Tossing you the keys, how do YOU fix GM?

[desy]

Let GM file ch11 allows them to restructure and avoid the 50 state franchise laws so they can get rid of dealership structure.
Sell Buick to China, close Saturn, Pontiac Hummer
GMC for trucks, Chev and Caddilac

 

[ProfJohn]

Originally posted by: Cattlegod
The request was how to save GM. A tariff on imports would save GM.

No it would not. It would start a trade war and the end result would be a shrinking economy and what GM needs is a strong economy, not one that is getting smaller.

Go back and study the great depression and see how they thought that tariffs would save jobs and instead resulted in more jobs being lost world wide.

 

[Chadder007]

Originally posted by: LumbergTech

Originally posted by: miketheidiot

Originally posted by: DomS

Originally posted by: daveymark
get rid of the union

/thread

yup.

Ironically the people at the japanese run company plants in the US working NON union are making more and have better benefits.

so then why is the union the problem?

wondering that myself

does not compute

They are a scapegoat used to cover extremely poor management.

 

[Strk]

Originally posted by: Chadder007

Originally posted by: LumbergTech

Originally posted by: miketheidiot

Originally posted by: DomS

Originally posted by: daveymark
get rid of the union

/thread

yup.

Ironically the people at the japanese run company plants in the US working NON union are making more and have better benefits.

so then why is the union the problem?

wondering that myself

does not compute

They are a scapegoat used to cover extremely poor management.

They show a lot of examples of poor planning that they can't simply get rid of like they did to white collar workers. Everyone used to have benefits for life. I believe it was 2005 that they cancelled them on non-union workers. The pensions also weren't being funded while the now-pensioners were working. The list goes on.

 

[halik]

Originally posted by: Imdmn04

Originally posted by: BarneyFife

Originally posted by: Zebo
Unless we start putting food on our kids table instead of foreigners kids table we are doom. Every other nations people understands this. We will too, again, very soon.

Yup. People in this thread still are either in denial or just don't get it. Fine, get rid of the Union and let every one make $10 hr but don't expect to sell many $30k vehicles anymore because none of the workers will be able to afford them. GM made a ton of sales off of workers and their family. Now that they are out of a job, there goes 6 figures in sales each year just in that alone.

The thing is that Americans are dying to work (over 2000 people applied for a job as a parking meter reader) but there is no where to go. The days are over where you can get laid off and find a job in a month. The days are over for teenagers to get a job at Mcdonalds. I will not be surprised if unemployment benefits get stretched out for another year. Where are all these people going to work? There is nothing out there and no sign of hope. Keep moving all of our factories overseas.

We are no longer a manufacturing-focused economy anymore. The days of raising a family on a single assembly line worker's wage are over.

As we move towards a service based economy, it will require a higher-educated labor force. The current labor force will have to adapt to meet that need.

In the current economic environment, assembly line workers are not expected to buy $30k cars, simply because their skills are not worth as much in today's economy as to 50 years ago.

Protectionism will not work either. If you impose a huge tariff on imported goods on China, China will do they same and kick out all the foreign companies. Keep in mind, GM is VERY profitable in China, where do you think the money they made in China goes? That's right, back to the good ol USA so we can fund our ever-deteriorating operations here.

If we produced everything here, expect $5000 tvs, $300 Nikes, and $3000 sofas. The reason that we are able to live in a higher standard of living than 50 years ago is because of global trade. Housing appliances as a percentage of income were extremely expensive back then compared to now. We are able to afford a LOT more things nowadays, purchasing power has increased.

Yes there will be casualties in economic globalization, but it is absolutely beneficial for everyone to trade with each other to maximize economic efficiency big-picture wise. If you don't even acknowledge this fundamental concept of microeconomics, then you are simply too naive or just stubborn.

THIS
Everyone in this country needs to read the above, including the highlighted portion for importance.

 

[halik]

Originally posted by: Cattlegod

Originally posted by: ProfJohn

Originally posted by: Cattlegod
profit is a function of revenue minus cost times quantity. You can either increase quantity, increase revenue, or decrease cost. There is no point in looking at items that will take 1-2 years to be realized. They need impact immediately.

Increasing revenue is not an option until completely different products come online so that is out for another x years of development. This isn't an immediate solution that they need.

Increasing quantity is difficult, the car market has shrunk so the only way is to steal share. This can come through tariffs on imports (government action) or one if its competitors going out of business to free up some market share or huge tax rebates on new cars from US auto companies (such as making the first $10,000 tax deductible).

Finally there is decreasing cost to increase marginal revenue. Most of their cost is fixed meaning they need to shut down plants, fire people, reduce marketing expenses, reduce R&D, squeeze suppliers for variable. Suppliers have been squeezed as far as they can be. Reducing R&D would be shooting themselves in the foot 4 years from now. Firing people they are already doing. Shutting down plants is already being done. Reducing marketing will hurt new vehicle launches, however, reduction on current vehicles will help.


My Recommendation:

Instill a temporary 1 year 10% tariff on all non US Manufacturers. Allow people to buy vehicles manufactured by US companies to not pay sales tax and allow them to claim $5,000 on their income tax for vehicles bought in 2009.

Reduce marketing on current vehicle lines.

Lay-off additional people.

Your tariff idea is insanely stupid.

I suggest you go back and look at the causes of the Great Depression. One of them was raising tariff in order to protect jobs at home.

If we raise tariffs then Japan, China etc etc all do the same and the end result is less trade and everyone losses.

The request was how to save GM. A tariff on imports would save GM.

That won't save anyone, rest of the world will retaliate and GMs COGS will go though the roof as a large portion of the parts come from abroad. As far as ideas go, this is BY FAR the dumbest one i've read yet.

 

[boomerang]

GM is going to put the Obama administration between a rock and a hard place next week. It?s going to be interesting to see how it shakes out, especially if you're into train wrecks. The administration is faced with two options. Keep them afloat with more loans, or finance their bankruptcy. Neither one has even more than a minor chance at success.

They're going to end up in Chapter 11. Chapter 11 instead of 7 because of their hard-headedness. It will drag out for 10 to 14 months and they will never pull out, eventually going under. There is not enough of a car market right now to support them all. And by all I mean domestic and foreign. Even if they can turn the enormous ship that is GM around, without car sales, they are doomed.

It's going to be between 5 to 10 years before our economy starts to get back on its feet to the point where we can have some degree of assurance that we've turned the corner. Few car companies will survive that long with sales this low and heading lower. Those that do, will be heavily subsidized by their governments - if they can afford to keep them going.

We can't afford the stimulus package that is set to go into place right now, and we sure as shit won't be able to afford the one to follow - the 'real' one. Expect a lot of casualties.

As always, I hope I'm wrong.

Edit: spelling

 

[Cattlegod]

Originally posted by: halik

Originally posted by: Cattlegod

Originally posted by: ProfJohn

Originally posted by: Cattlegod
profit is a function of revenue minus cost times quantity. You can either increase quantity, increase revenue, or decrease cost. There is no point in looking at items that will take 1-2 years to be realized. They need impact immediately.

Increasing revenue is not an option until completely different products come online so that is out for another x years of development. This isn't an immediate solution that they need.

Increasing quantity is difficult, the car market has shrunk so the only way is to steal share. This can come through tariffs on imports (government action) or one if its competitors going out of business to free up some market share or huge tax rebates on new cars from US auto companies (such as making the first $10,000 tax deductible).

Finally there is decreasing cost to increase marginal revenue. Most of their cost is fixed meaning they need to shut down plants, fire people, reduce marketing expenses, reduce R&D, squeeze suppliers for variable. Suppliers have been squeezed as far as they can be. Reducing R&D would be shooting themselves in the foot 4 years from now. Firing people they are already doing. Shutting down plants is already being done. Reducing marketing will hurt new vehicle launches, however, reduction on current vehicles will help.


My Recommendation:

Instill a temporary 1 year 10% tariff on all non US Manufacturers. Allow people to buy vehicles manufactured by US companies to not pay sales tax and allow them to claim $5,000 on their income tax for vehicles bought in 2009.

Reduce marketing on current vehicle lines.

Lay-off additional people.

Your tariff idea is insanely stupid.

I suggest you go back and look at the causes of the Great Depression. One of them was raising tariff in order to protect jobs at home.

If we raise tariffs then Japan, China etc etc all do the same and the end result is less trade and everyone losses.

The request was how to save GM. A tariff on imports would save GM.

That won't save anyone, rest of the world will retaliate and GMs COGS will go though the roof as a large portion of the parts come from abroad. As far as ideas go, this is BY FAR the dumbest one i've read yet.

How would GMs COGS go up? Maybe on foreign sales from other countries applying tariffs, but not in the US. Are you talking export tariffs? No way would a country do that. That would only spell more job losses for that country.

 

[MovingTarget]

Reinstate the Embargo Act of 1808.

Just puttin' that out there.

 

[Socio]

First, I would close all non-profit plants outside US borders in order to cut cost.

Then I would go full bore in to hybrid, fullbrid alternative fueled vehicles, electric powered vehicles, fuel cells etc?

They are big enough and have the wherewithal to become the leader in non-combustible engine technologies and should be able to stay on the cutting edge of it, setting the bar for everyone else.

 

[halik]

Originally posted by: Cattlegod

Originally posted by: halik

Originally posted by: Cattlegod

Originally posted by: ProfJohn

Originally posted by: Cattlegod
profit is a function of revenue minus cost times quantity. You can either increase quantity, increase revenue, or decrease cost. There is no point in looking at items that will take 1-2 years to be realized. They need impact immediately.

Increasing revenue is not an option until completely different products come online so that is out for another x years of development. This isn't an immediate solution that they need.

Increasing quantity is difficult, the car market has shrunk so the only way is to steal share. This can come through tariffs on imports (government action) or one if its competitors going out of business to free up some market share or huge tax rebates on new cars from US auto companies (such as making the first $10,000 tax deductible).

Finally there is decreasing cost to increase marginal revenue. Most of their cost is fixed meaning they need to shut down plants, fire people, reduce marketing expenses, reduce R&D, squeeze suppliers for variable. Suppliers have been squeezed as far as they can be. Reducing R&D would be shooting themselves in the foot 4 years from now. Firing people they are already doing. Shutting down plants is already being done. Reducing marketing will hurt new vehicle launches, however, reduction on current vehicles will help.


My Recommendation:

Instill a temporary 1 year 10% tariff on all non US Manufacturers. Allow people to buy vehicles manufactured by US companies to not pay sales tax and allow them to claim $5,000 on their income tax for vehicles bought in 2009.

Reduce marketing on current vehicle lines.

Lay-off additional people.

Your tariff idea is insanely stupid.

I suggest you go back and look at the causes of the Great Depression. One of them was raising tariff in order to protect jobs at home.

If we raise tariffs then Japan, China etc etc all do the same and the end result is less trade and everyone losses.

The request was how to save GM. A tariff on imports would save GM.

That won't save anyone, rest of the world will retaliate and GMs COGS will go though the roof as a large portion of the parts come from abroad. As far as ideas go, this is BY FAR the dumbest one i've read yet.

How would GMs COGS go up? Maybe on foreign sales from other countries applying tariffs, but not in the US. Are you talking export tariffs? No way would a country do that. That would only spell more job losses for that country.

Ever heard of supply chaining?

Many things are shipped back and forth for manufacturing before they hit assembly line. China could put a tariff on whatever particular thing GM ships there to be made just to drive up their cost. Hell or more simply just tariff the shit out incoming GM cars, good portion of their revenue comes form abroad.

 

[soccerballtux]

Originally posted by: synapsetx
OK, so Congress wants a plan to fix GM and return to profitability.

P&N'ers, lets get to work.

Let me offer the following to start:

Redundant branding must end.
[*]End the Buick brand
[*]End the Pontiac brand
[*]End the GMC brand

No more "kissing cousin" vehicles of any sort.

My understanding is they kept the Buick brand because that is a luxury vehicle on the level of Mercedes to the Chinese upper-middle class.