Originally posted by: SampSon
What are these legacy expenses you are talking about? Stop paying on all the pensions?
Pensions and health care costs. GM has the largest health care bill of any single American based company. None of this is news though, we have all discussed it on here and just about every economic analyst in the country has written a piece on GMs consistant decline. So I'm not going to sit here and type out all the bulletpoints that you and everyone else undoubtedly knows about. GM is in deep doo-doo and their business model focuses on the wrong economic principles. Sure they have a lot of cash and liquidity, but they can burn through that in a few years, easily.
So there is no easy answer, it's a catch-22. GM
has to become a smaller more streamlined company or it will fail. So that requires cutting workforce and revamping the entire business model, from current production to legacy pension costs. No one wants to see hard working people get put out of work, nor do we want to see pensioners get cut off from the benefits they were promised. The reality is that GM and the unions made some bad decisions in the highflying markets of the 90s, but something has to give.
You're right the domestic car companies shouldn't have planned making cars that people wanted they should have planned that the government would come in and with the wave of their hand change the type of cars that they can sell.
Tomorrow the government is going to decide that high powered computers are unnecessary and limit all computers to 1 Ghz and there is no need for people to have energy wasting home theaters. All TVs will be limited to a max of 27"
I'll bet those two industries are ready for that.
The government isn't telling them what type of cars they can manufacture and sell. They are telling them that if they don't meet fuel economy standards they will be penalized monetarily. It's not as if these standards only apply to GM, they apply to all car manufacturers. Now if GM is making the cars people "want", why are their sales dropping off a cliff? Why are they not completely dominating the retail consumer market by huge margins? The answer is because people must not want GM's vehicles that bad, right?
Now, as I said earlier in this thread, if a consumer knows what they want then they are going to pay to get it. These CAFE standards arn't going to magically change the tastes of the American consumer, suggesting that they will overnight is kind of silly. A prime example is the exponential increase in the costs of gas, yet Americans still buy plenty of trucks and SUVs.
Lutz is doing nothing but whining, spewing rhetoric, and trying to blame everyone but the company he chairs. As if we shouldn't expect this from the guy who brought us the Dodge Viper, Plymouth Prowler, was involved with the Cunningham supercar project, pushed hard to bring the Monaro (GTO) to the states, and was involved with the Cadillac sixteen. Mabey he should talk to his brother about economics, it might help him help GM.
As for your apples to oranges statement about computers, HT systems, TV sizes and other random consmuer goods, do you really want to go there? It really doesn't make sense, unless you're trying to make some comparison between government energy policies and communism. The government isn't saying you can't make or have these products, they are just saying that we should probably attempt to curb our excessive use of fossil fuels or pay a higher cost/penalty. I can see the argument on both sides of that issue. Though you can't really compare oil/gas to tvs and computers.