Quote :

"That market buys used cars."

That market buys used foreign cars.

[Edited on November 21, 2005 at 10:19 PM. Reason : -]

11/21/2005 10:17:53 PM

^um, ok

so what?

theyre still used

11/21/2005 10:21:54 PM

^wanna sell that new car to someone at some point? People would rather have one that had a decent resale value. Resale considerations influence new purchases.

[Edited on November 21, 2005 at 10:34 PM. Reason : -]

11/21/2005 10:31:14 PM

^^b/c before that market would even get to the new GM or used GM decision, they already decided to go foreign

[Edited on November 21, 2005 at 10:33 PM. Reason : .]

11/21/2005 10:32:59 PM

Problems with GM

Extremely high wages. Friend of mine from a while back works on one of the lines making $25/hour. He has no education past Highschool. He also gets full benefits for his whole family. The recent job cuts will affect him directly.

So why don't they just non unionize? Oh that would be illegal! The unions are corrupt as far as making fair deals with GM. They have so much power that at a snap of a finger everyone walks and GM looses like 10 million a day or something like that.

GM made the decision to cut it's losses that it's been having for years and take the war straight to the unions. Now the unions have to explain to 25,000 workers why they don't have jobs. In truth most of those jobs should never pay more than $18/hr. period. Not with the insane benefits they have. (that's about $25/hr w/o benefits).

GM is also restructuring. The benefits that are going out to management is also severance packages. You think that 25,000 workers are being laid off without management going too?

Next is the fact that GM has been hiring and forming design teams to fix the problems with their vehicles except most of these teams have one veteran and the rest are new hires some straight out of college who have good ideas, but don't know the market and difficulty of getting parts etc etc. The intricacies of the business.

Add to this the fact that there is a LOT of old management who doesn't like new ideas about business and having to change. New meets old, clashes happen and instead of changes happening like they should, shit like this builds up until it becomes critical.

However I complete agree with GM putting out trash of vehicles. Sure the Corvette is nice... it gets what 10mpg? Of course noone really drives a corvette as a daily driver unless they show it off.

GM also has made little to no efforts to reduce pollution or create vehicles that use LESS gas. This could go to so many other levels.... but the fact is GM has a shitty business model from the 50's, it's now doing something about it and will re-emerge a more robust company with less leeches on it.

11/21/2005 11:11:04 PM

if it reemerges that is.

11/21/2005 11:16:30 PM

Quote :

"Sure the Corvette is nice... it gets what 10mpg?"

nope. More like 22.

11/21/2005 11:27:59 PM

EPA puts the Corvette at 18 city and 30 highway. GM is well within CAFE compliance for fuel efficiency.

11/21/2005 11:45:29 PM

Quote :

"However I complete agree with GM putting out trash of vehicles. "

This is the only thing that matters. If they made better cars, they could raise prices to match the japs. Unfortunately, they dug themselves into a quality hole, and they have been backed into blaming everything under the sun for their problems.

11/22/2005 12:18:17 AM

yep, its not like there aren't companies out there that can afford to pay well for manufacturing jobs and offer good benefits/pensions

11/22/2005 12:22:04 AM

What's bad for GM is the fact that even once those 30,000 workers are gone, they will probably still be paying them severance for a couple years.

I think the stock dipped because this looks more like partially going out of business than "restructuring" or "cost-cutting".

I think the best thing GM could do is trim the number of models it makes (and probably the number of brands). I think Toyota sells 14 cars. GM should shoot for about the same.

11/22/2005 12:33:11 AM

i think this passage pretty much sums up GM's real problems:

Quote :

"Saturn once billed itself as "a different kind of company" making "a different kind of car," but after a promising start, Saturn let the car's look and technology get stale. New models were finally introduced, but to mixed results. The Ion production line was shut down for at least 15 weeks in 2004 as sales failed to meet the company's expectations."

that was from cnn.com btw

they've gotten stale and can't compete.

if they'd kept up w/ their competitors and not stopped innovating and made decent cars like toyota, then they could pay these wages and we wouldnt be talking about this. bottom line: GM fucked themselves.

V yeah, china is going to fuck it all up for the us and japan

[Edited on November 22, 2005 at 12:57 AM. Reason : .]

11/22/2005 12:53:15 AM

in 10 years, China will be the worlds biggest automaker, and they'll crank out cheap cars the way they crank out those damn textiles. Then American car companies will really be fucked.

Robots are our last hope, because we can't compete with those damn chinamen working for 100 bucks a month.

[Edited on November 22, 2005 at 1:00 AM. Reason : 1]

11/22/2005 12:55:07 AM

except even the initial investment required for robots is outweighed by a chinamen working for $100/month

11/23/2005 12:34:03 AM

i highly doubt china will have the biggest automaker in 10 years. Japan has been kicking US ass, and it still isn't the biggest. China cannot even make a good car, yet.

11/23/2005 12:39:30 AM

^you have no vision. Japan has to play by similar labor rules to what we do. In China the labor force is dirt cheap, giving them a huge advantage. And the government is poised to dump a shitload of money into China's auto industry.

^^Eh, Japs get like 30 times more productivity out of their workers than chinamen because of automated systems and highly refined production lines.


Yeah, I know these 2 statements contradict themselves, but in 10 years those Chinamen will have automated the assembly lines to the point where they can crank out cars significantly faster and cheaper than the US or Japan.

[Edited on November 23, 2005 at 12:44 AM. Reason : 1]

11/23/2005 12:40:35 AM

i foresee trade restrictions if that ever happens. I don't think it will in 10 years thats for sure

11/23/2005 12:52:14 AM

Yeah, that wouldn't surprise me. I would expect all of our patriotic rednecks to refuse to buy Chinese cars as a way of "fighting terrorism".

China is already offering tax breaks and financial backing to its auto companies that sell overseas.


PS, the world is bigger than just America. China has 1.3 billion people, and if they continue to grow at the pace they are growing, some of them might want cars.

[Edited on November 23, 2005 at 1:00 AM. Reason : 1]

11/23/2005 12:58:37 AM

^^^
Yeah, as if "China is going to own us all" is "vision." Only every brainless pundit in the world spouts that off as if it were the biblical. You have no sense about what it takes to dominate the car industry.

"cranking out cars" is exactly what the US is doing and is exactly why the US is losing. The most important thing is to make a quality product. It takes a long time to even learn how to build a good car, and it takes an even longer time to sell the public on your quality.

Look at korean car manufacturers, for example. They have been around for a long time and are just starting to convince people that they make quality cars. It took way more than 10 years to do that.

Furthermore, you act as if the costs in china will stay the same. It's just like korea -- the more successful you are, the higher your cost of living, and the less your competitive advantage on price.

[Edited on November 23, 2005 at 1:05 AM. Reason : fsd]

11/23/2005 1:03:25 AM

nail on the head except for the whole costs thing (what with communism and all)

[Edited on November 23, 2005 at 1:11 AM. Reason : .]

11/23/2005 1:11:22 AM

A quality product is great, but its not the only thing that sells cars. Competitive pricing goes a long way, and in that respect China will have a big advantage.

It took Korean automakers less than 10 years to gain a foothold in the auto industry. It'll probably take China less than 5.

You act like China is on the same playing field as Korea. They are not. Chinese automakers have the backing of a government that is thousands of times richer and more powerful. They will be a force to be reckoned with in the years to come if they decide to throw their weight into the industry.

11/23/2005 1:14:32 AM

Quote :

"I would expect all of our patriotic rednecks to refuse to buy Chinese cars as a way of "fighting terrorism"."

btw. there is nothing wrong with refusing to buy chinese cars. there are many millions of jobs in this country that work in and around the auto industry, I'd say many people would like to keep those jobs here. its not xenophobic, its looking out for oneself and neighbor.

11/23/2005 1:20:23 AM

fuck that, it contributes to the complacency and inferiority of the American auto industry.

What the US auto industry needs is a swift kick in the ass to get it back on track, not some form of patriotic welfare.

11/23/2005 1:22:48 AM

Quote :

"A quality product is great, but its not the only thing that sells cars. Competitive pricing goes a long way, and in that respect China will have a big advantage. "

You are wrong. American companies started to lose ground when they lost their reputation for quality. They are playing and losing the pricing game now because of it. No company wants prices to go down, and if a company does base their business on continually lowering prices, they will lose in the long run -- just ask GM, Ford, and Chevy.

Quote :

" It took Korean automakers less than 10 years to gain a foothold in the auto industry. It'll probably take China less than 5. "

Except that Korean manufacturers had been building cars for 30 years or more. It took them a long time to gain the expertise to build competitive cars. In fact, they still have to get motors from japan. The same goes for Japan, actually. They were building cars for a long long time before they were able to make the move internationally.

5 years? Clearly you are an idiot. How long does it take even build a car factory? What distribution network does China have within their own country and abroad? Marketing? Industry expertise? It takes a hell of a lot longer than 5 years to get these things in place. Have you actually worked in the real world? Do you have any idea of how long it takes for big things like this to happen?

Quote :

"You act like China is on the same playing field as Korea. They are not. Chinese automakers have the backing of a government that is thousands of times richer and more powerful."

Wow, more unadulterated BS. Last I checked, Japan was more powerful and richer than China, they're the best in the industry, they've got way more experience than china, and they still aren't number 1, yet.

Furthermore, do you care to explain how china being "richer and more powerful" has anything do do with how their car manufacturers can successfully compete in the car industry?

Never mind the fact that chinese car manufacturers with the help of the gov are not richer than korean automakers. Never mind the fact that chinese makers are very weak in the car market and have very little power to make deals go their way.

You act as if chinese automakers will win by having dollars (that dont exist) thrown at them. China will not be able to buy the expertise they need to compete. It takes time and experience under the best conditions, and you haven't even considered how American, European, Korean, and Japanese automakers would adapt over the same period.

For example, Japan is the biggest investor china and is the furthest along in terms of shifting car manufacturing over there. In 10 years time, what makes you think they won't be able to compete against chinese manufacturer on their own terms? Afterall, they did it to the united states.

Quote :

"They will be a force to be reckoned with in the years to come if they decide to throw their weight into the industry."

[insert vague prediction about how china will rule] -- you can't get more platitudinous than that.


[Edited on November 23, 2005 at 1:52 AM. Reason : sdf]

11/23/2005 1:51:01 AM

aha, you're trying to turn this into a soapbox thread, complete with the lame repetition and insults.

I could easily refute you line for line, but I'm too lazy.

ps, take an economics course, fag.

11/23/2005 2:04:56 AM

Anybody seen that new Buick Lacerne commercial? I'm impressed by any car that preheats the windshield washer fluid. Hot shit! Just make sure you ain't got a chip in the glass or you could destroy your windshield.

BTW I will agree some of their previous cars were bland crap, but I think they are improving quite a bit. Obviously the Vette is the ultimate car in GM's fleet, but they have some pretty good newer offerings. The LaCrosse is a LOT better than the Buick LeSabre and Century it replaced. The G6 is a completely different car than the damn Grand Am it replaced. The GTO is a nice mix of power and comfort (though they need to look at its fuel economy, which is shit compared to the Vette) and the new Impala SS is quite a performer for a family sized car.

[Edited on November 23, 2005 at 6:48 AM. Reason : ]

11/23/2005 6:44:23 AM

Quote :

"I would expect all of our patriotic rednecks to refuse to buy Chinese cars as a way of "fighting terrorism"."

That's a stretch. I would expect some of our more patriotic citizens to buy USA because it keeps jobs here in america. It has nothing to do with terrorism. The "Made in the U.S.A." labels (however misused) were designed to target a crowd that likes to purchase products made in the USA because they feel like they are helping to keep jobs in america. Those labels came out long before everyone in america started to blame terrorism for all their problems.

11/23/2005 9:16:38 AM

I do not think GM will be in the gutter for long. Have you seen some of the new cars they have coming out?

The Pontiac Solstice is pretty hot at a good price. I have seen a TON of those new Impalas driving around here in Nashville.

Speaking of Chinese cars, a few months ago I was in China and all of the cars I rode in did not have seat belts. There is no law requiring them, so they don't install them in the cars.

What is very strange is how big VW and GM are in China. The Buick brand is huge, there are Buicks everywhere in China.

11/23/2005 10:42:12 AM

Its still going to take GM a while to return (if ever) to former greatness.

Their biggest brand, Chevy, builds nothing but shit cars (excluding the Corvette). I'd never even consider the Impala, were I in that market. Its really nothing special. Pontiac is finally coming around with their G6, but from what I've heard its not selling as well as they'd hoped. The Solstice is nice, however its outclassed by its main competition the Mazda MX-5 (nee Miata). The new Buick LaCrosse is an improvement over previous Buicks, but its still a joke compared to any other car in its class. Saturn.....do I really have to say anything about Saturn? lol.

They're in trouble. Until their cars have decent handling (read newer technology) and interiors that don't scream of cheapness, I'll never consider one.

11/23/2005 1:38:38 PM

I read a rumor a while ago that GM was considering subcontracting all interior design duties to suppliers.

Did anything ever become of that?

11/23/2005 1:50:38 PM

I have no idea but its a step in the right direction.

I do know that GM made a deal with Honda and that all Saturn SUVs have Honda V6s. I think they're in some other models too, but I don't recall...

11/23/2005 1:57:51 PM

honestly their wages aren't that high. MOST unionized industrial factories have workers paid at around $25-27/hour. i think their bigger problem is like many, they have worked themselves into a position over time where the unions exert non-balanced power over the company. years of pussy footing around, giving in to demands, allowing poor performance, etc has made the risk of strike absolutely the control. i see the same in our plants. hell, it takes an act of congress to get a union worker fired here... even if he blew something up, slept all the time, and came in 3 hours late every day.

but definitely they are overpaying workers and having to compete with manufacturers with lower wage rates at home and abroad. add to that the generalized poor(er) quality of gm vehicles, less desirable aestheics, recent fuel concerns combined with their fleet of gas guzzling trucks and SUVs (previously big sellers), and supplier problems and poof! you have a failing company.

yeah sure the corvette is awesome (i'd sure like one) but it is a small % of gm sales. if they were to make a few more models like the cts and a few less like the aztec, i think they could be ok.

11/23/2005 2:02:38 PM

GM will be fine as long as they take appropriate measures to mitigate its losses.

- GM has around $19B in cash and short term investments.
- GM is planning to sell its controlling stake in GMAC, its financial arm, which will add another $15B to its reserves.
- As of last week's news, GM will downsize via various plant closures as job cuts
- GM can cut its dividend to increase the cash reserves.
- If gas prices continue to drop, GM will likely hit a home run with the GMT900 platform.

11/23/2005 3:40:47 PM

You must be an optimist.

Quote :

"- GM has around $19B in cash and short term investments."

That's misleading when you consider they have about $300 billion in debt (and their falling credit rating).

Quote :

"- GM is planning to sell its controlling stake in GMAC, its financial arm, which will add another $15B to its reserves."

Not sure this helps more than it hurts. The financing wing is pretty much a guaranteed winner. This would also probably lose some leverage in using financing to market their vehicles. The truth is they would be better off selling their stake in the automotive division.

Quote :

"- As of last week's news, GM will downsize via various plant closures as job cuts"

Shrinking it's way to profitability?

Quote :

"- GM can cut its dividend to increase the cash reserves."

And scare away investment.

Quote :

"- If gas prices continue to drop, GM will likely hit a home run with the GMT900 platform."

They're on the wrong side of that bet. I'd rather be selling gas sippers when the price of gasoline plummets than be selling gas guzzlers with even moderate gas prices. As Honda, Toyota, et al ramp up hybrid production, the price gap is going to close rapidly. Also, as high powered hybrids come out (like the 255 hp accord), they will lose their pussified, tree hugger stigma.

[Edited on November 23, 2005 at 4:37 PM. Reason : ?]

[Edited on November 23, 2005 at 4:40 PM. Reason : ?]

11/23/2005 4:34:03 PM

Quote :

" I could easily refute you line for line, but I'm too lazy. "

you misspelled "stupid and ignorant" as "lazy"

Quote :

" ps, take an economics course, fag. "

you first

[Edited on November 23, 2005 at 6:07 PM. Reason : throw in history, too]

11/23/2005 6:03:17 PM

Quote :

"Not sure this helps more than it hurts. The financing wing is pretty much a guaranteed winner. This would also probably lose some leverage in using financing to market their vehicles. The truth is they would be better off selling their stake in the automotive division."

I'll give you a hint.

of the near $300 Billion in debt, GMAC's share of it is about $260 Billion.

11/24/2005 9:31:29 PM

^that's misleading. they borrow that money to make loans that make money. the profits from the loans are greater than their profits on cars.

short of turning themselves into a bank and taking deposits, can you suggest a way how GMAC can exist?


[Edited on November 24, 2005 at 9:52 PM. Reason : l;']

11/24/2005 9:48:29 PM

^not when they have a bunch of it at 0% financing. The % of the 260 that is at 0% effectively reduces the profits of the higher rates by that %.

11/25/2005 8:30:26 PM

^they still come out better if 0% helps moves cars. besides, the financing IS, in fact, profitable. Not every loan is 0%.

11/26/2005 1:18:40 AM

^I didn't say it wasn't profitable. I just said that the 0% deals reduces profitability in that sector of their business. Basically, w/ the 0% (or even any fixed loans at less than the current federal funds rate) GM is caniballizing profits from financing to make the car manufacturing losses smaller.

I'll bet that offering the employee discount program was less harmful and less risky to the company than the 0% b/c they can adjust better for economic conditions or make variable loans.

11/26/2005 8:24:34 PM

GM: Shitty cars, worse management, and unions that have them by the balls.

11/26/2005 8:39:57 PM

^^ the original point was that GMAC is their most profitable business, despite 0% financing. That point still stands

11/27/2005 12:35:16 PM

yea the new vette is about as innovative as the 1960's engine design it uses.

11/27/2005 2:03:03 PM

not only are the employees overpaid but they're becoming unnecessary... GM now has one of the worlds most efficient automated manufacturing facilities... doesn't need thousands of line employees, aka shut down the old school lines and ramp up production on the automated ones. Really not hard to see. I can totally agree to busting up the unions. This last week (day after thanksgiving) I flew out of Greensboro to KC to pick up my new (used) ebay truck. Nothing construction wise was going on throughout the midwest because all the jobs were union, as I made my way back to the south around Tenn you start seeing people working again (on a "holiday weekend") this is a great example of the strengths of non-union labor vs unionized. I also liked all the signs along the way saying to use union labor and on a few construction sites real mean looking signs saying UNION LABOR ONLY.

12/1/2005 3:12:45 PM

i quit reading early but..

$27/hr is a lot for assembly line work

[Edited on December 1, 2005 at 4:21 PM. Reason : whereas $9/hr is pretty much like temp work..]

12/1/2005 4:20:45 PM