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GM and Chrysler both ask for more government assistance

As requested, both General Motors and Chrysler have filed reports to Congress detailing their progress on rebuilding their failing business models. Both companies witnessed massive erosions in auto sales during the months of December and January and for all of 2008.

Chrysler, which recently announced a strategic alliance with Fiat, is requesting an additional $5 billion USD in government aid and says that it will cut 3,000 more jobs. The company has already received $4 billion in loans from the government as previously detailed on DailyTech.

General Motors, however, is in much worse shape -- at least financially at this point. In documentation that was electronically submitted to Washington this evening, GM announced drastic plans to return to profitability. The company wants to close an additional five manufacturing plants in the United States. The company also wants to cut another 47,000 jobs worldwide (20,000 in the U.S.) by the end of 2009 to reduce costs.

In what perhaps is the most incredible shock to the system, GM is requesting an additional $16.6B in aid from the government according to the New York Times. $4.6B of that figure will come from the original loans granted to GM in December 2008. The other $12B is new aid that GM is requesting in order to avoid bankruptcy.

Chrysler, GM, and Ford just recently reached an agreement with the UAW on contract changes for current union workers. Although details of the contract changes have not been made available, UAW President Ron Gettelfinger said that, "The changes will help these companies face the extraordinarily difficult economic climate in which they operate."

For those that want to read GM's full 117-page report, you can download the PDF here.

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This article is over a month old, voting and posting comments is disabled
:/
By Eomer of Aldburg on 2/17/2009 6:55:21 PM , Rating: 2
As much as I would like to see the government not bail out companies, I can't help but also feel resentment towards loosing 47K jobs.




RE: :/
By amanojaku on 2/17/2009 7:02:27 PM , Rating: 2
If I read this correctly it says the jobs are going to be cut no matter what.
quote:
The company wants to close an additional five manufacturing plants in the United States. The company also wants to cut another 47,000 jobs to cut costs.

In what perhaps is the most incredible shock to the system, GM is requesting an additional $16.6B in aid from the government according to the New York Times.
This implies the company, like many, was too big to begin with. Cutting the jobs MIGHT solve the problem of loosing money in the future. The bailout money is too ensure GM makes it to that future.


RE: :/
By TSS on 2/17/09, Rating: -1
RE: :/
By amanojaku on 2/17/2009 7:26:15 PM , Rating: 3
I'm not sure what the point of your post was, other than to tell me to read the source myself, so I'll just say thank you and let you know that I did. I was trying to point out to the OP that he/she needed to read the article more closely without sounding like a dick.

BTW, I think Brandon did a good job summarizing both his and your sources.


RE: :/
By The0ne on 2/17/09, Rating: 0
RE: :/
By Lord 666 on 2/17/2009 8:48:53 PM , Rating: 3
The source? CNN? Come on now, the WSJ has much better financial reporting... even post-Murdoch.

http://online.wsj.com/article/SB123489494750801713...

quote:
GM said it now plans to phase out its Hummer brand this year and Saturn in 2011 if no alternatives arise. Earlier, it said it was trying to sell Hummer and was re-evaluating the future of Saturn. GM also is scaling back Pontiac and trying to sell Saab.


RE: :/
By PrinceGaz on 2/18/09, Rating: 0
RE: :/
By OCDude on 2/19/2009 9:14:18 AM , Rating: 3
Yeah, Im sure GM is going to sell its Hummer brand because of "global warming" or whatever you're calling it these days. It couldn't possibly be because of the fact that gas was over $4/gal last summer and nobody is buying them. Nope that would make sense...


RE: :/
By Cypherdude1 on 2/18/2009 1:27:54 AM , Rating: 2
quote:
personally, i'm moving my money tomorrow into a much safer bank. this is the beginning of the end, bailout or no bailout, mark my words.


Where exactly are you gonna move yer money? Where is a "safe bank" in the USA? Are you gonna move yer money offshore to a stable economy/currency such as Switzerland?! LOL.

Yes, Switzerland has a very stable currency. Save for a few bad Madoff "investments", Swiss banks have not had the massive problems USA banks have had. At least, I don't believe they've had any problems.


RE: :/
By Doormat on 2/18/2009 11:14:00 AM , Rating: 2
There are safe banks. Credit unions and banks that didn't whore themselves out during the boom are just fine. I looked at my bank when I was buying a house in 2004 and their interest rates were 0.75% above what I could get directly from the builder's preferred lender. I don't think my bank made a lot of loans during that time, especially not to those who could barely afford the payments to begin with.


RE: :/
By DPigs on 2/18/2009 11:59:16 AM , Rating: 2
Canadian banks are in decent shape:

http://network.nationalpost.com/np/blogs/tradingde...

Bring your money to Canada. We like everyone('s money) up here.


RE: :/
By DPigs on 2/19/2009 11:54:12 AM , Rating: 2
RE: :/
By Ringold on 2/18/2009 1:15:59 PM , Rating: 2
quote:
Save for a few bad Madoff "investments", Swiss banks have not had the massive problems USA banks have had. At least, I don't believe they've had any problems.


Eh? UBS and Credit Suisse have both soaked up billions in Swiss aid; should they fail, Switzerland itself could be thrown in to bankruptcy. Doesn't seem likely now, but they came close to disaster.

The Euro itself is also tricky; several countries are already heavily in debt and rapidly adding more on top of it. If they defaulted, that'd sting. Some of them probably will have to default at some point in the future, that or other EU countries will have to bail them out.

There are some safe banks in the US, but if you're looking for absolute safety, there is no such thing in the real world. Sorry.


RE: :/
By gipper51 on 2/17/2009 7:04:56 PM , Rating: 5
That and I would also hate to see an American icon and one of our last MAJOR manufacturing industries go down the tubes. The day ANY of the Big 3 close up shop for good I will probably shed a tear...it will be a sad day in American history.


RE: :/
By masher2 (blog) on 2/17/2009 7:10:13 PM , Rating: 5
Accepting bailout funds is the kiss of death, however. Once a company starts sucking on the government teat, it invariably begins trying harder to please the politicos rather than its customers. That just increases the cycle of dependence.

If we give GM this $17B, I think we can all expect to see it back this time next year asking for still more money.


RE: :/
By amanojaku on 2/17/2009 7:48:05 PM , Rating: 5
You have to admit... The government DOES have some nice teats.


RE: :/
By shin0bi272 on 2/17/2009 7:50:21 PM , Rating: 3
you remember the game doom2? there was a level in that called "tricks and traps" ... thats what this is.


RE: :/
By lagomorpha on 2/17/2009 8:31:19 PM , Rating: 5
That's why I voted for Admiral Ackbar for President - he knows when its a trap.


RE: :/
By SlyNine on 2/18/2009 12:27:49 AM , Rating: 2
I wish I could rate that up to a 6.


RE: :/
By Madellga on 2/18/2009 8:32:32 AM , Rating: 2
Me 2, give a 6 to the man, his reply made me laugh and smile in a boring morning.....


RE: :/
By RamarC on 2/17/2009 8:34:49 PM , Rating: 3
I'm all for stabilization, but if they need another $12B on top of the first bailout dollop, then GM is toast. GM's management is really playing hard-ball here and is ready and willing to go into bankruptcy. The feds should call their hand and immediately cancel any GM bailout.


RE: :/
By cheetah2k on 2/17/2009 8:45:33 PM , Rating: 1
No word on executive salary cuts?...

And the fat cats keep on getting fatter


RE: :/
By ekv on 2/18/2009 4:44:38 AM , Rating: 4
quote:
And the fat cats keep on getting fatter

This whole thing about executive compensation is an Ignoratio elenchi, a logical fallacy, wag-the-dog, a red herring. It "is a deliberate attempt to change the subject or divert the argument."

There will always be rich people and there will always be poor people. So what. The American form of capitalism has proven to be the greatest form of wealth generation ever. A lot of us, through the generations, have improved their position in life. Others have gotten lucky, or they have been rapacious robber barons, etc., etc. The point is that capitalism is a better system for most everybody to improve their postion in life. When I go out and work, what I earn is mine. Not yours. Nor the governments [for the most part]. That is changing. It is NOT, I repeat NOT "change I can believe in", unless by that you mean changing capitalism to socialism. Which is dead wrong. Communism has failed everywhere in the world. Socialism has proven not much better. Capitalism has done fairly well -- in fact, it may be a reason why other countries b*tch and moan over our military technology. [Not only do we have such technology, know how to make it, but we can make more of it and it's getting better].

Ok. I'm not ranting. I just want to point out the digression. I see Barney Frank talk a lot about executive salary cuts ... and I just marvel. How can he possibly get away with saying something so inane, especially when he is one of the main perpetrator's behind the CRA / Fannie Mae / Freddie Mac loan scandal. Look, think about this. Logically, if Barney Frank had a mere fraction of involvement in the scandal as I think, and Barney Frank belonged to the other politcal party, wouldn't he be taking some heat? Just think about how critical the Mainstream Media has been of, say, G.W. Bush.

It's not about executive compensation.

Why the hell is congress spending so much damn money? What are we the taxpayers getting for it (other than "reamed") ? Why is not real change taking place in the form of ferreting out government's involvement in the loan scandal? [The answer to the last is, of course, good-old-politics].

If you really want to talk about executive compensation, tell me where Nancy Pelosi is? ... taking her government issue private jet to Italy for vacation? uh-oh, two carbon demerits for Nancy. Tsk, tsk. And how come Senators get an AUTOMATIC $4000/yr raise? [It takes me 3 months to make that].


RE: :/
By the goat on 2/18/2009 8:55:29 AM , Rating: 3
quote:
This whole thing about executive compensation is an Ignoratio elenchi, a logical fallacy, wag-the-dog, a red herring. It "is a deliberate attempt to change the subject or divert the argument."


You are wrong.

The reason executive compensation is relevant to the discussion is that these companies claim employee compensation rates are based on job performance merit.

Executives rightfully get huge paychecks and huge bonuses when the company does well. But they also get huge paychecks and huge bonuses when the company is dieing. Meanwhile line workers are laid off or take a paycut to "save the company". That clearly shows that employee compensation is not merit based.


RE: :/
By ekv on 2/18/2009 2:45:54 PM , Rating: 1
So what. Executives get paid a lot or they get paid a little. So what. It's capitalism. Where in the Constitution does it say anything about how much Wagoner ought to be paid? [It doesn't.]

I'm saying the whole issue of executive compensation is a red herring. You have your opinion and I have mine. Btw, I agree that executive compensation ought to be merit based. No if's, and's, but's or maybe's. I agree. However, in the American system of Capitalism it is supposed to be a company's responsibility to set pay rates. If they screw up it is still their responsibility. Except now Congress wants to dabble in the equation. Congress has taken a radical turn to the left and they do not want you to talk about that. They don't want to hear it. Hence, the issue of executive compensation is raised instead. It serves as proof that Capitalism is broken, or at least that is what Congress wants you to think.

However, I'm saying that Capitalism works fairly well. It does not work when you have somebody like Barney Frank throwing a monkey wrench into the gears, behind-the-scenes, because his hidden agenda would be advanced by having more government spending (and hence more power for him and his cronies). Breaking the law is against the Constitution. Covering up the crime is also against the law.

If you want to talk about executive compensation, why didn't Congress vote no on their AUTOMATIC pay raise? why aren't they doing their part to "save the company" ['company' being the U.S.] Has Congressional staffing decreased, on average, or increased? Has the Washington D.C. bureaucracy decreased or increased? How about Congress gets their act together first, to lead by example. Then there would be moral authority for them to talk about executive compensation.


RE: :/
By mars777 on 2/18/2009 7:55:13 PM , Rating: 3
Why do you write capitalism with a capital letter?
It almost seems it's some kind of divinity of yours :D


RE: :/
By ekv on 2/19/2009 2:14:46 AM , Rating: 2
Good catch 8)

I had flashbacks of that Star Trek episode ... where the Yangs attacked in wave after wave, which turned out to be Yankees [sans A-Roid apparently 8] ... and Kirk elocutes in the penultimate scene how the Yangs were mispronouncing the words to the preamble, etc.

The other thought was that song "Suite Madame Blue" by Styx. "She" makes a noble ideal but a piss-poor wife, if you know what I mean. I believe I'll focus on somethin' a little closer to home 8)


RE: :/
By cheetah2k on 2/19/2009 12:15:48 AM , Rating: 2
ekv is somewhat right, but so what. He speaks more of double standards and everything other than what this article is about. So what.

So what. I just hope the tax payers of Australia dont have to bail out the Australian counterparts of GM and Ford...

"So what" (i got an echo in my head after reading ekv's comments.. lol)


RE: :/
By Hiawa23 on 2/18/2009 9:25:46 AM , Rating: 2
Well, I give em credit, they(Auto companies) are trying, but for some reason, with the downturn in the auto industry & the economy, cutting the 47k jobs still will not be enough for them to get the ship going in the right direction, & let me say, I don't want any of our companies to fold but in another couple of months, I see these companies coming back for even more money, cause there is noway even with the cuts I see them being able to pay back the loans. I really don't know what the answer is as this seems to be a sinking ship, no matter how much of our money the govt throws at them, so maybe some sort of bankrupt restructuring now may be the best way to go, so when the economy & auto industry rebounds, they can to come out of this. The way things are going this seems like a big yo yo.


RE: :/
By Chadder007 on 2/17/2009 7:42:57 PM , Rating: 2
47....thousand...
Thats an insane amount of jobs for one company to cut.


RE: :/
By psychobriggsy on 2/18/2009 10:13:16 AM , Rating: 2
And the knock on effects will be dire.

But not as dire as if they laid off all their workers after going bankrupt.

But what's the best solution? Let this company die to allow Chrysler and Ford to survive in the future despite the 100k jobs and knock on effects? A liquidation fire sale of cheap GM cars won't help them! Keep them alive? Dump the company, sell the car design rights to a new company, that rehires the work force sans union anchor?


RE: :/
By taber on 2/17/2009 8:32:07 PM , Rating: 2
I'm sorry, I just have trouble seeing the justification in it. According to Yahoo finance GM has 252k jobs total. So they're asking for 16.6 billion dollars to save 205 thousand jobs, which amounts to asking for $80,975 for each job they want to save. I realize the argument exists if GM goes under it will cause other supporting industries harm, but you have to draw the line somewhere. Odds are, even if GM declares chapter 11 and it does hurt Chrysler, Ford and their suppliers, some form of an American auto industry will still exist after the recession.

252k jobs is a lot, but last month alone the US shed 598k jobs. Where's the $81k for each of them?


RE: :/
By TSS on 2/17/09, Rating: 0
RE: :/
By masher2 (blog) on 2/17/2009 9:20:50 PM , Rating: 2
> "HAHAHAHA.HA."

And we thank you for that show of sympathy.


RE: :/
By TSS on 2/17/2009 9:34:10 PM , Rating: 2
lets google the word. from wikipedia:

"Sympathy is a social affinity in which one person stands with another person, closely understanding his or her feelings"

i really cannot understand your feelings on the matter as you got screwed beyond my comprehension.

how the american people can allow such a bail out on such a bankrupt company, is also beyond my comprehension (i would protest on congress's doorstep for weeks). if you look back when the first bailout newspost came, my reaction was "take the hit". currently, you'd still have to take the hit only now the hit's already much harder.

how GM themselves could screw up so badly, is also beyond my comprehension.

what *is* within my comprehension however, is that this is a snowball rolling down hill headed for my house. for if the american economy goes, it's dragging the world down with them (where's your sympathy there?)

so i'm moving out as fast as i can, getting my personal belongings to safety before it hits.

i live responsibly, within my means and debt-free. i don't need to give sypmathy, nor do i need to recieve it.


RE: :/
By Lord 666 on 2/17/09, Rating: -1
RE: :/
By DPigs on 2/18/2009 12:05:20 PM , Rating: 2
Too bad he's not that far off. You guys are getting jacked.


RE: :/
By mindless1 on 2/17/2009 11:15:50 PM , Rating: 3
Don't let the door hit ya on the way out.


RE: :/
By GlassHouse69 on 2/17/2009 11:53:56 PM , Rating: 3
We missed this guy's village when we bombed afghanistan.

damn.


RE: :/
By slunkius on 2/18/2009 1:15:39 AM , Rating: 2
So between posts on this site you do bombing runs? Impressive!


RE: :/
By Master Kenobi (blog) on 2/18/2009 7:15:36 AM , Rating: 2
There are some active duty personnel that visit DT. It wouldn't be that hard to imagine ;)


RE: :/
By crleap on 2/18/2009 1:02:46 AM , Rating: 4
I live in Kokomo IN, with the headquarters for Delphi and several large Chrysler plants. A lot of the old-time workers DO make 80k a year considering wages, overtime, and the killer insurance they get. Ridiculous if you ask me, for a job that barely requires a high school diploma.


RE: :/
By Athena on 2/18/2009 12:18:41 PM , Rating: 2
quote:
According to Yahoo finance GM has 252k jobs total. So they're asking for 16.6 billion dollars to save 205 thousand jobs,
I'm not one to defend GM at all. Nevertheless, I think it's appropriate to note that the government has committed to $150 billion to AIG with virtually no accountability. As a result, the white-collar workers at AIG continued to receive bonuses and attend junkets.

It's all very well to say that Congress has realized its misake with TARP but there is glaring double standard operating here.


RE: :/
By Ringold on 2/18/2009 1:32:18 PM , Rating: 2
I don't think at least anyone doubts that AIG will at least pay back the money. If you look at the interest AIG was forced to pay on the money it got, it's also far, far higher than the subsidized rate the Big Three get. Meanwhile, GM's bond holders are probably going to get screwed down to 10 or 15 cents on the dollar -- I think the UAW is pushing for as little as 2 or 3 cents. They're pretty different sorts of bailouts.

Not that I like seeing bailouts of any type. Just saying.


RE: :/
By segerstein on 2/18/2009 3:08:18 AM , Rating: 2
Congress mandates CAFE and production of cars Americans don't want to buy. Unlike foreign producers that pay CAFE fines, Detroit3 must not be seen as permanent violators.

And of course, Dems friends in UAW.

Taxpayers will have to transfer their wealth for the green lobby project of mandatory fuel efficiency [not based on economic value of lower consumption for the end user]. And transfer their wealth to UAW. BRAVO!!!


RE: :/
By callmeroy on 2/18/2009 9:39:37 AM , Rating: 2
All I know is GM and Ford I'd feel bad about going under a heck of a lot more than Dodge/Chrysler -- that POS company needs to just die already....

I'm a dodge owner by the way , first time and will be my last time with a dodge -- quality is complete crap, car had nearly a dozen recalls in the FIRST YEAR -- including a transmission issue that I wasn't even informed about until AFTER it decided to shift automatically on me while i was driving down the high way at 50+ MPH...scaring the living shit out of me...thank God there was no traffic that day.

Then I found out from folks I know in my condo complex and even some folks I casually talk to at the gym who all own dodges...only one guy out of about 5 people are pleased with the quality of his dodge (he has a pickup).

What a crap product line --- dodge.....


Unions
By zShowtimez on 2/17/2009 7:05:56 PM , Rating: 5
Lose the unions, and then they can have a real turn around ;p




RE: Unions
By gipper51 on 2/17/09, Rating: -1
RE: Unions
By shin0bi272 on 2/17/2009 7:35:20 PM , Rating: 1
we have things like the BBB and the employment security commission now that will look into allegations of improper treatment/payment/conditions. All the union's do now is intimidate workers who arent in the union to either join or get fired (including death threats) and jack up the cost of goods due to higher than average wages to do a simple task.


RE: Unions
By The0ne on 2/17/2009 7:46:30 PM , Rating: 1
My main gripe about UAW is their stance on QA improvement. What has been done with other companies cannot be done, and it's been tried many times, with the big3. Lazy and comfortable employees with power will not change how they work. It is that simple. It's what I face daily with many companies that want to change and improve.


RE: Unions
By masher2 (blog) on 2/17/2009 8:53:45 PM , Rating: 3
> "My main gripe about UAW is their stance on QA improvement"

Exactly so. Most people don't realize that it isn't just the bloated salary and benefit costs that hurt the Big Three, but the union work practices as well.

$73/hr labor cost is bad enough, but when coupled with lower productivity and much higher defect rates than non-UAW workers, it really adds up.


RE: Unions
By HinderedHindsight on 2/17/2009 9:33:56 PM , Rating: 2
The fact that Mercury (a non luxury brand) dependability is second only to Lexus (a luxury brand) seems to contradict your assertion regarding "lower" productivity in terms of QA. Mercury even beat out the hallowed Honda and Acura brands which supposedly are benchmarks for longevity.

Third on the list was Cadillac- if two of the top three are American brands, then it appears that good quality can be had out of UAW workers.

http://www.jdpower.com/autos/ratings/dependability...


RE: Unions
By masher2 (blog) on 2/17/2009 9:45:01 PM , Rating: 2
quote:
The fact that Mercury (a non luxury brand) dependability is second only to Lexus (a luxury brand) seems to contradict your assertion regarding "lower" productivity in terms of QA.
Not in the least. You've first confused productivity with quality, and then further confused final product quality with worker quality. When a worker makes a serious mistake on the assembly line, its caught and corrected -- at a cost to the manufacturer, of course.

Also, you've misread the JD Power survey. Mercury isn't "second only to Lexus", it's actually in a 9-way tie for the category of "better than most" with 8 other brands. Finally, you're somewhat misusing the survey itself, as it covers only the first 3 years of ownership, and most of the problems stated ("wind noise", "excessive window fogging", "noisy brakes", "vehicle pulling to the right or left") tend to be engineering-related, rather than dealing with quality of assembly.


RE: Unions
By HinderedHindsight on 2/17/09, Rating: 0
RE: Unions
By mindless1 on 2/17/2009 11:24:09 PM , Rating: 2
Misalignment and brake noise are not usually engineering problems, they're poor 3rd party service problems. Foggy windows on the other hand I'd have to agree with, but if we're going to selectively pick and choose which items to mention, let's at least stick to those which are relevant.


RE: Unions
By mindless1 on 2/17/2009 10:44:08 PM , Rating: 2
The BBB? LOL, surely you don't think they are remotely effective.

You have a nice easy to write stereotype in mind when it comes to unions, but the truth is much more complex.

Where is your proof the cost of goods are jacked up? Do Japanese cars cost significantly less, even without considering the yen devaluation and it's subsidy effect?

You might need to watch less tv, if it was a good mirror of reality would it be fiction and would anyone watch?


RE: Unions
By shin0bi272 on 2/18/2009 6:13:01 PM , Rating: 2
the average uaw union worker makes 27/hr vs 17/hr for non union workers doing the same job. That extra cost eventually goes into the cars obviously because its sure not going to come out of the CEO's pockets. When you trade in a japanese car its worth 27% more so it would stand to reason that a large portion of that devaluation of my car went to higher wages for workers and cheaper parts in the car. There's a reason that stereotypes exist... because in general they are true for that group of people. Not everyone in that group is stereotypical no but the stereotype had to come from somewhere didnt it? Plus I just heard on the radio yesterday a woman who said that she received death threats and calls from people saying that her husband was in a car accident and was killed because her husband wouldnt join the union. You might need to look at the facts instead of sitting at your computer on the internet all day putting other people down for disagreeing with your incompetent ideas.


RE: Unions
By mindless1 on 2/18/2009 8:01:13 PM , Rating: 2
One example, even if true, does not validate a generalization about a large group.

3rd party hearsay, not 4th or 5th at least on the radio is considered "fact"? That's insane.

YOU might need to look up facts, we do have things called NEWS reports, criminal cases. If this were common we'd be hearing of real cases of it all the time.

Stereotypes stemming from movies happen all the time, TV is one of America's primary pseudo-information sources.

Lastly, that jab at the end coming from someone who can't even put a few carriage returns in their reply was silly.


RE: Unions
By gipper51 on 2/17/2009 10:44:17 PM , Rating: 1
True we have those to 'protect' our rights, but they're not going to advocate for better wages and rights. If nobody's fighting for it, that's when it starts to slip...always does in any scenario. Wouldn't happen overnight, but it would happen. Without unions it would require another lobbyist group step up and start fighting for worker's rights.

Not saying unions are perfect...far from it, but they do have an important place.


RE: Unions
By Salisme on 2/18/2009 11:08:54 AM , Rating: 2
And your post is exactly why unions like the UaW fail. Why would someone need a lobbyist group to protect their rights? There are millions...er billions of people in the work force right now as I type this, are these non-union working folks all "violated" by their employer?

I worked at a GM facility as a contractor for over 10 years. I could go on and on about the craziness I have seen involving the union workers. The stereotypes are very true: people on the lines drunk, forklift drivers sleeping in the corners, promotions based on time instead of skill (at my facility we have a pipe fitter that knew nothing about pipe fitting, I had to contract out a repair service to fix the line when a pump went down).

Point I'm trying to make is, the UaW needs to lobby for protection, because it is one of the only manufacturing workforces, probably in the world, that would get fired in a heartbeat for incompetence if they were NOT protected by a union. The workers lack common sense that most of us learned as teenagers working part time jobs after school.

If you are a skilled worker, an employer is going to pay what you are worth to him, not what a union tells him to pay. If not, you find an employer that will pay or you improve your skills to make yourself marketable. There is a reason why that are so many posts here about QA.


RE: Unions
By mattclary on 2/17/2009 7:41:19 PM , Rating: 3
At one time in history, unions served a really good purpose. Now, the government has tons of laws on the book to protect us worker bees. Unions are an outdated relic of the past that have priced themselves, and American cars, right out of a market.

Also, did you know union wages are tied directly to minimum wage? Every time minimum wage goes up, so do union wages. You know minimum wage went up the last two years, and will go up again this June/July? Who do you think lobbied Washington to get those minimum wage increases?


RE: Unions
By psenechal on 2/17/2009 7:44:32 PM , Rating: 3
Yes, the unions originally fought for higher wages and better benefits, but in a time when the average worker's voice could not be heard. It's a different day and age now where the average cost of employing a UAW worker is $70 per hour. $28 of that is their wage, the other $42 is for health insurance and pensions (about $32 of that going towards retirees...people not even working to build cars anymore)

I think the unions negotiated pretty well for their members, and the big 3 and the average Joe are paying for it in high manufacturing costs and over-priced automobiles.

I for one think the government should treat them like any other company and let them fail if they can't run a financially viable entity. In the current recession, sales in the adult entertainment industry are plummeting..so when do they get to line up for their bailout $$ ???


RE: Unions
By taber on 2/17/2009 8:36:31 PM , Rating: 2
I've got some work for those in the employ of the adult entertainment industry if things get too rough.


RE: Unions
By ekv on 2/18/2009 4:56:55 AM , Rating: 2
Great 8|
Another one of Nancy Pelosi's office-boys, flush with bail-out money. Well, I guess there's a least one person who knows where the "stimulus" money is going....


We should have seen this coming...
By shin0bi272 on 2/17/2009 7:49:36 PM , Rating: 3
We knew theyd be back. They only wanted the 25b to last out the 4th quarter of 08 I think they said might have been the first quarter of 09. It was basically because they were days away from having to close their doors. So we should have known that they'd be back.

What really annoys me is that not only have they not made cars that people really want to drive (i.e. the volt)but they are now letting the government dictate how they run their business when the government gave them their 25b without any conditions. Now the government wants to tell them that they have to produce certain types of cars and sell their corporate jets and limit their pay to half a million a year. The dark side of asking politicians to give you money is they want things in return for it.

Did any of these companies get rid of their union labor? no. Did any of them stop producing cars that have a tiny profit margin? no. Did any of them file for bankruptcy so that they could be allowed to renegotiate those union contracts? no.

The american automakers have to sell almost 7 sedans to equal the profit from 1 suv... but the government doesnt want them making suv's so they are going to have to sell 7x more hybrids that people dont want in an economy where people cant afford a 50,000 hybrid car that will never save you enough gas to warrant the extra $30,000 you spent on it. Well maybe if gas goes up to $5.00/ga it would after driving it for 10 years... assuming the battery in it doesnt die and have to be replaced which will cost you an additional $10-20k. But I digress...

You want to get GM (and/or the economy) back on track fast? Cut the corporate tax and capital gains tax to 5%. Then if a company cant make a profit when they are paying 10% in taxes vs 45% that's just tough for them and they can go out of business. That might sound harsh but its not the government's job according to the fundamentals of this country (you know that pesky constitution), to bail out companies that make bad decisions.

Its their job to keep us safe from invasion and insurrection and keep our national debt paid off and get out of our way otherwise. So far they have it exactly backwards. They are in our way all the time, in our back pockets for every dime they can get and not keeping us safe from the invasion of illegals coming in from the south (and from other countries via mexico as well).




By ice456789 on 2/17/2009 8:09:15 PM , Rating: 4
quote:
You want to get GM (and/or the economy) back on track fast? Cut the corporate tax and capital gains tax to 5%. Then if a company cant make a profit when they are paying 10% in taxes vs 45% that's just tough for them and they can go out of business. That might sound harsh but its not the government's job according to the fundamentals of this country (you know that pesky constitution), to bail out companies that make bad decisions.

But if we cut their taxes that much, how are we gonna fund Obama's tax cuts for people who don't pay taxes? Remember... these are big companies and therefor they are evil. /sarcasm

I'm a little bitter because when I was an IT consultant and my consulting firm went belly up after the bubble burst, the gov't didn't swoop in and rescue us. I didn't expect them to. But threaten the automotive industry and all of the sudden blue collar workers fear for their jobs. Of course the government steps in there. Twice. Oh, and they're asking again.

Sorry. If your company isn't going to be able to thrive in the current economy then the Gov't has no business trying to artifically keep it afloat. We're at war, and our soldiers don't have body armor, or armor plating on their vehicles. But lets pump another $16B into a failing business and cross our fingers that the money fairy waves her magic wand.


RE: We should have seen this coming...
By DigitalFreak on 2/17/2009 8:25:36 PM , Rating: 1
quote:
The dark side of asking politicians to give you money is they want things in return for it.


As opposed to giving them the money with no strings attached? How did that turn out with AIG?


By Seolan on 2/17/2009 11:04:06 PM , Rating: 2
It's all over for gm.


By shin0bi272 on 2/18/2009 6:14:13 PM , Rating: 2
no as opposed to a federal government that lets private companies fail when they make mistakes!


RE: We should have seen this coming...
By Beenthere on 2/17/2009 9:55:29 PM , Rating: 2
You need to get your facts straight...

The initial BRIDGE LOANS were to get GM and Chrysler to March '09 when they would need additional LOANS to continue the restructuring to a viable business model to deal with the worldwide economic depression.

To obtain these additional loans, GM and Chrysler were required to submit restructuring plans by Feb. 17, 2009 - as they have. Now they are requesting the additonal LOANS that were understood by all to be required to continue the restructuring. There is no news here. This was the plan all along. That is why the original loans are called BRIDGE LOANS to get you from where you are to the next step in the restructuring of the business and additional longer term financing.

Not only do these LOANS have numerous security clauses to protect tax payers, they have mandatory restructuring requirments. These LOANS can be recalled at any time if the auto supervisory committee feels that the auto company is not meeting their obligations. In addition the CEOs from Ford, GM and Chrysler are working for $1/yr. until the loans are repaid in full with interest.

All of this information is available to anyone who wants the fact - with just a few clicks of your mouse.


By ice456789 on 2/17/2009 11:16:58 PM , Rating: 2
Why do you keep screaming the word LOANS at me?


By codeThug on 2/17/2009 11:27:37 PM , Rating: 2
quote:
viable business model


Buggy whips anyone?

Most current business models are broken and will remain so.

You need to think "outside the crankcase".


By shin0bi272 on 2/18/2009 6:38:08 PM , Rating: 2
they call them loans but I will bet you a dollar that its a pay out to the unions for voting for the messiah.


By shin0bi272 on 2/18/2009 6:41:11 PM , Rating: 2
oh and again... more government control of private businesses in exchange for cash to keep operating. Have you been paying attention? Khrushchev was right ... our children will live under communist rule (he said grand children in the 60's so that would be either us or our children) and just like in star wars liberty will die to a thunderous applause.


RE: We should have seen this coming...
By Bono007 on 2/18/09, Rating: -1
By mxzrider2 on 2/18/2009 4:23:46 AM , Rating: 3
ok first of all the ev-1 was made for California regulations that required auto manufactures to make an electric car. GM was first out the box and right as they made a few hundred copies and only sold a few, California realizing its mistake takes back the regulation

for reference
http://en.wikipedia.org/wiki/General_Motors_EV1
and the documentary WHO KILLED THE ELECTRIC CAR


By Roy2001 on 2/17/2009 7:04:17 PM , Rating: 1
Let it file BC, the sky won't fall. Don't say Toyota/Honda are all in trouble now. They did not and most probably won't, ask for government bailout.

UAW is a joke!




By JoshuaBuss on 2/17/2009 7:44:35 PM , Rating: 2
Toyota and Honda are both receiving far larger loans from the Japanese government than anybody in the US is getting.


By shin0bi272 on 2/17/2009 7:55:25 PM , Rating: 1
toyota also made 2bil internationally last year and gm lost 4 or 5bil... so if money was sent to the american plants to keep going it was out of that profit id be willing to bet.


By mindless1 on 2/17/2009 11:07:33 PM , Rating: 3
O Rly?

quote:
Toyota today reported the global auto sales plunge that began in the second half of 2008 will drag it to its first net operating loss in 59 years, as the company expects to record a loss of some $3.85 billion for the year ending in March.


http://www.autoobserver.com/2009/02/toyota-hits-gl...


By masher2 (blog) on 2/17/2009 8:48:13 PM , Rating: 1
Err, I don't know where you heard this, but I don't it's correct.


By Lord 666 on 2/17/2009 8:55:08 PM , Rating: 2
The OP might have seen 20 to 30 trillion, but thats in yen where it is about 300 billion US dollar.

http://online.wsj.com/article/SB123482989082995519...


By teckytech9 on 2/17/2009 10:52:03 PM , Rating: 2
From Reuters:

"GM and Chrysler are asking for billions of dollars in U.S. government aid, and warned that the current brutal downturn in U.S. auto sales will continue for the next few years."

The next few years means that more billion dollar handouts are just beginning. Heck, why not pass another bill and call it - "Auto Industry Rescue Program."


News Brief For The Uninformed!
By mindless1 on 2/17/2009 11:34:40 PM , Rating: 3
All those who want to feel that have a solid grasp of failings by GM and Chrysler, seem to be conveniently ignoring that your other favorite automakers are really hurting too, and now seeing, wait for it....... LOSSES.

The situation is not one of GM mistakes beyond not having the crystal ball they would need to see that soon gas prices would rocket and we'd go into a recession. That recession effects the middle class purchases of larger near-luxury class vehicles, exactly the type GM depended on for profits.

Want to fix GM? Fix the recession. One way to do that is, merely by coincidence if nothing else, not letting the US auto industry collapse. Think about it for a moment, if we let each of our industries in turn collapse, what exactly do we have left, sales of MS Windows in China? Granted that's stretching the situation but reinvesting in our own economy is the smart move, staying productive is the way out of the hole we're in as a nation.




RE: News Brief For The Uninformed!
By masher2 (blog) on 2/17/2009 11:55:44 PM , Rating: 2
> "The situation is not one of GM mistakes beyond not having the crystal ball they would need to see that soon gas prices would rocket and we'd go into a recession"

Err, GM was losing money when gas prices were high and when they were low. They were losing money when people were buying SUVS hand over fist. They've been losing money most of the decade in fact. Ten years ago, GM was trading in the $80-$90 a share range. Today, its at $2...and would be a penny stock, if it wasn't for government bailouts.

Blaming GM's problems on the recession is totally unwarranted. Every industry observer has seen this coming long ago. The current downturn did not more than speed up things up a trifle.


RE: News Brief For The Uninformed!
By mindless1 on 2/18/2009 2:07:01 AM , Rating: 2
I agree they weren't doing well, but not the crisis situation we have now. Why were they losing money in the past? To compete with ~ $3-10K subsidies enjoyed by Japanese automakers. Only now do we finally see the yen dropping to sub 95:1 exchange rates since about 1996.

It's pretty easy to lose money when you're at a multi-thousand dollar disadvantage per unit. Now that this disadvantage is gone what do we see? Japanese automakers losing money and needing help too.


RE: News Brief For The Uninformed!
By ekv on 2/18/2009 5:23:49 AM , Rating: 2
I might disagree on reasons for the cost differential -- I work for a union shop, unfortunately (non-auto) -- however, I'd rather ask, where do the bail-outs end? If $4B isn't enough, or $7B, or $17B, when is it going to be enough?

There is a standard process for when a business is in trouble ... yes, bankruptcy. GM has enough lawyers, they could make a ch.11 work. The business keeps going, cars are still made and sold. There is light at the end of the tunnel. No government involvement needed. Taxpayer dollars saved.

[As it is, the union doesn't have to make concessions, and they know it. Woops, sorry for the digression, it's late].

If GM goes the ch.11 route, then they have to restructure and find a way to become profitable. It is in everybody's best interest that they do so. But if they do not restructure, where does it end? What incentive do they now have to restructure?

To me, it looks like their incentive is to kiss Congress' back-side. Hell, next thing you know we'll have the Barney Frank inspired, hideous, viscerally and morally repulsive, just plain ugly, Element knock-off.


By mindless1 on 2/18/2009 7:54:58 PM , Rating: 2
Restructuring will happen either way. Chapter 11 is a reasonable alternative but what about GM's creditors? This doesn't just effect GM, why are others penalized and what's the trickle-down effect there, where does /that/ end?

I'm fairly confident they will be monitored and heads will roll whichever path is chosen, that it won't be a continual bailout payment. What they've proposed so far was already known going to happen when the whole situation surfaced initially.


Oh great
By SlyNine on 2/18/2009 12:25:21 AM , Rating: 2
He says he's going to spend money, all the companies start running to D.C. with their hands out. But yet people criticize people about to loose their homes.

Assuming you have a decent neighbor, would you rather help him out, or help the Banks, Car manufacturers, etc etc.

Lets help the people with their homes first. If they have a home they know they wont loose maybe they will spend some money.

How about this, lets get walmart and all these stores to clearly label something that's MADE IN THE USA, and spend some of that money on a campaign push to get people to buy made in the USA. Then raise the import taxes and THEN start this stimulus plan. Just my 2 cents.




RE: Oh great
By warpigseh on 2/18/2009 2:29:19 AM , Rating: 2
As much as I'd like to see our american car companies prosper, it's hard to justify giving them money they don't deserve... When one company dies, another one rises. No?

But it's even harder seeing your friends lose jobs due to incompetent superiors. I can see justification either way sometimes.


RE: Oh great
By SlyNine on 2/18/2009 4:41:36 AM , Rating: 2
Yea, As much as it makes me nervous about the auto workers losing their jobs. Maybe its time to take them off life support. At this point its really the government paying their wages.

Really, I almost cannot understand why they are not bringing in a profit, even with them overpaying their employees. They just thought, we'll spend and pocket and when it comes time the US of A will bail our ass's out.


I like GM in general sense...
By A Stoner on 2/18/2009 10:30:56 AM , Rating: 2
I like the Camaro, I like Buicks and that is a part of GM.

With that said, GM needs to go to chapter 7 bankruptcy and have all of it's assets sold to another company. There is nothing worth salvaging from the company other than it's hard assets and intellectual property. It's workforce is nothing but a bunch of pampered good for nothing peices of crap that will never overcome these shortcomings while they are employed by a company with the name GM. It will take GM closing it's doors for good to shock some of these people into actually making the soul searches needed to change into hard working people that contribute more to the company than they demand from the company in compensation. No company can survive when the workforce extracts total company value, none, because there are more to expenses than workers. I cannot find one thing about GM as a company that is worth salvaging, not one. It needs to be sold to the highest bidder.

The government has to take it's fucking grimmy sticky fingers out of my pocket and most importantly out of the pockets of my children and their children. The nice new $800,000,000,000 of debt is going to add additional burden onto this generation and every single generation hereafter with interest payments which is going to reduce forever the overall opportunity for this country to grow. There are some things that are worth this kind of future burden. One of those things that is not worthy is to prevent a little downturn in the economy. Save a couple hundred billion today by spending several times that today and smaller parts for the rest of eternity, I do not see that as a solution. Every last bit of this spending is going to become permanant with the exception of the tax cuts, since when does the government ever go back to it's old spending ways once new spending is begun?




RE: I like GM in general sense...
By Uncle on 2/18/2009 10:52:48 AM , Rating: 2
Yes , this is the same government who haven't extra money for education and medicare. I've never seen a more screwed up country when it comes to looking after whats most important, its people.


RE: I like GM in general sense...
By A Stoner on 2/18/2009 11:05:35 AM , Rating: 2
Sorry, do not see where it is FEDERAL responsibility to take care of school spending. That should be a state/local expense.

I also do not see why medicair should be a responsibility of the government. Taking care of the elderly should be the elderly's childrens responsibility or the elderly themselves. The fact the government takes care of it only causes poor life choices by all these people.


DailyTech?
By kelmon on 2/18/2009 8:51:18 AM , Rating: 2
Perhaps I missed something in the article, but what has this got to do with technology? Put another way, why has this article been posted to a technology website?




RE: DailyTech?
By chrnochime on 2/18/2009 11:05:27 AM , Rating: 2
...so the union supporters can keep saying blame the execs don't blame us and those who firmly believe only bankrupcy will do can have at it with each other? I mean neither side will take facts that don't support their view so might as well have them argue and make this place more interesting...


What happened to natural selection?
By Danish1 on 2/18/2009 1:22:52 AM , Rating: 2
If GM goes under wouldn't that be good for Ford and Chrysler etc. making them profitable again, much faster than otherwise possible?

I'm not American but I sympathize with everyone whose government is being a swine with their tax money and I think keeping an industry afloat that completely failed on its own is doing just that.

Every farmer can tell you there are good years and bad years, and when you spend the excess harvest from good years solely on making yourself fatter than you can sustain during bad years, instead of building a grain stash, then the sky is bound to come crashing down on you someday.




By Danish1 on 2/18/2009 1:30:36 AM , Rating: 1
I may add it's all the fault of greedy suits imo, the only thing they care about is profit right now and that's why we ended up in this shitty situation.

I salute DNA for coming up with the perfect solution to this, put all the useless leeching suit fucks who produce nothing anyone else can use on a spaceship with a one way ticket to far away.

/rant


By Chaser on 2/18/2009 10:18:07 AM , Rating: 2
So now we've transferred "oversight" and the most major decisions to politicians and legislators. There's a system in place for companies that fail its called bankruptcy courts and the judges that preside over them who are trained and staffed to helpreorganize companies and businesses.

Bankruptcy is not the end of the U.S. auto industry and can actually be a new beginning for a company. But the UAW is terrified of that option as it could allow the auto companies to renegotiate existing contracts under court protection.

But since the public believes that bankruptcy means failure and with trillions now flowing around to mismanaged companies that have learned they don't have to balance their books just like the federal government hasn't been for decades who cares?




payout
By Uncle on 2/18/2009 10:45:32 AM , Rating: 2
Two questions. If the government lends GM the 16 billion and they then declare backrupcy , how much, if any, would they have to pay back. Out of the 16 billion how much would go to paying out the 47000 workers.




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