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Here's an article with some interesting ideas for GM's restructuring:
Bill George: A Plan to Save GM
By BILL GEORGE
(excerpt)
....In spite of many calls to let GM go bankrupt from Congress and elsewhere, the GM board is correct in its assessment that American consumers won't want to buy their automobiles from a bankrupt company.
So why doesn't the GM board do the obvious: dramatically downsize the company to make it viable? The only way GM can survive is to consolidate around three brands – Chevrolet cars and trucks, Buick and Cadillac, and sell off or shut down the rest of the company.
The fastest and most efficient way to get this done is to split GM into two companies, a healthy GM and one to be liquidated. These would be separate legal entities with separate shareholders, so that the healthy company cannot be forced to assume the remaining company's liabilities.
I think that this is being blown WAY, WAY out of proportion. GM has been profitable up until about 2006. GM has steadily lost market share, for sure, however, the market has grown so large, since towered over it, that the market share loss does not represent that much of an ABSOLUTE loss. For example, just speaking hypothetically, If GM sold 5 million vehicles in 1970, and had 60% of the US market share, where as today they sell 5 million vehicles and only have 30% of the market share, the companies absolute sales have not declined….only their relative sales. Moreover, if they used 300,000 workers to build 5 million vehicles in 1970 and yet they use only 150,000 workers to build 5 million vehicles in 2006, that is a massive increase in productivity. So it’s not like the company has stood.
It’s asinine, in my personal opinion, to be focusing on the Auto Industry as some sort of anomaly of poor management. Hello…has anyone noticed that THIS COUNTRY is spiraling towards a depression and would be in a depression already if not for dollar hegemony globally as the dollar is the world’s reserve currency? Has anyone noticed that the same government that was chastising the Auto companies for poor management is running a 10 trillion dollar deficit and a deficit of nearly 60 trillion when unfunded liabilities of Medicare and Social Security normalizes the accounting? Has anyone noticed that banks have been failing and in need of a bailout and countless companies are laying off large portions of their workforce? Has anyone noticed that personal debt is at a all time high, savings rate is near zero, the stock market has lost half it capitalization from its high and home prices are falling, making the consumer public a poor credit risk for further loans? Had anyone noticed that gas prices had shoot through the roof? Obviously when times get tight, big ticket items, like cars and trucks, homes, and the like, will be the first to get hit hard. Hey….here is a thought….maybe the Big 3 problems are related to the mucked up US economy, the **** poor policies of political leaders, the Federal Reserve and running a Ponzi scheme economy that is now coming down like all Ponzi schemes do.
Hey….here is another news flash…..Toyota is posting is first loss…..EVER? Hey….maybe they should move their headquarters and shake things up over there too……since this is unprecedented losses can only be the result of poor management and culture of complacency that promotes it. This is total BS and I am sick of it. When the Steal Industry waned in America, was it because of poor management? When the Textile Industry waned in America, was it because of poor management? Things change globally that impact upon industries in the USA. Some nations evolve the “comparative advantage” in trade. They have some intrinsic advantage, such as lower labor rates, more honorable NATIONAL culture, and more government assistance (via health coverage and the like) and so on and so forth. Thus, these countries then win the trade wars.
It’s like people expect the Big 3 to stay afloat while the nation goes down the economic tube. That is azz backwards. If this country was HEALTHY ECONOMICALLY and the big 3 was losing profitability and solvency…..then all this radical talk would make sense. However, given the state of the US economy and how bad it’s likely going to get, the Big 3 woes are simply a symptom and not the problem.
Replacing Waggoner and other top management seems like a stupid move to me. These are the people who know all about GM and its current financial condition. How long would it take new top management to get up to speed so that they can effectively manage the company? I woudl expect that it woudl take a new preseident at least a year and a half to get familiair with every company and division and their specific problems and assets before he could begin to make any meaninguful decisions. I do nto think that GM has that long. This is not the time to change horses.
I think that this is being blown WAY, WAY out of proportion. GM has been profitable up until about 2006. GM has steadily lost market share, for sure, however, the market has grown so large, since towered over it, that the market share loss does not represent that much of an ABSOLUTE loss. For example, just speaking hypothetically, If GM sold 5 million vehicles in 1970, and had 60% of the US market share, where as today they sell 5 million vehicles and only have 30% of the market share, the companies absolute sales have not declined….only their relative sales. Moreover, if they used 300,000 workers to build 5 million vehicles in 1970 and yet they use only 150,000 workers to build 5 million vehicles in 2006, that is a massive increase in productivity. So it’s not like the company has stood.
It’s asinine, in my personal opinion, to be focusing on the Auto Industry as some sort of anomaly of poor management. Hello…has anyone noticed that THIS COUNTRY is spiraling towards a depression and would be in a depression already if not for dollar hegemony globally as the dollar is the world’s reserve currency? Has anyone noticed that the same government that was chastising the Auto companies for poor management is running a 10 trillion dollar deficit and a deficit of nearly 60 trillion when unfunded liabilities of Medicare and Social Security normalizes the accounting? Has anyone noticed that banks have been failing and in need of a bailout and countless companies are laying off large portions of their workforce? Has anyone noticed that personal debt is at a all time high, savings rate is near zero, the stock market has lost half it capitalization from its high and home prices are falling, making the consumer public a poor credit risk for further loans? Had anyone noticed that gas prices had shoot through the roof? Obviously when times get tight, big ticket items, like cars and trucks, homes, and the like, will be the first to get hit hard. Hey….here is a thought….maybe the Big 3 problems are related to the mucked up US economy, the **** poor policies of political leaders, the Federal Reserve and running a Ponzi scheme economy that is now coming down like all Ponzi schemes do.
Hey….here is another news flash…..Toyota is posting is first loss…..EVER? Hey….maybe they should move their headquarters and shake things up over there too……since this is unprecedented losses can only be the result of poor management and culture of complacency that promotes it. This is total BS and I am sick of it. When the Steal Industry waned in America, was it because of poor management? When the Textile Industry waned in America, was it because of poor management? Things change globally that impact upon industries in the USA. Some nations evolve the “comparative advantage” in trade. They have some intrinsic advantage, such as lower labor rates, more honorable NATIONAL culture, and more government assistance (via health coverage and the like) and so on and so forth. Thus, these countries then win the trade wars.
It’s like people expect the Big 3 to stay afloat while the nation goes down the economic tube. That is azz backwards. If this country was HEALTHY ECONOMICALLY and the big 3 was losing profitability and solvency…..then all this radical talk would make sense. However, given the state of the US economy and how bad it’s likely going to get, the Big 3 woes are simply a symptom and not the problem.
Agree. The money should be spent elsewhere because in this economy no one can buy a car anyways especially when everyone is afraid of losing their jobs. They are done for, and thats that! How about taking the bailout money and doing something, anything about the housing mess. Maybe pay everyones mortgage for a year, I dont know.
Agree. The money should be spent elsewhere because in this economy no one can buy a car anyways especially when everyone is afraid of losing their jobs. They are done for, and thats that! How about taking the bailout money and doing something, anything about the housing mess. Maybe pay everyones mortgage for a year, I dont know.
PAY for housing for everyone????? Let people live within their means. Where is a house guaranteed in the Constitution??
This is the time where the alternative energy thing really becomes important. If we can drive down the price of gas, electricity and whatever else, we can really save a ton of money each month! The wind thing is huge, if we could all have a smaller turbine on our home like everyone used to have antenna, then thats big! get some solar powered electrical stations built in the desert. Invest big into finding cheaper ways to build houses to drive down the cost.
This is where Obama is right on. I think he knows this kind of stuff is important, and needs to be done NOW not 5, 10, 20 yrs. from now!
I agree with some of your suggestions, that GM is to big and cannot continue operating in the shape that it is, BUT, I agree with the suggestions that others have brought to the table saying that it would not be a good idea to get rid of Rick Wagoner and other execs that know GM inside and out. The biggest mistake at Chrylser was to bring in Bob Nardelli from Home Depot, he does not know a single thing about the auto industry and does not even live in or close to Michigan.
As for brand slashing, I don't think that GM needs to haul around HUMMER or Saab anymore, they just have been big losers for the company. Even Pontiac, Buick, and Saturn are questionable.
The only reason why I would suggest keep on to HUMMER is because they are used in the military and for other professional uses, in many ways that is not something that you wnat to lose, but by a consumers stand point, HUMMER looks as if it is a big loss.
This is the time where the alternative energy thing really becomes important. If we can drive down the price of gas, electricity and whatever else, we can really save a ton of money each month! The wind thing is huge, if we could all have a smaller turbine on our home like everyone used to have antenna, then thats big! get some solar powered electrical stations built in the desert. Invest big into finding cheaper ways to build houses to drive down the cost.
This is where Obama is right on. I think he knows this kind of stuff is important, and needs to be done NOW not 5, 10, 20 yrs. from now!
You can put up a wind turbine any time you want. Enjoy!!! What you will alway find is the economy and the environment will be at odds with each other. In the end all "we" will do is whine on the forums.
PAY for housing for everyone????? Let people live within their means. Where is a house guaranteed in the Constitution??
No, not pay for everones housing forever. I meant pay everyones mortgage payments for a year. Excluding the super rich.
I know its a dumb idea, but its dumber to give the money to all these companies who are using it to give bonuses! How about take my tax money, and give it back to me? What do you think the automotive companies will do with it? They know they cannot survive, they will just line their pockets.
No, not pay for everones housing forever. I meant pay everyones mortgage payments for a year. Excluding the super rich.
I know its a dumb idea, but its dumber to give the money to all these companies who are using it to give bonuses! How about take my tax money, and give it back to me? What do you think the automotive companies will do with it? They know they cannot survive, they will just line their pockets.
Oh, I do not believe in managing the economy at all!!!
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Bs
