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Mrjoshua
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Username: Mrjoshua

Post Number: 606
Registered: 03-2005
Posted From: 69.208.123.105
Posted on Friday, December 23, 2005 - 4:54 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"...chairman and CEO Rick Wagoner keeps talking about staying ahead of Toyota in global production volume, as if that really matters. Toyota has long been No. 1 in profits and market cap. Mr. Wagoner risks sounding like the Kevin Bacon character in the closing scenes of 'Animal House,' insisting that everything is under control."

The Road Ahead

By PAUL INGRASSIA
December 22, 2005; Page A14
The Wall Street Journal, op-ed

General Motors hasn't collapsed. But confidence in GM has.

The company's shares have swooned to new 23-year lows, causing its dividend yield to climb above 10% for the first time in its history. GM's market capitalization stands at just $11.2 billion, even though GM reported having $19.2 billion in cash at the end of the third quarter. These numbers mean the market believes, as Dow Jones Newswires's Maxwell Murphy wrote, that GM either will have to slash its dividend, file for bankruptcy or do both. Indeed, speculation mounts that GM is headed for Chapter 11, although late yesterday UBS raised its investment rating on the stock from "reduce" to "neutral."

The real question, though, is not whether GM will file for bankruptcy, but whether it should file. I'm not recommending that. But there's a case to be made that, despite the $19.2 billion in the corporate piggy bank, GM should stop publicly pooh-poohing the notion.

The reason: Bankruptcy proceedings might be the fastest way to force the truly tough decisions that could fundamentally change -- and save -- the company. Evidence abounds that GM management and the United Auto Workers union, the two major protagonists in this drama, remain wedded to pursuing incremental improvements. And this, despite losing $4.8 billion on its North American auto operations in the first nine months of this year during one of the best car markets in history, debt ratings that have plunged into junk status, and a market cap 1/15th that of Toyota's. To be specific:

• Despite all these woes, GM still pays thousands of UAW members around $800 million a year not to work. These workers -- well, nonworkers -- are in the company's "Jobs Bank," elimination of which remains a taboo topic, at least until the next contract talks in 2007.

• GM is moving tepidly even on items that don't require union acquiescence. The company recently reduced its tuition-reimbursement payments to a maximum of $6,400 per year for each employee from the previous $10,000. Bold and urgent this isn't. Heck, just suspend the program entirely.

• In Tammy Wynette fashion, GM is standing by its Saab. This loss-making marquee is so small that it has zero potential to truly help the company, but much potential to distract management and drain financial resources.

There are other examples. The dividend should have been cut -- indeed, eliminated -- long ago. If the dividend's purpose is to prop up the stock price, well, what's Plan B? GM's stock has plunged 50% this year. What's more, chairman and CEO Rick Wagoner keeps talking about staying ahead of Toyota in global production volume, as if that really matters. Toyota has long been No. 1 in profits and market cap. Mr. Wagoner risks sounding like the Kevin Bacon character in the closing scenes of "Animal House," insisting that everything is under control.

As for GM's boldest measures to date, the 30,000 workers to be shed by 2008 include 25,000 who will leave through attrition anyway. And the sale of a controlling interest in GM's financing arm, GMAC, has yet to happen. Speaking of which, why would a company serious about cost cutting sponsor college football's GMAC Bowl? Toledo versus Texas El Paso isn't exactly a marketing home run.

In short, GM and the UAW aren't acting like they're facing threats to their very existence, which is why the markets are spooked. Both parties view the union's recent concessions on retiree health care as historic. But the $1 billion in annual cost savings won't start kicking in until later next year, which is why outside Detroit these concessions are viewed as overdue baby steps.

So why shouldn't GM enter Chapter 11? In truth, there are some strong reasons. The move could scare consumers away from buying GM cars. But plenty of people buy tickets from United, Delta and Northwest -- and accept the proposition that they'll honor frequent-flyer programs for the long term. The public seems to understand that bankruptcy more often means rebirth instead of death.

Then there's pity for the shareholders, whose holdings likely would be wiped out in a bankruptcy proceeding. But GM hasn't been a widows and orphans stock for years. Anyone still in the stock, or bonds, is by definition a speculator.

While it might sound disingenuous for a company sitting on $19 billion cash and another $16 billion in other liquid assets to seek protection from creditors, it isn't necessarily the case. GM's obligations in the bankruptcy proceedings of Delphi Corp., the auto-parts supplier that it once owned, could wipe out $12 billion, albeit not an immediate cash outlay. Continued operating losses and other obligations could threaten the rest without a dramatic corporate turnaround. Besides, companies that face intractable challenges and enormous liabilities usually file before they're truly destitute, because that improves the chances of emerging from the proceedings as a going concern.

It is true that other car companies have emerged from dire straits before without resorting to Chapter 11. Both Chrysler in 1980 and Nissan in 1998 are prime examples. But both needed new management teams to get the job done. GM's management has had a rough ride this year. Initially management forecast full-year earnings of $4 to $5 a share. But a couple months later, on March 16, the company rattled the financial markets by lowering that forecast to between $1 and $2 a share. Now the company, understandably, declines to predict when it might return to profitability. Meanwhile, GM has exited a couple of foreign alliances, with Fiat and Subaru, at a cost of nearly $3 billion.

The biggest reason for staying out of Chapter 11 is the enormous costs -- financial, legal, emotional and other -- that the process entails. United Airlines, a big company but one much smaller than GM, has spent hundreds of millions on restructuring and legal costs during its court proceedings. The bankruptcy lawyers and workout specialists reap huge rewards.

So here's a suggestion. At next month's Detroit Auto Show, Mr. Wagoner should announce GM will move much more aggressively to resolve legacy costs and other long-standing problems. Nothing is off the table, he should state, adding that while Chapter 11 would be gross overkill at this point, GM can't rule out going to court as a last resort. Then the company and the union can really get serious.

Mr. Ingrassia, president of Dow Jones Newswires, is a former Detroit correspondent for this newspaper.
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Digitaldom
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Username: Digitaldom

Post Number: 381
Registered: 08-2004
Posted From: 67.149.110.53
Posted on Saturday, December 24, 2005 - 11:42 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

It's alot worse than they are letting on...
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Mjb3
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Username: Mjb3

Post Number: 83
Registered: 11-2004
Posted From: 24.145.222.252
Posted on Monday, December 26, 2005 - 2:21 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I work for a GM supplier. The employee pensions will get axed in Ch 11, but Ch 11 may help turn around the company. On this forum we always talk about city of Det with 18k employees, needing to have about 11-12k to be rightsized. GM needs similar cuts, on the order of about 20-25% of white collar(Tech ctr, Ren Ctr) employees. The blue collar cuts won't affect Detroit, because Poletown is a newer plant, safe.

My guess is that a lot of these GM employees have not saved much in 401K or IRA's, just expected $4K/mth pension from the General. I hope I'm wrong.
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Llyn
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Username: Llyn

Post Number: 1331
Registered: 06-2004
Posted From: 68.61.197.206
Posted on Monday, December 26, 2005 - 2:34 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"It's alot worse than they are letting on..."

Why, and how do you know? Seriously curious.
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Alexei289
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Username: Alexei289

Post Number: 931
Registered: 11-2004
Posted From: 68.61.183.223
Posted on Monday, December 26, 2005 - 4:00 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

My girlfriend's dad was let go after 29 1/2 years with the company... just 6 months short of a full pension. He now recieves 1/8th of what he would have recieved.
GM instead of funding his 401k out of his paychecks, funded that with GM stock. On top of that, if he were to sell his stake in GM, he must give 1/3rd back to the company off the bat... if they go into chapter 11... he wont get anything for his 29 years with the company...

how can you run a company like this... and expect a loyal customer following, or your workers to give you ANY concessions when u flat out screw the loyal ones???? Its one thing to sit down and come up with a comprimise plan, but its another to screw some, and negotiate with the rest that if they dont give you what you want, they will suffer the same fate...

Its fuking bullshit is what it is... and GM is going to get what it deserves.


If they moved everything to Detroit, right there they would begin to make money on cars. My GFs dad flat out said the hardest part of his job, as a designer, was looking at a fuked up part... and trying to figure out who fuked it up. Once you locate the fuker upper, then you have to track him down in whatever bumfuck town GM builds that part at.... and sometimes that ment Mexico or China... Instead of a short drive down the street, correct the discrepency between design and product, and moving on with designing shit.... Half the time this process took weeks... while many inferior parts rolled off the line and into cars... creating the inferior quality that isnt distinct to Toyota... which locate their entire offices in Toyota city Japan, and can get anyone and their brother on the phone in any US factory within an hour. Not only that... but US Toyotas are built in the US, and South American Toyotas are built in South America. For GM, their supply chain is such a clusterfuk that nobody knows where jack shit is made... How many times does a part need to criss cross the country before its part of a full car??? My Gfs dad claims about 7... before the assembled part is now part of the car... add that shipping cost to the list, since everything is moved now by truck... 52 times less efficiant than barges (the intercoastal waterway system reaches 38 states), and 18 times less efficiant than trains...

This company needs to scrap everything and start over... It will be cheaper than losing their ass consistantly.
Locate everything close to home, and anything that leaves Michigan should be a complete car... that alone would do wonders for quality control.

Scrap the silverado, it directly competes with the GMC Siera.. same thing with the trail blazer and the Envoy... Keep one or the other. Keep the Impala... and run another redesigned car off that beautiful platform... THAT alone could do wonders for the company...

Get rid of that basterd child Saturn, they dont sell to anyone but bumfucks with no money that want new cars.... and they just draw sales from decent cars in the Chevy line. The sky and the Ion would make bad ass Pontiacs if you ask me with their european styling (the Sky was actually a Brittish Lotus, the design was bought by GM and resold as the saturn sky.)


OK... i just stated about 5 good ideas that would save GM billions. This took me about 10 minutes to come up with... Granted they need tweaking, and there are probably much better ones... but i think this is a good example of someone from outside the ass thinking with his eyes open..
So why cant GM do it??? I thought they were so reputable that Boeing contracted them to make parts for the International Space station, and secret Air Force projects? Now how the fuk can they not unclusterfuk a company so that it can make money?

Profitability is the cure for every company's ailments... How can GM not know this... and spit out bullshit like...

"We plan on keeping up production"
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Jjaba
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Username: Jjaba

Post Number: 2912
Registered: 11-2003
Posted From: 192.220.139.20
Posted on Monday, December 26, 2005 - 4:14 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

GM makes cars in 35 countries. The Chinese love Buick Regals. They can't make them fast enough and they tell me there's a lot of Chinese who want to drive. The Chinese hate the Japanese a lot more than we do.

There is going to be a balance between Wal-Mart and GM wages. It will all shake out.

Ford and GM saved Europe from the Germans and Italians. There's collective memory there.
Australians love us too.

GM ain't going away. Tweak it some, but Detroit cars will survive. No cheap Asian crap in my garage.

jjaba, Westsider.
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Jblaze
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Username: Jblaze

Post Number: 5
Registered: 12-2005
Posted From: 69.14.120.66
Posted on Monday, December 26, 2005 - 4:25 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Jjaba,

You must understand that GM/Ford in Europe and Asia are hardly burdened with the healthcare and pension obligations that they are here. They are also locally managed and make cars that suit those markets far more (lightweight, fuel efficient, etc. - ever seen a Vauxhall?).

As for cheap Asian crap - what's to say. Drive a toyota, then drive a chrysler (the latter of which is "cheaper", in monetary terms). Travel to either coast, US cars are becoming a minority on the roads - the market speaks.

I feel for all the workers at GM - they entered a social contract of sorts years ago that is quickly vanishing in America. The management is to be blamed. I have not heard of Rick Wagoner offering to forgo his salary, nor those of his countless Vice Presidents.

At least Bill Ford finally joined other big companies like General Electric and issued a report on climate change as a big issue that will impact both the world AND their bottom line. Ford and GE - there's a couple of tree-hugging pinkos, huh? Hopefully someone in the GOP is listening.
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Dove7
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Username: Dove7

Post Number: 1875
Registered: 11-2003
Posted From: 24.5.195.127
Posted on Monday, December 26, 2005 - 4:26 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Wow,

that was a mouthful. But you told the truth. I think that the problem lies within G.M. trying to avoid the labor here by making parts in other countries. It's called being cheap by hiring cheap labor. This is why things are so fucked up. G.M. like many corporate campanies refuse to pay the workers in this country what they deserve. Instead the company takes their business to places such as China and Mexico because they know that these countries will take those lower wages.


My family here in Cali. work for Toyota. The company continues to grow and hie new employees. There is even room for growth into other departments. My uncle's wife who just a assembly worker when she first got hired, works as a desgner and travels to Japan with others. Too much bullshit with the big 3.
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Jblaze
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Username: Jblaze

Post Number: 6
Registered: 12-2005
Posted From: 69.14.120.66
Posted on Monday, December 26, 2005 - 4:30 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Here's the Ford link on climate change:

http://www.ford.com/en/company /about/sustainability/default. htm

Excerpt:

Ford Issues Climate Change Report

DEARBORN, Dec. 20, 2005 - In an industry first, Ford Motor Company has issued a report addressing the business implications of climate change, carbon dioxide emissions and global energy concerns.

"I am proud to say that Ford Motor Company is one of the first companies to have open discussions about climate change," said Bill Ford, chairman and CEO. "We see climate change as a business issue as well as an environmental issue and we're accelerating our efforts to find solutions. Addressing this issue will require collaborative action across all sectors of our society and I'm committing Ford Motor Company to do its part."

The report addresses how concerns about emissions of greenhouse gases, including CO2, are linked to other factors affecting the business; the steps the company is taking to manage the risks and capture opportunities associated with climate change; and the market, policy, social and technological enablers required to achieve significant changes in the industry's carbon footprint.

Ford's report recognizes the importance of precautionary, prudent and early actions to stabilize greenhouse gas concentrations in the atmosphere. It also highlights the need for integrated approaches by fuel companies, vehicle manufacturers, consumers and policy makers.

For its part, Ford Motor Company is pursuing a three-pronged strategy:


Continuously reducing the greenhouse gas emissions and energy use of company operations.
Enhancing the flexibility and capability to market lower-greenhouse gas-emissions products that will attract consumers.
Working with industry partners, oil companies and policy makers to establish an effective and more certain market, policy and technological framework for reducing road transport greenhouse gas emissions.

"Climate change and energy security affect our operations, our customers, our investors and our communities," said Niel Golightly, director, Sustainable Business Strategies. "So you can be sure we see these issues as important to our long term business competitiveness. Some view these challenges as yet another burden on an already stressed industry; but we see potential for innovative business opportunities in solving them.
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Publicmsu
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Username: Publicmsu

Post Number: 558
Registered: 11-2003
Posted From: 71.65.11.17
Posted on Monday, December 26, 2005 - 5:00 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"Its fuking bullshit is what it is... and GM is going to get what it deserves."

GM is a corporation. It does not exist as a living being. GM does not suffer, but instead the people who helped build the company. The fat cats up top have nothing to worry about, as their pocketbooks are fat and happy, it's the common man that must worry about their fate as the company spirals down the drain.
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Alexei289
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Username: Alexei289

Post Number: 933
Registered: 11-2004
Posted From: 68.61.183.223
Posted on Monday, December 26, 2005 - 5:07 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Only about 10% of GM's manufacturing occurs outside of the US... They are keeping quite a bit here... whether this will change though is an enturely different story.
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Dove7
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Username: Dove7

Post Number: 1877
Registered: 11-2003
Posted From: 24.5.195.127
Posted on Tuesday, December 27, 2005 - 12:03 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

yeap,

gotta agree. Toyota cars and now trucks, aren't cheap crap. that's wishful thinking jjaba. reality is reality. toyota do make good cars. BUT, toyota too is starting to do a what g.m. did during the 80's. that is make some bad cars and recalls. Mercedes too had this happen this passing year.
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Dove7
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Username: Dove7

Post Number: 1878
Registered: 11-2003
Posted From: 24.5.195.127
Posted on Tuesday, December 27, 2005 - 12:05 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Alexie,

things are changing. the new cadillacs ae being sold over in germany. i read an article online. the new v series cars are big. they raced the cars, on the numberg tracks.
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_sj_
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Username: _sj_

Post Number: 1161
Registered: 12-2003
Posted From: 69.220.230.150
Posted on Tuesday, December 27, 2005 - 2:09 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

The day of the unlimited manufacturing jobs are gone and until the people understand their denial and entitlement issues it will continue to get worse.
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Alexei289
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Username: Alexei289

Post Number: 936
Registered: 11-2004
Posted From: 68.61.183.223
Posted on Tuesday, December 27, 2005 - 7:35 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

What i think should start happening, is cutting the benefits and raise wages.

At 72.50 an hour in benefits and wages... perhaps pay employees 40$ an hour, limit bennies to 10$ an hour, and let the employee decided what he wants to do with his 40$... either have him invest it himself, or put it in a 401k, or whatever he wants to do with it... make it his money.... and still save 20$ an hour per employee and raising your wages.
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Hagglerock
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Username: Hagglerock

Post Number: 190
Registered: 03-2005
Posted From: 69.221.71.181
Posted on Tuesday, December 27, 2005 - 8:57 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

_sj_ hit it on the head. As our nation plays in the global market without the immense industrial/economical heft it had after WW2 we will continue to see jobs flee to places where it is cheaper to operate and build. GM is already a huge world player so it only makes sense from a managerial, corporate survival perspective to move production overseas. I don't think something like this could have been avoided unless GM never took on the world market, yet at the same time they failed to foresee the major impact of having to go global and cut domestic manufacturing. Alexei is right, they screwed a lot of people and will continue to do so if they want to survive as a company. Sadly the same management who failed to read into the future will go relatively unscathed. That’s wrong, but it's also business. As true leaders of a company they are the ones who should be taking the heat and pay cuts. That alone could help soothe harsh feelings from those whom, “because of business” had to be let go. But with what little selflessness and leadership that remains in this country that’s never going to happen. Why, because it’s business.

http://www.consumeraffairs.com /news04/2005/geely.html

Look at what's coming to this year's auto show. At $3.50 an hour per worker I have no idea how US manufacturing can compete. As Americans, and in particular Michiganders in the auto industry, we NEED TO adapt.
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Bibs
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Username: Bibs

Post Number: 432
Registered: 10-2003
Posted From: 152.163.100.195
Posted on Wednesday, December 28, 2005 - 1:36 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Due to the costs and risk of transporting fully assembled cars and autoparts from overseas locations means that many of the manufacturing jobs will remain in the US but perhaps in other states with lower wages. It very easy to transport light weight items such as radios or electronic equipment via air or ocean freight. Fenders, car frames which are heavy and bulky will more than likely be produced in the US or Canada. Also, consider the risk of stretching out your just in time delivery model over 2000 plus miles where it can be affected by typhoons, strikes by dock worker or rail carrier delays.
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Livernoisyard
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Username: Livernoisyard

Post Number: 24
Registered: 10-2004
Posted From: 69.242.223.42
Posted on Wednesday, December 28, 2005 - 2:28 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Attn. Bibs:
Re: "Due to the costs and risk of transporting fully assembled cars and autoparts from overseas locations means that many of the manufacturing jobs will remain in the US but perhaps in other states with lower wages. It very easy to transport light weight items such as radios or electronic equipment via air or ocean freight. Fenders, car frames which are heavy and bulky will more than likely be produced in the US or Canada. Also, consider the risk of stretching out your just in time delivery model over 2000 plus miles where it can be affected by typhoons, strikes by dock worker or rail carrier delays."


Your opinions don't make much economic sense because the cost differentials due to labor clearly outtrump any added costs due to shipping raw materials from the US and importing entire vehicles here. It's already happening and has been for some time. It's about time for Detroiters to look around and see what the rest of the country and the rest of the planet is up to. The economy is booming most places. Only Michigan, especially Detroit, is still worse off since 1999.

The metal salvage yards in SW Detroit and elsewhere are exporting much (if not most) of their output to China. Much of the additional cost for crude petroleum is also attributed to the high demand from China. China's GDP is somewhere around $5.7 trillion compared to our $10.4 trillion.

GM, once the largest consumer of IT in MI and the US has already fired most of that locally and has been offshoring in that category. Expect fewer employees in the Ren Cen, especially with EDS if EDS expects that it'll be "business like usual."


Some linkages to recent articles of IT outsourcing at GM:

GM Shakes Up Outsourcing Industry

GM Takes Wraps Off Outsourcing Model
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Darwinism
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Username: Darwinism

Post Number: 295
Registered: 06-2005
Posted From: 69.209.155.236
Posted on Friday, December 30, 2005 - 5:24 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Alexei289 and Dove7 made the right points in regards to GM's troubles. The executives are overpaid to make substandard decisions for the company, therefore ending up with the situation of cutting corners that shouldn't have been cut. At the same time not cutting where they should have cut. As Alexei289 had brought up, having multiple competing car models makes absolutely no sense. The people who have been loyal to GM for decades are the ones who will end up being screwed the worst. Imagine Alexei289's example of a man who is 6 months short of pension benefits being let go. Now, that is the hardest slap in the face for loyalty.

Delphi has been screwing its own loyal employees via low-ball proposals. Think about all those retirees who have been slaving their lives to the loyalty of Delphi, and now being told that all health benefits promised in the past are washed down the drain. That is also the hardest slap in the face for loyalty. So, go ahead and check your garage/drive-way for a so-called American car because if that's your idea of loyalty then by all means take the slaps willingly.

Now, for what it's worth, here's a company to learn from and a corporate executive to emulate - Costco and Jim Sinegal.

http://www.businessweek.com/ma gazine/content/04_15/b3878084_ mz021.htm

http://abcnews.go.com/2020/Bus iness/story?id=1362779

Wal-Mart is not invinsible - Toyota is not invinsible. GM and Delphi, Ford and Northwest Airlines, it's time to rid yourself of the fat-check executives on golden parachutes. It's time to treat the employees well because you know what - the employees are the customers at the end of the day and the employees are the sales force, and the employees are the PR department as well as the shareholders.
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Darwinism
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Username: Darwinism

Post Number: 296
Registered: 06-2005
Posted From: 69.209.155.236
Posted on Friday, December 30, 2005 - 7:46 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

The Free Press did a whole series this week on the auto industry and the people who are involved.

Monday(12/26/05): http://www.freep.com/apps/pbcs .dll/article?AID=/20051226/BUS INESS01/512260315/0/BUSINESS01

Tuesday(12/27/05): http://www.freep.com/apps/pbcs .dll/article?AID=/20051227/BUS INESS01/512270319/0/BUSINESS01

Wednesday(12/28/05): http://www.freep.com/apps/pbcs .dll/article?AID=/20051228/BUS INESS01/512280329/0/BUSINESS01

Thursday(12/29/05): http://www.freep.com/apps/pbcs .dll/article?AID=/20051229/BUS INESS01/512290491/0/BUSINESS01

http://www.freep.com/apps/pbcs .dll/article?AID=/20051229/BUS INESS06/512290492/0/BUSINESS01

Friday(12/30/05): http://www.freep.com/apps/pbcs .dll/article?AID=/20051230/BUS INESS01/512300340

http://www.freep.com/apps/pbcs .dll/article?AID=/20051230/BUS INESS01/512300341
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Livernoisyard
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Username: Livernoisyard

Post Number: 26
Registered: 10-2004
Posted From: 69.242.223.42
Posted on Saturday, December 31, 2005 - 1:04 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I wouldn't shed too many tears for the "woes" of Delphi and GM UAW employees, especially when considering just how much these two firms have to put out for them. Delphi had been paying $65/hr and GM shells out some $72.5/hr per worker. Some seldom-used "workers" in the "card-playing" pools are costing even more. This goes to cover the overly generous salaries, health costs, "Cadillac" PEN$ION$, FICA taxes, workmen's comp, unemployment comp, and other sundry expenses.

Overpaying them just means that there is less money to go around for others - including the approximately 400,000 unemployed in Metro Detroit. Their counterparts in the non-unionized component firms are working for $7 to $10/hr, and there's no guarantee that many of these firms will survive this decade.

Approximately 4000 automotive component companies (entire firms, not just plants) are expected to close for good between 2006 and 2010. That's about 15 auto firms nationwide, on average, closing **every week** for the next 260 weeks. Granted, they're not all in Michigan, but a lot of them are.

Metro Detroit hasn't even come close to ending its graveyard spiral, which will crash-and-burn both its blue- and white-collar passengers. Standard & Poors stated this month that the bankruptcy of GM was no longer considered "far-fetched."

GM bankruptcy possible: S&P



(Message edited by LivernoisYard on December 30, 2005)
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Darwinism
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Username: Darwinism

Post Number: 297
Registered: 06-2005
Posted From: 69.209.133.27
Posted on Monday, January 02, 2006 - 10:50 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I have been analyzing some additional data from the retail sector, especially seeing how the general public is concerned about the WalMart-effect on consumer goods and on median household income as a whole.

The automobile industry here in Detroit has been touting 60-70% pay drops in order to make it in such economic climate. Steve Miller, Rick Wagoner and etc. are trying hard to sell the idea of plant workers making $9-$11 so that Delphi and GM can be viable. Well, behind all the smokescreen is the hidden agenda of protecting the upper-management's pocketbooks. It is definitely time to demand these executives to take a huge slash into their own paychecks because it is the only right way to set the company straight and to send the right message. Here's a write-up in Bloomberg Financial regarding how Costco can defeat WalMart: http://quote.bloomberg.com/app s/news?pid=10000039&refer=colu mnist_crystal&sid=arNjFjq0qpd0
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Burnsie
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Username: Burnsie

Post Number: 384
Registered: 11-2003
Posted From: 35.12.20.226
Posted on Monday, January 02, 2006 - 11:14 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Some random thoughts:

--I don't like jobs being shipped to China either. But could you tell Chinese people to their faces that they are somehow less deserving of jobs than Americans? Everybody in the world has to put food on the table, not just Americans.

--All the executives taking a big slash in their paychecks would barely make a dent compared with the current costs of pensions and health care. It would be a nice symbolic move, but the huge cost problem would still be there.

--I was born and raised in Flint. I have seen firsthand the drain of auto jobs. It sucks, big time. But isn't it likely that unshakable GLOBAL economic forces are at play here, and there basically isn't a damned thing any of us can do to change them? But we can alleviate the effects. For example, our tax money could be spent on college loans instead of imperialistic wars.
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Lilpup
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Username: Lilpup

Post Number: 775
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Posted From: 64.12.116.195
Posted on Tuesday, January 03, 2006 - 12:01 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"But could you tell Chinese people to their faces that they are somehow less deserving of jobs than Americans?"

some people seem to have no problem saying it to Americans (they often use the phrase 'entitlement mentality')

"But isn't it likely that unshakable GLOBAL economic forces are at play here, and there basically isn't a damned thing any of us can do to change them?"

so you'd like the common American workers to quietly roll over and die while the fat cats get fatter?
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Dove7
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Post Number: 1910
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Posted From: 24.5.195.127
Posted on Tuesday, January 03, 2006 - 12:19 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Lilpup,

you missed the point here. He didn't say that you don't have the right to complain, because you do. BUT, like he said, there aint a damn thing that you can do. That is a fact.
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Lilpup
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Posted From: 64.12.116.195
Posted on Tuesday, January 03, 2006 - 12:34 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Dove, a lot *could* be done, it just wouldn't be pretty because the fatties will fight tooth and nail.

And stop thinking you're immune
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Livernoisyard
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Username: Livernoisyard

Post Number: 37
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Posted From: 69.242.223.42
Posted on Tuesday, January 03, 2006 - 12:46 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

More less random thoughts:

These same Russians, Czechs, Swiss, Indians, Chinese, Philippinos, Koreans, and Japanese, etc. who are taking our jobs away also take their educational opportunities seriously, unlike the vast majority of Americans. They know that's how to get ahead and how to stay ahead. They turn out so many times more skilled scientists and engineers than we have for well over a decade. And it shows. It's not just because they work for less; they're better than we are at our own games. Consider how many industries that formerly were major here in the US that are now totally non-existent.

As a telecommuting technical editor/sometimes writer in the embedded microcontroller field for a major semiconductor manufacturer, I benefit somewhat from their lack of prowress in the English language. Fortunately for me, English is still the lingua franca in engineering and IT. It won't always be, but hopefully it will remain so for my lifetime.

If it weren't for that, I'd have to move elsewhere for employment. What other intelligent choices are there? Wait until some unknown industry to suddenly arise? Look at the huge number of unemployed around here! When the other shoes drop at the major auto firms, that number will surely increase greatly - both white and blue collar.

One poster mentioned that white-collar employment was secure here. How more wrong could she be?! That sector is just as (or more so) vulnerable. Ford has offshored from Dearborn to India its accounting IT for a few years now. When EDS's 10-year contract with GM expires this year, look for its IT personnel there to be hitting the streets in Detroit and Plano, TX for jobs, only to find none here. Plano will do OK, though.

Of all the places to choose from for locating their industries, why would investors choose such an anti-intellectual environment as Michigan, which ranks 39th among the states in per capita residents with college educations? During the late 1990s, Michigan ranked 36th. Not a promising trend...

Worse yet, Metro Detroit ranks 22th of the largest 24 municipalities in this area. It's no secret, as knowledge of this factoid is readily available, and the Governor repeatedly brings it up in her public appearances.
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Burnsie
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Username: Burnsie

Post Number: 385
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Posted From: 35.12.20.226
Posted on Tuesday, January 03, 2006 - 12:58 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Dove7, thanks for backing me up. Let me clarify my views. I do think that extremely rich people, like auto executives, have a moral obligation to give away a lot more of their salaries to worthy causes than they currently do.

But to expect that executives will take a huge cut in pay simply because "we're outraged!" is fantasy. Wake up, people. It's called a capitalist system that we live in. I don't care for many of its side-effects, but it's reality and not going to change any time soon.

Short of a mass riot of the people surging into executives' offices and demanding that they cut their pay, executives will continue to get paid as much as the market will bear.

And even if that riot *did* happen, it still wouldn't solve the problems of the pension and health care liabilities, which the foreign automakers don't have to deal with.
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Lilpup
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Posted on Tuesday, January 03, 2006 - 1:01 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)


quote:

And even if that riot *did* happen, it still wouldn't solve the problems of the pension and health care liabilities, which the foreign automakers don't have to deal with



but American legislators could...
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Burnsie
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Username: Burnsie

Post Number: 386
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Posted From: 35.12.20.226
Posted on Tuesday, January 03, 2006 - 1:17 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"but American legislators could..."

Yes, and I'm quietly optimistic that some legislative relief will happen to some extent within a couple years. There are just too many companies, not just in the auto industry, where this is becoming a huge problem, and too many people (constituents) affected. Hard to find money for it, though, with the billions each month we're spending in Iraq.
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Digitaldom
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Username: Digitaldom

Post Number: 412
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Posted From: 67.149.110.53
Posted on Tuesday, January 03, 2006 - 2:33 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Llyn, I work for EDS.. GM's major supplier for IT.. Computer Services for those not aware of what IT is.. I work on the GM account.. They have delayed the new contract signing till this month because of finacial reasons. They (GM) are rebidding all of there IT contracts (3 billion worth (they claim).. And the contract negotiations have at present been very interesting.. But as of recent all of that has changed.. They changed EVERYTHING they sent in the initial RFP (request for proposal)... Let me explain real quick what an RFP is for those that do not know... A company will put on the market what's called an RFP.. Suppliers such as IBM, HP, EDS, Accenture, etc recieve this request and create a proposal with price to the company that asked for it.. In the end one of the RFP proposal's will win.. Example I want you to take over all plant operations for x number of plants. How do you propose we improve those plants, what technology would you use, what is the architecture, what is the cost model? Then GM will decide which vendor it will use for those services.

The change that occured is that the original requirements they presented in the RFP have been changed! Which means re-pricing everything... And the bottom line is.. The bottom line needs to be reduced throughout GM.. They feel they are paying to much, and changed requirements to get services for much less than they wanted originally...

Hopefully that all made sense... I am tired..

To my original statement they are not revealing all there troubles, I have seen it first hand.. They are losing massive amounts of money in the US.. Making money in AP (Asia-Pacific) and South America.

Due to the way GM manages it's money, these regions can spend money on what they want, without approval from headquarters... GM right now acts as several seperate companies.. rather than one big company.. They let the individual regions determine what they need, rather then corporation determine all money allocations...

For anyone familar with business knows why this is really bad...

In final, GM needs act as one company.. They need to stop blaming the unions for all there problems.. They need to REDUCE there upper management by over 75% to become profitable.. Why does GM need over 500 executives? This is not a number blown out of propotion either.. it's really close to the true number...
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Lt_tom
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Username: Lt_tom

Post Number: 53
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Posted From: 24.208.255.171
Posted on Tuesday, January 03, 2006 - 5:33 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Livernois, glad to see another EE-oriented type on the board. Remember...forget about the SMART bus and get on the RAMBUS lol
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Livernoisyard
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Username: Livernoisyard

Post Number: 39
Registered: 10-2004
Posted From: 69.242.223.42
Posted on Tuesday, January 03, 2006 - 8:15 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Lt_tom:

Funny you should mention Rambus in jest today. Rambus just entered into a $75 million licensing deal with AMD, and Intel might also license its technology.


Rambus/AMD deal
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Rberlin
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Username: Rberlin

Post Number: 280
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Posted From: 65.43.38.50
Posted on Tuesday, January 03, 2006 - 9:21 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Holy crap! Rambus is still around? I would have thought they would have gone way of SCO by now, i.e. cut everything except a law department to file baseless IP infringement suits.
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Jenay
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Username: Jenay

Post Number: 107
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Posted From: 68.41.224.19
Posted on Tuesday, January 03, 2006 - 9:37 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

How depressing.

<--- Works for GM.

I guess I'm lucky because I'm salary. But, the fact that I missed a pension entirely by only a few weeks due to my hire date, and the cessation of 401k matching are downers nontheless. So are the promotion and raise freezes.

I'm more worried about my dad, who works for Delphi.
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Lt_tom
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Username: Lt_tom

Post Number: 54
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Posted From: 208.0.107.92
Posted on Wednesday, January 04, 2006 - 7:59 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Rberlin, the Bus is alive and kicking and, with a great deal of thanks to the crew at Samsung pleading guilty for their misdeeds, will probably emerge triumphant. Hynix will be the sacrificial lamb at the AT trial on Rambus's home turf of San Jose with a fair judge. Meanwhile, Rambus also designed the interface and memory for the Sony/Toshiba/IBM Cell multicore processor...pretty nifty stuff (nice writeup about it in the Dec. IEEE spectrum mag), and will mean the Bus is back for good if the PS3 is a success (and it should be)
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_sj_
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Username: _sj_

Post Number: 1164
Registered: 12-2003
Posted From: 69.220.230.150
Posted on Wednesday, January 04, 2006 - 12:41 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)


quote:

executives will continue to get paid as much as the market will bear.




Exactly, those executives are highly trained in and out of the office and right now that is the pay the market will bear. The market however will not bear mathcing 401ks, Computers, Cell Phones, Expensive job banks, paid layoffs, and 2 for 1 employee car purchases while everyone else pays 300-400 dollars a month more and can not figure out why no one buys American anymore.

I only count 58 Executives at GM WorldWide. Do they store them under a different title?
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Darwinism
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Username: Darwinism

Post Number: 299
Registered: 06-2005
Posted From: 69.215.30.34
Posted on Thursday, January 05, 2006 - 5:15 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Many people on this forum and in the Metro Detroit area assume that the problems only affect blue-collar employees, and therefore, being educated and having experience would be sufficient to hang in there as a white-collar employee.

http://www.detnews.com/apps/pb cs.dll/article?AID=/20060105/A UTO01/601050415

Well, engineers and technical consultants, IT departments(as mentioned above by Digitaldom), would receive deep cuts as well.

In another thread relating to how far Detroit will need to go in order to hit rock bottom ..... well, my guess is that the bottom will be reached once people in the area begin to see an upward trend in employment across the board in all industries, especially the automobile-related industry.
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Livernoisyard
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Username: Livernoisyard

Post Number: 48
Registered: 10-2004
Posted From: 69.242.223.42
Posted on Thursday, January 05, 2006 - 6:50 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

In case anyone is interested in understanding how outsiders consider the plight of GM or Ford, here's today's installment from Forbes:

Detroit: Heal Thy Self
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Darwinism
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Username: Darwinism

Post Number: 303
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Posted From: 69.209.133.3
Posted on Thursday, January 05, 2006 - 7:18 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Livernoisyard: Thanks for linking to that Forbes article.

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