General Motors just can’t catch a break

Boys and girls, can you say, "government bailout"?

Chrysler...the savings and loan industry...Harley-Davidson...pension funds...

Corporate welfare has an illustrious recent past. Anyone ever catch the final price tag for the S&L debacle? Those things have a way of disappearing off even the back pages.

Unfortunately, we all have to avert our eyes for another little while, as GM twists slowly, slowly in the wind before Uncle Sam shows up with his first truckload of money.

Do the Feds ride to the rescue for little guys who screw up? Sorta, if you count Willie Nelson as "half". But now he has to sing 'til he croaks.

No problemo, though, as W channels the Gipper in pooh-poohing deficits. After all, isn't this how you eventually get to Starving the Beast?

Sorry, off to FHOP again.

 

even though I don't own or will ever own another GM product, I have a sneaking feeling that I'll be making payments on one through my tax dollars.....

 

You and me both

 

I see GM has announced the elimination of 30,000 jobs and closure of 5 US plants. Might be a case of too little, too late. The stockholders should demand a change in the board of directors, but then again, tl,tl.

 

You should try having several million dollars invested to sell and service GM products.

 

I should have several million dollars, period. If I did, and because I am 'new school' I would invest in the 'up and coming', not entrenched 'has beens'.

 

Just imagine if they had a hybrid in production that was as popular as the Prius. Instead of laying of 30k, they could have those 30k make that hybrid. But.. they were to slow and too stupid to think ahead like Toyota.

 

GM's announcement will eliminate 4 billion dollars from the North American economy in salaries and benefits alone.

 

For years, GM was extremely anti-hybrid. They exclaimed the technology was a poor business choice and a waste of resources. Instead, they promoted their token efforts with fuel-cells and continued to increase the size & power (consumption & pollution) of their vehicles... betting the farm on that strategy... which has clearly failed.

Now they are faced 30,000 layoffs, 9 factory closures, no way to pay pensions, and inventory that cannot sustain the business. Their stock is at an 18-year low and their credit-rating is below junk status. To make matters worse, their suppliers are struggling with bankruptcy.

They are in a lot of trouble... which ironically is exactly what they said hybrids would case, only their perspective is backwards. Hybrids are actually the solution, not the problem.

 

Malorn,

I feel for you man. This all sucks. GM's appearent implosion (how much market share have they lost in 2 years?) will have devasting effects, for some more than others. However, GM controlled a sizeable chunk of the American automarket. I think the remaining players will be scrambling to pick up the pieces and fill the void. They're going to need those workers to do it. They're going to need factories to produce the vehicles. They're going to get great deals on GM's assets if nothing else. Hopefully most of the damage will be short-mid term. Americans have generally been able to pickup the pieces and move on. Hopefully that'll be true for the folks affected by this.

 

What void? They are not closing all plants and going out of business. They will be cutting costs and not making as many vehicles. Those vehicles were not selling anyway. I don't see a void. They already had lost the sales to other manufacturers. I really don't see other manufacturers increasing production to compensate for GM's over production. After all, they are cutting the plants and production because GM cars were not selling. If they were selling and GM cut production, then there would be a void.

 

If GM implodes completely there will be a void, assuming that they burn out rather than fading away. GM still controls a fairly sizable chunk of the US market. If they go under in a year or two it seems like there's gonna be a void unless the other manufacturers can ramp up that quickly. Maybe they can. Just seems like that's a lotta demand to fill without building or acquiring new production assets.

 

With skyrocketing debt (how much can Japan and our good buddy, China, buy?), interest rates climbing rapidly, the housing boom ending, an open-ended commitment in Iraq, rebuilding in Louisiana and Mississippi,the loss of major revenue via tax cuts for those unlikely to spend and private debt at an all-time high, how many shocks such as oil price spikes and massive layoffs can the Bush economy absorb? Could be we'll soon find out.

 

That's one way to look at it. The other way is to think that that is $4 Billion less in debt that the General is going to incur. Unmanageable debt is worse for the economy, as it is "false" dollars, dollars borrowed on the bond market. I see it as SAVING the US economy $4 Billion, because bondholders won't get screwed when that debt doesn't get repaid. For GM and associated, it's bad. For the rest of us, it's good. GM is now less likely to default on the debt they currently have.

Nate

 

That would be a void. What is really sad, is that 30,000 people will be losing their jobs with more to follow from their suppliers. They probably will not be picked up by other auto manufacturers.

 

I was having a good morning. :mellow: :huh: :angry:

 

Perhaps the severance pay for hourly workers could be derived from the obscene retirement plans for the CXO level folks who made the decisions that got GM into trouble in the first place. The core problem with GM is not on the plant floor but in the offices.

 

I personally would not be so quick to write GM off. Afterall they have a huge WORLDWIDE market share. The giant has stumbled, not fallen. It will be interesting to see them lay their woes on the government (pensions, debt, etc.) the same government the corporations hate so much and do everything they can to dismantle. (Except when it is to their advantage).