General Motors' Massive Negative Equity »
Posted By populist 1 year ago in Business & Finance
GM and to a lesser extent Ford are broke and run operations which are simply economically unviable. They really should therefore go bankrupt and have their assets liquidated. But I doubt that the future President Obama will let that happen considering how many auto workers who would become unemployed in a time when unemployment is already rising fast and considering the support Obama has gotten from unions (Detroit auto workers are heavily unionized).
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Republicrat1844Comment removed: Retracted by user
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canadianrancher571 year ago
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I really don't follow these big companies to much so I don't know who sits on the Boards but I really wonder about the qualifications needed to screw things up so bad. I realize that some of these problems started years ago with the size of the pension plans and wages but I think that the cream went to the top and these guy have no idea about running a company.
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I have to give these executives credit for one thing and that is they knew that with the size of their companies and the amount of employment and spin off industries that depend on them if the crap ever hit the fan the taxpayer would be called on to rescue them.
I at times feel that the world economy is sinking like the Titanic but a select few are going to get all the life rafts at the expense of you and me. -
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beavith11 year ago
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sure. let them fail. that's 250,000 'good-paying' jobs out hte window.
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and another 500,000 jobs in the support industries. go ahead. cut off your nose to spite your face. i dare you.
some of it is kind of funny, in a perverse way. my in-laws lived with us for 15 years, until they died last year. both were members of the UAW. they received the UAW magazine 'solidarity'. despite the cash crunch the major automakers were facing, the UAW came out big for O, dissing free trade, clamoring for universal healthcare, demanding card check unionization drives. and yet, they announce, proudly, that they unionized all kinds of support companies for the automakers. key suppliers, like the cleaning companies and landscaping operations.
sure. management is f'ed up, but the union is right in there too.
at this point, its a suicide pact. -
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Justice4All1 year ago
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Taxpayers have rights too. Or at least they should. I'm fed up with bailing out all these overpaid corporations. They can cut back on management first.
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Let's ask GM to tell us what the top 5 levels of management make. And include all the perks. -
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nostalgia1 year ago
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The US car companies need to file for bankrupcy
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Maybe then they will get new management and can stop the legacy costs which are between $3000-$4000/vehicle
They will never be able to compete if they don't get their legacy costs down to a reasonable level
Look at the foreign auto makers that are manufacturibg in the US. Those companies have labor compensation packages of $40 to $50 an hour per American worker. GM is stuck with legacy costs that leave it paying $70 an hour
It doesn't matter how much money the government throws at the car companies, the figures aren't going to change-
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beavith11 year ago
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the problem is that the legacy costs are retired employees and their health plan.
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if they go bankrupt, all that retirement liability falls on the Pension Gaurantee Benefit Trust, which is taxpayer guaranteed.
we just ship the liability from one aspect of the taxpayer to another.
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shapaug1 year ago
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I and many others do not trust gm products. Have had them before and after 15 to 50,000 miles were good for nothing. I have 2 toyota's that are serving me well. 1 with 74,000 and the othe with 147,000. both run great. Why would I buy a gm product? UAW hate the companies they work so why buy a car from unhappy workers. Go bankrupt and start over.
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doppich1 year ago
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Well, earlier this year I replaced my Lesabre with 235,000 miles, still running well, so count me as a happy GM customer. Go ahead, keep Koreans and Japanese employed. Me, I'll stick with American workers until you and your like-minded friends put them out of a job.
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rumple4skin1 year ago
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Obscene health care costs must be delinked from all business payrolls. Throwing thousands of workers out of work is an easy solution most corporations are using and thus shifting the responsibility (payroll) to state governments and federal agencies (unemployment benefits). They fire people in order to be able to pay dividends to stockholders. Do not blame or demonize unions. Their job is to protect the worker. Nobody else is in a position to help them. It's time to ask GM, Ford, and Chrysler why they sell fuel-efficient cars in Europe and not in the U.S.!
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beavith11 year ago
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"...They fire people in order to be able to pay dividends to stockholders. Do not blame or demonize unions. Their job is to protect the worker. Nobody else is in a position to help them..."
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the stockholders own the company. when you take away their ownership, you have exceeded the rule of law. imagine i drive to your house and take all your stuff because you lose your income and i have to bail you out.
don't blame or demonize the unions? are you kidding? they are the ones fighting for these gold plated retirement and health benefit packages that add $3000 per car.
what can anyone do? this is the proverbial case: stuck between a rock and hard place. -
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Georgia501 year ago
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I think you should inquire of your UAW friends, currently employed, and ask them how their benefits stack up to retired UAW workers. It will become clear that the outgoing generation of union workers sold out the auto makers and currently-employed union brethren for their own secure retirement.
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Sixty cents of every dollar on the price tag of a new Detroit vehicles goes for healthcare for RETIRED UAW members. There is no business model that can survive that non-value-added cash outlay.
Management is likewise to blame for failing to see the effect of the union agreements they signed. Clearly they were banking on higher numbers and better market position. Neither materialized. It's like one analyst said the other day, "Even if you give them billions, they're still not going to produce a car I want to buy."
Detroit's best hope is to exit the consumer sedan market and focus on trucks and various utility, fleet, and military vehicles. That's where their design and qualify edge comes through the best IMHO. -
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rumple4skin1 year ago
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The only rock is the refusal of the auto companies to sell better products. The hard place is the situation all companies have trying to pay health benefits. The hard place is taking action that will do the least harm to floor workers and the economy. If you are anti union and believe calling retirement and health benefits 'gold plated' try some of the platinum benefits the failed management gets. How much do you believe their benefit packeges contribute to the cost per car. Get off blaming unions. The only stock holders that have true ownership in the company are those with prefered stock. I did not suggest taking away their ownership. I do suggest adult leadership and responsibility.
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hefaa1Comment removed: Hard Banned
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Harbeas1 year ago
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I can't believe the number of people who don't have the faintest idea of the importance of the American auto industry. Let them go bankrupt anmd then we would be free to buy all the foregn autos we wanted. That would be all we could buy too. Think about it ass far as the eye could see it would be Toyotas, Honda, Hyundais and may be even a few European. I don't think so. If, God forbid, we ever had another world war who would produce our war machinery? The Japanese, Mexico, Korea or maybe Southeast Asia countries! We must not allow our manufacturing base(what's left of it)to be further dismantled. But, the most serious of consequences would be the millions of people who would be thrown out of work. Can we afford it? I think you know the answer to that. Can we do this and not reward the so called brilliant executives who are as much to blame as the oil price hike and the credit crash? Yes we can and we must. One of the stipulations for getting the loan would be for the highest level CEO's to resign and have any golden parachutes taxed at 98%.
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beavith11 year ago
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let's review a few facts.
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'...ever had another world war who would produce our war machinery?...'
it'd be over in about 1 1/2 hours.
'...We must not allow our manufacturing base(what's left of it)to be further dismantled...'
where do you think its going? a lot of it is just crazy efficient. instead of cavernous factories with wall-to-wall Bridgeports and machinists making widgets, one machining center replaces that whole factory.
what we are seeing is the transition that we saw with farming. at one time the US was 95% farmers. now its 5%. its just that the farmers left are insanely productive.
your anger is misplaced. what you should be feeling is helpless. react accordingly. help yourself.
'...brilliant executives who are as much to blame as the oil price hike and the credit crash?...'
no executives caused the oil price hike. our own piggish demand, in addtioitn to the success of China and India did. the credit crash could've been nipped in teh bud in 2005, but action was blocked by certain members of congress.
'...Yes we can and we must...'
cheerleading won't be a solution.
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FatFilefish3 months, 1 week ago
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Can you imagine what happens if they go bankrupt? The number of hungry unemployed in the streets?
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I recently read that the employees (workers, actually) of a smaller company in China (it seems to me it was China, not sure now) were so... desparate because of the reduction of the staff and salary delays that they simply killed their biggest boss. I also really approve of the way they treat those caught on corruption, bribery and plundering and the like in China, i think you understand what i mean. Result: no crisis, steady grouth.
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