GM Spirals the Drain (Part 2)

[Asher]

Yeah, the best way for GM to orchestrate its turnaround is to cut the salaries of their best engineers and watch them flee to competitors or other sectors.

No, GM needs to keep its engineers. The engineers are what will get GM out of this mess by pushing the envelope and innovating. Their pay is more than fine.

[Dinner]

The really good news is if the big 3 get access to TARP funds then GMAC might not go bust after all.

[DanS]

White collar Detroit will shrink more than blue collar Detroit. The UAW need not ask for shared sacrifice and its fears of shouldering the concessions instead of everybody else definitely ring hollow to me.

[Dinner]

Originally posted by Asher
Yeah, the best way for GM to orchestrate its turnaround is to cut the salaries of their best engineers and watch them flee to competitors or other sectors.

No, GM needs to keep its engineers. The engineers are what will get GM out of this mess by pushing the envelope and innovating. Their pay is more than fine.

Even if it is higher then what Toyota and Honda pay? I'm sure there will be plenty of young engineers looking for jobs just like the young MBAs. Supply and demand. Frankly they should fire a lot of the middle managers and trim the over head. Not to mention a lot of the engineering work could be outsourced very easily.

[Asher]

Originally posted by Oerdin


Even if it is higher then what Toyota and Honda pay? I'm sure there will be plenty of young engineers looking for jobs just like the young MBAs. Supply and demand. Frankly they should fire a lot of the middle managers and trim the over head. Not to mention a lot of the engineering work could be outsourced very easily.

Most of their engineering work IS outsourced in some way to contractors. There's a million companies here in southern Ontario full of engineers that design parts for the Big Three.

[Dinner]

Exactly. Thus they don't need to pay pensions to in house engineers when a contractor can do the same job for a set price without getting paid a pension by GM.

[Dinner]

The really funny part is if GM is treated the same as the Wall St guys then they'll get money which doesn't have to be repaid where as we were originally talking about giving automakers loans which had to be paid back. It's an even sweeter deal for the automakers.

The Treasury could give them cash in exchange for stock and everyone (but Dan and Asher) are happy. Treating industry the same as the banks.

[KrazyHorse]

The Treasury could give them cash in exchange for stock

No, because GM's market cap is only 2.4 bln $

[Asher]

Originally posted by Oerdin
The really funny part is if GM is treated the same as the Wall St guys then they'll get money which doesn't have to be repaid where as we were originally talking about giving automakers loans which had to be paid back. It's an even sweeter deal for the automakers.

The Treasury could give them cash in exchange for stock and everyone (but Dan and Asher) are happy. Treating industry the same as the banks.

They let Lehman fail, why not GM?

[KrazyHorse]

GM stock isn't worth ****. The loans they want are multiples of the whole value of their company. The loans they actually need are even bigger multiples!!!

[Japher]

Marry Christmas GM...

[Dinner]

So were a number of the companies on Wall St right before they got bailed out. It all depends on how rich the Treasury wants to make the deal. They have been especially generous to several Wall St firms. Equal treatment.

Oh, and GMAC has been asking to get into the TARP for some time now and it looks like they will after all.

[Asher]

Originally posted by Oerdin
So were a number of the companies on Wall St right before they got bailed out. It all depends on how rich the Treasury wants to make the deal. They have been especially generous to several Wall St firms. Equal treatment.

Oh, and GMAC has been asking to get into the TARP for some time now and it looks like they will after all.

Why GM and not Lehman?

Equal treatment indeed, equal to Lehman.

[DirtyMartini]

Originally posted by KrazyHorse
"Poor taste" is a pretty silly consideration when it comes to the fate of a multi-billion dollar company.

Except that the opinion of the masses with regard to these companies matters. The only reason people buy American cars at this point is brand/country loyalty. If they're convinced that the car companies are run by heartless crooks who continue to earn multimillion dollar salaries off their taxes, that loyalty will go out the window. "Heartbeat of America" may become "Bloodsucking leeches of Detroit". Congress can throw all the cash they want at the problem, people are still going to have to buy the cars in the end.

[KrazyHorse]

That's ridiculous. The number of people who won't buy a "domestic" car because of what the CEO gets paid is negligible.