I say BS most likely. Either labor is much more than 7% or their bleeding money badly with other inputs. Either way something is very wrong and the truth isn't being told. Where is all the $ burning coming from? [edit] Labor costs In 2006, GM paid "on average $81.18 an hour in wages and benefits to its U.S. hourly workers." In 2008, after GM offered buyouts to 74,000 workers, the average wage and benefits had dropped to $78.21/hour. New hires receive $26.65/hour for wages and benefits.[27] GM has announced elimination of lifetime health benefits for about 100,000 of its white collar retirees by the end of 2008. http://en.wikipedia.org/wiki/General_Motors#Corporate_structure
Yeah, we don't give any corporate tax incentives for BMW to build the X5 in South Carolina, or for Toyota to build the Camry or Avalon in Kentucky. Go figure.
GM outta shut down for 3 months and let the cash clock tick away. THEN, Congress can get busy and extend the unemployment benefits with the "build more fuel effecient auto" 25b fund. The PBGC can eat the pension and medicare can take over the health plan. Me and my friend Stosh will open a garage in Hamtramack and and start the auto industry all over again.
Of course I am. German Trader doesn't know what he's talking about . . . Mercedes received $253 million alone in "incentives" in Alabama, $29 million for Honda, $153 million for Toyota, etc.
Many in Alabama suspect that the amount of tax benefits given to Hyundai to build their plant their won't be recouped for more than 22 years, and that the plant VW is building in Chattanooga, TN will create a tax gap (because of tax breaks) that won't be able to be filled for more than 27 years. The battle for plants and the tax subsidies going along with them has created outright hostility among the states competing for these plants, as they are forced to bid more and more in subsidies as the manufacturer plays the desire for jobs up against each state in seeking greater benefits. While these facilities create great benefit, they also create great demands on infrastructure and local units of government (police, fire, water, sewer, roads), and many states, especially in the south, are actually paying as much as 23,000 or more per job created. I guess all is fair in love and economics.