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General Motors Corp. (GM) said it will notify 1,100 U.S. dealers on Friday that their franchise agreements will not be renewed. The cuts will come just a day after Chrysler announced it was dropping 789 of its roughly 3,200 dealerships by around June 9.
GM's dealer cuts are part of the company's plan announced last month to cut more than 2,600 dealers by 2010. The remaining cuts will come from closed Saturn and Hummer dealers, along with 400 dealers that the company expects will close voluntarily. Another 500 would be consolidated into other dealerships.
We question why GM is doing this before filing for bankruptcy. Chrysler is operating under bankruptcy protection, so it is likely to have an easier time tearing up its franchise agreements with its dealers than GM will.
GM plans to import its own China-made cars beginning in 2011, which would make it the first major automaker to import Chinese cars to the U.S. market. GM is planning to sell around 17,000 China-made vehicles in the U.S. starting in 2011. It hopes to triple that number to 51,000 by 2014. Even with sales of 51,000 vehicles annually, this will account for only 1.6 percent of GM’s estimated 3.1 million total sales in 2014.
Many of the cars likely to be imported are small cars like the South Korean-built Chevrolet Spark. Part of the reason for the small cars will be to meet the ever-increasing CAFE standards recently set by lawmakers. Importing vehicles built in China will also help decrease GM’s manufacturing costs as it approaches the June 1 deadline set by the U.S. government to restructure its operations and decrease its debt.
In addition, the company is planning to sharply increase sales of cars it manufactures in Mexico and South Korea. Mexico-manufactured vehicle sales would go from 317,763 units in 2010 to 501,316 in 2014, and South Korean-made cars would more than quadruple from 36,967 in 2010 to 157,126 in 2014.
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> The only thing GM really needs to outsource is their management.
> If GM begins making cars in China and importing them into the US,
> doesn't that make Honda's statement that the Ohio-made Accord is
> more American than many of the domestics?
>
> You'd think with the UAW owning, what, 55% of GM that they'd actually
> want to make cars here. Even the UAW appears to be selling out.
And the actor Mickey Rooney in the Twilight Zone below begged: “…Please make me small…I’ll never ask for anything again!!…”
www.youtube.com/watch?...
See much more news, analysis and satire on the entire auto bailout matter at our website above: carczarconsulting.com
The UAW may try to stop importation, but -- in the end -- they will be unable to do so. The union cast its lot in with the U.S. government, the selfsame government that sent its Sec'y of State to China earlier this year to beg that nation to keep buying US gov't securities so that the dollar would not fall. The union may speak loudly with its membership, all of whom are voters, but the Chinese speak even louder with their ability to cause a currency crisis.
As an aside, China may be nominally communist, but -- in practice -- it is not. Indeed, starting a business in China is easier than in some parts of the United States. While citizens have very little freedom of expression and are forced at gun-point to limit their family size (e.g. the one-child policy), their economic freedom is tremendous.
They are steeling us all blind and putting on a good media blitz and pointing the finger at the American people. You and me! Social security has been fleeced by our government and if they had to repay all the IOU's for the money that they have taken out of it this country would probably be bankrupt.
Just like general motors, when they negotiated the contracts with the unions they had the money to pay for what they negotiated but instead of funding their obligations they squandered the money from big fat bonuses and pay for to themselves to investments in fiat that cost them $5 billion to walk away with nothing. They took more money and invested in Mexico,Korea,china.Ger... and many more and now that they have taken that money and jobs from here now they want to file bankruptcy here and will not include their foreign assets in the bankruptcy. And guess who will let them our very same government that is supposed to serve and protect this country.
This same government also passed a law years back stating that negotiated contracts had to be fully funded, once negotiated they also let GM take money out of a supposedly over funded pension fund to which is now short by roughly $20 billion more or less and if GM turns over this pension fund the American are again on the hook all while GM hid money overseas and is playing us all for suckers.
Our government is way to fat with many more benefits and better pay than the Union workers. Our government gives themselves their own pay raises, raises our taxes and uses our tax money to ship our jobs overseas. Give all big Banks management bailout's for squandering investors money and yet these crooks never go to jail.
People you need to wake up and don't let these over paid CEO's and rich government officials go hand and hand and kill this country together.
Don't blame the unions as they have always had this countries people's best interest's at heart. They are the true fighters for your benefits,pay,insurance, work rules and conditions that you work in. Give it some thought and you might just agree.
I can keep going on and on because I do pay attention to what is going on and I don't let these fat cats think for me or tell me what's true and what's not. Just keep an open mind and an eye and ear on just what's going on and you will be amazed and very disappointed in big government and big business that only have their own interest's at hand because you and I are nothing to them other then cash cows to fleece and take advantage of.
Our countries people again really need to wake up or you might just as well change the USA's name to territories of New Mexico because we will be living in the next Mexico.
They are steeling us all blind and putting on a good media blitz and pointing the finger at the American people. You and me! Social security has been fleeced by our government and if they had to repay all the IOU's for the money that they have taken out of it this country would probably be bankrupt.
Just like general motors, when they negotiated the contracts with the unions they had the money to pay for what they negotiated but instead of funding their obligations they squandered the money from big fat bonuses and pay for to themselves to investments in fiat that cost them $5 billion to walk away with nothing. They took more money and invested in Mexico,Korea,china.Ger... and many more and now that they have taken that money and jobs from here now they want to file bankruptcy here and will not include their foreign assets in the bankruptcy. And guess who will let them our very same government that is supposed to serve and protect this country.
This same government also passed a law years back stating that negotiated contracts had to be fully funded, once negotiated they also let GM take money out of a supposedly over funded pension fund to which is now short by roughly $20 billion more or less and if GM turns over this pension fund the American are again on the hook all while GM hid money overseas and is playing us all for suckers.
Our government is way to fat with many more benefits and better pay than the Union workers. Our government gives themselves their own pay raises, raises our taxes and uses our tax money to ship our jobs overseas. Give all big Banks management bailout's for squandering investors money and yet these crooks never go to jail.
People you need to wake up and don't let these over paid CEO's and rich government officials go hand and hand and kill this country together.
Don't blame the unions as they have always had this countries people's best interest's at heart. They are the true fighters for your benefits,pay,insurance, work rules and conditions that you work in. Give it some thought and you might just agree.
I can keep going on and on because I do pay attention to what is going on and I don't let these fat cats think for me or tell me what's true and what's not. Just keep an open mind and an eye and ear on just what's going on and you will be amazed and very disappointed in big government and big business that only have their own interest's at hand because you and I are nothing to them other then cash cows to fleece and take advantage of.
Our countries people again really need to wake up or you might just as well change the USA's name to territories of New Mexico because we will be living in the next Mexico.
They are steeling us all blind and putting on a good media blitz and pointing the finger at the American people. You and me! Social security has been fleeced by our government and if they had to repay all the IOU's for the money that they have taken out of it this country would probably be bankrupt.
Just like general motors, when they negotiated the contracts with the unions they had the money to pay for what they negotiated but instead of funding their obligations they squandered the money from big fat bonuses and pay for to themselves to investments in fiat that cost them $5 billion to walk away with nothing. They took more money and invested in Mexico,Korea,china.Ger... and many more and now that they have taken that money and jobs from here now they want to file bankruptcy here and will not include their foreign assets in the bankruptcy. And guess who will let them our very same government that is supposed to serve and protect this country.
This same government also passed a law years back stating that negotiated contracts had to be fully funded, once negotiated they also let GM take money out of a supposedly over funded pension fund to which is now short by roughly $20 billion more or less and if GM turns over this pension fund the American are again on the hook all while GM hid money overseas and is playing us all for suckers.
Our government is way to fat with many more benefits and better pay than the Union workers. Our government gives themselves their own pay raises, raises our taxes and uses our tax money to ship our jobs overseas. Give all big Banks management bailout's for squandering investors money and yet these crooks never go to jail.
People you need to wake up and don't let these over paid CEO's and rich government officials go hand and hand and kill this country together.
Don't blame the unions as they have always had this countries people's best interest's at heart. They are the true fighters for your benefits,pay,insurance, work rules and conditions that you work in. Give it some thought and you might just agree.
I can keep going on and on because I do pay attention to what is going on and I don't let these fat cats think for me or tell me what's true and what's not. Just keep an open mind and an eye and ear on just what's going on and you will be amazed and very disappointed in big government and big business that only have their own interest's at hand because you and I are nothing to them other then cash cows to fleece and take advantage of.
Our countries people again really need to wake up or you might just as well change the USA's name to territories of New Mexico because we will be living in the next Mexico.
On May 15 04:34 PM User 410955 wrote:
> 60 minutes did an interview a while back regarding the GM Chinese
> made vehicles. The head of GM China related that these vehicles were
> for Chinese domestic consumption only The question was posed regarding
> exporting these Chinese made vehicles to the United States at some
> point in time....the answer provided was moot. I saw it then and
> am not surprised.....why would a company pay an employee a 60 dollar
> an hour wage and benefit package to produce a product when they can
> manufacture the same product overseas....ship it over here....and
> the only labor cost is a bowl of rice per day per employee without
> the militant union bullshit attitude that prevailed prior to this
> final awakening here. ..and the vehicle landson out shores at much
> less cost even when considering sending it over on a barge halfway
> around the globe? We lived too large for too long in this country
> and did not pay our dues....while the third world geared up to eat
> our lunch. It's here now...no going back.....we are going to look
> very poor and stupid while attempting to maintain a car industy.
> The folks we felt superior to have eaten our lunch.....and did it
> methodically. They will eventually have the Harleys and second homes......while
> we wonder about the bus of sloth that hit us. We deserve this....we
> begged for it. As for me....I made respectable wages during the good
> years and squirreled it away....for I saw too many idiots living
> large in an underserving way and predicted what was to transpire....and
> it came to pass. My neighbors lived beyond their means and thought
> that this was their American entitlement program...as for me.....I
> saved....not spent. It is good to be king! As for the fat cat executives
> at GM and other soon to be defunct entitities.....you have grown
> fat making very stupid decisions over the last two decades....you
> had ample time to develop a sensible business plan to avert this
> very foreseeable outcome....but you grew three and four chins on
> the links....and have exited or been terminated with millions of
> dollars of "unearned" income. Gm and the other two have gotten their
> just rewards....and I do not blame it all on the unions....they were
> greedy, stupid, and unrealistic for sure....protecting morons on
> a daily basis and securing Phd wages for those who can barely read
> and write and always want more...Management had not the balls to
> reign in the excess and bring the workforce to it's senses. But of
> course, management was too busy making bad decisions, approving poorly
> engineered vehicles, and taking home obscene pay, perks, and bonuses.
> So, both the blue collar and while collar legions in the U.S. auto
> industry have gotten their just deserts. I can remember that for
> years if one purchased an American made car this would entail going
> back to the dealer time after time to have the vehicle finished....for
> it left the factory half-built....but if you purchased a Japanese
> vehicle.....you might have a service related issue in the 200.000
> mile range....and the rest of the world is building them to that
> standard now....and the good news....our domestic vehicles are finally
> catching up.....funny how the American car industry finally gets
> it....after it is too late! In the end....one reaps the harvest one
> has sewn. America built high profit junk wheels for a long time....while
> the other world planned a better vehicle and saw how ripe we were
> for the taking. The only way to get out this situation is for American
> car manufacturers to bite the bullet.....engineer a superior vehicle
> while labor and management are willing to work for drastically reduced
> wages and benefits for a very long time...and realize that the global
> economy will forever prohibit what once was. Get use to it! It is
> over!
As for "free trade," it exists only in economics text books, virtually all trade is regulated to some degree. It is a myth. The question is how much regulation is closest to the right amount? The current trade imbalances are simply unsustainable, and so they will be self correcting to a certain degree. As for the notion that we in America, who still have a semblance of democracy, will simply sit back and watch our economic futures go down the tubes. . .I guess this will prove just how much democracy we really have in this country. That in a nutshell is the difference between our form of government and that enjoyed by the people of China. It is not a small difference.
I think we may see a collision between the unstoppable force (so called "free trade") and the immovable object (economic reality) pretty soon, certainly by the next presidential election cycle. As a practical matter, it is impossible for the previous status quo to return without major modification. Just a glance at this comment stream tells me that sparks will definitely fly.
I want American manufacturing.
GM wants low costs.
They will declare bankruptcy, void their labor contracts and make cars in China.
Then they will go bankrupt again.
The second one will not cost me 30 Gs.
On May 15 04:48 PM Thadeus Thornton III wrote:
> Well. . . I guess you got tha off your chest. Anything constructive
> to offer? A lot of innocent people are hurting over this. A gloating
> attitude help. And this is just the beginning. I guess folks like
> you like to see illegal immigrants and Chinese products here in the
> U.S. People like you have bought their kids into a bleak future.
> Yes there could have been more insight from the management at GM,
> Chrysler, etc. But it is far more complex than what you present in
> your bashing comment. Lighten up and try and support American Brands.
> You have no idea how much damage NAFTA and other unbalanced trade
> agreements affected hundreds of thousands of jobs in the last 20
> years. Folks from Japan, China, Germany and more are laughing at
> attitudes such as yours.
"
Don't blame the unions as they have always had this countries people's best interest's at heart. They are the true fighters for your benefits,pay,insurance, work rules and conditions that you work in. Give it some thought and you might just agree.
"
That was one of the best comments in this discussion, although he erred by posting it three times.
For the record, I'm a capitalist, although I am concerned about reverting to a barbaric form of capitalism such as existed in the 1800's early 1900's: basically, existed everywhere and forever until the USA achieved superpower status after WWII.
Yes, give that some thought, folks, because it has been only very recently since one could genuinely say that capitalism is the best system there is... That has been true only post WWII but, as things are progressing, civil society will continue to deteriorate as long as the benefits accrue only to the top 10% or so which will open the door to a TRUE politician of CHANGE who will tell the populace, it can get better than this. You can have a guaranteed job, housing, health care, and retirement pension/plan so long as you "worship" at the altar of Marx, and not Adam Smith.
You don't think it can happen? It has happened before, and it most certainly will happen again. When the economic system which purports to have been the "best", can no longer provide a decent job, housing, health care, and retirement pension/plan to the masses of the working/middle class do you think the masses will waste any thoughts about Adam Smith and his "theories" of private ownership of capital? Think again.
Personally, I don't think the American Oligarchy, or capitalist ruling class of the USA will be like the capitalists which Lenin described: "The capitalist will sell the rope used to hang him." Ok, honestly, it is my hope...
Definition for those who don't understand what a keiretsu is from ask.com:
" In corporate culture, keiretsu refers to a uniquely Japanese form of corporate organization. A keiretsu is a grouping or family of affiliated companies that form a tight-knit alliance to work toward each other's mutual success. The keiretsu system is also based on an intimate partnership between government and businesses. It can best be understood as the intricate web of relationships that links banks, manufacturers, suppliers, and distributors with the Japanese government".
As a Buyer - I have met with suppliers located here in the US that have formed joint ventures with keiretsu companies. They are not allowed to sell parts to OEM's that operate outside of the keiretsu.
On May 16 11:53 AM not so dumb blond wrote:
> It is obvious to everyone except the UAW that the unrealistically
> high compensation terms of the GM union contracts are killing that
> company. The UAW should give some thought to what happened to the
> Ladies Garment Worker's Union. Anyone under the age of 40 likely
> never heard of this union. That's my point!
Me...I'll just work an extra few years to pay the loans off.
On May 15 04:34 PM User 410955 wrote:
> 60 minutes did an interview a while back regarding the GM Chinese
> made vehicles. The head of GM China related that these vehicles were
> for Chinese domestic consumption only The question was posed regarding
> exporting these Chinese made vehicles to the United States at some
> point in time....the answer provided was moot. I saw it then and
> am not surprised.....why would a company pay an employee a 60 dollar
> an hour wage and benefit package to produce a product when they can
> manufacture the same product overseas....ship it over here....and
> the only labor cost is a bowl of rice per day per employee without
> the militant union bullshit attitude that prevailed prior to this
> final awakening here. ..and the vehicle landson out shores at much
> less cost even when considering sending it over on a barge halfway
> around the globe? We lived too large for too long in this country
> and did not pay our dues....while the third world geared up to eat
> our lunch. It's here now...no going back.....we are going to look
> very poor and stupid while attempting to maintain a car industy.
> The folks we felt superior to have eaten our lunch.....and did it
> methodically. They will eventually have the Harleys and second homes......while
> we wonder about the bus of sloth that hit us. We deserve this....we
> begged for it. As for me....I made respectable wages during the good
> years and squirreled it away....for I saw too many idiots living
> large in an underserving way and predicted what was to transpire....and
> it came to pass. My neighbors lived beyond their means and thought
> that this was their American entitlement program...as for me.....I
> saved....not spent. It is good to be king! As for the fat cat executives
> at GM and other soon to be defunct entitities.....you have grown
> fat making very stupid decisions over the last two decades....you
> had ample time to develop a sensible business plan to avert this
> very foreseeable outcome....but you grew three and four chins on
> the links....and have exited or been terminated with millions of
> dollars of "unearned" income. Gm and the other two have gotten their
> just rewards....and I do not blame it all on the unions....they were
> greedy, stupid, and unrealistic for sure....protecting morons on
> a daily basis and securing Phd wages for those who can barely read
> and write and always want more...Management had not the balls to
> reign in the excess and bring the workforce to it's senses. But of
> course, management was too busy making bad decisions, approving poorly
> engineered vehicles, and taking home obscene pay, perks, and bonuses.
> So, both the blue collar and while collar legions in the U.S. auto
> industry have gotten their just deserts. I can remember that for
> years if one purchased an American made car this would entail going
> back to the dealer time after time to have the vehicle finished....for
> it left the factory half-built....but if you purchased a Japanese
> vehicle.....you might have a service related issue in the 200.000
> mile range....and the rest of the world is building them to that
> standard now....and the good news....our domestic vehicles are finally
> catching up.....funny how the American car industry finally gets
> it....after it is too late! In the end....one reaps the harvest one
> has sewn. America built high profit junk wheels for a long time....while
> the other world planned a better vehicle and saw how ripe we were
> for the taking. The only way to get out this situation is for American
> car manufacturers to bite the bullet.....engineer a superior vehicle
> while labor and management are willing to work for drastically reduced
> wages and benefits for a very long time...and realize that the global
> economy will forever prohibit what once was. Get use to it! It is
> over!
The Govt's HIDDEN justification for bailing out GM: GM's pensions are grossly underfunded. Should GM fail, the US government and will be on the hook for billions to pay the bill thru the Pension Benefit Guarantee Corp (PBGC). The Govt doesnt want to have to bailout PBGC, so they keep GM alive on life support.
MORAL HAZARD POINTS:
1. Before the bailout the avg UAW workers cost $70 per hour in total costs, ( appx $34 per hour in wages the rest in healthcare and retirement benefits). Why are we saving such overpaid jobs?
2. They want to save the GM workers pensions, when the average american chump has no pension and has just seen his 401K plummet by 30+ percent.
3. The government wants to save the lavish health care benefits of UAW workers and retirees - in an a country where 25% of americans have NO health insurance.
4. There are certain sectors that we can't afford to let fail (electric utilities, telecom, banking) The auto industry is non-essential to the fiscal health of our country.
Union attitudes became such that one could act within the workplace with impunity and produce inferior work without fear of ramifications. The whole system got out of control. The problem is that all failed to act when the writing was on the wall for so long. If one calculates the average UAW wage and benefit package...it translates to app. 145K / yr without overtime. This would make any autoworker a weathy person by age 50 if they chose to save and plan for an early retirement. My total package at the industry I worked at amounted to much less....I saved....I got downsized....lost my job.....but still am able to retire soon.....with no defined pension.....it got wiped out and the government pension guarantee fund will give me a pittance at age 65. If I had made the autoworkers wages coupled with their retirement plans and benefits....I would be a wealthy man at a relatively young age. One can debate the desparity between the wages of mangement and rank and file in the auto industry......and both were obscene considring the way both watched the industry go to hell and did nothing on either side of the fence. My beef is that folks with no post high school education that went onto the assembly lines and made those fabulous waged and benefits should not complain....they should have just save their pennies...for they would not have to worry today if they had. The ability for one to obtain wealth and comfortable retirement in this country without a high degee of education is a thing of the past. Working on the assembly line and strutting like you are "all that" is history. I see so many of my former subordinates scratching for a living now.....people who treated my like shit when the union ran the shop...but now they finally realize what their unskilled labor is worth in the real world.....and they wait on me a restaurants....change the oil in my foreign made care......and cannot disrespect me while on duty....they have finally found their place....and I know that because I saved...my interest checks are more than their are earning
working. Sorry to gloat....but I put up with so many of these punks for so many years....and had to bite my tongue......in the end....well, wash my windshield while your at it! Maybe if you live long enough for this country to turn things around and demand quality work and ambitious attitudes in the workplace....and keep things in the middle....no pigs in managment....no junk in the workforce....everyone working together and being thankful and realistice about what they have,,,,then maybe in about 60 years our descendents will have a better lifestyle than we can look forward to during our and our childrens lifetime.....the next two generations will be buried thanks to greedy / complacent management and unions that lost their true vision and purpose.
.
> For the record, I'm a capitalist, although I am concerned about reverting
> to a barbaric form of capitalism such as existed in the 1800's early
> 1900's: basically, existed everywhere and forever until the USA
> achieved superpower status after WWII.
During the 1800s, America's economy and the standard of living for the vast majority of Americans grew enormously, save for the war in the 1860s. Railroads were created, factories were built, and mines were dug. In short, America enlarged its productive capacity. Such capital investment led to real increases in the wages of America's workers. Oh, and, during this time, we didn't have a central bank to debase the currency, as Pres. Andrew Jackson had fought Nicholas Biddle and closed down the Bank of the United States.
P.S. Just because the state wasn't involved in "caring" for the marginalized didn't mean that institutions to do so were absent. Churches and civic leagues assisted the hungry and the orphaned.
> It is amazing that the Govt can withstand the moral hazard of bailing
> out GM.
>
> MORAL HAZARD POINTS:
> 1. Before the bailout the avg UAW workers cost $70 per hour in total
> costs, ( appx $34 per hour in wages the rest in healthcare and retirement
> benefits). Why are we saving such overpaid jobs?
Because the UAW, though less powerful than it was 30 years ago, is still a force to be reckoned with, particuarly in swing states in the Midwest.
> 4. There are certain sectors that we can't afford to let fail (electric
> utilities, telecom, banking) The auto industry is non-essential to
> the fiscal health of our country.
Here I disagree: government has no business selecting which sectors are "too big to fail." The U.S. Constitution doesn't give Congress or the President that power. Moreover, I wouldn't trust such worthies to make such a momentous decision because their choices would be dictated by political concerns, as explained above with the UAW example.
Elections are won in the margins. The UAW (much like other unions) know they only have to deliver 5-10% of the vote to swing elections and get paid handsomly by politicians. This game will continue until my first sentence in this comment is no longer true.
The bailouts just took down the curtain to reveal there is no wizard called true capitalism in America. I don't see people revolting, so this is what we got.