You need to do a little reading on WHY the banks gave bad loans. 2 words, Government Intervention

 

IMO, (remember, it IS just my opinion), I think deregulation hasn't helped a lot either...

 

Would you think that Obama and administration people were not happy when the bonds holders said "NO" to their sacrifices. I'll bet that had lots to do with what is going on in the background.

 

First thought, on the banks. Yes, the government setup the situation that led to so many bad loans. But it was the banks that made the decisions to make those bad loans. No one twisted anybody's arm. Not all banks are in trouble. Some in fact are doing quite well because they didn't get lured into the trap of a quick buck. I know, I work for one that's doing well.

As far as GM and Rick Wagoner, well, all I have to say is that it's several years over due. He was doing a good job? GM lost money every year he was in charge. He should have been kicked out a long time ago. And the argument that GM didn't know this was coming is a weak one. Back in '05, there were warnings that the price of gas was going to top $4 with a few years. They knew what was coming. GM has had every chance over the years to position themselves to compete with Toyota and Honda, by trimming brands, developing fuel efficient cars, etc (you think direct injection is new technology?). They rested on their laurels and thought they could never be taken down. I read an interesting interview a few years ago with the guy who headed up the Impala. When asked if he was concerned that the Camry was the #1 selling car and that the Impala lagged behind, he said it didn't matter and went on to talk about the overall volume of cars that GM was selling. That's the kind of "head in the sand" thinking that's been at the heart of the US auto industry for far too many years. When I was done reading I understood why Toyota was easily going to outsell GM. All it took was a high gas prices and lack of consumer spending to make the final push over the cliff. GM has been dying for years, its just that someone forgot to tell them that it was happening.

Do I like any of this? Certainly not. I'm a huge GM fan. But the reality is that its been poorly run company, and Wagoner is one of the people responsible. As they say, the fish stinks from the head down.

 

You mean the thing that was a rare option on the 1957 Bel-Air?

Only took 30 years to become standard...

 

Yopu had better get the facts on this. Rick did do a good job and if the economy had remained stable and the final agreements witht he UAW and trust fund were hammered out GM had very good chance of refroming as a global company less many of the burdens they have carried for years.

The problem Rick faced coming in was a shrinking market share, too much production capacitym UAW problems, Too much inter division waste. I could go on. Either way GM was being turned. Rick also had to do this with little money. Rick brought about more changes as CEO since Anyone since the 50's when the trouble started.

To Change GM they needed Capital and lot of Capital. That is why they moved up the new trucks. The trucks make more profit than anything else on the market. Then the case cruch came in Followed up with the Market. Buying out employees and closing plants is not free. Killing brands like Pontiac Saturn and Hummer come at great cost buying out dealers alone. Making GM smaller is no cheap feat. In some cases more expensive in the short term to just keeping parts of it open.

If you really want to know what happened and what is going on read more then a interveiw. Read the new Book named Why GM Matters. It tells the story from the begining to the Sloan era on to around 1960 when the market changed and GM did not for many many years. It names names of past CEO's set this mess up and left it to Rick to fix.

GM's problems is over 40 years old and would not be solved in one year by one man. Rick in his few years has some more than anyone in 40 years.

To think he created this problem is foolish and to not give him credit for what he did right is even more foolish. Yes I will agree he did make some mistakes like the Fiat deal but the positive far out weight the negitives.

If you want to access the blaime it needs to go to the Roger Smiths and the like who did have their heads in the sand.

By the way GM is the first in this country to really push Direct Injection in gas powered cars on a large scale. IT too takes money to add this to each engine and the plan is progressing as they can pay for it in the budget. Justy as it is with many other programs.

Kind of like fixing up your HHR with little money. You have to do what you can afford to when you get the money.

 

My take on it is that Obama wants an all new management to come in to break the union and renegotate with bondholders in one final attempt to prevent a bankruptcy. If it doesn't work, they will go belly-up and start over again. GM is here to stay, it will just be a matter of getting the union to go along without the bankruptcy or going through it and forcing the issue.

 

You are correct.

No real new managment is comining is with Fritz Henderson [hand picked by Wagneer. Obama just got Rick out to show they are serious to the Bond Holders and UAW.

In the end I expect GM will go chapter 11 and we will have Chevy and Cadillac. Still an outside chance of Buick and GMC remaining. I figure this will end Pontiac even as a niche brand.

The question is how many models with in the divisions die and how soon. The HHR could be effected here.

I just don't feel comfortable with the same people calling the shots here are the same people with the 80% control of AIG. They have dons such a good job there.

I would think the president would look to people that know the industry and have some automotive back ground to help work this out. If you look at the oversight group not many with Automotive experience.

GM will be around in some form but no where near what it once was.

 

I know nothing of this CEO, but i know I wont buy ANY GM built between 75 and 2001(ish) based on looks AND reliablity risks (basically how you and your neighbor could buy identical S-10's. built on the same day.in the same place
his could rock while yours quickly rotted)

but i have been taking a shine to GM's lately, and i see no real faults in their business plans.

I just see a market that shifted violently, and a giant company that served that market(well) for decades. but is struggling to change for customers that quickly abandoned it.

i see no reason to punish anyone for satisfying customers for decades (even if i wasnt one of them)
because yesterdays yuppie wanted giant cars that looked like SUV's...
but in an instant wants a honda fit. it takes time to adapt to that. especially on as grand a scale as GM will have to.

thats my convoluted noob opinion. my apologies if it seems assine!

 

No you have the tight Idea.

Rick is the one for example who was trying to taking a company with so many purchasing departments that they would pay 5 different prices for the smae Federal Mogual bearing to a company that paid on fair price. There was a lot of waste for too many years and those who ignored it put GM where they are at today. There were nearly 10 CEO who did nothing.

Ricks one big failure was to put cars like the Cruze off till next year but that was due to the fact it was a global platform. In other words a Chevy to be sold world wide and it takes a lot of money they did not have.

The the trucks they spent money on were to generate that money. With truck sales slowing they were getting hte money but later than expected.

Rick and the GM PR people just did a poor job of explaining what they were doing. It is hard for a company with so many issues to admit publicly they have these problems.

Also if GM had been in as bad of shape as Ford was they would have gotten the low interest loans a few years ago and not had to go to the goverment.

Ford bad luck was in truth good timing. GM on top of their many proablems never caught a break on timing.

Now the Market is dead and it is to the point now that even companies like Toyota are losing money at a fast rate. If it goes long enough all MFG will be in trouble to a point. Toyota, Mazda, Nissan and others have already gone to the goverment in Japan for loans too but you don' see much of that in the news.

Toyota bears watchingas they just put the grandson of the founder in charge. Many feel he is not the one for the job. Time will tell.