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Is GM Going Into Bankruptcy?

bucky
18 years ago

Read a news item today that suggested the possibility that General Motors is teetering on bankruptcy. This is very scary stuff. If GM goes down we're is huge trouble economy wise. I was just looking at a new Impala. Looks like a great car for the money, but what protection does a buyer gonna have in this situation?

Comments (72)

  • cowboyind
    18 years ago
    last modified: 9 years ago

    Motorcycles are selling really well now; maybe GM should start selling those at it's dealerships. How about a Chevy/Suzuki sport bike?

    I don't have anything against GM being popular overseas. GM has had its European divisions for a long time, and they're well respected there. Suzuki is a good company, too. I've owned their motorcycles for about the last 20 years.

    I also think it's fine if people want to buy a Toyota Camry or whatever else. But I recently was comparing a Nissan Altima to a Chevy Malibu. It's amazing how much more value there is in the Malibu. Very comparable in terms of features and performance, yet the Malibu is thousands less. Plus if you get the Maxx, you get a vehicle that is classed as a full-size which has a huge back seat and lots of cargo space.

    Look also at the Cobalt. In a recent Consumer Reports test, the Cobalt SS beat out all of the competing models they tested, including a Scion and an Acura. Of course, Consumer Reports is not the ultimate automotive authority, but neither is anyone else. Their opinions are respected by many, many consumers.

    People can choose to buy a GM or other U.S.-built car to be patriotic, and that's fine. But to me, the best reason to give strong consideration to a GM car is because they're building some very good cars with innovative features which are leaders in their classes in some cases or at least very competitive in others.

  • bill_h
    18 years ago
    last modified: 9 years ago

    ok jd like the chevy/daewoo aveo or the chevy/dewoo/suzuki equinox, or the pontiac/holden gto or the pontiac/vauxhaul sostice or the pontiac/toyota vibe, yep buy american more or less. face it jd there not much 100% made here, even that flag you like to wave is made in china. g.m. is a top heavy company that built alot of junk in the 70s and 80s and lost their customers, maybe they make it maybe they dont, but stompin up and down screaming buy american aint gonna do it. they going to have turn out a top notch product at a great price, and keep the stock holders happy, or g.m. is going down.

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  • christopherh
    18 years ago
    last modified: 9 years ago

    JD said:
    I seen a Toyota Camry the other day.The older guy had a sticker in the side window.I love the USA.I asked him why he supported Japan and he said its made here.I said but the money does not stay here.He did not have a answer to that.I told him he should change the sticker to I love Japan.
    ****************

    So... If you believe that the money should stay in the country the auto is made I know you believe that GM as well as Ford should dispose of their overseas divisions. Like Ford of Europe. All those Europeans that buy Fords send money to Detroit. All those Europeans that buy GM products send their money to Detroit too. People that buy Jaguars, Aston Martins, Volvos, Saabs, Opels, Holdens, etc send their money to the good ol USA! So you agree that should stop, right? You can't say that it's wrong to send money to Japan when someone buys a Camry and not agree that it's just as wrong to send money here when someone buys an Opel.

    I drive a Ford Expedition and a Dodge Dakota. (The Ford gets better mileage than the Dodge) And I am happy with them. But that Nissan Titan is starting to look pretty good as I had a VERY good experience with Nissan with my last truck. And I like that 9,000# towing capacity.

    WAIT!!! I just saw a commercial that Chevy is putting the Duramax (IZUSU) diesel in the 1500 series trucks! Now THAT just might sway me!! The company that murdered the diesel in the USA just might save it with it's Japanese division's engine.

  • cowboyind
    18 years ago
    last modified: 9 years ago

    ChristopherH, you might want to check the reliability and customer satisfaction ratings on that Nissan Titan before buying. It's a nice looking truck and it has some good features, but it's had some problems.

    The GM/Isuzu Duramax diesel is a great engine and it's built in Moraine, Ohio.

  • john_g
    18 years ago
    last modified: 9 years ago

    There are just so many issues with this I'm sure it's beyond my ability to accurately predict the long term outcome. Lets face it, thats why the CEO's get the money they do. It's not for the changes that they can make happen next week, it's the ones that take decades to blossom.

    GM has, and still is leading the way in your everyday technology you see in todays cars. There is a very good reason why except for the label in the middle of the steering wheel on my daughters Rav4, you could just as easily be holding the wheel of a Pontiac Vibe. In otherwords those steering wheels are the same part, except for the identification marker in the middle. BTW, it isn't GM that is buying that part from Toyota.

    Someone mentioned electric steering assist. Each manufacturer has contributed to the overall technology we see in todays cars. Toyota by far leads the way with hybrids, but that does not mean that GM dosen't have one, and is progressing with developement. Currently AFAIK, Toyota does not have electric steering assist in their current model line-up. But when they do, guess who will hold most of the patents on the system they finally install? (rh) Yea, GM.

    Starting in 2006 Toyota has moved to a different scan tool, it's the GM TechII, simply with appropriate software. Prior to that the factory tool was GM's TechI, otherwise known as the Vetronix Mastertech. GM switched from the TechI platform back in 94 to the TechII. If GM is so far behind, why in the world would Toyota finally switch to a tool that is ten years old? Maybe it's just that the TechII was that advanced, ten years ago?

    Frankly the talk of plant closings and GM's financial issues and their causes are hitting this area hard. We will lose a metal stampings plant and some 800 manufacturing jobs. Like it or not, there is a price to pay for consumerism. When you make a choice to go to Wall Mart (or other large discounter) for common items that would be available through a Mom and Pop shop like mine, or the local Mom and Pop hardware store, or the local grocery store, eventually that choice ends up costing the consumer the very choice they started with as the little businesses falter and eventually close. This same force can affect major corporations as well, and until it hits home people just don't register what the actual cost is to them. I'll bet everyone that works at that metal stamping plant in Homestead does not drive a GM vehicle, and they could post dozens of reasons why. (We all know what the alledged reasons are). But if they had it to do over again, and everyone of them knew that buying a GM vehicle, no matter what the alternatives or reasons to do otherwise would protect their jobs, I'll bet there would be nothing but GM vehicles in their parking lot and anyone showing up with something else would be shown the door.

    Consumerism as an idea is fine, in practice it has to follow Newtons law just like everything else. For every action there is an equal reaction in the opposite direction. When consumerism drives pricing below profitable levels, the only possible result is failure of a business, be they large or small. The only thing to be determined is just how long it will take, and what the overall consequences are.

    One last note that I will repeat. For years GM attracted a buyer that wanted cheap transportation, that they didn't have to maintian. When the cars had problems from being treated that way, those same consumers blamed GM, and have now moved onto other companies. (Honda, Toyota et al.) It already shows with the numbers of complaints rising that these same consumers with bad vehicle maintanence habits are starting to tear down these companies just like they used to do with GM. In a much smaller scale, such as the MOM and POP shop like mine, we don't have the financial resources for people to try other routines for their cars and remain in business when the choice pans out to have been a bad one. Lets hope GM does.

  • earthworm
    18 years ago
    last modified: 9 years ago

    Posted by: John_G (My Page) on Wed, Nov 30, 05 at 9:23

    There are just so many issues with this I'm sure it's beyond my ability to accurately predict the long term outcome. Lets face it, thats why the CEOs get the money they do. It's not for the changes that they can make happen next week, it's the ones that take decades to blossom.

    I do take issue, big time, with the over-compensation that is so prevalent in our country.
    No CEO is worth the kind of money they command, worse yet, this continues until they die.
    Check out the GM Inside News forum, re : GM CEO to receive $4.6 million at retirement...

    And guess who pays for this ...

    The engineers/designers at GM are the important ones, the ones who earn patents that are so valuable to their company and their country..

    Toyota is smart in not adopting electric power steering right now - let VW and GM suffer the growing pains of new technology...

  • johndeere
    18 years ago
    last modified: 9 years ago

    Yes ChristopherH they should dispose of there overseas divisions.Keep it all here and build American products instead of worring about there needs.

    Exactly Bill H.Thats what im talking about.Example the Equinox being a Slapped together import and same thing with the Pontiac Vibe and Chevy Malibu and Potiac G6.That is what is hurting GM.

    I car and truck shopped during 05 and ended up with a last of the Buick Century's.I love the car but I hated to buy a last of a production run.We traded in a 99 Cavalier and we looked at a Cobalt but I was not going to be a ginny pig.The electric steering turned me away.Then we looked at a Pontiac G6.Again electric steering and the salesman made the mistake of saying it shared parts with Saab.I took a hike again thats where he lost that sale.

    Then I looked at a Malibu and found out it was built like a G6 and had electric steering and Saab parts and desighn.I said nope no way.Then I took a look at the Chevy Colarado and they made the mistake of showing me the 5 cylinder engine.Wheres the other cylinder and the lower price for leaving it out I asked.

    I was just about ready to say I will keep the 99 Cavalier.When I decided to take a look at the Ford 500.Then that saleman mentioned it was a half a Volvo.I did not like the looks of the Taurus.Thats when I decided that Ford was pulling the same stunts as GM and if I wanted a Volvo or a Saab I would buy one.Problem was no way was I buying into that.

    I then looked at a Buick LaCross and decided it was not for me.Looks like a Taurus in the front and a Chrysler in the back.I never asked if it was a Saab or Dawooe or Suzuki.I was not intersted however it did have a power steering pump and not electric steering.But I never was a Ford fan or a Chrysler and thats what it looks like one of each slapped together.

    I told my wife you have two choices.Buick Century or keep the Cavalier.But what ever you do you will have to keep it for many years.Because until GM and Ford wake up and stop the Volvo and Saab and electric steering and all this nonsence you will be driving it for a long time.

    Maybe there are more people who think like me and this is why sales are slow?They should have stuck with the Cavalier and S-10 pickup and Corsica from a few years ago rather then that older Malibu Toyota with a Chevy bow tie stuck over the top of.They would have been just fine.Oh and kept the odometer in the instument cluster where it belongs instead of part of the radio.

  • iinsic
    18 years ago
    last modified: 9 years ago

    I hate to say it JohnDeere, and no disrespect intended, but you really need to get your head out of the sand. GM builds more reliable cars than they ever have, largely because it shares platforms and technologies with it's successful partners' (Saab, etc.) products. They purchased these other entities to produce economies of scale, which translate to lower costs and largely better products, to the consumer.

    Most car buyers don't want non-electronic steering, for example. If they did, the marketplace would dictate that. GM, Ford, and Chrysler suffered for years because they felt they needed to continue to develop boring old products that an ever-shrinking portion of the car buying public was willing to buy. Now, they are reaping the results of that misguided marketing strategy.

    Yes, there will always be a relative handful of buyers who will settle for an old style Buick Century, or a Ford Crown Vic. But the buyers who shape the industry want cutting edge technology, which usually comes with higher efficiencies and more luxuries in the resulting product.

    Unfortunately for GM, I am in a generation of car buyers who were not willing to buy garbage cars when better products were available from Japan. Now that GM, Ford and Chrysler are starting to produce cars of similar quality to their competitors, I will start to look at them the next time I buy. Also, the fact that Ford owned Volvo made the last car I bought, a Volvo V-70, an easier sell to me from weirdly patriotic perspective.

  • steve_o
    18 years ago
    last modified: 9 years ago

    I'll bet everyone that works at that metal stamping plant in Homestead does not drive a GM vehicle, and they could post dozens of reasons why. (We all know what the alledged reasons are). But if they had it to do over again, and everyone of them knew that buying a GM vehicle, no matter what the alternatives or reasons to do otherwise would protect their jobs, I'll bet there would be nothing but GM vehicles in their parking lot and anyone showing up with something else would be shown the door.

    Would that it was that simple. If Homestead's plant had only GM as a customer, there would be good reasons for everyone to have a GM car. But you can't force people to buy a new car just because you have a new customer (unless you want to compensate them for it). It's not like GM is entirely the fair-haired child, either. They've been leaning on their suppliers for several years now to cut costs, but they do it in a dictatorial fashion, not a "let's see what we can do here" fashion. I'm also sure that if Elbonian Metal Works down the street offered a better price on stampings, Homestead would be a memory as a GM supplier. Then what? Everyone trades in their GM products for BMWs or Mazdas?

    It's not like Detroit's reputation was established solely by people who refused to care for their cars, either. My ex had a Chrysler LeBaron in the 80s. She isn't the easiest on cars, but she was not responsible for the persistent leak in the trunk, the mismatched trim in the cabin, and the head gasket that failed around 60,000 miles like too many of them did. I'll agree that the domestic manufacturers have done a 180 on quality. But it takes a while for perceptions, good or bad, to be changed. Detroit just has to execute and bide its time.

    I work at a manufacturing company and take pains to buy my company's products. It's also a preference to buy products which use my company's products (if all else meets my needs). I realize it's my paycheck. And I want to support the company at which I work. But I certainly won't sell what I have just to buy a product containing my company's stuff. I won't buy cr@p just because it may be made by my company. And I don't kid myself for a moment that, if my company could pay less and get the same services I provide for them, I'd be pounding the pavement. These days, even loyalty is a complicated issue. It's way more complicated than just saying "Buy American."

  • bill_h
    18 years ago
    last modified: 9 years ago

    hey j.d. isnt your buick built in canada?

  • iggie
    18 years ago
    last modified: 9 years ago

    Whatever the cause for GM,s decline, imports, consunerism, our economy is eventually going to pay dearly as will the coumtry. No economy can contnue to take the hits we are and survive. people can buy their imports, cheap Chinese made junk from Wal Mart and other places,however, eventually the economic piper will have to be paid and the price is going to be damn high. If things continue as they are, the discussions about electronic steering, hybrids and import quality will all be moot points, as most Americans won,t have the money to operate a vehicle. Maybe the imports won,t rust away sitting in the driveway as fast as US made models. Say what you will but when a company like GM starts closing plants and laying off the number of workers it proposed, the piper is starting to collect his due and things will only get worse. In conclusion all I can say is our government better stop spouting the free trade bs and do something to reduce our growing trade deficit. The president going to China and accepting a lot of Chinese double talk about eventually re vauling their currency is not going to cut it. A US worker, no matter how dilegently or hard he works cannot compete with a worker making $60 a month for skilled labor, no unions, safety regs, limited benefits and no overtime pay. America has already took the plunge towared becomong a third world country, and every quarter the trade deficit grows just hurries the process.

  • johndeere
    18 years ago
    last modified: 9 years ago

    That was a good question Bill H I had to check it out.I guess it was I thought it was Toledo Ohio because thats where the Satisfaction surveys come from.But unless I can find a sticker telling me different I guess it was built in Canada?Atleast it was built in North America I guess.However my other car a Chevy Cavalier was built in Lordstown Ohio.Canada is about as close as you can get I guess and we do not have a War memorial because of them so I dont feel to bad.

  • DNT1
    18 years ago
    last modified: 9 years ago

    Latest and best Saturn rumor. Toyota/GM joint venture in the works to utilize the Spring Hill Manufacturing Facility for hybrid car production. Keep in mind this is just a rumor but would anything surprise you now?

  • bill_h
    18 years ago
    last modified: 9 years ago

    could be, my brother in law used to work for g.m. a few yrs ago, and has worked for toyota since. i talked to him last week, he said he was heading to spring hill tenn. on buisness after the 1st of the year. didnt give any details though.

  • bill_h
    18 years ago
    last modified: 9 years ago

    if you are buying a new g.m. car or truck now, any worries? i would be relunctant to purchase a g.m. vehicle now. i would be worried about how many corners they were cutting to save money, or if joe sixpack building it is pissed and decided to leave a few nuts or bolts loose here and there. any thoughts?

  • christopherh
    18 years ago
    last modified: 9 years ago

    "...Atleast it was built in North America..."
    So the cars that are built in Mexico are OK in your book too? That's still North America.

  • johndeere
    18 years ago
    last modified: 9 years ago

    No I avoid Mexico products.I considered a 2.4 engine when I bought my 02 Cavalier.But went with the 2.2 because the 2.4 comes from Mexico.

    Its to bad GM had to start production plants out of the country.But its the trickle down affect of.People buying import brands and shopping at Walmart and wanting cheap and even at the cost of putting there neighbor out of work.

    Its to late to change now.But were just now begining to feel the affects.

    GM is not the only Co with plant closings and layoffs.Take a look around.Here in Illinois Caterpilar is huge or was.I have several friends that work there.Family members did but took there early retirement at 30 years to keep from loosing a retirement plan.They had to settle for less and are now working other jobs to pay for there health insurance.That was stripped of them.

    Some were laid off years ago and never called back and had nearly 20 years in.But there jobs were replaced by others that now just get a hourly salary without any benifits.There called casual workers.Yet if they get sick and miss work there fired at a drop of a hat.To me casual should mean just that.Part of this work force can not speak english and came from south of the border.They closed plants and plan on more closings.But not every day consumers buy a Bulldozer Wheeloader or Scrapers so you do not here about that.There not going broke no more then GM.There both Fat Cats and its all Corporate greed.

    But im sure all these cut backs boil down to X GM buyers buying a Import brand just like a X Caterpiliar buyer switching to Hitachi Fiat or some import brand.Most say to bad I saved $500.00 on a car or $50.000 on a Excavator.But some day we all pay.

  • steve_o
    18 years ago
    last modified: 9 years ago

    But im sure all these cut backs boil down to X GM buyers buying a Import brand just like a X Caterpiliar buyer switching to Hitachi Fiat or some import brand.Most say to bad I saved $500.00 on a car or $50.000 on a Excavator.But some day we all pay.

    We have met the enemy, and he is us. Too few people understand the dichotomy between wanting to buy stuff made cheap by Chinese and Indian and Vietnamese wages -- but wanting to be paid "American" wages themselves.

    And management and labor are "to blame," too. We tolerate -- even celebrate -- CEOs who make 150-200 times as much as entry-level people at the same company (this doesn't happen in most other countries). That money has to come from somewhere. Imagine what good that money could do instead of buying $15,000 umbrella stands.

    Unions did well for their members when times were good, and (have tried to) hold on through poorer times, but, IMHO, are guilty of not looking far enough ahead at global business trends and working collaboratively with management to ensure long-term employment for their membership.

    I firmly believe that if folks working at a company -- both on the shipping floor and on Mahogany Row -- understood they were both on the same side, American business would not have problems competing on the world stage, and we would not have to do it based on third-world wages.

    But that requires changing some long-held mindsets. Rick Wagoner's family might have to learn how to live on less than $10-15 million a year. And Andy Assembler might have to realize that, as long as the U.S. goes without a single-payer health-care system, medical coverage paid entirely by one's employer is damn hard to find at any big company outside of the auto industry and probably isn't something he should expect for the rest of his working days.

  • iggie
    18 years ago
    last modified: 9 years ago

    Well said Steve, everyone thinks his dipping in the import barrel won,t hurt anybody. However, it all ads up and the piper is starting to collect and unless we wake up it will only get worse. Many say they buy imports because of the quality. They say import cars run forever, rarely need service etc. However, rather than this being 100% true, a lot is hype and a certain part is snob appeal. Go to any import dealersship and one will find his service department jammed with autos and not all are there for regular maintance, many are in for major repairs.. I know this is A free country and one can buy any brand sold. However how long can the US economy exist and support the huge trade deficits we are piling up each quarter. The Chinese still espouse the teachings of Chairman Mao. The main theme was destroy capitalism and the US was designated the main bastion. Their ideals have not changed, a better method than direct military confrontation is being used, economuc strangulation. The Chinese , Koreans and Japanese are buying US government bonds as fast as out treasury can issue them, what happens when they decide to demand repayment in a bloc? 29 will look like a Sunday School picnic, all the foreign cars will be sitting idle in drive ways or on the street, because the owners won,t have money for gas, the stock market crash will make 29 look like a holiday. This can be prevented, but something must be done damn quick. Everytime we lose a few thousand more jobs. another nail is driven into our economic coffin. The thousands of illegal aliens streaming into the US is another thing that will bring serious consequences if not handled soon. Many fat cats say this is harmless and they only take jobs no Americans want. This is one of the biggest lies ever fabricated, In this area, roofing companies hire illegals exclusively, they are paid about half the going rate for American roofers, no benefits or overtime pay, as many as possible are paid in cash under the table off the books. They are being hired in all types of jobs, painters, carpentars, cement finishers and painters. This is another huge drain on the US economy, as most of the money they earn is sent out of the country. Most pay no income tax. All I can say is our government better wake up.

  • bill_h
    18 years ago
    last modified: 9 years ago

    iam ok with the buy american to a point, iam not going to buy a lesser product, just to buy american. i think you should support the companys that suport you, as in if you work for or have family working for g.m. then make the effort to buy that brand, in my case my sister is with hyundai/kia also 2 cousins, my bro. in law is with toyota, my mom retired from honda, and i have a freind with ford. so when buying a car or truck i tend to stay in that group. iknow when i drive past the ford parking lot and the daimler parking lot, it looks like alot of the employees are not loyal to the company they work for, to me that dosent look good. if i worked for g.m. or toyota or ford you can bet thats what i would buy.

  • john_
    18 years ago
    last modified: 9 years ago

    Steve o, well said.

  • Marcell
    18 years ago
    last modified: 9 years ago

    What people fail to realize is tha maim profit earned by companies like Toyota, Honda and Huyndai goes out of the US, the money they pay in salaries and spend here is a drop in the bucket compared to what is taken out, this is simply anothe nail in America,s economic coffin. If this trend conrinues one won,t have to worry about the quality of imported vs US made, because the dollar wont have enough value to buy anything. No economic system can take the hits we are receiving and continue to survive. The cracks are already starting to show in the layoffs at GM & Ford, plus all the other jobs leaving the US. This can,t continue and our economy survive/ Many Americans are in for a rude awakening, not a matter of if but when.

  • steve_o
    18 years ago
    last modified: 9 years ago

    A couple of thoughts after reading more replies:

    - We can't really say much about how foreign-car makers are sucking profits out of the U.S. when American car companies are working hard to do the same thing in other countries. The genie of a global economy is out of the bottle. Continued demands by stockholders to increase the stock prices of U.S. companies pretty much dictate that they sell more stuff overseas. And we can hardly ask people in other countries to buy our stuff if we won't buy theirs.

    - U.S. car manufacturers are not alone in contributing to the trade deficit. But the trade deficit pales in comparison to the hole into which the federal government is putting us. What's really ironic about that is that our dangerous dependence on foreign investment (necessary to prop up huge expenses unmatched by tax revenue) and huge amounts of imported oil (not lessened by any serious attempts at conservation) is brought to us by the same folks who claim to be keeping America safe.

    - Finally, if U.S. car manufacturers had a captive market in American consumers (that is, there was no real alternative to buying an American car), would they be anywhere near as good as they are now?

  • john_
    18 years ago
    last modified: 9 years ago

    Finally, if U.S. car manufacturers had a captive market in American consumers (that is, there was no real alternative to buying an American car), would they be anywhere near as good as they are now?

    Absolutely not. If it weren't for the competition with Japan, we would still be making the terrible cars of the early 80's.

    bill h, you seem to be kind of a mercenary, if I may ask, what kind of work are you in? Management?

  • iggie
    18 years ago
    last modified: 9 years ago

    The cars may not have been as good when US auto makers had a captive market. However, we didn,t have an over 700 billion dollar trade deficit, and thousands of Americans out of work. Also the far easten countries did not hold billions in US gov notes. Kind of a poor trade for some so called better cars, don,t you think? Remember, the jobs going overseas, ain,t coming back. The only thing I can see is the import craze ts hastening our transformation into a third world country. No economy can take the hits we are and not sink to a third world status. Our economy is already starting to crumble, layoffs at General Motors and Ford, factories closing daily and moving overseas. As I said before, the economic piper must be paid and the prce will be sky high.

  • cowboyind
    18 years ago
    last modified: 9 years ago

    True, and it happens so slowly that most people can laugh it off. We're working more hours for less pay then we did 20 years ago, and we also are working more than Western Europeans, with lower productivity per hour. The economic model we've been embracing (destroy unions, ship good jobs elsewhere) is not working out so well for us. But hey, it's not a problem, we can just get another credit card and max it out. That's how a lot of people keep financing their lifestyle despite falling wages.

    Here is a link that might be useful: WSJ Article - Why Western Europeans Work Less Than Americans

  • cowboyind
    18 years ago
    last modified: 9 years ago

    Take a look also at the growth in poverty, combined with either stagnant or declining median income. And this is in a time said to be one of great economic growth and recovery. How will 30,000 more GM employees losing their jobs, or thousands of Delphi employees having their wages cut in half, affect this for 2005 and 2006? Obviously it won't help.

    But you say this, and the response you hear from people is, "Look at all the new jobs!" Sure, I'm looking, and what I'm seeing are good jobs being replaced by marginal ones. The statistics seem to bear that out, too, because while we're adding jobs and companies are hiring, poverty is increasing and median income is either flat or sliding down -- despite employees working more hours.

    Here is a link that might be useful: Statistics Page - Nationalatlas.gov

  • steve_o
    18 years ago
    last modified: 9 years ago

    The cars may not have been as good when US auto makers had a captive market. However, we didn,t have an over 700 billion dollar trade deficit, and thousands of Americans out of work. Also the far easten countries did not hold billions in US gov notes. Kind of a poor trade for some so called better cars, don,t you think?

    But that's not accurate. Car sales are part of the trade deficit, sure. But they're not the whole story.

    Twenty years ago, Boeing's only real competition in commercial aircraft -- worldwide -- was a fairly weak McDonnell-Douglas, not a state-of-the-art Airbus. Twenty years ago, Motorola was a (the?) world leader in cellular phones; now they're third, behind Nokia and Samsung.

    Now, high-speed telecom lines and better educations (many received in the U.S.) have given technical workers in Ireland and India the ability to work real-time with counterparts in the U.S. to engineer, write software, support customers, and read X-rays.

    All the money that was being spent in the U.S. certainly is going someplace else.

    At the same time, the migration from pension plans to 401(k)s, and basing company officer compensation heavily on stock options, put millions into the stock market. Their expectations of ever-higher quarterly results still drive decision-making that encourages short-term business growth at the expense of long-term health.

    And, as I mentioned earlier, people didn't think things through. To be more on-topic, GM management pinched pennies on their cars and trucks for years, keeping outdated designs on life support and letting the beancounters rule the roost (cf. the too-long lifespan of the Chevy Cavalier and many critical comments about GM's "cheap interiors"). GM found -- quite late -- that their cars and trucks were not desirable enough to sell even for what they cost to make, nevermind a premium. This while they shell out millions to company officers, p!$$ed away two million dollars getting nothing from FIAT, etc.

    The UAW has been ignoring their wake-up bell for years. What, exactly, does GM or Ford or DCX get for spending lots of money on UAW labor? Compared to the non-union workers at Nissan and Honda (and other) plants in the U.S., UAW members are not better-trained. They're not more highly skilled. They're certainly not cheaper. How long does the UAW (and the members and management of other short-sighted unions) think they can keep commanding high prices when they offer no extra value?

    I agree that it's a shame that we have chosen to strip this country's manufacturing ability in exchange for more credit that we spend on largely-disposable "stuff," much of it made elsewhere. I feel a little cheated that company-worker-customer loyalty is a thing of the past; life certainly was simpler when you could be a good worker and not worry that your job was endangered by your company not making "enough" profit or by management more intent on lining its pockets than being stewards of what was given to them.

    But we've been chipping at this iceberg for a couple of decades now, and we're just now realizing that a few more good hits might loosen us on a chunk floating out to who-knows-where.

  • bill_h
    18 years ago
    last modified: 9 years ago

    answer to john, 24 yrs in the petroleum buisness. primarly the pipline industry. started in the maintenance gang, and worked my way into the office. non union.

  • iggie
    18 years ago
    last modified: 9 years ago

    Steve,my statement is accurate, I did not mean the whole trade deficit is because of imported autos, although a large percentage of it is. A lot of the US companies business loss is caused by unfair trade practices and outrageous tarrifs. For example, the duty on a US made auto entering Japan is 45% of it,s value a Japanese auto entering the US has a 6% duty. We have stringent copyright and patent laws that are rigidly enforced. Foreign companies can open factories in the US and operate them in any manner they chose. No laws as to who they must hire or who must be part owner. In many other countries, such as China ownership must be 50% local, top personell must be local people, Americans can be used for training etc. Many companies are paying dearly for this move. In a few months their technology is stolen as patent laws are not enforced, an identical product is being made elsewhere in the country and shipped to the USA for 1/4 the going price. This probably happened in the cell phone thing. One other thing imported products are not always bought because they are better, but in many cases because they are so much cheaper. Look at hand tools, such as wrenches, hammers chisels, power drills, small jig saws and other things. The currency exchange rates are so unrealistic these things can be made and dumped here for a fraction of a the price of a similar US made product.In many stores one cannot find a US made tool, they may have US name , but are made in the Far East. As Cowboy said it,s happening so slow people hardley notice it. The US economy is like a sinking ship with it,s passangers and the chief engineer dancing on the top deck while the ship slowly sinks, the engineer doesn,t think about turning on the bilge pumps until water starts to slop on the deck, It,s too late then.

  • john999
    18 years ago
    last modified: 9 years ago

    The drivetrain and suspension on the Cavalier was designed by Opel, in West Germany.

    One of the main reasons the US companies cannot sell US-made cars in Japan is beacuse they refuse to make them with the steering wheel on the right hand side !

    I should point out that GM is not the only company undergoing 'restructuring' at the moment. After a period of expansion, the number of automakers is starting to rationalise.

    Ford is also losing a lot of money, as is Volkswagen, Mitsubishi is on the verge of collapse, the Korean car industry has been severely rationalised and is a long way still from _real_ viability, Rover is gone, Suzuki's future is looking dim, Fiat will be gone in a few years, DaimlerChrysler is haemmorhageing money, Daihatsu is no longer (its part of Toyota) and Nissan is now controlled from France.
    Only Renault, BMW, PSA, Honda and Toyota are really making money now.

  • iggie
    18 years ago
    last modified: 9 years ago

    John999, what about the 45% duty on US made cars shipped to Japan? Doesn,t this hurt sales a bit ?

  • steve_o
    18 years ago
    last modified: 9 years ago

    I suspect the 45% duty is several layers deeper on the onion of why U.S. manufacturers don't sell much in Japan. Not making RHD vehicles is a BIG one (how many of you would buy a LHD car, no matter how good it was?). And, like it or not, Japan is a far more homogeneous society than the U.S., so anyone's foreign car is harder to sell. And most of the vehicles America is famous for (SUVs and big pickups) would be way too big and way too thirsty to succeed in Japan. The duty is the least of Detroit's problems.

    That said, Iggie, I understand what you're saying, but the U.S. is not guilt-free there, either. Do you know about the "chicken" tax put on small Japanese pickups to help preserve market share for U.S. small pickups (didn't help)? The Japanese found ways around it. Dumping is a crime, and it has been prosecuted successfully, so if it's really happening, it can be stopped. And while I agree that many people will buy anything from anywhere because it's cheap, that didn't help the Yugo folks. Didn't help Subaru for years and years -- people didn't get past the initial weirdness of the car. And people weren't buying American cars even though they were cheaper than their Japanese and European counterparts.

    It's not like one of us has to be right and the other has to be wrong on this. I stand by my statement that this country needs to make some deep changes in the way we conduct business. Pretending we're all that matters doesn't square with competing interests (always growing sales, buying stuff cheap, keeping stock dividends high). What the U.S. experiences selling elsewhere is only a bit more restrictive than what what other countries experience selling here. If the U.S. wants to be global in power and scope, that means selling what the world wants, the way the world wants stuff sold.

  • john_
    18 years ago
    last modified: 9 years ago

    bill h, not bad.

  • iggie
    18 years ago
    last modified: 9 years ago

    Steve, if you believe dumping is not going on in the US big time, go to any hardware store, look at the tables loaded with cheap foreign made hand tools, try to buy a nut bolt or nail made in the USA. The system our government has for policing dumping and other trade violations is a joke. I hear the global economy thing etc. Also the talk about the US shifting from a manufacturing economy to a service oriented one. We get figures from the government showing economic growth and job creation, no mention of the thousands of jobs lost at GM, Ford and other places. Also most of the jobs created are low paying mall retail and service jobs, many of which will disappear as soon as the mall has served it,s purpose as a tax write off and closes. The only way we can compete in the global economy is lower our living and wage standards. Every service ortented economy in history has failed, the most notable being the Roman Empire, it took several hundred years for it to fail, we,ll be lucky to last 50 unless something is done mighty quick. One thing nthat hasn,t been mentioned is, no new infusion of capital in our economy. We are sending out a great deal more than we take in, A service ortented economy simply shuffles the available capital around various segments of the population. A lot of our national wealth is sapped each quarter by the huge trade deficit. People simply don,t see this because it,s occuring so slowly. Most won,t see it until they wake up one morning and find their dollars are worth about 2 cents. The economy is running on borrowed money, sooner or later the piper must be paid.

  • steve_o
    18 years ago
    last modified: 9 years ago

    Steve, if you believe dumping is not going on in the US big time, go to any hardware store, look at the tables loaded with cheap foreign made hand tools, try to buy a nut bolt or nail made in the USA.

    There is a difference between illegal dumping and selling really cheap because there essentially is no labor component to the product. Real dumping, as has happened in TVs and other areas, is dealt with. Being able to produce a product cheaper because either the standard of living is lower or the government picks up the tab for things like health care and housing, is another thing.

    Also the talk about the US shifting from a manufacturing economy to a service oriented one. [...] The only way we can compete in the global economy is lower our living and wage standards.

    I don't disagree with you that a service economy is very different from a manufacturing economy. I agree that the U.S. likely will have to make some big changes in the way its economy operates. Some of those changes will hurt, if for no other reason than it's not what people are used to and change is hard.

    I do disagree that this is a terminal phase. Having traveled a lot of the world, I've seen that some of America's greatest exports are ideas: entertainment (movies, music), fashion, and food (you can find a McDonald's pretty much throughout the world). Granted, that's not making most Americans involved in those fields rich -- yet. But it could (maybe has to) happen. I suspect these same kinds of discussion went on in the transition from an agricultural society to a mechanized one. Yet we survived that one just fine.

  • English_Cottage
    18 years ago
    last modified: 9 years ago

    I suspect these same kinds of discussion went on in the transition from an agricultural society to a mechanized one. Yet we survived that one just fine.

    Back then the Chinese weren't buying goods by the truckload like they are now, India was still pretty much under Brit domination and there was no concept of global economy.

    Been trying to find a good Mandarin language tutor. Gotta go with the times, you know :).

  • iggie
    18 years ago
    last modified: 9 years ago

    Steve, call the flood of cheap imported tools what you will, the results are still the same, simply dumping under another name. When we changed from an agricultural economy to an industrial or mechanical one, our economy was not being sucked dry by trade deficits, People weren,t being layed off jobs by the thousands. More workers were needed as evidenced by the great number of immigrants entering the country at this time. Todays situation is totally different,decent jobs are leaving by the thousands, ther trade deficit grows each quarter. The last post makes a great suggestion, one would do well to learn Chinese.

  • steve_o
    18 years ago
    last modified: 9 years ago

    I think I'd be better off learning (re-learning) Spanish. :-)

    I think we'll have to agree to disagree on this. The conditions you mention about the transition from agriculture to mechanization are true. But it's also true that education is much more advanced now -- everywhere -- than it was then; that people were scared of having to leave farms that had been in their families for generations to go work at a factory in a city; and that the American population increased by millions in that time. In the meantime, the U.S. became the pre-eminent manufacturing and innovation leader in the world and millions of folks in Europe continued their good work to enjoy a standard of living that's even better than that of the U.S.

    Last year my employer was thinking about outsourcing to Indian "partners" the work I do here (along with three colleagues). They picked two projects and told us to work on them independently. We did the same things with the same software. And, when it was all done, the "high-priced" Americans beat the "low-cost" Indians. We worked smarter and got the job done better and faster. It can be done.

    Learn Chinese and bemoan the good ol' days if you want. I plan to be a survivor in this new economy.

  • iggie
    18 years ago
    last modified: 9 years ago

    Steve, I am glad you and your colleges were given an oppotunity to save your jobs. Your group was able to overcome cheap labor with a better preformsance, this is fine and I am happy this occurred Not everyone gets this chance. In many instances such is not possible. You tell me how an American machinist, regardless of how comptent and inovative he is cannot compete with a Chinese machinist who is probably almost as good and working for $60 per month and few if any fringe benefits, it can,t be done. It might be possible to out do cheap labor in something such as the project you describe. However an assembly line worker at GM or Ford does not have this chance. his work is regimented and in most cases one pair of hands is as good as another, especially where they are lots cheaper. You mention surviving in the new economy, I hope you do. However, I think you are in for a rude awakening down the road. I think an American trying to survive in this new economy and maintain a decent standard of living, will be like a man trying to survive in the Sahara desert without water. No matter how hard he tries without water he won,t survive. Also the next time around your Indian competitors might not be as productive or as innovative, but they may come so close that their cheap wages and almost as good performance will be enough to win the day. I hope not, but it can happen. Your group had a fairly level playing field,that should be enough. The sad thing is few American workers get a chance like that. They come to work one morning and are handed a notice saying the plant will close.To Illustrate my point , there was a small engine rebuilding company in this area. They rebuilt Tactor, Auto , big truck and industrial air compressor engines. They produced an excellent product. There was no labor trouble, and many of the workers had been with the firm since it opene 35 years ago. After NAFTA was passed, competitors started shipping engines south of the border, they could ship an engine to Mexico have it rebuilt shipped back and still make a larger profit and still sell for less than the local firm. The owners held meeting with workers and the union, the workers accepted pay and benefit cuts, everyone worked as effeciently as possible. However, no way could they co mpete with the cheap south of the border labor rates, operate plant to OSHA and EPA standards and make a profit. The owners had to close the local pite and move operations to Mexico. The sad part is the move was financed with a small business loan.and aided by our commerce department This move was not made because of lazy inefficent workers, or union demands and rules. The Us Plant produced a supertor product. the Mexican rebuilts have nearly twice the failure rate of the US rebuilts. However,they could be produced by workers earning $1 an hour,no benefits, no OSHA, EPA or workman,s comp and the products can be shipped here duty free. so they still generate a larger profit and can be sold cheaper than rebuilts from the US. Now Tell Me what could these workers have done to stop this move? New economy, what economy, layed off workers don,t make much of an economy. Still think learning Chinese is a good idea, down the road they may need some house boys. If things continue as they are many will be glad to get such a position.

  • steve_o
    18 years ago
    last modified: 9 years ago

    If labor and management continue to think that only management has brains, then, yes, the American economy and standard of living will go down the toilet.

    The keys are working in collaboration and being flexible. You no doubt have ideas about how your job can be done more effectively or how your company could offer new products or services. Smart management listens; dumb management insists that only the folks in offices know anything. That's an old habit of management.

    Employees also need to get out of some old habits. People cannot expect careers like their parents had 30-40 years at the same company, doing the same thing. Companies do not have the loyalty to employees like they used to. Those of us in Generations X and Y have learned that our careers are up to us. If we donÂt like the deal at our current employer, we go elsewhere. Or find another line of work. Or work for ourselves. Or move.

    Obviously, some jobs and some personal situations lend themselves to that better than others. I think people are far more likely to have multiple careers in the future. IÂm on my second career after 20 years in the workforce. Most of the folks I work with did something quite different before they got here. I fully expect I will have at least a third career. IÂm not sure what it is yet. I just know that the odds are high against my retiring as a computer geek with my current company. Too many years and too much can happen between now and then.

    There also is a danger to being the "low-cost producer" -- and smart management knows it. Maybe the Chinese and Indians are providing skilled labor for less right now, but someday soon, it may be the Vietnamese and Afghanis. Or Liberians and Sudanese. "Made in Japan" used to be a joke. Korean cars used to be a joke. Companies will have to be more nimble. If a product becomes a commodity, where only price is the differentiator, then theyÂll have to change businesses frequently. If they can add services to the product or sell a better version of it, they can continue to make money.

    To try to get this discussion back on topic, look at ChryslerÂs PT Cruiser. ItÂs a Neon with a different body. It is different (but in a useful, friendly way), decently built (not great, but no major failures), sells well (at one point people waited in line to buy one), has inspired competition (ChevyÂs HHR), and has enabled Chrysler to charge (and get) way more than anyone would have paid for a Neon. ItÂs not that the PT is such a great vehicle. But it was appealing enough to make Chrysler some money with a car that, frankly, was nowhere near the front of the pack -- or the cheapest box out there. Now the 300C is the hot seller. In a couple of years, theyÂd better hope theyÂve got something else in the wings. To think they can make PTs and 300Cs and money for the rest of company history is crazy. ThereÂs a time to move on. Here it is.

  • iggie
    18 years ago
    last modified: 9 years ago

    Steve , you are right, management, workers and the unions should work together, everything possible should be done to lower costs and improvre quality and production. Our government should also be doing everything possible to aid in keeping factories in the US. I think it;s obscene that tax payers money is being used to aid firms in relocating to foreign areas. To get bact to the subject at hand, the PT cruiser was a sort of fluke, but it worked and for a time they were a hot selling item.( Assembled in Mexico) Of course many great trends start because of flukes. The Japanese entry into the US auto market took off because of the first oil embargo, the had small cars and the oil embargo made the US a market place.I,ll concede the Japanese handled things well, including making full use of Madison avenue hype. It,s very true that one must move on, however he must have something to move to. New industries are finianced by investment capital. something that is diminishing in the US daily. We have evolved into a service oriented economy. This means very little if any new capital being infused into our economy. The available capital is simply moved from one segiment to another and no outside money coming in ,and if it does it,s borrowed money. Traverse the USA and all you will find under construction are Malls, restraunts, banks, retail stores and housing developments. None of these things bring fresh money into the economy to replace the huge amount sucked out by our huge trade deficit, this mean there will be fewer and fewer places or professions to move to. Look at the GM situation, what are these 30 K people going to move to? There are only so many position neededing people, Even highly educated and trained peole are having problems finding work, this is because our job base is constantly shrinking and unless some drastic action is taken it will continue to do so.

  • johndeere
    18 years ago
    last modified: 9 years ago

    Well now its a Ford things as well as GM

  • bill_h
    18 years ago
    last modified: 9 years ago

    man j.d. you better buy a new volvo so you can help out ford.

  • johndeere
    18 years ago
    last modified: 9 years ago

    If GM and Ford are in trouble.It can not be long before Chrysler anounces there problems.Of course they were bailed out once already so maybe there not hurting as bad?

    But with all the Import brands and a few trying to sell Hybrids.Who knows people in the Gas industry might be in trouble sooner or later also?Maybe you better buy a GM and a Ford Bill H to save your job?

  • bill_h
    18 years ago
    last modified: 9 years ago

    hey j.d. chrysler is an import, thats why their doing so good. haha cant buy g.m. dont have family or friends working there, you know i need that discount, but ford yep i can see myself in a new ford next time, maybe a miata, or mazda 6, an s-70 volvo, or a lincoln ls. i have always liked ford products, and have owned several. gasoline is a small part of our buisness, most of it is diesel, jet fuel and heating fuel, truth is i worry if i will have a job to go to every day, and have for the past 24 yrs. but what you gonna do, thats life.

  • johndeere
    18 years ago
    last modified: 9 years ago

    You dont need Family or Friends working at GM or Ford you could have bought during the Employee discount for everyone sales event they had and more then likley will have again.

    Plus get a GM or Ford credit card and use it.Buy everything including toliet paper and dog treats for the dog with it.But pay off the balance every month.So your not paying any interest.Then everything you buy you get 5% incentive money toward a vehical.With the Discounts and the Haggeling and the Credit card incentives you can watch the salesman nearly Cry.Just do not show your Card incentives.Until you get the price down as far as possible and in writing.

  • bill_h
    18 years ago
    last modified: 9 years ago

    tell you what if i ever get a family member working at g.m. i will take a look, otherwise got to support the companys that support my family. at the rate i drive its going to be 10 yrs or so b-4 i need to replace my cars or truck anyways, by then we all gonna be driving chinese cars haha.

  • tomcat_prowler
    18 years ago
    last modified: 9 years ago

    Well you can't complain about GWBush of not makeing alot of small bussinesses now can you? He takes big bussinesses like Ford and Gm and makes them smaller.LOL

  • bill_h
    18 years ago
    last modified: 9 years ago

    heard on the news today g.m. is no.1 in china.

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