Comments on: GM Slashing Production In Fight To Survive

Cash-Starved Auto Giant Tries To Save Money As Future Of Federal Bailout Hangs In Balance

[toolmangler-2009]

I have a fable for you;
Once upon a time there was a planet that had a thriving civilization. the inhabitants were very intelligent but somewhat short sighted. The industrial moguls were a bit on the greedy side and only looked at the bottom line and not very far into the future. The peoples of this world worked hard and learned everything they could about the world around them. As they advanced, their need for power grew exponentially and they searched the entire planet for more resources of energy but one day, they realized that the reserves were exhausted and they became frantic because no more liquid energy could be found. At this same time, the planet was racked by devastating events like droughts, earthquakes, extreme temperature changes and all forms of illnesses. Water was in such short supply that individuals were being killed and the water recovered from their bodies was sold by robber barons and other gangs. You might ask what happened to the water and receive this answer. "the energy companies pumped it into the ground to take the place of the liquid fuels they were extracting so that the surface of the world would not crash into the gaping holes left when the world was sucked dry."

End Part (1)

[McHineguy]

There was a time in the last century when the U.S. was almost 100% self-sufficient.

...

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Posted by incog-nito at 08:39 PM : Nov 21, 2008

I understand. But Im not convinced. Maybe Ill think about it a while longer and we can discuss it when we meet here again. Im sure we will.

But I do know this: Tarifs will increse the cost of foreign cars. They wont decrease the cost of US cars and they wont make US cars better quality. Our immediate problem is that it takes so much labor to produce a car that we cant build small cars and make money. Big cars get bigger prices to pay for the labor. Tariffs arent part of that problem. The Big 3 is.

[jsd330]

hitoyu1. Ok so you work for the UAW, I don''t know which carmaker you work for, and if your still working, you show me where I am lying. And if you''re a member of the UAW shame on you for not supporting your union, Maybe you don''t like Gettlefinger, I don''t either.And You are right he forgot where he came from the plant floor (Kentucky Truck Plant), But just like Obama he was elected so you have to support him like it or not.

I hope if the big three doesn''t get the loan, that you still have a job.Of course you can suck up that 85% for a year if you have enough seniority.

[incog-nito]

Posted by machineguy at 08:18 PM : Nov 21, 2008

There was a time in the last century when the U.S. was almost 100% self-sufficient. It just happens to also be a time when the U.S. was the world''s largest exporter and creditor (vs. the largest importer and debtor as we are now).

Tariffs are not meant to exclude trade altogether, but to equalize the disparities in the currency and labor costs and working conditions and to, yes, protect domestic industries by neutralizing any advantage to outsourcing. In other words, it''s to even the competitive playing field a little. The supposed intent of free trade is that both sides benefit. Clearly it hasn''t worked out that way.

Yes, certain goods will cost more, but more and better paying jobs will be around. Keep in mind also that tariffs bring in revenues to the treasury, revenues that it would otherwise have to raise elsewhere in the form of taxes, basically shifting collection from taxes to tariffs. So for the average person everything evens out in the end, except that they''re more likely to be employed than not.

[McHineguy]

The real losers are not the Big 3. They''''re the American workers. Doesn''''t matter what the union or non-union wages are. As long as there''''s some guy in some country who can do the same for $5 a day with no benefits (and he''''d be doing very well), that is where the jobs will go.

Even if Detroit survives, they will have to gradually move more of their operations overseas to cut costs, JUST LIKE EVERY OTHER MANUFACTURING INDUSTRY that have done so already. Maybe first to Mexico if shipping costs are a concern. As long as free-trade policies are in effect, there is no way to stop this trend. In fact it''''s probably too late anyway.



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Posted by incog-nito at 07:59 PM : Nov 21, 2008

I think most of us agree on the problem. But I dont agree on the implied solution where we just dont let those foreigners sell things here. I dont agree because I dont think it can work. If we stop the imports and/or exports we need to become 100% self sufficient and I dont think we can do that. If we just try to raise their prices by taxing imports we cause them to do the same to us (their government taxes our goods and then pays us back with our money when we tax theirs). In the end, everything we buy costs so much more we have to raise wages for the automakers and everyone else. Wages keep going up, products get more expensive, Sounds like the 70''s all over again, 20% interest rates on new homes.

[legacyabq]

Posted by larry969411 at 08:03 PM : Nov 21, 2008
Posted by larry969411 at 08:03 PM : Nov 21, 2008

Yes! Yes!

Excellent post man!

[larry969411]

AIN''T IT THE TRUTH!!?
Joe Smith started the day
early having set his
alarm
clock
(MADE IN JAPAN )
for 6am.
While his
coffeepot
(MADE IN CHINA )
was perking, he shaved with his
electric razor
(MADE IN HONG KONG ).
He put on a
dress shirt
(MADE IN SRI LANKA ),
designer jeans
(MADE IN SINGAPORE )
and
tennis shoes
(MADE IN KOREA )
After cooking his breakfast in his new
electric skillet
(MADE IN INDIA )
he sat down with his
calculator
(MADE IN MEXICO )
to see how much he could spend today.
After setting his
watch
(MADE IN TAIWAN )
to the
radio
(MADE IN INDIA )
he got in his
car
(MADE IN GERMANY )
filled it with
GAS
(from Saudi Arabia )
and continued his search
for a good paying American job.
At the end
of yet another
discouraging
and
fruitless day
checking his
Computer
(Made In Malaysia ),
Joe decided to relax for a while.
He put on his
sandals
(MADE IN BRAZIL )
poured himself a glass of
wine
(MADE IN FRANCE )
and turned on his
TV
(MADE IN INDONESIA ),
and then wondered
why he can''t find
a good paying job
in the United States .

[incog-nito]

The real losers are not the Big 3. They''re the American workers. Doesn''t matter what the union or non-union wages are. As long as there''s some guy in some country who can do the same for $5 a day with no benefits (and he''d be doing very well), that is where the jobs will go.

Even if Detroit survives, they will have to gradually move more of their operations overseas to cut costs, JUST LIKE EVERY OTHER MANUFACTURING INDUSTRY that have done so already. Maybe first to Mexico if shipping costs are a concern. As long as free-trade policies are in effect, there is no way to stop this trend. In fact it''s probably too late anyway.

[McHineguy]

"Analysts believe the changes will bring the average cost of union labor to less than $50 an hour by 2010 or 2011, in line with Toyota Motor Corp.''s labor costs."

Read the entire article at: http://online.wsj.com/article/SB122723654355647077.html?mod=googlenews_wsj

Am I the only one who sees this as between $60,000 and $100,000 per year for putting cars together? The average wage in the US is about $42,000. No wonder the average guy cant afford to buy a new car anymore.

Wonder if the Big 3 management gets paid even more than the line workers. Let em fail until they realize they are one of us and need to make their cars affordable again.

[erniepf]

If GM''s salary setting committees don''t start slashing (in a big way) top management salaries, or rehire smart execs, this isn''t gonna help.

And there''s no way the American taxpayer should bail out biz failures, no matter how big or small.

Let ''em go bankrupt, and let someone else buy the business.

[forasongca]

The Japanese cars I''ve owned have lasted an average of 10 years and 200K miles.

The American cars I''ve owned have lasted an average of five years and 100K miles.

GM "slashing" its production is a good start. Slash it all the way to zero, and then start building cars that people outside Michigan are willing to buy, and you might have something there.

[toolmangler-2009]

Tool&Die $30.60 with cola at year 4 $33.56

Posted by rickwar at 07:34 PM : Nov 21, 2008




This Tool & Die Maker retired in ''04 at $15 per hour. Don''t tell me that slavery is dead. But I still managed to buy 2 homes, many car and trucks and Motorcycles In North Carolina. Its not what you''ve got but what you do with it.

[ramos937]

Cutting production will not help one bit. GM''s economic model will still be faulty whether it builds 1000 units or 500 units. It has been established that for every vehicle GM sells, it suffers an net loss. Let''s assume that GM loses $200 per vehicle sold. Example: Assume costs = $1200 per unit and it can only sell a unit for $1000. It then loses $200 per unit. This is true if GM sells 1000 units ($200,000 loss) or sells 500 units ($100,000 loss). Either way, GM loses money.

[McHineguy]

WHAT SHOULD THE WADGE BE FOR AUTO WORKERS?


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Posted by rxzyu at 06:53 PM : Nov 21, 2008

New Idea to think about. There should not be more than $1000 of labor in each automobile, with benefits, say $1500. That includes "idle laber" (job banks and union stewards. It doesnt matter how much the worker is paid, its how much it costs to make the car. High pay is ok, job banks are even ok, but you need to produce, and sell, more cars per worker if you get more money or non-working employees. Similar rules for management.

Why in the world would anyone (labor or management) believe they can get raises without bringing the cost of their cars down? American Automobiles are the only manufacturer in the world who dont believe they need to reduce prices each year.

Of course we could erect rade barriers and everyone could pay $8000 for the labor in their new car. Personally, Id drive one in from Mexico.

[rickwar]

You want to become profitable GM? Try this, sell a product for what is worth. There is no way any GM product (except the Corvette) should be over 30 Grand.

Just as Lee Iacocca stated years ago: Ameicans want a full size Imperial for the price of a K car.

Hasn''t changed much read top comment

[rickwar]

Posted by machineguy at 06:27 PM : Nov 21, 2008
That was 2003, FIVE YEARS AGO. Wonder what it is today.


Actually, my figures are from 2007-2008.

April 2008, press release Detroit news:

local UAWs were threatening to strike because they felt GM was asking for too many lower-paid positions at their plants. The more regimented deal identifies 16,000 positions that will soon be paid $14 per hour, which will save GM up to a half-billion dollars per year.

2008

Assembler $26.09 with cola at year 4 $28.85
Tool&Die $30.60 with cola at year 4 $33.56

Entry level wages start $14.00 Healthcare plan changed

Profit Sharing
The profit-sharing formula will continue unchanged.

[tincup356]

when it collapses the only share of blame Obama will have is that as a Senator he voted for the bailout.but being a member of congress whoever was in what offices for the last 40 years are to blame , for it was they who passed legislation that led to this and have played a part of being in position and power to have known what was going on but failed to act against such things.We can blame the lobby dollar and special interest groups for buying off legislators who by doing so have committed treason on the people of the country.Our government has spun out of control and has betrayed the people that voted them into office.

[makemyday2da]

Right on, gheemaster38! Personally, you couldn''t give me a GM car over my ''92 Mazda - and this is no exageration! I owned two ''vettes back in the 80''s and one of them literally began falling apart in my hands (steering wheel ''center'' piece). That was enough for me! They''re junk just like the rest of their autos! Shut ''um down until they''re ready to build a QUALITY product at an affordable price. Wait a minute - Honda and Toyota already do - AND built in the USA!

[gheemaster38]

You want to become profitable GM? Try this, sell a product for what is worth. There is no way any GM product (except the Corvette) should be over 30 Grand. I bought a new 06 that has been in the shop for mechanical failure at least 5 times including a transmission leak(Lemon law). Talking to others I found simular issues. Before this car I had a 85 Toyota Cressida my mother bought brand new and a year later gave to me that last over 20 years before I had to get the engine replaced due to CAM damage. The finally tally 385000 miles with 1 major engine replacement. Transmission still was good when I sold it. Think a Cadillac would last that long? H3LL NO! Reduce the price by 30% and sell them for what they are worth. Same with Ford and Chrysler! Layoffs wont work either

[mikezembill]

WHAT SHOULD THE WADGE BE FOR AUTO WORKERS?