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#31
11-22-2005, 01:00 PM
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Re: Heavy investment
I would only point out that one of the economic issues that economists of all political stripes almost universally agree on is the stupidity of protectionism. Its very short sighted thinking.
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#32
11-22-2005, 01:03 PM
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Re: \"What\'s good for General Motors, is good for America!\"
[ QUOTE ]
That's what inevitably happens when you pay your help too much for too long. [/ QUOTE ] The funny thing is that the people working for Toyota, Honda, Nissan, and other foreign automakers in the US make just about the same per hour as the unionized UAW workers. GM would still be making money if they would MAKE SOME CARS THAT PEOPLE ACTUALLY WANTED TO BUY! Jim Cramer on mad money said GM is one of the worst managed companies in history - and while they are losing all this money the CEO and other higher ups are still making millions upon millions of dollars per year. The faliure at GM was not caused by their workers - it was caused by bad and incompetent manangement.
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#33
11-22-2005, 01:06 PM
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Re: Quest
The layoffs are smoke and mirrors to detract people from dumping the stock ahead of the company filing BK. I believe in the next year GM will spin off its profitable GMAC unit, then file BK and get rid of its pension obligations. This needs to be done IMO to give the company a chance long term. Toyota is eating GM's lunch because their costs are so much lower. The average UAW worker makes over $100K per year including overtime. Throw incredibly good benefits in the mix and you have the answer for what has killed GM.
There is zero chance that GM will be liquidated however. It's just not politically feasible as too many people are either directly or indirectly employed by the company (suppliers, truck drivers, dealers). I think BK is actually a good thing at this point. The unions have run roughshod over the US auto industry, and they need to be smacked around a bit.
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#34
11-22-2005, 01:12 PM
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Re: \"What\'s good for General Motors, is good for America!\"
[ QUOTE ]
That's what inevitably happens when you pay your help too much for too long. [/ QUOTE ] Toyota is not winning because of labor costs. They are crushing the Big Three because they are much better in corporate strategy.
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#36
11-22-2005, 01:17 PM
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Re: \"What\'s good for General Motors, is good for America!\"
[ QUOTE ]
[ QUOTE ] That's what inevitably happens when you pay your help too much for too long. [/ QUOTE ] The funny thing is that the people working for Toyota, Honda, Nissan, and other foreign automakers in the US make just about the same per hour as the unionized UAW workers. GM would still be making money if they would MAKE SOME CARS THAT PEOPLE ACTUALLY WANTED TO BUY! Jim Cramer on mad money said GM is one of the worst managed companies in history - and while they are losing all this money the CEO and other higher ups are still making millions upon millions of dollars per year. The faliure at GM was not caused by their workers - it was caused by bad and incompetent manangement. [/ QUOTE ] Patently untrue. GM's avg cost for health care and pension benefits per car is $1,360. Honda's US plants average $107 per car. There are currently 1.1 million people collecting benefits from GM. Less than 20% of these are actually working for GM today. Japanese companies pay nothing for health care costs at home because of socialized medicine. And this info came from none other than the website Mr. Cramer founded...
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#37
11-22-2005, 01:20 PM
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Re: Quest
[ QUOTE ]
Toyota is eating GM's lunch because their costs are so much lower. The average UAW worker makes over $100K per year including overtime. Throw incredibly good benefits in the mix and you have the answer for what has killed GM. [/ QUOTE ] I think there are more reasons than this that Toyota is eating GM's lunch. And more reasons than wages as to why their costs are lower. My understanding is that better manufacturing processes, and a better employee culture have led to lower costs, higher productivity, and higher quality. Toyota is eating GM's lunch because people would rather buy Toyota's cars. Wages are part of it, but not the only part.
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#38
11-22-2005, 01:32 PM
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Re: \"What\'s good for General Motors, is good for America!\"
[ QUOTE ]
Patently untrue. GM's avg cost for health care and pension benefits per car is $1,360. Honda's US plants average $107 per car. [/ QUOTE ] You need to compare across production costs in the same regional markets. The auto sector is not like electronics. You don't make cars in Southeast Asia and ship them over here. Do you have the figures for just North America? [ QUOTE ] Japanese companies pay nothing for health care costs at home because of socialized medicine. [/ QUOTE ] This will not help them in North America. Japanese firms also contribute a lot of social welfare costs to the state through various matching policies and corporate taxes, so you cannot just make this simple comparison of health care versus no health care. Further, if the story is all about labor costs, why are the Big Three also getting killed by German car manufacturers? Labor costs in Germany are significantly higher than here. The bottom line is that the Japanese crushed the Big Three at the level of corporate strategy. The lean-production system was simply much more powerful than the Fordist system and the Americans never really learned. Further, they never changed the nature of their supply relationships. Some costs do hurt the Big Three, but these things are invoked to avoid facing up to the bitter truth: They just got their ass kicked over time because they were too proud or too stupid to fundamentally rethink the ways that cars might be made. End result: The Japanese are more innovative and more nimble.
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#39
11-22-2005, 01:37 PM
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Re: Heavy investment
[ QUOTE ]
I would only point out that one of the economic issues that economists of all political stripes almost universally agree on is the stupidity of protectionism. Its very short sighted thinking. [/ QUOTE ] It is especially stupid for economists who invest heavily in multi national corporations.
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#40
11-22-2005, 01:50 PM
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Re: \"What\'s good for General Motors, is good for America!\"
I remember this subject title being credited to Charlie Wilson when he was with GM. I just checked the ole fave Wikipedia and found this...
[ QUOTE ] At one point GM was the largest corporation ever in the United States, in terms of its revenues as a percent of GDP. In 1953 Charles Erwin Wilson, then GM president, was named by Eisenhower as Secretary of Defense. When he was asked during the hearings before the Senate Armed Services Committee if as secretary of defense he could make a decision adverse to the interests of General Motors, Wilson answered affirmatively but added that he could not conceive of such a situation "because for years I thought what was good for the country was good for General Motors and vice versa". Later this statement was often garbled when quoted, suggesting that Wilson had said simply, "What's good for General Motors is good for the country". At the time, GM was the one of the largest employers in the world – only Soviet state industries employed more people. [/ QUOTE ] A lot of folks always clamor to blame whoever is in the Oval Office for all the problems in the country. Usually those who didn't vote for him. GM's problems can't be blamed on one single person, group of people, incident or area of operation. It's an example of synergy. And GM is an example of what happens, and will happen, when short-term results are the goal. It's true in business, politics and life. There's more than enough blame to go around. And GM isn't the only company in trouble or headed in that direction because the same mistakes they've made are being made elsewhere.
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