GM Loses Another $16 Billion -- Bankrupt?

[chequita guevara]

Originally posted by Oerdin
The big competitiveness issue is you can't pay a union auto worker $90,000 per year plus life time pension plus life time free health benefits when companies like VW and Toyota (Toyota builds Tacoma trucks in Tijuana) have factories in Mexico where they pay people $8-$12 per hour with no benefits.

Apparently Oerdin feels that American autoworkers should only be making $8 - $12 an hour so the can be competitive.

[Darius871]

Originally posted by rmsharpe

I sell propane and propane accessories.

Funny, but in other words you're ashamed to admit the real answer to his question? Then let the wild speculation begin!

My money's on unemployed or underemployed college or grad student buoyed by a trust fund. Any takers?

Maybe "Minneapolis" is your definition of "Minnetonka" too.

[Dinner]

Originally posted by chegitz guevara

Apparently Oerdin feels that American autoworkers should only be making $8 - $12 an hour so the can be competitive.

The alternative would be to tariff foreign made cars off the market.

[Darius871]

Originally posted by chegitz guevara
Apparently Oerdin feels that American autoworkers should only be making $8 - $12 an hour so the can be competitive.

As long as there is a system of free competition, you know damn well it's inevitable that the $8-12/hr manufacturer will crush the $45/hr manufacturer like a bug in the long term. Oerdin's not talking about what autoworkers "should" make, only what any sane person who acknowledges reality knows they "can" make. The only way to change that simple reality is to upend the entire market system on a macro level, but we already know where you stand on that point.

[Vanguard]

I think Oerdin's actual point is that it is unfair to penalize companies (like GM) that offer health care to huge numbers of manufacturing workers. Either

A. Offer national health care so that the burden of health care is equally shared

or

B. Put tariffs on imports so that foreign cars are not subsidized by their nation's health insurance.

This is a perfectly reasonable position. I agree with him.

Basically the US is subsidizing financial services firms with our health care policy. Since financial firms can generate large profits with few employees (and therefore low health care premiums) they are unfairly advantaged compared with manufacturers, who generate modest profits from larger numbers of employees.

Why do we want to discourage manufacturing? We don't. So let's stop.

[Zkribbler]

Originally posted by Vanguard
I think Oerdin's actual point is that it is unfair to penalize companies (like GM) that offer health care to huge numbers of manufacturing workers. Either

A. Offer national health care so that the burden of health care is equally shared

...

I've heard of firms moving from the U.S. to Canada to avoid paying the high health insurance costs here.

[Ben Kenobi]

Funny, but in other words you're ashamed to admit the real answer to his question? Then let the wild speculation begin!

Hey *****, he answered the question.

More then I can say for you. What does his employment have jack all to do with his opinion? His opinion is just as valid if he were unionised or not.

[Imran Siddiqui]

His point is that when people get into the working world they may realize why unions are good/bad rather than just talking points. I think most people who do work realize that unions are good in some aspects but bad in others.

[Kuciwalker]

Originally posted by Darius871
My money's on unemployed or underemployed college or grad student buoyed by a trust fund. Any takers?

Sure, I'll take that. Basically no one that age is being supported by a trust fund instead of the parents themselves.

[DanS]

Originally posted by onodera
Deripaska doesn't need the company. He needs the assets, not the liabilities.

The company will be forced into bankruptcy and run by the bondholders well before a random Russian tycoon gets a crack at the assets.

[Darius871]

Originally posted by Ben Kenobi
he answered the question.

*WHOOSH*

You actually think he sells propane and propane accessories Ben?

[Darius871]

Originally posted by Kuciwalker
Sure, I'll take that. Basically no one that age is being supported by a trust fund instead of the parents themselves.

Same difference. Though I know of plenty of post-grads that still draw from the same trust fund as they did in college.

[DanS]

Originally posted by Sandman
If they spend more on labour and raw materials than the finished products are worth, then wealth is being destroyed.

Yes, thank you.

Retained earnings is a summation of past profits (or losses), net of dividends. In GM's case, the company has lost $60 billion for its shareholders, net of dividends, over the course of its existence -- my earlier numbers were off because I didn't include this quarter's loss.

The market capitalization (stock prices) is a reflection of perceived future prospects for profit or liquidation of the company. In GM's case, the market perceives almost no prospects for future profit or value to the shareholders due to liquidation. A hot little number who invested $10,000 in GM in 1970, would be able now as a granny to sell her stock for $2,872.

[Vanguard]

I'm not going to say it is impossible that GM will go bankrupt. The US is in uncharted economic waters now. Thar be dragons here. Anything can happen.

But GM's current large losses are basically the result of very large mark-to-market losses on leases. They are just giving back the large profits they pretended to make on leases 4 years ago. Nothing has really changed.

Operationally they are ok. Not great, mind. They have huge fixed costs and it looks as if sales will be really bad this year. That's not going to be pretty.

But the fact remains that they have 10% of world market share in automobiles. Not a bad spot to be in, regardless of how expensive your pensions are.

[Vanguard]

TBA later, when I figure it out.

NM