General Motors doesn't rule out more restructuring if 'situation deteriorates'

[mgescuro]

Originally Posted by fp115

Ridiculous? Clearly you don't understand the importance of doing so. How much legacy costs have been removed from the past major restructuring? (Hint: its greater than $15b).

Having to do it again would mean additional job losses, more than the 10% that have been getting laid off recently and have until the end of October to leave without any sort of exit bonus. This will have a total savings of 15% to GM's payroll.

Why don't you learn how and why everything operates first before making such ridiculous, kool-aid laden statements.

ANYONE who would have run the financials on GM 10 years ago, would have determined the problems at GM. And no amount of restructuring that GM has performed TO DATE, has actually adequately tackled these problems!!

GM's problems are structural and cultural.
I've never believed that GM's even come close to hacking off the number of union and white-collar workers.
They continue to move 3 steps behind the market and 5 steps behind in terms of responding to market forces. That proves that the structural inadequacies at GM still remain.

If Lutz had really dissolved the so-called "fiefdoms" that persisted at GM, then the issue of miscommunication and product development would not persist to this day!

Legacy costs? $15B??? You don't just "get rid" of legacy cost! There is an underlying price that GM had to pay to get rid of it!!
WHy are there factories still churning out non-selling models? That's a legacy cost, is it not??
If GM had really wanted to make the cuts and truly restructure, these inefficient plants would have been gone DAY 1!!!

But no, these plants were allowed to exist. WHY? BEcause GM still is dependent on their spreadsheet. They don't understand that their problem is image and the perpetuation of vehicles like Uplander and Impala and Lacrosse that are old and constraining and exist ONLY to sell volume. That is a structural and cultural problem. THe decision to kill them should have been made LONG ago.

UAW remains an anchor weight at GM, despite the new deal made with them. GM gets rid of higher priced workers, but hires the same number of workers at a lower price. The result is a lower trained workforce. But GM isn't doing "more with less." They're doing the "same with less money." The efficiency of GM's plants will suffer. And there's no doubt GM can run their plants with less workers and GM should be allowed to do so. And that's another structural problem that GM hasn't fully dealt with either.

Again, these are fundamental changes that GM HAS NOT MADE!!!
So here we go again with GM stating that "they won't rule out more restructuring." WEll, they've been restructuring for 6 years now, non stop. It's a joke.

Having been part of reorgs and in charge of divisional reorgs, they're not pretty. And it's quite distracting. And it keeps managers and workers from doing their best work.

Constant reorgs that last years only lead to one thing -- Chapter 11.
It is most likely due to incompetent leadership at top. They don't know what to do or how to do it.

[mgescuro]

Originally Posted by joemac

Who, two, four and even eight years ago predicted the US economy meltdown in 2008?

Only the idiots who listen to the media without actually reading what exactly is going on in the economy would ahve been blindsided by this economic nonsense.

The signs began appearing in 2003.
No person in their right mind would believe a sub-prime loan would be healthy to the economy. The economy was thusly buoyed by the housing boom precipitated by this "free money."

Who was stupid enough to believe that??
Apparently a couple million dumb Americans who had no idea how to read the fine print and contracts when signing for loans that are $300,000+ with an income of $25,000.

And the recession and overall economic slowdown started in 2006. It progressed in 2007 and got severe in November 2007.
And if you looked at all the recession threads on GMI from that time period, you'd see that 85% of GMI-ers were in disbelief.

My company began implementing changes in operating procedures and started being more conservative in 2007 because we knew there was an economic slowdown pending.
If my company and many other companies in my area could see it, why is GM only realizing it now? Even Wagoner was saying that they expected better sales "mid-year" early in 2008!!!

Good grief!! That's incompetence.

Simply put.... GM needs to be proactive and not reactive!!
If GM has identified a market slowdown, then why aren't they instituting a hiring freeze and tightening the belt now? Instead of coming out with "well, we might reorg, if the economy drops further," DO SOMETHING NOW!

[vcs2600]

Originally Posted by joemac

Who, two, four and even eight years ago predicted the US economy meltdown in 2008?

There's a meltdown, and there's the normal business cycle. A recession was bound to come along no matter what, and any egghead at GM could have told them that.

The crime is that GM & Ford were structurally unprofitable even when the economy was booming and consumers were buying tons of high-profit vehicles. Instead of "restructuring" then, they kicked their problems down the road. Now that consumer spending is going down and corporate lending is getting tight, they are truly in deep doodoo.

[texassierradude]

Originally Posted by mgescuro

Only the idiots who listen to the media without actually reading what exactly is going on in the economy would ahve been blindsided by this economic nonsense.

The signs began appearing in 2003.
No person in their right mind would believe a sub-prime loan would be healthy to the economy. The economy was thusly buoyed by the housing boom precipitated by this "free money."

Who was stupid enough to believe that??
Apparently a couple million dumb Americans who had no idea how to read the fine print and contracts when signing for loans that are $300,000+ with an income of $25,000.

And the recession and overall economic slowdown started in 2006. It progressed in 2007 and got severe in November 2007.
And if you looked at all the recession threads on GMI from that time period, you'd see that 85% of GMI-ers were in disbelief.

My company began implementing changes in operating procedures and started being more conservative in 2007 because we knew there was an economic slowdown pending.
If my company and many other companies in my area could see it, why is GM only realizing it now? Even Wagoner was saying that they expected better sales "mid-year" early in 2008!!!

Good grief!! That's incompetence.

Simply put.... GM needs to be proactive and not reactive!!
If GM has identified a market slowdown, then why aren't they instituting a hiring freeze and tightening the belt now? Instead of coming out with "well, we might reorg, if the economy drops further," DO SOMETHING NOW!

Ok I've got the solution to GM's problems, as well as the economy as a whole. Your company should take over GM operations at once , without delay. You all should have had the foresight to take over day to day operations of Bear Stearns, Fannie Mae, Freddie Mac, AIG, Lehman Brothers, WaMu, Wachovia as well, and you could have saved our entire economy from near collapse. Perhaps you should phone Toyota, Nissan and Honda today and advise them what actions to take to improve the horrible sales figures they suffered last month. While you are improving the world, ring up Brian Sabean and advise him what off-season moves his crappy club needs to make to become competitive again.

http://news.yahoo.com/s/nm/20081003/...alifornia_loan

Looks as if the Arnold and the folks in Sacramento need your expertise as well.

It is truly amazing how self-brilliant some folks on this site are.

[tgagneguam]

Originally Posted by joemac

Who, two, four and even eight years ago predicted the US economy meltdown in 2008?

The economic struggles today are a direct result of our counties economic state, not bad business decisions by automakers.



How it is ridiculous when it's impossible to predicting the future economic state years in advance?

It's pretty obvious with tightening credit lines, or none at all. The retail customer base for automobiles will dry up very quick. With no financing available sales will tank.

GM's not alone. All automakers have made adjustments to the horrible market conditions. GM just happens to be the largest in the US, so it's adjustments are larger more realized than others.

I'm guessing you, like many on this site, don't actually run a business. I do. You run a lean business model through good times and bad precisely because everyone-even the second grade class dope-knows that business runs in cycles. You see how more successful companies negotiate fair contracts with their workers, how they invest in secure cash for inevitable economic downturns, how they run a model with some degree of flexibility to more ably deal with shifts in production demands, and so much more. GM wasn't being run well for some time, and its present predicament stems from years of mismanagement. Put another way, the current state of the economy did not cause GM's problems, it simply accentuates them. Not so sure why so many fans on this site are into apologizing for GM's mis-Management team that is ruining our favorite auto company.

Pretending that all automakers are in the same boat is not accurate. Just about every automaker is seeing sales declines. But it's very interesting to see that their financial situations are vastly different. And that largely reflects good versus bad business plans.

[fp115]

Originally Posted by mgescuro

Why don't you learn how and why everything operates first before making such ridiculous, kool-aid laden statements.

ANYONE who would have run the financials on GM 10 years ago, would have determined the problems at GM. And no amount of restructuring that GM has performed TO DATE, has actually adequately tackled these problems!!

If you know what the problems actually are, then please shed some light. I've had a relative in GM's management for 2 years now and don't see how what they are currently doing any much of a deviation of what they should be doing.

Originally Posted by mgescuro

GM's problems are structural and cultural.
I've never believed that GM's even come close to hacking off the number of union and white-collar workers.
They continue to move 3 steps behind the market and 5 steps behind in terms of responding to market forces. That proves that the structural inadequacies at GM still remain.

Laying off 10% of white collars and got rid of 74,000 UAW workers. Maybe you are simply choosing to ignore these facts, but they are there and very visible.

Originally Posted by mgescuro

Legacy costs? $15B??? You don't just "get rid" of legacy cost! There is an underlying price that GM had to pay to get rid of it!!
WHy are there factories still churning out non-selling models? That's a legacy cost, is it not??
If GM had really wanted to make the cuts and truly restructure, these inefficient plants would have been gone DAY 1!!!

Those have already been paid for, for the most part. Haven't you seen the details behind the past losses? Factories that are building non-selling models are slowed down and at times on hold for weeks. Look at the truck plants, several of them are going to be seeing 5-10 weeks of downtime, not including "normal" downtime.

Closing plants isn't as easy as you make it sound. UAW/CAW contracts are extremely limiting until 2009 and until then GM will not be able to have full control on shutting down and firing more workers without finding itself in court battling immense lawsuits. The UAW is also prepared to delay pension payments in order to allow GM to have better books, that cost there is close to $45b.

Originally Posted by mgescuro

But no, these plants were allowed to exist. WHY? BEcause GM still is dependent on their spreadsheet. They don't understand that their problem is image and the perpetuation of vehicles like Uplander and Impala and Lacrosse that are old and constraining and exist ONLY to sell volume. That is a structural and cultural problem. THe decision to kill them should have been made LONG ago.

Yet the Impala continues to see more sales on monthly basis? The Uplander is no longer built and the Lacrosse is getting its update soon? Though the Impala and Lacrosse have to do with CAW contracts. The CAW remains to be the only organization unwilling to negotiate any sort of rate with GM. A worker in Canada will gain on average $31/hour where in the US they will gain $17/hour. The decision to kill a vehicle is not up to them, its up to the contract they have signed.

How does this have ANYTHING to do with restructuring anyway?

Originally Posted by mgescuro

UAW remains an anchor weight at GM, despite the new deal made with them. GM gets rid of higher priced workers, but hires the same number of workers at a lower price. The result is a lower trained workforce. But GM isn't doing "more with less." They're doing the "same with less money." The efficiency of GM's plants will suffer. And there's no doubt GM can run their plants with less workers and GM should be allowed to do so. And that's another structural problem that GM hasn't fully dealt with either.

Are you serious? On average Ford, GM and Chrysler use less people on their lines to build cars than what Toyota, Mercedes, BMW, Honda,... have on their lines. Due to unions they hire the smallest amount possible to do the job required. If you have ever been into a plant and watched a shift for more than a few seconds or minutes, especially a fast moving line, you will see that these guys work hard as hell. What you are suggesting is to lower the quality to give it a smaller workforce. How does that make any sort of sense? On every area you need the extra people and managers to ensure the quality.

Originally Posted by mgescuro

Again, these are fundamental changes that GM HAS NOT MADE!!!
So here we go again with GM stating that "they won't rule out more restructuring." WEll, they've been restructuring for 6 years now, non stop. It's a joke.

You really don't get what the term means, clearly. It means they will have to cut down on additional work, remove some programs and trim even more excess in order to meet the nation's standards. After its back on track it will be able to return to expanding its project portfolio. GM has made a lot of changes, but you simply cannot see them because you refuse to look. $15b just doesn't appear out of nowhere.

Originally Posted by mgescuro

Having been part of reorgs and in charge of divisional reorgs, they're not pretty. And it's quite distracting. And it keeps managers and workers from doing their best work.

Constant reorgs that last years only lead to one thing -- Chapter 11.
It is most likely due to incompetent leadership at top. They don't know what to do or how to do it.

What you are talking about is completely different, this has nothing to do with restructuring, thats just reorganization or chair shuffling. Thats not at all what restructuring means. Maybe you need to take out your dictionary and actually read the definition, then look at all the details in past restructuring, maybe it will then click.

[paul8488]

If you were going to give me a free car company, and I got to pick, it wouldn't be GM. I'd much rather have a healthy company that is facing a downturn (like Toyota) than an unhealthy company that is facing the same downturn (like GM). All auto manufacturers were caught a bit off guard, but GM is very poorly positioned to weather this storm, at least in the US. This doesn't stop me from being a GM fan or liking many GM vehicles... but I'm very concerned for GM over the next few years.

[Buickman]

Originally Posted by fp115

If you know what the problems actually are, then please shed some light. I've had a relative in GM's management for 2 years now and don't see how what they are currently doing any much of a deviation of what they should be doing.


Laying off 10% of white collars and got rid of 74,000 UAW workers. Maybe you are simply choosing to ignore these facts, but they are there and very visible.


Those have already been paid for, for the most part. Haven't you seen the details behind the past losses? Factories that are building non-selling models are slowed down and at times on hold for weeks. Look at the truck plants, several of them are going to be seeing 5-10 weeks of downtime, not including "normal" downtime.

Closing plants isn't as easy as you make it sound. UAW/CAW contracts are extremely limiting until 2009 and until then GM will not be able to have full control on shutting down and firing more workers without finding itself in court battling immense lawsuits. The UAW is also prepared to delay pension payments in order to allow GM to have better books, that cost there is close to $45b.


Yet the Impala continues to see more sales on monthly basis? The Uplander is no longer built and the Lacrosse is getting its update soon? Though the Impala and Lacrosse have to do with CAW contracts. The CAW remains to be the only organization unwilling to negotiate any sort of rate with GM. A worker in Canada will gain on average $31/hour where in the US they will gain $17/hour. The decision to kill a vehicle is not up to them, its up to the contract they have signed.

How does this have ANYTHING to do with restructuring anyway?

Are you serious? On average Ford, GM and Chrysler use less people on their lines to build cars than what Toyota, Mercedes, BMW, Honda,... have on their lines. Due to unions they hire the smallest amount possible to do the job required. If you have ever been into a plant and watched a shift for more than a few seconds or minutes, especially a fast moving line, you will see that these guys work hard as hell. What you are suggesting is to lower the quality to give it a smaller workforce. How does that make any sort of sense? On every area you need the extra people and managers to ensure the quality.


You really don't get what the term means, clearly. It means they will have to cut down on additional work, remove some programs and trim even more excess in order to meet the nation's standards. After its back on track it will be able to return to expanding its project portfolio. GM has made a lot of changes, but you simply cannot see them because you refuse to look. $15b just doesn't appear out of nowhere.


What you are talking about is completely different, this has nothing to do with restructuring, thats just reorganization or chair shuffling. Thats not at all what restructuring means. Maybe you need to take out your dictionary and actually read the definition, then look at all the details in past restructuring, maybe it will then click.

you are most definitely a company stooge. Mr Harris should be proud of the job you are doing. trouble is a trained eye like yours truly can easily spot the farce which you have become.