GM & Chrysler on the Brink -- Part 3

[Dinner]

Tata is injecting cash into Jaguar Land Rover in order to "give the UK government more time to decide whether to use public money to bail-out the company".

http://news.bbc.co.uk/2/hi/uk_news/7795026.stm

As I said, it doesn't seem likely that the UK will bailout their automakers but it certainly is something before Parliament. If Jaguar Land Rover gets a bailout you just know Vauxhall is going to need one too.

Oh, and the German government is also considering an auto bailout. GM's Adam Opel AG is set to get a loan of 1 billion Euros and it seems likely that other German automakers will also seek funding from the government.

http://www.dw-world.de/dw/article/0,,3890097,00.html

Word out of Japan is that Toyota is going to announce a big lose too and if Toyota is in trouble you just know the smaller Japanese brands are too.

[DanS]

Your "big loss" is actually a small net profit for Toyota for the year. This is a strange sort of "trouble." It forecasts a profit while its cars are piling up at Long Beach.

By way of comparison, GM hasn't seen a net profit in 5 years.

[Dinner]

http://www.presstv.ir/detail.aspx?id=78310&sectionid=3510213

"Toyota likely to lose $1.1 billion"

The recession is just starting in Japan so it will likely lag the US in recovery as well. BTW GM has been in the middle of a restructuring since 2005 so that covers 4 of those 5 years. The good news is they're really slashing costs, outsourcing everything they can, and shedding employees. Still loses are to be expected when a company is going through a radical restructuring and then the financial crisis hit almost halving car sales nation wide. You can see why all the automakers are in trouble.

[DanS]

An operating loss, but a net profit of some $550 million.

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/22/AR2008122200266.html?hpid=topnews

[DanS]

Originally posted by Oerdin
BTW GM has been in the middle of a restructuring since 2005 so that covers 4 of those 5 years. The good news is they're really slashing costs, outsourcing everything they can, and shedding employees. Still loses are to be expected when a company is going through a radical restructuring and then the financial crisis hit almost halving car sales nation wide. You can see why all the automakers are in trouble.

You are so forgiving as to be obtuse, I'm afraid to say. GM has been cutting for 5 years but its cost structure is still well above Toyota's.

In a just world, GM would have died.

[Dinner]

The only major difference at this point is legency costs but those are being dealt with.

[DanS]

Excluding legacy costs (which you shouldn't do), GM's labor costs are higher than Toyota's.

[Dinner]

Slightly but not a lot. Even using the right wing American Enterprise Institute numbers (the liars who came up with the $70 per hour claim) by 2010 the figure will be down to $52 vs $49. That includes legency costs. Let's face it this has ALWAYS just been a right wing attempt to destroy the union.

http://www.nytimes.com/2008/12/10/business/economy/10leonhardt.html?_r=2&ref=business

They attempted to kill two of America's most important industrial companies just on the off chance that they could break one of their political enemies. The word for that is traitor.

[Zkribbler]

Originally posted by DanS
Excluding legacy costs (which you shouldn't do), GM's labor costs are higher than Toyota's.

And the cost of living is higher in Michigan than in Tennessee. ...and BTW: Toyota, Nissan, and all the other darlings of the union-busting Republicans are also losing money.

[DanS]

I don't know why you guys think a failed company's employees should be rewarded in greater fashion than a successful company's employees. It's bizarre and distasteful. There are so many things wrong with that outcome that it doesn't seem worthwhile enumerating them for you. I wonder what's going on in those brains of yours.

[Dinner]

An interesting conversation about Bush's legency and the auto loans.

[Dinner]

Originally posted by DanS
I don't know why you guys think a failed company's employees should be rewarded in greater fashion than a successful company's employees. It's bizarre and distasteful. There are so many things wrong with that outcome that it doesn't seem worthwhile enumerating them for you. I wonder what's going on in those brains of yours.

Except they won't and you keep repeating a lie? The restructuring plan ends up taking GM from 150,000 employees to just 90,000 employees and 20% of those 90,000 employees will be new hires making just $14 per hour. Do the math and look at the NYT's article; if you fire a bunch of people making $28 per hour and replace them with people making $14 per hour what happens to the average hourly wage? It goes down! Dumb ass.

By 2010 GM's workers will actually make less per hour then Toyota's because of the restructuring. There will still be some legency costs but it will be less then $400 per car. The company will end up completely reformed without the bankruptcy you've been stupidly hoping and praying for. The problem is solved and the pensioners didn't get tossed into the street as you so deeply desired be done with them.

[Zkribbler]

Originally posted by DanS
I don't know why you guys think a failed company's employees should be rewarded in greater fashion than a successful company's employees. It's bizarre and distasteful. There are so many things wrong with that outcome that it doesn't seem worthwhile enumerating them for you. I wonder what's going on in those brains of yours.

What rewards?? Rewards are for capital venturists.

Employers work for salaries, earned pursuant to contracts. ...or don't you believe in contracts??

[Naked Gents Rut]

Rewards are for capital venturists.

Good god...

[Vanguard]

Originally posted by DanS
I don't know why you guys think a failed company's employees should be rewarded in greater fashion than a successful company's employees. It's bizarre and distasteful. There are so many things wrong with that outcome that it doesn't seem worthwhile enumerating them for you. I wonder what's going on in those brains of yours.

Alright, let's assume that the government intervenes to overturn the contracts that the UAW has freely negotiated, reducing the wage of UAW workers to half what it is now.

Where do you think this money should go? To the shareholders? The bondholders?

Why do they suddenly deserve it? For the economic "service" of getting a court to overturn negotiated contracts? Why isn't that outcome "bizarre and distasteful"?