Still Losing Jobs
- Thread starter Facetious
- Start date
And this surprises who? Big business will always line their own pockets at the expense of the workers. I understand that you want a decent profit margin, but if you screw your own employees who is going to buy your product? It sure as hell won't be the ones making it. Eh, same shit different day.
tartanterrier
Is somewhere outhere.
Another one bites the dust 
Facetious
Moderated
The worst part about it is that the state is becoming depleted of taxpayers at a time when the revenues are most needed.
and to add insult to injury, the state "ledge" and AHHHNold are looking for creative ways to cut about 1. (?) Billion out of the budget and wouldn't you know it, they're looking into releasing some 30 something thousand (IIRC) felons out of prison early in order to make ends meet.
"but they're only druggies they're never violent"
:uohs: :hammer:
:helpme:
and to add insult to injury, the state "ledge" and AHHHNold are looking for creative ways to cut about 1. (?) Billion out of the budget and wouldn't you know it, they're looking into releasing some 30 something thousand (IIRC) felons out of prison early in order to make ends meet.
"but they're only druggies they're never violent"
:uohs: :hammer:
:helpme:
Will E Worm
Conspiracy...
"This is a great time to "restructure" our business." CEO quote
If the government and states were really working for "We the People" then they would put heavy tariffs on companies that outsource jobs from America.
I've been telling people to leave California for a long time.
It pays to listen to Will E Worm and my many other pseudonyms. :hatsoff:
If the government and states were really working for "We the People" then they would put heavy tariffs on companies that outsource jobs from America.
I've been telling people to leave California for a long time.
It pays to listen to Will E Worm and my many other pseudonyms. :hatsoff:
Rey C.
Racing is life... anything else is just waiting.
This is the reality that would have been multiplied many times over had GM (and Chrysler) been allowed to go into Chapter 7 liquidation, instead of Chapter 11 reorganization with government backed D.I.P. financing. And without the D.I.P. financing, there were no other funding sources to take GM through Chapter 11. So it would have gone into Chapter 7 and dragged down many of the suppliers with it - that would have affected most every community in the U.S. And that would have added between 2-3 million more people to the unemployment figures, and put us somewhere around an 11.5% unemployment rate by now.
I have no partiular love for GM or any other OEM (other than Jag, of course). So I understood the argument about not "bailing out" GM, Chrysler and the auto suppliers. I just wasn't sure that the people who were against bailing them out understood the consequences. One fellow wandered onto an automotive board I'm on and he was VERY much against the auto bailouts (screaming about "socialism" doncha know). He claimed that if GM, Chrysler and Ford went under, other car companies would just slot in and take their place. First of all, what other car companies? Where were they going to get the money to invest in expanding their presence in North America? If VW and Hyundai/Kia hadn't already secured financing for their projects, they would have ground to a halt too. And what he really didn't understand was that these foreign transplant OEM's use many of the same suppliers as GM, Ford, etc. So if those suppliers had gone down in flames, building ANY sort of car in North America would have been difficult, if not impossible, for some period of time. Ferraris aren't built in North America, but even they source some of their parts from North American suppliers. And all it takes is one missing $2 part... and you have a car that you can't sell.
I have no partiular love for GM or any other OEM (other than Jag, of course
). So I understood the argument about not "bailing out" GM, Chrysler and the auto suppliers. I just wasn't sure that the people who were against bailing them out understood the consequences. One fellow wandered onto an automotive board I'm on and he was VERY much against the auto bailouts (screaming about "socialism" doncha know). He claimed that if GM, Chrysler and Ford went under, other car companies would just slot in and take their place. First of all, what other car companies? Where were they going to get the money to invest in expanding their presence in North America? If VW and Hyundai/Kia hadn't already secured financing for their projects, they would have ground to a halt too. And what he really didn't understand was that these foreign transplant OEM's use many of the same suppliers as GM, Ford, etc. So if those suppliers had gone down in flames, building ANY sort of car in North America would have been difficult, if not impossible, for some period of time. Ferraris aren't built in North America, but even they source some of their parts from North American suppliers. And all it takes is one missing $2 part... and you have a car that you can't sell.
As much as I hate to admit it, I think you're right on this. They're trying to make money where there is nothing to be made, and they're fucking the people over while they're at it. By legalizing pot they'd open up a whole cash flow from sales taxes. I hate the idea, but desperate times call for desperate measures. :yinyang:
This is a false dichotomy. The choice was not simply either accept a $50-$100 billion bailout or suffer an unavoidable and catastrophic Chapter 7 liquidation.
Chapter 11 was certainly an option at the time. It simply would have necessitated different (more significant) concessions than those that were made in the end (such as real pay cuts by the UAW, reductions in generous benefits packages, etc..). The stakeholders (not just UAW) were not required to assume their due burden. The bailout in effect became a subsidy in which the taxpayers were forced to bear the burden of GM inefficiencies, inflated labor costs, and poor decision making.
As Daniel J. Ikenson of the Cato Institute puts it: "It is not only fair, but efficient and wise that the market rewards companies that make better products at better prices with higher profits and larger market shares, while the companies that make undesirable products at high cost lose profits and market share.
There are plenty of healthy auto producers in the United States, all of whom are facing contracting demand. The ones that are best equipped to survive the recession will emerge stronger. But we undermine the objective if Ford, Toyota, Kia, Honda, Volkswagen and all the others cannot compete on a level playing field with GM.."
Cato Institute: http://www.cato.org/pub_display.php?pub_id=10270
http://online.wsj.com/article/SB124385428627671889.html
http://kelsocartography.com/blog/wp-content/uploads/2008/12/1210-biz-webleonhardt.gif
I have no partiular love for GM or any other OEM (other than Jag, of course
The argument here is that if GM were allowed to file for bankruptcy protection, 2-3 million suppliers will all be suddenly out of work because no other auto makers could step in to satisfy the demand.
What demand?
Without proper market pressure, inefficient practices continue to dominate. Producers are given the incentive to continue to accept excess profits, overbuild capacity, and produce products that are not in line with consumer demand. This is the source of the problem that jeopardizes suppliers (not market adjustments).
Daniel J. Ikenson: "And let's not pin on those of us who favor market processes the sin of "destroying the productive capacity of our largest U.S. auto manufacturer and forcing thousands of suppliers out of business." The managers of GM and the United Auto Workers did that all by themselves, by colluding in mismanagement and greed and then rationalizing their destructive behavior with the presumption that they were too big to fail and that the government would be there to clean up the mess.
Is GM really too big to fail? The question is right on point. Auto demand has plummeted in the United States over the last year. The market is contracting. Not every producer can cover its own costs and make a profit. The most efficient and worthy will survive."
The job market is atrocious. Several colleges by me are having record setting attendance this year as so many are out of work now pursuing degrees. It's a sad day when someone who wants to work, can't.
Better than releasing violent criminals, but an insufficient measure ($1.3B annually) at best. But perhaps it is as you say, desperate times call for desperate measures.
http://www.ucsdguardian.org/opinion...h-crop-would-put-state-in-the-green-1.1591656
Rey C.
Racing is life... anything else is just waiting.
I agree with some of what you are saying. But no one is saying that GM could not have filed Chapter 11. But without D.I.P. financing, how do you propose they would have been able to operate during this period? If and when a company can no longer show itself to be able to operate as a going concern, the creditors and the bankruptcy judge usually move the filing to Chapter 7 status.
Are you suggesting that there were D.I.P. financing sources, other than the government? Can you name them? I can tell you that no one that I know in the automotive or banking universe knew anything about these D.I.P. sources... because they didn't exist.
It wouldn't matter how many concessions the various stakeholders would have been willing to agree to if there were no funds to operate the company. And the only reason GM exited bankruptcy in such a short period of time is because the government ram rodded the process through (right or wrong). Normally this process would have taken many months, or even years. And the operational funds during this period would have come from where??? Did this government action set a bad precedent? Not for me to say. Possibly it did. But I'm a realist, not an economic philosopher.
What do you mean, "what demand?" It's a major mistake to believe that North American auto demand dropped to zero units, even at its worst. Demand dropped by nearly 50%, and financing what demand there was made the situation very unpleasant for all involved. But there was most certainly some level of demand. What many people don't realize is that all it takes is one nut or bolt to be missing, and that unit cannot be sold. And there is not a single OEM in North America which controls its supply chain in such a way that it will not in some way be potentially connected to a supplier in financial difficulty. It might be some little Tier 2 supplier that produces a unique part for half a dozen Tier 1's that screws the pooch for everyone. Automotive is a much smaller world than many realize.
The concern within the industry late last year and early this year was that any major disruption caused by a messy GM bankruptcy would affect not just the domestic N.A. OEM's, but at least most all of the N.A. foreign transplants as well - and possibly a fair number of overseas operations. Again, all it takes is one missing bolt, a missing seal, or a missing shift knob. OEM's may build out the yard, depending on how vital the part is and how easy it is to install after build. But they cease production once the number of unsaleable vehicles reaches a certain level and the yard fills up.
No one is arguing that the market should not be the final voice in what is and is not produced. I've preached that and taught that for years. As for what jeopardizes suppliers, the list is a long one. The Japanese tend to use various J.I.T. models. And though they are not identical, they usually are somewhat similar. But as I've already explained, many non-OEM owned suppliers deal with many other (non-Asian) OEM's. And their concepts of safety stock, advanced order notification, etc. can vary wildly. Diversified suppliers have to jump through many hoops, of many different sizes, depending on who and how many OEM's they deal with. Having to do that forces many (most?) to adopt production practices which use the OEM with the longest "like product" lead time as the model for all "like product" production. And that leads to inherent inefficiencies. Either OEE or maybe labor costs are negatively affected, or inventory carrying costs are excessive. But either way, profits suffer - and margins on most commodity type products are already paper thin.
I have no idea what you mean by "overbuild capacity". Do you mean the overbuilding of production facilities or maintaining facilities which have poor OEE? One might overbuild product relative to demand (to falsely increase OEE metrics for the prying eyes above) and end up wth excess inventory, for which there is little demand. Toyota and Honda tend to better use the "demand pull" methodology, rather than the push methodology that the Americans have typically relied on for decades. But having to exceed capacity (in order to meet demand) is a sign that additional production capacity is needed = a good thing. Happy days: build another factory, hire more workers! :nanner:
As for "accepting excess profits", what is "excess profits"? Define that. Again, the market would/should determine when the sales price exceeds what the market will bare = sales will decline (at the margin). The percentage profit margin for a standard C6 Chevy Corvette is much greater than the percentage profit margin for a standard Toyota Camry. Does that mean that the profits on the Corvette are excessive? Not in my mind. The market decides at what point the price on the Vette is too high.
Ikenson makes a fine and logical free market argument there. One that I do not dispute... as it applies to the longer term. But what I've said is quite simply a fact: in the short term, there would have been a massive wave of unemployment had GM entered a Chapter 11 which would have necessarily turned into a Chapter 7, because of a lack of available D.I.P. financing at that time.
And as much as many claim to be all for free markets and (quasi) laissez faire capitalism, the truth of the matter is, Americans would not patiently wait around for the free market to heal itself, once unemployment hit the (as measured) 11-12% mark (actually more like 18-20% using previous methods).
Wainkerr99
Closed Account
If America had not fallen for the protectionist line it has held so dear all these decades, a lot of things would have been different. Not to blame the U.S. Every gov feels it has an obligation to its voters.
I can testify to the Opel being a wonderful car. At one stage the Opel Cub was one of the fastest cars, if not the fastest, in its class. The 2litre rivalled BMW. It is sold in the States as Saturn, in small amounts. It is not sold in the Middle East at all.
I can testify to the Opel being a wonderful car. At one stage the Opel Cub was one of the fastest cars, if not the fastest, in its class. The 2litre rivalled BMW. It is sold in the States as Saturn, in small amounts. It is not sold in the Middle East at all.
