General Motors Financial Troubles Continue

[Kitdy]

GM's big announcement came out today and it is pretty serious. GM announced a 4.2 billion dollar loss (http://jalopnik.com/5079567/gm-declares-bankruptcy-imminent-after-42-billion-third-quarter-loss) and is essentially saying that bankruptcy is imminent.

In GM's words:


Even if GM implements the planned operating actions that are substantially within its control, GM's estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business. Looking into the first two quarters of 2009, even with its planned actions, the company's estimated liquidity will fall significantly short of that amount unless economic and automotive industry conditions significantly improve, it receives substantial proceeds from asset sales, takes more aggressive working capital initiatives, gains access to capital markets and other private sources of funding, receives government funding under one or more current or future programs, or some combination of the foregoing.

GM's potential bankruptcy in my eyes is the biggest threat to the economy of the United States and the World; some solution needs to be found, and found quickly because the economic implications of GM going bankrupt are enormous. Hundreds of thousands if not millions of jobs will be effected and not just in the US, but worldwide. GM's needs to remain operating for the sake of the economy as far as I see it, and it looks like the only hope for GM is government assistance.

[Dino Scuderia]

It's quite a conundrum. Pour money into the hole which is GM and end up with no real plan to fix the company, if there were any customers in a bad economy anyway. In addition to having the same management in control when all is done. Wagoner should have been dumped long ago.

Crikey, even Toyota is slipping.

Now Hyundai wants to buy Chrysler.

Welcome to bizzaro world.

[Zytek_Fan]

This is what happens when automakers are slow to adapt to a changing market.
And a shitty overall economy doesn't help.

[Ferrer]

So basically GM is in big shit.

Goodbye GM.

[f6fhellcat13]

So basically GM is in big shit.

Goodbye GM.

Deep shit, indeed. :(

[Kitdy]

Goodbye GM.

We will see what the US government and economy does. President-elect Obama has stated that a priority is to aid the US automakers. As Dino said though, will giving GM loans just delay the inevitable or will it actually have a difference?

Ok, let's say GM does have to declare bankrupcy, what happens then? Do they still produce cars, are they bought by someone or what? Can they survive after this?

[SlickHolden]

GM was in the shit before the economy went under. Failure to brace for it could cost them dearly.

They got to shut down a few in the states now before it's to late. Sell off assets and accept overseas designs and idea's more. But shrink the amount of car makers at home.

[f6fhellcat13]

http://www.nytimes.com/2008/11/08/business/08auto.html

[SlickHolden]

Bail out a sinking ship ?. It's like a shit that needs 1000 buckets to keep it floating, But it looses 10 bucket a day. How much longer can they keep this pace going for ?.
Sooner or later someone has got to grab the bull by the horns and take charge and change everything for it's survival.

[NSXType-R]

If GM America goes down, does it affect GM Australia, and other countries?

It'd be a shame to see the Monaro et al go down as well.

Although I don't give a crap if GM dies. It deserves to. Since when does putting all your eggs into one basket ever work for the long term?

Even companies with fuel efficient offerings (Toyota, Honda) are hurting. What could GM possibly come up with within such a short period of time to pick up the slack (other than the Volt, of course). Nothing.

Epic fail.

[Ferrer]

If GM America goes down, does it affect GM Australia, and other countries?
Every part of GM is losing momeny apparently, so if GM goes under, everything does.

Except perhaps some parts (like Saab) could be sold off.

[Knuto]

Every part of GM is losing momeny apparently, so if GM goes under, everything does.

Except perhaps some parts (like Saab) could be sold off.

I saw news about Saab might be under Chinese or Japanese ownership soon

[Bleeding Heart]

It's quite a conundrum. Pour money into the hole which is GM and end up with no real plan to fix the company, if there were any customers in a bad economy anyway. In addition to having the same management in control when all is done. Wagoner should have been dumped long ago.

Crikey, even Toyota is slipping.

Now Hyundai wants to buy Chrysler.

Welcome to bizzaro world.

Actually, almost all car manufacturers are slipping... the world economy is going nowhere... and with the price of oil still going up... it's a safe bet that many people will prefer to walk or take the bus than driving their cars.

[Wouter Melissen]

Actually, almost all car manufacturers are slipping... the world economy is going nowhere... and with the price of oil still going up... it's a safe bet that many people will prefer to walk or take the bus than driving their cars.

The price of oil going up?

[henk4]

It'd be a shame to see the Monaro et al go down as well.
=
and Monaro_Country...

[NicFromLA]

For a long time I kept saying about GM, 'you keep showing up to gunfights with a knife and eventually you're going to die of bullet wounds.'

But between Ford, Chrysler and the king of low-cost cars, Toyota having difficulty I don't know what do think.

[Quiggs]

GM closing up shop will end the world economy.

[baddabang]

GM was in the shit before the economy went under. Failure to brace for it could cost them dearly.

They got to shut down a few in the states now before it's to late. Sell off assets and accept overseas designs and idea's more. But shrink the amount of car makers at home.

Brilliant idea! Oh wait, GM has been doing that the past 10 years...

[Quiggs]

Internet forums: Saving General Motors one post at a time.

[BarneyBoy]

For a long time I kept saying about GM, 'you keep showing up to gunfights with a knife and eventually you're going to die of bullet wounds.'

So true.

Here in Australia GMH has been stubbornly building the same crap year after year after year. No innovation, no research into other fuels, technology and markets. Then when fuel goes up (what a shock - never has before!) they have nothing to offer the punters who run away from their product in droves.

In the US, they keep building resource hungry SUVs built on 1970's technology and blinged up with GPS and leather. Lazy.

It's not the financial crisis, not the fuel crisis that's to blame - it's big, fat, complacent car builders. Rant over :D

[SlickHolden]

If GM America goes down, does it affect GM Australia, and other countries?

They haven't been in Australia since the 40's:p.. Inside joke:D..
Yes should hurt bad. What would become of them i don't know ?.

Brilliant idea! Oh wait, GM has been doing that the past 10 years...
They have closed who in N/A ?. Noone.

[LeonOfTheDead]

Ok, let's say GM does have to declare bankrupcy, what happens then? Do they still produce cars, are they bought by someone or what? Can they survive after this?

they would still produce and sold cars, after a probably long period in which a sort of purposely-made administration would sell all the not-necessary to pay debts or a part of it. in this part of the movie, a lot of people could lost thier jobs and that's the worst moment. then the whole manufacturer would be sold, or just a piece at a time, to raise more money to pay the rest of the debts. the new owners could decide to cut more jobs, another difficult moment. at this point, the manufacturer, or what it's still there of it, should be fine and ready to start a new and better life after loosing basically what ruined it before. that's what usually happens, see Delphi for example. but don't quote me, I'm not into these things.

[f6fhellcat13]

They have closed who in N/A ?. Noone.

Oldsmobile...

[SlickHolden]

1 down 3 to go.

[henk4]

Oldsmobile...
but they introduced Saturn as a separate brand....(and Corvette)

[Kitdy]

Anyone know where to get access to division and country profitability of GM?

I was looking at GM Canada's sales for this month and year to date sales are down only 3 or so percent for cars and 10% or so total. What I was wondering was what parts of GM were not doing as bad as the company average.

[f6fhellcat13]

but they introduced Saturn as a separate brand....(and Corvette)

Corvette makes money.

But, Saturn... *sigh*

[SlickHolden]

Anyone know where to get access to division and country profitability of GM?

I was looking at GM Canada's sales for this month and year to date sales are down only 3 or so percent for cars and 10% or so total. What I was wondering was what parts of GM were not doing as bad as the company average.
At a guess. Opel Holden i think make or come close to making profits. I wouldn't put it past deadwood to make a profit now. Saab maybe also.

In Australia now most who are owned by GM work out of holden hq, I'm sure that is a cost effect weapon. Yet I'm always shocked at the lengths GM goes to overseas to run Holt and order subsidiary into every which way but loose. And at home just keep up the status quo. Which apparently isn't working.

[SlickHolden]

Corvette makes money.

But, Saturn... *sigh*
Saturn Pontiac Buick roll them into 1.

[Ferrer]

Anyone know where to get access to division and country profitability of GM?

I was looking at GM Canada's sales for this month and year to date sales are down only 3 or so percent for cars and 10% or so total. What I was wondering was what parts of GM were not doing as bad as the company average.
Autoblog had an article with a rundown of GM divisions by geographical location, but not by brand.

Everyone was losing money. And I'm betting that it's the same if we looked brand by brand.

[LeonOfTheDead]

Corvette makes money. Really? I'm sure it sells good globally (especially in NA).


At a guess. Opel Holden i think make or come close to making profits. I wouldn't put it past deadwood to make a profit now. Saab maybe also.

In Australia now most who are owned by GM work out of holden hq, I'm sure that is a cost effect weapon. Yet I'm always shocked at the lengths GM goes to overseas to run Holt and order subsidiary into every which way but loose. And at home just keep up the status quo. Which apparently isn't working.

Saab is loosing money since many years IIRC, Opel apart from the Corsa, Meriva and Zafira has very bad sales (the now replaced Vectra was basically absent from the road). but I doubt th whole mater is a problem of sales, but of how they are running the company. I think the situation would very similar if they were producing candies.

[Ferrer]

Saab is loosing money since many years IIRC, Opel apart from the Corsa, Meriva and Zafira has very bad sales (the now replaced Vectra was basically absent from the road). but I doubt th whole mater is a problem of sales, but of how they are running the company. I think the situation would very similar if they were producing candies.
The Astra sells quite well too.

[LeonOfTheDead]

The Astra sells quite well too.

there aren't so much on the streets here, even if compared to its opponents.

[SlickHolden]

When sold here the astra was a big seller.

[Ferrer]

there aren't so much on the streets here, even if compared to its opponents.
Don't have the exact figures now, but on some months it was europe's best selling car.

[LeonOfTheDead]

Don't have the exact figures now, but on some months it was europe's best selling car.

the Astra?! never heard that. perhaps Italy is not the best market to consider, here the best selling car is always the Punto or the Panda, so definitely a smaller car. The old Astra (especially the F, but the G too) used to sell more than the last one here.

[Ferrer]

the Astra?! never heard that. perhaps Italy is not the best market to consider, here the best selling car is always the Punto or the Panda, so definitely a smaller car. The old Astra (especially the F, but the G too) used to sell more than the last one here.
That's because in Italy, people buy italian cars. :)

[LeonOfTheDead]

That's because in Italy, people buy italian cars. :)

oh that's true, but the selling numbers of Bravo, 147, Focus and others are never as high as those of Punto, Fiesta, Corsa and so on.

[Ferrer]

oh that's true, but the selling numbers of Bravo, 147, Focus and others are never as high as those of Punto, Fiesta, Corsa and so on.
But the Ypsilon sells like hot cakes, which doesn't happen anywhere else.

[LeonOfTheDead]

But the Ypsilon sells like hot cakes, which doesn't happen anywhere else.

yes, and it's indeed a small car. IIRC the Ypsilon used to contend the title of best selling "small showy car" or something similar in the continental Europe to the first gen Mini for some times when it came out.

[Kitdy]

More bad news. (http://jalopnik.com/5081990/deutsche-bank-views-gm-stock-as-worthless-sets-0-price-target)

Deutsche World has valued GM at $0 dollars in anticipation of a bankruptcy. In morning trading, GM shares lost 27%.

Let the good times roll.

[henk4]

More bad news. (http://jalopnik.com/5081990/deutsche-bank-views-gm-stock-as-worthless-sets-0-price-target)

Deutsche World has valued GM at $0 dollars in anticipation of a bankruptcy. In morning trading, GM shares lost 27%.

Let the good times roll.
Deutsche Bank.....

[Kitdy]

Deutsche Bank.....

That's the one - Deutsche World is an international German News Network that is aired early in the mornings on one of the channels here.

[henk4]

That's the one - Deutsche World is an international German News Network that is aired early in the mornings on one of the channels here.
no sir, that is Deutsche Welle...

[Kitdy]

no sir, that is Deutsche Welle...

Gah whatever it is. It's pretty interesting as sometimes it is in English but has a distinct German focus.

[henk4]

Gah whatever it is. It's pretty interesting as sometimes it is in English but has a distinct German focus.
I know, I watch it regularly....

[Kitdy]

I know, I watch it regularly....

What intrigues me is that it is shown here on a 24 hour Toronto News channel in the early morning- sometimes I see it in English, others with subtitles. I don't know the market for this however - there are plenty immigrant communities in Toronto and several have newscasts catered to them but I would not consider Germans a major immigrant population in this city. After Deutsche Welle is an Italian news program which is certainly understandable considering the vast Italian-Canadian population in many parts of the city.

[Wouter Melissen]

What intrigues me is that it is shown here on a 24 hour Toronto News channel in the early morning- sometimes I see it in English, others with subtitles. I don't know the market for this however - there are plenty immigrant communities in Toronto and several have newscasts catered to them but I would not consider Germans a major immigrant population in this city. After Deutsche Welle is an Italian news program which is certainly understandable considering the vast Italian-Canadian population in many parts of the city.

There are a lot of Germans in Ontario.

[Kitdy]

There are a lot of Germans in Ontario.

This is true, especially in rural Ontario, but the fact of the matter is is that most of these Germans have been here for generations and no longer speak German. I would predict many of them do not have an interest in German affairs, though I am surprised after looking into it that there are so many Germans and Dutch as well. If I remember my history well, a lot of the German immigration was in the 19th century - I suppose a decent amount came after the World Wars as well however.

[Ferrer]

More bad news. (http://jalopnik.com/5081990/deutsche-bank-views-gm-stock-as-worthless-sets-0-price-target)

Deutsche World has valued GM at $0 dollars in anticipation of a bankruptcy. In morning trading, GM shares lost 27%.

Let the good times roll.


Deutsche Bank.....


That's the one - Deutsche World is an international German News Network that is aired early in the mornings on one of the channels here.


no sir, that is Deutsche Welle...


Gah whatever it is. It's pretty interesting as sometimes it is in English but has a distinct German focus.


I know, I watch it regularly....


What intrigues me is that it is shown here on a 24 hour Toronto News channel in the early morning- sometimes I see it in English, others with subtitles. I don't know the market for this however - there are plenty immigrant communities in Toronto and several have newscasts catered to them but I would not consider Germans a major immigrant population in this city. After Deutsche Welle is an Italian news program which is certainly understandable considering the vast Italian-Canadian population in many parts of the city.


There are a lot of Germans in Ontario.


This is true, especially in rural Ontario, but the fact of the matter is is that most of these Germans have been here for generations and no longer speak German. I would predict many of them do not have an interest in German affairs, though I am surprised after looking into it that there are so many Germans and Dutch as well. If I remember my history well, a lot of the German immigration was in the 19th century - I suppose a decent amount came after the World Wars as well however.
None of this changes the fact that GM is in a totally rubbish state.

Is it possibly the one of the small 3 that's in worse shape?

(Multi-quoting ftw... :D)

[clutch-monkey]

None of this changes the fact that GM is in a totally rubbish state.

Is it possibly the one of the small 3 that's in worse shape?

(Multi-quoting ftw... :D)

i thought that was chrysler. because i can't for the life of me think of one good car that chrysler makes. and their reliability is consistently sub-par.

[f6fhellcat13]

i thought that was chrysler. because i can't for the life of me think of one good car that chrysler makes. and their reliability is consistently sub-par.

ACR


(this needs to be more than 5 characters)

[cmcpokey]

i thought that was chrysler. because i can't for the life of me think of one good car that chrysler makes. and their reliability is consistently sub-par.

the Jeep is great vehicle. there are complaints about the new one, but owners do like them a lot. traditional jeep owners are a conservative bunch.

i think the 300C/Challenger/Charger are all good too. i wouldnt own one, but they seem to be excellent in almost all regards.

[clutch-monkey]

ACR


(this needs to be more than 5 characters)
i'm sure the 100 or so they made contributes greatly to chryslers income :p
wasn't really considering that type of car more the 'bread and butter' type.

the Jeep is great vehicle. there are complaints about the new one, but owners do like them a lot. traditional jeep owners are a conservative bunch.

i think the 300C/Challenger/Charger are all good too. i wouldnt own one, but they seem to be excellent in almost all regards.
nah, the jeeps are all still trash. forgot about the 300c (old i guess). challenger and charger just seem like ill-built boats with cheap interiors
do they have any decent smallish cars? i remember some avenger crap or something being sold here for like 5 minutes.

[cmcpokey]

nah, the jeeps are all still trash. forgot about the 300c (old i guess). challenger and charger just seem like ill-built boats with cheap interiors
do they have any decent smallish cars? i remember some avenger crap or something being sold here for like 5 minutes.

no. they dont do small cars. the avenger is crap.

the 300/challenger/charger are all the same car. made with the help of MB. the interior quality isnt brilliant, but v8 rwd is hard to beat.

[Ferrer]

i thought that was chrysler. because i can't for the life of me think of one good car that chrysler makes. and their reliability is consistently sub-par.
Their mid-sized and compact offerings are awful, true. But the full-size cars are fine and as are the SUVs and trucks.

I said that about the GM though, because lately it's been the one that has had more "we are going tits in 5 minutes" news. Rather more than Chrysler or Ford at least.

[Kitdy]

"we are going tits in 5 minutes"

You know, you don't often hear the word "tits" thrown around 'round here with that connotation, which is a shame, because it is a truly excellent use of the word and amused me greatly especially coming form you.

[clutch-monkey]

maybe he meant 'tits up'
but what does chrsyler own overseas? i thought we already said GM does alright globally

[Ferrer]

maybe he meant 'tits up'
but what does chrsyler own overseas? i thought we already said GM does alright globally
But they don't. Their last report said they were losing money everywhere.

Chrysler isn't definitely as much a global manufacturer as the other 2 are. They sell some cars here and there but their main market is defnitely America.

[clutch-monkey]

America is a shrinking market though. If GM can pull through the recession it could be in amuch better position than chrysler if it survives?

[HARNESS MAN]

The government should only help gm,if they agree to bring back the jobs they have sent out of the country. Ross tried to tell them in 2000, that workers making $5.oo a day would not be able purchase a $20,000.00 car. Man has his prediction come true. Gm put workers on unemployment checks and now they can't afford to buy their cars.

[Quiggs]

First they need to make it profitable to build cars in a unionized climate.

[clutch-monkey]

the unions can bitch all they want about lost jobs, but maybe if they hadn't spent so much time on strike and demanding more benefits they wouldn't have seen their jobs sent overseas..

[Ferrer]

I was wondering, could GM enter in a spiral of dropping sales as a result of lack of consumer confidence due to their economic problems, which at the same time would worsen them resulting in less confidence, lower sales... etc.?

Could that actually speed up the end?

[f6fhellcat13]

I was wondering, could GM enter in a spiral of dropping sales as a result of lack of consumer confidence due to their economic problems, which at the same time would worsen them resulting in less confidence, lower sales... etc.?

Could that actually speed up the end?

If they declare bankruptcy, yes.
If not, no. Obama say he won't let them.

[Dino Scuderia]

I was wondering, could GM enter in a spiral of dropping sales as a result of lack of consumer confidence due to their economic problems, which at the same time would worsen them resulting in less confidence, lower sales... etc.?

Could that actually speed up the end?

That's exactly is what has happened...and they fear if they take the bankruptcy route that no one will have confidence in buying a car from them...to exacerbate the problem.

Due to the recent weeks events I'm convinced the gov't is going to float them the money needed to bridge the near term troubles. The Obama campaign does not want it to become what would be an even more devastating economic situation.

The current admin. are giving them an ear being that the whole mess will be handed off.

Long term it doesn't fix a damn thing...an overly bloated car company with poor management and too much debt load. It's really hopeless.

[culver]

the unions can bitch all they want about lost jobs, but maybe if they hadn't spent so much time on strike and demanding more benefits they wouldn't have seen their jobs sent overseas..

Yes, the union has hurt in many ways. They were unwilling to downsize when automation really made the size of the work force redundant. In the old days the union demanded benefits equal to the white collar jobs. When the white collar benefits were cut the union didn't follow suit. Also, the unions for a long time heavily dictated who the domestics could buy from. You needed to buy parts from a union shop. The unions, fearful of Ford and GM simply importing cars from overseas, put limits on how many cars the companies could import. I suspect GM and Ford were big supporters of NAFTA because it gave them access to "domestic" non-union production in Mexico.

Honda and Toyota don't have union plants in part because they have worked very hard to avoid the unions. Even if Ford were to setup a new plant it would basically come in as a union shop from day one. Such is the legacy of the unions and the laws passed to support the unions.

It's not just the cost but the tying of hands that caused the unions to hurt their golden gease.

[culver]

...an overly bloated car company with poor management and too much debt load. It's really hopeless.

I agree that between the 1970 and 1990s the management was bad. I think the current 2000+ management at GM has been pretty good. Not flawless but they really are tackling many of the issues people have been complaining about. The question is are they too late.

[LeonOfTheDead]

I agree that between the 1970 and 1990s the management was bad. I think the current 2000+ management at GM has been pretty good. Not flawless but they really are tackling many of the issues people have been complaining about. The question is are they too late.

the amount of money GM is loosing since 2000 makes me think they are not so good, and surely too late.

[culver]

the amount of money GM is loosing since 2000 makes me think they are not so good, and surely too late.

Too late, yes. Perhaps things would have been different had we not first had a run up in gas prices followed by a credit crash.

When we look at how much money GM lost since 2000 you need to ask how much was basically going to happen and what things could the management have changed. Since 2000 the management has done a lot to address the inflexibility of the unions as well as the excessively high pay many union members were getting. However, those changes didn't happen right away. Until the changes actually did occur the negative costs were still accruing. The same is true for the high cost of pensions. Also, much of the money GM lost until just this year was due to one time write offs to in essence buy off the union. Those pay outs cost billions.
We can blame GM for not having the right mix of cars over the past few years when gas was high. However, product planning occurs several years in the future in the car industry. Toyota didn't guess any better and built a new factory to supply the market with a new, larger and thirstier pickup.
When the market shifted to cars, Toyota did ramp up Camry and Corolla production in the US. GM ramped up their US car production as well. Both reduced truck production but GM, who was in the truck market long before Toyota, had more capacity. A 20% reduction in truck sales is a much bigger number when you are selling around 1 million pickups a year vs 200,000.
Where the Japanese really did well was in importing small cars from Japan. These small cars such as the Yaris had historically been poor sellers in the US thus were not worth building in the US. The same is true of GM's small Euro cars.
But there is a difference. Japan helped keep the Yen low as the dollar fell. That kept it profitable to bring small, low margin cars from Japan to the US. Europe most certainly didn't hold the Euro down for the sake of US exports (not that they should have). So European produced cars cost quite a bit more. So the cost of importing a European small car to the US is higher than doing the same with a Japanese car.
The other issue is the unions, long ago were afraid of the domestics simply importing a bunch of cars from overseas. So they forced the car companies to agree to import limits. Even if Ford thought they could sell 300,000 Fiestas a year in the US, they can't without union permission.
The current management has gained concessions in this regard but that wasn't easy. The union unfortunately acts a bit like Washington. You can tell them something is wrong and unsustainable but they won't react until it becomes clear that unsustainable means ends tomorrow.
The current management is not without faults but I can't name another car company aside from perhaps Honda that hasn't has similar mistakes. The difference is most of the other companies aren't coming from the same place as GM.
Also, I wouldn't liken this too much to the fall of Rover. Rover was selling very few cars when the show finally ended. GM is still #2 in the world for sales and very close to #1. This is a much different sort of failure.

[Ferrer]

This is a much different sort of failure.
More like British Leyland?

[culver]

More like British Leyland?

I don't see GM being nationalized like BL. What is probably best for the company would be a Chapter 11 filing which would give the courts broad power to renegotiate with the unions and pension holders. The government could step in with a bridge loan simply to make sure the company had operating cash while in C11.

However, the democrats may have a different plan. They understand that much of their base comes from Unions. If GM goes under the unions really loose. All of there long standing agreements which gave them great pay and benefits will be gone. They will have killed the golden goose. This will of course upset a huge block of democratic voters. As such the democrats are interested in stepping in to prevent the company from going under.

If the company doesn't go under I'm not sure how things will work out. Federal requirements to produce "eco" cars would likely be a disaster. GM was already constrained by CAFE back when the market wasn't asking for fuel economy. They were constrained by Unions who didn't let them import many cars thus preventing us from getting even in relatively small numbers many of GM's interesting European and Australian offerings. The last thing the company needs is the feds saying "sell more 1.6L cars" when the market wants V6s. If GM is going to be subjected to product type rules, the entire market should have the same rules.

At the same time a government agent might simply make sure nothing overly stupid happens. The agent could simply act as a member of the board.

In this case I actually see C11 being a better option. I wouldn't be too quick to sack the current management however. I haven't seen anyone give a good explanation how the *current* guys went wrong and where someone else would have done better.

[LeonOfTheDead]

Too late, yes. Perhaps things would have been different had we not first had a run up in gas prices followed by a credit crash.

When we look at how much money GM lost since 2000 you need to ask how much was basically going to happen and what things could the management have changed. Since 2000 the management has done a lot to address the inflexibility of the unions as well as the excessively high pay many union members were getting. However, those changes didn't happen right away. Until the changes actually did occur the negative costs were still accruing. The same is true for the high cost of pensions. Also, much of the money GM lost until just this year was due to one time write offs to in essence buy off the union. Those pay outs cost billions.
We can blame GM for not having the right mix of cars over the past few years when gas was high. However, product planning occurs several years in the future in the car industry. Toyota didn't guess any better and built a new factory to supply the market with a new, larger and thirstier pickup.
When the market shifted to cars, Toyota did ramp up Camry and Corolla production in the US. GM ramped up their US car production as well. Both reduced truck production but GM, who was in the truck market long before Toyota, had more capacity. A 20% reduction in truck sales is a much bigger number when you are selling around 1 million pickups a year vs 200,000.
Where the Japanese really did well was in importing small cars from Japan. These small cars such as the Yaris had historically been poor sellers in the US thus were not worth building in the US. The same is true of GM's small Euro cars.
But there is a difference. Japan helped keep the Yen low as the dollar fell. That kept it profitable to bring small, low margin cars from Japan to the US. Europe most certainly didn't hold the Euro down for the sake of US exports (not that they should have). So European produced cars cost quite a bit more. So the cost of importing a European small car to the US is higher than doing the same with a Japanese car.
The other issue is the unions, long ago were afraid of the domestics simply importing a bunch of cars from overseas. So they forced the car companies to agree to import limits. Even if Ford thought they could sell 300,000 Fiestas a year in the US, they can't without union permission.
The current management has gained concessions in this regard but that wasn't easy. The union unfortunately acts a bit like Washington. You can tell them something is wrong and unsustainable but they won't react until it becomes clear that unsustainable means ends tomorrow.
The current management is not without faults but I can't name another car company aside from perhaps Honda that hasn't has similar mistakes. The difference is most of the other companies aren't coming from the same place as GM.
Also, I wouldn't liken this too much to the fall of Rover. Rover was selling very few cars when the show finally ended. GM is still #2 in the world for sales and very close to #1. This is a much different sort of failure.

I have to admit I'm not very into these "union's thingys" :)

btw, there is something about the price of new cars that I'm not getting.
you said, correctly, that cars here (EU) cost more than there (NA). but, considering cars available in both markets, and by that meaning the exactly same car, not like the Focus, but like BMWs for example, so with just minor differences, and in some cases even built there and than sold here, you would notice that the prices are very similar but without considering the currecy, say 50.000 $ and 50.000 €. so they point is, are they rubbing us, or gifting the car to NA customers?

example. the BMW 528/530. in NA it costs 45.500 $, in Italy, 48.900 €

actual €/$ ratio is 1.27 so the car should cost here 35.700 €, or there 61.700 $

there is something I'm missing. the same Yaris you mentioned, even if we are not getting the 1.5 liter available there:

Italian price for the 1.3 liter version: from 11.800 to 15.300 € (so expected from 15.000 to 19.400 $)

NA price: from 12.900 to 15.900 (so from 10.200 to 12.400 €)

[culver]

I have to admit I'm not very into these "union's thingys" :)

btw, there is something about the price of new cars that I'm not getting.
you said, correctly, that cars here (EU) cost more than there (NA). but, considering cars available in both markets, and by that meaning the exactly same car, not like the Focus, but like BMWs for example, so with just minor differences, and in some cases even built there and than sold here, you would notice that the prices are very similar but without considering the currecy, say 50.000 $ and 50.000 €. so they point is, are they rubbing us, or gifting the car to NA customers?

example. the BMW 528/530. in NA it costs 45.500 $, in Italy, 48.900 €

actual €/$ ratio is 1.27 so the car should cost here 35.700 €, or there 61.700 $

there is something I'm missing. the same Yaris you mentioned, even if we are not getting the 1.5 liter available there:

Italian price for the 1.3 liter version: from 11.800 to 15.300 € (so expected from 15.000 to 19.400 $)

NA price: from 12.900 to 15.900 (so from 10.200 to 12.400 €)

I'm not sure what all goes into the price of a car in Europe. In this case I'm only talking about manufacturing. I suspect if we compare say a Miata in Europe vs the US we will find the same sort of pricing gap. Of course some but not all of it is what the market will bear.

[my porsche]

no sir, that is Deutsche Welle...
I get articles/videos from their website in my email all the time from my German teacher.

Cool, so GM is in the tank, but there is no way the government will let them fail, so maybe it is time they will sell me a front driveshaft for very cheaply. :cool: Or a new Yukon Denali, complete with front driveshaft. :p

[my porsche]

I have to admit I'm not very into these "union's thingys" :)

btw, there is something about the price of new cars that I'm not getting.
you said, correctly, that cars here (EU) cost more than there (NA). but, considering cars available in both markets, and by that meaning the exactly same car, not like the Focus, but like BMWs for example, so with just minor differences, and in some cases even built there and than sold here, you would notice that the prices are very similar but without considering the currecy, say 50.000 $ and 50.000 €. so they point is, are they rubbing us, or gifting the car to NA customers?

example. the BMW 528/530. in NA it costs 45.500 $, in Italy, 48.900 €

actual €/$ ratio is 1.27 so the car should cost here 35.700 €, or there 61.700 $

there is something I'm missing. the same Yaris you mentioned, even if we are not getting the 1.5 liter available there:

Italian price for the 1.3 liter version: from 11.800 to 15.300 € (so expected from 15.000 to 19.400 $)

NA price: from 12.900 to 15.900 (so from 10.200 to 12.400 €)
NA is the largest consumer of automobiles, so I wouldn't be surprised if they were giving them lower prices. It might also have something to do with the individual country's tariff schedule, unless that has been standardized by the EU? I'm not sure how international imports work in the EU.

[LeonOfTheDead]

NA is the largest consumer of automobiles, so I wouldn't be surprised if they were giving them lower prices. It might also have something to do with the individual country's tariff schedule, unless that has been standardized by the EU? I'm not sure how international imports work in the EU.

I don't know if it's a matter of imports, since some cars as the BMW X5 are build in both places. besides, even low volume cars as the Audi RS4 cost less over there than here. and I doubt the Yaris sells in NA as in EU.
between EU countries the difference in price is quite smaller, about 1/2.000 € usually.

[Ferrer]

I don't know if it's a matter of imports, since some cars as the BMW X5 are build in both places. besides, even low volume cars as the Audi RS4 cost less over there than here. and I doubt the Yaris sells in NA as in EU.
between EU countries the difference in price is quite smaller, about 1/2.000 € usually.
Except in those where the VAT is mental, like Denmark.

[LeonOfTheDead]

Except in those where the VAT is mental, like Denmark.

I never heard about that, more info plz!:)

[Ferrer]

I never heard about that, more info plz!:)
Look and compare. :)

European Union Value Added Tax - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/European_Union_Value_Added_Tax)

And there other taxes that make their cars even more expensive. I'm sure someone from there, could give you better information, than I will. In general Nordic contries have higher taxes than southern european contries.

[LeonOfTheDead]

Look and compare. :)

European Union Value Added Tax - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/European_Union_Value_Added_Tax)

And there other taxes that make their cars even more expensive. I'm sure someone from there, could give you better information, than I will. In general Nordic contries have higher taxes than southern european contries.

now I got it. nothing new probably, somehow also the quality of life is better over there.
they get what they are paying for.

[Ferrer]

now I got it. nothing new probably, somehow also the quality of life is better over there.
they get what they are paying for.
Probably.

I still wouldn't change, though. :)

[Dino Scuderia]

It's looking more and more like they will have to take the bankruptcy route.

The car makers are not getting much support from politicians as they do not have confidence in their current business models. Bankruptcy will allow a major restructuring from top to bottom which is really what is needed to be viable going forward.

Paulson plainly said today that the car makers would get none of the TARP money... and that was an outside hope the Big 3 had.

[wwgkd]

I think it's kind of annoying that Bush has said to give them money, and Obama wants to give them money, yet they're still arguing over the proposed sources of the money, and will probably argue until it's too late. Despite the fact that they agree on what to do. Politics sucks.

[LeonOfTheDead]

if it was a smaller factory, with less workers and so on, they would have just closed so much time ago, just because of their own mistakes. surely it's not completely their fault, but I can't think of GM (or even others) as healthy and good car makers.

don't get me wrong, but somehow, GM deserves the bankruptcy.

[Ferrer]

if it was a smaller factory, with less workers and so on, they would have just closed so much time ago, just because of their own mistakes. surely it's not completely their fault, but I can't think of GM (or even others) as healthy and good car makers.

don't get me wrong, but somehow, GM deserves the bankruptcy.
The thing is, the US can't probably afford it though.

And I've just seen in the news that some ecomentalists in Germany want to buy Opel...

[henk4]

And I've just seen in the news that some ecomentalists in Germany want to buy Opel...

my editor underlines this word in red. Can you explain what new specialism you have just invented?

[Ferrer]

my editor underlines this word in red. Can you explain what new specialism you have just invented?
It's an euphemism for "gree evil people who want to make all of us drive electric cars because they will save the world".

[IBrake4Rainbows]

More commonly known as Eco-Terrorists. but since that word is so Un-PC these days.....It's better to link them with a group who suffers a mental illness.

[henk4]

More commonly known as Eco-Terrorists. but since that word is so Un-PC these days.....It's better to link them with a group who suffers a mental illness.

I would say that a condition for any support would be the reshuffling of the model range with an emphasis on the future situation regarding fossile fuels. The only reason for support is restructuring, and not to bridge the gap for a certain and then to continue if nothing has ever happened.

[henk4]

and these German "ecomentalists" is a company employing 2000 people.....

[Ferrer]

I would say that a condition for any support would be the reshuffling of the model range with an emphasis on the future situation regarding fossile fuels. The only reason for support is restructuring, and not to bridge the gap for a certain and then to continue if nothing has ever happened.
True.

I'm still a bit skeptical, though.

[Quiggs]

I would say that a condition for any support would be the reshuffling of the model range with an emphasis on the future situation regarding fossile fuels. The only reason for support is restructuring, and not to bridge the gap for a certain and then to continue if nothing has ever happened.

I think the consumer should push the industry in this direction; not government interdiction. But I'm just a planet-hating, red meat-eating 'Murican.

[culver]

I would say that a condition for any support would be the reshuffling of the model range with an emphasis on the future situation regarding fossile fuels. The only reason for support is restructuring, and not to bridge the gap for a certain and then to continue if nothing has ever happened.

The problem with this notion is the same issue GM had with the electric car mandate, you can't sell what the public doesn't want. Yes, the fed could simply say that GM isn't allowed to make any cars that get say less than 29mpg city. That would be a stupid idea because it would mean GM couldn't compete in the markets where they have proven competitive. Any condition of a bail out should not replace one set of constraints (UAW limitations and legacy costs) with a new set (government restrictions on the markets GM is allowed to compete in). It would be really stupid if the feds were to say GM can't play in the full size truck and SUV market. GM, Ford and Chrysler have fended off Toyota and Nissan in that market by producing a good/better product. They lost a large portion of the car market by producing a largely inferior product. It would be really dumb to simply hand Toyota and Nissan the full size truck market while telling GM they can only play in the economy car market.
Any product restrictions should apply to all manufactures and ideally shouldn't exist. If a reduction in fuel consumed in the US is a goal then we should meet that goal by making gas more expensive.

[henk4]

Any product restrictions should apply to all manufactures and ideally shouldn't exist. If a reduction in fuel consumed in the US is a goal then we should meet that goal by making gas more expensive.

political suicide if you propose that. (but is the best solution:D)
political suicide if you allow a 25 bln bailout without any conditions

the trends before the credit crisis actually hit, whereby there was a clear shift in market demand for more economic cars, should be the guideline. You don't have to limit your production to Smart sized cars, but you have to reduce your emissions (and hence your mpg) over the longer run.
That the current credit crisis bites so hard is because, from what I understand, the vast majority of cars is bought on credit and people with actually cash money in hand are very rare. And as the credit dries up, so do the sales.

What could be asked of the big three is that average CO2 emissions (proxy to mpg) of their total output will not exceed a certain level (likewise as it will the case in Europe in 2012), and that it will be their problem to develop the technology to achieve that target value. If they can produce a Ford Expedition that does produces only 120 g CO2 per km, good for them, as they may meet the target in this way, and the American public will be grateful.

[Ferrer]

What could be asked of the big three is that average CO2 emissions (proxy to mpg) of their total output will not exceed a certain level (likewise as it will the case in Europe in 2012), and that it will be their problem to develop the technology to achieve that target value. If they can produce a Ford Expedition that does produces only 120 g CO2 per km, good for them, as they may meet the target in this way, and the American public will be grateful.
I doubt many will comply with that in Europe...

[henk4]

I doubt many will comply with that in Europe...

at least there is a target.....

[Ferrer]

at least there is a target.....
IIRC there's also a target of 35mpg in the US.

[Matra et Alpine]

GM closing up shop will end the world economy.
Not really.
It will drop the US out of the top nations at the economic table for sure adn the US will take decades to recover.
But other first world nations ahve gone through these changes decades ago which led to the US ascendency. Nothing new, here comes China, India and South America !!

[Ferrer]

Would GM shed Saab, Saturn and Pontiac to secure gov't aid? - Autoblog (http://www.autoblog.com/2008/11/28/would-gm-shed-saab-saturn-and-pontiac-to-secure-govt-aid/)

Now I don't care much about Pontiac or (especially) Saturn. But Saab can't die.

Damn GM.

[LeonOfTheDead]

Would GM shed Saab, Saturn and Pontiac to secure gov't aid? - Autoblog (http://www.autoblog.com/2008/11/28/would-gm-shed-saab-saturn-and-pontiac-to-secure-govt-aid/)

Now I don't care much about Pontiac or (especially) Saturn. But Saab can't die.

Damn GM.

the lost my support when they started the ugly-restyling process and keep the 9-5 going on mainly untouched.
I used to like Saab, but in the last years, their cars are too much average. when the 9-3 came out I liked it, but, what's its peculiarities? it's just a Vectra. good looking, nice interior (I like the plane-style design)...and then?!
surely I would want it to die just to save GM (I still think that bankruptcy is the way "to go").

[Ferrer]

the lost my support when they started the ugly-restyling process and keep the 9-5 going on mainly untouched.
I used to like Saab, but in the last years, their cars are too much average. when the 9-3 came out I liked it, but, what's its peculiarities? it's just a Vectra. good looking, nice interior (I like the plane-style design)...and then?!
surely I would want it to die just to save GM (I still think that bankruptcy is the way "to go").
Saab has been complety stripped out of all interestigness, that's true.

(Except perhaps for the 9-5, which despite the ugly facelift still retains some swedish lunacy...)

But that's entirely GM's fault.

[LeonOfTheDead]

Saab has been complety stripped out of all interestigness, that's true.

(Except perhaps for the 9-5, which despite the ugly facelift still retains some swedish lunacy...)

But that's entirely GM's fault.

the fact that the 9-5 still retains some swedish lunacy is just because they didn't have updated the car since a long time. GM has seriously done a good job.