This is why you just let GM fail

[02mingryGT]

Read this. You'll be pleased.

http://www.laht.com/article.asp?CategoryId=12396&ArticleId=320909

[Foxxx5oh]

link wont come up for me :(

[04 Venom]

Link worked for me.

[Foxxx5oh]

mustve had a lot of traffic to it at first, its workin an GM still sucks...LOL

[Katmandu]

Amazing. :rolleyes:

We have Children in this country that only eat (1) meal a day, Veterans sleeping in the streets, people losing their jobs and homes.....

Simply amazing. :mad:

[347sc]

Got to love NAFTA

[Gene]

Got to love NAFTA

NAFTA has nothing to do with it. Last time I checked, Brazil was in SOUTH America.

I don't see what the problem is. GM has an arm of the company that is actually making money, and they're spending money to ensure that it continues to make money. Seems like a smart business decision. In the end, those profits will come back to Detroit.

[DeckerEnt]

Have to agree with Gene here. The big three Here need to tighten their belts even more and plan on cutting the fat. This situation is going to be an eye opener. If they handle it right, the companies will come out on the other side stronger, better and more profitable. And that will be better for everyone.
Keith

[bestracing]

NAFTA has nothing to do with it. Last time I checked, Brazil was in SOUTH America.

I don't see what the problem is. GM has an arm of the company that is actually making money, and they're spending money to ensure that it continues to make money. Seems like a smart business decision. In the end, those profits will come back to Detroit.

I have to agree, It's been the foreign market sales that have kept them afloat and being in south america and other emerging markets will help insure they stay around longer

[SlowRS]

I also agree. As much as it sucks, I believe if one of the big 3 fall, all of them will

[02mingryGT]

NAFTA has nothing to do with it. Last time I checked, Brazil was in SOUTH America.

I don't see what the problem is. GM has an arm of the company that is actually making money, and they're spending money to ensure that it continues to make money. Seems like a smart business decision. In the end, those profits will come back to Detroit.

They're spending taxpayer money Gene. It would been smarter if they did some creative accounting and "pretended" they used other money. To me it's bad press and does not create or save jobs here in America. They came to Congress and asked the American taxpayer for money or they would fail and have to shut down plants here in America. Then they take the money and spend it in another country. Tell me again how that helps people here?

Ford and GM's solvency problems are here in America. They both are profitable overseas. And the reason for that, as I stated before, is the labor cost associated with their operations here. The Sheeple in this country believed if they didn't get the money they would go bankrupt. Which in reality means we'll shut down everything in America and still keep our plants open overseas. Suckers.

[02mingryGT]

link wont come up for me :(

Here's the text:

General Motors to Invest $1 Billion in Brazil Operations -- Money to Come from U.S. Rescue Program

By Russ Dallen
Latin American Herald Tribune staff

SAO PAULO -- General Motors plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker.

According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government and will be used to "complete the renovation of the line of products up to 2012."

"It wouldn't be logical to withdraw the investment from where we're growing, and our goal is to protect investments in emerging markets," he said in a statement published by the business daily Gazeta Mercantil.

Meanwhile, he cut the company's revenue forecast for this year by 14% to $9.5 billion from $11 billion, as the economic crisis began to cause rapid slowdowns in sales.

GM already announced three programs of paid leave, and Ardila added that GM Brazil "is going to wait and see how the market behaves in order to know what decision to take" with regard to possible layoffs.

For Ardila, the injection in Brazil's automobile sector of 8 billion reais ($3.51 billion) recently announced by the federal and state governments of Sao Paulo "has already begun to revive sales," which fell by 12% in October.

The executive said that the company will operate a "conservative" scenario in 2009 with an estimated production of 2.6 million units, and another more "optimistic" that contemplates sales of 2.9 million.

This year sales will reach 2.85 million vehicles, which represents a growth of 15% over last year.

[thecollector]

I would think if one of them failed it would help the other two. The two "survivors" would gain the sales (even though they are low currently it is still revenue) of the failed competitor. "Import" manufacturers would pick up some of that market share as well but there are still things the big 3 do that Toyota and honda don't (light/medium duty trucks, full size vans, etc) Im sure it wouldn't turn them around completely but I don't see how it would drag them down further... It would seem to make sense that if any one company was to fail the rest would do better by taking that available market share. Just my $0.02.

[SlowRS]

I would think if one of them failed it would help the other two. The two "survivors" would gain the sales (even though they are low currently it is still revenue) of the failed competitor. "Import" manufacturers would pick up some of that market share as well but there are still things the big 3 do that Toyota and honda don't (light/medium duty trucks, full size vans, etc) Im sure it wouldn't turn them around completely but I don't see how it would drag them down further... It would seem to make sense that if any one company was to fail the rest would do better by taking that available market share. Just my $0.02.

You may be right, but IMO, there are to many people who think that if one american car company goes down, then the others are just as bad, causing them to buy forgien cars. I could be wrong, I am not business man.

[02mingryGT]

I would think if one of them failed it would help the other two. The two "survivors" would gain the sales (even though they are low currently it is still revenue) of the failed competitor. "Import" manufacturers would pick up some of that market share as well but there are still things the big 3 do that Toyota and honda don't (light/medium duty trucks, full size vans, etc) Im sure it wouldn't turn them around completely but I don't see how it would drag them down further... It would seem to make sense that if any one company was to fail the rest would do better by taking that available market share. Just my $0.02.

Exactly what I've posted before in another post months ago when they first started wanting money. The demand would still be there regardless and then who ever survived would have to ramp up to meet that demand thus CREATING jobs here.

[02mingryGT]

You may be right, but IMO, there are to many people who think that if one american car company goes down, then the others are just as bad, causing them to buy forgien cars. I could be wrong, I am not business man.

Possibly but then Toyota and Honda would just build more plants here to meet that demand with substantially less labor cost. End result.....probably a slight net loss in jobs.

[05yellowgt]

I would think if one of them failed it would help the other two. The two "survivors" would gain the sales (even though they are low currently it is still revenue) of the failed competitor. "Import" manufacturers would pick up some of that market share as well but there are still things the big 3 do that Toyota and honda don't (light/medium duty trucks, full size vans, etc) Im sure it wouldn't turn them around completely but I don't see how it would drag them down further... It would seem to make sense that if any one company was to fail the rest would do better by taking that available market share. Just my $0.02.Well GM Ford and Chrysler basically use the same contractors to build all the parts for their cars. If one of the three goes under, there is a very good chance that the parts suppliers will no longer be able to stay in business themselves. Suddenly there is no one to make the parts to build the cars and boom, all three go under.

[IWRBB]

Well GM Ford and Chrysler basically use the same contractors to build all the parts for their cars. If one of the three goes under, there is a very good chance that the parts suppliers will no longer be able to stay in business themselves. Suddenly there is no one to make the parts to build the cars and boom, all three go under.

And that is the correct answer. Sorry, no cookie.

[347sc]

NAFTA has nothing to do with it. Last time I checked, Brazil was in SOUTH America.




Correct, but it opened the door for things like this. May be a smart business move still pretty fucked up.

[04 Venom]

Well GM Ford and Chrysler basically use the same contractors to build all the parts for their cars. If one of the three goes under, there is a very good chance that the parts suppliers will no longer be able to stay in business themselves. Suddenly there is no one to make the parts to build the cars and boom, all three go under.

And that is why Ford pressed for the bailout even though it was not requesting money. A bankruptcy of one of the manufacturers would cause a chain reaction of bankruptcies among suppliers.

[02mingryGT]

Well GM Ford and Chrysler basically use the same contractors to build all the parts for their cars. If one of the three goes under, there is a very good chance that the parts suppliers will no longer be able to stay in business themselves. Suddenly there is no one to make the parts to build the cars and boom, all three go under.

I would think that those suppliers if they lost a substantial part of their business would then eliminate plants and employees. I still believe the market would correct itself and someone, somehow would emerge to take up the slack. You need to think of all the car manufactures that have already failed over the years. Granted none of them were as big as GM but in those cases the other manufactures stepped up their production and took the market share. So yes in the short term tens of thousands would lose jobs but that would correct itself within a year or so. i would think some of those empty plants would be bought by whomever (Toyota, Honda, Ford or manufacture X, Y & Z) and they would start producing vehicles to make up for the shortfall.

Regardless, consumer vehicle demand would not suddenly disappear. That is what drives manufacturing anyway. If the demand even flat lines for a couple of years it would still require someone to make up for it. The underlying problem is the legacy cost. They will continue to escalate requiring GM to sell more and more vehicles just to stay afloat. Kinda of like a Ponzi scheme.

[DeckerEnt]

Well said!!
Keith

[thecollector]

Well GM Ford and Chrysler basically use the same contractors to build all the parts for their cars. If one of the three goes under, there is a very good chance that the parts suppliers will no longer be able to stay in business themselves. Suddenly there is no one to make the parts to build the cars and boom, all three go under.


In the first year of operations management you learn to diversify your supplier network, and provide primary and secondary suppliers. That is manufacturing 101. You ussually take a small hit on overhead and on time delivery however it would not put you out of business just slow your manufacturing times.

If a lumber supplier goes out of business would Lowes go under? No because lumber is only a portion of the product they offer, and another supplier would want to cut the wood for them. The supplier for a competitor would step up and increase their workforce to meet volume demand for Lowes.

In manufacturing if the demand and volume exist the supply is not far away. With manufacturing markets already being down capacity at other suppliers is not being utilized. These companies would love the opportunity to expand their output and grow.

I am not saying that the automotive industry wouldn't be dicey in the event of a failure, but then again it already is. Chances are the consumer base would never realize these problems first hand as the current inventory of manufacturers and distributors (dealerships) would fill the product demand during the manufacturing transition. Capitolist markets correct themselves without intervention.

The chapter 7 bankruptcy of GM would have allowed them to correct their own problems or fall by the wayside. Instead we are all paying the price.

[04 Venom]

Capitolist markets correct themselves without intervention.

In theory they do, in practice, not always.

[02mingryGT]

In theory they do, in practice, not always.

Name examples for your statement Comrade. I can name one in defense. The Depression of 1920. With little to no government intervention and even though unemployment and other economic numbers were worse than the first year of the Great depression the market recovered in a year and led to the Roaring Twenties. facts:

http://www.meltingpotproject.com/mpp/2009/02/the-great-depression-of-1920.html

I'll make this even more challenging. name one time when massive government intervention actually improved an economy. Good Luck Comrade.

[02mingryGT]

In the first year of operations management you learn to diversify your supplier network, and provide primary and secondary suppliers. That is manufacturing 101. You ussually take a small hit on overhead and on time delivery however it would not put you out of business just slow your manufacturing times.

If a lumber supplier goes out of business would Lowes go under? No because lumber is only a portion of the product they offer, and another supplier would want to cut the wood for them. The supplier for a competitor would step up and increase their workforce to meet volume demand for Lowes.

In manufacturing if the demand and volume exist the supply is not far away. With manufacturing markets already being down capacity at other suppliers is not being utilized. These companies would love the opportunity to expand their output and grow.

I am not saying that the automotive industry wouldn't be dicey in the event of a failure, but then again it already is. Chances are the consumer base would never realize these problems first hand as the current inventory of manufacturers and distributors (dealerships) would fill the product demand during the manufacturing transition. Capitolist markets correct themselves without intervention.

The chapter 7 bankruptcy of GM would have allowed them to correct their own problems or fall by the wayside. Instead we are all paying the price.

Excellent post collector.