So why is GM going down?

[Len_A]

Originally Posted by jfelbab

Len, a question... You mentioned the Big 3 have built new plants in MI and didn't get any tax incentives to build there. Why is that? If MI was not willing to encourage the plant be built there, why didn't the manufacturer look to other more willing states? I believe they could have gotten the same incentives that the foreign nameplates got if they had opted to move.

I see this is another in a string of bad decision by the company leadership, but I am not an expert on new state-of-the-art auto plants.

Every time I look at what is happening I come back to this problem being caused by terrible mismanagement at the top. I think that the current leaders and boards need to be removed. I believe it is time for new ideas and new leadership. I think this is the last opportunity for that to occur for the big 3. What is your view?

They got incentives, but it in the low side of tens of millions of dollars - mostly property tax abatements. Part of that was because they were transferring employees from the closed, so you're looking at the union contract being a part of it. And even in those cases, only two-thirds of the people were transferred, the remainder were jobs eliminated by improved manufacturing methods. Part of it is the politics of pissing off people in your home market. I will say that GM got some incentives when they put Saturn in Spring Hill, TN, but that was a different era, 1985- states weren't trying to out bid each other for work, to the extent the last ten to twelve years have become. It's really been an outgrowth of all the transplants coming to the USA. A lot of it has been the idea of bringing jobs from whatever company to their state, and since Detroit didn't approach them about a plant,well...

Michigan did make a pitch to Toyota for the engine plant that went south, but we got the expansion of their tech center. Not like they were going to move their North American engineering center any where else. About 80% of the suppliers all have offices and labs in the Detroit area. We also made a pitch for VW, but like Toyota, that company was going through the motions - I don't we were never seriously under consideration. Part of it is Toyota wishing to remain nonunion, but VW has tough unions in Germany - AG Metal would be like putting Soldiers of Solidarity in charge of the UAW, and when VW had a plant in the USA before, in Pennsylvania, that plant was UAW, and VW claims they had a good relationship with the UAW. Now I think they're trying to emulate the other transplants.

And this is definitely the last opportunity for the Big Three. On that I agree 100%. They've had crappy management, but these current teams were making progress on the turn-around plans, until the credit markets imploded. Now, in case you haven't been following it, car sales around the world have tanked, and European countries are scrambling to provide financial aid to their home companies - another example of a not so free market at work.

[Len_A]

Originally Posted by ramtough

Dude I am a landscaper I make about $14 an hr. how about you what do you make an hr.You tell me about hard work. GO get your tea now and tell me why any of the junk the big three sell. Cost for new F250 $35000 to $40000. Dodge $30000 to $40000 and Chevy $30000 to $40000. T ell me about change my 78 f250 4x4 gets better mileage than any of my company trucks. Company trucks are 2002 or newer. Check yourselves find a old dealer sticker compare to new. Then you tell me who is full of ****. LEN A.Don't forget to pay your union dues. ****** cars ****** unions have a nice day off.

Keep in mind something, too - today light trucks have to meet the same emmission and safety standards as cars. That means more engine performance issues and extra weight sucking down the gas, and jacking up the cost.

[ramtough]

Len A sorry didn't read what I wrote I used to pay dues to. Years ago I worked as a loader for WASTE MANAGEMENT to make money $10.00 an hr. 12 hrs. a day. I will always buy FORD for work trucks just to much money.

[Len_A]

Originally Posted by ramtough

Len A sorry didn't read what I wrote I used to pay dues to. Years ago I worked as a loader for WASTE MANAGEMENT to make money $10.00 an hr. 12 hrs. a day. I will always buy FORD for work trucks just to much money.

No offense taken. And they are too much money. For starters, it costing a third world country's GDP to engineer any new car or truck, with all the different standards they have to meet. And I will bet good money, not that I have much, that the incoming administration will up the roof crush standard on light trucks. Current administration tabled the proposed standard, but my bet is that it will go through.

To sum it up in few words, the new standard will not only be tougher, but instead of testing it by dropping a steel slab on the roof of the truck, instead - they're going to have to really roll the trucks over at driving speed, by remote, to see whether the new roof standard will actually hold up. It can be done, but it's going tp add more millions of dollars to the development costs. And what did I say about the Japanese and European governments and their car makers - national health care and strong national retirement programs free up a lot of R &D Yen and Deutsche Mark's. But everyone expects the Detroit THree to keep up on their own. It's not right.

BTW, I did six month in a stamping plant before I gave up and went back to school. After I got into industrial sales, that plant was one of my first sales calls. You know what hit the minute I went in? Not the noise level, which is LOUD. It was the damn smell of hydraulic oil and machine lubricant in the air. It was like you walked into a wall of it. Gawd, I couldn't stand that smell.

[Setec Astronomy]

Originally Posted by ramtough

Tell me about change my 78 f250 4x4 gets better mileage than any of my company trucks. Company trucks are 2002 or newer. Check yourselves find a old dealer sticker compare to new.

I'd be the first to agree that the Big 3 were complacent and could have striven for fuel efficiency (even when gas was cheap) instead of going for easy profits. GM was building an electric car in the early 90's (EV-1), they probably could have brought the hybrid system for the big trucks that came out Jan. 08 to market 2 or 3 years earlier; think what geniuses they would have looked like if they had made that system standard on all their big trucks 3 years ago!

But back to your comparison of '78 EPA mileage figures with today's...I don't think that's fair. Not only have the EPA mileage test procedures changed 2 or 3 times (revising the sticker lower to try to come closer to real world numbers) but emissions regs have changed many times in the last 30 years, as well as safety regs making the cars heavier. Not to mention cheap gas made everyone want bigger, more powerful, better equipped cars than in '78. The power-to-weight ratio of most of today's cars is equivalent to the muscle cars of '78.

[Len_A]

Originally Posted by jfelbab

Len, fill me on your VEBA plan.

Does not the big 3 owe the UAW some $52 Billion in funding for this plan? Do you see any way that plan is going to be funded?

Also here is a LAT article on the cost of labor differences.
Is Big Labor killing the Big Three? - Los Angeles Times

Here's a link to some information from GM, on their health care costs, including the VEBA contributions. It's a PDF file.
media.gm.com/manufacturing/handbook/health_care.pdf

According to this document, their contribution is a total of $3 billion. $1 billion a year, in three years - 2005, 2007, and 2011.

[Len_A]

Originally Posted by jfelbab

Len, a question... You mentioned the Big 3 have built new plants in MI and didn't get any tax incentives to build there. Why is that? If MI was not willing to encourage the plant be built there, why didn't the manufacturer look to other more willing states? I believe they could have gotten the same incentives that the foreign nameplates got if they had opted to move.

I see this is another in a string of bad decision by the company leadership, but I am not an expert on new state-of-the-art auto plants.

Every time I look at what is happening I come back to this problem being caused by terrible mismanagement at the top. I think that the current leaders and boards need to be removed. I believe it is time for new ideas and new leadership. I think this is the last opportunity for that to occur for the big 3. What is your view?

Like you, I can be a real good Monday morning quarterback with the leadership decisions of the Big Three. Then I read that document from GM on health care costs, a document that was put out when they finished negotiating the contract with the UAW last October or November, 2007.

I'm looking at that 2006 figure for health care expenses:

In 2006, GM spent $4.8 billion covering the health care costs of 1.1 million employees, retirees and dependents in almost every zip code in the United States. From 1996 ($3.0 billion) to 2005 ($5.35 billion) GM has seen an 80 percent increase in total health care spent. And, these total costs have increased despite our decline in the numbers of lives GM covers.

$4.8 billion. For health care. Money that Toyota, Honda, and Nissan don't pay for in Japan. That Volkswagen, Mercedes, and BMW don't pay for in Germany. That's a lot of money that can be used for R &D. I'm looking at the string of bad decisions, and wondering how much easier it would be, to be a bit more daring on product decisions, when you have over $4 billion, nearly 5 billion a year more to work with. It's real easy for you to look at their decisions and say "a string of bad decisions", and easy for me to look at it, and say "what the hell were these morons at GM thinking?", without looking at the context of everything GM has to work with.

I'm not advocating national health care. Let me say that. But between the Big Three having to pay health care costs their Japanese, Korean, and European competitors don't pay, and then they come over here to the USA, and various states get into a bidding war over their manufacturing operations, to the point where a quarter of a billion dollars to a half a billion dollars in incentives has become routine, I think it puts things in a different perspective.

$4.8 billion dollars more to work with for product development, each year. $250 million to $500 million in subsidies for each new, modern assembly plant. What could they have accomplished with those kinds of government subsidies???

[Len_A]

For anyone interested:

AutoblogGreen achieves 43.1 mpg in 2010 Ford Fusion Hybrid - Autoblog

Yes, the Detroit automakers can't be competitive. R-i-i-g-h-t.

2010 Fusion Dealer Order Guide in PDF

[ramtough]

I personally atleast hope ford makes it. They were first.That some gas mileage but were do I put the mowers.

[Len_A]

Originally Posted by ramtough

I personally atleast hope ford makes it. They were first.That some gas mileage but were do I put the mowers.

ROFLMA! Yea, I don't have the specs on trailer towing capacity either!!!

They did do a sweet job on the restyling, too.