It is simple math really...

. I was just thinking today....everyone likes to hark back to the days when GM owned 50% of the market. Now they are somewhere in the mid 20's..and the situation keeps looking bleak.

Everyone assumes this is due to GM making crappy cars (the general public at least). But when you look at the number of brands and models offered today, versus the number of brands offered in the 60's it becomes obvious the main reason is really that the market is flooded with choices. Normally choice is a good thing, however it is really not the case here.

Reason being, you are now forcing GM, a company with huge legacy and infrastructure costs to compete with companies that use much cheaper labor, not unions to deal with, and very low legacy and fixed costs. What is worse, GM's size is so huge that if it the company were to go under, so many people receive checks from GM, that the economy would take a rather large hit.

So the basic jist of my rant is...with all the choices, and all the disadvantages built into GM because of it's past, is there really a way it can fix itself? The only way I can see things fixed would be through a "correction" on the part of the government.

I really don't think the government would want GM's pension dumped on the PBGC/ (http://www.pbgc.gov/)...so at what point, and how do they help?

So here is my basic idea-

Create a government monitored private corporation that would hold, and fund the pensions and healthcare of every retired or active autoworker in the United States. The Automakers would all have some controlling interest based upon how many employees they have. The corporation would handle benefits and healthcare, compensation for current workers would still be paid by the individual companies. Current benefit and pension levels would be maintained for everyone entered into the fund at the time of the inception. Any new workers added later on would be given benefits set based upon whatever negotiations between the corporation and the UAW or worker groups yield.

The fund would then be funded based upon a fee imposed on the price of every car sold in the United States based on cents on the dollar. So say the fee was $.03 for dollar...you would pay more of the fee the more expensive the car was. Import manufactures would see this as unfair...however I really feel that any company that sells cars in the United States should help and give back to the people who built cars before them. The fee would raise or lower based upon the monetary status of the corporation.

This would bring the US manufacturers back on a level playing field while maintaining current benefits for everyone who has them.

I know it is probably an idea with holes in it....but I really think the only way to get GM from this hole is to make everyone who sells cars in the US share in supporting the workforce that was there before them

Yes, GM is painfully aware of the fact that it's impossible for ANY company to compete via economies of scale on a global basis. But rather economies of scope: finding a way to differentiate a company from its competition and to react to the market place as quickly as possible (or even predicting the tides of the market and changing before they occur). That sort of stuff just is not possible anymore at 50%.

Know what else happens when a bunch of foreign brands start taking US sales away? GM has the opportunity to start selling in other countries. It's just another effect of the global economy. Decreased local marketshare with the potential for greatly increased global marketshare.

1. bad GM dealer image
2. bad GM car image
.a. bad gas mileage
.b. unreliable
3. confusing incentive programs
4. conditioning the customer to wait for the next incentive

Since most of it has to do with image, GM has to work overtime to prove that they aren't what the consumer thinks they were/are.

I also think price is a major issue. (Why V-8's cost $10k more than a i-4 is something I haven't been able to understand.)

Know what else happens when a bunch of foreign brands start taking US sales away? GM has the opportunity to start selling in other countries. It's just another effect of the global economy. Decreased local marketshare with the potential for greatly increased global marketshare.

Other countries are much more nationalistic about their car brands than the US. You would be hard pressed to fine any american cars in Japan because the Japanese see it as disloyal to buy them. How many Germans say screw Audi, I am buying a Cadillac.

GM sells well in China because American cars are a status thing there, and there is no well developed dominate maker...but China is also inacting laws that will make it less financially attractive to buy cars with V6 engines, which are most american cars. China is very protectionalistic...to the point than every foriegn company that sells a product can not do so on it's own...it must set up a joint venture with a local company before it can sell. That is why GM has a joint venture set up over there.


Lastly, North America is the most lucritive, and profitable market in the world, which is why everyone wants a piece of the pie. Any company would rather be selling mostly $30K sedans in the US rather than all $10K ****boxes in Brazil. So it is not that easy to just setup shop somewhere and make up lost US sales.

A free market is good...but when your own companies can not compete, things need to be rethought.

Sad part is, GM can revive all of their brands, and make some really nice cars, and they still may not stop Toyota from becoming #1. I hope they maintain that status. But the overall goal is obviously to return to profitability, and if that means not being #1, so be it. Better off being profitable, and making the cars I love, than being dead.

So basically, you're creating more Gov't Bureaucracy (which has to be paid for) and adding a 3% tax on every car sold in America to fund the Big 3's Pension and Healthcare cost?

. ....everyone likes to hark back to the days when GM owned 50% of the market.

GM already owns a part of Toyota and have several agreements together. See how GM is related to the rest of the carmakers in this link http://www.carlist.com/autonews/2005/autonews_132.html

So basically, you're creating more Gov't Bureaucracy (which has to be paid for) and adding a 3% tax on every car sold in America to fund the Big 3's Pension and Healthcare cost?

That's the way I read things. Given the government's financials, I'm not sure that dragging it into this problem is going to fix the problem.

And given the numbers that are frequently thrown around, I'm not sure that a 3% fee would take care of the problem.

GM already owns a part of Toyota and have several agreements together. See how GM is related to the rest of the carmakers in this link http://www.carlist.com/autonews/2005/autonews_132.html
GM does not own a part of Toyota. And that listing is out of date.

GM does not own a part of Toyota. And that listing is out of date.

GM's ownership was mentioned by a professor/researcher of one of the world's top B-schools (INSEAD). GM HAS Joint ventures with Toyota (check the internet). True the listing is dated 2005 but how does that make it's contents invalid today?

I read government and then I stopped reading. We need a better US health system period. If we got that, it would take a lot of weight of US companies with legacy cost.

Ideas like that have been thrown out by some liberal union groups and some neoconservatives acting on President Bush's floating health-care idea.

I have always personally liked it.

GM's ownership was mentioned by a professor/researcher of one of the world's top B-schools (INSEAD). GM HAS Joint ventures with Toyota (check the internet). True the listing is dated 2005 but how does that make it's contents invalid today?

NUMMI is a joint venture with Toyota, that does not mean that they own part of Toyota. in all honesty i feel that NUMMI was a mistake and in retrospect GM really got the tail end of the deal.

about the listing. some of the things have changed, namely GM no longer owns their stake in subaru. they sold it and toyota bought up a lot (if not all, i cant remember) of it.


honestly what its really going to take is to shake toyota of their uber good fuel economy image and tell people how good GM's fuel economy is.

GM: HURRY on getting the hybrids out and get them out on as many models as possible! do something to differentiate their looks from the rest of the models. (maybe different grille and green pinstriping or something) Why? because look at the most successful prius: the hybrid. It looks unique and when u see it u know it is a hybrid. these things are image symbols first and foremost. its trendy to be fuel effecient right now.........
......or at least to look like you really care about saving the environment (not to mention gas prices).


when the GMT900 hybrids come out make sure they get better gas mileage than the toyota SUV's and advertise the HELL out of that fact.

beat toyota at their own game.

True the listing is dated 2005 but how does that make it's contents invalid today?

How does it make it invalid? Easily.

For starters GM's partnership with Subaru was disolved when they sold off their entire stake in that company.

Then GM sold off most of its stake in Suzuki. They retained 3% of the 17.4% stake they had.

Then GM sold off all of its stake in Isuzu, however, GM maintains they will still have some kind of working realtionship.

So....things change you see.

....GM's partnership with Subaru was disolved when they sold off their entire stake in that company.

Then GM sold off most of its stake in Suzuki. They retained 3% of the 17.4% stake they had.

Then GM sold off all of its stake in Isuzu, however, GM maintains they will still have some kind of working realtionship....

Throw in Fiat, and you have a pattern. :lol:

Throw in Fiat, and you have a pattern. :lol:

Hah yea that was the worst one of all. But let's not talk about that, it will probably make BM giggle or entice him back to post.

No...

I was suggesting creating a private corporation that would control the pension and healh benifits of all retired and active US autoworkers. This corporation would be controled by the automakers with representation on the board of directors based upon a companies number of employees in the plan. Labor deals would be negotiated with the UAW, and other representative employee groups.

The corporation would then be funded by a fee placed on all cars sold in the United States regardless of the mnaufacturer. The fee would be something like 5 cents for every dollar of MSRP or whatever. The only government involvement would be creating the laws that make the corporation work, and possibly some oversight to make sure there is no corruption. And the truth is, if GM goes bankrupt, the government will control the pension in a much more direct manner through the PBGC, and I really think no one wants that.

I really feel that since companies like Toyota and Honda are selling so many cars here, they should have a part in paying for the benefits of retirees. Afterall, if we were a much more closed market, GM would have no trouble gaining the marketshare needed to support it's legacy costs. Sure, some will say it is not fair for imports to be penalized for having low legacy costs. But should GM/Ford be penalized for historically making it possible for million to live middle class lives in manufacturing only to be strangled by the cost of doing such later down the road? I mean, for many, the American dream has been built on the backs of the automakers

One thing most americans fo not get, is we have become an open economy to the point that our own companies cannot compete at home, which will be a major problem going forward. This country was built on our manufacturing ability...and now that ability is a shell of it's former self.

the problem is that will add a good amount of money to the price of a car. if it is 5 cents per dollar. on a $40,000 car that would add $2000 to the sticker, not to mention all the other costs. Too me thats an extra 2 grand id rather spend elsewhere. Its not a bad idea but i think it should be less. maybe 1 cent per dollar.

formula79, I understand where you are coming from with this idea and I can understand the obvious frustration that you have towards the idea of a "global" market. The USA is getting beaten up in every sense in global trade due to the unfair practices that we (for the most part) are not involved with but we are subject to. This whole idea of having a global economy is a stupid idea that will never truly happen when countries like China keep pulling their same old crap.

This whole idea of having a global economy is a stupid idea that will never truly happen when countries like China keep pulling their same old crap.
I don't want to derail this thread into an international trade argument, but China's not the only one the can't follow a rulebook. Look up the US's history on softwood lumber trade, for example.

I don't want to derail this thread into an international trade argument, but China's not the only one the can't follow a rulebook. Look up the US's history on softwood lumber trade, for example.

See back where I said (for the most part), no country is completely innocent of not having bad practices. We get held to a much higher level of scrutiny as things stand right now and pay a much bigger price.

the problem is that will add a good amount of money to the price of a car. if it is 5 cents per dollar. on a $40,000 car that would add $2000 to the sticker, not to mention all the other costs. Too me thats an extra 2 grand id rather spend elsewhere. Its not a bad idea but i think it should be less. maybe 1 cent per dollar.



There is already probaly $1500 in healthcare cost tied into the price of every AMERICAN car. Basically, what this idea does is take that cost and spread it amoung every car sold in the US. Imports may see a few hundred extra dollars, but American cars may actually become a bit cheaper..and American companies can reinvest the extra savings into more inovation.

Whuddabout NAFTA? How could reverting that help domestic car companies? Sorta like China is doing now to pick on foriegn companies with their upcomming tax on engine size.

I know it's been mentioned before but GM has too many brands for a 'flooded vehicle market', today. What I find difficult to understand is why Buick should be getting such beautiful vehicles like Enclave and why Pontiac is "the excitement division" when clearly American people have an affinity with the successful Chevrolet brand, which GM has largely starved of fresh and innovative product (I'm not referring to the GMT-900s).

Surely GM would look at cutting its marketing and resource costs if it had to concentrate on 2 less brands? I know Lutz has stated that GM will take a big hit to cut these brands... but wouldn't it be easier to concentrate on getting the product right than trying to manage a whole division? There is still overlap between Chevrolet and Pontiac, why do the same job differently?

I know it's been mentioned before but GM has too many brands for a 'flooded vehicle market', today. What I find difficult to understand is why Buick should be getting such beautiful vehicles like Enclave and why Pontiac is "the excitement division" when clearly American people have an affinity with the successful Chevrolet brand, which GM has largely starved of fresh and innovative product (I'm not referring to the GMT-900s).

Surely GM would look at cutting its marketing and resource costs if it had to concentrate on 2 less brands? I know Lutz has stated that GM will take a big hit to cut these brands... but wouldn't it be easier to concentrate on getting the product right than trying to manage a whole division? There is still overlap between Chevrolet and Pontiac, why do the same job differently?


Cut brands, and you loose marketshare and volume, which requires a reduction in capacity which is VERY expensive and counter productive. GM still has not gotten back the sales it lost from Olds going away. It is more a matter of there are so many manufactuers competeing now, everyone gets a small piece of the pie. Normally that is no biggie...but when you are GM and have inflexable legacy costs from a time when the company was much larger things become very difficult.

Cut brands, and you loose marketshare and volume, which requires a reduction in capacity which is VERY expensive and counter productive. GM still has not gotten back the sales it lost from Olds going away. It is more a matter of there are so many manufactuers competeing now, everyone gets a small piece of the pie. Normally that is no biggie...but when you are GM and have inflexable legacy costs from a time when the company was much larger things become very difficult.

You just rebadge the Enclave and Solstice as a Chevrolet? No need to cut capacity. The Plymouth Prowler became the Chrysler Prowler overnight, didn't it? :)

You just rebadge the Enclave and Solstice as a Chevrolet? No need to cut capacity. The Plymouth Prowler became the Chrysler Prowler overnight, didn't it? :)


This just does not work...again...it didn't work with Olds, and it is not working with the models cut from Pontiac. How many Bonneville drivers have bought Lucernes to replace them? How many Sunfire buyers are buying Cobalts.

I drive a Grand Prix...but in it's absense I would not have bought an Impala or LaCrosse.

No...The corporation would then be funded by a fee placed on all cars sold in the United States regardless of the mnaufacturer. The fee would be something like 5 cents for every dollar of MSRP or whatever....

By any other name, that is still a TAX of 5% that I, the car buyer, will have to pay.

It is my opinion, perhaps nieve, that if GM/Ford build quality cars that American's want to buy, they will sell, and they will be profitable. With all the competition in the Auto Market today, the days of GM/Ford having an overwhelming majority of the US market are gone.

Bob

It is my opinion, perhaps nieve, that if GM/Ford build quality cars that American's want to buy, they will sell, and they will be profitable.

So, by this theory of yours, certain domestic vehicles might sell well at a profitable price without any assistance from the government or the competition - vehicles such as the Corvette, Mustang, Solstice, Charger/300C, Lucerne, GMT900, any pickup with a diesel, etc. I'm not sure I buy into this theory.

;)

I'd take it one step further. I like the idea of a special fund set up to take care of retired workers' pensions and health care.
However, take that fee, and apply it to ONLY foreign brand vehicles.

That would bring some parity to the market.

So now I'm being taxed extra if I buy a Honda?

I think the real issue is "Healthcare"; but I'm not going to expect our politcal system to do anything about it soon on either side. They'd rather fight over stupid sh!t then actually try to do something to help out American's and their companies.

Did I say that! Black SUV's are heading my way right now.

Oh, and Ross Perot 08'! ;)

I'd take it one step further. I like the idea of a special fund set up to take care of retired workers' pensions and health care.
However, take that fee, and apply it to ONLY foreign brand vehicles.


It would seem as if, in order to be fair, the same tax would need to be applied to domestically-branded vehicles that are built outside of the United States would also need to be taxed.

Of course, this has nothing to do with being fair, does it? Fairness probably would have required domestic automakers to show pension and health-care underfunding as a liability on the balance sheets, which would have wiped out their value long ago.

By any other name, that is still a TAX of 5% that I, the car buyer, will have to pay.

It is my opinion, perhaps nieve, that if GM/Ford build quality cars that American's want to buy, they will sell, and they will be profitable. With all the competition in the Auto Market today, the days of GM/Ford having an overwhelming majority of the US market are gone.

Bob

Well actually...every GM/Ford car has $1500 built into the cost of the car for healthcare and such already. If you take $1500 per car and spread it among every car in the US, the cost of american cars should actually go down quite a bit, and imports would go up a few hundred dollars...which most imports could probaly eat. With even a quarter of the savings, GM could build much better cars. More importantly it wipes GM/Ford of their strangling pensions, increases cash flow, and puts them on a level paying surface again.

It is true they will have much less of the market with all the competition...that is why a correction is needed. It is impossible to expect GM to support the number or retirees it has from when it owned 50% of the market using revenues from todays 25% marketshare. It is like social security...the math does not work.

So now I'm being taxed extra if I buy a Honda?

Well every car would have the tax. I feel Honda (or any import) should help pay for legacy costs of past auto workers who are displaced because of their increased market share.

It seems like a horrible form of socialism to force new companies to pay for established companies' legacy costs. The new companies had zero involvement with those retired workers and gained absolutely no benefits from their employment, so why should they be expected to pick up their liability now? Heck, a lot of retired employees were retired even before some of the newer automakers like Kia were even here.

Like it or not, this is the Big 3's own doing and they should have to fix it themselves. As a person works for a company, the company (and sometimes the employee) puts money away for their eventual retirement. The whole idea is the retirement should be funded while the employee is working, not after. So even if GM has 250,000 retirees, their retirement should have been funded while they were active employees and thus be a non-issue today. But of course we've come to discover that the Big 3 didn't do a very good job of forecasting just how high the retirement costs were going to be and failed to sock away enough money. Whose fault is that? Not the imports.

Yes, the imports have far fewer people currently on the retiree roles. But it's not like they don't have any obligations of their own. Remember that retirement obligation should be funded while the employee is active (not afterwards), and the import manufacturers have thousands of their own active employees that they currently need to be putting money away for. Hopefully they do a better job than the Big 3 did.

It was GM's shareholders who reaped the benefit of not putting away enough money in the past, so it should be GM's shareholders that now have to come good.

It seems like a horrible form of socialism to force new companies to pay for established companies' legacy costs. The new companies had zero involvement with those retired workers and gained absolutely no benefits from their employment, so why should they be expected to pick up their liability now? Heck, a lot of retired employees were retired even before some of the newer automakers like Kia were even here.

Like it or not, this is the Big 3's own doing and they should have to fix it themselves. As a person works for a company, the company (and sometimes the employee) puts money away for their eventual retirement. The whole idea is the retirement should be funded while the employee is working, not after. So even if GM has 250,000 retirees, their retirement should have been funded while they were active employees and thus be a non-issue today. But of course we've come to discover that the Big 3 didn't do a very good job of forecasting just how high the retirement costs were going to be and failed to sock away enough money. Whose fault is that? Not the imports.

Yes, the imports have far fewer people currently on the retiree roles. But it's not like they don't have any obligations of their own. Remember that retirement obligation should be funded while the employee is active (not afterwards), and the import manufacturers have thousands of their own active employees that they currently need to be putting money away for. Hopefully they do a better job than the Big 3 did.

It was GM's shareholders who reaped the benefit of not putting away enough money in the past, so it should be GM's shareholders that now have to come good.

Imports will never have the legacy costs of GM. Further more why should GM be punished by doing right to workers in the past. It is not GM's fault that any company in the world can set up shop in the US and sell cars....each one taking an even smaller peice of the pie.

Lastlty, I am not sure anyone could have forcasted the cost of healthcare today.

Well actually...every GM/Ford car has $1500 built into the cost of the car for healthcare and such already. If you take $1500 per car and spread it among every car in the US, the cost of american cars should actually go down quite a bit, and imports would go up a few hundred dollars...which most imports could probaly eat. With even a quarter of the savings, GM could build much better cars. More importantly it wipes GM/Ford of their strangling pensions, increases cash flow, and puts them on a level paying surface again.
So its a Progressive type of system? Those that can afford it (the imports) pay for those the can't (the domestics).

The problem for fixing GM/Ford Pensions belongs to GM/Ford, not to the buying public, IMHO.

It is true they will have much less of the market with all the competition...that is why a correction is needed. It is impossible to expect GM to support the number or retirees it has from when it owned 50% of the market using revenues from todays 25% marketshare. It is like social security...the math does not work.

Then let the corporations fix it - don't give it to the Gov't to fix (even in an "oversee" role), and don't make me pay for it by imposing a tarriff (or tax, or whatever you want to call it) on imports.

The best thing GM/Ford can do is make more people want their cars - and the problem certainly isn't price (at least not compared to Toyota & Honda).

Well every car would have the tax. I feel Honda (or any import) should help pay for legacy costs of past auto workers who are displaced because of their increased market share.

I'm sorry Branden, I don't want another tax. As for Honda (or any other non Ford/GM Company), they had nothing to do with past GM/Ford Autoworkers. I DO NOT want to see the Gov't get involved in deciding which company should have how much share of a certain market. No thanks - smacks of socialism.

I guess we can agree to disagree. :)
Bob

I'm sorry Branden, I don't want another tax. As for Honda (or any other non Ford/GM Company), they had nothing to do with past GM/Ford Autoworkers. I DO NOT want to see the Gov't get involved in deciding which company should have how much share of a certain market. No thanks - smacks of socialism.

I guess we can agree to disagree. :)
Bob

Not to mention we cannot impose tariffs like that due to WTO agreements in some cases (I think) and even if they are allowed, other countries would retaliate.

note: IDK if that point was brought up before; too lazy to browse.

How then can the companies fix it themselves with current market shares?

So its a Progressive type of system? Those that can afford it (the imports) pay for those the can't (the domestics).

The problem for fixing GM/Ford Pensions belongs to GM/Ford, not to the buying public, IMHO.



Then let the corporations fix it - don't give it to the Gov't to fix (even in an "oversee" role), and don't make me pay for it by imposing a tarriff (or tax, or whatever you want to call it) on imports.

The best thing GM/Ford can do is make more people want their cars - and the problem certainly isn't price (at least not compared to Toyota & Honda).



I'm sorry Branden, I don't want another tax. As for Honda (or any other non Ford/GM Company), they had nothing to do with past GM/Ford Autoworkers. I DO NOT want to see the Gov't get involved in deciding which company should have how much share of a certain market. No thanks - smacks of socialism.

I guess we can agree to disagree. :)
Bob

I don't know. Perhaps they can't. I don't think the Gov't should get involved with determining how much Market Share they should have, nor should they subsidize them.

Bob

I don't know. Perhaps they can't. I don't think the Gov't should get involved with determining how much Market Share they should have, nor should they subsidize them.

Bob

So you would rather the companies go bankrupt, and the US have no automotive companies of it's own?

I am a firm believer that the the government should stay out of things untill absolutley needed. I really feel a bankrupt GM would very much have a chance at throwing the US into a recession.

I guess we have a different opinion of "absolutely needed". And I stand by not letting the Gov't get involved in dividing up market share.

Breeds mediocracy.
Bob

Create a government monitored private corporation that would hold, and fund the pensions and healthcare of every retired or active autoworker in the United States. The Automakers would all have some controlling interest based upon how many employees they have. The corporation would handle benefits and healthcare, compensation for current workers would still be paid by the individual companies. Current benefit and pension levels would be maintained for everyone entered into the fund at the time of the inception. Any new workers added later on would be given benefits set based upon whatever negotiations between the corporation and the UAW or worker groups yield.

Awesome, but what do I get for funding this company? In effect by making my contribution in taxes, I would be more or less a shareholder.