GM and Chrysler

[Gawain 0]

In the end, I don't think this merger will happen. There is only one reason why GM would be interested in Chrysler -- Chrysler's cash. They got $11B in the bank, and GM is burning through $1B per month.

Everyone else is against this ideas: the Unions (a rare agreement with my opinion, but my reasons are different from theirs), certainly Gov. Granholm would come out against it, the dealers, auto-parts suppliers...US and Canadian regulators and groups are likely not keen on it either.

The bottom line is this:

The result of a GM/Chrysler merger would result in a loss of two-thirds of Chrysler's 68,000 employees, minimum. The Chrysler truck plants would close, the brand brings nothing to GM - the Chrysler brand line up, save Jeep, is worthless outside North America. If this merger does happen, it will be announced before the election, and they will try to close it before the inauguration (if Sen. Obama is elected) - it's the only way it will happen.

So, my suggestion to anyone associated with the Unions is this: push against this merger on both sides, and then renegotiate your contracts to tighten the belts. Without Chrysler's cash, GM doesn't have enough to make it though 2009 if the economy doesn't begin to recover. Without GMs resources, Chrysler must realign itself as a "regional" automaker, focusing on North America and maintaining its Jeep branding in it's European and Japanese/Asian markets. Also, find a neutral consultant and take over stewardship of your pension program, GMs overhead is too big to survive - trim the fat and become a lean machine dedicated to excellence.

State of Michigan Solution: Your tax policies are a disaster, you're facing double-digit unemployment in a state that has somehow managed to miss the tremendous growth of the past 8+ years. Get out of the way, the tea leaves should have told you what was happening, but instead your idea of increasing taxes would benefit the state have now crippled the environment. Slash state taxes from top to bottom offer additional long-term incentives for the two companies to re-consolidate operations.

Federal Govt Solution: slash capital gains taxes to 0% for 18 months, cut the corporate tax rate to 12% and allow all future development for new technology (alternative and traditional), as well as all investment for re-tooling of factories to be free of all tax liability.

None of this costs the taxpayer anything up front, and keeps innovation in the private sector.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[AWL71 0]

Ditching the unions would be a major step to the recovery of GM. I know it won't happen but it would help immensely if it did.

The most terrifying words in the English language are: I'm from the government and I'm here to help.

[ChasingBlueSky 0]

Did Chrysler ever pay back the $1B from years back? Does GM have a plan to pay back the $25B?

Also, here is a hint to GM: introduce the fuel saving technologies to all their cars that currently exists in the EU and people might be willing to buy cars again. Oh, and make just enough trucks to keep the construction people and Texans happy.

_________________________________________
you can burn the land and boil the sea, but you can't take the sky from me....
I WILL fly again.....

[akarunway 1]

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Ditching the unions would be a major step to the recovery of GM. I know it won't happen but it would help immensely if it did.

Yeah. Then we can have all those illegals making 10 bucks an hr. building our vehicles. The last truck I bought new was a 1999 Dodge Ram. Started falling apart at 5k miles. ASSEMBLED IN MEXICO. That what you want?

I hold it true, whate'er befall;
I feel it, when I sorrow most;
'Tis better to have loved and lost
Than never to have loved at all.

[AWL71 0]

Look at what Honda, Toyota, and Nissan have done with their American manufacturing facilities. They offer high payings jobs and produce quality products without all the "union" bullcrap. And all of those manufacturing facilities have fought unionization. You tell me who is better off? GM with their unions or honda, toyota, or nissan with no unions.

The most terrifying words in the English language are: I'm from the government and I'm here to help.

[kelpdiver 2]

The Japanese plants do have the advantage of youth, and no obligations to retired employees.

And the unions were not the cause of disasterous short term planning by the Big 3, sucking the teat of the high SUV profit margins until the floor dropped out.

But a merger of these two makes no sense - two bad companies doesn't make one good one.

[akarunway 1]

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Look at what Honda, Toyota, and Nissan have done with their American manufacturing facilities. They offer high payings jobs and produce quality products without all the "union" bullcrap. And all of those manufacturing facilities have fought unionization. You tell me who is better off? GM with their unions or honda, toyota, or nissan with no unions.

Not sure about that. My quality of life has gone way up since i joined the union 6 1/2 yrs. ago. I work my tail off and put out a quality product. And when I'm a boss on the job I do my best to run off any slackers.

I hold it true, whate'er befall;
I feel it, when I sorrow most;
'Tis better to have loved and lost
Than never to have loved at all.

[AWL71 0]

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Look at what Honda, Toyota, and Nissan have done with their American manufacturing facilities. They offer high payings jobs and produce quality products without all the "union" bullcrap. And all of those manufacturing facilities have fought unionization. You tell me who is better off? GM with their unions or honda, toyota, or nissan with no unions.

Not sure about that. My quality of life has gone way up since i joined the union 6 1/2 yrs. ago. I work my tail off and put out a quality product. And when I'm a boss on the job I do my best to run off any slackers.

Honest question. Do you have success running off the slackers when you are boss on a job?

Unions may work in some industries but they are sucking the life out of GM. It is a shame. GM's unionized workers earn an average $27 an hour, $56,000 a year without overtime. Benefits increase the hourly average to $73. Now wonder they can't turn a profit.

The most terrifying words in the English language are: I'm from the government and I'm here to help.

[Gawain 0]

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The Japanese plants do have the advantage of youth, and no obligations to retired employees.

That's not necessarily true.

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And the unions were not the cause of disasterous short term planning by the Big 3, sucking the teat of the high SUV profit margins until the floor dropped out.

Yeah, that massive pension burden that GM, Ford and Chrysler are managing just appeared out of thin air...the unions never sought such huge salaries, such lax hours, input on inefficient manufacturing techniques...

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But a merger of these two makes no sense - two bad companies doesn't make one good one.

I agree, and again point out that it's Chrysler's cash flow that's keeping GM interested, not much else. It's not like they need to expand their line-up.

So I try and I scream and I beg and I sigh
Just to prove I'm alive, and it's alright
'Cause tonight there's a way I'll make light of my treacherous life
Make light!

[DrewEckhardt 0]

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Unions may work in some industries but they are sucking the life out of GM. It is a shame. GM's unionized workers earn an average $27 an hour, $56,000 a year without overtime. Benefits increase the hourly average to $73. Now wonder they can't turn a profit.

Even if you corrected that relative to American standards for semi-skilled labor, you'd still be competing with Chinese autoworkers who make under $2000 a year.

The problem isn't unique to manufactured goods. American engineers are competing with guys in the Pacific Rim and Eastern Europe making $5000 a year and body shops which can still turn a profit reselling people for $20/hour instead of $100/hour.

There's a _big_ crash coming. While we could be protectionists and slap tarriffs on anything shipped via boat there's no simple way to tell the difference between software or tax advice which came from America or overseas.