GM's b/k details released

Discussion in 'Politics' started by B_starinvestor, Jun 1, 2009.

  1. B_starinvestor

    B_starinvestor New Member

    Joined:
    Mar 1, 2006
    Messages:
    4,409
    Likes Received:
    0
    Gender:
    Male
    Location:
    Midwest
    According to Wall Street Journal, here are the details of GM's Chapter 11 filing this morning:

    The Obama administration will spend over $30 billion to fund the bankruptcy; and in exchange will receive 60% of GM's stock.

    The Canadian gov't will put in $9.5 billion and get a 12% stake in the stock.

    Let's hope this works out for the taxpayers. It is a big gamble.
     
  2. faceking

    faceking Well-Known Member

    Joined:
    Nov 14, 2004
    Messages:
    7,483
    Albums:
    1
    Likes Received:
    77
    Gender:
    Male
    Location:
    Mavs, NOR * CAL
    Oh boy...

    One thing for sure, is we'll learn a lot both in the short term, and look back 10 years later.

    Personally, I think too much of this is a B.S. handout to the unions, but we knew we'd get that post-election.
     
  3. Trinity

    Trinity New Member

    Joined:
    Sep 16, 2006
    Messages:
    2,682
    Likes Received:
    0
    Gender:
    Female
  4. B_Nick8

    B_Nick8 New Member

    Joined:
    Jun 29, 2007
    Messages:
    11,912
    Likes Received:
    44
    Gender:
    Male
    Location:
    New York City, by way of Marblehead, Boston and Ge
    Yes, it is. But from what I understand of it the plan seems solid. The company is projected to begin to repay the loans, read: taxpayers, within two years. A smaller, leaner, more efficient GM is a goal most Americans can find reason to support.
     
  5. faceking

    faceking Well-Known Member

    Joined:
    Nov 14, 2004
    Messages:
    7,483
    Albums:
    1
    Likes Received:
    77
    Gender:
    Male
    Location:
    Mavs, NOR * CAL
    "a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry."

    That could be either be a very good thing, or a very bad thing. I like "fresh ideas", but you don't want a 7 yr old pruning the rose bush.
     
  6. faceking

    faceking Well-Known Member

    Joined:
    Nov 14, 2004
    Messages:
    7,483
    Albums:
    1
    Likes Received:
    77
    Gender:
    Male
    Location:
    Mavs, NOR * CAL

    Nick, I completely agree. But...

    Since when was the Federal Government an expert on small/lean/efficient? Name one instance... DMV? No. SocSecurity? No. Civics? No. Postal Service (vs FedEx, et al)? No. MediCare? No. We'll see whose brought in, and get some analysis on the game plan...

    Also, I'm VERY curious on the privatization plan here... what's the exit strategy, or like Obama's bank bailout a la (and in simple terms) we won't allow you to pay us back. Whu?

    The "projections" are unfortunately PR spin. I makes a number of assumptions that are out of anyone's control. Reminds me of someone assuming some conservative historical portfolio performance of 6% stocks, 3% bonds for the next two years. 'magine making that promise on 1/1/07. I'm curious the "recovery" of consumer spending they are planning, as well as the "forcing" of design and engineering for bogus global warming B.S.

    Toyota, the hallmark of hybridism... lost a shitload of money last year, I think more or near as much as GM (forget the numbers), and asked their own gov't for $2B. So this is NOT a case of "american automakers missed the boat on auto engineering".

    More importantly, ... how many American would support a smaller, leaner, more efficient (read as: less bloodsucking) United Auto Workers union?

    I have serious issue with their involvement, when they are one of the many culprits here...
     
  7. jason_els

    jason_els <img border="0" src="/images/badges/gold_member.gi

    Joined:
    Dec 16, 2004
    Messages:
    10,576
    Likes Received:
    25
    Gender:
    Male
    Location:
    Warwick, NY, USA
    I have to agree with Faceking on this. Projections are blather and particularly so in this economic climate. Are we to expect GM to re-tool and re-engineer everything from the cars to the corporate structure? How long before any gains are realized from it? Toyota may be hurting, but they still build better cars. The competition isn't going away and should, by all market laws, capitalize on GM's weakness.

    I don't think GM is going to have a real shot until credit loosens, consumer confidence rises, restructuring is completed, and GM debuts some new and innovative products.

    There's also the whole consumer mindset. Consumers are going to want to walk into GM show rooms and see all these brave new cars that the brave new restructuring is going to create. If they feel that GM has had a major overhaul and the products didn't, they'll stay away in droves because they'll feel ripped-off. Trumpeting, "NEW AND IMPROVED!" without renewing or improving anything is disastrous for a brand.

    GM will also have to deal with consumer backlash as some consumers walk away from GM products on principle alone whether due to lost jobs, anger at shaming the country, fears of socialism, harm to local economy, or any other non-economic factor. Of course, Ford and FIAT will be waiting in the wings... particularly Ford... which will now be the only car company to resemble an American car company. If Ford is smart, they'll start waving the flag in every ad and perhaps gently remind people of what FIAT was like when it was in the American market.

    I will disagree that it's not a case of missing the boat on engineering. As I've pointed out, GM has had plenty of time to change its practices and hasn't. It's not just engineering though. They've needed to restructure everything about the company from the top down for a very long time.

    Complain all you want about greedy UAW workers, but the fact is GM agreed to their demands under contract and GM failed to hold-up its part of the contract. That's exclusively the fault of GM.

    GM is not out of the woods by a longshot.
     
  8. B_starinvestor

    B_starinvestor New Member

    Joined:
    Mar 1, 2006
    Messages:
    4,409
    Likes Received:
    0
    Gender:
    Male
    Location:
    Midwest
    as the horrifying pain of this GM bankruptcy ripples through the working class....some people are enjoying lavish dates at $45,000 per night...

    How Obamas' romantic £120 trip to Broadway racked up a £45,000 bill | Mail Online

    Back to the OP:

    As part of this gov't sponsored b/k; are there provisions to loosen up auto financing as well? It really doesn't matter how 'lean and mean' you make the post-b/k GM; if folks can't secure financing to purchase their autos, it isn't going anywhere.

    A huge % of middle class now have poor credit.

    The 31-year old auto rainmaker (with no experience), Summer's boy, will really need to pull together some magic to fix the financing problem.
     
  9. B_Nick8

    B_Nick8 New Member

    Joined:
    Jun 29, 2007
    Messages:
    11,912
    Likes Received:
    44
    Gender:
    Male
    Location:
    New York City, by way of Marblehead, Boston and Ge
    As I understand it, and I'm only going on the reports I've heard on CNN, that's exactly what they're doing under Chapter 11. They're streamling to only 4 brands, shedding the others, closing inefficient plants, shedding superfluous dealerships and insisting on additional union concessions. I bow to the more economically minded and better informed among you, but it seems to me that "saving" the company, ie: helping (forcing it?) to turn it into a healthy one and concomitantly saving the jobs directly and indirectly associated with it is a far better thing for the economy in both the short and long run than trying to absorb the shock of an outright failure.
     
  10. jason_els

    jason_els <img border="0" src="/images/badges/gold_member.gi

    Joined:
    Dec 16, 2004
    Messages:
    10,576
    Likes Received:
    25
    Gender:
    Male
    Location:
    Warwick, NY, USA
    Starinvestor: Yes, the bill was huge for the Obamas to go out. The bill is huge any time the president decides to leave the White House. It does not seem there's much we can do about it. Believe it or not, I didn't begrudge Dubya his jaunts out to whack weeds in Crawford when hiring a few Mexicans would have been far cheaper. Nor do I begrudge the Obamas a night out in New York when a night out at Ford's Theater would have been..... no, wait. Scratch that.
     
  11. faceking

    faceking Well-Known Member

    Joined:
    Nov 14, 2004
    Messages:
    7,483
    Albums:
    1
    Likes Received:
    77
    Gender:
    Male
    Location:
    Mavs, NOR * CAL
    neither do I, unless this becomes rampant. unfortunately, it's during an era when unemployment is double digits in some states. so it's a bit of snub, but under normal conditions, ... you are the president after all.

    per GM... I don't see an easy way out. i despite the union backscratching Obama administration is doing, but at least I expected, so I'm not bushwhacked in that regard. this one is a big shit sandwich, and i wish GM was left taking the bites, not us.

    FAILURE IS VITAL TO CAPITALISM, and that's been removed. Uh oh.
     
  12. jason_els

    jason_els <img border="0" src="/images/badges/gold_member.gi

    Joined:
    Dec 16, 2004
    Messages:
    10,576
    Likes Received:
    25
    Gender:
    Male
    Location:
    Warwick, NY, USA
    Yeah, but can they make a competitive car company out of it? There are no guarantees that GM will be any better five or ten years out and there is lots of competition. To be a successful large manufacturer takes vision and a sense of pending market needs a few years down the road. There needs a commitment to research and development, quality, market pricing, and niche. GM has not demonstrated any ability in these areas of late.

    I think John DeLorean, who was the General Manager at Chevrolet during the introduction of the Vega illustrated GM's corporate culture very well:

    That's nearly FORTY years ago and the same problems continue. The introduction of platform sharing made everything worse when GM divisions found their products with so little individual identity that dealers were cannibalizing sales from each other. Ignoring the high-margin dependency for the last ten years made GM a one-trick pony and when that pony died (SUV sales), so did GM.

    It's not just GM that needs to change, multiple car companies the world over are doing it by shedding in-house departments and outsourcing everything from manufacture to marketing and branding.

    Ideally, GM should be left to rot, having fucked-up. That's how raw capitalism works. I would have vastly preferred all the bailout money go to line workers for retraining, medical care, and living security than to anyone else. These people are screwed and likely many of them will be left with next to nothing which means, of course, that the taxpayers will have to be burdened with them. Not so the shareholders, banks, and managers who stand to lose much less.

    We're bailing out the fat cats, not the rank and file.

    It's really, really rare for a former huge company to adapt to changing market forces without radical restructuring. Kodak, Polaroid, AT&T, PanAm, Western Union, and many others exist today as shadows of their former selves or gave-up the ghost entirely as markets changed and they couldn't. Usually it takes a start-up to respond to new economic conditions and markets and the company has to have very strong guidance to force the change in corporate culture and vision. I'm not sure a publicly owned company with government oversight can manage that. I get flashbacks of British Leyland, FIAT, and Chrysler when I attempt to picture it.
     
  13. houtx48

    Gold Member

    Joined:
    Sep 13, 2006
    Messages:
    7,095
    Likes Received:
    35
    Gender:
    Male
    ahhhhh star and queen are having a love fest or is that bromance?
     
  14. midlifebear

    Gold Member

    Joined:
    Dec 21, 2007
    Messages:
    5,908
    Likes Received:
    11
    Gender:
    Male
    Location:
    Nevada, Buenos Aires, and Barçelona
    Dear Jason:

    I get those same flashbacks. In all of the hoopla about a new mean leaner GM not once have I heard anyone mention that Demming quality methods will be part and parcel of GM arising like the Phoenix from the rust of Detroit. Currently, the only US automobile company reintroducing Demming's point-of-manufacture quality philosophy is Ford, and they're doing it begrudgingly. It's been since 1955 Demming was invited by Toyota to train them how to implement quality manufacturing methods at ALL levels of producing goods and services (from the board room to the janitorial staff) and Japanese as well as South Korea's recent success as a major car manufacturer are examples of how Demming's theories of practical quality assurance, which is a responsibility of every employee in a company, is what has made Japan, Korea, and most recently in the last 10 years Renault/Peugeot successful automobile companies.

    Ford implemented his theories when they developed the first mid size Tauruses and Sables. Then for some unknown reason they removed the responsibility of each worker's need for strict attention to quality control on the production line -- a power of quality control where an assembly worker could stop all production just to correct a minor problem and not restart the production line until the quality issue was resolved. The same philosophy was used in the board rooms of those (or that one) division of Ford. Then they decided managers all the way up to CEO's didn't need to be held to the same rules.

    I doubt GM (and especially Chrysler) ever learned how to incorporate Demming's methods into their production lines. Why should a UAW employee be bothered by such attention to detail when there's beer to be drunk when everyone clocks out at 5:00 PM or the end of any shift?

    GM is not remotely prepared to adopt and implement a completely new (1950's) philosophy in it's manufacturing processes. The Tesla ('Mericuhn made all-electric autos) were able to produce their first test cars with battery charges good for 250 miles. GM still hasn't figured out to beat the 90 mile between charges issue. The biggest issue has been Tesla's engineers, designers, and production process to have put Demming-like quality assurance in place before they even designed their first model.

    I'm afraid GM will assume that just slapping Cadillac on the pieces of shit it has been producing will continue to hypnotize the public into believing they've "Seen Jesus and can do no wrong."
     
    #14 midlifebear, Jun 1, 2009
    Last edited: Jun 1, 2009
  15. B_starinvestor

    B_starinvestor New Member

    Joined:
    Mar 1, 2006
    Messages:
    4,409
    Likes Received:
    0
    Gender:
    Male
    Location:
    Midwest
    fixed that for ya.
     
  16. jason_els

    jason_els <img border="0" src="/images/badges/gold_member.gi

    Joined:
    Dec 16, 2004
    Messages:
    10,576
    Likes Received:
    25
    Gender:
    Male
    Location:
    Warwick, NY, USA
    You've just stolen my thunder damnit! I was writing about Demming when your post popped-up. I suppose I should thank you for saving me the trouble but you're in a different division so we'll just re-invent the wheel all over again. :wink:

    Interesting to note how well those first Taurses did under Ford. For a while they were kicking the Accord and the Camry, becoming the top selling sedan in the country. I heard people rave about how good their Fords were. As you point out though, American management style is strictly top-down and Demming programs do not survive long any place I've seen them implemented (including my former employers).
     
  17. faceking

    faceking Well-Known Member

    Joined:
    Nov 14, 2004
    Messages:
    7,483
    Albums:
    1
    Likes Received:
    77
    Gender:
    Male
    Location:
    Mavs, NOR * CAL
    The core campaign broken promises are getting well into the dozens and dozens.

    He said it, not me "You can't get corporate jets. You can't go take a trip to Las Vegas, or go down to the Super Bowl on the taxpayers' dime."

    Don't mind the Prez having a night out on the town, but don't pull the "do as I say, not as I do" trick... be smart and have better judgement on the timing. That was a Biden-like gaffe.
     
  18. B_starinvestor

    B_starinvestor New Member

    Joined:
    Mar 1, 2006
    Messages:
    4,409
    Likes Received:
    0
    Gender:
    Male
    Location:
    Midwest
    as i've said many a time - THE unheralded King of hypocrisy

    Evidently there were no venues worthy of 'date night' in D.C.

    Yet auto execs get crucified for flying privately to congressional hearings; The Chosen One does so on eve of GM b/k filing - and gets Princess Di-type adulation from liberal outlets.
     
  19. HazelGod

    Gold Member

    Joined:
    Dec 11, 2006
    Messages:
    7,531
    Albums:
    1
    Likes Received:
    9
    Gender:
    Male
    Location:
    The Other Side of the Pillow
    WTF does the Obamas' NYC visit have to do with GM's bankruptcy?

    :rolleyes:
     
  20. B_starinvestor

    B_starinvestor New Member

    Joined:
    Mar 1, 2006
    Messages:
    4,409
    Likes Received:
    0
    Gender:
    Male
    Location:
    Midwest
    1. Media vilified auto execs for taking private jets to congressional hearings on gov't aid dollars for autos.

    2. On eve of GM b/k, Obama takes private jet and entourage to NYC burning $45K in taxpayer money on for a date with Michelle

    3. Obama in recent speech, "you can't get corporate jets and go to Vegas or the Super Bowl on the taxpayers' dime."

    So the lesson is that you can't take personal trips to Vegas or a Super Bowl venue on taxpayers dime, but it is acceptable to take a personal trip to NYC on the taxpayers' dime.
     
Draft saved Draft deleted