OT - General Motors to Cut 30,000 Jobs & Close Plants

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A point to note

I wonder what went wrong with GM in the US, GM in Most other countries is prospering.

It would appear from an outsiders perspective, that all they had were big inefficient cars, and now there is an oil crunch and the US govt can no longer artificially maintain the cost of fuels, GM is Screwed.

The US is the only market in which GM attempts to sell huge SUV's. They tried with the Suburban in the Late 90's in AU and it dissappeared without a trace. Look at the average size GM car in every country other than the US. Its mid sized.

GM need to realize that bigger is no longer necessarily better.

Regards

Nathan
 
Things are changing on the cars-now found in the US-Americans are less interested in fuel efficient cars.this seems to go like a roller coaster-when fuel prices are high-everyone tries to buy a high milage car-when the gas prices drop-US car buyers go back to the giant gas hogs.and the auto industry is too slow to respond to these changes.Like a Toyota dealer that is nearme-got My Toyota from them(It was built in a US factory)They had mostly v-8 equiopped cars-Four Runners,Tundras,Etc.when I told the operator of the news of folks less interested in high mileage models-he Exclaimed"Thats great-I have 20 on order and coming!" It seems in the car industry its hard to win.the market changes so fast.And even with the high gas prices-US drivers still hung onto their big gas hog cars-they just drove less.The restuarants in my area were feeling the summer pinch from this.I talked to the managers of some and they pointed out during the summer people were eating at home for the two big reasons-they didn't have the money to spend on the "out to eat " meal and they had to buy gas for the car rather than go to the restuarant to eat.The gas money was eating into peoples budgets and eating out would be ruled out.And for any car builder-it takes TIME to configure production lines for various cars.They have to try to determine in advance which models will sell and which will not.Then they have to decide how to configure the production lines.I guess they are going back to the big cars??Must be miserable for a car factory manager.
 
Nathan

You have it partly right, the problem with GM here is the size of the beaurocracy of the company impeeds any quick progress which is the main reason they went and founded Saturn. Which I understand is doing fine.
There is a great read on this in a book called "The Machine that changed the world".

But more to the point, I just attended our auto show here in Boston. And it was blaringly obvious GM has not been doing its homework for a long time. The cars all were boxy, and they all had the feel of the 80's! I said nothing to see what my friends reaction was and he blurted out Lets get out of these 80's junk cars.
GM is gussying up 1980's technology for its main line vehicles--case in point All the dashboard buttons come from molds made in the 1960-1980's! And people know this!
Americans are savvy shoppers GM is fooling no one.
I know in Australia most car purchases (Outside Melbourne) are based on need for durability & functionality but over here like Tolivac said the market is driven by innovation and style.
Here there are many many Hummers & Land Rovers fully loaded rolling the streets that have never seen or ever will see the Dirt!
GM has a three almost up to date cars in their stable, the Chevy truck styled like a 1950's hot rod, the Cadillac STS and the Corvette.
ALL priced well over $65,000 US! The Cadillac base is $77,000!
Now when I can go out and buy a Ford Ranger fully loaded , 4 wheel drive truck and get 10 years use out of it for $24,000 what do you think I am gonna buy?
Even if I was a luxury shopper look at this; I can go out and buy a Mercedes Benz R350 fully loaded which has the MOST advanced safety features I have ever seen in a road vehicle, every seat fits my 6'6" frame, it has a V-8 engine,it seats 7 comfortably, it is built here not Germany. All this for $55,000!
With cars like the R350 around you don't even look at GM.

When I grew up GM was the standard, my parents never bought anything but Oldsmobile 98's. Today they wouldn't even look at GM because GM has made enemies of their customers. There are many stories like this one , my dad in 1980 bought their new front wheel drive Chevy Citation hatchback. At 1,000 miles the transmission ate itself literally. It was coming out in the oil,all the gears ground to dust--1,000 miles! GM would do nothing and never did! That's when he swore he'd never by another GM product again and he hasn't.
You have to keep in mind GM is bigger than most countries and it behaves like one here. Thats the whole key,its sooo big the individual customer is no longer important to their business model.
 
Similar job cuts are coming soon at Ford Motors as well. In an email, they announced that 4000 white collar jobs will be cut and many more to come in the manufacturing side as well after the first of the year. Probably at similar numbers to GM analysts are predicting. Toyota will employ more people in this country than GM after it's cuts are finished.
 
A huge part of the problem is health insurance costs. We are the only industrilized nation that has not adopted some form of universal coverage, and it is hurting our competitiveness.

My dad was an executive for Mutual of Omaha, but he was also convinced that we need to change the way the system works. It was his feeling that we could have nationalized basic care to relieve the burden on private industry, and the health insurance companies could do very well for themselves by providing coverage for elective services. Unfortunately, not everyone at MOO was so enlightened.
 
I was a GM person until '94 when I bought a Geo Prizm (they are a Toyota Corolla) at a GM dealership. The Mighty Geo now has 188,000 miles on it. I'm still on the original clutch and exhaust system. It has been far and away the most reliable car I've ever owned. There are no rattles in the dashboard----nothing in the way it starts, runs or behaves suggests its 11 years old and just a stone's throw away from 200K.

Why Toyota can make cars this reliable and GM can't (or doesn't), I don't know.

I like the new Chevy Malibu, but it's really a Saab 9-3 and although its silky smooth and very quiet inside, reliability has not been very good.

This is what drives me crazy about GM cars: The choice of colors. They are the most blatant, Hot Wheels, toy-car colors I've ever seen. Compare them to Honda, Toyota, Nissan, Volkswagen whose color choices are generally more sophisticated-looking.

GM has a big problem with the amount of pensions/insurance it's having to pay out. Had they remained the overwhelmingly dominant force in auto sales, things might be better for them. But they've lost a fair amount of their market share. I think I heard this morning there is one worker for every 2-1/2 retired pensioners. The math is obvious. And they lost another 5% of their market share last year alone. They're looking at a 5 billion dollar loss this year. That's huge, even for a company as large as they are.
 
I hear about the costs of pensions and health insurance for the employees and retirees whenever the poor profit picture for corporations is discussed, but what about the insane amounts of money paid to the CEOs and board members? If you ask me, they are not worth their pay when the only way they can turn a profit is to close plants and move the production to some 3rd world country. Maybe the corporate big shots could join the effort for universal health care coverage since they are having such a hard time paying for health insurance. Maybe their pay, not their bonuses, but their pay, should be pegged to a percentage of the profits, not earnings, but profits. If they don't like that they can step down and maybe make room on the board for someone who has worked in the production area and knows the product and the problems. I wondered at the sanity of the President talking to China and other countries about our trade deficit. It's not their buying that is to blame, but rather our sending most of our manufacturing out of the country so that so much of what we buy is made abroad.
 
Exec pay

Tom! What radical ideas! Are you a Communist? ;-)

Unfortunately, executive compensation is usually set by the board of directors (or a committee of the board) and the boards are almost always comprised of fellow CEOS and other cronies. It's a very cozy club.

Lack of innovation, as in the case of GM, is due largely to cutbacks in R&D and the tyranny of Marketing, with their idiotic focus groups and largely dim-witted staffs (again, I work in marketing, so I know of what I speak. I marvel sometimes at how the company I work for survives the Big Thinkers I work with ;-) The idea is, the more you dumb it down and give people the cheapest, shiniest object, the more money is left for "Wall Street" and the senior management. The long term viability of the company doesn't matter as long as the stock price stays up. This line of thinking has served the celeberity CEO generation very well for the last 30 or so years.

Contrast this with the successful non-American car companies, who innovate. Generally speaking, their CEO's aren't as grossly overpaid, and they have more money available because their governments pick up the tab for healthcare and pensions.

Only here are the middle-class and poor expected to suck it up so that the uber-rich can be even uber-richer. They present that as being the "American Way" and enough poor slobs buy into it to keep that group in power.

But here's the question: Once the middle class is eliminated as an important voting block, and we have mostly poor people and a few rich, who is going to do the buying to keep this economy alive so that the rich can stay rich?
 
vanishing middle class

And who will keep society stable? That is one of the big problems in South American countries; you have the rich and the poor. The poor can be swept up by anyone making promises with a loud voice. They form the popular front for whatever, the current felon in charge gets ousted and the "People's Man" takes office and picks up right where the former office holder left off; except that the new guy knows who the radicals are and has them dispatched. People with nothing have nothing to lose. Trite, but true. People who have investments in a society help to stabilize things.

I am still amazed by the complicity of so many "Good Christians" in this taking from the poor. The gay-bashing I can understand. You always have to have a target for the hate you carry around because there are others richer, prettier, more popular, more successful, still able to have sex, at least without begging and/or paying. And their preacher says it's all right to hate the right kind of people, people who are different. Once it became illegal to do and say horrible things about the former group who bore the wrath of everybody whose daddy would have inherited a plantation and by now, he'd have it and not have to go to his stinkin' job everyday because he was too busy raising hell, bein' the star "athalete" and chasing girls to learn anything and then had to get married and suddenly life got hard. So he has a bitter attitude. He's stuck in a bad marriage with a woman he never really loved and has kids that further trap him. He sees younger people who are better educated gettin' jobs he feels he should have, but he can barely read email, hell, why single out email? "Barely read" says it all. So he listens to angry white guys on the radio and angry preachers on TV and sends them money to do the Lord's work because they are gonna help him and they reinforce his hate, because they hate the same people he does. Forget about clothing the nekid; that was taken care of when the half-nekid statue up in Washington was put behind a curtain. All the poor are on food stamps; eating well off his taxes so there's no hungry to be fed. He doesn't bother to read papers or magazines, except a bit of the sports, but he knows that what they say must be true, 'cause it's what he thinks, too. He still wants a big car and they are going to see to it that nobody is going to legislate what the car companies make or what he can buy. If he helps make them richer and more powerful, he will be one of their supporters, part of their club and have some one fighting for him, at least until after the election. Or something like that.

Hey, musical question. A group called the Atlanta Rhythm Section recorded the song "Doraville." One line went "Doraville, bit of country in the city." Has anyone heard it? It must have been recorded in the early 70s. I know that many of you were not yet born, but I was hoping somebody else might remember the song. It was right popular around Atlanta. I went to school with children whose parents and relatives worked at either the Chvrolet plant or BPO, the Buick, Pontiac, & Oldsmobile plant across the road.
 
GM has been making bland cars for too many years.It's a far cry from the company that employed Harley Earl,and some of his great styling examples,Bill Mitchell,Zora Arkus Duntov and the Corvette,John DeLorean,the list goes on.
Personally I think the last great styling breakthrough they had,was the 66 Toronado/Eldorado.Endura bumpers on Pontiacs were also great,but I can't think of much past that.

Also,they put most of their eggs in the SUV basket,and suddenly,that market is drying up.Now they've lost direction,and focus,and are grasping at any chance for revival.

kennyGF
 
Making bland cars hasn't been the crux of the downfall, making poor quality cars cars has been. Nothing says bland like early 60's Japanese cars in comparison and that trend served them well for 30+ years while in the meantime slowly adding a bit of bling now and again, moreso now that the tables are turning. All the while you rarely if ever would see advertisements about Japanese car service departments, only positive reliability commentary. And here's GM still spending a fortune on tv and print advertising Mr.Goodwrench service.
None of this was news, the exact same thing happened to RCA in the 60's & 70's, they proliferated the airwaves about service service service while Sony and pals talked quality quality quality.
 
MR GOODWRENCH SERVICE

I have just seen an ad where the woman goes in for a free brake inspection and they tell her she needs new tires.
Now she is driving on ICE!!!!! and because she has new tires she doesn,t slide off the road. I was allways told that new tires wern,t any better on ice than bald tires.
Unless there studded (which are aginst the law in most states anyway)??????????????????
 
economic

I have a great book written by an Australian politician called Bob Ellis. He writes in a really engaging style, I couldn't put it down till I was finished. The book is "First Abolish the Customer - 202 arguments against economic rationalism."

Here is a tiny excerpt: (I have trimmed it a bit for space reasons.)

"Economic rationalism at its heart is a refusal to spend money on the unnecessary. If a company can make a bigger profit by shedding this or that worker, it should do so. This is regardless of how much the worker has done for the company in the past or how long he has done it, how well or how loyally or selflessly. If he is now superfluous to company needs, he should seek work elsewhere or go on the dole.
"This attitude is not too hard to understand given human tendencies of the past five thousand years. What is remarkable is the belief - a belief that all economic rationalists share - that this decisive, sudden process is good for society, or good for the economy as a whole.
By sacking people in their hundreds of thousands, the theory asserts, you create employment and stimulate spending.
A moron could see that the opposite is true. But not an economic rationalist.

"For a man out of a job is a man with little money to spend on anything but food and bus fares to his next job interview. He has no spare cash for shirts or shoes or handkerchiefs or cars or house extensions or video tape hire or (...) a wine cellar or new skis. His sacking has ended his ability to do anything much of use to an expanding economy.
"It has ended his wife's ability to spend money too....
"It has ended moreover his children's capacity to spend money on toys, skateboards, CDs, video games, big macs or nights at the cinema.
Every man sacked, in short, stops four people at least from spending money on things other than basic food and shelter.
"When, as happened in Canberra, Australia, thirty thousand public servants are sacked by a government keen on cutting costs and saving taxpayers money, one hundred and twenty thousand people ceased spending money in Canberra.
This put pressure on many Canberra small businesses. Many of these responded by sacking people. Others responded by closing up shop and putting the family home on the market. These homes were competing with the abandoned homes of the sacked public servants and Canberra house prices therefore dramatically dropped. This rational market response further pressured the families of the sacked workers and heightened their despair.
Some sought relief in drugs and alcohol. Some committed suicide. Some blundered onward in their limited lives... A lot of grief was caused.

"And the Prime Minister calls this process rational.
And the Prime Minister is an honourable man.

"Economic Rationalism is a process that can be summed up pretty well with the following slogan: First Abolish the Customer.
Hold on to that thought and follow the thread."

I thoroughly recommend the book.

Chris.
 
Styling get's 'em in the showroom,price,and service keep's 'em coming back. And GM is losing ground on all counts.
Take the SSR.I think it looks great,has decent performance,a lot of potential.Then GM prices it out of range of 80% of the buyers! Makes no sense,especially when you're not selling vehicles....

kennyGF
 
My 1986 Celica GT liftback was my favorite automobile. Her name was Baby Blue and we were together for 14 years and over 160,000 miles. Never had clutch problems. In 2000, I bought a Solara whch is a wonderful car; remarkably trouble free. I donated Baby Blue to Mellwood, an organization that uses the cars to fund their operations helping the developmentally handicapped. I took pictures of her and when the truck came to take her away, I snapped a few more then went inside and cried. I don't know what it was about Baby Blue that caused me to bond with her. Maybe it was the 5 speed which made me a link in the operation of the car, I don't know. I got the Solara with automatic because I have had too many friends have to change cars when the shoulder or elbow pain from accumulated years made it impossible to drive with a stick shift. If the Solara lasts as long as the Celica and energy realities force new technologies for transportation, this might be my last car. Since the Metro station about 3 miles from my house opened sometime in late 2000 or 2001, I have been taking the train to work so at just over 5.5 years of age, the Solara only has a bit more than 48,000 miles on her. The wonderful music system coupled with a very quiet cabin make her a super listening chamber.
 
All I can say is that GM, like Maytag is probably the victim of corporate greed and mis-management....and after years of this, the shit is hitting the fan....
 
Like Jetcone, our entire family was dedicated to GM products, Buick Electras, Chevy Caprice, Impala's, etc. My Dad had a 72' Olds 88 that went well over 150,000 miles before he sold it.
It seems around 1976 or so is when the quality at GM started going downhill. Remember the 1st Cadillac 4-6-8? The Citation? The Vega and it's horrible little variants?
And who can forget the 350 gas engine that was converted to run on Diesel? And the scandal when people were buying Buicks and Olds only to find Chevy engines in them? Too many mis-steps in the eye of the public.
In the early 80's we switched to Toyota and Ford with good results and in the 90's we switched to Mazda with even better results.
You couldn't give us a GM product now.
 

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