Thadeus III

GM and Chrysler Buyout Offers: Should Taxpayers Be Angry?

Don't be too upset by yet another of these "Alpha" self appointed expert/analysts.
I get the feeling they are either fretting for their own existence or still wet behind the ears. This is one of several articles I've read on this website from writers who are apparently selected to attract readers and build up traffic for the advertisers of this site. A good many of these "writers" may be freshly out of work from corrupt or defunct finance and banking outfits that had shady dealings. They do little if any research to get all the facts straight, let alone their own thinking.
In addition, I would agree that a reduction in wages and benefits seems logical and would reduce costs some degree. This would not result in any viable improvement in the short or even near term. Especially when the cost of labor at even the overstated 70 some dollar amount is only 5 to 10% the cost of an vehicle depending on what plant and company you are talking about. Wages and compensation have not been a major issue for years at the BIG 3 when it comes to profitability. Labor costs per vehicle and hours per vehicle produced have gone down significantly over the last 15-20 years. To put it into perspective, in Henry Fords heyday of the model T, his labor costs were approximately 15% of a vehicle. This includes the housing, schools, medical care, etc that Ford originally provided at his "Ford City" operations. And he was happy with that. If you don't believe labor costs are not so much an issue, take a look at Toyota and Honda. They have lower labor costs but what does that matter when sales are sluggish or greatly reduced.
One more thing. Labor was never really an issue at the Big 3, because they would happily have workers work overtime which really decreased the per unit cost of a vehicle. Over the last 20 years, the practice has been to reduce head count and then speed up the assembly line while having folks work 10 hr shifts 5 or 6 days a week.

$5k Vouchers for Car Purchases: Utter Nonsense

As many people have said, these are complex issues and the government is looking at innovative ways to stimulate the economy. The 5K voucher sin't that much different than giving consumers a tax credit for buying a hybrid for environmental reasons. A lot of people applauded that. This is for economic reasons.
On the home buying front, a local PVC pipe manufacturer just went out of business here and also another commercial building supplier. The "trickle down" effect is now happening. I don't want to think it, but I see a lot more unemployment, businesses folding, and people on the street before this gets better. I don't see it getting better till possible mid 2010, and that is iffy.

GM and Chrysler Buyout Offers: Should Taxpayers Be Angry?

The really, really sad thing is, Salomon probably hasn't even checked back to read any of these comments. Or, he is so arrogant that any comments from anyone with less "credentials" than himself are beneath him to consider.
But at least this is a forum for comment. . .

GM and Chrysler Buyout Offers: Should Taxpayers Be Angry?

@ Robert Solomon

" It’s one thing if a firm does that with the capital of its private shareholders, but quite another if they use public money toward that end. "

". . .I’m not so sure paying those employees an exit bonus is, in principle, different from John Thain paying bonuses to exiting Merrill employees in advance of its acquisition by Bank of America (BAC). "

The first statement is an assumption. The money is not coming from US taxpayers. The money , last time in 2008, came out of the employees own pension reserves and didn't cost GM any money that wasn't already put aside by law for pension benefits. If anything, that was an unethical thing to do to current and future retirees. Almost like the US government raiding the Social Security fund for I.O.U.s.
Your second statement is a faulty analogy.This will be the 4th time since 1982 that GM and the Big 3 offered employees special attrition packages to reduce head count, so precedence has been made. It's not a "reward the rats jumping ship" sort of thing like the banks and finance shysters did. The special attrition program is just that. A means to open the door so the Big 3 can hire $14/hr employees.

Why Won't GM Just Go Away?

I wish it were a simple thing to help people understand the total economics of this country, it's companies, the banking and investment business, and the fainess of wages and benefits. Alas, these are very complex issues. Suffice it to say, the "trickle down" theory of wealth and a reasonable standard of living, have not been well served over the years. Greed by investors, CEOs, many businesses and politicians bowing to lobbyists in Washington have gotten us to this point. Add to that, global economic issues and many businesses trying to compete with foreign manufacturing, illegal immigrants here in the workforce pulling working people down closer to third world standards, and the near future seems bleak indeed. If the problem is lack of credit now, how bad will it be when more people can't qualify for credit and make the purchases any business needs to sustain itself? _It's not a "have your cake and it it too" thing for busness, investors, banks, the real estate marketers, etc to reap gross profits and have an "I got mine" attitude, and then expect that everyone else working for a living should have only what the aforementioned think they deserve. And this for just being the backbone that makes any business operate. Despite how many jobs ( even auto workers ) wages have escalated to $20 - $30/hr, people have fallen behind in earning power especially in the last 30 years. $18 - 25/hr is not a high wage anymore folks.Especially in a one wage earner family and that worker is somehow supposed to fund his/her own 401K for retirement AND suffer a high co-pay for health care. How many of you folks remember when, in the 50's and 60's one earner families were the norm? It's the greed of the few that have pushed costs up so high that now the saturation point has been reached where there is little or no discretionary income left for the majority of workers. Sad to say, but every dollar we choose to use and buy foreign products sends $$$ out of the country. Lexus, Acura, Maxima, Hyundai, BMW. No matter if they are made here on not they represent big $$$$$ out of the US. Sure it's difficult to buy other items not from China, Malaysia, or Korea. But buying American products where we can, especially big ticket items, would certainly not hurt. But maybe ego and status is still too important so then, here we all are.

What's an American Car These Days?

Mr. Perry likes to filter information like many do today so suit their POV or assuage their conscience because of buying a foreign car or product. All one needs to do is to look at what other countries are and have been doing for their businesses, people, and banks, not just now, but for YEARS. . In Japan, China, and especially Germany and other European countries the governments have been subsidizing their car makers for years. Since last Fall, Germany has been giving it's citizens a cash incentive to buy GERMAN made cars such as the now popular Opel Agila. When a $5K incentive is suggested here in the US all people can do is complain about how it's helping those lazy *#@$! auto workers and their companies. Other countries have always been protectionist. Ever since WWII the U.S.A. has been too much the worlds care taker. People here need to get past petty jealousies and prejudice when it comes to the well being of us all. There will never be a time when all of us get the same pay or benefits. Contrary to what many people think or say, a union doesn't "dictate" how a business is run or what engineering or production design choices are made. A union does help workers attain safer work standards, benefits, and compensation based on how well the company is doing, while trying to establish a decent standard of living or well being for workers and their families. Is spite of what others may say, this has helped establish a fairer standard of living for others not working in a unionized company or occupation. No more. Now GM, Ford, etc, want to provide $14-1$16/hr and also have a person fund his/her own 401K and a good deal of their medical insurance. Not even Suze Orman would see how that is possible. In the case of the UAW, losses in benefits and pay have occurred especialIy since 1982. But many are too petty, jealous, or ignorant to research that. Well, I guess we all need to move 10- 20 people into a single household and start living like third world countries.

In addition, I've always told my kids to make the best of what you have, live within your means, but keep your eye open for opportunity to better yourself by making efforts to do so. Not everyone has the same talents or academic abilities, another reason for a union to help provide a worker some measure of dignity no matter what his job position. . If you keep looking at the other guy, making comparisons, and being competitive for money, you will either be unhappy or an arrogant blowhard that no one wants to be around (except others like you).
This country needs to take care of it's own as other countries have for years. Instead of criticizing and and forming narrow minded opinions, we need to see how the rest of the world is handling this financial crisis. And Kman, I applaud you for your moving into the electrical field. Ir does require a lot of sacrifice to travel and move around a lot. I have a friend that did electrical contract work as you are. But he decoded to eventually work for a local contractor for less pay and a weekly paycheck to be with his kids and family. We need to be mindful of other people's circumstances and respect their decisions.

Why Won't GM Just Go Away?

I am thinking that a lot of the lower level people in the failed greedy, irresponsible financial world are turning to free lance "journalism" like Mr. Snyder. Where does Alpha get these people. AS for the UAW being cooperative. You need to review all the give backs, reductions in benefits, and job loss the UAW conceded particularly in 1982, 1986, and in the last 10 years. On a related note about US vs foreign autos:


Zacks.com
Time to Hit the Car Lots
Thursday January 8, 10:16 am ET
By Paul Raman, CFA

We think it is an excellent time to hit the car lots. Sales are slow, inventories are high, raw materials (steel, chemicals, plastic, rubber) are depressed, and interest rates are near zero. Demand is off due to the credit crunch. Dealers and manufacturers are hurting and are hungry for business.

Despite the bad publicity recently, Chevrolet and Chrysler have some of the best products in the market. The non-Chevy part of General Motors (NYSE: GM - News) must be restructured. Also, Honda (NYSE: HMC - News) has emerged to be a Big-4 player in the US. They work and act more domestic than even Chrysler.

We were disappointed with Ford , Toyota and Nissan , and feel they have tired old product lineups. A strengthening Japanese Yen may force Toyota and Nissan to become the Big-5 and Big-6 in the US. Toyota's quality ratings were the lowest among all models studied, especially for the pickup/SUV part of the product line.

The Ultimate Risk of Government Influence Over the Private Sector (Part 2)

It's sad to see the degree of corruption in both the U.S. economy and government policies. It actually has been that way for much of out history to one degree or another. For all that time, their has been enough "slack" in the system to absorb the manipulations, graft, and special interests served by devious devices. The difference now is that it's been stretched to the limits, too many have been in on the ill gotten gravy train for too long, and there is the whole global economy thing, not too mention illegal immigration, and other social and economic failures.

Why Won't GM Just Go Away?

Carlos needs to re-read this post.

Zacks.com
Time to Hit the Car Lots
Thursday January 8, 10:16 am ET
By Paul Raman, CFA

We think it is an excellent time to hit the car lots. Sales are slow, inventories are high, raw materials (steel, chemicals, plastic, rubber) are depressed, and interest rates are near zero. Demand is off due to the credit crunch. Dealers and manufacturers are hurting and are hungry for business.

Despite the bad publicity recently, Chevrolet and Chrysler have some of the BEST products in the market. The non-Chevy part of General Motors (NYSE: GM - News) must be restructured. Also, Honda (NYSE: HMC - News) has emerged to be a Big-4 player in the US. They work and act more domestic than even Chrysler.

We were DISAPPOINTED with Ford , TOYOTA and NISSAN and feel they have tired OLD product lineups. A strengthening Japanese Yen may force Toyota and Nissan to become the Big-5 and Big-6 in the US. * *Toyota's* QUALITY ratings were the LOWEST among all models studied, especially for the pickup/SUV part of the product line.

Four Myths from Detroit's Auto Show

Ok so let's rehash the past. Early Honda Accords (1979-1982 were rust buckets. They couldn't keep fenders on them. They also had a tendency to start using oil at relatively low mileage and then gas mileage would also suffer. Google it. Nissan (Datsun) engines have always had problems with oil seals failing. Even later model 1998 - 2005. I could go on. Both currently made Honda Accord ( harsh ride, poor seat comfort, poor mpg) and Toyota Camry ( slipping transmissions) are suffering from quality and performance issues.But how about this from last week:


Zacks.com
Time to Hit the Car Lots
Thursday January 8, 10:16 am ET
By Paul Raman, CFA

We think it is an excellent time to hit the car lots. Sales are slow, inventories are high, raw materials (steel, chemicals, plastic, rubber) are depressed, and interest rates are near zero. Demand is off due to the credit crunch. Dealers and manufacturers are hurting and are hungry for business.

Despite the bad publicity recently, Chevrolet and Chrysler have some of the BEST products in the market. The non-Chevy part of General Motors (NYSE: GM - News) must be restructured. Also, Honda (NYSE: HMC - News) has emerged to be a Big-4 player in the US. They work and act more domestic than even Chrysler.

We were DISAPPOINTED with Ford , TOYOTA and NISSAN , and feel they have TIRED OLD product lineups. A strengthening Japanese Yen may force Toyota and Nissan to become the Big-5 and Big-6 in the US. Toyota's QUALITY ratings were the LOWEST among all models studied, especially for the pickup/SUV part of the product line.

UAW: It Should Be Giving Up More

Here are some more facts:


Zacks.com
Time to Hit the Car Lots
Thursday January 8, 10:16 am ET
By Paul Raman, CFA

We think it is an excellent time to hit the car lots. Sales are slow, inventories are high, raw materials (steel, chemicals, plastic, rubber) are depressed, and interest rates are near zero. Demand is off due to the credit crunch. Dealers and manufacturers are hurting and are hungry for business.

Despite the bad publicity recently, Chevrolet and Chrysler have some of the BEST products in the market. The non-Chevy part of General Motors (NYSE: GM - News) must be restructured. Also, Honda (NYSE: HMC - News) has emerged to be a Big-4 player in the US. They work and act more domestic than even Chrysler.

We were DISAPPOINTED with Ford , TOYOTA and NISSAN and feel they have tired OLD product lineups. A strengthening Japanese Yen may force Toyota and Nissan to become the Big-5 and Big-6 in the US. * *Toyota's* QUALITY ratings were the LOWEST among all models studied, especially for the pickup/SUV part of the product line.

GM and Chrysler Buyout Offers: Should Taxpayers Be Angry?

@ Kman

Nice try. You use many words to say little if anything of substance or that is valid. You have too much time on your hands to write this much nonsense and are apparently miffed at what auto workers get for compensation. You didn't like factory work by your own admission, and now find auto workers, the union and GM/Chrysler the target you wish to vent on. You have ignored most, if not all, what I said . Do you really want GM and Chrysler to go bankrupt, empty out the pension funds, etc? Then you would be complaining how the PBGC ( government and your tax $$) has to take on all the underfunded or depleted pension funds.You have just shown you are among the narrow minded folks who can't cope with others choices. And where do you get $100K? Never mind, I really don;t care to know.
If you, and people like you, can't understand how much more other countries have done, and are doing, for their own people and businesses, than the US government is doing for us; we are doomed because of you attitudes. Listen to or watch DW-TV, the BBC, CC-TV, etc. These broadcasts would enlighten you to how what countries have done for Opel, BMW, VW, Audi, Toyota, Nissan, Honda, Fiat, and many more. Your comments reveal what sort of person you really are. I won't waste any more of my time or words on someone like you.

Why Won't GM Just Go Away?

No. US buyers of Nissan or any foreign product still sends money out of the country. Benefiting from some Nissan rebate or price reduction because of a Japanese government subsidy is the very same opportunistic principal that got us here, just on a smaller scale. And Nissan, Honda, or Toyota workers have been duped into working for those companies. Where do you think they will be when those companies want to dump them as their "legacy cost" approach GM's or Ford's. The Asian companies are just being opportunists by moving their factory here. It's short sighted. You don't see the larger economic picture.


On Jan 14 11:49 AM Paul Killinger wrote:

> Oh, and if the Japanese government is subsidizing Nissan's loss,
> aren't U.S. Nissan buyers benfiting from this foreign subsidy?

UAW: It Should Be Giving Up More

Kman. .. GM has continued to sell more vehicles even in this bad economy in the US than Toyota.
online.wsj.com/mdc/pub...
Sorry. If you like Toyotas, Hondas, Hyundais, etc so much, go live in the country of their respective origins. Get behind American and their original brands. . . ALL of them. Other countries are laughing at us with all this internal criticism of American Brands. It is a disgrace.

UAW: It Should Be Giving Up More

Oh and I remember my 1990 Nissan truck that left me stranded along the road side. It turns out in those years the throttle body was prone to carbon build up in the main jet. I had to get a tow and take the thing apart to clean out the carbon from exhaust the geniuses fed back into the throttle body for emmisions control ( via the PCV valve). And then there's the 1988 Sentra that had so many coolant leaks the head gasket went. Another Nissan my daughter had blew out the oil seals, another very common thing for Nissans. And the Subaru I had? Well, a rear brake job was $800. Unless you bought your own parts, then it was about $400 in 1992. And let's not forget the fabulouso early 2000's Toyota 3.0L V6 with engine failures ( Camrys and Sienna mini vans that we had ) because of too small oil returns in the cylinder heads. Toyota engineers did that. And Toyota tried to talk their way out and initially denied any responsibility. And then there was rear brake problems ( squealing and premature wear). There is more. I could go on.

Madison Ave hype and "trendy" attitudes? Yes. . . I do believe so.