GM

[TGRR]

Originally Posted by sycamore

I'm not the biggest union fan, but based on what I've read and seen, the UAW is not really much of a problem in this situation. The job bank thing...yeah, that seems ridiculous, but that's gone now, if I'm not mistaken. GM was more than willing to pay what the UAW wanted and could afford it at the time. The members work hard; they deserve to make good money...it's not like they're making bazillions.

And it's easy to pick on the costs that the unions bring when those similar costs are covered by the government in Japan, Germany, etc.

Problem is, the union was too stiff-necked to bend the necessary amount when things got tough.

In the end, they - collectively - were dumb, and Adam Smith's "invisible hand" has come along to punish them for their stupidity.

[sugarpop]

Originally Posted by TGRR

Problem is, the union was too stiff-necked to bend the necessary amount when things got tough.

In the end, they - collectively - were dumb, and Adam Smith's "invisible hand" has come along to punish them for their stupidity.

Here's the thing about unions "bending" though, why don't the friggin' people at the TOP give up something? Because they never do. It's always the workers who have to pay. Unions look out, as much as they can, for their workers. Yes, there was a problem with corruptness in unions some years ago, it probably still exists on some level, and that should be dealt with. But picking on workers who earn a fraction of what the executives at the top make is silly. A few executives earn more than many, many workers. If we really forced corporate America to be more equitable with the profits, the country would be much stronger. When unions "bend" and make concessions that cost their members, when those in power give up nothing, it makes the industry as a whole weaker. When times are hard, EVERYONE should have to give up something, NOT just the unions and the workers.

America was strongest when we had a strong middle class, because the middle class drives the economy. Without a strong middle class, we become much weaker as a country. We screwed ourselves when we allowed corporate America to ship all our manufacturing jobs overseas. A country that makes nothing is not a strong country. A country that has a majority of the people working for very little while a very few at the top own most of the wealth is not a strong country. That description usually refers to third world dictatorships. We are only now seeing the consequences of what has been coming for years, as a result of the actions of those in power. Until we make some serious changes, it will never get better.

But look at China and India. Now that they have our manufacturing base, they are developing a middle and upper middle class economy, and they have grown very strong. (China has even been sending their upper middle class people over here to buy houses.) I have been ranting about this for years, but no one wanted to listen to me, because you know, I'm just a "whacko communist leftie" so of course I must be stupid. But it has been my experience that those on the left tend to look more at long term consequences than those on the right. No offense meant to those on the right, (and of course it doesn't apply to everyone on the right, nor to everyone on the left, maybe it's just people in south Georgia ). And we need to look long term and not be so shortsighted.

GM was certainly shortsighted when they confiscated all those electric cars they built, and then demolished them. WTF? I mean really, couldn't they have just sold them to the people who had been leasing them and wanted to buy them? Why couldn't they have kept that ONE LINE of green cars? Imagine where they would be now. Probably not going completely bankrupt. It certainly wasn't the unions, or the workers, who made THAT genius decision. It was the executives.

[tw]

Originally Posted by lookout123

They should have gone into bankruptcy a long time ago. There is no news here.

Originally Posted by sycamore

I certainly don't want to see any of the Big 3 fail...but I just don't know if Chrysler or GM can really survive this.

Failing or the threat thereof means most employees don't lose their job AND screwed up top management gets dumped. Attack the reason for failure. It has not changed. 85% of all problems are directly traceable to top management. If that problem is not solved, then even employees and stockholders lose everything.

But again, need I post lessons from history including 1979 Chrysler and 1981 Ford. Or John Aker’s 1990s IBM? Or 1981 Xerox? Or Spindler's Apple Computer? Armstrong's AT&T? In every case, the threat of bankruptcy forced the only problem to finally be removed. In Apple's case, I am told it was four letter words cast upon the Board of Directors in a stockholder's meeting after Spindler was not removed. The same solution applies to GM and Chrysler's only problem.

How much damage has been done to GM because money games averted a 1991 bankruptcy? Or how many did not know that GM was only 4 hours away from bankruptcy in 1991? Those unsolved problems continued to fester today.

Originally Posted by TGRR

Dear GM:
Build cars that people want to buy. Get new engineers.

Originally Posted by TGRR

Does that include the actual wages of the hourly workers who build the car?

Again, need we list facts that were ignored in those posts? GM does not need new engineers. Just like during the Challenger (every engineer said, "Don't launch."), GM also does not have patriots in top management. GM engineers do not design GM cars. Innovations from GM engineers often appear in foreign products 10 and 20 years later. Even McPherson was a GM engineer. Of course, you know that McPherson struts appeared on superior imports 20 years later ... and GM still would not use it.

Benchmark for stifled innovation is the 70 Horsepower per liter engine which was developed in GM in 1975 and is still not in all GM cars today. Just another innovation that has been standard in patriotic (foreign) cars since 1992. But again, more GM engineer innovations stifled by MBAs - business school graduates who are taught and practice communism.

Let's see. Bill Clinton gave them $100 million in the early 1990s to build a hybrid. Since you are an informed American, then you also knew Ford, GM, and Chrysler had working hybrids ready to take to production before 2000 - the Prodigy, Precept, and ESX3. Where are these domestic hybrids? Stifle the engineers in the name of cost controls. Then get the ignorant to believe engineers designed that crap. Stifle innovation - an MBA solution made even easier when government no longer requires innovation. Wacko extremists even encouraged them to stifle innovations in fuel economy. And then blame the engineers? Are you that uninformed?

We all know George Jr hated innovation. After all, he was trained as an MBA. Therefore no more government pressure to liberate engineers – to permit innovation. MBAs also trashed their hybrids as any good MBA would do. Then blame the higher costs on unions - because so many Americans would believe that myth rather than first learn the facts and numbers.

Labor costs too high? Trivial labor costs per car were defined previously with numbers. I need not repeat what everyone should have known before having an opinion. But just like Saddam's WMDs, so many knew by ignoring numbers. Labor costs are trivial and do not explain the much higher costs of a GM product. Little hint on why you know labor costs are small. How many man-hours to assemble a car from scratch. You knew those man-hours times $50 per hour is how much?

If you do not know those numbers, then propagandist love you - because you can have an opinion and don't bother to first demand numbers.

The sooner GM and Chrysler admit bankruptcy will be the minute that both remove their #1 problem - Wagoner and Nardelli.

Meanwhile Ford has been far more American patriotic. Rumored fist fights between Nasser and William Clay until Nasser was removed. Only then could Ford engineers finally design a 70 horsepower per liter engine. As a result, Ford does not need government money just like two other patriotic companies do not - Honda and Toyota. Yes, all are losing money. But patriots are only leaking money. GM is the busted dam with some of the world's worst products and virtually nothing innovative in the pipeline. Just another paragraph chock full of facts that should have been known before having opinions.

Yes, Ford still has much work to become profitable. They have only been at it for most of the last 10 years. Undoing only four years of MBA management typically takes something closer to a decade. But then anyone with basic economic knowledge or who learned from history also knew that.

Jobs bank - the employee takes training, helps refine better manufacturing techniques, etc. Employees can be offered a transfer to another plant and fired if they do not take the transfer. Instead, GM would have everyone sit on their ass doing nothing. After all, when the boss is an MBA, then more training or fixing (optimizing) a temporarily halted assembly line only means more costs. Innovation, according to spread sheets, makes no profits. Jobs bank problem is only how management (people who despise innovation) makes it most destructive.

BTW, Saturn never made a profit. Now compare the myths to reality. Saturn was saddled with debt that increases the price of every car by $2000. To pay back that debt, Saturn needed a second assembly line. But GM MBAs said Saturn had to first make a profit. Classic Catch 22. Eventually, independent Saturn had to sell itself to the devil which forced Saturn to now sell renamed Chevy, Pontiac etc. Independent Saturn who could sell every car made but could never make a profit - due to GM's top management.

[xoxoxoBruce]

Originally Posted by TGRR

Does that include the actual wages of the hourly workers who build the car?

Yes, and their benefits.

Originally Posted by TGRR

Problem is, the union was too stiff-necked to bend the necessary amount when things got tough.

In the end, they - collectively - were dumb, and Adam Smith's "invisible hand" has come along to punish them for their stupidity.

Not true, the auto industry has always been cyclic with the economy and have had a number of lean times. Every time that happens the automakers pressure the unions to bend (givebacks), but then when business picks up the automakers don't resume the things they took back. That's why the unions are reluctant to give too much, it will be gone for good... while the management pocket millions.

By the way, much of what they are juggled on the spread sheets so they could pocket those millions should be going into the pension funds to cover their past agreements. Those agreements were made when the company was making billions and the deal was the people that made those billions happen were supposed to get a pension funded by part of the profits, not future profits, the profits they produced.

[TGRR]

Originally Posted by xoxoxoBruce

Yes, and their benefits.

Well, then, that's not actually outrageous, if you think about it.

Originally Posted by xoxoxoBruce

Not true, the auto industry has always been cyclic with the economy and have had a number of lean times. Every time that happens the automakers pressure the unions to bend (givebacks), but then when business picks up the automakers don't resume the things they took back.

1. This isn't a "lean time", it's a disaster.

2. During the bailout negotiations, the execs had agreed to taking a hit, IIRC. The UAW didn't. I am unsure why, or of the details.

[xoxoxoBruce]

Maybe because the UAW workers and the Toyota workers are only a buck or two apart.
The work rules that the Uaw negotiated generally fall into two categories.
One is safety related, trying to cut down on death and injury. Even when OSHA came about the union were their defacto in house agents because while OSHA had the clout, they didn't have the manpower.
The other category is trying to get more people employed by making overtime costly. A noble ambition stemming from the sweat shops they were formed to combat, but it probably has something to do with more people working means more dues collected and more power/prestige for the union.

Make no mistake the union's goals are honorable, but all union leadership is elected. They are in the end, politicians. Blaming the membership for the bad apples is like blaming everyone in Illinois for Blagojevich.

[TGRR]

Originally Posted by xoxoxoBruce

Maybe because the UAW workers and the Toyota workers are only a buck or two apart.
The work rules that the Uaw negotiated generally fall into two categories.
One is safety related, trying to cut down on death and injury. Even when OSHA came about the union were their defacto in house agents because while OSHA had the clout, they didn't have the manpower.
The other category is trying to get more people employed by making overtime costly. A noble ambition stemming from the sweat shops they were formed to combat, but it probably has something to do with more people working means more dues collected and more power/prestige for the union.

Make no mistake the union's goals are honorable, but all union leadership is elected. They are in the end, politicians. Blaming the membership for the bad apples is like blaming everyone in Illinois for Blagojevich.

I do blame Illinois for Blagojevich.

[TGRR]

Originally Posted by sugarpop

Here's the thing about unions "bending" though, why don't the friggin' people at the TOP give up something? Because they never do.

That's a very good point. However, in the case of the sought-after bailout, I believe mgmt DID give up something.

Am I remembering this correctly?

[tw]

Originally Posted by TGRR

That's a very good point. However, in the case of the sought-after bailout, I believe mgmt DID give up something.
Am I remembering this correctly?

Well yes. They gave up 30% and 50% per year salary increases. Salary increases that occurred even as GM was losing money and shorting the pension funds. Increases that occurred when GM then complained about legacy costs - because those same executives had shorted the pension fund to claim quarterly profits - and justify more executive bonuses.

Did they give up the private airplanes? No. Only a few. Why does GM need private airplanes? Because GM corporate executives are not permitted to fly on commercial airliners - that are too dangerous.

So rent a private jet when one is needed? That too would mean aanother perk denied elite executives.

So they gave up what? Did they take bonuses when the UAW gave up previous concessions? Of course. Did they surrender their hundred of $million golden parachutes? Of course not. They give up something when they surrender bonuses from past years that were never earned. UAW gave up concessions in years previous and GM executives took more bonuses.

There is only one reason why GM products are some of the worst in the world. There is good reason why the only part of GM that is productive was the part run by Louis Hughes. Hughes was then driven from GM because he was a car guy; not a bean counter. Rick Wagoner - whose history was to run only unprofitable operations - got promoted instead of Louis Hughes. What did he give up? They rewarded Wagoner for created quarterly losses.

Where are these concessions? He could not even tell Congress how much money GM would need from the government. What kind of leader is that? Typical of someone who also says GM has no internal problems; that GM's only problem is the economy. Any concession is for show. He sold off two(?) of six(?) private jets.

[TGRR]

Originally Posted by tw

Well yes. They gave up 30% and 50% per year salary increases. Salary increases that occurred even as GM was losing money and shorting the pension funds. Increases that occurred when GM then complained about legacy costs - because those same executives had shorted the pension fund to claim quarterly profits - and justify more executive bonuses.

Did they give up the private airplanes? No. Only a few. Why does GM need private airplanes? Because GM corporate executives are not permitted to fly on commercial airliners - that are too dangerous.

So rent a private jet when one is needed? That too would mean aanother perk denied elite executives.

So they gave up what? Did they take bonuses when the UAW gave up previous concessions? Of course. Did they surrender their hundred of $million golden parachutes? Of course not. They give up something when they surrender bonuses from past years that were never earned. UAW gave up concessions in years previous and GM executives took more bonuses.

There is only one reason why GM products are some of the worst in the world. There is good reason why the only part of GM that is productive was the part run by Louis Hughes. Hughes was then driven from GM because he was a car guy; not a bean counter. Rick Wagoner - whose history was to run only unprofitable operations - got promoted instead of Louis Hughes. What did he give up? They rewarded Wagoner for created quarterly losses.

Where are these concessions? He could not even tell Congress how much money GM would need from the government. What kind of leader is that? Typical of someone who also says GM has no internal problems; that GM's only problem is the economy. Any concession is for show. He sold off two(?) of six(?) private jets.

Dang. I just got spanked by TW.

[tw]

Originally Posted by TGRR

Dang. I just got spanked by TW.

No spanking. Between us, demonstrated is what GM is excellent at doing. They actually have some people believing their latest myths. Because Rick Wagoner stopped taking a salary, then he made concessions?

You have posted what is probably popular beliefs. GM would do this propaganda every five some years. They would say, "We were making bad cars but we have now got our act together." As if an act of contrition suddenly made a saint. But people would believe that myth. GM promoted that myth again only two years ago. Now is using that propaganda machine to promote a myth of stability.

Reality - GM is either as bad as I have stated - or worse. Popular press is now suggesting 'medicine' even worse than I thought necessary only six months ago. GM is falling like a rock faster than anyone here had predicted. Nothing short of wholesale management removal can even start a recovery.

So they surrendered a few private jets. Chrysler's Nardelli did not even take a salary cut. The arrogance and denial remains. And still some people praise their GM products. And still some always believe that myth of "but we are better now". Well, Chrysler would be doing the same thing if they had an equally effective propaganda machine. You have simply demonstrated how effective their propaganda machine really is.

[TGRR]

Originally Posted by tw

No spanking. Between us, demonstrated is what GM is excellent at doing. They actually have some people believing their latest myths. Because Rick Wagoner stopped taking a salary, then he made concessions?

You have posted what is probably popular beliefs. GM would do this propaganda every five some years. They would say, "We were making bad cars but we have now got our act together." As if an act of contrition suddenly made a saint. But people would believe that myth. GM promoted that myth again only two years ago. Now is using that propaganda machine to promote a myth of stability.

Reality - GM is either as bad as I have stated - or worse. Popular press is now suggesting 'medicine' even worse than I thought necessary only six months ago. GM is falling like a rock faster than anyone here had predicted. Nothing short of wholesale management removal can even start a recovery.

So they surrendered a few private jets. Chrysler's Nardelli did not even take a salary cut. The arrogance and denial remains. And still some people praise their GM products. And still some always believe that myth of "but we are better now". Well, Chrysler would be doing the same thing if they had an equally effective propaganda machine. You have simply demonstrated how effective their propaganda machine really is.

I checked. When you're right, you're right.