion.

[Kuciwalker]

Originally posted by KrazyHorse
Vanguard, you are now competing at Kidicious levels of retarded. Welcome to my ignore list, you ****ing worthless piece of moronic trash.

Yet again, way ahead of you