GM Loses Another $16 Billion -- Bankrupt?

[rmsharpe]

Originally posted by Colon™
I sense a Bruce Springsteen song coming.

Springsteen is an idiot. He'd probably want the car factories still here, but he'd have such stringent environmental and labor restrictions that they wouldn't be able to produce anything.

Just shut up and play your guitar, Bruce.

[chequita guevara]

What do you do for a living, rmsharpe?

[dannubis]

Being dull...

[rmsharpe]

Originally posted by chegitz guevara
What do you do for a living, rmsharpe?

I sell propane and propane accessories.

[snoopy369]

Ahh, so now we know your real name, Hank. Nice to disguise it with the name-like logon... but you cannot fool us anymore!

[Vanguard]

Um, GM is still the biggest car maker in the world. If they are "destroying" wealth, then it is pretty hard to see how any wealth ever gets created anywhere.

That said, I don't have any particular sympathy with GM. They have known for 25 years that they have to build cars competitive with the Germans and the Japanese. And they still produce garbage. Their styling is rotten, the interior materials are cheap and they are nothing special mechanically. And they can't even compete on price. Eventually you have to assume that their management is incompetent. Instead of building good cars they have spent their time trying to get people to custom order the color of their interior trim.

[snoopy369]

Dan is suggesting that they are destroying wealth by causing their stock price to go kablooie. As their company becomes less valuable, they 'destroy' wealth.

[Vanguard]

But how does this "destroy" wealth? They are still producing cars. They still pay their workers.


The cars are the "wealth" they produce. Since they produce more cars then anyone else, they must produce more wealth than any other car company (give or take).

Share price provides some indication of wealth production, I guess. But it is hardly an infallible guide. The price of oil is basically the same as the share price of oil. If the price of oil were to fall dramatically, would that mean that huge amounts of wealth were being destroyed?

[Kuciwalker]

Originally posted by snoopy369
Dan is suggesting that they are destroying wealth by causing their stock price to go kablooie. As their company becomes less valuable, they 'destroy' wealth.

More specifically, they're destroying wealth by actually making the company worth less. The stock price is just a reflection of that...

[MrFun]

Originally posted by Arrian
MrFun, Dan's point is pretty solid: GM is a badly-run company and has been for a long time. The union was also part of the problem. Put it together, and it's a massive cluster****, and it's not fixable. Let it die, and let something better arise.

-Arrian

Damn workers looking after their own interest when they should have let executives exploit them on unfair terms and conditions.

[Kuciwalker]

Have you been paying attention to this thread at all?

Like, maybe the part where GM's entire history represents a net loss of $40bn of wealth? Largely because of the ridiculously good compensation that union managed to secure?

[MrFun]

Of course not!

[Vanguard]

Just because workers get some of the wealth created by the manufacture of automobiles instead of shareholders getting all of it, that does not mean that wealth is being "destroyed."

Unless, by "wealth", you mean money owned by wealthy people. Is that what you mean?

[notyoueither]

I think it's that the workers have received more of the wealth created by the manufacture of automobiles than can be profitably warranted. And Dan is talking about average Joe investors who buy blue chip so they can have a safe retirement. Personally, I'd question the sanity of anyone relying on the NA auto industry for their retirement, or who has done so over the last 10 years.

One wonders why management never said 'no' to the unions and stuck to it. I suspect it's a wee bit more complicated than deciding over drinks to screw the company by giving in to the unions.

[notyoueither]

The lore is that auto workers would pick one company and stirke them if necessary to get what they wanted from bargaining.

The other two of the big three would then fall in with the contract negotiated with the target or get struck.

I suppose it would have been illegal for the big three to come to an arrangement to support each other in the case of labour unrest. It would have been an anti-trust issue I am sure.

So what we are left with is a domestic auto industry that is near dead after having been sucked dry by one or two generations of workers.

Yay.

Our laws have worked well.