SkyscraperCity Forum banner

The GM/Ford/Chrysler Discussion Thread

153K views 750 replies 53 participants last post by  hudkina 
#1 ·
Jesus, how many people can GM lay off in Flint? It seems like they've laid off half the damn city...

GM to lay off 3,550 at 4 pickup truck and SUV factories
By TOM KRISHER, AP Auto Writer
1 hour, 9 minutes ago

DETROIT - The dwindling U.S. auto market and an accelerating shift from trucks to cars has brought grim layoff news to four General Motors Corp. factories.

The company announced Monday that it plans to cut one shift each at pickup truck and large sport utility vehicle plants in Flint and Pontiac, Mich.; Janesville, Wis.; and Oshawa, Ontario, resulting in about 3,550 layoffs.

The world's largest automaker by sales said the cuts, to take effect this summer, were brought on by weak demand due to high gasoline prices and an economic downturn.

GM said it will make about 88,000 fewer pickups and 50,000 fewer big SUVs this calendar year because of the cuts. The layoffs represent just over 4 percent of GM's hourly manufacturing work force of about 80,000 in North America.

The announcement came after stock markets closed. GM shares rose 56 cents, or 2.6 percent, to $21.94 Monday, then lost 3 cents in after-hours trading.

"With rising fuel prices, a softening economy and a downward trend on current and future market demand for full-size trucks, a significant adjustment was needed to align our production with market realities," GM North America President Troy Clarke said in a statement.

For about the past three years, the U.S. auto market has been shifting from pickup trucks and SUVs to cars and crossover vehicles, but the trend picked up in recent months due to gas prices that have reached $3.60 per gallon, on average.

GM expects the layoffs to begin July 14 at the Flint, Janesville and Pontiac plants, and Sept. 8 at Oshawa. Most of the factories had already seen layoffs and production cuts due to a parts shortage from a two-month strike at American Axle and Manufacturing Holdings Inc.

GM spokesman Tony Sapienza said the company will eliminate shifts with 750 workers each at Flint and Janesville, 1,150 workers in Pontiac, and 900 workers in Oshawa. Final numbers must be worked out with unions, he said.

Laid-off workers will get unemployment benefits and supplemental pay that total 80 percent of their normal 40-hour gross pay, said GM spokesman Dan Flores.

Greg Gardner, an analyst with the Oliver Wyman Group, said the cuts look like "a realistic assessment."

"The full-size pickup and SUV market is not going to rebound anytime soon," he said. "It looks like that they don't plan on making up very much of the production loss due to the American Axle strike."

Gardner said GM's announcement reflects the industry's overall production forecast this year, down to about 15 million light vehicles from an earlier forecast of 15.5 million.

The Flint, Pontiac and Oshawa plants make the Chevrolet Silverado and GMC Sierra pickups, while Janesville manufactures the Chevrolet Tahoe and Suburban and GMC Yukon big SUVs.

GM said it did not forecast how many of those vehicles it expected to make this year, but it sold about 1.1 million of them in the U.S. last year, according to Autodata Corp.

GM said pickup sales overall are down 15 percent through March, while sales of large SUVs are off 26 percent.

Jesse Toprak, chief industry analyst for the auto information site Edmunds.com, said GM has a 92-day average supply of large trucks. A 60-day supply is considered optimal in the business.

Toprak said the automaker will lose about $4.4 billion in gross sales because of the production cuts, but it's nearly impossible to determine the impact on GM's net profits.

The production cuts should help GM keep its inventory under control, said Catherine Madden, an analyst with the consulting firm Global Insight.

The cuts come as 74,000 U.S. workers represented by the United Auto Workers face a May 22 deadline to decide on GM's latest round of buyout and early retirement offers.

AP Business Writer Jeff Karoub in Detroit contributed to this report.

http://news.yahoo.com/s/ap/20080429/ap_on_bi_ge/gm_cuts
 
See less See more
#294 ·
General Motors Discussion Thread

Seven reasons GM is headed to bankruptcy
By Sharon Silke Carty, USA TODAY
http://www.usatoday.com/money/autos/2009-05-31-gm-mistakes-bankruptcy_N.htm

DETROIT — If just one big mistake had brought General Motors (GM) to its knees, maybe it could have been fixed and averted its march into bankruptcy court Monday.

But what put the huge company — it once sold more than half the cars in the U.S. market and now controls less than 20% — in such a hole was a series of missteps, an inability to change lanes quickly when the market or government veered … and a heaping dose of bad luck.

"If there was one decision that was the lynchpin … it would be easier to fix," says Laura Marcero, a restructuring expert at Grant Thornton. "But these are systemic problems pervasive in the industry for decades."

Now, GM is operating on $20 billion in government aid and will need billions more to reorganize. Over the weekend, GM put final pieces in place for a filing: a cost-cutting labor deal got union approval; the U.S. and Germany brokered the sale of its European Opel unit to Canadian parts maker Magna; and more than half its bondholders agreed to a deal to cut its debt.

Some would argue GM got here mostly because the sales-killing recession came just as it was about to turn around. "This has nothing to do with the management of the company over the years," says David Cole, chairman of the Center for Automotive Research. "When you take sales down to Depression-era levels in a high-fixed-cost industry like this, it's a killer."

Still, GM made some key missteps that hastened its decline. Here are seven of the biggest:

1. Not filing for bankruptcy sooner
Momentum toward a bankruptcy filing accelerated since the auto market collapsed last fall. But as far back as the North American International Auto Show in Detroit in 2005, then-CEO Rick Wagoner faced questions about whether GM would be better off filing for bankruptcy reorganization to cope with its labor costs, debt load and excess dealers.
Wagoner was then, and remained until his last days at GM, adamantly opposed to bankruptcy. He said it would drive away buyers and irreparably harm workers and shareholders. He believed GM could turn around: He was CFO in 1992 when GM teetered on the brink of bankruptcy, only to make a strong rebound.

But a bankruptcy filing in 2005, when the company was stronger and the economy was chugging along well enough to absorb job losses, could have been better for everyone, says Martin Weiss, president of Weiss Research. Weiss predicted GM would file for bankruptcy in 2005 and still believes it should have. "They could've been leaner and meaner to prepare for the tough times that were coming," Weiss says.

2. Driving incentives into the ground
Following the 2001 terrorist attacks, GM was praised for responding quickly and decisively: It offered consumers 0% financing on loans up to five years. When the newness of that deal wore off, the automaker piled on a $3,000 rebate.

And the deals kept coming. GM stuck with cash-back deals and low-rate financing for years, increasing rebates to $6,000 to $8,000 in some cases. But to afford the rebates, GM kept sticker prices high. It took GM until 2006 to realize it was damaging itself with the non-stop deals: Shoppers often wouldn't consider a GM vehicle because its sticker price was so much higher than the competition.

Jesse Toprak, executive director of industry analysis at Edmunds.com, says once GM started offering heavy incentives, it was stuck with them, because competitors weren't easing off on rebates, either.

"It was a function of the marketplace at the time," says Toprak. But rebates killed residual values, meaning new car buyers would see the value of their GM car erode faster than foreign brands.

And GM's heavy incentives skewed its marketing into promotions for the deal, not the cars.

"If you're constantly advertising the deal, and the car is in the background, that's not a viable strategy," Toprak says.

3. Killing the EV1 electric program
Wagoner said his biggest mistake was killing the EV1, the company's pint-size electric car that was in test fleets in the late 1990s. It was a public relations debacle when the test cars had to be reclaimed and GM then scrapped them. But the real loss was scrapping the program behind them. GM abandoned a big lead in electric car technology and let Toyota take the green mantle for its hybrid Prius.

Now, GM is scrambling to regain the lead, promising its plug-in electric Volt will be on sale at the end of next year.

Al Benchich, a retired union president, says with the failure of the EV1, GM squandered the opportunity to keep the U.S. a dominant manufacturing force in a greener era.

"We have the people and the skills to do these things, and there's no reason we can't be doing it," says Benchich, who watched membership in his local United Auto Workers shop shrink from 2,800 13 years ago to about 500 today. "We could've been building this kind of stuff for a while now, keeping plants open and keeping people working."

4. Selling control of GMAC
For years, the ongoing joke was that GM was a bank that happened to make cars. Quarter after quarter, year after year, GM's financing arm, GMAC, pulled in way more revenue than its automotive operations.
In 2006, facing a cash crunch, GM sold off 51% of GMAC to private-equity fund Cerberus for $7.4 billion in cash and another $6.6 billion in staggered payments.

"That was a huge mistake," says Pat O'Keefe, managing director of turnaround firm O'Keefe & Associates. "GMAC was the financial strength of General Motors. … GMAC was a cash cow."

Although GMAC ran into problems with its mortgage unit in the housing crisis, keeping control could have helped GM weather the slide in auto sales last fall, O'Keefe says.

During the credit crisis, dealers saw their GMAC financing for inventory revoked, and about 25% of potential buyers couldn't get GMAC car loans.
In the past, GMAC could have extended loans with a "wink and a nod" to help keep dealers stocked with cars and keep financing loans, O'Keefe says.

But once GM gave up control of GMAC, it lost that flexibility.

5. Ignoring Jerry York
In the fall of 2005, billionaire investor Kirk Kerkorian bought up 10% of GM's shares, making him the company's largest shareholder. He then pressured GM to take his aide, Jerome York, as a board member, and tried to force GM to partner with Nissan and Renault.

Although the Nissan/Renault marriage failed, York showed some foresight.
In an early 2006 speech, he spelled out what he thought GM needed to do to right itself: Be more realistic about market share and revenue expectations, cut excess products and brands, sell or close business units that weren't making money and take what he called a "clean sheet of paper approach to the business," looking at everything in the company with fresh eyes.

Most important, all of it needed to be done fast.

"Time is of the essence," he said.

That list of fixes is eerily similar to the moves President Obama's automotive task force has forced GM to tackle in recent months. It rejected GM's first restructuring plan, saying the automaker wasn't realistic enough about market share and revenue projections. GM has been pressured to sell off Hummer, Saturn, Saab and its European unit, Opel.

It's closing Pontiac.

CEO Fritz Henderson has said the automaker is going over the entire company, questioning every plant, product and personnel move. But Henderson's moves came after the company was essentially in free fall and operating on billions in federal aid.

York didn't hang around long. He resigned from the board after eight months, sending directors a sharp letter chastising them for not being critical enough of GM and saying he had grave reservations about GM's ability to compete.

6. Mishandling Fiat
When GM bought 20% of Italian automaker Fiat for $2.4 billion in GM shares, the deal seemed like a genius move. With Opel/Vauxhall, it would've given GM dominance in the European market and made GM an even stronger global player.

But then Fiat CEO Gianni Agnelli died, and problems with the automaker mushroomed.

As part of the deal for GM's stake, Fiat had the right to force GM to buy the remaining shares and take control. In 2005, GM decided, instead, to pay Fiat $2 billion to get out of the deal.

Fiat used that money to turn itself around, and it will be Chrysler's newest owner.

Is it ironic or sad?

7. Overreacting to the truck boom
GM is often criticized for too many SUVs, but, as Wagoner has acknowledged, GM actually overlooked the start of the high-profit truck boom kicked off by the launch of the Ford Explorer SUV in 1990.

"We always considered ourselves a 'car' company," he later explained to USA TODAY.

When GM realized how fast 1990s buyers were switching to trucks as personal transportation, it overreacted, pouring time and money into SUVs and pickups at the expense of car development. The result: As long ago as 2000, Wall Street was warning that GM could be overcommitted to trucks and wind up out of phase if the pendulum of buyer preference swung back to cars. Once consumer tastes began changing, the market was awash in new truck models, and profits were sapped by discounts needed to keep sales boiling.

The symbol of GM's swing too far toward trucks is the high-end Hummer. GM launched the big SUV in 2003, the compact H3 in 2005. As buyers edged away from trucks, then fled as fuel prices hit records in 2008, GM wound up with pricey models that not only didn't sell, but also gave it an environmental black eye. Some of the heftiest Hummer H2s barely managed 10 miles per gallon.

____________________________

Champagne, anyone?:cheers:
 
#295 ·
It's officially official, but really, it's been official for years that GM was bankrupt.

It's kind of funny that in the GM bankruptcy thread, there were people in denial right up until the end. Just totally blind homers. Go read the first posts in that thread....

I guess it's not funny, it's sad really.
 
#296 ·
It is silly that people take a rumor piece in the WSJ about how GM is considering bankruptcy as an option and turn it into "GM going bankrupt". My guess is that GM is using the threat of bankruptcy to get the UAW and bondholders to agree upon better terms.
That is what I said. Yes it was a rumor piece by the WSJ, and yes GM was using it as a threat to get more concessions out of the UAW at the time. I never denied that GM was considering bankruptcy, and while in February, I thought that the company had a fair shot at reorganizing without going into Chapter 11, obviously that didn't happen.

In any case, entering Chapter 11 doesn't mean the company is done. In fact, while the "bad assets" of GM will probably remain in bankruptcy court for years, the "good assets" will likely emerge as a completely separate company within two or three months.

If the pundits are right, and the auto market does begin its recovery later this summer, and especially into next year, we may see a "New" profitable GM in the next year or so. And the two of you can drive your brand new Chevy Cruze off the lot and wonder why you ever thought the Corolla looked appealing...
 
#297 ·
And the two of you can drive your brand new Chevy Cruze off the lot and wonder why you ever thought the Corolla looked appealing...
I will never buy a GM or a Chrysler.

Ford issued this statement today:

"We look forward to working with the Obama administration to ensure that the government's majority ownership of GM will not change the industry's competitive dynamics and that a level playing field will be maintained"

Kind of hard to compete with a company that in effect gets billions of dollars risk free. (the government will convert loans to equity shares and get paid back through selling those shares)

Ford bets everything they have, secures money for it's future, and GM is rewarded with taxpayer money for flushing all of their money down the toilet.

A lot of people are going to give GM and Chysler the finger and a lot of people who wouldn't have considered a Ford previously are now going to consider a Ford. All of the government money for GM and Chysler won't mean $hit because Ford has the consumer goodwill which is priceless.

I am waiting for the Fiesta and new Focus with the eco-boost engines, and I will compare those two with what Honda and maybe Hyundai will be offering.

Boycott Government Motors.
 
#301 ·
BTW, new data is showing Ford and GM posted the lowest sales decline year over year in May, while Toyota and Honda saw their sales decline by more than 40%.

Ford: -24.2%
GM: -29.6%
Nissan: -33.1%
Toyota: -40.1%
Honda: -41%
Chrysler: -47%

For the second straight month, Ford continued to outsell Toyota to become America's #2 auto company. Ford sold 155,954 vehicles in May (161,197 if you include Volvo), compared to the 152,583 vehicles sold by Toyota's three U.S. brands. The Corolla saw its sales plunge 55% compared to last year. The Civic saw its sales plunge 60% compared to last year.
 
#302 ·
GM will be back - just in different form. Hopefully smarter one
 
#308 ·
Exactly. My advice to the Obama administration is to tell the conservatives decrying government intervention in the auto industry to **** off, now is PRECISELY the time for the government to completely revamp the company and position it to build the new public transit and electric vehicles of the future. GM should be the main, and first, American manufacturer of intercity and commuter trains. It is bullshit that Amtrak and commuter railroads have to buy from Bombardier or Alstom.
 
#303 ·
The top 5 best-selling midsize cars of May:

1. Camry - 31,325
2. Accord - 22,597
3. Fusion - 19,786
4. Altima - 18,408
5. Malibu - 14,098
TOTAL - 117,273

The Fusion sold nearly as well as the Accord in May. Sales for the Camry are down nearly 40% from last year, while the sales of the Accord are down nearly 50% from last year. Sales for the Malibu are down less than 10% from last year, while sales of the Fusion are up nearly 10% from last year.
 
#305 · (Edited)
The Impala sort of hurts the Malibu. The Accord benefits from being on the cusp of the midsize and fullsize segments, so Honda doesn't really need to offer a "fullsize" sedan. It's large enough to be classified as a fullsize car, but it competes in the midsize car segment. The Impala is similar to the Accord in that it is large enough to be classified as a fullsize car, but has more in common with the Midsize segment than it does with the historically large cars (Crown Vic, Grand Marquis, etc.). The Impala sold 18,709 units in May, and if you combine the sales of the Malibu and the Impala, you get 32,807.

Chevy needs to bring the Impala more upscale (similar to what Ford is doing with the new Taurus) to really separate the two segments. I've said it a million times, but I really think GM's best bet is to import the RWD Holden Commodore as the new Impala and seriously upgrade the interior materials. In that sense, it can really focus the Malibu towards the "every-day" commuter car, while the Impala draws from a more upscale demographic.

To give you an idea the base model of the Impala ($24,615) is only about $2,000 more than the Malibu ($22,325). In comparison, the base model of the G8 is $29,000. That's the price point where the new Impala needs to be.
 
#306 ·
I read today that several more GM facilities are closing, seven or eight in the state of Michigan alone. And don't forget: for every job lost, there are usually several other supportive jobs that are adversely affected, whether directly or indirectly. Things like suppliers, couriers, etc. This will seriously impact Michigan's already-high unemployment figures. How sad.
 
#310 ·
^^Wow, I haven't come across such a steaming pile oh horseshit since I went to the zoo. Have you ever ridden a bus or train? They are fine. The problem is that they are not available for many Americans. There were critics and naysayers who said there was no way Americans would give up their horse and carriage for a dirty, loud, automobile. There were people who said that air travel would never work. And if you didn't have your head shoved way up your ass, you would know that the dominant form of travel in the U.S. was RAIL, until the government plowed hundreds of billions of tax dollars into airports and highways. High speed rail can and will work if it receives a comparable level of government support. Twenty years ago Spain had no high speed rail and most people flew to get from Madrid to Barcelona. Nowadays, high speed rail has captured the market for travel between those two cities and the country has one of the largest high speed rail networks in Europe, and is expanding it at a rapid pace.

GM did fine for a long time with its unionized workforce. The company put all of its eggs into SUVs and trucks and when the shit hit the fan (high gas prices) their narrow focus and poor decisions were left exposed. The UAW allowed millions of Americans to live the American dream, own their own home, raise a family, and send their kids to college. So **** you for your irresponsible union bashing.
 
#311 ·
They haven't taken any paycuts, pension cuts, healthcare cuts (other than Dental, Vision, and Viagra).
The unions have conceded a lot more than you think. It's now to the point that the UAW contracts with GM and Chrysler are basically on par with the foreign plants. GM expects to save $1.3 billion a year from the UAW concessions! As time goes on, it will save even more money with the two-tier payscale. The UAW-run VEBA will also save GM the headache of having to fund retiree pensions. I know that you like to villanize the UAW, but any arguments you have now are basically empty.
 
#319 ·
I'll be first in line for a great car at a great price. To me a great car is fun to drive, reliable, and will get decent gas mileage.

Ford Europe/Mazda and Honda have so far proven to do it best and I see no reason why they won't continue the trend. They know what they're doing and they're not new to this game-fun to drive, economical small cars. And now Ford Europe is bringing it's finest to the US! I can't wait.

The Obama-Pelosi and fat ass Michael Moore types, or Bill O'Reilly, not so much. :)

Hmm, let's see, a European bred Ford/Mazda made with pride in Mexico, or a GM-Daewoo-Obama-Gettlefinger-UAW taxpayer welfare machine? Tough choice.
 
#316 ·
I don't feel one bit bad for them, even though I know its hurting our country's economy.

Welcome to capitalism, GM. (minus the gov't aid)


You make terrible decisions, you will fail. Natural selection on an economic scale you could say. Unfortunately our gov't no longer understands that concept.
 
#321 ·
But you specifically stated you wouldn't buy a car from GM, I assume, even if they are indeed making the most "fun to drive, reliable" car that gets "decent gas mileage."
I don't have faith that GM can do that. They haven't done it yet, and they're now being run by an even more incompetent group.

Though, it's good that you've finally come around on Ford...;)
Of all of the big 3, I've always prefered Ford and I've always been a fan of their European offerings. I did own a 91 Mustang 5.0L. Wasn't the most refined or highest quality, but definitely better than a Camaro or Firebird of the day, and it never gave me any problems despite the abuse I dished out on that car.

I'm even more a fan of Ford now that they're the only company of the Big 3 not bankrupt, not in Obama/UAW's pocket....now that they're increasing production while the others are taking taxpayer money, figuring out which division to kill off, which dealerships to close, and which creditor to **** over next.
 
#336 ·
I know what you're trying to get at, that I'm biased against GM and couldn't possibly know anything about it without owning one.

I know enough about GM to know I wouldn't have even considered anything from them up until very recently.

For a long time, during the 80s and 90s, the only people purchasing GM cars were government agencies, fleets looking for the best deal, or people biased/brainwashed towards GM (for example, people from Michigan). During the 80s and 90s, you could always find a better car than anything GM offered.

If I had owned a GM car, would my anecdotal experience really matter when you look at the big picture? The big picture being GM losing massive amounts of marketshare, losing billions of dollars, and ultimately going bankrupt?

I know you're big on claiming GM not getting a fair shake, but is GM being a mess of a company really just a perception issue, or might it just be a reality, because all signs point to it being reality.

Being from Michigan, you're really not in a position to look at this objectively.
 
#333 ·
Because it would be VERY difficult to sustain stand alone Buick dealerships with the three models they currently have. Also, GMC is by far GM's second most popular brand after Chevy. GMC is the premium version of Chevy trucks geared toward a more professional customer base, and it is obviously a sizeable base. GMC trucks are much more upscale than the Chevy variants, much in the same way that Buick is a much more upscale brand than Chevy. Basically Chevy is the base-level brand, Buick and GMC are the premium brand, and Cadillac is the upscale brand. If it were like beer, Chevy would be the "Busch" brand, Buick-GMC would be the "Budweiser" brand, and Cadillac would be the "Michelob" brand.;)



LOL! I literally live across the street from that strip club! Haven't been inside though.;)
 
#332 ·
You know I still don't get why GM chose to keep GMC of all brands. GMC could have been consolidated easily as "Chevrolet Truck" for those who currently own GMC dealerships, with almost zero controversy/effort. I'm sure GM gets some extra sales from the altered GMC sheet metal, but it also costs twice as much to market both GMC trucks and Chevrolet trucks. It's a completely redundant brand. :dunno:
 
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top