are US automakers still crippled by unions?

[BlahBlahYouToo]

if so, screw those greedy bastards.

NEW YORK (CNNMoney.com) -- General Motors Corp. said Tuesday it will suspend its dividend, sell off $4 billion to $7 billion worth of assets, and cut 20% worth of salaried cash costs.

CEO Rick Wagoner said in a statement that these were "difficult decisions," but necessary for company survival in the weak economy.

GM (GM, Fortune 500) has lost about one third of its 107,000 U.S. hourly workers since 2004. GM offered buyouts to its entire remaining U.S. hourly workforce of 74,000 in February, in a bid to unload its more experienced, higher-paid employees.

The Detroit-based automaker has been hard-hit by record-high gas prices, economic weakness, and a waning consumer interest in trucks and sport utility vehicles. The company has not made a profit since 2005.

Truck sales were down 21% in the first six months of 2008, while car sales were down 9% and Hummer sales plunged 40%. Overall, GM's vehicle sales were down 16%: worse than the industrywide vehicle sales decline of 10%.

In June, GM said it would shut four SUV and truck plants, would shift to more fuel efficient vehicles and discontinue its Hummer brand.

The stock price for GM (GM, Fortune 500), the world's largest automaker, has plunged 62% this year, to 50-year lows.

Despite the doom and gloom in America, GM's sales edged up in Europe by 3% in the first six months of 2008, including a 58% increase in Eastern Europe and a 60% surge in Russia. This includes a 21% increase in Russian Hummer sales.

GM is the fourth-largest American company in terms of annual sales, competing with Toyota Motor (TM) and Ford Motor (F, Fortune 500).

 

[ElFenix]

looks like right now they're crippled more by the salaried workers and a product mix that was dictated by the old labor contract and $1.50 gasoline.

 

[Squisher]

What they are more crippled by is a loss of market share because of past unreliability, moving too slowly to cater to the desire for better interior designs, and a product mix that relied too heavily on full framed vehicles.

 

[BlahBlahYouToo]

Originally posted by: Squisher
What they are more crippled by is a loss of market share because of past unreliability, moving too slowly to cater to the desire for better interior designs, and a product mix that relied too heavily on full framed vehicles.

but the underlying cause is that the absurd legacy costs which prevented them from creating more innovative and desirable products.

perhaps that and piss poor management.

 

[vi edit]

Originally posted by: BlahBlahYouToo

Originally posted by: Squisher
What they are more crippled by is a loss of market share because of past unreliability, moving too slowly to cater to the desire for better interior designs, and a product mix that relied too heavily on full framed vehicles.

but the underlying cause is that the absurd legacy costs which prevented them from creating more innovative and desirable products.

perhaps that and piss poor management.

As much as I bag on unions, this isn't their fault. Gas prices nearly doubled in about 18 months time. Consumers freaked out like they always do and and demanded more efficient vehicles. You just can't spit out a new car in that short of time. SUVs and Trucks dominated sales charts for a better part of two decades. There was a lot of money to be made in them and people ate them up.

Toyota got caught with their pants down on this too. The Tundra and full size SUV's they put out recently are sucking up lot space. They are just lucky that they have the Prius there to suck up some of the sales void left.

Legacy costs didn't leave GM short sighted. That was purely a leadership problem fueled by ignorance and arrogance.

 

[Ktulu]

Originally posted by: BlahBlahYouToo

Originally posted by: Squisher
What they are more crippled by is a loss of market share because of past unreliability, moving too slowly to cater to the desire for better interior designs, and a product mix that relied too heavily on full framed vehicles.

but the underlying cause is that the absurd legacy costs which prevented them from creating more innovative and desirable products.

perhaps that and piss poor management.

Talk about having a monkey on your back, GM has a 600 lb gorilla that would rather see them die than get off. How is it no surprise to everyone why GM has such troubles with R&D and moving forward?

 

[Ktulu]

Originally posted by: vi edit

Originally posted by: BlahBlahYouToo

Originally posted by: Squisher
What they are more crippled by is a loss of market share because of past unreliability, moving too slowly to cater to the desire for better interior designs, and a product mix that relied too heavily on full framed vehicles.

but the underlying cause is that the absurd legacy costs which prevented them from creating more innovative and desirable products.

perhaps that and piss poor management.

As much as I bag on unions, this isn't their fault. Gas prices nearly doubled in about 18 months time. Consumers freaked out like they always do and and demanded more efficient vehicles. You just can't spit out a new car in that short of time. SUVs and Trucks dominated sales charts for a better part of two decades. There was a lot of money to be made in them and people ate them up.

Toyota got caught with their pants down on this too. The Tundra and full size SUV's they put out recently are sucking up lot space. They are just lucky that they have the Prius there to suck up some of the sales void left.

Legacy costs didn't leave GM short sighted. That was purely a leadership problem fueled by ignorance and arrogance.

The difference between Toyota and GM is that Toyota has billions and billions of cash on hand and is worth some crazy amount. If they screw up no biggie, they can move however which way they want and don't have to answer to anyone. GM on the other has it's legacy issues to worry about, a union they have to discuss every god damn move with so long as it affects them, and very little money to reinvest into the company.

 

[vi edit]

Last I checked, GM was sitting on around 24 billion in cash reserves. It is burning through about a billion a month in losses though.

 

[Ktulu]

Originally posted by: vi edit
Last I checked, GM was sitting on around 24 billion in cash reserves. It is burning through about a billion a month in losses though.

Exactly, GM is hemorrhaging money, Toyota is not.

 

[chucky2]

People aren't buying American primarily because of gas mileage needs, and preconceptions (sometimes valid, mostly not) about initial and long term quality/reliability.

There is no excuse for not designing, engineering, and parting better vehicles. This is a total failure of Management at GM, Ford, and Chrylser...it has almost nothing to do with the Union folks. They just build the sh1t Management sends them...

Don't worry though: Upper/Senior Management at the big 3 has exactly what they want now. No more healthcare costs on the books, and Union workers start at $14 an hour now, instead of $20 or whatever it is an hour. Meanwhile, while blue collar and low level white collar folks loose their jobs, these same Upper/Senior Management folks at the big 3 will still be raking in the $Millions...because, Yeah, the company is hurting...

Chuck

 

[nightowl]

One of the other problems with GM is they have too many brands which have essentially the same vehicle. They do not need Saturn, Pontiac, GMC, and Chevrolet. They should consolidate and kill off some of the brands as the article mentions.

 

[PingSpike]

GM does have legacy labor cost problems, but I'd have to blame management really. What is with their fascination with buying other brands and then transforming their vehicles into rebadged units? Hummer and Saab come to mind...if you're just going to sell a boxy tahoe with the hummer brand name on it, couldn't they have just called it a Chevy dummer and saved the money not buying hummer? If there's on thing GM hasn't needed for a long time, its more brand names under its hat.

Whether GM vehicles have improved in quality or not, I cannot say. I suspect they have. But this is a perception problem. They pumped out a lot of crap for a long time. You can't spend a couple decades putting out crap quality vehicles, burning your remaining customers and then start complaining that the day after you fixed the problem there was no one left to care. The burned up good rep, now they have to rebuild it. No, its not fair that toyota gets a pass all the time...but they've got rep to burn these days.

All automakers got caught with their pants down, they've all adjusted their product mix to be bigger and heavier since the 1980s. The oil price rise was breakneck paced. But GM let the small car segment languish for a long time and let the Japanese really cement themselves as leaders of that segment.

 

[Ktulu]

I think I'm actually beginning to lose hope for GM.

http://www.autoblog.com/2008/0...n-the-way-insignia-st/

So what about the Chevy Beat? The subcompact hatch is slated to arrive in Europe next year as the Spark, replacing the vehicle that shares the same name. However, GM didn't intend for the Beat (or Spark) to be offered in the U.S., so it doesn't meet federal safety and crash standards. It would take too much money and about two years to bring the Beat up to snuff for sales in the U.S., so Lutz conceded that it wouldn't be coming to the U.S. until the next generation arrives... whenever that is.

In more unfortunate news, the Chevrolet Cruze, set to debut in Paris and with sales beginning next year in Europe, won't be replacing the Cobalt in the U.S. anytime soon. Lutz maintains that the current Cobalt is "no where near the end of its life-cycle" and that it's "finally coming into its own" in the U.S. market. When the Cruze does debut, expect an interior that's a cross between the Cobalt and the Malibu, and powered by a turbocharged 1.4-liter four-pot that will get 40+ mpg.

These 2 entries alone would have greatly changed the game for them. It's almost as if they WANT to fail. Instead what do they bring us? More useless crossovers. :disgust:

 

[BassBomb]

The only American car I have ever considered is a Corvette :laugh:

 

[PingSpike]

I kind of agree about the cobalt. Its the first generation so it will take awhile to come into its own. And it seems like a solid little car, although it reminds me of the dodge neon in some ways. I think people will look at it closer now that gas prices are a concern...you'll have traditional GM people actually looking at their small car segment. GM sort of forgot it made small cars itself for awhile (the incredible 10 year cavalier) so its not really a wonder that people don't look to them for small cars.

But yeah, they really should have found a way to fast track those offerings. They seem to be big on promises lately, not so great on delivery. As awesome as the volt sounds, I'm still going to call that thing vaporware until I see them on dealer lots.

 

[boomerang]

The same management is essentially in place that orchestrated the Fiat boondoggle.
A management shakeup would help tremendously. It's absurd to think that the same people that got them in trouble are capable of getting them out of trouble.

Redink Rick should resign, plain and simple. Too bad the board keeps giving him the wink and a nod. One would think the stockholders would revolt and call for his head. Maybe now they will in light of their dividends being suspended.

Edit: All you business majors blaming everything on the hourly workforce is getting old. I've presented the alternate point of view.

 

[woodie1]

I'd say management and the UAW share equally in causing GM to implode. The unions asked for outrageous salaries and benefits for years and management said ok we'll just pass the cost on to the car buyer. Eventually competition foiled that idea. Then there is the quality issue which I never understood since Americans have built Hondas and Toyotas without too many quality issues for some time.

Guess it is more of a management problem. But they have to get the unions on board or the ship will sink.

 

[sandorski]

No

 

[BUTCH1]

One of GM's biggest problems is the cost of benefits to current AND retired workers,
in the early 80's unions deferred large pay raises at contract time for lifetme healthcare
bennies, seemed like a good idea at the time but now that HC cost's have gone to the moon
it's coming home to roost. I read somewhere that $1800 of every car GM sells goes to employee
benefits...

 

[StageLeft]

If there's on thing GM hasn't needed for a long time, its more brand names under its hat.

Yeah the whole thing is confusing to me. From Buick to Lincoln to Pontiac to Chrysler and Dodge I frankly have no damn idea what is what. If I get a Toyota Camry I know that there isn't another Toyota Camry with a different name.

You're right about perceptions. They churned out garbage for decades and rested on laurels and are now facing the fact that Made in the USA doesn't swing as many as it used to despite similar quality.

These 2 entries alone would have greatly changed the game for them. It's almost as if they WANT to fail. Instead what do they bring us? More useless crossovers.

But two years is still a while. Also, how much will these things cost? AFAIK the European cars we lament not having here are in fact pretty expensive.

 

[Svnla]

Toyota is not perfect. They bet wrong on the new Tundra plant in San Antonio. They will shut it down for 3 months to trim down inventory. The employees still get pay as usual by do other works such as training and safety classes/projects.

Bottom line = small, fuel efficient vehicles are in demand. Big size and low gas mileage ones are not.

Mgt and Union both are guilty in this mess. Mgt = puts too much in the SUV and big truck basket, company is still too bloat. Union = demands for high salary and great benefits without much in return, still not a top notch quality vehicles <getting better than they used to be..but is it too late?>

Comparison: GM market value = 5 billion <could be lower if the ship is not turning around>, Toyota = 140 billion.

GM stock value is so low, it is about the same price as when Einseinhowser was the President of the US. It cuts dividends for the 1st time since 1922 and 20% of its white collar workforce.

We will see if the plan will work or not.

 

[bctbct]

US auto makers cant increase sticker price to keep up with costs....less profit.

Hardly the Unions fault.

 

[ElFenix]

Originally posted by: chucky2

There is no excuse for not designing, engineering, and parting better vehicles. This is a total failure of Management at GM, Ford, and Chrylser...it has almost nothing to do with the Union folks. They just build the sh1t Management sends them...

Chuck

and due to the ridiculous labor contract the only sh!t management could make a profit on was full sized trucks. so yes, it has a ton to do with the union folks. they didn't see that they would be strangling the goose that laid the golden egg back when the contracts were negotiated, and even if GM saw that there was no way the union would buy into it.

 

[sandorski]

Originally posted by: ElFenix

Originally posted by: chucky2

There is no excuse for not designing, engineering, and parting better vehicles. This is a total failure of Management at GM, Ford, and Chrylser...it has almost nothing to do with the Union folks. They just build the sh1t Management sends them...

Chuck

and due to the ridiculous labor contract the only sh!t management could make a profit on was full sized trucks. so yes, it has a ton to do with the union folks. they didn't see that they would be strangling the goose that laid the golden egg back when the contracts were negotiated, and even if GM saw that there was no way the union would buy into it.

BS

 

[mooseracing]

It is the Auto markets fault, first they demand big powerful vehicles now they want small fuel efficent ones, a company can't change directions quickly enough to satisfy the market. If they were constantly changing they could improve other technologies faster instead of 3 steps foward, 2 back.