Pent up demand

Is GM's Worker Buyout Offer Insulting?

I was not "gloating" about the treatment of auto workers. Only pointing out yet more evidence of their detachment from reality of other industries. The vast majority of workers who will be let go in this recession will get a few weeks or months of severance pay depending on their length of service. There will be no buyout payments offered. In light of the fact that GM continues to hemorrhage cash, I am actually surprised that they feel they can do another round of buyouts.



On Feb 04 09:23 AM Tomas04 wrote:

> It's pretty sad times when people get excited over others mistreatment.
> We are all in for a very rocky ride and yes the union workers for
> the auto plants will get hurt in the end here but is that something
> to gloat about?

Is GM's Worker Buyout Offer Insulting?

The insulted worker should have taken the earlier buyout I guess. They made a mistake by betting that jobs bank, etc. would be around. If the insulted worker waits around another year or so, maybe he'll be let go with nothing.

Detroit: Please Bring Back the Stripped Car

Fleet sales are a good thing? Yeah, nothing better for resale than hundreds of thousands of rode-hard-put-away-wet fleet vehicles hitting the used market every year.

First Take on GM: Packaged Bankruptcy Inevitable

This is simply not an option. These are real companies with payrolls and interest payments to make out of cash, which is evaporating rapidly. You cannot expect the taxpayer to just take over the liabilities of an ostensibly private company for a while without some stake of ownership. Much has been said about the "unfairness" of the auto situation relative to banking. Those people should go look at the specific terms under which that assistance is being rendered to banks. The government basically owns those banks at a date in the not too distant future. If you are proposing that we nationalize the automakers and run them for a loss at over capacity, then we would be no better/different than the infamous Soviet tractor farms turning out product that nobody wanted to rust in a yard somewhere.

This is a bit like the "third rail" issue of Social Security reform. Any politician who proposes a painful reform is taken out and shot because there are always stupid or unscrupulous opponents willing to say that maintaining the status quo benefitis is an option and ignorant voters willing to elect them on a promise they cannot keep.


On Dec 03 09:17 AM aarc wrote:

> Re-structure GM once the global economy becomes less fragile or at
> least already on the way to recovery.

First Take on GM: Packaged Bankruptcy Inevitable

I agree with this 100%. Some sort of government assistance is inevitable. The automakers can enter bankruptcy now, or later (after burning through a round or two of government cash).

Take the tough medicine now. A healthy auto industry means shedding capacity in manufacturing and in dealerships. That will be painful, but that is the sad reality.

Let GM Fail

"GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of about 560,000 so far this year. Globally, GM in 2007 remained the world's largest automaker, selling 9,369,524 vehicles worldwide -- about 3,000 more than Toyota."

And how much profit was turned on those sales? Oops.

The Autos and Mentality That Ruined Detroit

On Nov 17 10:51 AM Chris B wrote:


> ...yet we are investing in the crappy SUV and subprime mortgage businesses
> of the past instead, so nobody has to be out of a job. This is exactly
> why China will be the dominant superpower in 15-20 years. They are
> investing in the future, not subsidizing failure.

Where do you get your news? The financial industry is shedding jobs like crazy. The "investment" in mortgage backed paper will be a failure just as the "investment" in the auto industry will be. In both cases the same medicine is called for: liquidate, recognize the losses and create a blank slate for some new leaders to build businesses.

The automakers cannot keep their promises on pensions. We can recognize that now or we can wait until the problem grows even worse.

Could Capital Injections Save the Auto Industry?

Don't use all caps. Just don't.


On Nov 13 03:11 PM jimmy46 wrote:

> A federal BAILOUT WOULD BE STUPID.
>
> The auto companies have so many problems that $50 Billion won't save
> them.
>
> THEY NEED TO GET RID OF WASTEFUL WORK RULES THAT LOWER
> PRODUCTIVITY.
>
> WORKERS &amp; RETIREE'S NEED TO PAY MORE OF THE HEALTH COSTS.<br/>
>
> THE UNION NEEDS TO HELP OUT.
>
> THE JAPANESE FACTORIES IN AMERICA DON'T HAVE GM'S PROBLEMS,
> WHY???

Could Capital Injections Save the Auto Industry?

They should go through bankruptcy. That would force them to show a workable plan of how they intend to become a going concern again. Then if the government wants to bestow goodies they can guarantee loans for the restructured entities. It's time the face the fact that our auto giants are going the way of the British automakers. For too long they have essentially been jobs programs (auto production) subsidized by financing companies.

We've heard a lot about Wall Street pay lately. Let's talk about the jobs bank and the rampant absenteeism and all the other excesses of the auto workforce before we sign over the tax dollars.

15 Notes on the Current Market Stress

Nice article. I think broken promises are the issue of our time. So much of the mayhem going on now can be traced back directly or indirectly to the fact that government and some businesses have been writing checks for too long that they will not be able to cash.

Real Prices for New Cars Keep Going Down

I agree with chuckp. The costs of car ownership have been somewhat backloaded. Cars are engineered in ways that make them as cheap as possible to assemble; it seems little regard is given to the cost to repair them.