GM in the shit

[Ratdat]

General Motors just announced they will go tits up in 3 months if some major cash doesn't come their way.

 

Linky

 

That's a LOT of jobs if they do go under. Can't imagine the US government would let it happen mind.

[Ross_K]

Wired was saying they're looking to get together with Chrysler.

 

http://blog.wired.com/cars/2008/11/motor-city-coul.html

 

GM would get the $11 billion in Chrysler's piggy bank. Add that to the $21 billion in cash and $5 billion in credit GM has and the General figures it'll have enough money to carry it through the end of next year.

And what then? Hope the "credit crunch" isn't so bad by then, or go to the government for a loan?

[Ratdat]

Apparently they've suspended merger talks with Chrysler.

[retrogeezer]

You've gotta laugh haven't you....I don't know how long GM have been going but lets say its 70-80 years.So thats 70-80 years of making nice profits and probably huge profits since the 70's. And now, after 18 months of down turn they are going tits-up....what a joke.

[MrRegieRitmo]

So thats 70-80 years of making nice profits and probably huge profits since the 70's. And now, after 18 months of down turn they are going tits-up....what a joke.

What can you deduce from that? That it's been one big smoke screen or they've just pi**ed it up the wall??

[Father Ted]

Well, in all honesty it means piss cheap Astras built by the next Chinese or Korean firm to wade in with the readies really.

[retrogeezer]

I don't know - I guess some big bosses have become very rich?? I can't see how a company that huge can be out of reserves already.It's like Bentley....last year they had record profits, this year they are on a 3 day week and closing over xmas.....something is wrong somewhere.

[Richard]

Obama can't let something as big as GM go tits on his watch so this will be an attempt to hold him to ransom. He should call their bluff and sell GM to BMW for $1.50.

[pogweasel]

Did they learn nothing from the British motor industry's pitiful slide into the shit? No chance of long term survival at all for these dinosaurs. Too much is wrapped up in history & politics to save it from the inevitable. I should think that they'll have to start selling off the family silver pretty shortly.

[Richard]

They can't be short of silver to sell.

[Ross_K]

I don't think it should be any government's responsibility to bail out the private sector no matter how big an employer they are.The recent bank "rescues" shouldn't have been allowed to happen either, but when you've got big business lining the politician's pockets I suppose they feel entitled to a little something on the first rainy day they come encounter.And how much blame do the unions share in the downfall of GM or MG Rover? They're a mill stone around the neck of the manufacturing industry.Bring on the Chinese I say...

[Albert Ross]

Refreshing thought really..............seeing as I work at a Vauxhall dealership, and have millstones like mortgage etc

[Ratdat]

I don't think it should be any government's responsibility to bail out the private sector no matter how big an employer they are.

In theory no but the reality is wether it costs the country less to bail them out than it costs to let them go under. If GM were to go under they'd take hundreds of other businesses with them right through the supply chain. The jobs lost directly at GM would only account for a small proportion of the total job losses as a result. All of which would have a massive impact on the economy of not just the US economy but worldwide.

[Pillock]

I reckon the car makers in general have got it a lot harder than in the 70's, 80's and 90's... new car prices haven't risen THAT much especially with whacking great discounts, incentives etc yet todays cars are loaded with goodies, both by law (airbags, pre-tensioners, emissions control) and because new car buyers demand them (aircon, satnav, heated electric everything).My mum's Ford Escort 1.4 LX cost around £8500 in 1988, brand new. It had keep-fit windows, sunroof, four-speaker stereo, two-tone paint, wheeltrims. She bought a Fiesta 1.4 Zetec last year, also brand new, from the main Ford dealer. Paid just over £10k. Electric windows, aircon, alloys, metallic paint, much nicer engine. I'd say that car cost a hell of a lot more to build, both in raw materials and labour. So why in nearly 20 years has the price only gone up £1600 or so?Obviously the global financial situation is the underlying problem right now, but I'd say their profit margins have been steadily rotting over the past couple of decades so they've got nothing under the matress to tide them over.

[Ross_K]

I don't think it should be any government's responsibility to bail out the private sector no matter how big an employer they are.

In theory no but the reality is wether it costs the country less to bail them out than it costs to let them go under. If GM were to go under they'd take hundreds of other businesses with them right through the supply chain.

I hear what you're saying as regards the car manufacturer being tip of the iceberg, but where does it stop with bailouts? They're not sustainable...People must have short memories. Rover in Longbridge: a £400m shortfall in the worker's pension fund. A chronically mis-managed company with an inefficient unionised workforce. Something like £230m of taxpayers money was used by Blair & Co. to help Rover out. Where did it get them? 6,000 jobs still got the axe.How similar is GM's fate today to the Rover we knew 8 or ten years ago? Seems to me to be ticking all the same boxes...I could go on and on

[Cavcraft]

I don't think it should be any government's responsibility to bail out the private sector no matter how big an employer they are.

 

The recent bank "rescues" shouldn't have been allowed to happen either, but when you've got big business lining the politician's pockets I suppose they feel entitled to a little something on the first rainy day they come encounter.

 

And how much blame do the unions share in the downfall of GM or MG Rover? They're a mill stone around the neck of the manufacturing industry.

Bring on the Chinese I say...

Complete, total, absolute and utter bollocks. They might have been in the doom and gloom of the seventies but things have moved on considerably since then.

 

I'd agree to a point that governments shouldn't bail out the private sector but a) they've been doing it since I can remember with farmers and the implications of even one arm of GM folding are frightening for the amount of jobs that would disappear.

I reckon GM have spent too long pissing good money up the wall with the likes of Daewoo and Saab (amongst others) and should have stuck with their longer owned brands. I also believe their mission to become the world's biggest manafacturer was just to say that they were. Surely to fuck someone must have seen this coming, I can't see how overnight they've gone from huge profits to sleeping under a park bench as it were.

[Ratdat]

The main difference with Rover is they struggled even when the times were good. All the car manufacturers are in difficulties at present and the drop off in sales is unprecidented but greed is largely to blame for making things worse than they would otherwise be. Most of the large car manufacturers know full well they over produce but provided they can force the cars out to dealerships and onto the market they are happy to keep taking them money. The net effect has been that the decline of sales has been far greater than it would normally be and the companies cannot easily gear down production to suit. A 45% drop in sales year on year is gonna hurt no matter how you run your business and whilst some of that can certainly be atributed to GM's business practices, the bulk of that is down to the general market slow down and mainly problems with finance. The difficulty of getting finance is what started the decline in sales. If people couldn't get finance they simply didn't buy the cars.

[The Reverend Bluejeans]

Simple. GM makes cars which are just not desirable. You NEED a GM car, but you don't ache to own one. Because the company is so huge, the costs of employees is massive and so is the cost of continually replacing a huge model range. Ford are in the same shit, but if it did come to that, Ford Europe (which has always been massively profitable) would be split away and sold. Some say it should be anyway because it is keeping Ford US afloat when really, it should be left to drown.The problem is that you can now buy a nice car (BMW, Mercedes, Audi) for an acceptable price. It's a nice car, it's better than GM/Ford porridge, the dealership doesn't stink like a fetid armpit and the car has some sort of resale value. Job done. Buying a 25 grand 3 Series is a relatively smart move. Buying a 17 grand Vectra is madness because it will be worth £3995 3 years later along with the other 34 billion of them.GM and Ford have been fcuked by the Koreans Kia and Hyundai in the US and it's happening here too.GM's time is over. If Vauxhall disappeared tomorrow, it would barely be noticed. People would just buy another worthy but dull porridgemobile.

[Cavcraft]

So how is an Audi, BMW or Merc 'nice' then? Because the cost of a new one isn't (compared to most Vauxhalls and Fords) and neither is the servicing costs etc. Audi's recent reputation isn't exactly fantastic and having owned and ran several Mercs of a similar age to Vauxhalls I can tell you unequivocally there is no discernible distance in build quality. BMWs? No ta, not my cup of tea. I bet I'm not the only one who's not enamoured with their image, running costs or the stereotypical owner.Yes, Vauxhall and Ford make some quite dull and uninspiring cars but that's what people want and the sales charts for the UK don't lie. Also when people say Vauxhalls and Fords are dull, then dull compared to what? Flashy German cars may be but flashy German cars cost more and not everyone is impressed by them.There maybe 34 billion other Vectras and Mondeos out there but there's also a few thousands poncey Golfs/Audis/BMWs out there with some jumped up sales rep thrashing the tits off them down a motorway near you.I know I go a bit OTT sometimes defending Vauxhalls but there is a lot of badge snobbery about (and a reasonable amount on here at times) and not everyone thinks German cars are the greatest thing since sliced bread. I love my older Mercs but hell they're just cars at the end of the day and no better than most Vauxhalls I've owned. You could even argue GM and Ford do a good job because the market for ordinary family cars is far bigger than the one for supposedly upmarket ones and keeping ahead of Toyota/Honda/Renault/Citroen/Fiat/whoever on the sales charts (at least in Britain.I'd also suggest that if VAG/BMW/Merc went down it wouldn't be too noticeable either. Apologies for rant but we're all different and I don't agree that GM and Ford stuff is neccessarily shite.

[The Reverend Bluejeans]

.Yes, Vauxhall and Ford make some quite dull and uninspiring cars but that's what people want

And the Japs and Koreans make them so much better, for less outlay, demonstrably better reliability and with 5+ year warranties.Vox Hall stuff is okay I guess but there is nothing exciting about it. Ford is equally as dull.BMW/Mercedes/Audi are three very successful and profitable companies that sell successfully to people who don't want a humdrum car like an Ashtra or Vectrum. The German companies make record profits every year, GM is going down the toilet - fact.Vauxhalls are merely fleet/hire cars and the VXR stuff is for tattooed thugs and the marque has terrible image problems. To me a GM car is something you buy for a couple of grand down the auctions, such as an 02 plate Veccy or something and I'm sure it would be a decent car. As for actually buying new - you'd need your head testing.

[Ross_K]

I reckon GM have spent too long pissing good money up the wall with the likes of Daewoo and Saab (amongst others) and should have stuck with their longer owned brands. I also believe their mission to become the world's biggest manafacturer was just to say that they were. Surely to fuck someone must have seen this coming, I can't see how overnight they've gone from huge profits to sleeping under a park bench as it were.

Well I dug around a bit and it turns out it wasn't just their shitty cars that did them in. GMAC, their credit arm, had a bit of a dabble in the subprime mortgage market. GM made $602m in the first three months of 2006, followed by just $62 million in the same period of 2007.Check this article which was written a year and a half ago:http://www.nytimes.com/2007/05/04/busin ... o-web.html

The loss in North America is concerning to Jonathan Steinmetz, an analyst at Morgan Stanley in New York, who had expected G.M. to instead report a $122 million profit in the region. That shortfall could signify trouble later this year if demand for vehicles softens because of high gas prices and a stumbling housing market.“G.M. is still burning cash near the peak of its product cycle,†Mr. Steinmetz wrote in a report to clients today.

So why the fuck have they now got their knickers in a knot at the end of 2008. Why were they not acting on this problem a year ago? Although I suppose once you're at the subprime party it's kinda hard to leave...I believe PWNED!! is the word we're looking for.

[Albert Ross]

Well...............I may work for Poxall, but I own Fords. The last purchase was 2006 Focus Ghia Fully loaded with all sorts of desirables. Leather trim and park sensors. Electric drivers seat adjust, heated front seats. I keep fiinding stuff to be delighted at. The only Astra to come close is the Elite........Surely a name that belongs on a Hethel plastic? The "leather" isn't. (I reckon it's vinyl, the seats in my Land Rover feel better to sit in.) There's nothing good to say about current Vauxhalls, I might try to find work at Ford.............or go and open my own Shite Servicing Centre. Or go mobile........................<<<<<<<< I have the main weapon!

[Justin Case]

My mum's Ford Escort 1.4 LX cost around £8500 in 1988, brand new. It had keep-fit windows, sunroof, four-speaker stereo, two-tone paint, wheeltrims. She bought a Fiesta 1.4 Zetec last year, also brand new, from the main Ford dealer. Paid just over £10k. Electric windows, aircon, alloys, metallic paint, much nicer engine. I'd say that car cost a hell of a lot more to build, both in raw materials and labour. So why in nearly 20 years has the price only gone up £1600 or so?

Try repairing one and you'll soon find out Cars like TVs, etc nowdays are designed for ease of assembly and cheap routine servicing, not to be repaired when something eventually breaks or wears out in a few years time.To be fair to Vauxhall, they make excellent cars for the fleet market and everything from finance to specification is tailored to that market. I had a look this week at a 10 month old Vectra and it was very impress,ive, especially at less than £8,000 with Network Q guarantee. No the real trouble with GM is in the US, where they continued to make 4x4s that no-one wanted for too long. Either they will become a purely Asian and European, or I will be looking for a job as a photocopier rep next year so I can have a nice shiny new Fiat Insignia

[Rocket88]

Ross K is right. GM ceased to be just a car maker in the early seventies, after stitching themselves into some untenable [in the long term] pension arrangements with the unions. To have enough cash to pay these pensions, they had to invest in riskier and riskier investment schemes, some of which paid off, some of which didn't. It's not just GM who are faced with this problem, although they seem more exposed than others. The Landsbank fiasco has bought a large number of chickens home to roost over here as well!As to the cars, I've always had a soft spot for Vauxhalls, mainly the big stuff. I think that the Mk2 Senators/Carlton GSI are fantastic value for money, and drive really well.

[Milford Cubicle]

I've always thought of Vauxhalls, and Fords, as the choice of car for people who don't know much about cars, the kind of people who buy a certain type of car because they know someone else with the same one.

[Richard]

It's nothing to do with unions, 4x4s, dull cars or ill-advised financial transactions. This is why they are in the shit.

 

[Rocket88]

Vauxhall now seem intent in catering for the ASBO market, although the new Vectra replacement is supposed to be a cracking car. Ford have historically always been the "working man's car", although that changed with the onset of our friends from the Land of the Rising Sun. Rover, under there various guises, went from being the car of choice for your solid middle class types to a complete disaster during the lifetime of the SD1, another great concept with appalling build quality. The P6 was the last British mass produced car built with any attention to quality, and even some of the decisions taken with those was decidedly ropey, namely thinking that an unmodified TR7 gearbox would take the power of the V8 without exploding the first time you dropped the clutch in anger!

[Milford Cubicle]

The Insignia (which sounds like some kind of failed Royal Mail rebranding) is bigger than the new Mondeo. Why do they have to be so enormous? A new Mondeo pulled up beside my car, and it somehow managed to make a Mk1 Primera look like an Austin A35 scale-wise. It's mad.

[Rocket88]

I haven't seen one in "the flesh", but your right about the the increasing size of cars. Apparently, the current Golf weighs twice as much as the original one did! You can blame this on two things, ENCAP safety requirements, and the increasing amount of totally unecessary stuff that modern junk is loaded with as standard. I'm quite partial to 'leccy windows, central locking and power steering, but I can well do without aircon, electric seats, pollen filters, and my pet hate, bloody sun roofs!

[Waderider]

I don't think it should be any government's responsibility to bail out the private sector no matter how big an employer they are.The recent bank "rescues" shouldn't have been allowed to happen either, but when you've got big business lining the politician's pockets I suppose they feel entitled to a little something on the first rainy day they come encounter.And how much blame do the unions share in the downfall of GM or MG Rover? They're a mill stone around the neck of the manufacturing industry.Bring on the Chinese I say...

Have to say I broadly agree with this. A good way to avoid a repeat of the current financial woes would be for a hell of a lot more separation between business and politics.