GM failure: The Shockwave

[Juggs]

While I do agree that the UAW is a big problem to the "big 3's"... I also have to say that the management is crap. I watched part of the hearing today, and found it funny how the CEO's all took their own private jets at a cost of thousands of dollars (Which their respective companies will probably pay for,) and then when asked if the CEO's would take a pay cut, they all refused. So while the workers are taking pay cuts, the management will not, even though they make over 10 million dollars each... Funny about that eh!

It is hard to get sympathy when your firing workers to try and save money, while your still making millions... Plus saying if your company fails it will mean millions out of work, but at the rate the big 3 are going... Most of their workers will be out of work anyways.

I say let them go for chapter 11 and the management be fired... Then they can work on better contracts with the UAW. Plus drop some of their brands. Personally I think Ford, GM, and Chrysler have to many models and brands that compete with each other. Like Ford has Volvo, Lincoln etc. That are in competition with each other, meanwhile they are owned by the same company.

I 100% totally agree with that statement as well.

I have a gm plant and a chrysler plant in my area. The GM one is closed and chrysler is having major layoffs. Tons of people losing their jobs. Its very sad to see my friends and family this way but in all reality this was inevitable with the way things were going

[Dino Scuderia]

While I do agree that the UAW is a big problem to the "big 3's"... I also have to say that the management is crap. I watched part of the hearing today, and found it funny how the CEO's all took their own private jets at a cost of thousands of dollars (Which their respective companies will probably pay for,) and then when asked if the CEO's would take a pay cut, they all refused. So while the workers are taking pay cuts, the management will not, even though they make over 10 million dollars each... Funny about that eh!

It is hard to get sympathy when your firing workers to try and save money, while your still making millions... Plus saying if your company fails it will mean millions out of work, but at the rate the big 3 are going... Most of their workers will be out of work anyways.

I say let them go for chapter 11 and the management be fired... Then they can work on better contracts with the UAW. Plus drop some of their brands. Personally I think Ford, GM, and Chrysler have to many models and brands that compete with each other. Like Ford has Volvo, Lincoln etc. That are in competition with each other, meanwhile they are owned by the same company.

You're partially wrong. Wagoner has already cut his pay 50% but he did waffle on reducing it to nothing. Nardelli said he absolutely would wave his pay. The Ford CEO stammered around and never said he would or wouldn't, then again they aren't in as bad of shape as the others.

As far as the private jets...those are offices that fly...I don't think it's entirely unreasonable even under the circumstances if you have international locations to use the jet. Everything management does needs to be done efficiently and using their own jet is more efficient than messing around at airports.

[bypopulardemand]

i agree that the free market needs to stay free...maybe it is time for GM to start selling off parts of itself to stay afloat?

[henk4]

i agree that the free market needs to stay free...maybe it is time for GM to start selling off parts of itself to stay afloat?

who would want which part?

[Quiggs]

They weren't private jets. They're corporate jets. And these guys are too busy trying to save their companies to fly United Air.

[Matra et Alpine]

Hewleett and Packard managed to run the company fine with no personal company jets.
The t**t Carly Fiorina came in, got herslef some private jets and that was only her third worst decision.
Gladly rid of her and her CEOs-are-gods philosphy.

Quiggs, you've just proved why American CEOs are now liabilities rather than assets !!!!

[Dino Scuderia]

Some agreement has been reached by the politicians to float some to the Big 3.

No details yet but I would guess they have stripped the requirements attached to the 25 billion so they can use the monies for daily operations...then they'll let Obama worry about the next hand out when he is handed the basket of crap.

[Equinox]

I don't know if anyone else heard... But I was just watching the news and they said the Bailout is dead.

Here's an article I found at: Bloomberg.com: Worldwide

GM Tumbles to Lowest Since '30s, Ford Falls as Aid Plan Falters

By John Hughes and Jeff Green

Nov. 20 (Bloomberg) -- General Motors Corp. fell toward its lowest since the 1930s after U.S. lawmakers deadlocked on an auto-industry bailout, raising the prospect it could run out of cash before a new Congress can come to the rescue next year. Ford Motor Co. tumbled to a 28-year low.

Democratic congressional leaders disagreed with Republicans and President George W. Bush's administration over how to provide $25 billion in aid to GM, Ford and Chrysler LLC. Only two days remain in a lame-duck session to resurrect a compromise, though Senate Majority Leader Harry Reid said today Congress might return in December to finish its work.

``The desire is we complete all of our actions until we come back on Jan. 6, but that may not be possible,'' the Nevada Democrat said. ``It may be necessary that we come back after Thanksgiving.''

Reid earlier suggested the situation was dire and refused to set aside time today to debate a compromise proposed by Senator Kit Bond, a Missouri Republican. Reid said Bond's plan hasn't been put in writing and the House of Representatives is about to adjourn.

Bond and fellow Republican George Voinovich of Ohio insisted they weren't giving up on their proposal to speed up and broaden access to $25 billion already approved for fuel- efficient vehicle development that was a compromise.

A Democratic plan to help the automakers with funds from the recently approved $700 billion bank-rescue package stalled in the face of Republican opposition and a Bush veto threat. It may be revived next year after President-elect Barack Obama takes office in January and Democrats install a strengthened majority in both houses.

GM, the biggest U.S. automaker, said Nov. 7 it may run short of the $11 billion minimum cash it needs to pay its bills each month by the end of this year and will fall ``significantly'' short of that level by the middle of next year.

Cash Augmentation

The Detroit automaker burned through $6.9 billion in cash in the third quarter and had $16.2 billion on Sept. 30. Wagoner said yesterday he expects the automaker to slow its cash use to the $3.6 billion a quarter rate of the first half of this year.

``We're continuing to do everything we can to augment our cash position,'' Wagoner said in an interview yesterday after eight hours of testimony split between the U.S. House and Senate over two days.

So it looks like while the plan is not 'dead' yet... Just put on hold until after Thanksgiving or January at the latest. GM may be in big trouble now.

Read the entire article above... It is a pretty good read.

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Edit:

Now I don't know whats going on. Article: Bloomberg.com: Worldwide

Now there saying deal has been met

U.S. Stocks Gyrate as Auto-Industry Rescue Offsets Jobless Rise

By Eric Martin

Nov. 20 (Bloomberg) -- U.S. stocks swung between gains and losses as prospects that lawmakers will agree on a plan to rescue the auto industry offset a jump in jobless claims.

General Motors Corp. rallied as much as 43 percent, reversing a 39 percent slide that sent the largest U.S. carmaker to its lowest price since 1938, after an aide to Democratic Senator Carl Levin said a compromise has been reached. Ford Motor Co. jumped 21 percent for its steepest advance since at least 1980.

[Ferrer]

who would want which part?

I'd happily buy Saab.

(if I had the money)

[Equinox]

They weren't private jets. They're corporate jets. And these guys are too busy trying to save their companies to fly United Air.

Corporate jet = Private jet. Even if it was a corporate jet, it was still a private jet that costs thousands of dollars. You have pilots, flight crew, fuel costs etc. I'm pretty sure when your the CEO of Ford or GM, it would not be hard to get past the security/ luggage department of an airport to fly business class or first class.

Or, since they did not go to Washington as competitors, but rather 'allies' trying to get money... Could they not have taken just one jet between them. Instead of each taking their own jet.

Yes they do need the jets for international travel. But going from Detroit to Washington is not an international flight (It's a flight that takes what.... A few hours.) I agree with Metra that this just shows they are more liabilities than assets.

[wwgkd]

Corporate jet = Private jet. Even if it was a corporate jet, it was still a private jet that costs thousands of dollars. You have pilots, flight crew, fuel costs etc. I'm pretty sure when your the CEO of Ford or GM, it would not be hard to get past the security/ luggage department of an airport to fly business class or first class.

Or, since they did not go to Washington as competitors, but rather 'allies' trying to get money... Could they not have taken just one jet between them. Instead of each taking their own jet.

Yes they do need the jets for international travel. But going from Detroit to Washington is not an international flight (It's a flight that takes what.... A few hours.) I agree with Metra that this just shows they are more liabilities than assets.

Not really the same thing. Corporate jets are available to many in the company and are really more of a very fast office. It allows them to continue working with resources and privacy they wouldn't have on a commercial liner. Also, security guards hate people who say "do you know who I am?" so that they can jump ahead of everyone else and sail through checkpoints faster. Given how much they are paid, it actually saves money to give them the ability to continue working as effeciently as possible.

[Dino Scuderia]

The latest.

Excerpt:

What do we take away from all this? The Big 3 will get no assurance of federal aid before Thanksgiving, and there's still no guarantee they'll get help after the break. The ball is again back in the court of the Big 3 CEOs, who need to show up in December with detailed plans of how each would use any federal aid. The Democrats are calling for "accountability" and "viability" in their proposals, which are due to Congress by December 2.

Aw Snap! Congressional Democrats undercut compromise bailout bill - Autoblog

[Matra et Alpine]

Given how much they are paid, it actually saves money to give them the ability to continue working as effeciently as possible.

That's just CEO egotistical BS

I flew the same jets -- and the SAME SEATS -- as every manager in HP.
That attitude made the company "great". Idiots like John Young and then Fiorina never knew how to run a real business .... but WERE able to pamper herself ( and emply relatives !!! )

Current CEOs and supporters woudl do well to see what actually MADE US industry world class and then compare that with the mess they've made of it.

[callum122]

Not a fan of GM, glad they are being punished.

[MRR]

Kill the UAW.

In order to kill the UAW the company must go into bankruptcy. As long as the government "loans" them money the UAW still has a reason to exist. I dont see why everyone fears a bankruptcy. It will allow them to sell off bad assets, focus their production on more profitable vehicles, and best of all nullifies their contracts with the UAW workers and retirees allowing them to hire non-union workers at a more reasonable wage.

They would probably emerge a stronger and better company in the long run if we allowed this to happen instead of sending tax dollars to buy a UAW worker's boat on Lake Superior.