General Motors: The money pit

[waldo]

for someone, like you, who struggles to accept... to recognize... the ever increasing costs of the F-35, who wants to stick to a ridiculous fly-away cost projection that has no foundation in reality, you're pretty bold considering all the order "delays", the past (decade+) historical project failure, the continued ongoing project failings... and impending sequestration. If you feel emboldened to talk F-35 costs again, strike it up in an appropriate thread... there's no need to have you sidetrack this thread.

[Guest Derek L]

for someone, like you, who struggles to accept... to recognize... the ever increasing costs of the F-35, who wants to stick to a ridiculous fly-away cost projection that has no foundation in reality, you're pretty bold considering all the order "delays", the past (decade+) historical project failure, the continued ongoing project failings... and impending sequestration. If you feel emboldened to talk F-35 costs again, strike it up in an appropriate thread... there's no need to have you sidetrack this thread.

What if Lockheed promised to use recycled pop bottles as a source for plastics?

Chevy Volt/GM largess = good

Lockheed F-35 largess = bad

Got it.

[bleeding heart]

Oh, I did not know that GM was owned by the government during the past 30 or 40 years of decline prior to them effectively going bankrupt... and prior to the government taking its ownership stake to bailout the failed publicly owned company.

But, no, I'm sure all that is past and any current problems are all the governments fault.

[Pliny]

Oh, I did not know that GM was owned by the government during the past 30 or 40 years of decline prior to them effectively going bankrupt... and prior to the government taking its ownership stake to bailout the failed publicly owned company.

But, no, I'm sure all that is past and any current problems are all the governments fault.

You agree then that it has been poorly managed since before the government got involved? And how is it a good management decision to reward poor management with taxpayer money? Was the purpose to save GM or was it to save jobs or, as claimed by government, to save the auto industry or was it just a favour to the UAW? Of course, the government says they saved the "auto industry" so it is all of the above. They really mean the "American" auto industry but is it saved? It's too early to tell is all I have said.

By the way, the American auto industry just recently dropped market share in the US to below 49% for the first time in history - A sign of continued good management?

Hallelujah, for corporate bailouts and continued poor management.

[kimmy]

By the way, the American auto industry just recently dropped market share in the US to below 49% for the first time in history - A sign of continued good management?

A sign of increased competition and more consumer choice!

-k

[Shady]

Did anyone else know that GM and Chrysler are exempt from paying taxes for several years? It was part of their bailout.

[bleeding heart]

Did anyone else know that GM and Chrysler are exempt from paying taxes for several years? It was part of their bailout.

But wouldn't you support exactly this tax policy?

[Shady]

But wouldn't you support exactly this tax policy?

How so?

[bleeding heart]

How so?

Zero taxes on corporations?

I apologize in advance if I have mistaken your view.

[Shady]

Zero taxes on corporations?

I apologize in advance if I have mistaken your view.

Yes, you definitely have mistaken my view. I'm not a proponent of a zero tax rate, nor am I a proponent of exempting one particular company, based on their failure from paying said taxes, while all others in the same industry pay their share.

Edited September 26, 2012 by Shady

[Shady]

False choice is Obama OR Romney.

Not this election. It's between those two. In future elections, it will be different.

[bleeding heart]

Yes, you definitely have mistaken my view. I'm not a proponent of a zero tax rate, nor am I a proponent of exempting one particular company, based on their failure from paying said taxes, while all others in the same industry pay their share.

Well, now I think of it, even if you were a proponent, you'd still presumably object...based on the unfairness of exempting some but not the others, as you say.

So fair enough.

[Pliny]

A sign of increased competition and more consumer choice!

-k

Where is the increased competition coming from? And how does a bailout contribute to increased competition?

Government intervention generally leads to less competition. Subsidies and bailouts tend to eliminate competition and consequently to less consumer choice.

[Bonam]

Where is the increased competition coming from? And how does a bailout contribute to increased competition?

Competition is coming from the foreign car companies that are successfully growing without needing bailouts.

[msj]

By the way, the American auto industry just recently dropped market share in the US to below 49% for the first time in history - A sign of continued good management?

Hallelujah, for corporate bailouts and continued poor management.

Yeah, brother!

Because going from 75% to 50% is magic but going from 50% to 49% is all the governments' fault....

[Pliny]

Competition is coming from the foreign car companies that are successfully growing without needing bailouts.

Yes. As has been the case for many decades. ???

[Pliny]

Yeah, brother!

Because going from 75% to 50% is magic but going from 50% to 49% is all the governments' fault....

Going from 75% to 50% is poor management. Keeping on sliding after a bailout is continued poor management - government or not.

[dre]

Going from 75% to 50% is poor management. Keeping on sliding after a bailout is continued poor management - government or not.

Thats not necessarily a true statement. GM has been losing marketshare since 1980, and the main reason for that is that a whole slew of foreign competition was added to the market. Thats not necessarily an indication of bad management, just the pie being split between more vendors.

[jbg]

Thats not necessarily a true statement. GM has been losing marketshare since 1980, and the main reason for that is that a whole slew of foreign competition was added to the market. Thats not necessarily an indication of bad management, just the pie being split between more vendors.

Trust me. Until recently the product of U.S. domestic car manufacturers was garbage. My wife's 2008 Ford Taurus is a huge improvement over her 2001 which it replaced.

[BubberMiley]

You bought another one after the first one was garbage?

[kimmy]

Why did "big-3 market share of the US auto market" suddenly become the relevant metric of whether GM is being well-run or not?

To put market-share in perspective: Apple has never had top market share in either computers or in smartphones, and Apple is the most valuable company on earth. Making a profit on a smaller market share sounds like better management than posting losses on a bigger market share, and GM is making profits again.

Pliny has cherry-picked market-share because it's the only metric he can find to support the narrative he wants to spin, but it's desperate and rather dumb.

GM knew in advance that some of the moves they did to stop the hemorrhaging (shutting down their Saturn and Pontiac divisions, as well as Oldsmobile a few years earlier) would result in a loss of market share.

Combined with that, consider that Kia over the past 5-6 years has changed from a bit-player to an established major brand in North America, who are doing huge business in the value-car segment that Saturn used to compete in.

-k

[Bonam]

Was Saturn really a "value car" brand? I always remember their cars being one or two steps up the price/luxury ladder.

But otherwise I agree, if GM is making a net profit again, then they are definitely better managed now than they have been.

[jbg]

You bought another one after the first one was garbage?

My wife didn't consider either garbage. I did. We both agreed that the 2000 Volvo we owned for a while was also garbage. The current Ford Taurus 2008 is quite good.

[Pliny]

Thats not necessarily a true statement. GM has been losing marketshare since 1980, and the main reason for that is that a whole slew of foreign competition was added to the market. Thats not necessarily an indication of bad management, just the pie being split between more vendors.

I guess they never saw it coming. They rode the market just on their name for years before recognizing a problem.

The fact is they continue to lose market share in North America even after a "whole slew of competition was added to the market". The biggest reason they have lost market share is because in the past their product became both inferior and more costly than the competition. Those factors make room for their competition to thrive and grab market share.

[Pliny]

Why did "big-3 market share of the US auto market" suddenly become the relevant metric of whether GM is being well-run or not?

To put market-share in perspective: Apple has never had top market share in either computers or in smartphones, and Apple is the most valuable company on earth. Making a profit on a smaller market share sounds like better management than posting losses on a bigger market share, and GM is making profits again.

Pliny has cherry-picked market-share because it's the only metric he can find to support the narrative he wants to spin, but it's desperate and rather dumb.

GM knew in advance that some of the moves they did to stop the hemorrhaging (shutting down their Saturn and Pontiac divisions, as well as Oldsmobile a few years earlier) would result in a loss of market share.

Combined with that, consider that Kia over the past 5-6 years has changed from a bit-player to an established major brand in North America, who are doing huge business in the value-car segment that Saturn used to compete in.

-k

I cherry picked market share? It's a pretty good indicator of the health of a company.

Apple is a superior product and is more proprietary. It's market share is growing. RIM is in trouble and Apple is suing Samsung. It looks like Apple wants to be a monopoly. Since the PC is going the way of the Dodo, Microsoft will be in trouble as well.

One can't possibly believe that an automobile manufacturer can be better run with the government on board? Oh! I'm sorry I guess someone can.

Are they just doing the UAW a favour, maybe? The Government administration wants votes and it wants revenue and it cares about its perception. That's about it. It has no business acumen. The UAW doesn't either. They both seem to kill competitive businesses. If one looks at the postal service they do seem to be able to keep a monopoly alive for awhile at least.

I originally said that GM had problems that they seemed to be addressing but the North American Market was still struggling.

Someone implied that I said it was all the government's fault. I never said that. Basically, I only said that government did not make a good business partner and until they were gone the real health of the company would and should remain questionable.