Big 3 workers do much better than Big 3 shareholders

[Ming]

Sunday, March 20, 2005
Big 3 workers do much better than Big 3 shareholders
By Nolan Finley / The Detroit News

Maybe it's time for Detroit's Big Three automakers and their major suppliers to file for nonprofit status.

Making a profit of any significance and with any consistency has been an elusive target for General Motors, Ford, DaimlerChrysler, Visteon, Delphi and the other major automotive players for going on three decades, despite serial restructurings.

They've downsized, spun off, retooled, redesigned and gone global. And yet last week, GM reported it expects this quarter to be its worst since 1992 and said the rest of the year may be equally puny.

GM stock hit a 10-year low. Shares that traded in the $90-plus range not so long ago fell below $30, costing investors foolish or faithful enough to have stuck with the company a two-thirds loss. That's a lot of people in this town.

Though still the world's largest automaker, GM's market value of $16.6 billion is one-eighth the size of No. 2 Toyota.

This is not a company that can even pretend it exists to serve its shareholders.

The owner of 100 shares of GM stock at the start of 2004 lost roughly $1,500 in value during the year and recouped a miserly $200 in dividends.

At Ford, a 100-share investor lost $250, offset by dividend checks totaling $40.

DaimlerChrysler AG's shareholders finished the year fairly even, when the dividend is counted.

While the companies' owners didn't share in the meager profits, their employees did. All three mailed profit-sharing checks to UAW workers -- $195 at GM, $600 at Ford and $1,500 at Chrysler. White-collar workers were also rewarded with bonuses.

Stockholders would have loved a piece of that action.

GM responded to its bad news last week by announcing steep job, salary and benefit cuts for its white-collar staff.

Notice that it didn't announce cutbacks for union workers. That's because there's very little GM can do to bring its blue-collar costs under control. They're bound by the outrageous labor contracts the automakers keep signing.

Those contracts put the Big Three and the two largest suppliers on the hook for $8 billion to keep issuing paychecks to union workers idled by production cutbacks.

Workers who produce nothing earn nearly as much as those who punch in every day. The deal forces the Big Three to make production and pricing decisions that have nothing to do with market demand.

The automotive manufacturers are also buried under billions of dollars in legacy costs to provide generous pension benefits to workers who may spend 30 years on the job and another 30 as wards of the company.

And although GM chief Rick Wagoner promises a come to Jesus meeting with the UAW next month, the automakers have a poor track record in convincing the UAW to help with soaring health care costs. Instead, they are looking for the government to take over their health care obligations. A federal health care bail-out would make the Big Three's financial ruin the nation's.

These companies are in trouble because they work for the comfort of their unions, not for the enrichment of their owners.

Article Source: http://www.detnews.com/2005/editoria...A17-122137.htm

[goblue]

Originally Posted by Ming

Sunday, March 20, 2005
Big 3 workers do much better than Big 3 shareholders
By Nolan Finley / The Detroit News


These companies are in trouble because they work for the comfort of their unions, not for the enrichment of their owners.

Article Source: http://www.detnews.com/2005/editoria...A17-122137.htm

Here's the problem with the UAW and Domestic makers...

GM determined after the last strike that it can't happen again - its too expensive. The UAW knows this, and therefore, knows if they hold out - GM will fold and they'll get back pay for the strike, and even better benefits.

Therefore - I still believe its Chapter 11 - GM has to reset the system. They will not get the UAW to mandate contributions to h/c, eliminate the jobs bank, and cut wages - exactly what it needs to stay afloat. It just won't happen. Small cuts are not enough and waiting till 2007 and enduring a strike is too far off. They need help NOW.

[AndrewGS]

With the way things seem to be and given the people in decision-making positions, I say to hell with it all. Liquidate.

[GM-10]

By October:

Ch11
Lutz Gone
Wagoner maybe...depends on how he does with UAW.
Buick, SAAB and/or Pontiac Gone (probably Pontiac) (I bet two of the three)

Watch...it will happen by the third quarter.

[Maverick]

Originally Posted by Ming

Do they really put bumper stickers on their backs? I'd say that means dedication.

[mrfunji]

I really don't seen the problem with Lutz. All vehicles produced under him are far, far better than the vehicles they replaced. Who knows what a pile the STS or LaCrosse could have been. Those vehilces now could be the best thing he could do with them. For example, the when the Red Line ION was released with the improved fascia, it wasn't great looking but given the base '04 ION it's a great improvement for what they had to work with.

Plus the first all Lutz vehicle is the Solstice. I'll place my bets that the Solstice won't falter, even if the Miata beats it (there will be 20k people who will still buy it.)

[ImajV]

Under-promise and over-deliver. It's that simple. It'll at least steedy the stock price

[surferdude00711]

Funny, I kept on saying I won't sell my 10 GM shares till Zeta sells for a year. Now my excuse will have to be Lambda...

WHERE ARE GM'S BREAD AND BUTTER CARS THAT WILL RETURN IT BACK TO PROFITABILITY!

[Cortazzo]

Ugh GM, they really do need a management shakeout, this is pathetic. Someone needs to get tough with the UAW, let them go on strike. I'm all about American workers, but none of them will have jobs if GM goes under. Unless you're toyota or nisssan, selling cars in this country isn't a guaranteed cash cow anymore, Ford and GM can't afford monopoly-rate labor costs when they aren't a monopoly anymore, it's that simple.

Lutz has been doing a good job, all of the new products are pretty good. The only major sticking points with me are the rampant use of 4-speed automatics, which I refuse to buy in a new car, and the lack of powertrain choices on the sedans (the g6 esp needs that 3.9l with DoD). I was really dissapointed to read that the Malibu SS would not have a manual at all, just a 4 speed auto, it's getting tired when all of Ford's new sedans have at least 5 speeds, many will have 6-speeds or CVTs.

[Maverick]

Originally Posted by ImajV

Under-promise and over-deliver. It's that simple. It'll at least steedy the stock price

A page out of Bill Ford Jr's book? I was suprised when even the media got on Ford's back about that- sounds good to me though.

[SilverZ]

I say... Get the plants up and running for a couple of months(some have been shut down to adust inventories)... build inventories, then start renegotiating the contract with the UAW and the gov't... and when its the right time, shut the plants down until resolution while eating up your buffer inventory and getting supply down to 40-60 days levels.... and if that doesnt work, chapter 11 it already.

[spudglo08]

Sell some small cars like Cobalt and Aveo for 8K that will get some sales.Cut Buick it cant turn around in 2 years.Give it time unlike the Bonnie,and Comaro,and ZETA.if allelse fails file chapter 11 and take your time restructuring all the brands and management.Do it right.And come back strong by 2010 with Hydrogens.

[Slack]

If GM has the sense to rework its upper levels of managemnt and can hold out till the end of their UAW contract without signing another one, they could be on a much more promising trajectory. If the UAW doesn't make the proper concessions by 2007, let them go. When they go on strike, hire people who need these jobs and will work for a much more reasonable deal. And tie their package to the overall company earnings. If the company has a bad year/quarter, lessen their raises or take away their bonuses. If the quality improves and buisness gets better reward the workers. Incentives sell cars, and I'd be willing to bet they can motivate workers also. As is the case now, the workers can do rough-shod jobs and still count on that yearly bonus. It is possible to give workers good pay/benefits without having to succumb to and be stuck in these ridiculous UAW contracts.

[D C]

Originally Posted by goblue

Here's the problem with the UAW and Domestic makers...

GM determined after the last strike that it can't happen again - its too expensive. The UAW knows this, and therefore, knows if they hold out - GM will fold and they'll get back pay for the strike, and even better benefits.

Therefore - I still believe its Chapter 11 - GM has to reset the system. They will not get the UAW to mandate contributions to h/c, eliminate the jobs bank, and cut wages - exactly what it needs to stay afloat. It just won't happen. Small cuts are not enough and waiting till 2007 and enduring a strike is too far off. They need help NOW.

Couldn't have said it better. The UAW knows they hold the cards with their ability to strike. Problem is, they're so **************** short sighted, they'd cut off their nose to spite their face. "Haha! We can make GM lose money and they'll cave!" Well guess who won't have a job when GM goes out of business you moron!

[ozzcrue]

Originally Posted by Slack

If GM has the sense to rework its upper levels of managemnt and can hold out till the end of their UAW contract without signing another one, they could be on a much more promising trajectory. If the UAW doesn't make the proper concessions by 2007, let them go. When they go on strike, hire people who need these jobs and will work for a much more reasonable deal. And tie their package to the overall company earnings. If the company has a bad year/quarter, lessen their raises or take away their bonuses. If the quality improves and buisness gets better reward the workers. Incentives sell cars, and I'd be willing to bet they can motivate workers also. As is the case now, the workers can do rough-shod jobs and still count on that yearly bonus. It is possible to give workers good pay/benefits without having to succumb to and be stuck in these ridiculous UAW contracts.

I would gladly cross a picket line of greedy UAW workers to work for GM for half of their pay. I'll Bet there are thousands of people willing to work fo 15-18 dollars an hour