Goodbye GM
posted by Greg at 12:38 PM
Thursday, January 26, 2006
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2 Comments:
Ford is next!
-D
Yes, GM has definitely taken a huge hit over the past decade. Yet, GM remains the world’s #1 largest auto maker (volume speaking). They’ve had a billion dollar plus (times 3, 4, 5, who knows?) loss, but they are taking steps to reorganize and restructure. Too little, too late? Possibly and most likely is what are initial reactions are. But, this is yet to be seen. The masses tend to write them off. As noted on this site several times, the masses tend to be wrong. In fact, it's very easy to write GM off from most mainstream viewpoints. If GM even remotely heads toward the right direction and recovers a fraction of their "glory days", then they will again begin to turn a profit consistently. The simple fact is that over 66% of GM's employees are union workers and that will hamper GM on all fronts concerning overpaying ill-qualified workers (in most educated persons minds), paying ridiculous healthcare benefits, and paying for retired GM workers benefits (remember back in the day these were the money maker jobs, now they are putting billions per year (to the tune of 14 billion plus per year) into pension funds). But, in this day and age unions are in retreat mode because they know that in order to succeed in this world they will need to pursue an education eventually. (note: this is not a knock to union employees. I was a union employee for five years and my family as a majority is blue collar… (can’t help I was raised in flotown)) Unions can't even win a battle with grocery stores it seems. The culture this day and age does not promote a union job as successful or even noteworthy unless you work in a mining town, utility based town, or even some other specialty service/raw natural resources providing town. Once you get past those communities what significance does belonging to a union mean? Not much! Simply speaking and summing up, GM I believe, will follow parts of Toyota’s, Honda’s, Volkswagen’s business model. It is too simple and too dumb not to. It’s called benchmarking. We all do it in all facets of business and life even if we don’t realize we are doing it. We size up the competition and follow a gameplan that works. It’s like taking a page out of any successful NFL defense’s book. Not convinced, even if GM falters in this simple game of copying successful strategies, the U.S. the government will bail them out somehow someway. Check out the airlines. United just recently came out of bankruptcy after a few years of hard times. American will follow soon along with other airlines. There will always be a GM and Ford no matter how much we would all like to see them fold and falter due to mismanagement, bad quality, and retarded bloodlines (ie. Bill Ford… possibly related to GDUBYA JR.? ). GM is definitely deserving of a downfall of even bigger epic proportions but it’s very obvious that it’s not possible at the current stage where they stand. Historically, GM has only lost money in 1980, 1990, 1991, 1992, and 2005. (I am unable to verify any other numbers from the 80’s as they may have had a loss, just can’t find them at the moment.) Assuming they’ve only lost money in 5 years since 1921 I would say that is a good track record. GM has made way more money than it has lost. Besides sucking at auto making, GM owns Allison Transmissions, GM Locomotives, partial stakes in: Isuzu, Suzuki, Daewoo, Fiat, Subaru, and a locomotive assembly manufacturing business. Their subsidiary GMAC provides financing ($$$) which is a breadwinner. So before jumping off ship I would recommend following their response and reaction to the current environment of efficient, cheaper, more reliable foreign cars. A lot is yet to been seen in the eco/hybrid vehicle environment. Let’s see how it plays out!
-Dickens
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