Obama takes no prisoners... GM boss ordered to quit
Discussion
900T-R said:
Again, personally I'd rather that the whole shebang went into Chapter 11 and let the market sort out the true value of the parts that make GM, but that's a choice none of the parties involved is willing to make (yet).
The reason they are avoiding Chapter 11 is because warranties would be invalidated or at least jeopardized. If that happens, their sales will sink to zero because no one is going to touch a new car without a 3 year warranty that they can expect from any other supplier.DJC said:
Thereafter I would be impressing upon the new board of GM that mother is the neccessity of all invention and they have 12 months of funding to come up with nwe products to sell and trade their way out of trouble otherwise they can say hello to Chapter 11. That way you give them funding, you give them incentives but you also leave them with the knowledge that they are on a strict grace period after which the market can take them or leave them.
1) I'd love to see them design and produce new, wholly different world class cars within 12 months.2) There is no shortage of cars or suppliers in the US. Why give GM help and grace to survive over and above anybody else who isn't doing a bad job?
Kermit power said:
Do remember as well that Wagoner himself believes that his own biggest mistake was not investing in hybrid and alternative propulsion technologies. Yes, we all know how vile the Pious is, but it's the sort of thing that has sold in droves with the high oil price. Wagoner couldn't have done anything about the rise in oil prices, but he could've done something to ensure the success of his business wasn't so closely linked to it.
Crocodile tears from Wagoner.The only thing high oil prices did was stop people buying new pickups and SUVs, they put the purchase off for another year or two.
In the south, people don't buy little cars either. They buy "trucks". Some redneck doesn't suddenly trade in his Chevy pickup for a Prius because his trailer park trash wife suddenly has a conscience about their petrol costs.
Also, where do you think the profitability of GM, Ford and Toyota US lies? Its not in s
t boxes that everyone lauds, its in "trucks" and SUVs. It doesn't matter whether someone decided not to buy a Tahoe and buys a Prius, the profit margin just tumbled from $15k to maybe a negative because the last I heard, the Prius made a loss on every unit.900T-R said:
The conditions that were the result of agreements between the unions and GM were serviceable and sustainable at the time they were made,.
Perhaps900T-R said:
and they would have been if GM had not allowed to let its market share slide by a combination of pure arrogance and sheer incompetence.
.
Far more questionable. Without reform to pay & benefits for existing (&past) employeees all of the big 3 American car companies were in trouble, before the current crises. .
DJC said:
Thereafter I would be impressing upon the new board of GM that mother is the neccessity of all invention and they have 12 months of funding to come up with nwe products to sell and trade their way out of trouble otherwise they can say hello to Chapter 11. That way you give them funding, you give them incentives but you also leave them with the knowledge that they are on a strict grace period after which the market can take them or leave them.
But people in the US aren't buying cars at the moment, regardless of ranges.Toyota - the company that everyone thinks can do no wrong - isn't selling cars. Not even the Pious. It doesn't matter how good the range is, how technically wonderful it is, people aren't buying like they used to. Why would a new range of cars from GM get their sales going again?
They already make legions of s
t boxes, some of which are frugal, but NOTHING is selling in the same quantities as before.The way out of this isn't to piss money up a wall by making more new models, but to rationalise the current production facilities to a much lower level where you can make money again.
It will be years before car manufacturers are back to 2007 production levels.
turbobloke said:
"I would argue that Obama is the taxpayer."
No, he isn't. Definitely not. No way.
He is elected by the taxpayers to represent the taxpayers. He is their representative.No, he isn't. Definitely not. No way.
What do you think the whole "no taxation without representation" line that kicked off the American Revolution was about?
900T-R said:
[
It's widely accepted that the poor state of affairs that GM - alonside Ford and Chrysler - find themselves in is because of onerous pension obligations. Clearly the UK were not the only country to have their auto industry sabotaged by the unions in the 60's and 70's, it's just taken a bit longer to play out in the US.turbobloke said:
Where were their PR words getting Union bosses sacked?
Cmon.
AFAIK the Unions haven't been knocking on the goverments door demanding a couple of dozen billions or else...Cmon.
10 Pence Short said:
How would things be if there was no incentive for success?
If you succeed, you get to keep your job for another while. Works as an 'incentive' for the rest of us. 
Seriously - the current way of doing things has created ample incentive for chasing after short-term (3-6 months at best) profit over long-term viability. Which IMO is one of the bigger underlying causes for the predicament we find ourselves in currently.
900T-R said:
10 Pence Short said:
How would things be if there was no incentive for success?
If you succeed, you get to keep your job for another while. Works as an 'incentive' for the rest of us. 
Those of us who aren't employees depending on brand equity, brand loyalty, or success of previous staffers, but instead risk our own finances in an enterprise. Those small business types who contribute so much to the UK economy.
Freshly coined by Hiscox as the UK’s ‘EDP’ measure – or Entrepreneurial Domestic Product – this represents every small business owner in the UK clocking up nearly 2,500 hours of blood, sweat and tears every year. Compared to an employee working a standard 37.5 hour week, small business owners work an extra 700 hours a year, or almost 2 hours every day.
So there's more work involved too. The risk-effort-reward equation must balance otherwise we'd all be salaried minions
Anyway, back to Obambi's scapegoating mistake
turbobloke said:
Those of us who aren't employees depending on brand equity, brand loyalty, or success of previous staffers, but instead risk our own finances in an enterprise. Those small business types who contribute so much to the UK economy.
Which patently don't include corportate execs. 900T-R said:
turbobloke said:
Those of us who aren't employees depending on brand equity, brand loyalty, or success of previous staffers, but instead risk our own finances in an enterprise. Those small business types who contribute so much to the UK economy.
Which patently don't include corporate execs. Unless that was you outing yourself as a fatcat GM corporate exec.....
In fact the legislation for easy access home loans spreads back to the 30's legislation, just opened up by Clinton and totally unruled by Republicans.
It is free market in that their actions were left unchecked and self regulated.
GM are in the poop and if left alone the whole world will suffer.
You obviously dont like Obama so unsure if anything he did would meet with your approval.
Given that you say he's made a mistake i find this enlightening given you know about as much as the rest of us and we have yet to see if its a mistake.
It is free market in that their actions were left unchecked and self regulated.
GM are in the poop and if left alone the whole world will suffer.
You obviously dont like Obama so unsure if anything he did would meet with your approval.
Given that you say he's made a mistake i find this enlightening given you know about as much as the rest of us and we have yet to see if its a mistake.
10 Pence Short said:
Kermit power said:
elster said:
But surely if you are singling out one person, then you are saying the reason for the failing business is due to that man.
Which is complete BS. The whole episode hasn't actually changed anything, other than sold a few newspapers.
He is the CEO.Which is complete BS. The whole episode hasn't actually changed anything, other than sold a few newspapers.
When he took the position in June 2000, GM's shares were worth $60 each. On Wednesday last week, it was down to $1.27.
Wagoner has been paid what, $10M or so per annum for that little result?
Sure, he's not the only person to blame, but he's the figurehead. Part of his job description is to take the blame if the s
t hits the fan, and fans don't get much sttier than GM's current ventilation arrangements.You work for 30 years and you can retire on a full pension. So you start at 18 and you are done before you are 50. You live till you are 80 and you are on a Pension for more years than you worked. US Auto Worker's Union has steadfastly refused to even discuss it and they will sooner or later feel the repercussions of that intransigence/short-sightedness/stupidity, call it what you will.
Such an arrangement is (always was) totally unsustainable
Edited by Iain328 on Tuesday 31st March 03:03
Iain328 said:
More exactly the Pension agreements & resulting deficits. One of GM's biggest problems is "30 and out".
You work for 30 years and you can retire on a full pension. So you start at 18 and you are done before you are 50. You live till you are 80 and you are on a Pension for more years than you worked. US Auto Worker's Union has steadfastly refused to even discuss it and they will sooner or later feel the repercussions of that intransigence/short-sightedness/stupidity, call it what you will.
Such an arrangement is (always was) totally unsustainable
Actually, the situation is subtly different, though the end result is the same.You work for 30 years and you can retire on a full pension. So you start at 18 and you are done before you are 50. You live till you are 80 and you are on a Pension for more years than you worked. US Auto Worker's Union has steadfastly refused to even discuss it and they will sooner or later feel the repercussions of that intransigence/short-sightedness/stupidity, call it what you will.
Such an arrangement is (always was) totally unsustainable
The US auto worker pension is about 50% of the final wage, and generally not index linked so people were required to save and invest to give themselves an adequate standard of living. But in theory their pension contributions should have covered their needs and the pension pot would therefore not require further input.
HOWEVER:
Medical science improvements have led to people living longer than actuaries originally thought.
AND .....
GM did not provide a Medical Provision fund - it paid medical insurance costs out of current earnings. So even though the retiree should have nothing to do with the company post retirement they were getting retiree medical benefits from the company.
In addition GM went through an extremely painful strike in the late 90s that did them extreme damage - to repeat the same event would have brought any US automotive related company down in the past 5 years. So GM like all the other companies did what they could and avoided confrontation to avoid obliteration.
Pommygranite said:
In fact the legislation for easy access home loans spreads back to the 30's legislation, just opened up by Clinton and totally unruled by Republicans.
Whatever else he did, Bush tried as far back as 2003 but was unable to get reform through.http://americanelephant.wordpress.com/2008/09/17/b...
Not because of Republicans!
10 Pence Short said:
Oh dear. Obama seems to be fulfilling the style over substance politics of circa 1997 New Labour.
30 days working capital for a maximum of 60 days?Not that I'll be sad to see GM go, most of the stuff I've driven from them is/was rubbish (including those marketed as Holden). This has been on the cards for a long time.
From my perspective as an industry observer it's like this: GM has become an unviable company in its current state due to an outdated business model. They come to the government cap in hand to ask for multi-billion loans. Unsurprisingly the government is reluctant to throw good money ater bad so they demand a good restructuring plan.
Now without knowing the exact content of the plans submitted to the US Government, from what we do know there's nothing to suggest that they are anything more than a quick nip and tuck of existing plans and strategies which have been clearly insuffucuent to stop the bleeding so far - so why would they all of a sudden turn the company around now?
It seems clear that there's simply too much inertia within GM to do anything much but hope for a quick ecocomic recovery - which isn't on the cards any time soon. It may not be due to the incompetence of current leadership in se - but they are ultimately responsible and to be honest, it doesn't look like they have a clue how to turn things around within a reasonable timeframe without upsetting the applecart - which they are still unwilling to do.
So if for a moment accepting that Chapter 11 isn't an option, what's the alternative for interference? The iceberg is straight ahead, the ship is heading straight for it and internal politics on the bridge is precluding anything but a s-l-i-g-h-t change of course. If you were in charge of the country, wouldn't you take the rudder and give it a firm yank - even if this brings the chance that you might hit something else?
Now without knowing the exact content of the plans submitted to the US Government, from what we do know there's nothing to suggest that they are anything more than a quick nip and tuck of existing plans and strategies which have been clearly insuffucuent to stop the bleeding so far - so why would they all of a sudden turn the company around now?
It seems clear that there's simply too much inertia within GM to do anything much but hope for a quick ecocomic recovery - which isn't on the cards any time soon. It may not be due to the incompetence of current leadership in se - but they are ultimately responsible and to be honest, it doesn't look like they have a clue how to turn things around within a reasonable timeframe without upsetting the applecart - which they are still unwilling to do.
So if for a moment accepting that Chapter 11 isn't an option, what's the alternative for interference? The iceberg is straight ahead, the ship is heading straight for it and internal politics on the bridge is precluding anything but a s-l-i-g-h-t change of course. If you were in charge of the country, wouldn't you take the rudder and give it a firm yank - even if this brings the chance that you might hit something else?
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