GM Loses Another $16 Billion -- Bankrupt?

[Kuciwalker]

The sad thing is that the UAW views the employer/employee relationship as adversarial rather than as a partnership. It seems obvious that the fortunes of the UAW are tied closely with the fortunes of the companies/investors/management.

Not just the UAW. When dealing with a union of airline workers my dad overheard one of the union leaders saying "if the airline doesn't go bankrupt, we've left money on the table".

[Kidlicious]

Originally posted by Kuciwalker

The sad thing is that the UAW views the employer/employee relationship as adversarial rather than as a partnership. It seems obvious that the fortunes of the UAW are tied closely with the fortunes of the companies/investors/management.

Not just the UAW. When dealing with a union of airline workers my dad overheard one of the union leaders saying "if the airline doesn't go bankrupt, we've left money on the table".

Well it's true.

[KrazyHorse]

Originally posted by Kuciwalker

The sad thing is that the UAW views the employer/employee relationship as adversarial rather than as a partnership. It seems obvious that the fortunes of the UAW are tied closely with the fortunes of the companies/investors/management.

Not just the UAW. When dealing with a union of airline workers my dad overheard one of the union leaders saying "if the airline doesn't go bankrupt, we've left money on the table".

Given the state of the airline industry, this is pretty reasonable.

[Dinner]

Originally posted by DanS
OFITG: You could do that through bankruptcy.

Many people have a misconception about what bankruptcy means for US companies. It offers a company a chance to restructure while being protected against the claims of those to whom it has obligations.

It doesn't necessarily mean that the company will stop doing business. Few of the big airliners who have been through bankruptcy have ceased doing business, for example. This is true even though those airliners have good competition from Southwest Airlines.

The bottom line is that bankruptcy facilitates restructuring. That's what the system does, day in and day out. It is reasonably good at it. So it makes sense to entrust GM to the bankruptcy process.

Airlines don't cost that much to operate especially once they've declared bankruptcy and got most of their debts cleared (I.E. the cost of the planes get mostly paid off). Auto making is extraordinarily capital intensive on a day to day basis so they won't emerge from bankruptcy and you know it.

The last auto company to try to reorganize under bankruptcy was Studebaker and how well did that turn out? The people pushing for bankruptcy are ignoring the realities of the auto business.

[Vanguard]

Okay, if you guys think that labor costs are the problem, then how do you explain German automakers? They have high labor costs and their unions are even stronger than the UAW. How come they are competitive and the Big Three aren't?

[KrazyHorse]

Because they make cars that don't suck.

[Kidlicious]

Because the companies are managed better.

[Imran Siddiqui]

"The Big 3" haven't recovered since they found out that tariffs made sure their cars were far crappier than European and Japanese cars.

[Vanguard]

Originally posted by KrazyHorse
Because they make cars that don't suck.

So why reduce labor costs then? Fire the designers, bail them out, and you should be all set.

Originally posted by Kidicious
Because the companies are managed better.

So why reduce labor costs then? Fire the management, bail them out, and you should be all set.

Originally posted by Imran Siddiqi
"The Big 3" haven't recovered since they found out that tariffs made sure their cars were far crappier than European and Japanese cars.

So why reduce labor costs then? Bail them out and you should be all set.



How are you liking Fallout, Imran? I just completed on normal difficulty and am going through again on hard.

[Dinner]

Originally posted by Imran Siddiqui
"The Big 3" haven't recovered since they found out that tariffs made sure their cars were far crappier than European and Japanese cars.

That's funny. Then why are all three making big profits every where but North America? All three are making money (with GM and Ford making money hand over fist) in Latin America, Europe, and Asia.

The truth is they make some darn good cars which consumers want but they're ****ed, ****ed, ****ed in North America because of high pension costs, high worker costs, and high medical costs. Sure, they've made bad choices with SUVs and trucks and should have moved 10 years ago towards small cars but the main reason they've concentrated on large cars is because given their prices structure (workers making $74 an hour on average, $2500 per car cost for health care, more for pensions) they have a really hard time making money off small cars.

The fact is they make great small cars in other countries so rather then claiming they suck we should be fixing the problems with North America.

[Asher]

All three are making money (with GM and Ford making money hand over fist) in Latin America, Europe, and Asia.

Cite?

[KrazyHorse]

Originally posted by Vanguard


So why reduce labor costs then? Fire the designers, bail them out, and you should be all set.

Good cars are more than good design.

[Kidlicious]

Originally posted by Vanguard
So why reduce labor costs then? Fire the management, bail them out, and you should be all set.

I'm don't believe reducing labor costs would save the company. Also, bailing the company out is not the answer for me. In fact, it's really pissing me off seeing all this money go to corporations. But you can't just hire managers for them. That's something they have to do themselves.

[Dinner]

Originally posted by Asher


Cite?

GM and Ford prosper in South America.

http://detnews.com/apps/pbcs.dll/article?AID=/99999999/AUTO01/708210301/-1/SPECIAL&template=THEME&theme=AUTOS-SOUTH-AMERICA

Big profits in China.

http://www.autoblog.com/2008/10/24/gm-may-use-profits-from-china-to-float-north-american-operations/

Big profits in India.

http://in.news.yahoo.com/241/20081112/1019/tbs-gm-on-verge-of-bankruptcy-indian-arm.html

Europe profitable.

http://www.businessweek.com/globalbiz/content/aug2007/gb2007088_694094.htm

The truth is they're making profits every where but North America and that's primarially because of legency costs (pensions, health care) and because of uncompetitive union contracts. Not to mention the credit crunch has cause auto sales to fall below the level achieved in 1969.

[Kidlicious]

Originally posted by Oerdin
Sure, they've made bad choices with SUVs and trucks and should have moved 10 years ago towards small cars but the main reason they've concentrated on large cars is because given their prices structure (workers making $74 an hour on average, $2500 per car cost for health care, more for pensions) they have a really hard time making money off small cars.

It is a fact that it takes more labor to build American cars but market share is measured in dollars, not cars. The fact is that American car companies are not efficient, and that is why they've lost market share.