GM bankruptcy

[Partha]

Dd, we need that app. Seriously.

If GM was "damn-near criminal" in charging a "higher profit margin".......where are the profits? Clearly they weren't "selling fewer cars" by any appreciable margin.

Did you not read the part of my link where it said that sales of SUV's dropped 30% or more? There is a profit of about 10k on any SUV sale in America, and a small LOSS in compact cars. If they sell 30% more compact cars and 30% less SUV's, guess where the profit goes. In contrast, Toyota's fuel efficient vehicles cost more and actually deliver a PROFIT.

Look at their sales in Asia and Europe and you find not the rosey picture that Partha tried to paint as GM has literally no market penetration in any established auto market like Germany or Japan. Their growth is coming in emerging markets.......and so is everyone elses. This is not any kind of competative advantage.....it actually highlights exactly what I claimed which is they face strong barriers to entry in other established auto markets.

Perhaps you're getting it backwards - they're not building quality small cars, which is what the people in Germany and Japan want and are used to. They're building SUV's, which are frequent targets of vandalism and too expensive for the ordinary consumer in those countries to boot.

And, of course, let's not talk about how Toyota offers LIFETIME EMPLOYMENT to their workers and haven't had a layoff since the 50's.

[Lurker]

Consider that from 1993 through 2007, GM has spent a total of $103 billion in the U.S. to fund legacy pensions and retiree healthcare – an average of about $7 billion a year – a dramatic competitive and cash-fl ow disadvantage.

One thing that never gets brought up is that employees accepted lower wages in exchange for future pensions and healthcare. Those lower wages obviously provided some benefit to GM's balance sheet for all those decades, even if the past benefit doesn't equal the current liability. It would be nice if they mentioned that at least once.

[Kulaf]

Consider that from 1993 through 2007, GM has spent a total of $103 billion in the U.S. to fund legacy pensions and retiree healthcare – an average of about $7 billion a year – a dramatic competitive and cash-fl ow disadvantage.

One thing that never gets brought up is that employees accepted lower wages in exchange for future pensions and healthcare. Those lower wages obviously provided some benefit to GM's balance sheet for all those decades, even if the past benefit doesn't equal the current liability. It would be nice if they mentioned that at least once.

Yeah I actually brought that up. Like I have said in past posts my dad is retired UAW with 30+ years in the union. I know what they did any more importantly why they did it.

[Kulaf]

Dd, we need that app. Seriously.

If GM was "damn-near criminal" in charging a "higher profit margin".......where are the profits? Clearly they weren't "selling fewer cars" by any appreciable margin.

Did you not read the part of my link where it said that sales of SUV's dropped 30% or more? There is a profit of about 10k on any SUV sale in America, and a small LOSS in compact cars. If they sell 30% more compact cars and 30% less SUV's, guess where the profit goes. In contrast, Toyota's fuel efficient vehicles cost more and actually deliver a PROFIT.

Now answer the important question......why do Toyota's cars deliver a profit and GM's don't?

Perhaps you're getting it backwards - they're not building quality small cars, which is what the people in Germany and Japan want and are used to. They're building SUV's, which are frequent targets of vandalism and too expensive for the ordinary consumer in those countries to boot.

And, of course, let's not talk about how Toyota offers LIFETIME EMPLOYMENT to their workers and haven't had a layoff since the 50's.

I would suggest you read up on cartel behaviour of Japanese auto makers. If those same companies you extol tried what they do in Japan here you'd pitch a fit.

[Lurker]

Now answer the important question......why do Toyota's cars deliver a profit and GM's don't?

The two main reasons are lower legacy health care costs due to government provided care in Japan and few American retirees, and lower parts costs because they standardize everything from hinges and bolts to side view mirrors. Those two items save nearly equal amounts per vehicle. They can also charge more because their cars are better.

[Harlowe]

why do Toyota's cars deliver a profit and GM's don't?

Because they are better vehicles.

[Fallakin Kuvari]

due to government provided care in Japan

You think that will solve any problems here? For them to implement Government care here they're going to have to jack up corporate tax rates higher than Japan has now (we're second to them now). If they do that you can say goodbye to a lot of corporations in the US.

Not to mention they raided Social Security Fund before the first checks went out. Medicare Parts A,B and D are a drain as they have unfunded liabilities at $85.2 trillion (Parts A & B: $68 Trillion, Part D: $17.2 Trillion), Social Security has unfunded liabilities at $14 trillion. And you want them to run healthcare?

To fix our auto industry they need to shed the UAW entirely or work out a deal where the members of the UAW give up legacy pensions and healthcare, work for a decent wage (they start at $28/hr, Honda workers for example start at about half of that), and here's the real kicker: they have to work to get paid (you won't be able to not accept a job at another plant than the one you want to work and still get paid while sitting at home).

[Partha]

You think that will solve any problems here? For them to implement Government care here they're going to have to jack up corporate tax rates higher than Japan has now (we're second to them now). If they do that you can say goodbye to a lot of corporations in the US.

Sadly, no. Every single country with socialized medicine in the Western world provides it for a smaller per-capita cost than the US. They also deliver longer lifespans and better patient satisfaction, too. This is old news on this board, too - you should really try and keep up. Besides, your own logic doesn't support your statements - if taxes become so outrageously high that corporations will have to move, how come they don't in Japan, where taxes are already the highest in the world? Probably the whole 'government run healthcare taking that burden off the bottom line' thing that we don't have, right?

[Partha]

They can also charge more because their cars are better.

Indeed, in 2006 they were charging 12% more per-vehicle than GM. Not hard to see how that can turn a small loss into a small profit alone.

[Kulaf]

why do Toyota's cars deliver a profit and GM's don't?

Because they are better vehicles.

And now for the final question which gets us back to what started this little excursion.......why are their cars better?

[Lurker]

For christs sake, just make your point.

[Kulaf]

For christs sake, just make your point.

I did back here:

It's all tied together. You can't make good product if you don't have money for R&D into new processes and such and you can't get the money if you don't sell product. So much of the American car companies profits were being eaten up by various factors that they started to fall behind technologically.

To whit Pratha brayed "Horseshit!" and started us on this little circular journey back to where we started.

[Lurker]

I don't think lack of R&D money fully explains the moronic business practices that cost the company thousands per vehicle. For decades the U.S. Auto companies had scattered product lines, no standardized parts between lines, horrible quality control because they bought parts inventory months or years in advance, and completely missed the boat on what the public wanted. Lack of R&D money just doesn't cover all that. It is nice that you finally admit the US cars were worse though. You used to claim otherwise.

[Partha]

Well, at least half his argument was bullshit to start with, by his own admission.

It's all tied together. You can't make good product if you don't have money for R&D into new processes and such and you can't get the money if you don't sell product. So much of the American car companies profits were being eaten up by various factors that they started to fall behind technologically.

Which would make sense except for the fact that a few posts later he was touting the fact that GM was selling plenty of cars.

[Fallakin Kuvari]

GM and Chrysler failed because of the UAW and huge legacy costs as well as huge wages (which led to a lack of funds for R&D). Ford may yet survive, but not if Dear Leader decides that their competition with GM is a direct threat to government earning potential.

[Lurker]

/wingnut on

Yeah, luckily Ford didn't have any UAW workers or contracts or they'd be in the same boat as Chrysler and GM. It was obviously all the UAW's fault! Now Dear Leader is trying to make profits for socialist America! We must boycott GM!!

/wingnut off

Fallakin... you sound just as stupid as that most of the time.

[Lurker]

You can't make good product if you don't have money for R&D into new processes and such

which led to a lack of funds for R&D

I checked, and until the last couple years GM outspent Toyota on R&D. So, it doesn't appear that lack of R&D spending is the reason GM produced inferior cars over the decades. Nice try, though. Funny that you got the Wingnut to parrot you on that being a main reason the company failed.

[Ddrak]

GM and Chrysler failed because of the UAW and huge legacy costs as well as huge wages (which led to a lack of funds for R&D). Ford may yet survive, but not if Dear Leader decides that their competition with GM is a direct threat to government earning potential.

Blaming the UAW is stupid. The UAW's purpose is to provide the maximum possible benefits for its members and I would say it was pretty damn successful at that - actually too successful. The whole problem is the car companies shouldn't have agreed to so many demands 30 years ago, so it's their own stupid fault.

Dd

[Fallakin Kuvari]

/wingnut on

Yeah, luckily Ford didn't have any UAW workers or contracts or they'd be in the same boat as Chrysler and GM. It was obviously all the UAW's fault! Now Dear Leader is trying to make profits for socialist America! We must boycott GM!!

/wingnut off

Fallakin... you sound just as stupid as that most of the time.

Did I say Ford didn't have them? No. They were smart enough, however, to not take bailout money and allow the government to tell them what to do. Instead they worked with the UAW themselves and brought their wages down to what equates to $55/hr rather than the standard ~$80/hr (Current worker wage/legacy costs/pensions/etc) and saved themselves $500million a year.

GM and Chrysler deserved their fates, they should've filed Chapter 11 and reworked their deals with the UAW on their own and not looked to the nanny state for help. No one is too big to fail.

And you're correct Dd, it is the auto companies faults for not having the foresight to see that letting the UAW contracts get so bloated would harm them if things ever went south economically. The UAW did their job to an astounding degree, but its only because they did so well and complained so loud for better concessions that the automakers are where they are today.

They all should've listened to Henry Ford back in the 30's when he didn't want to have unions in the work place... you know what happened then? The Dear Leader of that era (FDR) tried to put him out of business. Its not entirely crazy to think that BO would try to do the same thing.

[Partha]

Did I say Ford didn't have them? No. They were smart enough, however, to not take bailout money and allow the government to tell them what to do. Instead they worked with the UAW themselves and brought their wages down to what equates to $55/hr rather than the standard ~$80/hr (Current worker wage/legacy costs/pensions/etc) and saved themselves $500million a year.

Seeing as how they were losing billions a year, 500 million ain't shit. And, of course, you drag out the old, discredited $80/hour meme again.

So tell us - does Rush's cock REALLY taste like Michael Steele's asshole?