GM Board Reviews New Turnaround Plan For Bailout

The board of General Motors Corp met on Sunday to review a restructuring plan intended to cut costs and win support for up to $12 billion in emergency funding from the U.S. government, a person familiar with the deliberations said.

Along with rivals Ford Motor Co and Chrysler LLC, GM is rushing to complete the business plans demanded by Congress as a condition of considering a $25-billion rescue package for the embattled industry.

Read the whole story here.

Comments

[research]

Read Moore's column:

http://www.huffingtonpost.com/michael-moore/saving-the-big-3-for-you_b_147970.html

Let's buy controlling shares of the Big three.

Fire the current management.

Hire new management.

The same factories can also build Wind turbines.

[alleycat32]

Do not bail them out. Just like anyother business, if you can't make it then file bankruptcy and start all over.

This gets rid of all the union contracts and management with such narrow minds they couldn't see what was happening.

Get rid of them all.

AMERICA WILL SURVIVE

[demrepub]

GM executives could work for free and GM would still not be competitive. Executive compensation is a drop in the bucket of GM's problems. And the product they produce is not the problem, it's the cost of the product. It costs GM about $2,000 more per car than foreign manufacturers. The bulk of that cost differential is in employee post retirement benefits. If GM is to ever become competitive again they need those labor contracts rewritten. The quickest way to get that accomplished is bankruptcy. It will be brutal but a better company will emerge. The bailout is a horrible idea that I hope congress passes on.

[ObjectiveRealist]

[
The bulk of that cost differential is in employee post retirement benefits.
]

National health care would cut their costs, too.

[JScott]

Sorry IT IS all about product, they all make bland uninspiring cars, if they would make something that car buyers lust after or the just gotta have it, maybe they might break even.

[gcallaghan]

If the bailout materialize due to mangement's and the unions' concessions, both sides should agree that no further reductions in benefits or wages will be forthcoming and that until the American public is made whole, there will be no strikes.

[Mark701]

Cerebus Capital (who owns Chrysler) has only an 8% stake in the automotive industry. Why are bailing them out?

[ObjectiveRealist]

That's Cerberus, as in the hound of hell. I don't normally correct spelling but in this case I think it's appropriate to point out that the capital management company is not named after a part of the brain, but after a vicious mythological beast.

Your point is very well-taken. Given that Chrysler is only 8% of its holding company's assets, Cerberus is better positioned to bailout Chrysler than the United States is, unless Cerberus itself is on the verge of collapse. Either way, Cerberus has headquarters somewhere in Europe and I don't object to putting all Chrysler employees on Welfare with generous, government-funded renewable energy training. Shoveling cash on a foreign holding company is unacceptable.

[rkimball]

too little too late. the big three should had make these concessions years ago so they could position themselves to compete globally.

they build good cars overseas for the overseas markets, we get the junk. how about selling us some of those nice products exclusively for the eu markets.

[ObjectiveRealist]

All of their competitors' headquarters are in countries with national health care plans.

[BuckeyeGal]

And in this country when Hillary had the temerity to suggest it back in the 90s, it could have made a difference. But nooooo, that was tanatmount to Communism.

[stardot]

It's like this. When you have a crew running the ship, and getting paid by the truckload of cash, I do not accept the argument that pensions, health care, unions, or whaever are to blame.

When you are compensated to that degree, you are saying "I can handle this job."

It's not like any of this is a surprise.

Surprise! We have workers who draw a salary! Wow. Didn't expect that....

Surprise! We have to pay our pension obligations! Wow. Didn't expect that one either... Huh?

This reminds me of the wide reciever who can't ever catch a pass during the game, or the weather forecaster who always calls for sun when all he has to do is look out the window to see it's raining.

[vegasobserver]

Requirements should be:

1) Appointing several new board members from the unions.

2) 40% across-the-board pay cut for all executives, including stock and other benefits.

3) Each board shall include ombudsmen from Congress, from the environmental movement, and from the general public.

4) The US shall take a 20-30% stake in the companies.

5) Mandatory programs to build and sell green electric cars within 3 years.

6) Cut SUV production by 75%.

7) Major sanctions if jobs or factories are exported from the US.

[Donegal]

First of all, these guys need to DRIVE to Washington from now on. In fuel-efficient cars, if their company makes one. And Mulally? Does he really need to make $21 million a year? How much money can you spend in one lifetime? That's twice the worth of the company I work for. And they want to save money by taking it from older workers? What is wrong with this picture?

[sklfcats]

Buy Honda !

[local21]

Remember the UAW wages are $2,573 without benefits while the non union auto worker comes in on Saturday and Sunday on their own time to help keep cost down.

[local21]

If the Dems don't back labor Barack will be the last one to live in the White House for a long time.

[000Jade000]

I will definitely NEVER purchase another car from the Big 3 if the unions are made to give up ANYTHING else.

This is nothing short of class warfare.

The unions workers are in no way to blame for the fraud that has been perpetrated AGAIN on the US and the rest of the world by crooked politicians, investment bankers, hedge funds, Wall Street in general, and the Federal Reserve.

All across the globe, workers and the poor are paying for the CRIMINAL ACTS of these greedy, dangerous thugs. Poorer countries relying on loans from the IMF to keep from going completely bankrupt are being forced to accept even more brutal economic conditions in exchange for those loans. Meanwhile, the crooks/financial terrorists are obsconding with their loot from the markets, the Treasury, and the Federal Reserve. Nada one of them have been indicted.

Any worker who thinks its okay for the Unions to take a hit had better wake up and see the writing on the wall. An attack on the unions is an attack on all people who exchange their labor for a wage and are not of the top 1% of earners.

[ceasenake]

High labor costs is the biggest problem GM has - especially retiree stipends and the idled workers they are forced to pay in "job banks" who are NOT making cars for them.

http://www.detnews.com/2005/autosinsider/0510/17/A01-351179.htm

[Merewen]

Your point? They earned that. They busted their behinds and ruined their bodies to be able to retire and not have to worry. Ya'll need to get over the whole retiree and union issue. Focus on the fact that the Big 3 have been building crap for many years.

[anitaemile]

high labor costs?Idle workers?... Union workers have not asked to be put on layoff. The auto industry has been recruiting workers on H-1Bs visas to replace American workers with less costly foreign workers. We have become disposable workers , easily replaced with cheap foreign workers. You wonder why the many recalls? Laid off workers would love to go back to work. There is no work to replace their jobs, so do you want more foreclosures? More people on welfare ? More kids pulled out of college because of lack of funds? We need fair employment agreements, and the UAW has been working for that.

[Tommygun2146]

The CEO of Toyota makes approximately $900.000.00 per year, the employees are unionized, have never been forced to make concessions, and they all - like everyone else in Japan - enjoy nationalized health care (which, by the way was set up by the US as part of the Marshall Plan). The CEO of Ford receives $24,000,000.00 every four months, whereas UAW workers make approximately $28 per hour (the mythical amount of $75 per hour includes salaries and the cost of health care insurance for all active workers, the cost of health care and pensions paid to retired workers, their widows and minor orphans, divided not by the number of recipients, but by the number of active workers). So who needs to make concessions? Mr. $24 million every four months, or the workers already struggling to survive on salaries that were negotiated in good faith?

[aweissnet]

Thanks for clarifying the info! Yeah, I keep hearing how much those union workers are getting. In my view, $28 an hour is NOT excessive today. It's a moderate living. They ain't buying mansions on that. They're about in the low-middle I guess.

[ceasenake]

http://www.heritage.org/Research/economy/wm2135.cfm

[aweissnet]

The CEO of a Japanese airline, that was aired on CNN the other day got $90,000 per year, making less than his pilots. He takes the bus in the morning, and stands in the cafeteria line with his employees. He has taken some cuts, along with them, and feels he should "suffer" along with them, because he cares about his company, and he relies on them.

I think we should see major cuts along these lines. We won't see it, but we should.

[tomas0808]

Wow. What a citizen, patriot, hero. If we had more people like that running things we'd be in good shape. But they all think they're Gordon Gekko or some crap.

[local21]

The poor CEO should join a union.

[ConservativeAcademic]

American workers are among the best in the world, especially U.S. auto workers. You are justified in calling attention to these extreme executive salaries...what value do the CEO's of Ford and GM bring to their companies that justifies these salaries?

The same question can be asked, however, regarding the value that the UAW offers. In some American facilities, Toyota workers' salaries -- who are non union -- exceed that of their GM and Ford counterparts. The workers are receiving a fair, market-driven wage, not a wage artificially protected or inflated. Similarly, why should union workers be protected in job banks, where they collect salaries for doing absolutely nothing? Unions used to champion safe work places/practices, but this role has largely been relegated to the federal and state government. In revamping the Big 3, there need to be some serious concessions by the UAW if GM, Ford and Chrysler are to become competitive again.

But let's not forget the role of the US government in this debacle. U.S. Automakers do not have a level playing field in many foreign markets. The government must remove the trade barriers that have been erected by, e.g., Korea, resulting in a hugely lopsided trade deficit and no real opportunity to compete.

Let's unfetter the U.S. auto industry at all levels and allow it to rise to its true capacity to compete -- and to profitability.

But

[golferman]

I agree with most of what you have said except I would like to point out that Toyota workers make as much as uaw workers for one reason. Toyota knows if it doesn't pay its workers what union workers make they rank and file would vote to go union. Toyota workers have Ford, GM, and Chrsyler union workers to thank for thier rate of pay. Believe me if the big 3 were not union and only paying thier workers $18 an hour the Toyota workers would only be making $18.50 an hour. Toyota doesn't pay thier workers the same rate out of the kindness of thier hearts. And I beleieve more in Fair trade than Free trade.

Also the US auto industry has had years to compete. They have fought every effort to build fuel efficent cars, smaller cars and so forth. They are a company, they sell what thier customers want and that is big SUVs and trucks. Until they truely change thier mind set it will be hopeless.

[Tommygun2146]

The fact that some Toyota workers earn a wage higher than some UAW workers does not diminish the simple fact that the practice of union busting and pursuit of an unfettered free market, which was begun by the Reagan and George H. W, Bush's administration and endorsed by the Clinton administration and pursued even more fervently during the George W. Bush administration, are factors that have contributed to the current economic crisis. American workers have never fared better once a union has been dissolved - only the corporations have done better. Wages and benefits are driven down and businesses, with no obligation to their employees, have given their employees the choice of giving up benefits and cutting their wages or losing their jobs all together if the company moves it's manufacturing facilities to Mexico, China and other Southeast Asian countries with a lower standard of living. The idea that some Toyota workers earn a bit more in certain areas does not negate historical fact.

[anitaemile]

You are absolutely right..

[harriettubman]

We no longer need a top 3 anything in this country. Either the union wants to keep people employed or they will go along with concessions. It's as black and white as that.

CEO's, CFOs and all upper management should cut out all travel perks, bonuses and a decrease in pay.

If the automakers in the U.S modeled their businesses around some Japanese companies they wouldn't have to beg for money. Even the Japanese CEO doesn't have a special parking spot.