Is General motors really in bad financial shape ?
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GeneD14
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Our company does billions of dollars per year with GM alone and I can tell you they are in dire straits. It is possible to turn them around but it will require radical surgery. They have huge issues: cash flow, pension expense, lagging sales, high inventories, alienated suppliers, shrinking market segments, and that is just the tip of the ice berg.
reb
Platinum Member
Someone once said something to the effect of "as GM goes, so goes the country." I wonder if we might see more of this as a result of competition from foreign countries, especially China.
ByronBob
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As far as I'm concerned it's yes. They fall into the same boat Kodak did. They thought the world revolved around them. All the while companies were chipping away at their profits until you wake up one day and realize that you need to do something and do it fast.
Kodak is now a shell of what it once was. They closed a 1 million square foot facility which was a city of its own 4 years ago and moved back to Kodak Park which itself is huge and half empty. They lay off people in a dept, go around and come back to the dept and do it again like a carousel.
GM is hemmoraging losses and the end isn't in sight yet. 11 different types of truck models will do that to you. Look at Nissan. The Titan comes in 1 engine size not 6. The Honda Renegade has 1 engine size. Costs are a fraction on GM's because of it.
They'll survive, but after radical changes........
Kodak is now a shell of what it once was. They closed a 1 million square foot facility which was a city of its own 4 years ago and moved back to Kodak Park which itself is huge and half empty. They lay off people in a dept, go around and come back to the dept and do it again like a carousel.
GM is hemmoraging losses and the end isn't in sight yet. 11 different types of truck models will do that to you. Look at Nissan. The Titan comes in 1 engine size not 6. The Honda Renegade has 1 engine size. Costs are a fraction on GM's because of it.
They'll survive, but after radical changes........
Dargo
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Gee ByronBob, you said the same thing I did but did much better of a job doing it. /forums/images/graemlins/grin.gif Obviously, I agree with you.
Junkman
Super Member
They are about to get the last rites, and then comes the funeral. I don't see how they can turn it around unless the Unions let them off the hook for some of the pension problems and then they need to get rid of the country clubs etc that they keep for the execs. You can't give someone a 80% pension unless you are making lots of money. In this lean economy, it is an almost certainty that they will continue to loose market share unless something drastic happens to the management team. The only thing that is keeping them alive today is the non automobile business that they have such as Ditech mortgage business that makes a profit. The only difference between GM and the Congress is that GM has stock holders that are loosing money and the Congress has taxpayers that keep putting money into the treasury for them to waste and steal......
boustany
Platinum Member
The general problem with GM (& Ford & the Chrysler part of Diamler-Chrysler) is that they make lousy cars.
Usually, when it comes to quality & such, making a good product doesn't cost much more than making a bad one, and in the case of cars the price of steel is pretty much the same. A lot of high quality 'foreign' cars are made in the US or Canada, so its not the workers or the wages.
Case in point: the model year of the last American (made in Canada) vehicle I owned had had more recalls than Toyota had had on all models as far as the records went back 20 years or so.
So setting aside lousy handling, uncomfortable drivers' position, and bottom of the barrel reliability, why would I even consider buying another 'domestic', except at a hugely discounted price? Actually, since I can afford it, why would I put up with the aggravation.
GM and the other could chose to make good, reliable, vehicles. They don't, as a matter of corporate policy.
Until they learn how the market now works, they are on a steady slide into oblivion.
Usually, when it comes to quality & such, making a good product doesn't cost much more than making a bad one, and in the case of cars the price of steel is pretty much the same. A lot of high quality 'foreign' cars are made in the US or Canada, so its not the workers or the wages.
Case in point: the model year of the last American (made in Canada) vehicle I owned had had more recalls than Toyota had had on all models as far as the records went back 20 years or so.
So setting aside lousy handling, uncomfortable drivers' position, and bottom of the barrel reliability, why would I even consider buying another 'domestic', except at a hugely discounted price? Actually, since I can afford it, why would I put up with the aggravation.
GM and the other could chose to make good, reliable, vehicles. They don't, as a matter of corporate policy.
Until they learn how the market now works, they are on a steady slide into oblivion.
kenmac
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Come on junkman, those 80% pensions are a drop in the bucket compaired to just 1 of the top dog's bonus, stock options, travel expenses, pensions,etc; etc; Its not the labor people that put them where they are ,but thats who always gets the blame. /forums/images/graemlins/frown.gif
gizmo
Silver Member
As an engineer for GM I am amazed at the misinformation in this thread, and by a couple of you that I thought would have a little more insight. I am not going to try to refute anything as there is clearly some bias here that presentation of the facts will not overcome.
However, I will say that the the average net earnings for Toyota per vehicle is around $1600, while GM's is about $100. This is due almost entirely to supporting 1.1M current and retired employees health care and retirement costs. Further, executive compensations, even if eliminated entirely, would have no noticable effect on the situation. In my opinion, GM's situation while serious, will improve with the plan that is in place. By the way, I am not an executive.
However, I will say that the the average net earnings for Toyota per vehicle is around $1600, while GM's is about $100. This is due almost entirely to supporting 1.1M current and retired employees health care and retirement costs. Further, executive compensations, even if eliminated entirely, would have no noticable effect on the situation. In my opinion, GM's situation while serious, will improve with the plan that is in place. By the way, I am not an executive.
