GM Slashes Benefits: One Bad Decision After Another 50 comments
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The GM (GM) story is, in my eyes, pathetic. How this company can unilaterally cut the pension benefits of its retirees is beyond me. How are retirees, some quite elderly, ever going to afford healthcare premiums on their own now? This man Rick Wagoner, once again, shows me he is the very bottom of the barrel, a rotten apple, amongst American CEOs. My beef is that it's easy for him to beat down old people after they have given the best years of their life to the company that has been paying him mega-millions for what. This guy, as smooth a salesman as he is, has done nothing but make one bad management decision after another. Now he intends to arbitrarily bankrupt thousands of America's finest elderly citizens. I ask again, for what purpose? I feel sick about this and hope he gets his ass sued.
Where are Toyota (TM), Honda (HMC) and Nissan (NSANY) when America needs them to take over the likes of GM, Ford (F) and Chrysler (DCX)? If America wants to save itself, start by getting rid of Detroit's Big Three.
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This article has 50 comments:
Were you asleep at the wheel when Ford and Chrysler did the same thing and did you berate their chairmen when they made the same decision?
Do you have any idea how much Toyota, Honda & Nissan are paying their retirees?
You are so right Bill, let them come in to build their cars in the deep south, pay scab wages and the then complain when the big three can not compete.
We have come to focus on today and tomorrow not next week and next year. Maybe this will bring a awakening in the US that we need to look 1-5-10-20-50 years down the road. I heard yesterday a candidate in Virgina opposed to offshore drilling because it would not yield any revenue to the state untill 2030. So let's wait another 10 years and then the revenue will be seen in 2040. I think we need to start thinking about our children and grandchildren and get our acts together. Hydrocarbon fuel is still king and will be for many years so lets get going developing our resources. Nuclear is next so let's start building plants, they should start coming on line in 10-20 years. All the other nickel and dime stuff we are doing with biofuels, wind, solar are neat, but will not make a dent in demand.
Bottom line is to conserve and to develop new high output energy sources. By they way, lets liquify some coal now that the EPA has agreed to sequestering CO2 emissions. South Africa has been doing this for years.
Sorry for the divergence, I just get tired of people complaining and not getting on with business. By the way what company is for practical purposes sold out of hybrids????
Anyway, how does GM's valuation compare with the net book value of its assets? Are we there yet?
Careful what you ask for America. If any of the big three go under a lot of people would cheer a loud "Ha- I told you so-they deserved it!"
If GM especially goes under it will be a huge disaster for this country. They employ directly and indirectly hundreds of thousands of people in this country alone.
The last figure I saw was one in 15 people are directly or indirectly employed by the auto industry in this country.
Look what happend to Flint Michigan when ONE pland was closed. The entire city is a ghetto now. Take that one step forward if all or most GM plants closed this country would literally fall apart.
One local GM dealer went out of business. Forgetting the owner they employed 128 people many of whom have lost homes and vehicles to reposession and bankruptcy because they could not find new jobs in time.
Like them or hate them we need the big three now more than ever. Stop saying they build cars people don't want.
Everyone likes to fly the Prius flag and talk about what a green company Toyota is. Ever see their SUV and Pick up lineup? They are gas guzzling pigs that ave 15mpg highway.
Wake Up! GM has over 24 vehicles that get 30 MPG or better and not all of them are compacts.
And don't tell me GM won't go broke, it already is! It's equity is negative $40 billion. That's equivalent to the total profit GM made in the last 10 years it had a profit (1995-2004: $43 billion). Assuming GM could repeat this despite the recession, oil prices, eroded market share, subprime effect on GMAC, etc. it would take GM 10 years to have a net equity of zero!
"Now he intends to arbitrarily bankrupt thousands of America's finest elderly citizens. .."
And you call him:
"... a rotten apple, amongst American CEOs. "
But then you go on to say:
"If America wants to save itself, start by getting rid of Detroit's Big Three."
So you berate Rick for one thing, then suggest we cut everyone's throat? I have 5-year-ld triplets and I work my butt off here. I don't "give" my years to any company. They PAY me for my work. You suggest doing the same thing to us that you call Rick names for.
Must be easy to lash out with a keyboard as your sword and a monitor as your shield.
GM is still killing the Asain brands with their retirement benefits.
Last time I checked, GM's market cap equalled that of Bed, Bath & Beyond, which basically sells frilly junk from China. For all you GM faithful, that should be cause for concern.
The problem with the Detroit's big three is that they don't want to spend money on their product. Just compare the paint finish, interior quality, rear-end packaging and you will know why people are more into the Japanese and European vehicles. The engine technology for the Japanese is much more sophisticated then the North American's. The quality and sophistication look now years ahead. One main reason is that in the Japanese companies, the supplier selection is in the hands of engineers or they have a good say in that. While in the GM, the supplier selection is done by the buyer/finance whose top priority is to save money. So obviously there will be a difference between one supplier who meets the product requirements by a bare minimum compared to one who meets them by a big margin. Definitely your product will be expensive like that of Japanese and Europeans but you will also save a lot of warranty cost later on and you will have happy customers who enjoy good quality product.
If they want to argue partiotism then they need to explain why they favor destroying America's economic base to the advantaqge of the few and the foreign elite. Once they face their own elitism they need to ponder just how patriotic THEY really are.
You are not very knowledgable on this subject. He will let retirees keep their benefits until 65. Did you know this decision will not effect union workers?. VERY important point!!
Oh well, GM's days are numbered anyway!
Even Toyota is having to retool its truck plants because of the dramatic effect of oil prices, so market changes can be and are affected, sometimes suddenly, by other major policy failures of the current power structure not just perceived or propagandised failure by GM and other American companies.
It completely amazes me how people like you are alomost gleeful over the potential demise of another American Corporation, and your willingness to totally ignore the damage done to American companies and Americans by state sponsored foreign corporations coupled with the corrupt and failed trade policies of the deceive and thieve conservatives.
If anyone expects America to last any longer than the last employer we have, they are kiding them selves. If anyone believes we will control our fate economically and militarily when we manufacture nothing of oue own , they are less than intelligent, and anyone who believes we are better off fighting boogey men in Iraq instead of fighting for the security of American jobs, is short sighted, elitist, unpatriotic and just plain wrong.
There are far better ways to improve the worlds economic opportunities bedisdes simply giving away our own economic future.
it#s making me sick hjow corporate execs continue to enrich themselves for - in 90% of the cases - delivering ZERO or negative added value to the company.
fuels that we all want to drive with quality and style like the CTS, Camaro and Malibu that we have now, and we will all look back on this period and say, WOW they really pulled it off, Waggoner and Lutz were true visionaries, and I love my car! In the mean time gas usage and prices will go way down and States will be scrambling to find ways to replace gas tax revenue.
On July 17, BLoy wrote:
Mr Cara,
Do you have any idea how much Toyota, Honda & Nissan are paying their retirees?
If you make big claims and want to be taken seriously, give evidence to support your position.
On July 17, Thinker notTalker wrote:
What is obscene is that we are being trained that making good on our commitments to Americans is somehow unpatriotic. The deceive and thieve conservatives have succeeded in making it logical for those who have gained the most from our nation to be the least responsible for its continued economic success, and making it look as if if Americans who have performed the labor that produced that wealth simply have no right to expect the promise of the American dream should ever be realized.
On July 18, User 228489 wrote:
As a General Motors retiree I feel they are the pits. Those worthless ASSES at the top care only for themselves,typical of american CEO`s the broom pusher is always the blame. If all these retirees say screw you from now on we buy only Toyota`s and Honda`s I wonder what kind of an affect it would have on GM. Hopefully it would get those bastards fired.
US consumers make the ultimate vote on cars; at is stands GM isn't doing that well. I don't buy the statement that GM cars are built well.
I agree whole-heartedly that listening to consumers and responding appropriately is the way to sustained profitability. As a company GM has failed. GM has failed because management has failed.
GM does need to change, but I don't believe that it has. I don't have confidence in the current management team--based on performance.
I want to see GM succeed and thrive; I don't believe it's going to happen.
On July 20, Rocky_08 wrote:
And Bio, you are clearly motivated by your personal self-interest as well. If the business had not been allowed to flounder, everyone would be content. The employees, the share holders and most of all... the customers. The object in this business is to sell vehicles. It's nice to make money at it too but you can't make profits first and hope to get repeat buyers if you fail in the customer's demands. Our most recent GM vehicles were built well. GM's manufacturing process is very good. The floor level of GM has made leaps and bounds in improvements but we have had and still have parts and components failures in our GM vehicles. Again, GM made cuts in this area to keep profits up and in so doing frustrated the customers with trips to the dealer where often repairs were only half A## attempted. This has gone on for decades. GM has a poor track record of caring for the customer. Instead they wrapped themselves around short term profits by way internal cuts. You can't cut your business to profitability. You must meet the customer's demands. Having said that, GM would be a full contender here in North America if they had just listened to the cry of the customers and responded to that cry. I only hope they have finally changed their ignorant ways of treating the customer. We have 2 vehicles that need major work right now. One is a 04 and the other is an 03. Both are out of the warranty but still considered with low mileage in comparison to vehicles that have less issues over 100k miles. One has 15k miles on it. GM uses cheap parts. They need to get away from that. Their independant dealers have abused the customers but the GM is taking the heat for all this. We need a new car but we will buy what fits our budget and one that Consumer Reports gives high ratings to. GM has a long way to go to swoon the buyers now. It's easier to keep a customer than to try to win him back after he has been stung.
In that I say that the cars are built very well by GM employees with the parts GM selects which have been in past, sub standard. The line workes don't get to select the parts they install. Being forced to insytall cheap parts cannot be blamed on the workers who build the cars.
For example: I have an 04 GM pick-up with a power window in the rear that works only intermittently. That is not a manufacturing problem. GM does not build window motors, window regulators, window relays and so on.... They build cars. This is a component problem via cheap part. Incidently, the window has been used very little. No one sits back there. The mileage is low at 15k and the vehicle is out of warranty being an 04. Again... this is not a manufacturing problem. GM employees do a great job but the parts and components are another issue GM deals with. GM has had to learn the hard way that a cheap part is often not the best. I do hope that I have cleared up what you seem to think makes no sense.
Your comment about the assembly of parts is not relevant. If the parts are poor but assembled correctly, so what? If a GM car is poorly made, it's still a GM car. The company made the decision on how the car would be built, which companies to have as partners and the quality systems to employ. Regardless of how the car is constructed, it's a GM vehicle.
For what it's worth, I didn't comment on the abilities of GM employees in the plants. My concern is with management. You introduced topics that I didn't discuss.
On July 21, Rocky_08 wrote:
Bio... I would guess that you really don't know that GM employees only put the vehicles together. Many, if not almost all of the parts are supplied by way of "OUTSIDE" suppliers. Many of these parts are not GM parts at all but they are often and with hope, the best that GM can find. But also they are the in and among the lowest cost parts, via bid offerings. This often equates to cheap parts.
In that I say that the cars are built very well by GM employees with the parts GM selects which have been in past, sub standard. The line workes don't get to select the parts they install. Being forced to insytall cheap parts cannot be blamed on the workers who build the cars.
For example: I have an 04 GM pick-up with a power window in the rear that works only intermittently. That is not a manufacturing problem. GM does not build window motors, window regulators, window relays and so on.... They build cars. This is a component problem via cheap part. Incidently, the window has been used very little. No one sits back there. The mileage is low at 15k and the vehicle is out of warranty being an 04. Again... this is not a manufacturing problem. GM employees do a great job but the parts and components are another issue GM deals with. GM has had to learn the hard way that a cheap part is often not the best. I do hope that I have cleared up what you seem to think makes no sense.
On July 22, duster/bee wrote:
all these people have one thing to think about,when you buy any article from a forieng country. That country takes in all the profit from the article. so if it is a auto that country gets the profit.They build school's, park's and infrustructure in thier country so please buy American when making a purchase. There are American products in the stores look at the product to see where it was made. Talk or call your Senator's In Washingon, tell them free trade is not working.
Maybe we can agree on this: The pattern of paying CEO's for blundering markets will continue and the people on the lower end of these corporations will continue to pay for these blunders. CEO's will lose nothing. Their pay should be based on total performance of the Corporation. We know that won't happen... don't we?
I won't take your word for it that GM will survive--that's meaningless. I buy arguments, not personal opinions.
I believe GM will have to file for Chapter 11 bankruptcy: costs continue to rise; GM is burning through cash; the company has problems generating revenues. It's easy to connect the dots and realize what will happen within the next 12 to 18 months.
No one can know for sure if the company will survive. Lower oil prices could help. I'd like to see the company do well, but based on the track record of current management, I don't hold out much hope for a major turnaround. Bankruptcy isn't a pleasant experience, but if it's coupled by a culling of the top management of GM, I'd be in favor.
You certainly do invest capital where products are sold, but the challenge in Asian markets is that margins will be smaller. Asian and European manufacturers arrived in the US markets with high end products because they were highly profitable margins. It's a pity that GM has ceded that market to foreign competition.
I agree with the argument you appear to be making about CEOs. I am not as interested in the salary as with performance: it a management team isn't performing, it should be removed. The problem at GM is management.
I do agree that people lower down in the ranks suffer from the incompetence of senior management. I would like to see some mechanism to remove management. I am not sure what that could be--boards should be more accountable.
On Jul 23 08:09 AM Rocky_08 wrote:
> Bio ... I think you should set your interests outside GM. Mark my
> word, GM will survive. GM has and will continue to downsize untill
> they have themselves right-sized for U.S. market conditions. Will
> GM go broke? I don't think so. They have partnered themselves with
> in other Auto corporations here in the US and abroad as well. GM
> does well in other markets. CEO management has never been good at
> multi-managing all their markets. GM has a habit of letting one market
> founder while investing in another. This has not served them well
> but the U.S. is not really a surging market anyway. In this business,
> you invest capitol and build your best products where your products
> can be sold. The market here is flooded... so it makes sense that
> all vehicle manufacturing will take a hit. GM being the largest is
> taking it on the chin. GM could have done a lot better.... but who
> says it really matters to them? People are just a casulty of war
> in big business competition. Nothing will change till CEO's are held
> accountable. When they continue to get paid 10 million a year to
> run corporations in the red, then they see themselves as doing all
> the right things. It's like committing a crime and never getting
> punished for it.
>
> Maybe we can agree on this: The pattern of paying CEO's for blundering
> markets will continue and the people on the lower end of these corporations
> will continue to pay for these blunders. CEO's will lose nothing.
> Their pay should be based on total performance of the Corporation.
> We know that won't happen... don't we?