One of GM's largest problems is the unions. Going through bankruptcy would provide them with a much needed chance to re-negotiate the labor contracts. I vote for bankruptcy all the way.
Ask YC: To save GM or not?
11–20 of 74 posts
Re: Ask YC: To save GM or not?
#12Some (self described) smart people believe that "it'll all just work" if we put the just-right smart person in charge of such a bailout to decide what the just-right thing to do is. We instead need to put 200 million smart people in charge of deciding what to do - and they can each decide with their own hard-earned money. Give your money to government - or just the same, give government the power to take your money -…
If only there were 200 million smart people in the US! By definition, 50% are below average.
Perhaps we need some sort of document that states, and that people in elected office would swear an oath to support, that no matter where you fall in the bell curve, that only you have the right to pursue your own path when deciding what is best for yourself. I just can't think of what to call such a thing.
Re: Ask YC: To save GM or not?
#13One idea I heard on C-SPAN this morning was to chop them up and take the bailout money to instead build something like 12 hardcore engineering outfits to build cars of the future, then get startup people to pitch for an opportunity to run those outfits and/or commercialize them down the road. I don't have any capacity for analyzing the pros and cons to this, but the idea of focusing on starting from innovation rather…
"I don't have any capacity for analyzing the pros and cons to this".
Nor does anyone else - especially if they claim to do so.
Re: Ask YC: To save GM or not?
#14Short answer is "yes, let GM fail". For more details, I appreciate Daniel Ikenson's insights on this:
http://www.cato.org/dailypodcast/podcast-archive.php?podcast...
Re: Ask YC: To save GM or not?
#15Let them die, but don't let them die now, because now things are bad enough as it is.
Think of it as a bail out of everybody else.
We're going to spend 3,4, maybe 5% of annual GDP to get through this mess. Might as well use some of that to kick the GM can down the road a bit.
Re: Ask YC: To save GM or not?
#16it can't be a blank check, if they are going to bail them out that better come with a huge list of demands...forget golden parachutes, demand complete reorganization, huge cuts, new focus. i.e. I'd sell/cut Buick, Hummer, Saab and then go through the brands cutting models. GM makes 89 vehicles and many of them are pretty much copies of each other and compete with each other. Notice how honda only has 10 models, 1 for…
Yeah... I read somewhere that the GM bailout should come with the requirement of replacing their current vehicles with a hybrid/electric/whatever lineup in X number of years.
I would be happier about a bailout with those sort of strings, but in general, reading that Executives at these car co's have been deriding climate change evidence and the need for hybrids/alternative fuels, makes me skeptical that refunding these companies is the best way to fix the car problem.
On another note, this stuff sucks. Everyone loses if we bail out poorly run companies, but there's a very high cost to letting them go under. Good luck, Mr President-Elect.
Re: Ask YC: To save GM or not?
#17Is it really that GM has failed to innovate? Let's look at the numbers:
GM======================================Toyota
$1,525 in healthcare per vehicle $201 in healcare per vehicle
$73.73 avg cost of a labor hour $48 avg cost of a labor hour
34.3 hours to build a vehicle 27.9 hours to build a vehicle
Loses $2,331 per vehicle Makes $1,488 per vehicle
The other things they need to do is use less labor hours to build a vehicle, increase plant utilization (which is only at 85% right now), and get idle workers off their payroll - yes GM is contractually obligated to pay people not to work.
GM should innovate. They do need to come up with better models. They do need more reliable cars. They do need to be more fuel efficient. However, none of those are really their big problem. GM is still selling nearly as many cars as Toyota. They don't have problems creating popular cars. That's a misconception with many people who happen to dislike GM cars (heck, I think they're complete crap).
The big question is, can GM reduce those labor and healthcare costs? If not, they will NEVER, EVER be profitable. You can't compete with a $2,200 handicap per vehicle. In fact, it's a testament to GM that they have been able to compete for so long with such a huge disadvantage. If those costs can be lowered, GM just needs a small loan (like $25bn) and a few years time. If those costs can't be lowered, we'll be talking about giving them another $50bn in a year and another $100bn in two years.
EDIT: Figures provided by NPR (http://www.npr.org/news/specials/gmvstoyota/)
Re: Ask YC: To save GM or not?
#18Some (self described) smart people believe that "it'll all just work" if we put the just-right smart person in charge of such a bailout to decide what the just-right thing to do is. We instead need to put 200 million smart people in charge of deciding what to do - and they can each decide with their own hard-earned money. Give your money to government - or just the same, give government the power to take your money -…
If only there were 200 million smart people in the US! By definition, 50% are below average.
So? The 'average' IQ could be 200, which would make a lot of 'below-average' people still really smart. :)
Re: Ask YC: To save GM or not?
#19Earlier quoted context omitted.
If only there were 200 million smart people in the US! By definition, 50% are below average.
So? The 'average' IQ could be 200, which would make a lot of 'below-average' people still really smart. :)
I think it is implied that the average IQ is 100. But you are right there is nothing wrong having 50% below average if the average were 200.
Re: Ask YC: To save GM or not?
#20I don't like the word "bailout", but I think letting them die at the moment is too risky.
I would consider a government-backed loan or temporary equity stake on the conditions that: - Executives are replaced - The UAW agrees to major contract restructuring or is disbanded altogether (see below before you crucify me) - The companies set efficiency goals for production and sales processes (stop putting out designs earlier and changing them every year)
I also think the government could do things on the demand-side to help. Such as offering tax credits for buying a new, American car
On the UAW issue, please be aware that I'm not "anti labor". Non-union workers at US-based plants (for Toyota, Hyundai, etc.) have comparable salaries, good benefits (including pensions), and negotiating power.
Some good info on all of this at NPR: http://www.npr.org/templates/story/story.php?storyId=9694532...