The beginning of the end?

[Lawrence G.]

Re: The beginning of the end?

[quote=Timothy Barbieri (6542);384239]May be we can all get goverment jobs. I doubt they are feeling any pinch from this, $.50 prescriptions, wonderful health care and you get to walk around like your doing someone a favor and produce if your in a good mood!!

I'm hearing from my Government neighbors that whole Government divisions are on the chopping block in DC and northern VA for cost cutting measures

So yes...they are feeling a pinch....no job in America is safe any more, public, private or Government

[Duke W.]

Re: The beginning of the end?

Duke, Your statement that chapter 11 would give GM the opportunity to fire the UAW might be construed as wishfull thinking on your part, but your use of the airlines as an historical example is factually incorrect. The fact is within the past decade all of the chapter 11 airlines still have all of their unions on the property. The union members have seen their court ordered cuts go to management in the form of huge bonuses. In light of this, most aviation industry experts predict the pendulum is poised to swing the other way now. The pilots of Jetblue have just filed to form a union.
Andre

I was speaking somewhat metaphorically. Chapter 11 means that all contracts are open for renegotiation, and I would expect the court to only accept a labor contract that is competitive with the foreign transplant competition, but anything could happen including a structure that virtually guarantees another crisis or bankruptcy down the road.

The retirees will also have to take a hit to one degree or another. Delta pilots lost their entire retirement benefit (a friend of mine's brother is a retired Delta pilot), but most of the other unions only took a partial hit.

Bankruptcy gives Detroit a chance to restructure their businesses into something that is, hopefully, competitive. Any kind of government "bridge loan" is just going to prolong the agony, and piss away more taxpayer dollars, while the UAW stubbornly refuses to make the necessary concessions to produce a competitive labor rate.

I'm not convinced that Chapter 11 would kill GM sales and force them into liquidation. Certainly they will loose market share for a period of time, but I think when a competitive business model is developed customers will return.

A prenegotiated bankruptcy could bring GM in and out of the process in a few weeks, but this requires the UAW to make major concessions very quickly as part of the up front negotions. If this becomes the case, I would support a government bridge loan. But the longer this whole mess drags out the more likely that GM will die and a large percentage of the UAW guys loose their jobs permanently.

It's like "pressure night" at an O-club bar. The first guy to leave the bar buys a round!

You can also look to the demise of the US steel industry in the seventies to see how this one is going to go.

There are no silver bullets!

Duke

[Michael G.]

Re: The beginning of the end?

<<...while the UAW stubbornly refuses to make the necessary concessions to produce a competitive labor rate.>>

The UAW has made concessions. And as I pointed out in an earlier post, their actual wages, which should not be confused with GM's labor costs (particularly the "legacy costs"), are comparable with the non-union plants.

When the facts don't support the assertion, I suspect this has devolved into more of an ideological argument.

Mike

[Duke W.]

Re: The beginning of the end?

There's a difference between "concessions" and "necessary concessions" (in order to bring total labor cost including "legacy cost" down to competitive levels for Detroit to be sustainable.)

Though actual hourly rates may be similar, current UAW workers get more in benefits, and the cost of supporting retirees' lucrative benefits, which are much more lavish than the vast majority of Americans receive, will have to be part of the deal, so retirees are going to take a hit, but so have most other retirees from across the business spectrum over the last decade or two.

In particular, retiree medical benefits - and those of most current employees have been significantly reduced. Twenty years ago most corporations offered "free" medical benefits to their employees and families, but now there are significant employee contributions to maintain coverage, and most retirees' "free" medical benefits have either been completely eliminated or now require substantial retiree payments to maintain coverage.

Why should taxpayers, most whom have to pay a signifcant sum for medical benefits, fund "free" benefits for the UAW?

Duke

[Wayne W.]

Re: The beginning of the end?

<<...while the UAW stubbornly refuses to make the necessary concessions to produce a competitive labor rate.>>

The UAW has made concessions. And as I pointed out in an earlier post, their actual wages, which should not be confused with GM's labor costs (particularly the "legacy costs"), are comparable with the non-union plants.

When the facts don't support the assertion, I suspect this has devolved into more of an ideological argument.

Mike

Problem is, however you figure it, the total cost, wages and legacy costs still add up to the total hourly cost. Frankly, I as an independent business owner, dont totally understand the legacy cost idea anyway. I was always under the impression that retirement benefits were supposed to be paid for when the employee was activily producing, under some investment, insurance, etc. plan that paid the cost after retirement. What the heck is this paying a retiree out of current operation capital. Sounds like Social Security. Any plan like that is a recipe for disaster. You are assuming that the company will stay in business forever, just like SS assumes someone will be working to pay my SS. It should have been a self supporting program in the first place. When I quit working, thats it pal. If I havent saved and provided for future income, no one else is going to do it, nor do I expect them to. Thats the real world. Problem is ya`ll that aint in the real world, will want me to bail you out.

[Stuart F.]

Re: The beginning of the end?

As a retired GM salaried employee, I am sad and plenty angry because we are the ones that will take the big hits, not the Union Folks. True, we have no one to blame but ourselves. We made the choices along through our careers to join and stay with GM due to the promised benefits, rather than take perhaps more lucrative offers elsewhere. In other words, we played our cards on GM and bet it all. That's the sad part.

The angry part is we are at an age and physical condition now where we can't do a thing about it. We can't go back and change anything, we can't start over, get new jobs - we're screwed. Even when I retired, I had to make a choice where I took a reduced amount of pension to ensure that my wife would continue to get my pension if I passed first. Having already had open heart surgery it seemed like a wise move at the time, but may turn out to have been shear folly.

Stu Fox

[Dennis O.]

Re: The beginning of the end?

I have 3 GM cars, all of them pre 1970. My dad was an Oldsmobile man (Some men are Lutherans, some are Baptists, mine was an Oldsmobile man). With the experiences I had with 3 GM products in a row in the seventy's and early eightie's, (and being absolutely ignored by the dealer thru all of this), I wouldn't buy one of their products on a bet. Except for the Corvette, they make JUNK. Why don't they put the current Corvette engineers in charge of the company?

[Bill L.]

Re: The beginning of the end?

Yes the UAW is a big problem no doubt. I did some work and the Union rules would not even allow me to put on a simple wire nut. It took 4 hours for them to get to it, and it required 3 guys! The work rules are totally out of control. I ended up turning out the lights and using a flash light to get the job done or I would never get back home. This was at their tech center several years ago.

A lot of people are over- looking the governments culpability in all this.

1. GM wqs building cars people wanted but the price of gas forced people in to the small cars they really did not want but were forced to reduce gas consumption to save money or lose their house. GM's business model required them to sell x number of SUVs to support all their legacy costs and cover loses on little cars no one wanted.

2. CAFE standards resulted in ending certain car lines with the ability for better gas mileage than those SUVs. My wife's 94 Roadmaster wagon with an LT1 gets over 24 mpg on the highway and did so years ago. The government said that was not good enough. The corporate CAFE standards had to be met or they would be fined. They had to sell small cars at a loss to sell enough in order to cover CAFE standards. That became a double edged sword since all their profit jacked up the price of the vehicles people really want to drive. I sold my Regal GSE (Great Car) to buy a Chevy Aveo because of the price of gas. The UAW gave millions to those who insisted on CAFE standards. Shame on them!

3. The government's energy policies virtually guaranteed high gas prices. I won't get in to all those details other than to say when was the last time a new refinery was built in this great country. UAW gave millions to those who again guaranteed that the cars GM needed to sell to remain viable were basically legislated out of favor at a minimum.

Bottom line is GM will never be viable with the the UAW. Management has made major mistakes but their hands were tied buy the unions and the government. If gas remained at 1.00-$1.50 a gallon GM would have been fine and we would not be forced to drive the little pieces of crap the government is forcing us to drive based on the hoax of global warming. When I brought the Aveo home my liberal wacko neighbor asked how I liked it. I said it is only good for one thing. Saving me money on gas.

What would all of us rather drive. A Pontiac G8 GT (Great Car) Corvette, or some little econo box. Last time I checked there has never been a classic collectable Japanese Accord or Camry and talk about boring! My wife insisted I buy her an Accord. Hated it from the day we brought it home. Never bought another.

If I had the money I would go out right now and buy a brand new G8 GT just to show support for GM. Alas the government takes over 40% of my income too or I would have one in my driveway right now.


Bill

[Lynn S.]

Re: The beginning of the end?

The unions and fat cat gm exec's along with car state legislators have done a great disservice to the entire country. Let the bankruptcy process clean the system. The pain will be great but I believe there will be jobs again. As for the fear that GM cannot make a good vehicle or no one would buy a vehicle from a bankrupt company I think is short sighted. Fellas, have you driven the new Suburban? I will not drive a foreigh toy truck.
Gutless politicians in Washington and the White House may give them the money but they will blow it and end up reorganizing. Does anyone believe the government can manage the car industry? Who bailed out the textile workers in the south, or the furniture manufacturers.

[Harmon C.]

Re: The beginning of the end?

As a Chrysler retired skilled trades person we now pay $20. per month for our free health care. Most claims for health care are refused. Our $5.00 charge per prescription now costs $17each. This all happened after the new contract when the union took over the health care and Chrysler paid a fixed sum over five years and won't pay retiree health care anymore. I'm sure the union will lobby for national health care before the money runs out. The CEO's get lots more money and don't build anything. Why is it a shame to make 50K a year? Should making McDonalds wages be good enough for auto wokers. The real problem with the high wages is health care.

[Rainer S.]

Re: The beginning of the end?

I work for a Ford transmission plant in Michigan.(Salaried)
I can't believe the waste that Ford puts up with, when dealing with the Unions. The majority of the workers are good people, but due to the past demands by the unions, and Management having agreed to ridiculous work rules, we are now so top heavy in the maintenance departments, its not even funny. We have more than 6 (!!!) different trades ! Most other (US and Overseas) manufacturers (Non-union) have (2) - Electrician and Machine Repair.
To fix a typical, minor problem on a machine, it would take (1) electrician and possibly (2) to (3) Machine Repair men, at non-union plants.
Here at Ford it takes (worse case scenario),due to overlapping "Lines of Demarcation", (Union lingo):
(1) Electrician, (2) Machine Repair, (1) Toolmaker, (2) Millwright, (1) Pipe fitter, (1) Hydraulic Repair and (1) Tinsmith and (1) Welder.
Sometimes its more than one of each trade ("I work with a partner")
I am not making this up ! We have a "Multi-Trade" work force here.
I understand, at GM or Chrysler it is not much better.
Besides employing more people, than necessary, it takes more time and expense to carry out the simplest repair tasks...
I do know, that the "Detroit Three" are the only companies , which have that arrangement, nobody else.
Ford tried to combine several trades into one during the last contract, but the union shut it down. Go figure...
I struggle with this, ever since I came to work for this otherwise excellent company, having worked in the Special Machine Tool industry, before I had to make career move..
So, if the "Detroit Three" want to become competitive, they have to change more than just reducing "Legacy". In one word: Union....
I hope I get to see this happen...

Rainer

[Wayne W.]

Re: The beginning of the end?

As a Chrysler retired skilled trades person we now pay $20. per month for our free health care. Most claims for health care are refused. Our $5.00 charge per prescription now costs $17each. This all happened after the new contract when the union took over the health care and Chrysler paid a fixed sum over five years and won't pay retiree health care anymore. I'm sure the union will lobby for national health care before the money runs out. The CEO's get lots more money and don't build anything. Why is it a shame to make 50K a year? Should making McDonalds wages be good enough for auto wokers. The real problem with the high wages is health care.

Wait a minute Lyle, you are complaining about having to pay $20 per month? You have got to be kidding. I am an unretired self employed small business owner. It takes about all that I make to pay the $565 per month health policy for myself, and they, at any time, can increase that at will. Who`s paying the rest of your health care bill?

[Ian G.]

Re: The beginning of the end?

As a wacko liberal I'll let those poor (wink) starving polar bears and penguins debate if there's a global warming hoax. I just hope if you buy an SUV, it comes with an air conditioner to handle the heat :P

I actually like small cars. I plan to get a Mini once my Toyota "rice burner" hits 200,000 miles. Can anyone with a GM say that? Maybe, maybe not.

I love my '59 in my garage though, and hope all the GM retirees on this board don't get left out in the cold by whatever happens to GM and the UAW. But change is going to have to come from somewhere.

[Harmon C.]

Re: The beginning of the end?

Wait a minute Lyle, you are complaining about having to pay $20 per month? You have got to be kidding. I am an unretired self employed small business owner. It takes about all that I make to pay the $565 per month health policy for myself, and they, at any time, can increase that at will. Who`s paying the rest of your health care bill?

The $20. is not much but if this happens every three months before long I will not be getting a check instead I will owe the union money.

[Chuck S.]

Re: The beginning of the end?

Chuck, you cite the airlines use of chapter 11 as a model for GM. The airlines are a service provider and manufacture nothing. Chapter 11 for GM would be a sure first step toward an eventual chapter 7 as all business models show a significant percentage of consumers would no longer purchase a car from a bankrupt manufacturer.
Fact: consumers use different criteria when purchasing services vs. durable goods.

You seem informed on the airline industry...What do you think is a primary area for cost-cutting by a troubled airline? History seems to show it is fleet maintenance that begins to deterioate. American is not in Chapter 11, but they seem to be having more failures, and only redundancy and luck seem to be keeping them from tragedy.

And, you say consumers are more likely to fly a bankrupt airline than buy a new car from a bankrupt car company? What are those morons thinking?...you can walk home from a bad car, but you can't take the elevator down from a failed aircraft at 35000 feet.

P.S. I own a 2006 Corvette and a 2008 Malibu after owning nothing but Toyotas for two decades. Both vehicles have performed flawlessly and have been trouble-free, as I expect them to be for many years.

I have been very pleased with my choices, and hope to be able to buy parts for them from the General (I keep my driver cars for 8-10 years). But...If the General can't manage for prosperity in an capitalistic environment, then another entrepreneur will fill the parts gap.

Why did I go back to GM products after such a long hiatus?...One reason: Bob Lutz influenced both car designs and insisted they meet his high standards. Few would argue that his efforts have failed to produce superior products. I think they even named my Malibu for him...it's right there on the deck lid...LTZ.