GM's situation is far worse than what is being reported.

It is bad enough that they have reported a massive $1 billion loss for the last quarter.Their real problem is that the more cars they sell, the more money they lose. So, expect the hemorrhage for the rest of the year to be as bad as, or even worse than what happened in the last quarter.And the prospect is that with no products that grab the customer's attention, they are stuck.

In the movie industry, one mega hit can rescue a studio from bankruptcy.Something similar is what is needed for GM.And because that is not even a remote possibility, S&P is saying, in essence, GM is a dead duck.And Kirk Kerkorian has his eyes set on the GMAC division which is the only profitable division GM has.

We may be heading toward a situation where the number one car company in the world will be out of the car business and become ,surprise!, a seller of mortgagaes.

Could you expand a bit on "the more cars they sell, the more money they lose?" Is that because of the incentives/zero-percent financing? Assume I know next to nothing and use short words!

:hi:

sedans unless it comes wrapped in a $5000 bill either as rebate or as a financing package.That, to a certain extent is being remedied by the high profit margins on the trucks and SUV's.That market is fading fast for GM because of, one, higher gas prices and two,the entry of Toyota ,Nissan and Honda into these markets.Cars then were originally designed as loss leaders to build traffic into GM's showrooms. Now, with very little to sell, a loss leader has turned into a loss period.Nothing to offset these losses.

is GMAC, which does all the financing...

remember, GM may be losing a billion dollars a quarter right now, but they have 35 billion in cash on hand and some interesting products in the pipeline. The problem is health insurance for retirees, for every dolalr GM spends on insurance for an employee, it spends $1.30 on a retiree, guarantees given in the salad days. With the legacy costs, GM has an overall profit margian of 2%, without them, it has a margian of 8%. that's the difference between losing a billion and making a billion.

When I was a kid, I thought GM was forever, like Reynolds Aluminum.

remember that Rover MG was the third largest automaker in the world in 1979.

of kirk kekorian?

Underfunding the pension program to use that cash elsewhere is also an issue - with more than just GM.

edit: sp

gm has far greater expenses than their oriental counterparts. the high cost health insuance is only the biggest. environmental regulations,osha rules,and taxes are a few more. i am a gm retiree, and i get eight hundred dollars a month pension after working for 26 years and being hurt on the job. i don't know any assembly line worker that makes 100k per year. most of retirees health costs are covered by medicare, gm only pays for a supplemental policy. the plant i worked in now makes as many cars with three thousand employees than the ten thousand employed when i started. it's called out sourcing. of course oriental automakers originated this concept when they would have japanese families produce parts in their homes, employing the entire family running a small lathe or milling machine. quality control was quite easy-make a bad part they take the machine back. cheap labor is the goal of all enterprises. cheap labor is the goal of all enterprises. cheap labor is the goal of all corporations. cheap labor is the goal of the republican party.

On the one hand, I hate their outsourcing and going for the "cheap labor" rather than employing the people they want to buy their cars. On the other hand, it's harder and harder to stand by the Americans losing their jobs when I see them driving Toyotas and Hondas, when they don't understand that if they want the jobs HERE then they have to by things made by OUR companies in OUR country.

that was being outsorced. anybody's job is in danger, and we all still go for the bargain. must be inborn.

to where their money goes or who it funds or what it supports or whose job it takes away.

*sigh*

and i don't think it will ever change.

http://www.consumeraffairs.com/news04/2005/gm_toyota.html
May 9, 2005
Toyota Motor Corp appears willing to bail General Motors out of the economic mess stifling the world's largest automaker. Toyota chairman Hiroshi Okuda said his company is open to supplying its hybrid technology to GM to help the ailing U.S. rival regain competitiveness.

Also, GM is going to build a cheap, fuel efficient car in India. They say they are gonna take ten percent of the market.

This could be a ploy to depress the stock price. Maybe there's some money to be made in the buy low, sell high business.

Isn't Honda already building engines for GM????


BTW, that Ridgeline Pickup is the shit. I will own one as soon as I get a better job and am out of school.

Ratio of active workers at General Motors to retirees on its pension rolls: 2:5

Total pension costs of the company per vehicle General Motors Corporation produces: $675

Percentage of Social Security contributions that go toward administrative costs: 0.6

http://www.harpers.org/HarpersIndex2005-04.html

For an expenditure of a few million dollars to the right lobbyists and campaign funds they could get Congress to pass a law erasing their debt.

Problem solved.

to break the Union and dump their retirees pensions and health care.

the rank and file are the ones who get it in the neck.

An assembly-line worker in a GM or Ford production plant can easily make over 6 figures a year, including overtime. And IIRC, the UAW has been one of the most outspoken opponents of raising CAFE standards or producing more fuel-efficient vehicles.

The UAW had a chance to help push for reforms, but they instead chose to continue collusion with management and fight those reforms. Now, they are reaping the benefits.

I'm not saying any of this to let management off the hook, because they definitely deserve blame. But so does the UAW in this instance, IMHO.

didn't it?

"You can never find a horn when you need one."

Gotta love the big "bubble" for the backseat, too!

:rofl:

I've seen that several times and practically been rolling on the floor each time.

:rofl:

..sure those Behomeths have a higher profit margin, but they aren't selling and you can't make profits off of what doesn't sell. Instead they should be focusing on hybrid technology, which I read where they are going into partnership with Toyota. Hybrids are the future and once again the Japanese (mainly Toyota & Honda) have the head start!

because they all go buy Toyotas and Hondas, then we complain that they aren't looking into more fuel efficient technology when the only cars they sell that make a profit are the gas guzzling SUVs.

Japan has the head start but hybrids are still a relatively small portion of the market. I'm sure it'll grow as our gas prices rise, but for now the US companies can try to catch up.


edit: sp

boy you should have heard the sheet-metal workers for bush in the last camp pain.

Is that a camp for masochists? I'll make sure to stay away from there. Seriously though, NAFTA and the Welfare Reform Bill were the two parts of Clinton's Presidency that I disagreed with most. I think NAFTA's the big stain on his Presidency, not Monica. Of course, a lot of what he passed that I didn't like was done so for political capital.

for NAFTA??? I wasn't for it either - but seems like to me they were all in on this one.

that GM isn't being honest about. Check out www.evansvsgm.com Lying, cheating, stealing.

The Evans company has environmental technology that should be MANDATED! Their coolant is non-toxic and non-corrosive. Once installed, it NEVER needs to be changed. It allows big deisels to use EGR without overheating. It allows cars to run leaner (better mpg) and with fewer emmissions. The non-corrosive property and lower system pressure means that radiators, hoses, pumps and other components last indefinatly instead of failing and spewing toxic death on the roadway.

This really is the "100 MPG carburetor" that the industry is trying to ignore.

maybe that's why their cars are soo shlocky...

It was on the news constantly. I don't watch cable news but I would guess that nothing is being said about it. This will come a quite some surprise to the public when they go belly up.

employees. C-Span had a business writer for the Detroit Free Press on Sunday morning, talking about GM's financial woes. It was pretty depressing.

Edit: typos

of managememnt

Ford and Chrysler have higher executive compensation packages. In fact, the company has TOO MANY employees, it could cut the industrial workforce by 15-20%, replacing them with automation, and save money 5 years down the road. Part of the problem is that there are too many workers involved in building each car, because GM has not laid off as many workers and outsourced as much as Ford and Chrysler have. It takes 49 hours to assemble the average GM car, compared to 39 for Ford and 27 for Toyota. http://www.thinkingmanagers.com/management/management-myths.php there's your problem.

By the way, the CEO of GM made, last year, about 8,000,000 dollars. a 43% cut from the previous year. (that includes options, retirment and bonuses. that is way low for a 50 billion/year company. The head of Ford made 20 mill. Meanwhile, the workers got paid the same amount, way too high for factory workers in the US (not higher than fairness says they should be, but higher than the market will bear)

we repay them by buying Japanese cars...

the CEOs of GM and Ford aren't even in the top 100 for highest paid CEOs of American companies. They're still pretty big, $12-14 million "total compensation," but considering that they're both in the top five largest companies they don't make as much as they probably could. Not as much as they should, as much as they could.

...where the government pays for all healthcare costs? Too bad the USA doesn't do this so that GM and Ford can save that $1,500 per vehicle.

health care in the United States. There are more and more corporations coming to this point of view, because they are realizing how costly the current system is to them and their bottom line.

Look how many GM commercials are on the tube...endlessly attempting to "entice" me into a car I wasn't interested in, and each of those commercials cost how much? Auto companies always pay the higher rates, as well. Then not to mention the tremendous amounts spent on lobbying and buying off politicians and others to maintain their power.

There's a detach in American business between true profits and paper one. Enron was a text book example, and if you don't think it's still going on, talk to a knowledgeable broker. GM's still considered a blue chip...and a key in this regime's social security privitization scam (how else do they really make the money off that ponzi scheme??).

GM will not go bankrupt, just like any major American industry won't. This regime won't permit it and they're not adverse to ramming through a bail out turning GM's debt into part of ours. The show won't begin until stockholders don't get dividends. If creditors come calling, you'll see GM go flying up to Capitol Hill...reminding them of how they bailed out the airlines on 9/11 and the individual tabs each Congressperson and Senator has gotten from the Fisher Bldg.

because if they did, there'd also be a lot of angry, unemployed Americans running up to Capitol Hill wondering why the government didn't save one of our largest employers. You know, the non-Wal-Mart one that actually pays people and provides excellent benefits.

are going bankrupt. G/F mom doesn't know how much longer she will have her job. She told me her company has changed names and went bankrupt 3 times in 3 years. Last boss packed up and left before they went bankrupt and took some money with him according to her.

despite huge loyalty from the few who were able to get their hands on them...

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/04/24/MNGDTCEA9B1.DTL

The automakers, saying all-electric vehicles occupy a tiny and economically worthless niche, simply stopped making, leasing or selling the cars. And the people who leased the cars and wound up adoring them, only to see them called back in at the end of the lease period, are livid. Many wanted to buy the autos, but all but one manufacturer said no.

The automakers, saying all-electric vehicles occupy a tiny and economically worthless niche, simply stopped making, leasing or selling the cars.

<snip>

Tom Gage, who was a manager in Chrysler Corp.'s regulatory strategy office for eight years, said automakers were unenthusiastic about making electric cars because it was the first time a government agency -- in this case, the state air resources board -- had told them specifically what to do. "The air board made them build a small percentage of cars for zero emissions," Gage said. The only car with no tailpipe emissions, he noted, was powered by electricity.

"The automakers saw this as a precedent they didn't want, something where regulators could tell them what to make," Gage said. "(They) fought it very hard, and one way to kill the mandate is to say it's a bad product, nobody wants to buy it, it's too expensive and its range is too short."

Makes you wonder, eh?

GM is making the ugliest line of automobiles today.
No wonder people aren't buying them without incentives.
I'd want compensation for driving an ugly car too.

Their biggest source of income has been the credit selling for years, I thought. I'm really scared. I've lost a lot of money on them and with my low income and lack of ability to work now I don't have it to lose.

The conservation movement is a breeding ground of communists
and other subversives. We intend to clean them out,
even if it means rounding up every birdwatcher in the country.
--John Mitchell, US Attorney General 1969-72

That will devastate many elderly retirees in Michigan and Ohio.

All because of the corporate mentality that approved GOP/Enron style accounting practices and called it doing "business" while lining their own bank accounts with the pensions of the working class employee.