Whether you lose it or not isn't going to change anything. If a GM / Ford worker with minimal skills makes $40/hr or $80/hr, with gold plated health insurance, early retirement ability, ability to get paid for doing nothing in many cases, and more, it just doesn't go over well with a public that is used to being considered lucky if they get $15/hr for similar types of jobs. I have heard of auto workers in MI having super nice homes, second homes at the lake, $50K boats, $50K SUVs, etc, etc. I can only assume some of the stories are true - you sure don't hear them about the guy making $15 an hour at a non-union shop somewhere.
Could we split the baby at GM? I think even in good times, the North American operations of GM were only marginally profitable. Why not just have the North American operations file BK? If the run rate is only 10mm units, there is no way GM North America can be profitable, let alone cash flow positive without major cost reductions....
Ah...that would be Chairperson Sheila Bair @ FDIC..and she is doing that on a regular basis these days.!! As I said on another thread, Citi and Bofa should be cut up into sizable chunks so the Sheila can handle them too.
But GM is going bust anyway. GDP will not be 4% lower if it goes bust this year rather than next year or in 2 or 3 years. In fact, the sooner it goes bust, the higher GDP will be because the people currently working there will move onto more productive activity. Just think how much lower GDP is because of the last 10 years of GM building rubbish products at an excessive price and losing gargantuan sums of money, not to mention workers learning useless skills for a decade.
This is all a waste of time. GM, Ford, and Chrysler are ALL broke, and it is totally irrelevant what anyone thinks on the matter. They will not stay solvent. They will go into bankruptcy, probably merge leaving 2 or even 1 manufacturer, that will re-emerge from bankruptcy and consolidate a smaller US auto sector. Nothing anyone on the planet does will alter this outcome.
Yep. Right on. Building roads to nowhere doesn't work. Neither does stock-piling cars that never get used. People erroneously conclude that if GM engages in an activity that looks, feels and smells like "Work" - except nobody buys the end product - it really is WORK. Not so. In order for Work, to "Work", somebody must be willing to exchange their labor to pay for the end product. Otherwise, the economy is just a Communist Ponzi scheme that transfers wealth from citizens via debasement to Corporate Oligarchs who stock-pile toilet paper that never sees the shiny white gleam of a porcelain commode. Money has to circulate from one productive endeavor to the next, in order for the economy to function. When we start propping AutoMakers or Banks, or whoever, with endless Trillions to stay in business producing worthless shit nobody wants, we the taxpayer, bear the entire cost of that bailout through increased tax or decreased purchasing power. When that happens, GDP contracts and we all lose. This is happening already and will only worsen our situation. Shit like this is ridiculous. Even all the bank talk of cataclysmic failure is bullshit. Nullify derivatives, nationalize bad mortgages, and its done. This Country is really far gone.
As for previous posters - Gnome and others had it right. The US is recalibrating to a entrenched period (5 to 10 years+), of significantly lower consumption. The Country couldn't support the Big Three during the 2000 BOOM, how the hell can they support them now???? Its a lost cause. Subsidizing GM, F and Chrysler to build cars that get moth-balled on some race-track is no more different than paying those same fucks to stand around and pick their nose all the day. It accomplishes NOTHING. Its just a welfare tax. Handing money to people who sit around and contribute jack to the economy.
i had a vision several years ago that the auto industry (not just domestics) would have a sales problem at some point. vehicles today, in general, are just too fricking reliable. even the worst piece of crap will make it to 100k miles with few mechanical problems. they may have issues with their interior or non-essential components, but it will be driveable till 100k easily. rarely do you see a car broken down on the road anymore, but it was more common in the 80s. the only reason people need to change cars every 4.5 years is because they treat them as fashion accessories that go out of date. from a strictly practical point of view, any person who is 18 years old today would only need 3 cars in their lifetime. if not for population growth, the auto industry would be in a perpetual decline.