"Operationally Bankrupt"

[Todd Wilson]

  Didn't the UAW pretty much screw GM and Chrysler all to hell?  From what I've been hearing, when they all re-negotiated a few years back, the employees got a ridiculous settlement contract that basically screwed the companies that they were working for.  I'm not too keen on the details but bought contracts, outrageous health benefits and basically money for nothing in certain instances were part of the deal.  Now I'm all for paying a worker a fair salary for a fair day's work but how much should a guy make working on an assembly line tightening the same nut over and over.  It might be the white collar corporate greed or the UAW that is forcing the Big 3 to assemble their cars in Mexico, Canada, and other places abroad. 
  I do know that the Japanese laugh at our business practices when we fire or hire someone.  Take for instance that nice lady CEO for Hewlitt-Packard that was let go a couple years back.  She started off making a ridiculous salary, got fired within 3 years and was prompty rewarded with $20 million and stock options.  What the hell kind of business are they running?  Anyway, we need to get back to the America of old and start whooping some ass again.  Our country is going into the toilet because of this crap.

A deal is a deal. A contract is a contract. What has happened is neither side has looked to the future until recently. The old retired UAW people need to continue to get their benefits. A deal is a deal and a contract is a contract. What they need to do is re negotiate the future contracts. The new people simply are not gonna get what the older people that hired years ago are getting. As for rediculous settlement contracts the older workers probably had one of their benefits bought out. As an example if over the course of 30 years I will pay you an extra amount that will total 300,000$.  Or I can pay you 150,000$ now and you dont get anymore money. Most will jump on that deal and it actually saves the company money.

The biggest problem I would imagine is health care costs have gone up terribly bad. This is something they did not see in the future and its biting them now. Just recently on the radio when GM was the topic of discussion for a few weeks they interviewed some 80 year old retired GM worker and he was pissed about maybe loosing his health care for himself and wife and grand daughter.  My questions is WHY is a 80 year old guy on the health insurance plan. He should be on medicare with the option to be on GM's health care plan if he would like to PAY the monthly fee. Also why is his grand daughter on the plan. This is an example of whats killing the auto makers. A deal is a deal and a contract is a contract and this GM worker is taking full use of what was negotiated by the UAW and the Company. Both sides need to stop this if they are going to survive.  The railroads saw this and made changes in 1985. The few railroaders on this forum know what I am talking about. The old guy I work with makes roughly 100$ a day more then I do. Do I like it? No! But on the flip side I have an extremely good job and those changes have put the company in a better position then it was which will allow it to remain a company providing jobs.

As for the Big 3 building stuff in Mexico theres 2 sides to that.  It allows them to cut costs involved with building a vehicle and increasing profit per vehicle. Is this corporate greed or are they simply trying to stay afloat. I would be curious to see if the extra profit made from a mexican built vehicle is carrying the US built units. Profits have to be used for the future to buy/build/retool and redesign to keep advancing and make vehicles better. Early on it was probably corporate greed as costs have not come down on anything built outside the US now it may be the only way they can figure out how to cut costs.

As for people not liking the new design of Chryslers vehicles thats all fine. I actually think most of their new vehicles look good and for the most part they have not fell into the cookie cutter look so many other cars have fell into. They are different then most of the other companys. The muscle car days are overwith folks. Its a new time and era. Reliable and cheap (mpg) transportation is what most people are looking for nowadays. Yes the prices of new vehicles are very high but they are safer and get better MPG and run a lot longer then the old muscle cars could ever think about doing.


As for Chrysler being broke and going under I dont think I would sweat that just yet. Its probably a bunch of stuff happening right now to get the company turned around and running again. End of year is a good time to show loss's when its time to take care of taxes and stuff.  I think if you dig into it the new Chrlsyer Bosshog isnt getting paid stupid amounts of money and bonus's and stock options as he will get paid those on Chryslers performance so its in his best interest to see to it things go good.


Todd
 

[nh_mopar_fan]

Really good post, Todd.

[hemihead]

 The solution  always seems to be cut the the little guy . Is it better to cut 10,000 UAW jobs or one guy who is an overpaid dead weight ? How can you expect to sell new cars if nobody working can afford one ? That what happens when Corporate greed takes over. Blue collar people working minimum wage jobs cannot afford to buy a new car so then the company cries that they can't sell any. Look what happened to the pet food companies that bought the food ingredients from China. They bought from China to make a bigger profit.They didn't care if it killed your pet.All they cared about was their own bottom line. If the labor is cheaper in other countries, why aren't the car prices lower? Because some white collar guy hiding behind a desk found a way to make more money for the company so he could further his career. There's nothing wrong with making a profit. That is what business is for , but come on , isn't there a drop of morals left anymore ? Society today worships the almighty dollar.

[HeavyFuel]

Say what you will about the hated "Abomination", but along with the 300 and the Magnum, it's probably the reason why the company is still around at all.  God knows nobody (except car rental companies and Brock) was buying those underpowered and stylistically uninspired FWD Intrepids, 300M's, Stratuses, and LHS.

You might want to rethink that.  I have seen about 1/2 dozen Mags, Chargers, 300s around town. 

Top selling vehicles through May 07. 


May 07
RANK   VEHICLE              2007     2006  '06 RANK  %Chng
1  Ford F-Series P/U       290,282  334,725   1       -13.3
2  Chevy Silverado-C/K P/U 265,941  258,378   2       +2.9
3  Toyota Camry            193,900  177,090   3       +9.5
4  Toyota Corolla          165,722  159,992   6       +3.6
5  Dodge Ram P/U            154,143  150,799   4       +2.2
6  Honda Accord            153,431  145,529   5       +5.4
7  Chevrolet Impala        144,541  114,014   13      +26.8
8  Honda Civic             137,288  138,744   7       -1.0
9  Nissan Altima           114,318  102,785   9       +11.2
10 Dodge Caravan            94,220  103,876   12      -9.3
11 Honda CR-V               84,464   59,660           +41.6
12 GMC Sierra P/U           84,106   80,957   10      +3.9
13 Ford Eco'ine/Club Wagon  80,641   74,876   21      +7.7
14 Chevrolet Cobalt         79,257   93,023   15      -14.8
15 Ford Focus               77,732   80,559   17      -3.5
16 Toyota Prius             76,747   38,460   33      +99.6
17 Ford Escape              73,058   74,978   22      -2.6
18 Toyota-RAV4              72,447   61,811   35      +17.2
19 Chrysler Town & Country  66,951   68,943   19      -2.9
20 Ford Fusion              66,260   57,398   34      +15.4

[T3/RT]

Wow! I did not realize how much they make off these cars. I knew they sold a lot for SRT8`s but the cash. Wow!

From Oh20 on Allpar:

As of the end of business circa 12/20/2007:

8,851 Challengers pre-sold to retail customers... and counting

That's almost THREE HUNDRED MILLION DOLLARS at wholesale!!

GREAT NEWS for Chrysler. GREAT NEWS for the SRT division, 2008 is going to be their highest sales year to date.

[T3/RT]

More SRT8`s from Dec. 3-20 than any one year previously. They would be smart to keep making these. As many as they can as fast as they can.

[Mike DC]

 
The prices of cars are never gonna come down no matter what happens withe UAW or Mexican plants or anything else. 



The simple fact is that when American car buyers have $15,000 to spend, they'll more often buy a higher-end $30K car that's several years old. 

Too many people would rather do this than buy a brand new lower-end car for $15K.  So except for a segment of penny-pinchers (who really do buy new $15K econobox cars), there's pretty much no market to produce new cars/trucks in the $15K range.

.  .  .  And the longer this goes on, the more the $30,000 buyers will dominate the car market .  .  .  and the more expensive features/safeties they'll make "standard" on everything  .  .  .  and the more the Fed will mandate these things to appease the "Dateline NBC" expose shows .  .  .  and the harder it will be to produce ANYTHING for $15,000 even if people actually began wanting cheap new cars again. 


Vicous cycle.