Big Auto Wants $50B

[pBills]

Payroll is just an expense that needs to be managed. Granted the unions make it very hard to control but it's not impossible to make a profit with those contracts.

 

IMO, unions are only effective when they represent a job that can't be shipped overseas. (i.e. teachers, repairmen, installers, construction and others) The UAW has shot itself in the foot. Toyota and Subaru aren't union affiliated and are having an easy time with the manufacturing in the U.S. the benefits may not be as good as a UAW member but it makes it profitable enough to keep the manufacturing here and not in Mexico.

 

 

 

What's killing the contracts and the cost of them right off the bat is the ridiculous increase in Health Care. What has that gone up in the 12 years, let alone in the past year. Salary is just one part. Most contracts go with three years deals... 3% increase, 3% increase, 3% increase. Where as the cost of Health Care per year may be going up as much 50% or way higher.

 

Control Health Care, and that will HELP... not completely save. But HELP these companies out. That and slim down the product lines. get rid of the cars/trucks that are not selling.

[bills_fan_in_raleigh]

GM builds cars (crappy ones) for the sole reason of paying inflated salaries and lifetime benefits to its retirees. It can no longer do that. The UAW will make sure that the auto workers and the steel workers meet the same fate.

was wondering how soon someone would be blaming the Unions. Yes GM built crap and has been since mid 70's but the whole company is at fault.

[pBills]

was wondering how soon someone would be blaming the Unions. Yes GM built crap and has been since mid 70's but the whole company is at fault.

 

 

 

It's always the union fault

[bills_fan_in_raleigh]

It's always the union fault

especially those retirees that at times made sacrifices for better pensions. Maybe not in auto but I know of many union worker getting reduced pension snow and they gave up higher wages for that promise. Just like many of us working for companies and accepting lower salaries with a promise of a pension to be later raped by executives and the fed just looking away while it was done.

[RLflutie7]

The auto industry is probably a good topic to discuss. It seems apparent to me that there are WAY too many car companies with WAY too models to support with WAY too many dealerships to really be sustainable these days. Cars just don't go to the junk yard after 60k miles like they did in the 70's.

 

 

I think this is all true and I can't understand why the Big 3 doesn't own their own dealerships and make the profit off the resale of used cars. They let fly-by-night jack offs make all the money.

 

Several NFL owners are used car salesmen. The Saints owner, Benson, owns car dealerships and so does Red McCombs (Vikings former owner).

 

I think that's about to change and change in a big way. I think also they should stop leasing cars. I think that's what killed them because it forces too many cars on the resale market and kills resale value. The customer comes in and he's "upside down" on the value of his trade in.

 

Plus I think GM should blow out all the fly-by-night repair shops too. These people are just a bunch of jack offs. In the future, I can see the Big three opening mega-repair shops with over 100 bays each. Regional repair shops that hire over 300 ASE mechanics. Kind of like Walmart.

[KD in CA]

was wondering how soon someone would be blaming the Unions. Yes GM built crap and has been since mid 70's but the whole company is at fault.

 

Yes, let's ignore the impact of the policies toward managing the largest expense of the company.

 

It's amazing how you 'tards that swallow this union bullsh-- have no ability whatsoever to understand or evaluate the impact on these industries. I guess it's pure coincidence that airlines and auto makers all have the most incompetent management, huh?

 

Instead, keep clinging to that brilliant "CEO comp" argument. If they cut his pay in half they could probably run the company for an extra five minutes.

[pBills]

Yes, let's ignore the impact of the policies toward managing the largest expense of the company.

 

It's amazing how you 'tards that swallow this union bullsh-- have no ability whatsoever to understand or evaluate the impact on these industries. I guess it's pure coincidence that airlines and auto makers all have the most incompetent management, huh?

 

Instead, keep clinging to that brilliant "CEO comp" argument. If they cut his pay in half they could probably run the company for an extra five minutes.

 

 

 

And I wonder how you instantly believe that all the unions fault. Although, knowing you it's not that hard to understand... you are VERY pro-CEO and management.

 

It's easy to just jump on the bandwagon without digging a bit deeper. Take a look at what union contracts cover. Which BOTH sides agree upon and sign.

[KD in CA]

And I wonder how you instantly believe that all the unions fault. Although, knowing you it's not that hard to understand... you are VERY pro-CEO and management.

 

It's easy to just jump on the bandwagon without digging a bit deeper. Take a look at what union contracts cover. Which BOTH sides agree upon and sign.

 

No, I didn't say it was anyone's "fault". I said that the cost of labor & benefits is a large component of the cost structure for this failing company. Therefore, you can not possibly address the issue of GM being financially viable until you take a serious look at those costs. How is that difficult to understand?

 

http://finance.google.com/finance?fstype=bi&q=NYSE:GM

 

Here you go....last year COGS were 92% of revenues. That means that costs of the materials (which I would guess is high since they build cars), freight, warranty and labor is almost as much as the purchase price of the car. SG&A was a mere 8% of revenue last year. So you tell me where they need to cut costs to make this work? Why do you think that labor costs should be an untouchable topic?

 

And spare me the "both sides agreed" line. If you want to really have a free labor market, try ending the government sponsorship/protection of unions. Companies are forced to deal with them at the point of a gun or else have their business destroyed.

[molson_golden2002]

If we had national health care the Big Three would have a big burden lifted from their shoulders

[/dev/null]

If we had national health care the Big Three would have a big burden lifted from their shoulders

Shifting the big burden to everyone else's shoulders

[pBills]

No, I didn't say it was anyone's "fault". I said that the cost of labor & benefits is a large component of the cost structure for this failing company. Therefore, you can not possibly address the issue of GM being financially viable until you take a serious look at those costs. How is that difficult to understand?

 

http://finance.google.com/finance?fstype=bi&q=NYSE:GM

 

Here you go....last year COGS were 92% of revenues. That means that costs of the materials (which I would guess is high since they build cars), freight, warranty and labor is almost as much as the purchase price of the car. SG&A was a mere 8% of revenue last year. So you tell me where they need to cut costs to make this work? Why do you think that labor costs should be an untouchable topic?

 

And spare me the "both sides agreed" line. If you want to really have a free labor market, try ending the government sponsorship/protection of unions. Companies are forced to deal with them at the point of a gun or else have their business destroyed.

 

 

In response to the last part... not true. Maybe the teamsters work that way. However once and if contract negotiations stall they go to arbitration. No side is forced for crap. And really, the unions and their members are wanting and working on change in order to not only save the business but their jobs. One other big problem is that the workers themselves didn't have enough pride in their own work to buy their own product. That in itself can hurt a company. Granted only the smallest of dents, but a dent none the less.

[KD in CA]

In response to the last part... not true. Maybe the teamsters work that way. However once and if contract negotiations stall they go to arbitration. No side is forced for crap. And really, the unions and their members are wanting and working on change in order to not only save the business but their jobs. One other big problem is that the workers themselves didn't have enough pride in their own work to buy their own product. That in itself can hurt a company. Granted only the smallest of dents, but a dent none the less.

 

That's all very debatable. Does GM have the right to fire workers en mass and rehire non-union labor? If not, than they do not have the right to run their business as they see fit.

 

And what is your response to the rest of my post? What is your solution to GM?

[erynthered]

I hope they dont give them any more of OUR money

[erynthered]

I predicted this a while ago. To do a re-tool isn't going to change the inevitable. But lets go ahead and give these retards more money. This is only the beginning. Another 250 Billion will be bestowed to them with in the next year too.

[DC Tom]

I predicted this a while ago. To do a re-tool isn't going to change the inevitable. But lets go ahead and give these retards more money. This is only the beginning. Another 250 Billion will be bestowed to them with in the next year too.

 

Look at it this way: we're not subsidizing the auto industry, we're funding yet another federal jobs program.

 

Still cheaper than DoD, as federal jobs programs go.

[Fingon]

Manufacturing in the USA is DEAD. People need to start accepting that.

[/dev/null]

Manufacturing in the USA is DEAD. People need to start accepting that.

 

Of course it's dead

 

Everybody in America has a right to a college education

 

Why would somebody with a college education stoop to the peon level of accepting a manufacturing job?

[DC Tom]

Of course it's dead

 

Everybody in America has a right to a college education

 

Why would somebody with a college education stoop to the peon level of accepting a manufacturing job?

 

They shouldn't have to stoop. Everyone has the right to a high-paying white collar job - not only that, but they have the right to one in their own hometown, so they don't have to travel anywhere for it. [/Obama]

[finknottle]

They shouldn't have to stoop. Everyone has the right to a high-paying white collar job - not only that, but they have the right to one in their own hometown, so they don't have to travel anywhere for it. [/Obama]

 

We will call them green collar jobs. And there is going to be 15 million of them, impervious to overseas competition, you wait and see.

 

According to someone I was recently discussing this with, it is only Big Oil that has been holding back the revolution. She wouldn't tell me what was holding back this economic jobs miracle in technologically sophisticated countries without big oil interests, like Japan, Korea, or Taiwain, but I'm sure it was something equally insidious.

[YellowLinesandArmadillos]

I hope they dont give them any more of OUR money

I was just listening to Larry Sabato on MSNBC and he was stating that we should not bailout the Big 3. We should invest money in all these little car companies springing up around the US that are either building or modifying old cars to burn alternative fuels often getting over 50 mpg. There are number in MA as well. We have a veg oil/diesel with a conversion kit out of CA... called Lovecraft in an old '85 Mercedes Station Wagon as a third car experiment. So far so good.

 

But my version is the tip of the iceberg. We had a valedictorian at UMass going off the do computer research for software into systems that managed alternative fuel injectors and burn rates. He got his degree in chemical engineering and computer science. He wants to start his own car company. Pretty neat stuff.

 

I say bite the bullet and screw the car companies. Buy out the pensions, cut the health care benefits and let the companies sink or swim on their own merit.... Meanwhile invest in the a new generation of car builders and the real ingenuity and creativity the powers America.