Let GM go Bankrupt

@CalamityJane,

There are a terrible lot of workers in the US, and here, who get a lot more than $38 an hour and do nothing productive. In fact a terrifying number of them do work which requires productive work to neutralise.

Take the court battle in Dover as an example.

There are other factors operating in Detroit which don't exist in other places. As wages in Detroit rise the infrastructure around them becomes dependent not only on the wages but on them at whatever level they reach. Parkinson's Law. And local government is dependent on all of it.

One of the biggest problems I think is that if the income of the local government doesn't go down at the same rate as the wage input into the system from the production workers (a vague term I'll admit) an imbalance begins and if problems arise due to the imbalance and are not properly taken into account, as they usually are not as they are put on Ignore, local government costs expand even further etc etc.

That's one of the reasons I think for politicians looking like they don't know what they are doing. They must know of the problem. They don't know how to tackle it because it's all on Ignore.

0 Replies

Interesting article, hamburger. There they blame the Detroit executives for
the downfall. It would be interesting to compare the CEO salaries from
Toyota and Honda versus the ones from the Big 3.

Spendius, was it truly an ignore default mode or did they simply not know
what to do? Ignorance is bliss, as they say. Only problem is, we the public
cannot afford to be ignorant.

3 Replies

I think that the intractability of the auto industry has a lot to do with it. The "Big 3" always take about 2 times longer for roll out of new products than do the average non Detroit company.

When the gas was still affordable, the Big 3 werent in a spiral and were actually making money. This stopped when gas skyrocketed and GM and al didnt have anything to fill in , and only rollout s scheduled for 2010 at the earliest.

GM, for one, is run by MBAs and not the engineers and designers. They have a plodding management style and the still seem to have a philosophy that its "**** the customers, we know whats good for them"

Perhaps if GM spun off its Saturn division and several others (that are possibly profitable) and then let the badges like Buick and Olds just sink and then revive them as a "new concept divison".

One thing that most of us agree on is that, US car manufacturers have usually been the innovators and design innovators , which is then taken over and done much better by the foreign companies. The technology in the US cars is mostly tired old stuff that has been mostly "safe" and not market challenging. The US company concept cars are scooped up from car show attendees and are put out by foreigns. Look at the Ford focus, the minivan,Boxy SUVs (then the "jellybean shaped SUV " )which was a Ford concept back in the late 90's.

Where is a guy like RAymond Lowey or Doc Johnson, now that we need them

2 Replies

@CalamityJane,

But we are ignorant Cal. That is why we are so interested. It is why I am interested. I want to know what dispositions I might need in the future. And I can't do that without looking at the possible scenarios which they will be serviceable in. And they range from "It's all a distraction to take our minds off other matters" (which has happened and anything that happens a sensible person thinks about why it happened ) and through having to catch and skin rabbits to eke out a living in a dugout.

I'm hoping it is the former because an itsy-bitsy financial crisis, with ads on the telly showing big-eats Christmas festivities and a packed house at the big match in Spain tonight (that's 300 consecutive minutes of play over 4 matches that those two have played without a goal being scored) in insufficient to distract me overmuch.

But there is a possibilty that it's all one vast "sub prime" problem going way beyond the housing market. If a business needs a loan to keep going isn't its success based on the loan rather that whatever it does. Like if your lungs have no oxygen your contributions to A2K are gone and thus your contributions are derivates of your oxygen supply. Or any other essentials.

In other words-is capitalism flawed. Marx said so. Hence socialism is coming the easy way. And they have made a good start. Our banks are going to be warned tomorrow that if they don't behave like nationalised companies they will be nationalised formally. De facto they call it. De jure is a self indulgence don't you know?

With a set in stone Constitution it seems to me that there is a difficulty you have not yet considered.

So the Boy Scout's motto is the best advice. Not that I was ever a Boy Scout.
Perish the thought. But their motto is relevant I think.

And the boom in gun and ammo sales suggests plenty more are of the same view. Corned beef has long sell by dates.

0 Replies

@farmerman,

And effemm talks about me posting irrelevant shite to puff my image up.

Sheesh!!

Quote:

Where is a guy like RAymond Lowey or Doc Johnson

Keeping their heads down if they have any sense.

0 Replies

@CalamityJane,

cj wrote :

Quote:

It would be interesting to compare the CEO salaries from
Toyota and Honda versus the ones from the Big 3.

i remember from articles in business week and forbes , that salaries of japanese top executives are MUCH lower than those of north-american top guys - it's probably a cultural thing .
for a japanese to "show off" is a no-no i understand - c.i. can probably fill us in on that sometime - when we have p.m's back ?

i did a google search and found a number of older articles . it seems that a even few $100,000 are exceptional salaries for japanese chief executives - i doubt that many have three and four residences and multiple marriages and divorces (they do have the geishas - even today , i understand - but they don't cost a few million dollars ) .

now , even bringing the salaries of the big three top executives down to zero dollars won't fix the problem - but it might set the tone .
here are some links - to be read at leisure - if you have any !
hbg

google link :

http://www.google.ca/search?sourceid=navclient&ie=UTF-8&rlz=1T4GGLJ_enCA233CA233&q=salaries%2btop+executives+japan+united+states

NYT article from 2002 - i doubt that much has changed :

Quote:

Still, Japanese executives are paid far less than their American counterparts. On average, Japanese chief executives earn a salary of $300,000 to $500,000 a year, more in line with European chiefs, versus an average of $1.5 million for an American in the same position, according to East West Consulting, an executive search firm in Tokyo. Fixed salaries, on average, make up three-quarters of the pay of a typical Japanese company president, with the remainder in bonuses and stock options. In the United States, stock options make up three-quarters of a chief's pay.

Executives here earn about 12 times more than the average worker, a gap that has grown gradually since stock options were introduced in 1997. By contrast, American executives earn 180 times more than their employees, a gap that has more than quadrupled since 1980, according to East West Consulting.

1 Reply

@hamburger,

It's just the same with footballers. That's why football is so much more interesting than it used to be.

0 Replies

@Bi-Polar Bear,

You know there are times like now when I can only wish that the theory of parallel universes would allow me to say to those who wish is to see the Big Three gone by stopping a pocket changes bailout of 25 billions, you can enjoy a universe where you get your wish concerning the Big Three. I however will cheerfully move over to a universe where the government did indeed stop the heart of this country remaining manufacturing section from being destroyed once and for all.

That way I don’t take a chance of living in a universe where fools was able to block a very cheap government bailout and save tens of trillions of dollars of wealth from disappearing forever along with millions of jobs.

A universe where the 1930s will be view as the good old days and cars become so costly that most of us that own cars are keeping them running for decades on end.

The European 5 or 6 billions dollar Hadron Collider may prove the exist of parallel universes in the next few years, however I am forever lock into the same universe with you fools and it can frankly be very annoying.

1 Reply

@CalamityJane,

another illustration of the huge differences in executive pay - from TIME magazine 1992 :

http://www.time.com/time/magazine/article/0,9171,975422-2,00.html

a snippet from the article :

Quote:

Often missing is any real link between pay and performance. Although American corporations are losing ground to foreign rivals, their executives continue to be the most richly paid on earth. While the average Japanese chief executive earns $400,000 in annual pay and the typical head of a major German company makes about $800,000 a year, most heads of major U.S. companies make $1 million to $4 million a year. This disparity was embarrassingly highlighted earlier this year when the Big Three auto chiefs accompanied President Bush on an ill-fated trade mission to Japan. Although General Motors', Ford's and Chrysler's combined losses totaled $7.5 billion last year, their top executives were together paid $5.3 million. Their counterparts at Toyota, Nissan and Honda collectively made $1.8 million.

0 Replies

@BillRM,

It's sad that you consider 25 billion to be cheap.

Also sad that you think taxpayers should be raped to help stock prices go up.

You you alive in the 30's?

1 Reply

@maporsche,

I have parents who was very must alive in the 30s my friend and I hope you will enjoy the world you are trying to bring about.

And hell yes 25 billions is cheap compare to many trillions of dollars that will disappear a day after the what you seem eager to see happen occur.

And all those tax payers you are so worry about will wish the hell that the government had granted those bridge loans as they wait in the bread lines.

0 Replies

this really scares me, as I see the aircraft companies next in line.

The American way is NOT bailouts...

1 Reply

@Rockhead,

Quote:

The American way is NOT bailouts...

let's call it "subsidies" - doesn't sound nearly as harsh .

Quote:

The following is the subsidies by crop in 2004 in the United States.

Commodity US Dollars (in Millions) Percentage of Total

--------------------------------------------------------------------------------

Feed Grains 2,841 - 35.4 %
Upland and ElS Cotton 1,420 - 17.7 %
Wheat 1,173 - 14.6 %
Rice 1,130 14.1
Soybeans and products 610 - 7.6 %
Dairy 295 - 3.7 %
Peanuts 259 - 3.2 %
Sugar 61 - 0.8 %
Minor Oilseeds 29 - 0.4 %
Tobacco 18 - 0.2 %
Wool and Mohair 12 - 0.1 %
Vegetable Oil products 11 - 0.1 %
Honey 3 - 0.0 %
Other Crops 160 - 2.0 %
Total 8,022 - 100 %

it's done pretty much all over the world - is it called "competition" ?

0 Replies

Here's my .02c worth of opinion:
1. Let GM go bankrupt.
2. Taxpayers should not pay anything towards GM workers benefits or company retirement funds. a) Many workers did not have the same level of benefits or retirement plan when they worked, and should not be held hostage to pay other's benefits. b) Enron employees also lost their retirement savings, and they were not rescued by taxpayers.
3. After the US implements a universal health care plan, let another group of investors and entrepreneurs start a new auto company from square one at the GM plants.

0 Replies

I think if we do end up bailing out the Big 3, we should also force them to be broken up into several different companies so that they will not be too big to fail in the future. If the "big 3" were instead the "smaller 9", then we could allow some of these smaller companies to fail.

We should do the same thing with any corporation that is "too big" to fail. The fact that something is too big to allow the free market to decide it's future is a problem, and needs to be resolved.

1 Reply

@maporsche,

Quote:

We should do the same thing with any corporation that is "too big" to fail. The fact that something is too big to allow the free market to decide it's future is a problem, and needs to be resolved.

You realize that you are swimming against the tide, right? We have pumped a couple hundred billion dollars into the financial sector with little purpose other than to grease the skids of mergers (solidify balance sheets so that the companies can eat other companies) , and presumably become solid institutions. Good luck finding a single person who is influential in America who agrees with you.

1 Reply

@farmerman,

Quote:

Obviously youve had no experience with bankruptcy in industry.

Actually I quite extensively have, but we can each claim whatever we will in this forum.

I repeat, companies that go into bankruptcy do not come out the other side intact but without debt.

Chances are pretty good that the companies that you were associated with didn't survive bankruptcy - you got 10 cents on the dollar because that was all there was to get.

What would have been a fairer deal?

You somehow were able to legally shoulder your way to the front of the line and get your money while those behind you don't even get 10 cents on the dollar?

The taxpayers stepped in and paid what was owed to you? Good for you, of course, but not so good for tax payers.

As a sub-contractor you ran a business. You cut deals with other companies. If you didn't do your due diligence as respects these companies, whose fault was that?

If no one might have expected their demise why should the taxpayer pick up your losses? Were you prepared to share, to the same extent, your profits with us all?

0 Replies

@farmerman,

Quote:

Your pompous stements are a demo of the Lucy factor
"If you cant be right, be wrong at the top of your lungs"

Ad hominem, pure and simple.

What's more - So's your Old Man!

0 Replies

@spendius,

Quote:

Well- creditors do shaft themselves by extending credit to companies which are not sound. They are too eager to take orders. If they don't know they are taking a chance then they are hardly fit and proper companies.

Bankruptcy laws are necessary for capitalism.

Very well said indeed.

0 Replies

@BillRM,

Quote:

Frankly I think that it companies with unions are the one getting the short end of this deal.

No kidding?

Quote:

Real odd that an insurance company can get over four times what the whole auto industry is asking for and not one word concerning it from anyone.

First of all you clearly do not understand the nature of AIG's business. It was its financial operations that tanked and required a bailout, not its insurance operations.

Secondly, there were many a word that argued AIG should not be bailed out. Just because you didn't pay attention to the debate doesn't mean it didn't happen.

Finally, finance, and certainly not manufacturing, is the circulatory system of our economy. All bailouts are not eqaul in their value to the overall economy.

Detach yourself from your slavish adherence to Unions and perhaps you will find yourself with a perspective that might foster objectivity.

1 Reply

Let GM go Bankrupt

Related Topics

Quick Links

My Account

able2know