What a way to run a railroad...

[Rami]

To all,

http://www.comcast.net/articles/finance/20090217/GM.Bailout/

General Motors announced today that in order to stay in business, they need to borrow an ADDITIONAL 16 billion dollars if conditions worsen and slash nearly 50,000 jobs worldwide, closing five US plants to make themselves a viable company again, hopefully repaying the government by 2017.

But they say they could achieve "profitability" in two years.

Oy vey...:faint:

[brad kaste]

At one time I had thought the right thing to do is to bail out our domestic car makers. However, the more I've studied it,...the more I think they should be allowed to go belly up and restructure. Clean out the house and start over. The federal government isn't in the business of saving or running business.
Of any type or size. Because of their poor managing and marketing the tax payers should pay for another bailout? I don't think so.

[Rami]

I completely agree....I remember saying a few years ago that they should have taken the money from their SUV cash cows and invested it in small cars and alternative power, but they chose to line their own pockets. It just goes to show ya, you reap what you sow.

The sad part is it will affect people who had little say in how the company was actually run. That's not fair.

I'd love to replace those executives' "golden parachutes" with a couple of ACME anvils from the old Looney Tunes cartoons.

[brad kaste]

Rami,....I'm not too sure if Wiley Coyote would allow you take take any of his ACME equipment. Well,....maybe the power rocket shoes......

[GT182]

Yep, let the Big 3 all file Chapter 11 and restructure. Nobody would bail any of us out so why them. And all 3 are involved with foreign car makers, so let the foreigners bail em out. Time for our government to help out the people here that go to bed hungry and don't have a bed to sleep in. Screw the car companies.

[Wiens]

So the question is: Who buys their cars/trucks after the bailout?

Kevin

[cheezyflier]

it won't be the big 3 that go down. it will be the big 2. ford's hangin' in there, and i suspect that they are hoping the other 2 will fail, leaving them to be the big ONE.

[Allen]

it won't be the big 3 that go down. it will be the big 2. ford's hangin' in there, and i suspect that they are hoping the other 2 will fail, leaving them to be the big ONE.

Won't brake my hart!:jump:

[lifejogger]

I don't think we should be bailing out the auto industry!!! They have had plenty of time to change the way they do business but they never did. It is strange how we never heard how bad they were doing until he government decided to bail out of those financial institutions and then all of the sudden GM and Chrysler needed money to. Let them declare bankruptcy and then start all over with new management I think the results from that will be a lot better.

[cheezyflier]

i don't support a bailout either. however, i think we're going to get one weather we like it or not. the tricky thing in my mind is how this will effect the unions. certainly the uaw's greed has played a part in all of this, although maybe not to the level the corporate execs would have you believe.
they need to be held in check, and their real value isn't what it used to be. that's typical for 99% of all unions i have come into contact with. i truly think they need to go the way of the dino, and so does GM and Chrysler.

[wombat666]

Here we go ...... one more time.
:friday:
The cost of 'Bailing Out' the US Automotive Industry is a (relative) pittance compared to the Welfare Costs needed to be paid to those unemployed if GM and Ford went belly up.
I tend to diregard Chrysler as a manufacturing force.

Not the executives, just the one in five citizens employed throughout the Nation directly or indirectly by these corporations.
Need we remind ourselves that any 'cleaning house and restructuring' will obviously see all manufacturing and 99% of jobs ending up in China or worse, India.

As for the 'foreign car makers' ............. they're not doing very well at all.

The smaller and more economic vehicles have been available for years, all over, but as long as the 'SUV Mindset' has ruled the market then that's what has been marketed.

And the other side of 'cleaning house and restructuring' coin is ugly.................. any skills required by 'US' employees remaining will be minimal ...... no domestic car industry, no need for 'skilled' domestic employees (packers and stackers??) is a long term manufacturing disaster.
I certainly look at the projected GM numbers and echo the disbelief, but does anyone really want to see a minimum of 20% of the present workforce across the board on welfare?

Regarding the 'executives', their benefits are very strictly capped under the present scheme, 'Golden Parachutes' are done and gone.

:focus:

[Cratermaker]

I'm thinking the one in five jobs is union propaganda figure... come on, 1 in 5?
20% of our GDP is automobile manufacture?

Even if that is true, 1 in 5 jobs don't disappear. The demand for vehicles is what it is. The same number will be sold whether it's made by GM or Honda, the same amount of steel will be used.

We can give them money to keep making cars that people aren't buying, depressing the price of vehicles even more. OR.... we could give them money to NOT make cars! Man, does that sound great!

[Lionheart]

gm builds factories in Mexico, India, China (especially China) Canada, and other countries.

gm is not helping out massively in American interests.

In a world where electric cars are now extremely important and wanted intensely by the market (as noted by sales of the Toyota hybrids, of which now ford, gm, and BMW now produce), it was gm who tried (with all their heavy might and power) to destroy the near future (10+years) of the electric car because it wasnt profitable enough. (Yet Toyota cant sell enough, and fuel costs have now risen to its highest points in history in the past several years).

I think if anyone deserves a loan, its Toyota, so they can put in another factory in America building these little electric cars!


I say, we give gm a loan this way, lets hire a moving company to help them move to China. Lets rent the empty gm factories to Toyota and other manufacturers that will build good cars here and employ Americans... .


Thats my 2 cents worth. Its a bit of hard love, but dang.. Look what all gm does.. Why should I back them if they wont back us!!



Bill

[wombat666]

Nothing to do with Unions or 'Propaganda', it comes from a (IMNSHO) reputable source, and it's "Not the executives, just the one in five citizens employed throughout the Nation directly or indirectly by these corporations."
Think about it, everything from textiles and plastics down to rivets and welding rods (so to speak).
Of course 'people' will buy cars, if they have any money to do so, but food and shelter will come first.
As for the manufacturing basics, both China and Japan have cut back notably on their imports of Coal, Iron and Bauxite, three of our major exports to our major (Australian) trading partners.
:faint:
I really could care less, as we (as a couple) are independant and largely unaffected by the recession, in fact, in some ways I (just me, myself) have had a few wins when it comes to buying my 'toys'.

[rhumbaflappy]

I'll give you guys something to think about concerning GM.

My local factory in Janesville Wisconsin is now closed. At one time it employed 7000 hourly workers and supported a rich local variety of suppliers.

At the time of closing, there were about 1200 active employees, and these assemblers actually made more vehicles per hour ( or week or year ) than the 7000 did 25 years ago. GM's productivity has skyrocketed in recent years. more productive than any of the foriegn or "transplanted" automakers.

Cutting employees at this time is now proportionate to cutting products. You can't just lay off shifts or reduce production in individual plants as they are already cut to the bone. You have to eliminate the entire factories.

That local plant, at closing, supported a modest number of local suppliers.. perhaps totalling 1000 employees. Oddly, many of those support workers are short-haul truck drivers, as GM needs "just-in-time" delivery to avoid inventory overhead... and the taxes on that inventory. 95% of all supplies to that factory arrive by truck, not rail. That is much of the hidden cost of modern manufacturing. 30 years ago, the opposite was true, as rail was by far cheaper.

Near the closing of the plant, a schedule change had to be made. Roofs for the sunroof option for large SUVs are made from heavily galvanised steel, or stainless stell can be substituted. Stainless is much more expensive. GM had been using stainless because it could not get smaller orders of heavily glavanised ( remember "just-intime" ?). China has gobbled up all galvanised in the huge quantities steel mills like... and they also grabbed all the stainless! So sunroofs could not be made for several weeks in Janesville... at any price.

I'm sure the steel was shipped by rail, then ship... not by truck... to China.

What's sick here is not just GM.

It is the entire modern way of manufacturing, financing, shipping, taxing.

The modern way works when times are good, and volume is not the problem. But when volume stumbles, the whole system crashes, as the manufacturers are no longer set for rail transportation, or can store months of raw supplies, or can cut back workers and linespeeds, as these are already set for maximum productivity... not guarding for catastophy.

GM cannot go back to using hand-held spotwelders, even though you could run a body shop with a few people and have them double or triple up on jobs at lower speeds. The modern robot-shop requires volume for profit. Same for the paint shop, trim, and chassis lines. Without redesigning the manufacturing process, there is no going back.

But China is not run by modern standards of productivity. It does hand weld. It is labor intensive, and can cut back in hard times. They do use rail, and large onsite storage of materials. They do not outsource what can be made in house.

The UAW union forsaw many of these problems, and feared GM and Ford would simply layoff or close factories in response to hard times, rather than just layoff or reduce linespeeds. That is why they forced the big three to have SUB pay and JOB banks... to discourage the practice of closing one plant, and building another, to suit their modern manufacturing productivity.

This forced GM and Ford to look a bit ahead when designing their products and manufacturing processes to preserve the status of their hourly workers. Apparently Ford listened, and they will survive... perhaps without government intervention. GM did not listen to the union. Now they are on the verge of bankruptcy, even though their union labor is a fraction of what it was 25 years ago. And the government was also warned by the UAW, that this was a possible result of our modern manufacturing process... where productivity is just a way of eliminating jobs, rather than a way of making workers more productive.

Skeleton crews running robotic factories financed only for maximum production will eventually fail. Doesn't matter if it's GM, Ford, Toyota, or Harley Davidson. It doesn't matter if it is the US, great Britian, Germany or Japan. This has nothing to do with labor, or even management. It is our accepted way of producing things.

GM did everything right by the modern book of manufacturing. And they desperately have already sold off every division they could to trim their size... Delphi, EDS, Hughes, Locomotive, Bus... to try to save their business and stave off the bond holders.

This is eactly the problem facing the governments now. It's not just a matter of throwing money at the problem. The entire system of finance and capitalism and manufacturing is ill. That has got to get fixed. A little over a year ago, GM stock was at a record high, and they had record quarterly profits.

And they were already doomed, as their process was modern productivity, modern finance, and cannablism of their holdings, to satisfy stock and bond holder expectations. Never did they consider they were on the wrong path.

Small, labor intensive shops, minimally financed, producing needed goods will survive without any help from the government... if the government leaves them alone. This is the production model in China and India. If they try to mimic the modern US productivity model, their businesses will collapse just as ours has.

It's not a matter of saving GM, or Chrysler, or Ford, or Wall Street. It's a matter of saving ourselves by rejecting the processes that do not work, and demanding our businesses behave responsibly to the welfare of the general public. We need a new game plan, so shareholders, and bond holders, and workers are not left holding an empty sack when hard times arrive. For example, did no one think of saving the grain for the coming famine? That concept is thousands of years old and still valid today.

Dick

[ckissling]

rumbaflappy
The GM plant at Janesville Wi, was the oldest plant of the GM plants and the only two story plant. It was far more expensive to change over that plant to run a new of trucks than any other plant GM had. And as a GM
mechanic for 35 years I can remember a lot of cars and trucks that came
from there that had tons of crap to fix before it was ready to be sold to
someone. Living in Beloit WI, I knew and still know some of the people who
worked there.ckissling

[Lionheart]

I see a change coming, weather we like it or not. I see changes in those who control laborers such as unions.

Having watched them at Chrysler, they 'hated' the engineers (at the fascility I worked at), and we had drivers making 3 times more then the engineers.

That is what I call imballance.

The union guys were always acting like bullys, ready to start a fight, grumbling about everything.

I am sure its not like this everywhere, and this was over 10 years ago. Since then, Chrysler has been bought and sold twice, and is now on the sales block again and their track is long since gone.... Dust in the wind.


Greed can really destroy alot of things. Might work for a while and look like this 'beautiful, lovely system', but after a while, it will surely burn out...



Bill

[ckissling]

Lionheart
Your right about the greed part, about ten years ago the workers at
the Janesville plant were given employment apps for their friends and
family. Some of the workers put them up for sale at 10% of the hired
persons pay for 6 months. As far as I'm concerned on the closing of the
plant, they had it coming. ckissling

[cheezyflier]

Here we go ...... one more time.
:friday:
The cost of 'Bailing Out' the US Automotive Industry is a (relative) pittance compared to the Welfare Costs needed to be paid to those unemployed if GM and Ford went belly up.



ummm....no.

have you ever been on welfare? i doubt it. see, none of those auto workers would be able to collect it, unless they had 10 kids and owned nothing.
you see, in order to collect welfare you have to fill out forms that show all your assets. have a car? it's an asset you can sell to get money.
401k? annuity plan? assett, no welfare till they're gone. own a house? assett, no $$ for you. collecting un-employment? that will be deducted also.
anything you own that has any value what so ever is expected to be reported, and is counted against your eligibility. including jewelwry of any kind, collectibles, antiques, whatever you got that has any value. get caught not reporting it, and that is fraud. the kind that sends you to jail.
think i'm wrong? go down to social services in your town and try to collect it.
i have in the past, i know the routine involved with trying to collect welfare and foodstamps. no matter what you or anyone else wants to believe, they don't just go around handing out checks to anyone who asks. as a matter of consequence, the welfare cost from unemployed auto workers will be very very low, at least for a while.

[GT182]

If you stop and think about it, if Chrysler and GM fold, then there's the people that make the parts for them that will fail too. No place to sell their product. And all those people will lose their jobs. It's one big domino effect tha's gonna get us all in the end. Either way we're all scrod.

[Wiens]

So my original question still stands: Who will buy their cars/trucks after the bailout?


The bailout doesn't create demand........it only prolongs the inevitable.

"Capitalism without loss is like religion without Hell."

The government cannot successfully manage any business enterprise they've entered into.


Kevin :d

[Lionheart]

My brother had an interesting insight on this. (I was telling him about this thread earlier today).


He says... Why not help the people instead of the corporation. The reason cars arent selling is because the people are broke and jobless. Sales would be up if the people were working and making money.

Makes sense to me.

If you keep the corporation in business and not the people (making a living) what do you have? The government would be paying corporations to stay in business when it should actually be helping the economy 'engine' itself, which is the people. When the poeple can afford the cars, then the corporations will be able to run on the proceeds...



Bill

[cheezyflier]

My brother had an interesting insight on this. (I was telling him about this thread earlier today).


He says... Why not help the people instead of the corporation. The reason cars arent selling is because the people are broke and jobless. Sales would be up if the people were working and making money.

Makes sense to me.

If you keep the corporation in business and not the people (making a living) what do you have? The government would be paying corporations to stay in business when it should actually be helping the economy 'engine' itself, which is the people. When the poeple can afford the cars, then the corporations will be able to run on the proceeds...



Bill

if they couldn't do it when they were sellin suv's left and right they won't suddenly be able to do it now i dont think

[EasyEd]

Hey All,

Absolutely outstanding post Rhumba!

You touch on so many salient points. I'll add a bit.

- near 6.5 billion people on earth and most need a job
- technology commonly designed to eliminate jobs at big investment
- does anybody see a conflict here? Growth based on innovation is suposed to fill the gap but innovation simply cannot keep up much less maintain a level of profitability to support big investment.

next

- we can overproduce anything we want on this earth for those with cash to pay for it.
- am I the only one who sees a problem here?
- in theory producers who fail are supposed to disappear and in fact those who fail do - the people - but not the factories because they are a financial asset upon which money can be borrowed. As a result production capacity does not decline and we maintain over production capacity. The result - we set up the next set of losers (people) but ultimately we all lose as all kinds of financial manipulations go on to maintain profitability which eventually catches up with us. One bubble to another coupled with bailouts.

Rhumba has it right the whole system is sick very sick.

My opinion is that small (where peoples lives have real meaning) really is beautiful and sooner or later we as a people on earth have to realize this and have governments act accordingly cause we ain't leaving this earth anytime soon. We simply can't afford big - the costs in money and eventually blood will be too high - mega large and efficient corporations anymore - too many people costs since extremes in wealth distribution lead to bloodshed - simply because innovation cannot keep up with the demand for growth. Teddy Rooseveldt knew this a long time ago just on a different scale.

And we haven't even touched on the discussion on how many people can the earth sustainably (cause technology will eventually fail to bail us out) support at what standard of living.

-Ed-

[Allen]

If you stop and think about it, if Chrysler and GM fold, then there's the people that make the parts for them that will fail too. No place to sell their product. And all those people will lose their jobs. It's one big domino effect tha's gonna get us all in the end. Either way we're all scrod.

Hey, if we're are all going to get screwed, Let's get it over faster and let them go bankrupt now. Than get screwed slowly for the next 10 years before they go bankrupt

[wombat666]

ummm....no.

have you ever been on welfare? i doubt it. see, none of those auto workers would be able to collect it, unless they had 10 kids and owned nothing.
you see, in order to collect welfare you have to fill out forms that show all your assets. have a car? it's an asset you can sell to get money.
401k? annuity plan? assett, no welfare till they're gone. own a house? assett, no $$ for you. collecting un-employment? that will be deducted also.
anything you own that has any value what so ever is expected to be reported, and is counted against your eligibility. including jewelwry of any kind, collectibles, antiques, whatever you got that has any value. get caught not reporting it, and that is fraud. the kind that sends you to jail.
think i'm wrong? go down to social services in your town and try to collect it.
i have in the past, i know the routine involved with trying to collect welfare and foodstamps. no matter what you or anyone else wants to believe, they don't just go around handing out checks to anyone who asks. as a matter of consequence, the welfare cost from unemployed auto workers will be very very low, at least for a while.

cheezy,
No, I've never needed unemployment benefits, ever.

But both myself and my partner have been careful, maybe lucky, know that ther'es no such thing as high investment returns without hogh risk and studiously avoided any form of 'Big Business'.
Of course, really good Medical Professionals will never be unemployed and semi-retired 'Old Soldiers' are mostly looked after, and in my case, remain employable.

Obviously the system is different in Oz, still not easy (Pat aka 'Aussie Man' could be more specific) but it seems to be less inflexible, according to a number of people we know. The Australian system is not great, indeed, if you are young and lacking certain skills, it is just plain bad, but it seems to be more cohesive. 'Food Stamps' simply have no place in it.
The 'welfare' you cite fits into the 'Age Pension' scheme we have, the specifics are different but broadly speaking, a retiree with good assets receives less than one with nothing, which is (to me) fair.

However, different strokes and all that stuff ............ :kilroy:

Speaking of which, time to move this 'discussion' to the Cantina.
Way too political gentlemen (and others)!
:hand:

[wombat666]

I really could care less, as we (as a couple) are independant and largely unaffected by the recession, in fact, in some ways I (just me, myself) have had a few wins when it comes to buying my 'toys' due to the economic downturn.

And a PS:My better half beat the BMW dealership of her choice down by more than 20% on their original 'best price'........!

[Cratermaker]

I often see people pleased with the discounting of an already inflated price. ;)

[Rami]

Guys,

I started this thread, but I think we've "gone off the rails" a tad. I'm going to end it before things get out of hand.