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      04-26-2010, 09:05 PM   #1
HoustonScott
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Anyone else surprised GM is claiming to have payed back the government loans. They were loaned over 60B dollars and have lost another 4.5B this year. They payed back 6.5B to USA and Canada by using government money to pay loads to Canada. The fact is GM looses money on every car or truck it sells, the more they sell the more they loose. Until the unions go away GM is going to loose money. Your thoughts.

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      04-26-2010, 10:04 PM   #2
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Hourly labor manufacturing costs are higher in Germany than they are in the United States. Nevertheless Mercedes Benz, BMW, VW and Porsche are solid companies. And Germany is the world's second largest exporter.

The problem is management, not labor. And it has been for decades.

Until the revolving door of short term MBAs goes away GM is going to lose money. And the United States will continue its slide to third world status.
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      04-26-2010, 10:17 PM   #3
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Anyone else surprised GM is claiming to have payed back the government loans. They were loaned over 60B dollars and have lost another 4.5B this year. They payed back 6.5B to USA and Canada by using government money to pay loads to Canada. The fact is GM looses money on every car or truck it sells, the more they sell the more they loose. Until the unions go away GM is going to loose money. Your thoughts.

HS
GM paid back the loan amount they were required to....the other billions of dollars still owed will be given to the U.S. government as stock once they start an IPO. The U.S. government will more than likely get all of their money back plus some when that time comes.
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      04-26-2010, 10:27 PM   #4
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Hourly labor manufacturing costs are higher in Germany than they are in the United States. Nevertheless Mercedes Benz, BMW, VW and Porsche are solid companies. And Germany is the world's second largest exporter.

The problem is management, not labor. And it has been for decades.

Until the revolving door of short term MBAs goes away GM is going to lose money. And the United States will continue its slide to third world status.
The UAW was still certainly a factor. Management largely, but you still can't ignore the UAW contribution.

But, thanks to the bankruptcy GM worker wages are now roughly equal to Toyota's US workers. The Jobs Bank is gone( that went away in 2007) and the UAW is now responsible for the health benefits for their workers. Shedding a lot of costs from GM's finances. Q1 should bring in a small loss or a small profit. 2010 overall should bring in a profit. All of GM's divisions are profitable right now with the exception of Opel.


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GM paid back the loan amount they were required to....the other billions of dollars still owed will be given to the U.S. government as stock once they start an IPO. The U.S. government will more than likely get all of their money back plus some when that time comes.
Yep exactly. GM used the money they gained from the equity swap to pay back the loans. The government didn't give them more money to pay off the loans. They used the money they already had when they gave a 60% stake to the US government. That money will be made up when the IPO is issued and the US slowly sells their shares.
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      04-26-2010, 11:10 PM   #5
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The UAW was still certainly a factor. Management largely, but you still can't ignore the UAW contribution...
I have an unusual background. I have held management positions both with and without unions. I have been, and am at the moment, a union member. I have been through two unionization drives, one on each side of the fence, and a decertification drive.

A strong, militant union is a symptom of an incompetent management. The vast majority of employees will support a management team that they perceive to be managing the company over the long term. Conversely, a management team that is perceived to be short sighted and opportunistic (which is to say that they took their MBA training to heart) will empower the thugs who tend to percolate to the top of the union hierarchy.

And I have to point out that the German workers at Mercedes, BMW, VW and Porsche are unionized. As are those at Southwest Airlines, the most unionized airline in the United States. You might want to read that last sentence twice.

A union problem in a company is a symptom of a far more serious management problem. Every time. A union in a well run company is nothing more than a mild annoyance; "herpes", as one VP of Ops described it to me.

As a thought experiment try to figure out why over the past 3 decades the unionized employees at Cadillac could not compete with the unionized employees at BMW. I don't think that it was the UAW keeping the engineering budget tight and making the cost focused design and manufacturing decisions.

I couldn't care less about the UAW, but letting them be used as a scapegoat hides the very real management problems at GM and, more importantly, in the United States as a whole.

Last edited by 742; 04-27-2010 at 07:39 AM.
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      04-26-2010, 11:59 PM   #6
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I have an unusual background. I have held management positions both with and without unions. I have been, and am at the moment, a union member. I have been through two unionization drives, one on each side of the fence, and a decertification drive.

A strong, militant union is a symptom of an incompetent management. The vast majority of employees will support a management team that they perceive to be managing the company over the long term. Conversely, a management team that is perceived to be short sighted and opportunistic (which is to say that they took their MBA training to heart) will empower the thugs who tend to peculate to the top of the union hierarchy.

And I have to point out that the German workers at Mercedes, BMW, VW and Porsche are unionized. As are those at Southwest Airlines, the most unionized airline in the United States. You might want to read that last sentence twice.

A union problem in a company is a symptom of a far more serious management problem. Every time. A union in a well run company is nothing more than a mild annoyance; "herpes", as one VP of Ops described it to me.

As a thought experiment try to figure out why over the past 3 decades the unionized employees at Cadillac could not compete with the unionized employees at BMW. I don't think that it was the UAW keeping the engineering budget tight and making the cost focused design and manufacturing decisions.

I couldn't care less about the UAW, but letting them be used as a scapegoat hides the very real management problems at GM and, more importantly, in the United States as a whole.
Don't mistake me as being anti-union and I am not pointing most of the blame at the UAW. They are a factor( even as a by product of poor management) in this mess. But, most of it( 85-90% of it) is due to poor management.
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      04-27-2010, 07:38 AM   #7
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All that said, GM lost another 4.5B this year, at that rate the loans will never be paid. If they made 5B a year it would take over 10 years to repay. Why would anyone think the government is going to get their money back?

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      04-27-2010, 08:41 AM   #8
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Originally Posted by 742 View Post
I have an unusual background. I have held management positions both with and without unions. I have been, and am at the moment, a union member. I have been through two unionization drives, one on each side of the fence, and a decertification drive.

A strong, militant union is a symptom of an incompetent management. The vast majority of employees will support a management team that they perceive to be managing the company over the long term. Conversely, a management team that is perceived to be short sighted and opportunistic (which is to say that they took their MBA training to heart) will empower the thugs who tend to percolate to the top of the union hierarchy.

And I have to point out that the German workers at Mercedes, BMW, VW and Porsche are unionized. As are those at Southwest Airlines, the most unionized airline in the United States. You might want to read that last sentence twice.

A union problem in a company is a symptom of a far more serious management problem. Every time. A union in a well run company is nothing more than a mild annoyance; "herpes", as one VP of Ops described it to me.

As a thought experiment try to figure out why over the past 3 decades the unionized employees at Cadillac could not compete with the unionized employees at BMW. I don't think that it was the UAW keeping the engineering budget tight and making the cost focused design and manufacturing decisions.

I couldn't care less about the UAW, but letting them be used as a scapegoat hides the very real management problems at GM and, more importantly, in the United States as a whole.
742, thanks for your perspective as someone who has seen this from both sides. Bad management at GM has been a problem for years. The workers were to blame too, but not as much as management.

The radio program "This American Life" recently did an article about the joint factory that GM & Toyota had been using up until a few weeks ago. It was a pace called NUMMI. The article discusses the failure of this manufacturing plant, and how it is emblematic of GM as a whole.

Also rather shitty of GM to say they have paid back the loans we gave, when they used TARP funds to pay the loans back.

Oh and HoustonScott, it's "Ad" not adds. We are discussing ADvertisement, not math.

PS pretty much every big hollywood feature film is also unionized.
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      04-27-2010, 08:44 AM   #9
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All that said, GM lost another 4.5B this year, at that rate the loans will never be paid. If they made 5B a year it would take over 10 years to repay. Why would anyone think the government is going to get their money back?

HS
The loans have been repaid. GM is officially out of debt with ~$30 billion in cash reserves. The rest of the money is in equity. GM is not responsible for paying that money back. When GM's IPO is issued and the government slowly sells their shares( they can't just sell in large sums or the stock value will plummet) and that is when the government will get the rest of the money back.

GM in Q1 will have a small loss or small profit. 2010 should be profitable.
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      04-27-2010, 09:04 AM   #10
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Don't mistake me as being anti-union and I am not pointing most of the blame at the UAW. They are a factor( even as a by product of poor management) in this mess. But, most of it( 85-90% of it) is due to poor management.
Fair enough, and I hope that I did not come across as ranting. Labor can certainly fail, but it appears to me to be far more common for the union straw man to be used as an excuse by/for failed management.
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      04-27-2010, 10:09 AM   #11
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The problem with the ads is their intention. They try to make the public believe that GM has had a spectacular recovery and now doesn't owe anybody anything. They used a government bailout to pay off their government loan. The stock price for a company that is majority-owned by the government will never be that great, and while GM made some changes to make the corporate culture slightly less bad, it still isn't very good.

Last edited by carve; 04-27-2010 at 12:37 PM.
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      04-27-2010, 12:18 PM   #12
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The problem with the ads is that their intention. They try to make the public believe that GM has had a spectacular recovery and now doesn't owe anybody anything. They used a government bailout to pay off their government loan. The stock price for a company that is majority-owned by the government will never be that great, and while GM made some changes to make the corporate culture slightly less bad, it still isn't very good.
I agree. I was appalled when I heard the commercial on the radio and then saw it on TV. I'll never buy a GM car.
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      04-27-2010, 08:06 PM   #13
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No- I think GM only knows how to subtract
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      04-27-2010, 08:29 PM   #14
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No- I think GM only knows how to subtract
damn...you beat me to it....
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      04-27-2010, 08:56 PM   #15
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Hmm that commercial is really intentionally deceiving, and I'm actually a slight proponent of GM. I think they really need to focus on building their own quality small car personality, much like Ford has done with the '11 Fiesta and the '12 Focus (and even previous iterations of the Focus). Instead, GM just continues thinly veiling Daewoos....

After that commercial, I really am disappointed that they would so blatantly mislead the American public like that. Kind of reminds me of the guy who said many many times that every one making $250k or less per year would see no increase in taxes; not even a dollar. But that's neither here nor there....
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      04-27-2010, 09:19 PM   #16
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The stock price for a company that is majority-owned by the government will never be that great
What makes you say that? What examples in history can you point to that support your statement because I don't recall of any similar examples.

Citigroup seems to be doing pretty well and when the government sells away its stock, it will make over 7 billion in profits and getting back all 45 billion it loaned.

History has showed that bailouts help more than hurt. Examples are:

Lockheed in 1971 and even the bailout of Penn Railroad in 1970..the first bailout ever by the federal government (if you don't count the bailouts by the pentagon for contractors going back to the 1950s) turned out ok and still operates today.
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      04-28-2010, 07:06 AM   #17
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...(if you don't count the bailouts by the pentagon for contractors going back to the 1950s)....
Corporate welfare for Pentagon contractors goes back much further than that. The the contract for the P-6 fighter was awarded to Curtis as a bailout -- in 1929.

There is no greater example of socialism than the United States Military Industrial Complex, except that the profits are privatized.
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      04-30-2010, 09:10 PM   #18
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"We are concerned that GM, under your leadership, has come dangerously close to committing fraud, and that you might have colluded with the United States Treasury to deceive the American public," Rep. Darrell Issa, R-Calif., wrote Whitacre on Thursday. "If someone relies on your statements in the future ... your false statements may expose GM to millions of dollars in damages, further reducing the value of the taxpayer-owned company."

That says it all for me...

HS
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