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GM goes bankrupt and gets nationalised

bub

bub

R.I.P. Léo
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WASHINGTON — President Obama will push General Motors into bankruptcy protection on Monday, making a risky bet that by temporarily nationalizing the onetime icon of American capitalism, he can save at least a diminished automakerthat is competitive.

The bankruptcy, to be filed in New York, is a moment of reckoning for an industry that was once at the heart of the American economy. It culminates a remarkable four months of confrontation between Washington and Detroit that is expected to result in a drastic downsizing of the company.
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http://www.nytimes.com/2009/06/01/business/01auto.html?_r=1&hp

Bad news for shareholders. I guess it was the only thing to do to save GM.

Next step: fire the marketing boss: it's not normal that GM sold less and less cars every year while Toyota or Volkswagen were conquering parts of the US market.
 
bub said:
http://www.nytimes.com/2009/06/01/business/01auto.html?_r=1&hp

Bad news for shareholders. I guess it was the only thing to do to save GM.

Next step: fire the marketing boss: it's not normal that GM sold less and less cars every year while Toyota or Volkswagen were conquering parts of the US market.
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They should let them die. They have failed.

GM sold less for many reasons.

The labor unions reducing profitability is one of them.
 
bub said:
There are very strong labor unions in Europe, and Volkswagen, BMW, Mercedes, Fiat...are healthy enterprises
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Strong would not be the problem with the UAW. Unchecked might be the best word to describe those problems. For a very long time, being an automaker meant huge profits. The UAW felt it was entitled to get a large share of those profits in perpetuity. Since money was flowing in, and a strike could really hurt them, the automakers gave the UAW most of what it wanted. Then profits started to decline, but contractually mandated costs continued to rise. Just the costs of retired autoworkers was killing the big 3.
 
they went under because no business can pay out the kind of defined benefit pensions that were common in large American corporations after WWII.

the reason BMW and Volkswagen aren't collapsing is that they're not paying 40 years of retired workers healthcare.
 
As others have said, GM's problems lay mostly at the feet of the UAW demands. When you are paying retired workers full medical insurance, as well as in many cases 75%+ of their pay every year till they die. It gets expensive. Plus, GM made some dummmmmmb decisions that cost them.

The RIGHT anaswer to the automakers problems has always been to let them collase, and make room for new companies to come in and replace the bloated monsters. They were never "Too big to fail." Their UNIONS were too big too fail.
 
B L Zeebub said:
to be fair, a good marketing director will only succeed if the company has a marketable product
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So GM's new boss in the WH wants them to sell cars only 2% of the peopl bought last year... that's not gonna help them at all.
 
MrVicchio said:
So GM's new boss in the WH wants them to sell cars only 2% of the peopl bought last year... that's not gonna help them at all.
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I dont unerstand your point?
 
If GM couldn't be a competitive force in today's automarket, let them collape fulling. There's no point in wasting tax-payer's money to keep this company limping along when there's plenty of other fine auto companies to choose from.
 
B L Zeebub said:
I dont unerstand your point?
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He cannot post without whining about President Obama. He is factually wrong as well, since no one is telling GM they have to sell anything in particular, but that they have to make cars more fuel efficient.
 
the first part of the solution is national healthcare, the second is making a better product and the third is renegotiating with the unions

American companies can't be competitive with foreign countries that have national healthcare. The model of employer provided health insurance only worked because the US was afforded so much prosperity after WII. It's not sustainable, and that's being illustrated clearly now.

But it would also help if they stopped building ludicrous cars. 8 ton suburban assault vehicles might sell for a lot individually but they're far too easily affected by oil price fluctuations.
 
FYI Buick is the #2 seller in China.
 
new coup for you said:
the first part of the solution is national healthcare, the second is making a better product and the third is renegotiating with the unions

American companies can't be competitive with foreign countries that have national healthcare. The model of employer provided health insurance only worked because the US was afforded so much prosperity after WII. It's not sustainable, and that's being illustrated clearly now.
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Exactly. Nationalised health care requires only small contributions from every worker in the nation, while employer provided insurance not only means more expense for employers but leaves workers tied to jobs they may wish to leave for fear of losing coverage. The UK spends far less per person on healthcare than the US, but we spend it efficiently and can ficus our time and money on providing care as opposed to working in billing departments and going through the financial ramifications of every single tiny little treatment. Cut that useless beureacracy, and everyone benefits.

And for anyone who's interested? A British worker on minimum wage contributes £24(around $50) to the NHS in the form of taxes per annum and receives a high standard of care - higher, in many instancs, than that which can be received in the US.
 
Redress said:
He cannot post without whining about President Obama. He is factually wrong as well, since no one is telling GM they have to sell anything in particular, but that they have to make cars more fuel efficient.
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thank you, I have only been here a couple of wks and I thought I better bed in before playing spot the Pule:)
 
Anima said:
Exactly. Nationalised health care requires only small contributions from every worker in the nation, while employer provided insurance not only means more expense for employers but leaves workers tied to jobs they may wish to leave for fear of losing coverage. The UK spends far less per person on healthcare than the US, but we spend it efficiently and can ficus our time and money on providing care as opposed to working in billing departments and going through the financial ramifications of every single tiny little treatment. Cut that useless beureacracy, and everyone benefits.

And for anyone who's interested? A British worker on minimum wage contributes £24(around $50) to the NHS in the form of taxes per annum and receives a high standard of care - higher, in many instancs, than that which can be received in the US.
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Large companies realize this too, big auto are among the more vocal proponents of healthcare reform.
 
Someone please explain how this is legal?

Nationalized health care isn't the answer. Ending the Federal Reserve and wasteful government spending is the answer. As long as they continue to devalue our currency. Health care costs will rise. The Federal Reserve is pricing Americans out of life, liberty and the pursuit of happiness. If you support national health care. You need to realize that national health care is not affordable if we keep our current foreign policy. It is not affordable if we continue subsidizing every industry in good times and bad. You cannot take all this wealth from Americans and expect them to thrive. Stop the theft and let the American people prosper.
 
should have let the country folk take care of GM
you know, a gun, a shed and a ditch...
 
Harry Guerrilla said:
They should let them die. They have failed.

GM sold less for many reasons.

The labor unions reducing profitability is one of them.
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Wrong. It's the lack of unionization by the ignorant southerners and foreign companies.

I can not for the life of me understand the mentality that says 'I will fight to get paid less and accept fewer benefits than a union worker doing the same job.' So that CEOs and shareholders can make more money... baffling. :confused:
 
Redress said:
Strong would not be the problem with the UAW. Unchecked might be the best word to describe those problems. For a very long time, being an automaker meant huge profits. The UAW felt it was entitled to get a large share of those profits in perpetuity. Since money was flowing in, and a strike could really hurt them, the automakers gave the UAW most of what it wanted. Then profits started to decline, but contractually mandated costs continued to rise. Just the costs of retired autoworkers was killing the big 3.
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No, stupid southerners and foreign auto companies killed the big three, along with bad strategy.
 
GM has to downsize and will certainly seek to renegotiate its labor contracts while in bankruptcy. Wonder if GM will sell off some of its divisions/facilities to competitors? Could Cadillac become a Toyota product etc?
 
Hey, that's great. Now you can buy a car from the government (GM), get it financed and insured by the government (AIG), and if you can't make the payments, go on government welfare and have the payments made for you. Did I also mention that the price for a new car will double? Get ready for the government bailout of Budweiser. $100.00 six packs are coming soon, and you can also finance one of those through AIG. Just put up your GM car as collateral. Conversely, you can use the beer as collateral to buy a car, that is, if you haven't drank it already. :mrgreen:
 
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MrVicchio said:
As others have said, GM's problems lay mostly at the feet of the UAW demands. When you are paying retired workers full medical insurance, as well as in many cases 75%+ of their pay every year till they die. It gets expensive. Plus, GM made some dummmmmmb decisions that cost them.

The RIGHT anaswer to the automakers problems has always been to let them collase, and make room for new companies to come in and replace the bloated monsters. They were never "Too big to fail." Their UNIONS were too big too fail.
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Well, don't fret, it won't be long before wages and worker benefits in this country fall to third world levels and then jobs will come back to the USA. What a great plan for corporations, instead of bringing the rest of the world up to our level of pay and standards we'll decrease them to the lowest possible levels so corporations make bigger profits... soooo smart. I guess we know the answer to this question "is the economy here to serve the people or are people here to serve the economy?"
 
Slippery Slope said:
Wrong. It's the lack of unionization by the ignorant southerners and foreign companies.
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You don't know what your talking about. That is very clear with your bigoted regionalist attacks.

Slippery Slope said:
I can not for the life of me understand the mentality that says 'I will fight to get paid less and accept fewer benefits than a union worker doing the same job.' So that CEOs and shareholders can make more money... baffling. :confused:
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Union workers get paid more than what they are worth. If they wanted more they themselves could have become, gasp, shareholders.

Its funny to me because when all these too big to fail companies finally implode I get more job opportunities.
 
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