The beginning of the end?

[Chuck S.]

Re: The beginning of the end?

Keep buying those Toyotas, Honda, etc. That's the Big problem. You seem to Think that your 1 Toyota doesn't matter.....your right, its the 750,000 other Americans fault. Just my rant.

I, like many Americans, bought my first Toyota in the middle eighties after experiencing a total BS experience with a 1980 Oldsmobile Cutlass wagon.

It was a piece of crap; the gas mileage on the window sticker was at least twice what the car actually achieved. The engine technology dated back to 1949 (my fault for not doing due diligence). Free moisture condensed on the oil fill cap. It had other continuous annoyance problems...wipers didn't work, knobs broke and fell off, etc. It was impossible to get these fixed by dealers because dealers had to pick up some of the tab; your car just sat there overnight, and next morning, they said it was fixed. It, of course, had just rested overnight at the dealer.

I had owned Chevys my entire life up until I tried that Oldsmobile, and was a loyal GM owner. I doubt there was much discernible quality difference in the two marques at that time. Anyway, after five years of dealing with that horse manure, I finally traded that piece of crap in on a nearly new Toyota 4Runner out of exasperation. I found the Cutlass had next to no trade-in value...nobody wanted them.

My experience was same for millions during that time frame, and the reliability and economy of Japanese vehicles began to establish buyer loyalty that persists to this day. All because the corporate management was arrogant, their employees (both union and salaried) built crappy cars, and dealers refused to listen to loyal GM owners begging for help with the junk.

So now your feelings are hurt because Americans won't buy American, in order to pull these once-arrogant aholes back from their own destruction...Too (expletive deleted) bad. Maybe it's not your fault personally, but Americans control their pocketbooks. Americans weren't going to put up with that crap forever just because these were American companies. Foreign competition offered another alternative, and now GM will be lucky to EVER win most of those converts back. Toyota and Honda continuously improve their products...they don't sleep until problems that would annoy MOST customers are GONE.

For my own part, I have given GM another chance based on biased evaluation of my 2006 Corvette (a very good car). My newest vehicle is a 2008 Malibu built in Kansas City by Americans with domestic and foreign content. My current opinion is it is a damn fine automobile to be made by an American company, and a worthy replacement for an aging Toyota Avalon, which would be up-scale competition. Incidentally, the Avalon was also a damn fine automobile and was built in Georgetown, KY by Americans.

It's not like Americans caught GM not looking, and then sandbagged them by buying foreign-designed, sometimes foreign-built automobiles. They are paying attention now, but only because energy prices have killed the truck/SUV. They had begun to respond, and sought competent help with their products...the progess is showing, but even so it will still be a tough sell in America. It may be too late now, even if they build the best automobile in the world.

[Chuck S.]

Re: The beginning of the end?

Look up "Amero" on Snopes.com.

Of course there are those who will say Snopes.com is run by the CIA -- so we go round and round

My son was telling me about the "Amero"...I regret that he's so naive.

I'm telling you...Obama is the anti-Christ...Soon you'll be getting your official notice in the mail requiring you to report to the nearest processing center to get your "Amero Speed Pay" number tatooed on your forehead.

[Jack C.]

Re: The beginning of the end?

Speaking of which; did you see old George W. Bush dodge those two big shoes thrown at him at a news conference in Iraq? Wow! Those were some great moves! He didn't flinch a bit!

Stu Fox

With all of the Sh_t that the Left was throwing at him for nearly 8 years, this was just a piece of cake.

[Grant M.]

Re: The beginning of the end?

There's an interesting take on this subject in the Dec 8th issue of Forbes magazine in which their automotive industry writer Alex Taylor III, recounts his decades of covering GM and the changes he has seen. In a departure from much of what I'd previously read concerning accountants versus "car guys" running automobile companies, Taylor reflects positively on the tenure of Roger Smith and his attempts to get some of GM's basic business practices in order (centralized purchasing, investing heavily in factory automation etc), but notes that some of these ideas were not well thought out or executed (buying EDS, starting Saturn).

Overall, Taylor criticizes the entrenched GM 'culture' which he blames for much of the corporation's inability to change quickly enough or even at all. He seems genuinely impressed with Rick Wagoner as CEO, but ultimately has lost patience waiting for the promised turnaround. He ends the article by wondering aloud whether anything will really change with a bailout, noting that the corporate culture is not likely up to the task of restructuring the company fast enough to ensure its survival and suggests in closing that bankruptcy may be the better path to real change.

So much for my 'book report', but it says what many others have contended: the "General" didn't get this way overnight, no single aspect of the Corporation (unions, management, economic situation) is singularly to blame for its present plight, and only rapid, radical change will save it. Although I wince at the thought of seeing GM file for Chapter 11, perhaps it will be the only way that serious enough action can/will be taken to move it in a better direction toward survival.

grant

Like others on this board, he also points to the unsupportability of too many divisions and the costs of trying to distinguish between various versions of the same vehicle.

[John H.]

Re: The beginning of the end?

As an example of how elastic the demand is for high-mileage small cars, the sales of all five of the lowest-priced and highest-mileage small cars (Honda Civic, Toyota Corolla, Nissan Versa, etc.) which were each running at 50,000 a month in July ($4.00 gas) were all under 8,000 a month in November with $2.00 gas; pretty hard to forecast production requirements under those conditions.

Toyota announced about an hour ago that they have called a halt to their new plant in Tupelo, Mississippi that was to build the Prius, with Prius sales down 57% in the last 60 days. They'll finish the shell of the building (which is 90% complete), but have stopped all the orders for production facilities, equipment and tooling for it. Toyota U.S. sales overall were down 33% in November.

[Kenneth B.]

Re: The beginning of the end?

I was starting to think gov money was good for GM but now I feel chapter 11 is the best and go at it without goverment telling them how to run there business.. Can you imagine the federal goverment trying to run auto business!!! Wait till they get done with health care.. Of course I don't think any in congress are going to be on that same health plan..

I would like everyone to understand what chapter 11 means for businesses. GM will not have to pay any suppliers in fact if thy received payment within 60 days previous to filing they will have to give the money back. Tier 1 vender's will not get paid & will also file & not have to pay tier 2 ETC. This will filter down to small business like mine that supply tooling for the foundry's. GM will not pay Dana. Dana will not pay foundries which will not pay my company. Most GM suppliers will not be able to take another hit. Thousands of small company's will go out of business putting 100'S of thousands of well paid non union people out of work. Of course the lawyers,accountants,& consultants will make millions & GM & the tier 1 company's will reorganize & go on using parts tooling & material they never pay for. In essence it will be the small business that bail out the car companies. That boys & girls is how business bankruptcy works. Also they can do this over & over. No time limit. Look what happened a few years ago with.
KEN BARRY

[David D.]

Re: The beginning of the end?

I would like everyone to understand what chapter 11 means for businesses. GM will not have to pay any suppliers in fact if thy received payment within 60 days previous to filing they will have to give the money back. Tier 1 vender's will not get paid & will also file & not have to pay tier 2 ETC. This will filter down to small business like mine that supply tooling for the foundry's. GM will not pay Dana. Dana will not pay foundries which will not pay my company. Most GM suppliers will not be able to take another hit. Thousands of small company's will go out of business putting 100'S of thousands of well paid non union people out of work. Of course the lawyers,accountants,& consultants will make millions & GM & the tier 1 company's will reorganize & go on using parts tooling & material they never pay for. In essence it will be the small business that bail out the car companies. That boys & girls is how business bankruptcy works. Also they can do this over & over. No time limit. Look what happened a few years ago with.
KEN BARRY

Ken,
I am extremely sorry that you are in this particular postion, seriously..... but as a tax payer having to foot this bill and many, many more, I am still on the fence so I am also curious what you as a down the line vendor:

Expect to happen in the auto industry if/when the administration provides the necessary bridge loan?

How many other bridge loans or bail outs (total money) would you be expecting over the next xx year(s)?

Do you believe that if/when administration opens yet another flood gate of money, that all will be back to normal/good, and if so, when?

Do you believe that we are stuck in the weeds, not just with the big 3, but as a nation, and even as a world economy that will also be 'seriously' affecting even the Foreign auto's, or do you think all is going to be fine once the new administration takes over, or shortly there after?

What is your thought, that even with a bridge loan/bail-out, as to how many Big 3 employees will be let go? 10%, 20% 50%? And how would you anticipate this to affect folks such as your self....?

Finally, what is your thought about how with them seriously cutting the product line(s) down will be affecting folks down the line?

Thanks for the indulgence,
David

[Jim T.]

Re: The beginning of the end?

I don't know what all the other vehicles get for gas mileage. I do think GM is OK in selling their small compact that is advertised at 35 MPG, the Impala at 31 MPG, and the 400 HP Corvette at 26-27 MPG. My 96 LT4 gets about the same gas mileage as my 96 V6 3.1 Monte Carlo on the interstate 27-29 MPG.
Saw a new car in a neighbors driveway the other day, the two doors have more sheet metal than the rest of the car. Reminded me of car manufactured in Europe years ago that only had one door in the front of the vehicle.

[Larry P.]

Re: The beginning of the end?

My wife and I had the good fortune of being at the assembly plant on Thursday and Friday, Dec. 11th and 12th to participate in the buyers/photo tour as our 2009 was assembled. During the day on Thursday the schedule was for the plant to be closed down from the completion of assembly on Dec. 24th thru the third week of January 2009. On Friday morning it had been announced that due to the field stock of 9806 Corvettes in dealer inventory, the plant would be in a cold shutdown thru the third week of February 2009. The entire line would be shut down and stripped with no units on the line.


Even with the bleak outlook, during our day and a half at the plant, each and every one of the workers was supportive and had a positive outlook. At each station they took the time to talk and say how much they appreciated the support of the Corvette community. They thanked us for our continued support of Corvette and GM in general. Many of them knew they were either being laid off or if on furlough till the third week in February upon their return would be doing different jobs in the assembly process. Yet they took pride in what they did and looked forward to returning in February.

Lay me off untill February and pay me most of my salary and your gonna see a smile on my face as well!
Larry

[David K.]

Re: The beginning of the end?

Sure why not. Why not also stop farming until it gets warmer also. If you made 33mil. last year, you could probably live off the interest for the rest of your days. This is all in jest, to make some think. My fire suit is on. Oh, the real estate market is bad as well, where does the line start for the realtors. I was watching my local TV station last night. There were a group of buddies that worked for the city of Piqua, Ohio and together they bought lottery tickets and WON 200 Mil. This now makes headline news! Now, just suppose that was 6 guys, I really don't know how many there were, last I heard it was not told yet. But if it was 6 guys, that would equal one CEO and that is a yearly salary! These guys will all quit their jobs after one year at 33 mil. and retire. Damn unions.

[Duke W.]

Re: The beginning of the end?

There's an interesting take on this subject in the Dec 8th issue of Forbes magazine in which their automotive industry writer Alex Taylor III, recounts his decades of covering GM and the changes he has seen. In a departure from much of what I'd previously read concerning accountants versus "car guys" running automobile companies, Taylor reflects positively on the tenure of Roger Smith and his attempts to get some of GM's basic business practices in order (centralized purchasing, investing heavily in factory automation etc), but notes that some of these ideas were not well thought out or executed (buying EDS, starting Saturn).

Overall, Taylor criticizes the entrenched GM 'culture' which he blames for much of the corporation's inability to change quickly enough or even at all. He seems genuinely impressed with Rick Wagoner as CEO, but ultimately has lost patience waiting for the promised turnaround. He ends the article by wondering aloud whether anything will really change with a bailout, noting that the corporate culture is not likely up to the task of restructuring the company fast enough to ensure its survival and suggests in closing that bankruptcy may be the better path to real change.

So much for my 'book report', but it says what many others have contended: the "General" didn't get this way overnight, no single aspect of the Corporation (unions, management, economic situation) is singularly to blame for its present plight, and only rapid, radical change will save it. Although I wince at the thought of seeing GM file for Chapter 11, perhaps it will be the only way that serious enough action can/will be taken to move it in a better direction toward survival.

grant

Like others on this board, he also points to the unsupportability of too many divisions and the costs of trying to distinguish between various versions of the same vehicle.

There was a similar situation at IBM back in the early nineties, at which time GM was close to bankruptcy. That's when Stemple and Ruess were cashiered.

IBM execs back then were all "born at IBM". The CEO, an ex-naval aviator by the name of John Akers thought IBM was going to keep selling multimillion dollar mainframes, forever, as did most other execs and managers down to first line.

I was hired in mid-career (mid career hires are rare at IBM) into the IBM marketing organization because they wanted more penetration in the engineering sector, but my pay grade and position in the marketing organization didn't allow me very wide influence, and I gained a reputation as a "rebel" - one of those "professional hires" - not "true blue".

I finally got tired of rearranging deck chairs on the Titanic and took the first buyout offer to hit the marketing organization in 1991. When I left the stock was about $100 a share. I told everyone to sell because it was going to $75. Everyone laughed and, as usual, I was wrong. The stock went to $45, and the "lifetime employment company" made 200,000 people walk the plank over the next couple of years.

The board finally got fed up with Akers and company and brought in a guy named Lou Gerstner (a year or so after I left) from of all the places, the tobacco industry! Gerstner took a look from his fresh perspective, reorganized and refocused the company, and IBM came back, but I'm sure it is very different from the old "Big Blue" days. Of course, a lot more blood was spilled, but it was a case of cutting off some limbs for the patient to survive.

GM management has made some colossal mistakes in the last decade. Example One is the Fiat fiasco that cost the shareholders over $2 billion, and I don't think even one exec lost his head over that asinine deal.

On the other hand, the Detroit execs don't have much choice, but to cave to UAW demands because a strike for more than a couple of months against any of the three could set them so far back they might never recover. Execs have a fiduciary duty to shareholders, and they can't sacrifice the company to break the UAW. From a realistic business perspective, you have to settle and hope for the best. The UAW has Detroit over a barrel!

The UAW is a monopoly. We have anti-monopoly laws for business, but labor is free to form monopolies and pursue monopolistic policies.

I also think GM can use a new CEO - one with proven "turnaround" skills and track record - a guy like Gerstner who can tell the UAW what the labor costs are going to be - take it or there will be no jobs at all. I think that approach is viable because, at this point, the shareholders don't have much more to lose.

Getting total labor costs (including all pay and benefits for both employees and retirees) down to a competitive level is the only way the big three can survive in the long run, but some could also use fresh management.

Duke

[Chuck S.]

Re: The beginning of the end?

...I think that approach is viable because, at this point, the shareholders don't have much more to lose...

Quite right.

I bought in (lots of shares; litte $ invested) when the stock price was around $9 a share, thinking there's no way GM could fail...the facilities would be worth that much if the worst happened (Chapter 7). When the stock price broke the chart, I was out of it faster than a speeding bullet with a little loss. I intended to wait and see what happened, and buy back in cheaper. It sure got cheaper...it finally bottomed at $1.70.

My bud and I had been discussing this potential investment, and he made a call to his broker to see if he could get any insight into the estimated value of GM's assets. The response was a shocker...the marketeers were valuing the assets/debt at parity. That means, if the stock price goes to zero, so will your investment...and there will be plenty of debtors in line ahead of you too.

Now that another layer of debt is likely to be added, with the taxpayers being first in line for repayment, and since no dividend is likely to paid for a long time, common stock in GM will make no sense for a long time IMO. Investment in GM at this point could mean a tremendous future windfall when/if they get their act together, but right now, I can't risk capital at such long odds. If you already own it, it makes no sense to sell it either; worst case, the certificates will make interesting conversation, like Confederate money.

[Grant M.]

Re: The beginning of the end?

A colleague here at work (not a North American car guy--Prius owner, but he really likes the new Malibu) made an interesting observation about GM's predicament and in particular, the 'total' labour cost disadvantage they face in comparison to the 'transplants':

If GM, with a 30% or so labour cost disadvantage could still manage to retain its status (last year, anyway) as the world's largest automobile producer (Yeah, I know--through 0% financing and dealer/manufacturer cash back incentives that are part of the deficit they're facing), wouldn't they be a force in the marketplace to reckon with if they got those costs down to par with the transplants and could therefore afford to reduce prices (legitimately) and invest in R & D, new products and modernized facilities?

To me it's a valid point; getting there (ie: reducing the total labour costs) will be no mean feat, but the possibilities for GM's future if they can accomplish would be interesting indeed...

grant

[Clem Z.]

Re: The beginning of the end?

A colleague here at work (not a North American car guy--Prius owner, but he really likes the new Malibu) made an interesting observation about GM's predicament and in particular, the 'total' labour cost disadvantage they face in comparison to the 'transplants':

If GM, with a 30% or so labour cost disadvantage could still manage to retain its status (last year, anyway) as the world's largest automobile producer (Yeah, I know--through 0% financing and dealer/manufacturer cash back incentives that are part of the deficit they're facing), wouldn't they be a force in the marketplace to reckon with if they got those costs down to par with the transplants and could therefore afford to reduce prices (legitimately) and invest in R & D, new products and modernized facilities?

To me it's a valid point; getting there (ie: reducing the total labour costs) will be no mean feat, but the possibilities for GM's future if they can accomplish would be interesting indeed...

grant

they "out produced" toyota but there are still 2007 and 2008 GM cars that are unsold on dealers lots including our favorite car the corvette as many as 8000 + corvettes counting the 2009s

[Henry S.]

Re: The beginning of the end?

George,

I agree, it seems the union bashers are out in full force. Just a thought, I guess most were asleep or just not paying attention when the banking industry came to Washington with it's hand out.

Until we have FAIR TRADE laws instead of FREE TRADE the U.S. will always be fighting with one hand tied behind it's back. Many foreigners want to buy American automobile but because of the trade laws their countries have they can't. Our #1 export is cardboard to China so they can send more crap our way and now they are saying they don't want that.

The AIW has already taken some concessions but there is ALWAYS more to give. How about putting the retiree benefits, OOPS sorry, I mean LEGACY costs on the government's dime. Since the retirees, DAMN IT sorry, I mean legaciers (I guess that's what they would be called) are getting paid so much in retirement, CRAP, sorry, I mean LEGACY costs maybe we could give them a cut in retirement, OHHH, I mean Legacy earnings to what some of our politicians or government employees are making. And of course put them on the same health care plan as government workers also.

There you go, that $73 an hour those BAST**D AUTOWORKERS are getting is cut down to the same as foreign autoworkers around $48-50 and EVERYBODY is HAPPY!! Except of course those "good ole boy" Senators from the South that are hell bent on breaking the unions. Since they just like free handouts to the NON-UNION plants.

Then again another option would be to just cut off all the retirees pension and benefits, CRAP CRAP CRAP, I MEAN LEGACY costs altogether , send them a gun with one bullet for Christmas along with a letter thanking them for their service.