How would you categorize the loss of 375,000 jobs and an instant recession as "progress"? Im just curious.

 

I assume most of you are old enough to remember 1979-80 bailout of Chrysler??? As much as our government has issues with itself, there is no way in the world GM or Ford will close their doors. As has been said in this post it would kill our economy..not a recession, more like the Great Depression.. No way any politician repub or demo will watch that happen

 

Absolutely right. Weak or poorly run companies must be allowed to fail. It's not fair otherwise to those companies doing it right. This is the problem with the airline industry.

 

They are selling off the GMAC division I heard.

They will need to go bankrupt to get rid of the union contracts..

I don't think the gov. will save them either..more likely Toyota will. haha

 

In some cases, we ARE starting to see some good quality on new vehicles from GM....in others, the same old junk with a layer of sugar-coating.

 

If they do go belly up, then that is SOLEY their own doing. I think it would be a shame to see them do so because it will put a LOT of strain on the employees and the economy for that matter. But considering how dumb some of their moves have been, it's almost as if they are wanting for it to happen.

GM seems unwilling to evolve into a changing global market of demanding highly efficient RELIABLE cars and trucks. They totally missed the boat on a TON of new market niche's and are about to miss the boat on the hybrid thing. They have a hybrid Sierra that gets 19 mpg at its best. What kind of efficiency is that when you get 17 from a regular gas powered truck? It doesn't help either that the UAW has them bent over a barrel....

I HOPE that GM can manage to right the ship, but the way it's going... they might tank before we have another President.

 

I used to live in Chicago for a few years and when I would travel up to Milwaukee I would see dozens of pro-union signs on the highway. There was a time for these unions to speak up, but there is also a time for them to shut up.

 

Another point.
I don't think they need to do something super radical to improve their situatin. Well, maybe in the styling department. The malibu? The pontiacs and buicks? They need a styling renaissance. As for quality. Every car is better than they were 20 years ago. Every car has problems. I'm starting to believe lexus isn't so far above others as I thought. The past 2 years I've had several issues with my 2 cars. Don't getme wrong. Lexus overall quality is good but not what I thought. My scwith 61k miles should not have had 2 oil leaks requiring valve cover and seal replacemnts. Then there's the 3k ac repair. The starter. The crappy cd changer. Well, you all get the point. I won't even get into the es.
All GM really needs to do is improve the styling. Improve the interior materials and they are on there way.

 

First off, even if GM declares bankruptcy it will be YEARS before they actually "go out of business", making that loss of jobs spread out over a long period of time. And there is too much value in the GM name and those of its divisions for them to disappear completely. More likely, other investors will swoop in and reinvent the company, keeping those jobs in the current industry.

But let's take your argument to the extreme. GM goes out of business and all their jobs (and those of their suppliers) are instantly lost. Those 375,000 jobs would hardly plunge us into a recession. Don't forget that unemployment is at extremely low levels. In fact, some economists have been concerned that our economy is approaching full employment, which basically means that everyone who wants a job has one. To function well, society needs just a little bit of slack in the job market.

In addition, what do you think would happen with those 375,000 workers? Would they all become a drain on society, sitting at home and collecting unemployment, welfare, and medicare? Of course not--some would retrain and get jobs in new industries, providing valuable services in areas that our economy apparently values more than auto manufacturing. That's the beauty of a free market economy--jobs are created in industries that need them, and are lost in industries that don't. How many farmers are there today compared to 100 years ago? But these same arguments were made then, that we were losing our competitive edge and that the whole economy would collapse when our major product started to change.

This is evolution, just on a human rather than a global scale. It happens faster.

 

IF GM declares bankruptancy it will probably help them in the long run, not drive them out of business. Their costs will be reduced but the same people who buy their cars now will buy them later. Same sort of deal with Delphi declaring bankruptancy in the USA, only good for them. But possibly bad for shareholders (whose stock value could be chopped) and sub-tier vendors (who don't get paid full value for goods already sold to GM).

 

Lots of good points....and you're right, everyone who wants a job has one or can get one. The unemployment figures are misleading. Unemployment is so low because millions of americans have taken themselves out of the market. Americams on the welfare rolls has decreased but still thousands are added monthly. More americans on disability than ever. More americans working temp or at home. More opting for social security at the earlier ages. Many more who are just tired of working. I work in the unemployment compensation office and I see many people who are unemployed and have little chance of becoming employed.

 

The Tragedy of General Motors

The Detroit giant is a weird, scarred combination: a carmaker doing poorly, and an insurance company engulfed by its obligations. It's heading for a wreck -- which is why CEO Rick Wagoner has the toughest job in business.

(FORTUNE Magazine) - It is the instinctive wish of most American businesspeople, even those unlikely to be directly affected, that General Motors not go bankrupt. True, some people will say, "They had it coming to them." But the majority will be more practical, telling themselves that the company is so central to the economy, so sprawling in its commercial reach, that bankruptcy--"going into chapter," as restructuring folks say--is ominous almost beyond contemplation. And yet the evidence points, with increasing certitude, to bankruptcy. Rick Wagoner, GM's 53-year-old chairman and CEO, may say, as he did in a January interview with FORTUNE in his aerie of an office high above the Detroit River, "I know that things will turn around." But he cannot know that. He may not, deep down, even believe it himself.

Bankruptcy isn't going to occur next week. But down the road--say, past 2006 --its probability is high. That point of view seems supported by the opinions of the bond-rating agencies, which troubled companies must keep informed and which become virtual insiders in their understanding of a company's finances and operations. In recent months both Moody's and Standard & Poor's have made increasingly grim statements, bald in their talk of bankruptcy and laden with doubts that GM (Research) can turn around its reeling North American auto operations, now reduced to an embarrassing market share of 26%.

In that percentage lies a harrowing, and maybe intractable, revenue problem. Says one GM executive: "There's no fix for us unless we get revenues stabilized."

Nonetheless, Wagoner and crew must also deal with the full range of GM's problems, and they add up to a Hummer-sized load. The company lost $8.6 billion last year, burning up billions of dollars in North America, earning too little back overseas. Its product mix in the U.S., heavily weighted toward trucks, pickups, and SUVs, is on the wrong side of gas prices. It has a finance subsidiary, GMAC, whose majority interest it needs to sell to keep that business healthy and itself in cash--and so far, no buyer has emerged. It is inextricably entangled in the bankruptcy of its biggest supplier, Delphi. In that imbroglio, as in countless others, it is up against a formidable and sometimes militant union whose ability to accept the full reality of GM's problems is not assured. The company is even under investigation by the SEC for accounting sins, as yet unrevealed.

And gravely, it is burdened by health costs, which it supplies for a population bigger than Detroit's--that is, for a total of 1.1 million employees, retirees, and dependents. Its thriving Japanese competitors, such as Toyota (Research), pay health benefits for their U.S. active employees and dependents too. But Toyota does not have GM's retiree health burden, a mountain that at year-end totaled an unfunded $64 billion and that, in annual effect on the bottom line, adds about $1,300 to the cost of every car and truck GM makes in the U.S......

Read the rest at http://money.cnn.com/magazines...x.htm

 

What a great thread....lot's of good points. I don't know if it's already been said but here's another.
Let us not forget Nissan was on it's way to oblivian also. A lot of smart moves along with 3 cars have turned that company around. The G35, 350Z and Altima. Now look at them.
Let's take Chrysler. A pure after thought in my view. Wouldn't have ever considered buying one. The 300C has changed all that. Rented one last week. Not my preference but it has a lot going for it. If GM really wants to live , they can. It starts with a couple of good cars and wise business moves. Maybe some of the fatcats need to leave or take pay cuts. Probably sell off some of the brands they have like Saab. I also want them to make it.....I'm old skool. But I won't lose any sleep if they go down. I'll help those that come to my office for help and listen to their stories and say, let's move on.

 

I think the resurrection of the Camaro will save the company like the New Mustang did for Ford. If the pricing point is on par with the Stang, then GM will be in great shape

 

But the new Mustang hasn't saved Ford, at least not yet. Even with that modest success and the money-making F-series trucks, Ford is in almost as much danger of bankruptcy as GM. Besides that, one hit car is not going to single-handedly resolve GM's myriad problems as highlighted in the Fortune article.