The drop in my 401K has several zeros and a comma.

But my pension is based upon my years of service, age at the time of retirement and ending salary and not the market ... thank God!

The amount of control you have over your 401K depends on who you have it with. Most 401K's give you packages or general areas to invest in, but the individual stocks are determined by the handler. Some if not most 401K's give you the option to buy bonds instead of investing in the market. On average over years of time, the market out performs bonds by almost 2X, but bonds don't go down in amount (this is different than value because value is based on the strength of the dollar). There have been people speaking out wanting their 401K to be more like an e-trade account, where they can choose exactly what they invest in. I'm not sure if this exists yet, but I can see this being an option in the future for people that really follow the market. This allows the 401K handler to rake in the trading fees because you are locked into using them. Since 401K handlers are investment firms anyway this seems like a natural progression.

You get a pension and a 401K. I interviewed with ExxonMobil last year and they had the best pension and 401K matching program I've ever seen. They told me straight up that their focus was to retain experienced workers because their industry is so specialized, they can't buy experience in the oil industry where one small mistake costs millions of dollars.

Let me add ...

I've seen several on other boards that want total control of their 401Ks, as Phil said. And along with that, they say that if you aren't market savy, too bad, so sad.

I find that kind of mentality very short-sighted and arrogant. If a percentage of folks gamble away their savings playing the market (and it is, in reality, legalized gambling) then that percentage of folks will become wards of the government in some form or fashion.

FYI, my 401k has gone up over the past few months. But, that's only because I moved things around a year ago. Put a lot into money markets.It's in no one's best interest to have people lose their savings, even if it's their own fault.That said, now I see why GM et al are going under. They pay pensions, 401k, healthcare, andhigher wages? Sounds like I should have fed at that trough before the food ran out! But, that's unsustainable.The only time a company should do all those things is if their competition is doing it - if it's the only way to entice employees. But, the competition is NOT doing it.

The competition was doing it, it was called Ford and Chrysler. At least the competition was doing it at the time it started being done. And, good luck getting anyone to accept "going backwards". Meaning, you generally expect to get a raise every year (or at least stay even with the cost of living). Nobody is going to accept "we're not doing that anymore". Once something becomes "the way it's always been done", it's the way everyone will expect it to be done. Nobody expects to take a job that pays you less every year to where in 30 years you can't maintain the standard of living you had when you started (as a new employee with no experience). So, once you go down that road, you are going to keep driving. There isn't a good place to turn around, so nobody did.

The foreign automakers moved here and went to some of the less affluent states (without pulling the numbers) where people were just happy to have work. So, they took jobs for less money than the Detroit guys. But there was no existing precident. You are hiring and you pay how much? Well, ok, I need work so I'll take it. That's how the foreign automakers got away with cheaper labor. If they had opened a plant in Detroit, they'd probably have had a hard time getting enough people to fill their labor needs (You want me to work for what???), but I could be wrong.

Kevin - I know you're not advocating the quoted attitudes, just expressing the hurdles the Big 3 face. None of the below is aimed at you (or anyone) personally!

That said...

The pay at airlines went "backwards" back in 2001-3 at every level - flight crew, maintenance, and management. Some voluntarily, some through bankruptcy. So did software consultants from 1999-2002. Sometimes the market changes and jobs don't pay what they used to, and we're fortunate enough that we live in a country with a free market that allows us to change our individual courses if we so desire. As someone who works to earn money it is MY responsibility to be worth more to an organization (maybe not even the same one) year after year, not theirs to pay me more just because I've managed to hang around on payroll for another 365 days. It seems the US automakers are paying well over market value for their labor (when compared to competitors) and that needs to be fixed.



The only difference is the lesser paid workers will still have jobs. Ironically, in the long run they'll be paid more.

I 100% agree with what you said Cody.

To state this in another way, you are worth as much as someone is willing to pay for you. Just like your house, a used car, a share of a particular stock, baseball cards etc. I'm an engineer and if someone comes up with a machine that can do my job faster/better/cheaper than I can more than likely I will have to take a pay cut, get in the business of making that machine, or find a new profession.

What scares me is all the engineering and design that is being outsourced to India. I better pay off my debt fast.

From my local news:

http://www.10tv.com/live/content/business/...da.html?sid=102

Looks like everyone is getting hit. I hear that the Euro car makers are asking for many of the same thing that the American ones are (bailout, loans, etc.). Now Honda is being hit.

I think the car companies (not just American ones, either) are going to have to make some changes. Stop paying pensions. Cut the fat on administration. Make a flatter corporate structure to enhance efficiencies. Cross-train employees so that they can perform more than one job function. Automate. Pull salaries back in line.

Then comes the hard parts - make a car that people want to buy and price it cheaper than the next guy. This isn't the 50's. I don't think Americans (or any other nationality) is going to pay more for a "X" brand car just because of where it's made.

Besides, who knows where cars are made? My Trans Am was assembled in Canada, with a gazillion Mexican parts. But, it's an American car. My G8GT is made in Australia, with who-knows-where parts. But it's an American car. Whereas my neighbor's Toyota is made in America, with who-knows-where parts, but it's foreign?

Back in 2000, you were in for a world of hurt if you were in the tech industry. Today, you're going to be in a world of hurt if you're in the automotive industry. It's not nice, but I think that's where we're going.

Don't worry - I'm not immune, either. I'm in healthcare. Not that people are going to stop getting healthcare, but I think the landscape and the direction healthcare is going is going to make it a very NOT FUN place to work in a few years.

For my part, I'm doing what I can to help - I bought a new Saturn in 2006, and a new G8 and Honda Pilot in 2008. I think my new-car-buying days are over for a while, but I tried!

Considering I work at GM doing engine calibration I suppose my opinion on this whole mess could be considered biased. Given I go to work every day and we all talk about the possible scenarios we could be facing in coming weeks, I'm a little burned out on discussing the issue.

However, the biggest point I see that just flabbergasts me is how GM is not initiating any kind of positive PR campaign. The misconceptions so many people have about the domestic car industry and how it's stuck in the past, and all we make are trucks/SUVs, etc. are just mind boggling to me. The information is out there, but most of the public has to be fed this info. They won't go out and find it themselves. None of the Detroit 3 are doing much positive PR to the public right now. I'm sure they're doing it in Washington, but that method obviously isn't working.

I also want to point one thing about this argument that a Toyota that is made here is just as American as a GM car that is made in the US. That is simply not true, not even close. Where the car is made, is only a very small part of the picture. Of course, I'm an engineer, so my opinion may be biased here too, but Japanese cars are almost exclusively designed in Japan. There are engineering centers here in the US, yes, but they are just minions to Japan. Toyota has an engineering center in Ann Arbor, a suburb of Detroit, but the powertrain engineers are basically a liason to US based suppliers. They do not engineer the parts. Most of the engineering done in Ann Arbor is for vehicle crash safety, dynamics, and some vehicle calibration, centered on having emissions testing support for EPA testing. So, when you talk about Toyota cars being just as American because they are made here, remember, the jobs that Toyota has here in the US are decidedly low in tech and on the totem pole vs. what the domestic auto companies have here. As foreign auto companies gain ground here, those higher tech jobs are being lost. Do we really want to replace engineering jobs with manufacturing jobs? Is that a net gain for our country?

I'm the one that brought it up and I went back and looked to make sure I didn't say that the American assembled Toyata was just as American as your GM. I didn't say that and would never assume that.

I did say ...



Yes, the high tech jobs are going elsewhere and have been for years in multiple industries and disciplines. There can be only 2 reasons for it. Better talent or lower costs.

Toyotas are assembled here because of lower costs.

It's a tough nut to swallow, but I believe the myth that we Americans are over-paid when compared to a global work force is becoming a reality. And these econmic times are the fall out from that.

Mitch, I was referring to this:



It's not just that comment though. I see or hear this almost every day, and just wanted to put my opinion out there.

Regarding high tech jobs going overseas, yes, that's true, but manufacturing jobs usually lead the way. It's the low tech jobs that generally go first and are less valued because of the pay scale and resulting standard of living. Think, textile manufacturing. Once we start losing most of our higher paying jobs, we're in a lot more trouble.

OIC ... I can see both sides ... ALL cars are now homoginized to a large degree.

I think we can all agree, though, that we all began down this slippery slope decades ago, are feeling the bubble burst today and are realizing there is no short term fix.

94bird - You're right, it sounds like I was saying that. Not what I meant, though. I meant that it's getting tougher to distinguish. But, you're right in that a Japanese car still has most of its profits going overseas.Also, I think you are SPOT ON with talking about the Big 3 not doing enough PR. I have a responsibility to learn if I want to express an opinion. But, if they want me to agree with them, then they should make that info easy to find. Otherwise, I'm likely to find info that runs counter to their position and base my position on that.That said, if anyone knows of a way to save the companies, lessen union power, but preserve what workers now have, then I'm all for it! Perhaps say that current workers keep what they have been promised, but all new employees will have whatever it takes to make this work (lower wages, no pension, etc.)???

CASHOLA!!!!!

http://www.cnn.com/2008/POLITICS/12/19/aut...lout/index.html

(Bolding by me)

interesing.I don't know - but is it realistic to expect a 180 turnaround in less than 4 months?

Not in my opinion, but the bankers are walking around with "lots" of govt. money and little oversight and the Big 3 are going to get beat to death over "some" money.

The investment bankers ran up the price of oil/fuel which killed demand for trucks and SUV's (which are quite profitable). Then the banking industry locked up the credit market by giving bad home loans to everyone on the planet and seeing record defaults. This has made it nearly impossible to purchase a new car, thus severely hurting the domestic auto manufacturers. However, the manufacturers are getting "oversight" and have to perform while the banking industry seems to be mostly unregulated with regard to what they do with the funds they have received.

I still say the banking meltdown caused the domestic auto manufacturers to wind up where they are currently. And everyone is picking on the wrong group...

Yeah, but the coyotes look after their own kind....

Howdy,



This picture says it pretty well:

http://www.flickr.com/photos/stoller/2907411559/

Mark

Howdy,

Having said that... I'd rather have seen GM/Chyrsler go though a "managed" chapter 11 with the government stepping in as a creditor as needed, plus incentives for folks to buy a domestic car, plus some program / "money vault" to ensure service for ten years.

I think expecting everyone involved to sit down and agree that they should hurt themselves for GM to succeed is completely insane. Gettelfinger in particular doesn't strike me as someone that will bend at all.

GM has other problems and its 100% true that its not all just about the UAW... But the UAW isn't helping. If the workers aren't being stepped on, the UAW is just making things cost more, unless all the union employees that work only on union business and the union lobbyists are doing it for free (and they sure as hell aren't). Chapter 11 would let them ditch that anchor, hopefully along with another few.

Couple that with some new direction (which they're already starting to do, but need to do more of... No minivan? Really?) and I think GM can be as good as any other car company.

But I think Chapter 11 is the only way they'll politically be able to shed the deadweight.

Mark

I think the simple answer is many things have conspired to put the Detroit 3 into dire straits. The final straw was the credit crisis when GM's cash was very low because they were giving huge sums of money to Delphi, buying out workers to bring in lower paying workers, etc. It may not be common knowledge, but most UAW workers who had good seniority, and who took buyouts in the past 2-3 years got close to $100K each to take "early retirement". Multiply that by 25,000 workers or more per year, and you can see that billions of cash has been going each year to lessen their labor costs in the long run. I don't think the credit crisis is hitting the Detroit 3 any harder than the transplants, but the big difference is how little cash GM and Chrysler have on hand to deal with 6-12 months of very low sales. Ford is very lucky since it got a good LOC in '06 IIRC, for about 28 billion dollars. They couldn't get that deal this year and were lucky they hadn't tapped into it too much until now.

But, I'll be the first to say too many times GM's thinking has been too short sighted. The company is many times too quick to think about whether a project will pay off in the short term and not about whether it will strengthen their portfolio if the market changes. It does amaze me, since everyone knows if you don't have a broad enough portfolio, and the market wants a car you don't have, you're likely 3-4 years away from having it in the market. You just can't afford short term thinking in conditions like that.

Whether or not it's formally called Chapter 11 or not, GM and Chrysler are functionally in bankruptcy right now, with DIP financing from the government. A real Chapter 11, where you go to court to get your plan approved before you can come back out of it, is what Delphi has been in for about 4 years now. They still don't have an approved plan to exit Chapter 11. GM's been bankrolling Delphi's buyout packages for UAW workers, etc. for the duration of Delphi's bankruptcy, and it's seemed like a money pit. There are just so many stakeholders and road blocks to getting everyone to agree to a final company structure and debt settlement it becomes nearly impossible.

Multiply that by at least ten fold, and you're somewhere in the ballpark of how difficult it would be for an OE automaker Chapter 11 to work. Compound this by the fact that if Delphi is in bankruptcy, OEs will still order parts from them. albeit with purchasing terms designed to protect the OE if the supplier moves to Chapter 7. If an OE goes into bankruptcy, customers won't buy from them. End of story.

The current path has a shot at working, but there has to be a big stick in the negotiations that scares everyone enough to think that negotiating is better than just fighting for a spot in a Chapter 7 liquidation. I haven't seen that big stick yet.

Howdy,



Bull. If anything has been proven, its that the American consumer buys the cheaper product, all else equal and often all else NOT equal. One of the saddest thing about this whole mess is that the OEMs have managed to convince folks of this particular fallacy.

With tax credits for purchasing a new domestic vehicle, help with credit for a domestic purchase, and some handwaving about "we guarantee service/parts" by the government, people would buy the cars, perhaps more so than in the past.



There's no stick anymore. The government has proven to them that they'll bail them out and there's no reason to expect folks (Gettelfinger in particular) to think it won't keep happening. Couple that with the reorg process being more political than it would have been under chapter 11 (since by definition it'll be a new process) and I think there's less chance it'll work.

Certainly there's a shot it'll work, and I'd hope some of the people in charge have learned some lessons, but I think the chances are fairly remote. These fuckers have been getting away with (hell, rewarded!) dumbass decisions for so long they don't know how to make smart ones. And no, that's not specific to GM and its various stakeholders.

As an example, Madoff ought to be executed, but I bet he ends up with a better life than any normal person could hope to expect.

Mark

Bring a little levity to the situation:








THE RIGHT WAY


THE WRONG WAY

I'm surprise no one has said anything about the though that GM, Ford and Chrysler have also put their products in peril by diluting their brands. (if I missed a post mentioning this feel free to ignore my ramblings) I mean does GM needs to sell cars under the GMC, Cadillac, Chevrolet, Pontiac, Hummer, Buick, Saturn and SAAB Brands, especially when a lot of the cars are the same they just have different styling or options. I do understand that there is a sense of history attached to the names but I think they should consolidate brands. Why do I have to choose between a Saturn Outlook, Chevrolet Equinox, Buick Enclave, GMC Acadia, and Cadillac SRX. It is not enough that a Brand has to compete with the other car companies offerings but do they really need to compete with other brands withing their own company? I mean if you offered only the Solstice and not the Sky you would be reducing costs by reducing having to tool, manufacture and stock parts for each of the 2 brands (personally I like the sky better but you get the idea). I mean when you look at Honda they have 2 brands Honda (economy, sporty and Mid-Scale) and Acura for (Upscale Luxury and sporty luxury) then you have Toyota/Lexus similarly. GM could be Saturn (economy), Chevrolet (Mid-scale and performance) and Cadillac (Luxury and Sporty Luxury). Ford maybe would look like Ford Brand (Economy, Mid-scale and performance), Lincoln (Upscale Luxury), Jaguar (Upscale Performance). I don't know but I think doing this makes a lot of sense as they can market their products better, increase quality (less money dedicated on variations for the different brands and spent increasing quality, fit and finish), and better use of manufacturing facilities by reducing the complexity of building different brands of vehicles based on the same underlying platform. That coupled with new labor agreements can move this companies into profitability in my opinion.


Edit by trackbird: Acura is Honda's upscale line (not Mazdas).

GM and Ford do have a lot of brands. However, most Americans that are not into cars don't understand that a Lexus ES300 is basically a Camry with leather. My wife didn't understand until we saw a Camry and an ES300 parked next too each other at the mall. She looked at the interiors and said "It's a Camry with leather and color accents".

At one time, GM had like 40-50% of the US market and they used all of those brands to cover the demographic. Obviously that's not a reality now that they are in the low 20% range of the US market. GM needs to cut models, dealers, and plants to be profitable. The unions make it tough to cut production capacity, and every division wants its piece of the pie, and who wants to close down a dealership?

One of the main problems with GM having so many different models and divisions is marketing. It's difficult to properly launch 4 different models when, like you said, they are essentially the same vehicle. Most people don't even know what a current Saturn looks like, which is a shame because I think they are some of the best looking cars GM is making now.

Regarding GM cutting brands, they've already said they want to sell Hummer and Saab, and are studying whether they want to sell or shut down Saturn. Pontiac will become a niche brand. That will leave them with Chevy, Buick, GMC, Pontiac and Cadillac. They've also announced they will reduce their dealerships by about 2000 (approx. 33%). This goes a long way, but GM has said for a long time now, their main brands to focus on are Chevy and Cadillac. That begs the question why they're not proposing to cut more brands. For what I've read, the main reason is, Buick, GMC, Pontiac are traditionally under one dealership. This gives a dealership a reasonably full line of products to sell, no matter what the market trends are. If GMC was disbanded, for example, this dealership would have no trucks or SUVs to sell. GM wants to keep Buick, as this is a very strong selling brand in China and older people here also gravitate toward's a Buick design features. Buick has also topped the quality charts with JD Power for a few years now.

So, a BGP dealership would have some family cars and a crossover with Buick. They would potentially have cars like a G8 and Solstice with Pontiac. They would also have SUVs and trucks through GMC. That's a viable dealership, albeit missing a fuel sipping car, like an Aveo, Cruze or Astra. That could easily be rectified through the Pontiac brand.

Chevy is already a full line dealership and Cadillac is doing quite well, so not much change is needed there.

I understand the logic stated above, but I think it's short sighted thinking again. It will be hard to just drop down to Chevy and Cadillac, but I think it needs to be done. Saturn has failed as a brand, but some of their products like the Astra should be folded into Chevy I think. GMC just is not needed. Chevy trucks and SUVs basically duplicate their whole product line. Buick is the only brand with a good following in the BGP group that would be hard to get rid of, but I would still do it.

Ah, but Mark, when I said bankruptcy, I meant a true Chapter 11. This would have no safety net by the government. As soon as you add the safety nets you mentioned it's not Chapter 11 anymore. As it is, the OEs are already functionally in a government backed Chapter 11. There is really very little distinction. The Treasury gives the DIP financing because the private sector never would in today's financial environment and the Presidential appointed overseer is the bankruptcy judge. A huge reorganization is still going to happen, just like in Chapter 11. It just means that a bankruptcy court won't be involved.

Show me a survey of the American people that says anywhere near a majority of them would buy from an OE in Chapter 11. The surveys I've seen, and I'm not including any done by the automotive industry, say otherwise.

A little info on the Buick, GMC, Pontiac dealership position.

When I bought my G8 earlier this year, I thought that Pontiac was a HORRIBLE match for a Buick-GMC dealership. Pontiac is trying to sell cars to a younger generation. But, every dealership I went to was filled with the all the ambience of a mortuary. They'd have a couple of $20k Buicks on the floor, plus a couple of GMC trucks. Then, some lone G8 would be off to the side.

No wonder I don't see more G8s on the road. This, despite the fact that my friends (owners of an Audi RS4, Audi S4, BMW 550i, BMW 328i, and BMW 750i) all said that they thought the G8 looked just as good as any of their cars, admitted that it outperformed all but the RS4, and cost less than every one of them.

GM not only has financial problems, they have image problems. Even when they innovate something new (like the Volt), people assume that they are following someone else's lead.

Did you know that when GM had the last round of plant closings, if the TOP THREE EXECS would donate their salary for one year, they could have kept all those plants going for another three.
Quit bashing Union Labor with Full Assembly line Pay at $ 30.00 ($ 62,000 per year salary) Per hour, and target the real Greed Problem. The Presidents and CEO's of Large Corporations, Banks, and even the National Executive Committee of the UAW.
Who the Hell needs a 8 to 10 figure salary a year with such an outragous "Golden Parachute"?
It seems some of you may have never worked at the ground level before.
Try it sometime and see if you can raise a family of five on $ 11.50 an hour.
Even my late cousin Gerald Knight (Fuel System Engineer for Cadillac that retired in the 80's) said that the "Newbs" probably never changed a spark plug in their life the way they were designing the vehicles.

Todd, I realize this can become a very emotional issue, especially when you have relatives who are factory workers, UAW, or the like. However, plant closings haven't been solely to lessen their labor costs. Plants closings have been frequent the past few years because the OEs need to shrink their capacity.

Also, I think you'll find the CEOs of the Big 3 don't have golden parachutes in their contracts. Other industries do, but I have heard nothing of this in the auto industry. Richard Wagoner testified as such in the grillings by Congress earlier this month. Granted, he did make $16 million last year. That may seem like an exhorbitant sum, but compare that with the CEOs of companies like Goldman Sachs and AIG and it's a paltry sum.

There are still issues with UAW contracts which hurt the competitiveness of the Big 3, but the gap became much less last year with the new UAW contract. Things like the jobs bank and VEBA funding are an issue, but they are being dealt with now, under Bush's terms for the bridge loan.

What are still left are:

1. Legacy costs for having approx. 1 million retirees with their pensions and healthcare. That's a much tougher issue to solve, since none of the transplants have such a "handicap".
2. Overall debt - last I heard GM owes about 66 billion dollars. My understanding is they have to reduce that by 2/3 by getting debtholders to accept equity and other bargaining chips for their debt.
3. Reducing dealerships by 33%. When GM stopped the Oldsmobile brand, IIRC, it took them about 3 years from when they made the first announcement to when they made their last Oldsmobile. This was largely because dealerships are independent franchises, with state laws protecting their franchises. Each dealership can demand a buyout from GM before they can be forced out of business. To close a plant, new negotiations with the UAW have to happen. By the time GM shut Oldsmobile down it had cost them almost $2 billion, almost 5 years ago. That would likely cost more now, if it weren't being done under the threat of bankruptcy. The theory is debtholders are likely to take pennies on the dollar to settle a debt rather than being left out in the cold if Chapter 7 is the result. We'll see if that works in this instance.

Howdy,



Did you ever hear the saying "Two wrongs, don't make a right"?

This is a great example of that, except that there's a lot more than "two" wrongs.

To me, as an outsider, it seems that everyone in the mess that is GM is currently engaged in pointing a finger at the other parts of the mess.

To me, as an outsider, GM shouldn't have the UAW involved at all since its nothing but overhead, and executive compensation shouldn't be at the stupid level.

Mark

Howdy,

Also... How does an overabundance of dealerships cost GM money?

Mark

Good question. I don't know how it directly costs GM money. It certainly makes it harder for dealerships to make money, when they have so many competitors. I can also understand an argument that having too many dealerships dilutes the brand's image. Which looks better to a customer, having a thriving dealership with a lot of customers and frequent turnover of new cars, or having 3x that many dealerships that appear much more stagnant?

Last I heard Toyota has only about 2500 dealerships across the country and GM has about 6500. They both sell similar numbers of vehicles in the US each year. GM's factories and labor force are downsizing, but their dealership presence hasn't kept the pace.

Howdy,



My wife is a college physics professor with tenture, PHD, etc. etc.

She makes ~$55k/year.

I'd been working as a hardware/software engineer for ~ 4 to 5 years, with a BS in 'computer engineering' (basically a cross between the digital side of EE and the core classes of CS) before I passed the $60k/year mark.

I'd also be extremely surprised if the UAW worker contribution toward health care was anything like as costly as what she and I pay.

Don't go there.

Mark

Howdy,



Yeah, I totally get how it would hurt individual dealerships, but it seems like the competition would drive dealership prices lower, which would tend to sell more cars in total compared to other brands, and all at no cost to GM directly?

People say this is an inefficency of GM, but I have yet to hear how its a GM problem, vs. a dealer problem. If anything, it seems like it would help GM a little, unless they're financially supporting their dealerships in some manner.

Mark

More dealerships does drive the cost per unit down, which in turn drives the profit down for both entities. When you have 4 Chevy dealers in a 10 mile radius (which in some areas around here we do) you can certainly go from place to place and hammer them on price. Also, each franchisee is entitled to some support from the mother ship which means that you either just spend a ton and fully support them all, or you dilute your funds and settle for less effective marketing, branding, etc. Then you have delivery costs, a lot more dealer rep's for sales, service, marketing, etc.

Ford just bought out a local dealer in my area which was extremely saturated. Oddly enough it was a profitable store, but it was also on a small pad and couldn't really expand.

Howdy,



I don't see why extra dealerships means the _factory_ would lower the price on a vehicle.

It makes sense that the dealer would need to sell the vehicle closer to the factory price, but the factory is in competition with toyota/ford/whatever, not another chevy dealer.

What support does each dealer get from the factory? The only thing I know of is per vehicle sale incentives, and that's going to be based on volume sold in total, not volume per dealer.

Mark

http://findarticles.com/p/articles/mi_qn41...s_/ai_n19342425

I'll say one thing we only have a couple Toyota dealers in the area, both of which are astounding in size. GM dealers? Too many to count and most are pretty small. It will also cost GM a pretty penny, depending upon state franchising laws, to close some of the smaller dealers.

Also see the 3rd paragraph of this:

http://online.wsj.com/article/SB122688631448632421.html

It's like mom and pop competing against Wal-mart.

Howdy,

Both of those articles blur the line between what's bad for the dealer and what's bad for the automaker...

I'd still like to see something that talks about costs to GM per dealer that would be cut if the dealer network was reduced. I don't buy that sales would increase with less dealers... I think if anything they'd shrink. Using Mini as an example (which is at the far end of the other extreme, with a very limited dealer network), I will not buy a Mini because I will not deal with Mini of Pittsburgh and there are no other dealer options other than going all the way to Cleveland.

I think reducing the dealer network makes sense in terms of overall "that seems silly" stuff, I just don't understand how reducing the dealer network will help GM itself and every article I've read has focused on things like dealer oversaturation, rather than how that oversaturation affects GM vs. the dealer franchises themselves.

Mark

From here:

http://www.cnn.com/2008/POLITICS/12/22/pol...lout/index.html

Howdy,

I'd need to see the exact poll (and who paid for it, given the automakers wailing about it in the congressional hearings) before I put any credence into the result. Even taking it at face value "less likely" doesn't mean a heck of a lot. I'd be less likely too, all else equal.

The point is to make sure all else _isn't_ equal.

I wonder how many of those polled would be less likely to buy a domestic car vs. an import? Or who'd be less likely to buy a GM vs. a Ford?

And again, despite what anyone might want to believe, the success of walmart, Harbor Freight, and others proves that we as consumers will buy the lower priced option, even if it doesn't work as well, the customer service is worse, etc.

Mark

It's a CNN poll paid for by CNN:

"The CNN/Opinion Research poll was conducted Friday through Sunday, with 1,013 adult Americans questioned by telephone."

Of course the sampling size is non-scientific IIRC and who knows how the questions were phrased.

I think the example of Mini, as you admitted is too far in the other direction. Mini is very stretched it sounds like, whereas in my hometown you could eliminate 1/2 the Chevy dealers and still have more than twice as many Chevy dealers as Toyota dealers.

The costs to buy out the dealers varies state to state and as of this time I haven't seen any numbers on what that might cost. However, with no capital up front it's not something they could've pursued.

I strongly agree with what Mark has said here. The problem is many of these UAW workers are unskilled and wouldn't have a chance of making that much on the open market. Where I work we employ union mechanics, I/E techs, and operators who make about the same pay. I think it's fair because our union employees are actually worth that much. They could find a job on the open market with comparable compensation. FWIW, with a bachelors and masters in mechanical engineering I make about half of what union employees at our plant make-and I have authority over them.

My point is the UAW really is a unique situation here and is costing GM more than it should for labor.

I think everyone agrees with that, which is why the contract signed with the UAW last year allows the OEs to bring in new workers at about $14/hr, instead of the current $30/hr average. Problem is buying out a large percentage of the workers who are working at a higher wage, is costing $50K-$100K per worker. That's a boatload of money that the OEs thought they could afford, and now realize they couldn't. It's also getting very hard to find more takers, as many of the workers who took buyouts are still unemployed, or are working at minimum wage a year or more later. A "retired" auto worker can burn through that kind of cash very quickly if he's working at near minimum wage with very limited or no benefits. That reality is now common knowledge with current workers. Many of them are staying put and taking their chances that the Detroit 3 will make it out of this mess, and they'll be better off than taking a buyout. Of course, with these new terms for company viability, may come the end of buyouts as we have known them for the past few years. We'll see how many strings are attached to layoffs of workers after March 2009.

OTOH, as a salaried engineer at GM, if they want to lay me off, they don't have to give me anything. As a courtesy they might give me one month's pay for every year I've worked there. Many of you may have heard that Chrysler's plants are shut down until Jan. 19. The UAW workers will get paid about 95% of their normal wages through collecting unemployment and getting Jobs Bank money from the UAW, or so I've heard on the news. The salaried workers like engineers and other plant employees will have to burn through vacation time or just not get paid. The disparity isn't lost on me, believe me.

I work for a tier 1. GM and Chrysler's releases to us are down to ZERO for the month of January. In response, we had to shut down completely, that means even the Engineering office that is located 800 miles away shuts down. I'll be at home collecting unemployment, and hopefully use my time off to put a cage in my car. I'm not totally bummed out about it since it is only one month and I'll be ok, assuming I go back to work and stay employed etc etc, but I don't get 95% of my salary while I sit at home are you freaking crazy?



A very good percentage of those people made over 100k for many years after they work a little overtime at 1.5x, 2x, and 3x. I’ve even heard of a couple people making over 200k/year.

I don’t care too much about how much they get paid / hour. It is higher than it should be, but my biggest gripe is how big of a pain in the ass it is to work with the UAW and Skilled trades. Its one thing for them to get paid a lot and be hungry for work and high degree of respect and professionalism and quality, but they don’t. Many of them are spoiled brats.

I worked in a UAW plant for a couple years and this is just a sample of some things that I remember coming from them:
“I’m not doing it, that’s not my job”
“I’m calling my committee man”
“Can’t you see that I was busy sleeping… reading the newspaper…etc, don’t bother me” (wasn’t actually said, but definitely implied)
“why should I bust my ass and finish this job? I need to milk this so I have to come in on Sat and Sunday and get paid 2x or 3x or whatever” (wasn’t actually said, but definitely implied)

You are getting paid a crap ton of money, QUIT YOUR BITCHING AND DO YOUR FREAKING JOB!! This isn’t true for everyone, but it is for a decent percentage. Many of the people aren’t concerned about making good product or making/saving the company money. Only concerned about extracting as much money as possible, do as little work as possible, and be a pain in the ass the whole time. And because of the foot hold that the Union has these bad apples can get fired but will come back to work after a short time.

How can union company be competitive with this mindset?

A friend of mine and my father-in-law are both in skilled trades, and they aren't bad apples. But they are getting hurt by this.

I agree with this too. John Wagner, your company is in the hole, you don’t deserve your 8 figure salary and you certainly don’t need that much to live.

There isn’t just one problem, there are many.

Hopefully I don't ruffle too many feathers here.

I'm rapidly getting out of my element here, given that no one I know is employed by a union, and (living the Deep South) am very unfamiliar with the intricacies of the situation.

However, let me focus on one thing I've seen a few times. I've read that some of the workers make upwards of $100k by working overtime. This means that GM has to pay them at least time-and-a-half, and perhaps more (if it's a holiday or whatnot). That sounds AMAZINGLY inefficient.

I realize that the factory may need workers at some times and not others. But, paying 150% salary is not the answer. They should do what the healthcare industry does - hire part-time, on-call workers. We have PRNs that are nurses. They are not full time, so they get no benefits. They come to work when we are busy and need extra staff. Then, they go home when it's not busy. They are usually inexperienced and therefore get less $$ per hour.

Wouldn't that be great. If an engineer or any non-Union individual even touches a wrench, a grievance can be filed. It is different in every plant, but I've seen / heard of it happening.

By federal law, hours over forty in a work week are compensated at 1.5 times regular pay.