tomorrow General Motors is going bankrupt

[pbpersson]

I remember back in the early sixties when I first learned of General Motors. My dad was ALWAYS a GM guy - Chevy's and Pontiac's were what I grew up with.

I never imagined in my wildest dreams that Chrysler and especially GM could ever go bankrupt.

They are saying the ripple effects across the nation for the dealers and parts suppliers will be enormous. Do you believe that, or will this just be a speed bump and will life go on?

Does this qualify as a "lighthearted and enjoyable discussion" per the forum guidelines?

[benj1]

life will go on, businesses go bust all the time and the world doesn't end, it will probably get bought out anyway (GM europe already has).
its about time anyway, when was the last time GM actually made any money???

[WinterMadness]

Good. Hopefully they get liquidated like they should have in the first place.

a productive company should either buy gm, or many companies should buy the assets from GM.

Government shouldnt be involved in the economy, and this is proof as to why. Government intervention has hurt our economy, not business.

[Screwdriver0815]

being an automotive guy (I am an automotive engineer) I say: its a shame and a pitty that they are bankrupt. But its also right because this is what they deserve with these mistakes done in the past

And who pays the bill? as usual: the worker and taxpayer. Not the managers who did all the mistakes.

it will be a enormous ripple to the american nation. Believe me. I am from east germany and after the Wall went down we had nearly the same situation: all the big companies went down... it was really tough to come over this. Now it is 20 years ago and we still have to recover from that.

So it will not be easy for America.

[XubuRoxMySox]

The new GM - from General Motors to Government Motors.

Wasn't the bailout supposed to prevent bankruptcy? Seems like bankruptcy is better for everyone - including the company.

P.S. My family asked for a bailout too. We were turned away on grounds that we're not wealthy enough to qualify...

[fatality_uk]

I heard it was Chapter11, not full blown bankruptcy.

[Polygon]

if its chapter 11, then the courts help them prevent from going into full blown bankruptcy, which is a lot better.

[fatality_uk]

From just a quick scan, looks like it's not C11 :(

[Skripka]

From just a quick scan, looks like it's not C11 :(

It doesn't matter. No one in their right mind would want to buy GM. Sure they may get into bankruptcy protection of some sort, but I doubt they will ever get out.

[ssam]

doesn't the world have enough cars already?

[jrusso2]

This is what happens when government gives tax money to companies to move overseas. Makes it hard for companies to mfg here.

[cubeist]

life will go on, businesses go bust all the time and the world doesn't end, it will probably get bought out anyway (GM europe already has).
its about time anyway, when was the last time GM actually made any money???

The GM Europe / Opel scenario is / was very different from GM America. No one will buy GM America. The primary reason being no one wants to run a business where the government has the controling ownership stake...

[gn2]

My antecedents worked in shipyards on the river Clyde, building some of the best ships that the world has ever seen.

At one time there were over sixty shipbuilders on the Clyde, now there are only two.

The reasons that shipbuilding collapsed on the Clyde are the same reasons that car production in the USA will probably collapse to a shadow of it's former self.

[Skripka]

The GM Europe / Opel scenario is / was very different from GM America. No one will buy GM America. The primary reason being no one wants to run a business where the government has the controling ownership stake...

I honestly don't think it matters who would have the controlling stake. No one will want to buy GM anyway.

[toupeiro]

I've read various things about whats going on with GM, with specific regard to Saturn, as I feel that is the best division GM had going for it for the last 5 years. It looks like Saturn will break off and become an independant company of General Motors (which is how they started out to begin with). I see this as a good thing. Its sad to see household names like Chevrolet, Pontiac, and Cadillac potentially go away, but its not alltogether unheard of either. Studabaker, Packard, and Willys were all once very common companies that disappeared over the years due to poor economies, or poorly run business practices. Saturn and Studabaker have one thing in common, Their customer service is unparalleled! They will go to far ends to satisfy the customer. Saturn was not as wreckless about this as studabaker was. Studabaker basically would lifetime warranty their parts. As a classic car enthusiast and restorer, a few of my friends that go to different shows own studabakers, some of them are original owners, or second-hand owners, and they remember having studabaker replace complete rear ends for free some 10 to 15 years after the vehicle was purchased. Going to a Saturn dealership in a large city, as opposed to a Chevrolet, reveals very personal customer service and a sense that the technicians really care about you being 100% satisfied with your dealing with them when you roll your car off the lot. I've experienced this firsthand with a 2004 Ion-2 I used to own.

Long story short, GM greatly mismanaged themselves. Some divisions were better than others. Hopefully, people learn from this example of what not to do..

[durand]

GM goes down, other companies (hopefully) learn from it's mistakes, companies evolve. It might be a bad thing now, but it's better in the long term. Plus, as ssam said, who needs more cars..

[cubeist]

I honestly don't think it matters who would have the controlling stake. No one will want to buy GM anyway.

Actually it does, hence the fact that Opel was (or rather is) successfully bought. Between semi-decent management at Opel, and a non-controlling stake from the German government, Magna believes it can derive value from it's investment.... However this is a rather simplistic statement, and there are a plethora of additional factors why your correct - no one wants to touch GM America - I'm just saying one of the larger factors when making an investment is who has controlling stake.

[benj1]

The GM Europe / Opel scenario is / was very different from GM America. No one will buy GM America. The primary reason being no one wants to run a business where the government has the controling ownership stake...

it will be sold, probably in pieces, i doubt the us gov wants a car company, a few unpronouncable chinese/indian brands will buy up the big chunks probably.

[Screwdriver0815]

I see the Opel scenario very sceptic. Why?

Because:

From the day on as rumors came up that GM could go bankrupt all the politicians over here in Germany were really begging to get an important role in the rescue of Opel.

We have elections over here in Germany in the next time.
We have elections for the european parliament now. The Opel deal is a perfect stage for the politicians to show the people that they care about us. Which is not true, BTW.
They want to make people forget about all this ignorance in the last time towards the economy and the financial stuff in which rich people collected billions and the poor didn't know how to pay their taxes.

The much more important thing is: in Germany we had a similar problem 20 years ago as the communist wall went down. The whole economy in eastern Germany went bust and the east germans faced a mixture from ignorance and no perspective for the future.
The result was: people have concentrated on securing their lifes and their economic status rather than elect and doing consume which runs the economy. Thats why we still have 4 million or more unemployed (more than 5% in general but in some areas there are more than 25% unemployed) and lots of people who have a job do not earn enough to pay their life.

This is so since 20 years over here. And there is no light at the end of the tunnel.

Now at Opel there are 25000 people who are potencial voters... ;) and at the suppliers are even more ;) Thats the reason for the rescue and the engagement of the politics over here.
But lets look at the figures: Opel burns (loses) 3 million euros per day. The german gouvernment gives 1.5 billions credit. But when Magna (the buyer of Opel) goes down and with them Opel too, the state has to pay also the credits of Magna. This is 4.5 billion euros.
It would be cheaper to let Opel go down too. But they don't, because of the elections.... So the taxpayer is in charge. For the career of maybe 10 people. Nice!

its all about lobbyism, the old game played since 100 years or so.

[pwnst*r]

night night.

[sara-90]

unbelievable
this my chace to sell more:)

[Screwdriver0815]

unbelievable
this my chace to sell more:)
are you at Toyota? Or Ford? :D

[logos34]

its a shame and a pitty that they are bankrupt. But its also right because this is what they deserve with these mistakes done in the past

And who pays the bill? as usual: the worker and taxpayer. Not the managers who did all the mistakes.

it will be a enormous ripple to the american nation.

+1

Read Ralph Nader's latest open-letter (http://www.commondreams.org/view/2009/05/30-0) to Obama about this. Certain interests are pushing for Chap 11. It doesn't need to go this way. Get rid of the management, maybe freeze worker salaries and compensation, and have a government holding company run it until it returns to profitability (by innovating and making fuel-effficinet vehicles). Maybe even steer some military contracts or a green public-transportation works plan toward them. Surely they can manage to make light-rail cars or natural gas-powered buses

The social cost of this will be huge. Why are we pouring oceans of taxpayer money into AIG and to prop up the the financial sector for the whole securitized debt bubble, but not the manufacturing sector, which actually PRODUCES something tangible (even if the current product is poor)? Boy, when the Wall Street guys find themselves looking into the abyss of endless toxic assets, the sky's the limit for how much they can shakedown the country for a bailout. But when it's a matter of workers' jobs, screw 'em is the attitude.

I agree with the statement 'Too big to fail, or just too big?', but in this case you have to think about the social implications. GM has a lot of industrial expertise and it would be shame to let it all just go up in smoke. And their workforce is gigantic. Do you hear any politicians talking about extending unemployment benefits or providing job retraining funds to the tens (or is it hundreds?) of thousands who have nowhere to go after losing their jobs?

I mentioned AIG above...Does anyone really know where all that money has gone? What is it now, $180 BILLION? Only recently have we learned about the counterparties (http://money.cnn.com/2009/03/07/news/companies/aig.fortune/index.htm) to AIG credit default swaps, which included Goldman Sachs, the investment bank formerly headed by Bush Treasury secretary Hank Paulsen.

Infinite government largesse for finance capital, a swift kick in the *** for labor.

I hate the car culture and these oversized corporate behemoths, but in this case I wonder if there is a way to save all those jobs by breaking up GM, and restructuring the management for each of the resulting companies.

[Screwdriver0815]

+1

Read Ralph Nader's latest open-letter (http://www.commondreams.org/view/2009/05/30-0) to Obama about this. Certain interests are pushing for Chap 11. It doesn't need to go this way. Get rid of the management, maybe freeze worker salaries and compensation, and have a government holding company run it until it returns to profitability (by innovating and making fuel-effficinet vehicles). Maybe even steer some military contracts or a green public-transportation works plan toward them. Surely they can manage to make light-rail cars or natural gas-powered buses

The social cost of this will be huge. Why are we pouring oceans of taxpayer money into AIG and to prop up the the financial sector for the whole securitized debt bubble, but not the manufacturing sector, which actually PRODUCES something tangible (even if the current product is poor)? Boy, when the Wall Street guys find themselves looking into the abyss of endless toxic assets, the sky's the limit for how much they can shakedown the country for a bailout. But when it's a matter of workers' jobs, screw 'em is the attitude.

I agree with the statement 'Too big to fail, or just too big?', but in this case you have to think about the social implications. GM has a lot of industrial expertise and it would be shame to let it all just go up in smoke. And their workforce is gigantic. Do you hear any politicians talking about extending unemployment benefits or providing job retraining funds to the tens (or is it hundreds?) of thousands who have nowhere to go after losing their jobs?

I mentioned AIG above...Does anyone really know where all that money has gone? What is it now, $180 BILLION? Only recently have we learned about the counterparties (http://money.cnn.com/2009/03/07/news/companies/aig.fortune/index.htm) to AIG credit default swaps, which included Goldman Sachs, the investment bank formerly headed by Bush Treasury secretary Hank Paulsen.

Infinite government largesse for finance capital, a swift kick in the *** for labor.

I hate the car culture and these oversized corporate behemoths, but in this case I wonder if there is a way to save all those jobs by breaking up GM, and restructuring the management for each of the resulting companies.
its not so simple. And this is the problem.

GM is a huge company - they are too huge. They produce the wrong products and (and this is the most important!) they have a huge workforce which does not produce anything. All these managers and officers - they are simply too much people who get fed by less and less people who earn the money for the company.
So one can say: "just kick them out and restructure the company". For sure, this is the only way. But who should restructure the company? Its the managers and the officers. Not the workers in the plants.
And there raises one question: will a manager or an officer cut his own job? No! Never!
This is the actual problem, such a huge company has. They can not recover from this because all the management is protecting themselves. This is catch-22.
I also worked for Opel and Saab and Ford (Europe) and I saw this management stuff and this waste of money all over the place. I know what I am talking about.
Its not done with some gouvernmental and military contracts. This is only like a drop in the ocean.

I read and also saw something in TV about this bailout stuff as the Chrysler, Ford and GM guys were in Washington begging for some money.
What was evident was, that they did not have any clue how to proceed.
They know that they have to build more efficient cars but they look like standing before something from outer space - not knowing what to do with it. This is my personal impression.
Then they should present a businessplan at the gouvernment. They were not sufficient. So if a company leader can not make a business plan which describes how he wants to build the future of the company: he either has no clue about business (so kick him out) or the company is in a situation where there is no way out and no alternative than bankrupt.

So maybe the bankruptcy is the only way out and a new start from scratch. I think its not about the money. As you said the bankers have got so much money, then the some 50 billions for GM don't matter. I think it is because there is no future for such companies.

And yes, the cut in the american economy will be huge. So this will not be a speedbump only. But maybe a fast death of GM is better than a slow fading? Because so the economy can start faster to grow on something new than fading away and drive lots of people into this no-perspective stage over years and generations?

[benj1]

@logos34
the difference between the banks and GM is that the banks were up until recently profitable, and have realistic business plans for ongoing survival. GM on the other hand hasn't made a profit in years, even the boom years, and theres no realistic possibility of it being a profitable company again in its present form. its costs are too high (i read a statistic that $1800 from every car sold goes to paying for retired workers), and considering most US car makers seem to make their money from big 'SUVs' which no one is buying, and finance (GM sold off half of GMAC 2005 i think, and thats in the mire after investing in sub prime) the future of GM isn't bright, and it would be a mistake for the US gov to try and save it.

[Skripka]

its not so simple. And this is the problem.

GM is a huge company - they are too huge. They produce the wrong products and (and this is the most important!) they have a huge workforce which does not produce anything.

You're forgetting-the insanely paid UAW and benefits that GM continues to have to pay. That burden will not go away, even with new management. I'd wager if Ford Europe had to pay the insane benefits to it's employees like Ford (USA) does to the UAW, Ford Europe would have gone bust.

[Dark Aspect]

The motor industry in the US is behind, they need to develop new technology that is more efficient like some foreign cars or else they're probably all go bankrupt. Personally, it seems the whole world is going bankrupt and I doubt very seriously that all these businesses needed a federal bailout at once. It looks like everyone is trying to their hand in the cookie jar since the government doesn't seem to mind giving our tax dollars away to people who made poor business decisions.

just my two sense...

[Screwdriver0815]

You're forgetting-the insanely paid UAW and benefits that GM continues to have to pay. That burden will not go away, even with new management. I'd wager if Ford Europe had to pay the insane benefits to it's employees like Ford (USA) does to the UAW, Ford Europe would have gone bust.
this is another thing: the lack of social security provided by the state. In Europe, especially in Germany (because from here I know how it works), the worker pays a certain amount from his earned money and the employer pays the same amount into the social insurance system. So when the worker retires, he gets the money which he and the employer has paid during his working life from the state.
At Ford Europe they also pay a company-pension on top.

So all this is planned and in a structured way. Here no union guy comes up and asks for such stuff like it was in the US. Thats why Ford Europe is not gone bust.

But there is a second reason why Ford Europe is not gone bust: they build cars which people want. The european Ford Focus is the most sold car on the earth. The new Fiesta (which comes to the US next year) is running good, the Galaxy/S-Max and the Mondeo too...
And this is the reason why Ford US is not bust now because they and Ford Europe have slightly understood what the signs for the future are.
This is the difference to GM who even in europe do not sell cars which people want. The only exception is the new Opel Insignia and the Corsa but these are two models... they can not feed such a big company.

[Vostrocity]

Although I've always been a huge Ford fan, it's sad to see the other two go. Of course I still don't believe they're going anywhere.. People were freaking out when Chrysler went down, but really Fiat took over, and nothing really happened.

[Screwdriver0815]

Although I've always been a huge Ford fan, it's sad to see the other two go. Of course I still don't believe they're going anywhere.. People were freaking out when Chrysler went down, but really Fiat took over, and nothing really happened.
... and in Europe evervybody asks: what the hell does Fiat want with Chrysler?

the only reason is that Fiat wants to go on the US market. They always wanted to but did not sell well.
But why should Fiat cars sell better when Fiat owns Chrysler?

Fiat also does not pay anything. Chrysler still gets money from the US state and thats it.
So nobody knows what comes out of this.

[pbpersson]

You know.....the last GM car I owned......actually my ex and I had two 2002 Saturns. Something was always breaking on those things. The suspension was messed up on both cars and it would wreck the tires. I think the camber was wrong and it would feather the tires? I could have this totally wrong. They said, "Oh yes, this is a known issue" and the question in my mind was, "Then WHY did you sell me a broken car???" They had to fix the problem AND replace all four tires. So I said, "My car is acting the same way, does mine have the same problem?" They said, "Oh no, your car has a 4-cylinder engine, it is totally different" but when I brought my car in, sure enough - four new tires.

I think they just don't know how to build quality cars like the Japanese do. I am sorry to say it.

Also, I do not.....do not get this "we can only make money by selling cars that are huge and get lousy fuel economy" line they keep using. Gasoline is going up in America again, it has always been high in Europe, ENOUGH ALREADY with the huge cars!

OK.....end of rant.....back to our regularly scheduled thread. :redface:

[Seishuku]

I dislike General Motors for their fuel-inefficient cars and the stunt they pulled with the electric cars. I am not sad at all to see them go.

[logos34]

@logos34
the difference between the banks and GM is that the banks were up until recently profitable,

yeah, on paper only. All those mortgage-backed securities and subprime loans looked great--until the inevitable crash. A worse crime in my mind than producing gas-guzzling suvs nobody wants


and have realistic business plans for ongoing survival.

right, like becoming zombie banks dependent on massive infusions of public money to help stave off collapse UNTIL such time as they can, through one TARP-style swindle or other, dump the toxic assets off their balance-sheets at artificially high rates. Because if they have to sell at mark-to-market prices under normal conditions, they'll take a massive haircut because no investors will buy such crap.


So one can say: "just kick them out and restructure the company". For sure, this is the only way. But who should restructure the company? Its the managers and the officers. Not the workers in the plants.

...

Then they should present a businessplan at the gouvernment. They were not sufficient. So if a company leader can not make a business plan which describes how he wants to build the future of the company: he either has no clue about business (so kick him out) or the company is in a situation where there is no way out and no alternative than bankrupt.

...

...But maybe a fast death of GM is better than a slow fading?



I agree though about the risk of throwing good money after bad...It's a real dilemna. Just what is the way forward here? It's clear you can't rely entirely on govenment contracts to keep it afload, but it may be one part of the solution. (Why not? We're in effect subsidizing Boeing, Martin-Marietta, and all the rest with zillions worth of useless 'defense' contracts. A least this way we might get some products that a benficial to the public). There is still a market for vehicles (or it least will be. Hopefully. Maybe).

And, yes, everyone seems clueless about how to proceed...Middle management is indeed bloated...But if they were able to rescue and restore the saving and loans back in the '80's by nationalizing them under the RTC (which later sold them at a small profit to taxpayers), why not something like that here? Oh, and about GMAC: yes, it was really a drain on the company, like GE's finance unit is now. I just think we need to stop blaming the UAW and worker compensation (right-wing rant) for all of GM's problems...The company was massively over-leveraged (like just about every other corporation in the country), unwilling to spend money on R&D, let alone udpate their product line, too reliant on relatively cheap gas prices and easy credit to keep up the demand for big cars...We need to look at the big picture here, the whole economic context of the credit crisis, corporate deregulation, lack of health insurance driving up labor compensation (GM wouldn't have to pay health benefits if this was supplied by, for instance, a single-payer national plan, right?), etc. etc.

Folks, the whole system is coming apart at the seams, and don't kid yourself, the latest uptick in equities market is just a dead-cat bounce...U.S. Government securites are looking might risky these days, the dollar's about to take a nosedive, foreign investors are skittish, Japan and Germany are in freefall, the alarm bells are going off over East European and Baltic countries debt default, unemployment rolls are going up and up, housing prices are still headed south with no end in sight, China is so desperate they're throwing money into domestic projects to keep up demand in an export-oriented economy, energy prices will continue to rise because even reduced demand is still outstripping supply (peak-oil) etc etc.

So maybe you're right, maybe we should let GM die instead of do life-support, because at this rate there's not going be many people who will even be able to afford a car, or even want one.

[benj1]

yeah, on paper only. All those mortgage-backed securities and subprime loans looked great--until the inevitable crash. A worse crime in my mind than producing gas-guzzling suvs nobody wants


right, like becoming zombie banks dependent on massive infusions of public money to help stave off collapse UNTIL such time as they can, through one TARP-style swindle or other, dump the toxic assets off their balance-sheets at artificially high rates. Because if they have to sell at mark-to-market prices under normal conditions, they'll take a massive haircut because no investors will buy such crap.





I agree though about the risk of throwing good money after bad...It's a real dilemna. Just what is the way forward here? It's clear you can't rely entirely on govenment contracts to keep it afload, but it may be one part of the solution. (Why not? We're in effect subsidizing Boeing, Martin-Marietta, and all the rest with zillions worth of useless 'defense' contracts. A least this way we might get some products that a benficial to the public). There is still a market for vehicles (or it least will be. Hopefully. Maybe).

And, yes, everyone seems clueless about how to proceed...Middle management is indeed bloated...But if they were able to rescue and restore the saving and loans back in the '80's by nationalizing them under the RTC (which later sold them at a small profit to taxpayers), why not something like that here? Oh, and about GMAC: yes, it was really a drain on the company, like GE's finance unit is now. I just think we need to stop blaming the UAW and worker compensation (right-wing rant) for all of GM's problems...The company was massively over-leveraged (like just about every other corporation in the country), unwilling to spend money on R&D, let alone udpate their product line, too reliant on relatively cheap gas prices and easy credit to keep up the demand for big cars...We need to look at the big picture here, the whole economic context of the credit crisis, corporate deregulation, lack of health insurance driving up labor compensation (GM wouldn't have to pay health benefits if this was supplied by, for instance, a single-payer national plan, right?), etc. etc.

Folks, the whole system is coming apart at the seams, and don't kid yourself, the latest uptick in equities market is just a dead-cat bounce...U.S. Government securites are looking might risky these days, the dollar's about to take a nosedive, foreign investors are skittish, Japan and Germany are in freefall, the alarm bells are going off over East European and Baltic countries debt default, unemployment rolls are going up and up, housing prices are still headed south with no end in sight, China is so desperate they're throwing money into domestic projects to keep up demand in an export-oriented economy, energy prices will continue to rise because even reduced demand is still outstripping supply (peak-oil) etc etc.

So maybe you're right, maybe we should let GM die instead of do life-support, because at this rate there's not going be many people who will even be able to afford a car, or even want one.

well we don't need to worry about GM then :p

[burvowski]

Oh no! People won't be able to get a new car? So sad!

You hear that?

:-({|=

PS - Often ignored statistic in media: For all the jobs in the American car industry that have been lost in the last 30 years or so, MORE American jobs have been gained from foreign car companies opening up new factories here in the States.

We (America) rolled the dice on big new cars every few years, on oversized houses in the suburbs, on all that stuff while the rest of the world laughed at us. No one forced us into this position. Tough ****, I say.

[logos34]

well we don't need to worry about GM then :p

but we do need to worry about Wall Street, whose cynicism, recklessness and greed inflated a massive credit bubble, resulting in the present crisis? They can walk away from their troubles at public expense, while GM cannot? (and what GM needs is dwarfed by what we've lavished on a handful of large banks, brokerages and insurance giants).

[MikeTheC]

I agree with those who say that GM's past actions have gotten the company to where it is at now, and that it's right and proper that this should happen.

Remember something: Actions have consequences.

Part of our problem in so-called "modern society" is this escapist mentality we have to get out of taking responsibility for our actions. That kind of crap is exactly what's led at least the U.S. to the place we're now at. GM is simply the present-day "high visibility" example. There will be more, I'm certain.

One by one the dominoes will fall.

[Dr. C]

I dislike General Motors for their fuel-inefficient cars and the stunt they pulled with the electric cars. I am not sad at all to see them go.

Here in Canada there was a documentary today on CBC News World on who killed the Electric Car. The part about GM forcing consumers to surrender the EV-1 cars at the end of the lease, refusing consumers' offers to purchase the cars to the tune of millions of dollars, and then crushing perfectly good cars is particularly apt.

Bankruptcy is the appropriate consequence for a company that makes such poor decisions. It is how the free enterprise capitalist system heals itself.

[cubeist]

but we do need to worry about Wall Street, whose cynicism, recklessness and greed inflated a massive credit bubble, resulting in the present crisis? They can walk away from their troubles at public expense, while GM cannot? (and what GM needs is dwarfed by what we've lavished on a handful of large banks, brokerages and insurance giants).

=D>

Nicely said.

[zekopeko]

but we do need to worry about Wall Street, whose cynicism, recklessness and greed inflated a massive credit bubble, resulting in the present crisis? They can walk away from their troubles at public expense, while GM cannot? (and what GM needs is dwarfed by what we've lavished on a handful of large banks, brokerages and insurance giants).

i thought that greed was the norm in america, no matter if you are from wall street or main street?

[gn2]

i thought that greed was the norm in america, no matter if you are from wall street or main street?

That's not confined to America, you'll find greedy people everywhere.

[Illuminus]

well hopefully this means dumping less tax-payer in to things that should of chapter 11ed months ago

[Screwdriver0815]

You know.....the last GM car I owned......actually my ex and I had two 2002 Saturns. Something was always breaking on those things. The suspension was messed up on both cars and it would wreck the tires. I think the camber was wrong and it would feather the tires? I could have this totally wrong. They said, "Oh yes, this is a known issue" and the question in my mind was, "Then WHY did you sell me a broken car???" They had to fix the problem AND replace all four tires. So I said, "My car is acting the same way, does mine have the same problem?" They said, "Oh no, your car has a 4-cylinder engine, it is totally different" but when I brought my car in, sure enough - four new tires.

I think they just don't know how to build quality cars like the Japanese do. I am sorry to say it.

Also, I do not.....do not get this "we can only make money by selling cars that are huge and get lousy fuel economy" line they keep using. Gasoline is going up in America again, it has always been high in Europe, ENOUGH ALREADY with the huge cars!

OK.....end of rant.....back to our regularly scheduled thread. :redface:
ah yes... we call this (selling cars where you know that its broken by design) the "american style" ;) :D
The main thing in an american car manufacturerer is: it has to be cheap (for the manufacturer). No matter if the customer is satisfied. Okay, the management always finds arguments why a customer is more satisfied with the cheap solution...

But this is also one of the things which broke the neck of Chrysler and GM: selling crap




I agree though about the risk of throwing good money after bad...It's a real dilemna. Just what is the way forward here? It's clear you can't rely entirely on govenment contracts to keep it afload, but it may be one part of the solution. (Why not? We're in effect subsidizing Boeing, Martin-Marietta, and all the rest with zillions worth of useless 'defense' contracts. A least this way we might get some products that a benficial to the public). There is still a market for vehicles (or it least will be. Hopefully. Maybe).

And, yes, everyone seems clueless about how to proceed...Middle management is indeed bloated...But if they were able to rescue and restore the saving and loans back in the '80's by nationalizing them under the RTC (which later sold them at a small profit to taxpayers), why not something like that here? Oh, and about GMAC: yes, it was really a drain on the company, like GE's finance unit is now. I just think we need to stop blaming the UAW and worker compensation (right-wing rant) for all of GM's problems...The company was massively over-leveraged (like just about every other corporation in the country), unwilling to spend money on R&D, let alone udpate their product line, too reliant on relatively cheap gas prices and easy credit to keep up the demand for big cars...We need to look at the big picture here, the whole economic context of the credit crisis, corporate deregulation, lack of health insurance driving up labor compensation (GM wouldn't have to pay health benefits if this was supplied by, for instance, a single-payer national plan, right?), etc. etc.

Folks, the whole system is coming apart at the seams, and don't kid yourself, the latest uptick in equities market is just a dead-cat bounce...U.S. Government securites are looking might risky these days, the dollar's about to take a nosedive, foreign investors are skittish, Japan and Germany are in freefall, the alarm bells are going off over East European and Baltic countries debt default, unemployment rolls are going up and up, housing prices are still headed south with no end in sight, China is so desperate they're throwing money into domestic projects to keep up demand in an export-oriented economy, energy prices will continue to rise because even reduced demand is still outstripping supply (peak-oil) etc etc.

So maybe you're right, maybe we should let GM die instead of do life-support, because at this rate there's not going be many people who will even be able to afford a car, or even want one.
yes, okay, the military contracts... of course this would help but its not the final rescue. Its the same as throwing money into something which will die anyway.

They seemed to recover in the 80's, yes. But actually the big three started to die at the end of the 70's. And it took until now to finish this dying.
Of course they made money and revenues. But in technological terms and in terms of economy they failed since the 70's.
The truth is, folks: economy and fuel efficiency was ALWAYS important. Its not only important now because of the high petrol prices.
But its not only fuel efficiency. Its also technology in general. So why didn't they adopt the newest technology into their products? Why did it have to be cheap, no matter what the consquences are? Why didn't they do R&D, which of course costs money?
Because otherwise they would not earn revenues - because they were dying and they knew that they die.

The workers and the UAW were one coffin nail but not the main one. Maybe they also knew that the company is dying and wanted to rip off as much as they could in the first place.

So I think their time is over, like at the time as the dinosaurs went bust. There are so many new ways to be gone... and a GM company who has done this EV-1 story which was purely lobbyism, will just not be credible when they say "we build an electric car". No they just want to get some taxpayers money to restart their practices which they did since the 70's.

[NCLI]

They dug their own grave by ignoring the need for smaller, fuel-efficient cars. I feel no pity, good riddance.

[benj1]

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[Skripka]

Why didn't they do R&D, which of course costs money?.

Well, to give GM some credit--they had a working fuel cell prototype back circa 1966.

Detroit kept making crap, because that is what the buyer, up until the last year wanted.

Also, another major reason that fuel cell/electric has not been taken seriously by manufacturers is that in the US we have over 117,000 gas stations that were built and are still in operation across the US. There is NO serious plan by anyone to make them able to deliver ANY fuel other than petroleum fuels. Equally, the US electric grid is in NO shape to take ANY kind of extra load, let alone the kind of load caused by a country of electric powered cars.

WHY should Detroit have made and spent LOTS of time/money in cars people did not want, and that there STILL (over 50 years down the line from the 1st prototype) is no viable means for distributing fuel for? Hmmmm?

[pbpersson]

i thought that greed was the norm in america, no matter if you are from wall street or main street?

The great American dream is to own nice things and people have faith they can pay for them later in life somehow. I mean, you always get raises, your home always goes up in value, and if someone is smart, they can always find work, right?

Now this has all become the great American nightmare. All the rules have changed. The most shocking part is the home values going down the drain.

I signed on the dotted line to buy a house in January of 2007, at that time everyone thought the home values had tanked and were recovering and the experts said "You will be rich in a year".....the best laid plans of mice and men.

People who have money are going to hang onto it for dear life. No one is going to buy anything unless they cannot live without it. That plus some of the posts I see here.....and the ripple effect from the GM reorganization have me concerned.

If the worldwide economy is in a free fall I still fail to understand what is supposed to stop it. Also, how are all these jobs going to be replaced? It FEELS like we are now going through a massive "adjustment" where the entire world is changing their lifestyle, but I am wondering how the new world will appear.

[Screwdriver0815]

If the worldwide economy is in a free fall I still fail to understand what is supposed to stop it. Also, how are all these jobs going to be replaced? It FEELS like we are now going through a massive "adjustment" where the entire world is changing their lifestyle, but I am wondering how the new world will appear.
nothing will stop it. Only the Recovery stops it. Its like in the 1920's with the worldwide depression.
Okay the end of the 1920's depression was World War II and such a stupid thing will not happen again. This is the only difference.
The stop of the free fall is the same like the stop of the unlimited raise: one day some of the economy-dudes say "its going up again" and then it goes up...

But we will not see much difference I think. I don't know how it was in the US in the last Boom-years because I never was there. But speaking for this little piece of earth over here: we will not see much difference.
Not because we are so smart. We are not.
Because we face this sharp dividing between rich and poor more and more since 20 years.

So now as the house prices fall in Florida all these arrogant new-rich Frankfurt stock exchange guys fly over to buy a cheap house.
in the meanwhile the state is begging to give away some 1.5 billion euros for a bankrupt bank...
and the state is begging to throw away 1.5 billions for Opel - just that a company buys a part of it... while paying the social costs for closing down Opel are 1.1 billions...

This tells me: we over here have learned nothing from the last 20 years.

the taxpayer is in charge...