|
Re: So why is GM going down?
What has hit the Big 3 is their legacy costs: insurance and retirement benefits for thousands/millions of retired workers (that lived years and years longer than what was projected when contracts were signed). The sad thing is that in 2010, those costs are absorbed by the UAW and the Big 3 should be in good shape going forward.
Toyota, Nissan and the other manufacturers that have built plants in the US have no "legacy" employees and can therefore profit with fewer units being sold.
The problem is GM, without a "bridge loan" from the government, will run out of cash before 2010, because it didn't borrow up its credit limits when credit was available.
The automobile industry runs off credit and those lines have been closed.
Mike
|