Still Don't Think Obama Should Have Saved GM? (1 Viewer)

[Andy Dufresne]

What does the fact that the labor demand is being fulfilled by foreign workers mean for US employment and the economy in general? Again, if the big uproar is "jobs, jobs, jobs", I don't get the argument to stand idle while any US industry collapses. How does that help the US job market?

What do you mean by foreign workers? We're still talking about the auto industry right?

If everything can be made cheaper overseas because of cheap labor, what does that mean for the US? 9% unemployment will either be a historic low going forward or we all better get used to a quality of life like workers in Asia have.I remember a time when "Buy American" was patriotic. Times have changed I guess.

You're making no sense.

 

[LHUCKS]

I kind of look at it like this...the bailout saved jobs and some American GDP in the long term(arguable.)

The only problem I have is the 15 billion that was forgiven...that's bullcrap.

 

[Dr. Bronner]

I kind of lool at it like this...the bailout saved jobs and some American GDP in the long term(arguable.) The only problem I have is the 15 billion that was forgiven...that's bullcrap.

I'm with you on this. Corporate handouts are lamentable regardless of the type of company, and regardless of whether it's in the middle of a financial crisis.

 

[Novice2]

Lehman Brothers is asking a similar, but not quite the same, question.

Lehman wasn't nearly as vital to the U.S.

GM isn't vital to the US. We have other manufacturers that could have picked up the slack as well as smaller companies that were solvent and would have loved the opportunity to step up.

You don't really believe this, do you?

Of course. What, people that were going to buy a GM but ended up not being able to would have just decided to buy NO car?It would have been painful in the short term as GMs suppliers retooled to support the companies taking up the demand, but it wouldn't have been a killer.

There would have been a million jobs lost!!!!!!Obama saved one million jobs just like the last ditch efforts saved 15 Dem seats for the in the house in last weeks election!!!!!!

 

[Kimber]

Ford started making money again long before GM started making money again by refusing government intrusion.

 

[RhymesMcJuice]

"See? We told you so!"

Right, but they didn't fail, so it was the right call...assuming the money is paid back over time.

The $15+ billion that was forgiven will never be paid back.

The US was spending $700 million each day in Iraq helping build their economy and we have US citizens #####ing about spending money to help keep the US economy from falling off a cliff? Priceless.

I don't believe one wasteful policy should be used to justify another wasteful policy. I'm consistent like that.

Link your your anti-Iraq war posts.

 

[RhymesMcJuice]

Ford started making money again long before GM started making money again by refusing government intrusion.

Ford was a better run company, plain and simple. GM did a pretty good job at failing prior to "government intrusion".

 

[Johnnymac]

Ford started making money again long before GM started making money again by refusing government intrusion.

Ford was a better run company, plain and simple. GM did a pretty good job at failing prior to "government intrusion".

Ford and GM are different companies.

 

[RhymesMcJuice]

I kind of look at it like this...the bailout saved jobs and some American GDP in the long term(arguable.) The only problem I have is the 15 billion that was forgiven...that's bullcrap.

I don't like it either but $15B is a drop in the bucket compared to what job losses would have done to federal revenue and costs. By forgiving that loan it allowed GM to recover much more quickly which means the U.S. recovering its money much sooner.

 

[Cunk]

It was a mistake to have bailed out a failing business. Not just GM - some of the banks should have failed also. And the people responsible for making bad business decisions should have been held accountable.One fo the problems is that we are supposed to have a checks and balances system - rewards are tied directly to the risks involved. If there is no risk of failure, then people will (and did) take unnecessary risks. When they worked, they reaped huge rewards, but had no fear of being wrong.its good to have a fear of being wrong.

Apparently you don't have a good grasp of history. Check out the Great Depression and what made that happen and what steps were taken to recover. It's nice to sit there and spout out of the mouth of what should be done when we are somewhat stabilized. Sometimes you can't just point fingers and let the cards fall as they may. It won't always lead to a positive result. Sometimes actions have to be taken that might "reward" the fault bearers to keep everything afloat. It's a necessary evil IMO in times of crisis. Let the banks fail? Where do you think that would lead to?

 

[Drunken Cowboy]

People have already forgotten how bad the economy was when this decision was made. The biggest effect of bailing GM was preventing the panic that would have happened as a result of it failing.

Now that's a perfectly legitimate reason in favor of the bailout.

I supported the auto bailout for 2 reasons.1) see above.

2) We were looking for ways to spend money quickly to create jobs. That money was going to be spent on some sort of stimulus. There aren't that many ways to quickly spend billions of dollars.

Give every taxpayer $300 and see what they spend it on.

They have tried this and it isn't particularly effective.

 

[Sinn Fein]

It was a mistake to have bailed out a failing business. Not just GM - some of the banks should have failed also. And the people responsible for making bad business decisions should have been held accountable.One fo the problems is that we are supposed to have a checks and balances system - rewards are tied directly to the risks involved. If there is no risk of failure, then people will (and did) take unnecessary risks. When they worked, they reaped huge rewards, but had no fear of being wrong.its good to have a fear of being wrong.

Apparently you don't have a good grasp of history. Check out the Great Depression and what made that happen and what steps were taken to recover. It's nice to sit there and spout out of the mouth of what should be done when we are somewhat stabilized. Sometimes you can't just point fingers and let the cards fall as they may. It won't always lead to a positive result. Sometimes actions have to be taken that might "reward" the fault bearers to keep everything afloat. It's a necessary evil IMO in times of crisis. Let the banks fail? Where do you think that would lead to?

Are you feeling the effects of the great depression?Those "actions" have the same effect as any other artificial prop - a bubble waiting to burst.We want people to act rationally. If there is no downside or consequences to actions people will continue to take unnecesary risks - pocketing the profits walking away from the losses.People are so afraid of the short-term that they ignore the long term ramifications. The money would have been better spent on any number of things that would generate a long-term profit rather than a short-term crutch.

 

[All Your Base Are Belong To Us]

The whole auto company bailout was a VERY bad idea.Car companies can go away and it will not have a large enough effect to hurt the entire economy. **Obligatory Notice: Yes I would be sorry for those that lost their jobs and sorry for their families and for their neighbors.... - BUT the real bad guy here is the upper management of GM.

So why'd we do it?

Because the administration had a vested interest in satisfying the UAW.

Oh dear Christ.Some of you really need to breathe real air once in a while.

 

[jonessed]

Link your your anti-Iraq war posts.

They are there. Find them yourself. Or if you don't believe me find one where I explicitly support it.

 

[bueno]

I still don't think so. I'm not buying GM stock either.

 

[thatguythere]

The whole auto company bailout was a VERY bad idea.Car companies can go away and it will not have a large enough effect to hurt the entire economy. **Obligatory Notice: Yes I would be sorry for those that lost their jobs and sorry for their families and for their neighbors.... - BUT the real bad guy here is the upper management of GM.

So why'd we do it?

Because the administration had a vested interest in satisfying the UAW.

Oh dear Christ.Some of you really need to breathe real air once in a while.

The Unions are the reason GM was in the position they were in the first place. Anyone who denies that is insane. You can't run a business paying people those wages unless you have no competition, and can set your prices at any level and people will still buy your product. Just not in line with reality.There was no way Obama was going to let the UAW lose this one on his watch. Matter of fact why not give the union some ownership while we're at it. Seems like a good plan.......to get UAW votes, again.

 

[Cunk]

It was a mistake to have bailed out a failing business. Not just GM - some of the banks should have failed also. And the people responsible for making bad business decisions should have been held accountable.One fo the problems is that we are supposed to have a checks and balances system - rewards are tied directly to the risks involved. If there is no risk of failure, then people will (and did) take unnecessary risks. When they worked, they reaped huge rewards, but had no fear of being wrong.its good to have a fear of being wrong.

Apparently you don't have a good grasp of history. Check out the Great Depression and what made that happen and what steps were taken to recover. It's nice to sit there and spout out of the mouth of what should be done when we are somewhat stabilized. Sometimes you can't just point fingers and let the cards fall as they may. It won't always lead to a positive result. Sometimes actions have to be taken that might "reward" the fault bearers to keep everything afloat. It's a necessary evil IMO in times of crisis. Let the banks fail? Where do you think that would lead to?

Are you feeling the effects of the great depression?Those "actions" have the same effect as any other artificial prop - a bubble waiting to burst.We want people to act rationally. If there is no downside or consequences to actions people will continue to take unnecesary risks - pocketing the profits walking away from the losses.People are so afraid of the short-term that they ignore the long term ramifications. The money would have been better spent on any number of things that would generate a long-term profit rather than a short-term crutch.

First of all I apologize for my insulting first sentence in my first post. I had a couple of drinks and was getting a little frustrated by what I was reading.Yes, like in the depression, people took unnecessary risks. And, like the depression, nobody foresaw what was going to happen a couple of years ago. So now we have unveiled what made this latest great recession happen and have put tools in place so it won't happen again. Hopefully we've learned from our mistakes. Unfortunately, like the depression, immediate action had to be taken to prevent banks from failing. If banks start failing, people panic and it would have just led to a vicious cycle and, I think, we would have come much closer to a great depression if the banks were allowed to fail. I'm not so sure about the auto industry.

 

[parasaurolophus]

People have already forgotten how bad the economy was when this decision was made. The biggest effect of bailing GM was preventing the panic that would have happened as a result of it failing.

If it got those hideous cars off the road it would have been worth it.

 

[Bottomfeeder Sports]

Of course. What, people that were going to buy a GM but ended up not being able to would have just decided to buy NO car?

This wasn't about where a consumer would buy a car, or how nimble suppliers could be getting new work but who was on the hook for GM retirees pension (and to a lesser extent since their was no government guarantees - healthcare).

 

[EasyMorningRebel]

Of course. What, people that were going to buy a GM but ended up not being able to would have just decided to buy NO car?

This wasn't about where a consumer would buy a car, or how nimble suppliers could be getting new work but who was on the hook for GM retirees pension (and to a lesser extent since their was no government guarantees - healthcare).

Hint - he knows that.

 

[Andy Dufresne]

Of course. What, people that were going to buy a GM but ended up not being able to would have just decided to buy NO car?

This wasn't about where a consumer would buy a car, or how nimble suppliers could be getting new work but who was on the hook for GM retirees pension (and to a lesser extent since their was no government guarantees - healthcare).

Right. It was just one giant welfare program.However, please be careful in taking my statements out of context. There was more to this conversation than just my statement alone holds.

 

[Bottomfeeder Sports]

Of course. What, people that were going to buy a GM but ended up not being able to would have just decided to buy NO car?

This wasn't about where a consumer would buy a car, or how nimble suppliers could be getting new work but who was on the hook for GM retirees pension (and to a lesser extent since their was no government guarantees - healthcare).

Hint - he knows that.

Maybe so, but I think that one of the major reasons taxpayers had an involvement in the bankruptcy of GM should be mentioned somewhere in a thread discussing the bailout.

 

[Phurfur]

People have already forgotten how bad the economy was when this decision was made. The biggest effect of bailing GM was preventing the panic that would have happened as a result of it failing.

The economy is worse today, look at the stats.

 

[EasyMorningRebel]

Of course. What, people that were going to buy a GM but ended up not being able to would have just decided to buy NO car?

This wasn't about where a consumer would buy a car, or how nimble suppliers could be getting new work but who was on the hook for GM retirees pension (and to a lesser extent since their was no government guarantees - healthcare).

Hint - he knows that.

Maybe so, but I think that one of the major reasons taxpayers had an involvement in the bankruptcy of GM should be mentioned somewhere in a thread discussing the bailout.

I agree with you.

 

[Flying Spaghetti Monster]

People have already forgotten how bad the economy was when this decision was made. The biggest effect of bailing GM was preventing the panic that would have happened as a result of it failing.

The economy is worse today, look at the stats.

What world do you live in? We are no longer on the edge of a depression and the economy is growing at a 2% rate - we have had several months of growth.

Employment is still a problem but that is a lagging indicator.

 

[texasheat]

Now I do

 

[Da Guru]

Ford started making money again long before GM started making money again by refusing government intrusion.

Ford was a better run company, plain and simple. GM did a pretty good job at failing prior to "government intrusion".

Ford started getting leaner years before GM. Had to take some losses to make gains in the future. Right now Ford is in great position and can be more profitable with less market share than before. Plus they had rid themsleves of dead weight and now have a very nice slimmed down product line. Less products and better quality.

 

[Phurfur]

Ford started making money again long before GM started making money again by refusing government intrusion.

Ford was a better run company, plain and simple. GM did a pretty good job at failing prior to "government intrusion".

Ford started getting leaner years before GM. Had to take some losses to make gains in the future. Right now Ford is in great position and can be more profitable with less market share than before. Plus they had rid themsleves of dead weight and now have a very nice slimmed down product line. Less products and better quality.

The Obama Administration's circumventing the bankruptcy procedures will prove to be the downfall of the corporation. It is the same crap company only now it is run by government puppets.

 

[Al Czervik]

Ford started making money again long before GM started making money again by refusing government intrusion.

Ford was a better run company, plain and simple. GM did a pretty good job at failing prior to "government intrusion".

Ford started getting leaner years before GM. Had to take some losses to make gains in the future. Right now Ford is in great position and can be more profitable with less market share than before. Plus they had rid themsleves of dead weight and now have a very nice slimmed down product line. Less products and better quality.

The Obama Administration's circumventing the bankruptcy procedures will prove to be the downfall of the corporation. It is the same crap company only now it is run by government puppets.

Actually, it's a very different company now. But what would I know.

 

[oso diablo]

Actually, it's a very different company now. But what would I know.

can you elaborate on the positive changes you've seen? i think it would be great if GM were great again, but i'm just soured from what i saw over the decade i worked with one of their subs.

 

[CletiusMaximus]

Ford started making money again long before GM started making money again by refusing government intrusion. :(

Ford was a better run company, plain and simple. GM did a pretty good job at failing prior to "government intrusion".

Ford started getting leaner years before GM. Had to take some losses to make gains in the future. Right now Ford is in great position and can be more profitable with less market share than before. Plus they had rid themsleves of dead weight and now have a very nice slimmed down product line. Less products and better quality.

The Obama Administration's circumventing the bankruptcy procedures will prove to be the downfall of the corporation. It is the same crap company only now it is run by government puppets.

Actually, it's a very different company now. But what would I know.

nor were any bankruptcy procedures "circumvented", but best to let it go and just enjoy act - he's on a roll

 

[DartTeamGoalie]

The whole auto company bailout was a VERY bad idea.Car companies can go away and it will not have a large enough effect to hurt the entire economy. **Obligatory Notice: Yes I would be sorry for those that lost their jobs and sorry for their families and for their neighbors.... - BUT the real bad guy here is the upper management of GM.

So why'd we do it?

Because the administration had a vested interest in satisfying the UAW.

Oh dear Christ.Some of you really need to breathe real air once in a while.

The Unions are the reason GM was in the position they were in the first place. Anyone who denies that is insane. You can't run a business paying people those wages unless you have no competition, and can set your prices at any level and people will still buy your product. Just not in line with reality.There was no way Obama was going to let the UAW lose this one on his watch. Matter of fact why not give the union some ownership while we're at it. Seems like a good plan.......to get UAW votes, again.

:( If GM had filed bankruptcy, they would not have disappeared off the face of the earth. It would have been an opportunity for them to restructure and get out from under the short-sighted and unsustainable agreements they had made with the UAW in the past, and eventually re-emerge from bankruptcy. This has happened before in the US, most notably by several major airlines.The Obama administration knew this, and knew that under a bankruptcy scenario the UAW would take one in the teeth. Thus, the bailout, which was much more about saving the UAW than saving GM. They have propped up an unsustainable business model, and I also believe that unless something changes, it will fail again before my children are my age.

 

[Al Czervik]

the bailout, which was much more about saving the UAW than saving GM.

Rahm Emanuel; "#### the UAW"

 

[CletiusMaximus]

If GM had filed bankruptcy, they would not have disappeared off the face of the earth. It would have been an opportunity for them to restructure and get out from under the short-sighted and unsustainable agreements they had made with the UAW in the past, and eventually re-emerge from bankruptcy. This has happened before in the US, most notably by several major airlines.The Obama administration knew this, and knew that under a bankruptcy scenario the UAW would take one in the teeth. Thus, the bailout, which was much more about saving the UAW than saving GM. They have propped up an unsustainable business model, and I also believe that unless something changes, it will fail again before my children are my age.

This was addressed earlier in the thread. GM did file bankruptcy. In order to confirm their sale, they presented compelling evidence that an urgent emergence was crucial to the company's survival. The judge ultimately agreed that an auto-maker could not survive a 2+ year long reorg like some of the airlines successfully negotiated. More importantly, there were no lenders willing to finance this kind of reorganization - including the US Treasury. As for the UAW, it received some stock in the reorganized company, while making some concessions to its CBA, but keeping it largely intact. Secured debt was paid in full - which is most certainly much better than they would have done in a liquidation, which is why they all supported the sale. I don't understand how this means the UAW received better treatment than secured bondholders, as I so frequently hear. Certainly, GM could have pursued a drawn out Chapter 11 reorg. in which it was adverse to its own union and sought to throw out the CBA, but how would that company survive the bankruptcy process and who would invest in such a company? The professional administrative costs alone would have been astronomical. Who would want to own a Detroit automaker with no labor agreement? The answer is obvious - anything other than a quick sale, financed by the government with the union's backing, would have meant the death of GM.I think one could argue that it would have been better to let the company die, so long as you admit that no electable president from either party would ever let that happen. What no one can reasonably argue is that this company could have been successfully reorganized without the union's buy-in.

 

[DartTeamGoalie]

This was addressed earlier in the thread. GM did file bankruptcy. In order to confirm their sale, they presented compelling evidence that an urgent emergence was crucial to the company's survival. The judge ultimately agreed that an auto-maker could not survive a 2+ year long reorg like some of the airlines successfully negotiated. More importantly, there were no lenders willing to finance this kind of reorganization - including the US Treasury. As for the UAW, it received some stock in the reorganized company, while making some concessions to its CBA, but keeping it largely intact. Secured debt was paid in full - which is most certainly much better than they would have done in a liquidation, which is why they all supported the sale. I don't understand how this means the UAW received better treatment than secured bondholders, as I so frequently hear. Certainly, GM could have pursued a drawn out Chapter 11 reorg. in which it was adverse to its own union and sought to throw out the CBA, but how would that company survive the bankruptcy process and who would invest in such a company? The professional administrative costs alone would have been astronomical. Who would want to own a Detroit automaker with no labor agreement? The answer is obvious - anything other than a quick sale, financed by the government with the union's backing, would have meant the death of GM.

I think one could argue that it would have been better to let the company die, so long as you admit that no electable president from either party would ever let that happen. What no one can reasonably argue is that this company could have been successfully reorganized without the union's buy-in.

Touche. I was not aware that GM was unable to obtain financing for a Ch. 11 restructure. Nevertheless I maintain, and this Forbes article agrees that the bailout has propped up a company with a flawed business model that is likely to fail again because essentially the same team that brought GM to this point is still in charge.Furthermore, the new UAW ownership has an inarguable conflict of interest between what is best for GM and what is best for the UAW workers. Reorganization or not, it would have been better in the long term for GM to go bankrupt. I fully recognize the short-term pain that this would have caused.

As for the political ramifications, I wish politicians would do what is right, rather than what will get them re-elected. A pipe dream, I know.

 

[Bottomfeeder Sports]

The Unions are the reason GM was in the position they were in the first place. Anyone who denies that is insane. You can't run a business paying people those wages unless you have no competition, and can set your prices at any level and people will still buy your product. Just not in line with reality.

It wasn't union members designing and selecting the crappy product line.It wasn't union members (or leadership) that manufactured gas guzzlers when Americans were looking for gas economy, and making tiny death traps when Americans were looking for something bigger.It wasn't union members (or leadership) that made the companies so bureaucratic that they were so painfully slow reacting to every change in the market place, including new methodologies in running an auto plant.It wasn't union members (or leadership) that decided to promise "employment for life" in the '80's in exchange for reduced pay.It wasn't union members (or leadership) that decided to promise "healthcare for life" in exchange for allowing plants to be shut down in the '90s.It wasn't union members (or leadership) that decided to offer generous early retirement packages in the '90s to pay even more people to not work.It wasn't union members that offered GM employees "profit sharing" and the devised systems such that GM would always lose money while their subsidiary companies not included in profit sharing pulled in the dough (in good times). GM employees never saw much profit sharing, but dividends were always paid.It wasn't union members (or leadership) that decided to sell off each of these profitable divisions leaving only the parent company structured to lose money.It wasn't union members that allowed the now sold off GMAC be the only profitable division of GM for about a decade, until the collapse of the credit markets of course. Now you might want to argue that the time from the end of WWII and the oil embargo when the Big Three ruled the industry pretty much unchallenged that they companies got fat and lazy and part of that laziness was not keeping labor cost in line as a mostly cozy relationship developed between the companies and the union where the union and its member became fat and lazy also, but that is not really the union's fault either.You could argue that when the automakers were facing real competition in the '70's and '80's the union hindered rolling back wages, except the union routinely traded away wages for future benefits offered by the company and improved working conditions. The working conditions were more important than wages because the companies were running the lines round the clock with two shifts as overtime became cheaper than hiring. This wasn't the union either.So not blaming the union is not not insane, it is a pretty accurate reflection of reality. Sure the unions made things more difficult for GM since things started getting tough the '70s, but so what? It was GM's stupid offers that resulted in many more ex-workers being paid than employees. In making healthcare GM's biggest expense. Do you really expect that when GM came to the bargaining table offering these things the unions should have just stated that we will take pay cuts and GM should keep the other stuff? It wasn't union members (or leadership) that decided to underfund its schemes to win concessions fifteen, twenty-five years ago that bankrupted GM when GMAC was no longer laying the golden eggs.

 

[Dr. Bronner]

I hope that Obama will also bail out Shuke.

 

[Phurfur]

People have already forgotten how bad the economy was when this decision was made. The biggest effect of bailing GM was preventing the panic that would have happened as a result of it failing.

The economy is worse today, look at the stats.

What world do you live in? We are no longer on the edge of a depression and the economy is growing at a 2% rate - we have had several months of growth.

Employment is still a problem but that is a lagging indicator.

Right!Nothing was needed after TARP, BHO sold you a bill of goods.

 

[Phurfur]

Because the administration had a vested interest in satisfying the UAW.

Oh dear Christ.Some of you really need to breathe real air once in a while.

How slow are you? The Unions gave $400 million to the Democratic Party and their candidates in 2008. You need to open your eyes, this is business as usual in Washington.

 

[bueno]

It wasn't union members (or leadership) that decided to promise "employment for life" in the '80's in exchange for reduced pay.

It wasn't union members (or leadership) that decided to promise "healthcare for life" in exchange for allowing plants to be shut down in the '90s.

It wasn't union members (or leadership) that decided to offer generous early retirement packages in the '90s to pay even more people to not work.

It wasn't union members (or leadership) that decided to underfund its schemes to win concessions fifteen, twenty-five years ago that bankrupted GM when GMAC was no longer laying the golden eggs.

You really believe that the unions didn't negotiate these concessions?

 

[videoguy505]

China mulls buying stake in GM?

China's SAIC close to GM IPO stake buy-sources

DETROIT/NEW YORK | Wed Nov 10, 2010 6:04pm EST

DETROIT/NEW YORK Nov 10 (Reuters) - General Motors Co [GM.UL] is in the final stage of talks to sell equity to long-time Chinese partner SAIC Motor Corp (600104.SS) in conjunction with its landmark initial public offering, two people familiar with the matter said.

The two government-funded automakers are currently finalizing how much of a stake SAIC would buy in the top U.S. automaker after discussions involving technology sharing and SAIC's ambitions to move beyond the China market, the sources said.

Any agreement between GM and SAIC would need Chinese government approval and could still fall apart, the sources cautioned.

One person familiar with the matter said previously that SAIC had initially reached out to GM to explore the prospect of taking a "single-digit" stake in GM. The size of SAIC's prospective investment was not known.

The final round of talks have been led by SAIC Vice Chairman Chen Hong and could conclude as soon as the weekend, that source said.

The sources were not authorized to speak with the media and declined to be named because the talks are private. Representatives for GM and SAIC declined to comment.

 

[Bottomfeeder Sports]

It wasn't union members (or leadership) that decided to promise "employment for life" in the '80's in exchange for reduced pay.

It wasn't union members (or leadership) that decided to promise "healthcare for life" in exchange for allowing plants to be shut down in the '90s.

It wasn't union members (or leadership) that decided to offer generous early retirement packages in the '90s to pay even more people to not work.

It wasn't union members (or leadership) that decided to underfund its schemes to win concessions fifteen, twenty-five years ago that bankrupted GM when GMAC was no longer laying the golden eggs.

You really believe that the unions didn't negotiate these concessions?

Did they negotiate these? Certainly. Did they bring the ideas to table? Not unless it was done before any chatter was public. I wasn't in the closed door meetings, nor was I directly impacted or involved, but I had reasons to be plugged in back then. Not so much since the beginning of this century.But even if I am wrong and the union did initiate the schemes as compensation for lost wages, that doesn't excuse the company agreeing and then not appropriately funding these deferred income schemes when the income was earned. Of course GM wasn't alone in doing this and wasn't the first US company that became uncompetitive because its costs structure had to include paying for labor performed in years ago.

 

[bueno]

It wasn't union members (or leadership) that decided to promise "employment for life" in the '80's in exchange for reduced pay.

It wasn't union members (or leadership) that decided to promise "healthcare for life" in exchange for allowing plants to be shut down in the '90s.

It wasn't union members (or leadership) that decided to offer generous early retirement packages in the '90s to pay even more people to not work.

It wasn't union members (or leadership) that decided to underfund its schemes to win concessions fifteen, twenty-five years ago that bankrupted GM when GMAC was no longer laying the golden eggs.

You really believe that the unions didn't negotiate these concessions?

Did they negotiate these? Certainly. Did they bring the ideas to table? Not unless it was done before any chatter was public. I wasn't in the closed door meetings, nor was I directly impacted or involved, but I had reasons to be plugged in back then. Not so much since the beginning of this century.But even if I am wrong and the union did initiate the schemes as compensation for lost wages, that doesn't excuse the company agreeing and then not appropriately funding these deferred income schemes when the income was earned. Of course GM wasn't alone in doing this and wasn't the first US company that became uncompetitive because its costs structure had to include paying for labor performed in years ago.

I guess we should review the company's profits history to see if they were ever able to appropriately fund these deferred income schemes.

 

[Bottomfeeder Sports]

I guess we should review the company's profits history to see if they were ever able to appropriately fund these deferred income schemes.

Which quarter did they fail to pay dividends? And the original post points out how the cost were shifted to GM proper and the profits went to the subsidiaries to avoid rank and file profit sharing.

 

[bueno]

I guess we should review the company's profits history to see if they were ever able to appropriately fund these deferred income schemes.

Which quarter did they fail to pay dividends? And the original post points out how the cost were shifted to GM proper and the profits went to the subsidiaries to avoid rank and file profit sharing.

I will agree with you that paying dividends when a company is losing money seems to make little sense, but because of GMAC, was GM ever losing money? The reason for a company losing money to pay a dividend is in part to add value to their stock so people will continue to invest.

 

[Bottomfeeder Sports]

I guess we should review the company's profits history to see if they were ever able to appropriately fund these deferred income schemes.

... but because of GMAC, was GM ever losing money? ...

You are use to getting away with having it both ways aren't you? All of this was covered in the original post. You seem to agree that the costs of paying long idle workers is what made the cost structure uncompetitive and ultimately unsustainable when GMAC's fortunes changed. No matter what sins that UAW might have committed, GM was responsible for making these bad deals. They could have brought up the issue at some point in the numerous contract negotiations in the twenty years. When they finally did bring it up the union agreed to a buy out, but GM couldn't survive long enough to complete the deal.

 

[bueno]

I guess we should review the company's profits history to see if they were ever able to appropriately fund these deferred income schemes.

... but because of GMAC, was GM ever losing money? ...

You are use to getting away with having it both ways aren't you? All of this was covered in the original post. You seem to agree that the costs of paying long idle workers is what made the cost structure uncompetitive and ultimately unsustainable when GMAC's fortunes changed. No matter what sins that UAW might have committed, GM was responsible for making these bad deals. They could have brought up the issue at some point in the numerous contract negotiations in the twenty years. When they finally did bring it up the union agreed to a buy out, but GM couldn't survive long enough to complete the deal.

I'm not having it both ways. The union and GM share blame. There is more than one signature on that contract!

 

[Bottomfeeder Sports]

I'm not having it both ways. The union and GM share blame. There is more than one signature on that contract!

So GM willing entered into contractual obligations, figured they could get away with not funding the agreed upon obligation, and it is the unions fault when GM was wrong?

 

[bueno]

I'm not having it both ways. The union and GM share blame. There is more than one signature on that contract!

So GM willing entered into contractual obligations, figured they could get away with not funding the agreed upon obligation, and it is the unions fault when GM was wrong?

Both sides were greedy and short-sighted.

 

[Bottomfeeder Sports]

I'm not having it both ways. The union and GM share blame. There is more than one signature on that contract!

So GM willing entered into contractual obligations, figured they could get away with not funding the agreed upon obligation, and it is the unions fault when GM was wrong?

Both sides were greedy and short-sighted.

While it was in the best interest of the UAW to keep GM viable, it was the management of GM's responsibility. The UAW negotiated for their members, they didn't make the management decisions that did GM in.

The Unions are the reason GM was in the position they were in the first place. Anyone who denies that is insane...

There doesn't seem to be any room for "both sides" though, so you are still insane claiming such per the above.