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Discussion in 'Politics, Religion, Social Issues' started by Blue Velvet, Nov 18, 2010.
But let's take a look back with Jay Bookman:
Conservatives: wrong about just about everything.
GM should have gone under, been liquidated, and sold to the highest bidders. The net result would have been stronger more adept companies with higher revenues and more employees.
Government keeps inflating the bubble and eventually it will pop. If companies are backed by government and have no risk of failure, why not take unnecessary risks and give in to every union demand. Why not make idiotic business decisions and allow competitors to dominate quality standards?
Pipe dream. Who would have bought the assets and what would the "new" companies have made? When? Look at Saturn by way of example. Its assets were sold off, and where are all the new Saturns? They had one of the best dealer networks around, plus the backing of an existing company.
Ahhh, here comes the right wing hysteria. The unions did it! I'm not big fan of unions, but management agreed to every negotiation for every benefit and pay raise. Oh, and the government wasn't a party or guarantor of the car industry at the time those negotiations took place. The unions and companies negotiated compensation in the free market you constantly argue for. So, which is it. The free market is good, or the free market is bad?
One more thing, the US companies today are rapidly becoming the gold standard for quality.
If no company would have bought them, then that would mean there wasn't enough consumer demand to justify a purchase. Saturn is a good example, all it has is duplicates of other vehicles... they weren't offering anything substantially different from their competition. GM, specifically their truck division, would have had many potential buyers. If they had gone under, that would mean growth for companies like Ford who would take on the additional demand.
If you don't think the unions played a HUGE role in the destruction of GM, you're willfully ignorant or just plain misinformed. GM and Ford have been getting crushed by companies with leaner workforces for years. Wages were exorbitant, prices had to go up, and sales diminished as a result. The unions negotiated themselves out of a job. The unions have every right to form, but when their actions result in the failure of the company it should be allowed to go bankrupt and sell off. The government is effectively subsiding tyrannical unions at the expense of consumers, companies, and our economy.
You do realize that the non-union car plants in the US pay their workers more than union wages. Right?
Prices had to go up to accomodate the rising costs of providing health care. If there was UHC the cost of each car would drop like a rock. I'm a lot more knowledgable about this subject than you think, and you clearly are not.
FYI, it wasn't the union that underfunded the pension plans GM maintained. That was just poor management.
Well, just about the entire country disagrees with you, Mcrain. I believe GM's compensation cost per manufacturing employee was over $70/hr. Toyota's is around $40/hr. It's hard to argue when the facts are directly refute your points.
HA HA, LOGIC FAIL. READING COMPREHENSION FAIL! Sorry, I couldn't resist pulling a FP.
GM pays $29.78 per hour while Toyota pays between $27 to $30 per hour. Both companies offer similar benefits and pension plans.
The difference was the additional costs required to pay for healthcare and fund the pension plan for retired workers (which Toyota has fewer of - GM chose to underfund its pension plan).
The US government bought 60% of GM for 30 billion after pumping 20 billion to prop up the company. GM is bankrupt anyway.
USGov sells half of their shares for 13.6 billion.
I think we're still in the red.
Attention anyone in these forums with any business sense whatsoever!!!
Answer this one question... Could you or could you not, maintain a profitable manufacturing business when you're paying an equivalent salary/pension of $75 PER MANUFACTURING EMPLOYEE? I know I couldn't... and clearly GM can't. I doubt anyone can.
These companies should be allowed to fail for their ridiculous mistakes. This way the lesson can be learned and new more lean companies can be started in their place.
To touch on Saturn, you can thank Old GM's bureaucracy for that. When Saturn was launched, it was a success. The S-Series was selling decently and found a following due to its unique polymer panels and great dealer service. The Old Guard( Chevy) didn't like that resources were being diverted to Saturn and protested. The result? Saturn was starved. The product grew stale, vehicles didn't expand past the S-Series, and the growth was halted. By the time the Vue, Ion, and L-Series were introduced, it was pretty much too late. Saturn fell because of typical GM politics. By the time GM got serious about Saturn( when they introduced the Aura, Sky, and Astra) to make it into Opel's US arm, the brand was bleeding heavily and was not enough to stop it when the financial crisis hit.
As to why GM collapsed..... It is a combination of factors. Bad management and UAW had a hand in the fate of Old GM. GM was too slow to react and pick up on trends. They focused too much on the SUV and truck business and didn't maintain their cars lineup to remain competitive. So when gas prices sky rocketed, they had their pants down when SUV and truck sales collapsed. They also agreed to the ridiculous UAW contract which came back and bite them. The UAW is as well for trying to keep all the money losing deals they had with GM despite signs saying that GM was going to go under due to their high healthcare and benefits costs( and other costs). They also realized they needed to restructure too late. So while the restructuring started in 2006, when the financial crisis hit in 2008, GM didn't have enough money to continue the restructuring. And Wagoner refused to prepare for bankruptcy.
The UAW had a hand in GM's demise. They are not the sole reason or do I think they were the biggest reason in GM's demise. But, they do still share a big chunk in the collapse.
Also, technically GM did fail and went under. How GM's bankruptcy worked is the government setup a new company and bought GM Corporation's good assets. GM Corp. with the bad assets are still in bankruptcy under the name Motors Liquidation and will liquidate. So fivepoint's wish came true. GM Corp. was allowed to liquidate and the assets were bought by another company. That other company is the now called General Motors Company.
The government still holds a 1/3 stake in GM. Given the track record of the White House and GM on this issue so far versus those stood against it, want to bet against this happening? From the same article:
The whole point of this thread is to demonstrate, once again, real world trumps ideology. And from some cursory recent reading of the financial press, I'll wager that no-one here will be talking about a jobless recovery in 6-9 months time here either... which is going to throw some people into a desperate panic, attempting to rationalise their 'worldviews' which can't accommodate reality.
I know that this is technically a new Company that is called GM and the original company is dead. What exactly are they liquidating of the old company? New GM still has its car lineup and dealerships with a new life.
Closed plants( Fisker bought GM's Wilmington, Delaware assembly plant where the Solstice and Sky were built), tooling, any assets under the dead brands( if there is, I am not 100% sure), any property they owned( they owned a church and a golf course), etc.
Let me know when GM stock drops to $0.75 again, than I'll buy it.
Ahh ok, that makes sense. What happens to Saturn and Hummer, do the brands just die off or can they sell the naming.
Brands are property and can be sold. Hummer was going to be be purchased by a Chinese company at some point I believe, but it never went through If I remember correctly.
What you have to remember is the effect of GM going defunct on the wider economy. When the UK's Rover Group went under it ruined manufacturing over a wide area of the West Midlands as their suppliers and dealers gradually folded too. Those jobs are now gone and will most likely never return to this country. What remained of Rover is now under Chinese ownership and employs a tiny amount compared to what it did.
There's more at stake than just one company. Government steps in when natural disasters occur. I don't understand the reluctance when it comes to economic ones.
So for a cost of around $0 billion, the governments decision was the right one.
Wasn't part of the deal to file bankruptcy and reemerge that Saturn, Hummer, and Pontiac had to go. So why not put those brands in the liquidation. I know Pontiac is more of a native brand over Saturn and Hummer but wasn't that a stipulation of the realignment?
Hmmm, Germany's unions have a seat on each of the boards of the companies they work with. Their wages surpass American automakers wages and the retirement and health benefits are far superior. I haven't seen any German automakers fail lately. Have you?
The problem with US automakers lies not with the unions but with the boards's insistence on short term profitability so as to please Wall Street. So, it's not at all surprising to see US automakers in the same boat that American passenger carriers were in. Whenever a company ignores its customers, its employees and the communities they are in, in favor of Wall Street, they will fail. How many more American failures will it take for you to see the light?
Time, money, energy spent on doomed ventures is a waste. The free market is easily the best, most fair, and most efficient way to decide whether the company is creating a product/service valued by society and whether or not it is managed correctly. By the government propping up certain companies, that decision now lies with a few elite individuals in Washington. So, the question becomes... do you trust those people in Washington more than the free market to determine winners and losers thereby ensuring the continued improvement in product quality, product price, wage increases, etc.
I believe that history has proven over and over again that the manipulative hand of the government, while it may provide momentary assistance to failing industries, that it does far more negative in the end for all parties involved. Bad companies should be allowed to fail so new improved companies offering better products and better prices, with better compensation strutures can be built in their place. Imagine if the government had decided to prop up the horse and buggy industry when cars were invented or the telegraph companies when the phone was invented or the radio companies when the TV was invented. Bottom line, we'd have less innovation, fewer jobs, less compensation, and worse.
Apparently, as many as it takes until the country goes belly up. Even then, you'll still have people like this barking on and on.
I'm not sure about the specifics of German automakers... but I will say this. My wife's Volkswagen Jetta was built in Mexico... and I'm guessing the people who built it aren't highly paid German union members living in Mexico.
BTW, I can't think of a single way GM could have made Wall Street happier than to dismantle their over-burdening union wage structure.
Which the Center for Automotive Research has helpfully supplied:
GM did try to sell Saab, Saturn, and Hummer. Saab to Koenigsegg, Saturn to Penske, and Hummer to a Chinese automotive company. All three sales failed and Spyker came and bought Saab, but GM shuttered Saturn and Hummer. GM had to get rid of the brands, but the government didn't care how( either by selling them or closing them). Saturn, Pontiac, and Hummer( and I would also imagine Oldsmobile) trademarks are owned by New GM though despite Saturn, Pontiac, and Hummer being apart of Motors Liquidation.