Off Topic - Does anyone live in Michigan? What R ppl saying about the future of GM?

[Patrick Bateman]

Does anyone on the board work in Michigan, or better yet, work for an automaker? I'm curious what employees are hearing about the likelihood of a GM failure.

[ppia600]

Haven't heard about any details but considering they're asking for financial help, it doesn't look good so far. Maybe if they could just make some larger gas guzzling suv's everything would be okay. If they make it through these tough times, hopefully they will learn a little in the process and improve their philosophy all together.

[limono]

Well, I live in Detroit and talked to some guys from GM designing team. They basically said that for decades American People wanted bigger and bigger cars (along with everything bigger) and Gov supported this trend with low gas prices . They did not make any money on small cars because average Joe and his female wanted a huge trucks/SUvs on their driveways. Now, they (manufacturers)are blamed for everything .
I did not buy into this opinion entirely but have to admit that there is some truth to it and Hummers in the city look pretty ^%^%$#$ ridiculus. The mood in the city is grave and I can't imagine they will let GM sink.
Regards, L

[gedlee]

I live in Detroit and worked for Ford for more than 20 years. Thank God I don't now!

The problem with the big 3 are legacy. They have legacy contracts for the employees that locks them into high wages, high pensions, outrageous health benifits, etc. This makes the overhead for each car high enough that they cannot make money on smaller cars as the price and margins are not sufficient to cover their nearly $2000 per car offset from the imports due to legacy contracts. Thats why they HAVE TO sell bigger cars and trucks. And the fact that ammericans loved these gas guzzlers was not inconvenient - until they didn't like them anymore, then it was a problem.

Do I think they will go bankrupt - I certainly hope so. Thats the only way to get out from under the noncompetitive cost structure that they are shackled with.

Want an example. My wife has a PhD and is a Department head at the local university. She heard an interview on NPR about a year ago with a factory worker at one of the car companies who was complaining that his overtime had gone away. When asked he admitted that with overtime he was making a six figure income! Not my wife or anyone in her Department has a six figure income! Now how did this happen? A factory worker with no education makes more than a Professor teaching our kids!

Go bankrupt - not soon enough for me.

No one at Ford ever wanted to hear me when I spelled doom and gloom for the auto industry when I was there last. It's all coming true now. Do I have sympathy, no not really. Its time that Detroit got competitive, not sympathy.


A bail out only forstalls the problem - it does nothing to correct it.

[1moreamp]

This post has NO business here.......and some comments are offensive

[jacco vermeulen]

You mean to say that something Mr Geddes posted is not true ?

[audiobahnkid592]

this country is set up for failure in GM ever goes under there will be to many unemployed people and it will be an instant depression. i think the government will never let it get that far.

[gedlee]

Originally posted by 1moreamp
This post has NO business here.......and some comments are offensive

I was specifically asked to post this comment by one of the above posters so it IS on the topic on this page. If you are offended I'm sorry about that.

[scott wurcer]

Originally posted by limono
Gov supported this trend with low gas prices .

Almost free interstates and cheap gas did wonders for the railway infrastructure too.

[Patrick Bateman]

Originally posted by audiobahnkid592
this country is set up for failure in GM ever goes under there will be to many unemployed people and it will be an instant depression. i think the government will never let it get that far.

Is it?

I've personally owned two Volkswages, and Audi, a Ford, a Hyundai, and two Hondas. The least reliable car I ever drove was made in Germany; the most reliable was made here in the good ol' USA.

Yay for Ford right?

Well, no. My Ford was made in Hermosillo and had serious problems. Not a terrible car, but it was no Honda either.

Yes, my most reliable car was a Honda made here in the U-S-A. So reliable that it's the only car I've purchased twice.

Now why can Honda make a great car in the USA, but GM can't? A lot of people blame the designers, but I think the cost structure is the real culprit. From the lowliest janitor to the chairman of the board, The Big Three pay EVERYONE more than the competitors do. In 2007 GM paid their CEO 15.7 million(1), and INCREASE from 2006 as the company continued to lurch towards bankruptcy. The salary of Honda's CEO isn't public, but statistics show that Japanese CEOs make 1/5th what American CEOs do. From what I've read, the compensation across the board is nearly double what it is for Honda and Toyota.(2)

Do you see how that explains my crappy Ford? It's not that Ford is completely inept; it's that they're saddled with a cost structure that dictates they MUST cut corners to sell a Ford for a competitive price. Since the labor cost is so high, they have to make compromises in other areas. Ford chose to build the car in Hermosillo Mexico.

I see a ton of people argue that The Big Three simply need to make better cars and they'll be competitive with Honda and Toyota. This isn't true. Even if GM had the blueprint for the world's best sedan, they couldn't make it as cheaply as Toyota because they pay their workers too much. So they would have to sell it for more than Toyota, and it would fail in the marketplace. That's the reason that Ford and GM sell vehicles which are comparable to Honda and Toyota, but always fall short in one respect or another. It's not their fault; they do this to keep the price competitive.

1 - http://www.reuters.com/article/busin...34738420080425

2- http://www.cbsnews.com/stories/2008/...n4630103.shtml