In 2005, GM had 777,000 employees + retirees worldwide. In 2007, GM had 181 billion in revenues.

[Hannah Bell]

assume half the revenues went to pay for materials, overhead, etc.

That leaves 90.5 billion.

Take half of that as profit: $45.25 billion.

It still leaves about $60K per person to pay salaries & retirement benefits.

GM is expanding in China, India & Russia.

There are lots of ways to show paper "losses".

http://en.wikipedia.org/wiki/General_Motors

http://www.accessmylibrary.com/coms2/summary_0286-9693173_ITM

[BootinUp]

1. Assume 70% went to pay for materials, overhead etc

50% is not seen in mature markets as far as I know.

[Hannah Bell]

3. Then $60K per employee/retiree & 10 billion in profit.

There are lots of ways to book paper "losses".

[Hannah Bell]

5. BTW, if 70% of costs are fixed & non-labor, it suggests that labor cost

doesn't really contribute much to the car corps "problems".

[StreetKnowledge]

66. It's probably higher than 70%

Labor costs are probably 80% of GM's costs. Remember that you also have to include buying parts from thousands of suppliers as GM does. The losses are probably quite genuine.

[Hannah Bell]

72. OK, so, if this is the case, then 80% of the cost of a 30K car = 24K.

Labor cost is 6K.

If plant is off-shored to somewhere labor is 50% cheaper, that means we could get the same car for 27K. Wow! I bet people would flock into the showrooms!

Except there'd be about 500,000 people fewer who had jobs.

The whole storyline is bullshit.

[gravity]

2. GM lost $40 billion last year

http://finance.yahoo.com/q/is?s=GM&annual

[Hannah Bell]

4. Yes, while they were shutting down plants in the US & expanding them in China, India, Russia.

This is my point. There are lots of ways to book phoney "losses".

[gravity]

6. They are real audited losses

GM was selling a lot of cars, but they weren't making any profits from it.

[Hannah Bell]

8. enron was "audited" too. auditing is a joke. all the us automakers

have been building new plant overseas hand over fist. new russian plant announced this week coincident with their bailout demands.

there are lots of ways to book losses, & some of them are perfectly legal.

doesn't mean they're necessary, efficient, & especially doesn't mean the taxpayers should cover the phoney losses.

[gravity]

15. If anything GM would like to book fake gains

It was in GM's interest to book gains because it raises the stock price and allows them to get cheaper loans. I don't know how you can suggests that GM has phony losses when all their financial information has been public knowledge for years and has been analyzed by experts who have an interest to make sure GM's accounting is clean.

[Hannah Bell]

17. as i said, so was enron's. There is no "clean," anywhere.

[gravity]

22. 99% of companies are clean

You can fudge some numbers, but you can't cover up billions of dollars in losses and negative equity.

But since you are an expert on this, why don't you tell me how GM could be posting its record profits. You are making the accusations, so tell me what is wrong with GM's numbers.

[Hannah Bell]

45. you can assert it, but so what?

2/3 of corps pay no taxes, for starters. think it's an accident? you think giant multinationals are constantly doing so poorly that they need tax breaks? 75% of global markets & they just can't make the rent?

nearly every major corp within the last 20 years has some kind of dirtiness - prosecuted for price-fixing, tax-cheating, environmental & labor violations, etc. etc. - & that's just the blatant stuff.

[gravity]

51. Every multinational corporation pays taxes

You can argue that they are greedy wanting tax reliefs, but they still pay taxes on the profits they make. The only way for a company to avoid paying taxes is to not make profits which means they are going to lose their money anyways.

Stop spreading nonsense. This is public information you can look up and research.

[Hannah Bell]

55. so these sources are lying, then?

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/08/13/MNC4129OFL.DTL

"about a quarter of large corporations - ones that had more than $250 million in assets or $50 million in gross receipts - paid no taxes. In 2005, for instance, 3,565 large U.S. companies and 998 large foreign-owned companies operating here did not pay any income taxes."

http://www.boston.com/business/globe/articles/2004/04/11/most_us_firms_paid_no_income_taxes_in_90s/

"WASHINGTON -- More than half of US corporations paid no federal income taxes during the boom years of the late 1990s, and those that did were able to shelter much of their income, according to congressional accountants."


http://www.csmonitor.com/2004/0419/p16s03-cogn.html

Just as millions of Americans were filling out their federal 2003 tax forms to beat the April 15 deadline, the GAO study indicated that most corporations owed no taxes from 1996 to 2000, a boom period for corporate profits.

Those untaxed corporations earned $3.5 trillion of revenues.


http://www.nytimes.com/2008/08/13/business/13tax.html


Two out of three US corporations paid no taxes 1998-2005 per GAO.



I guess it's you who should stop with the disinfo.

[gravity]

59. Were those corporations making profits?

I can believe that there are numerous amounts of small corporations who didn't make profits, or received enough tax credits to offset their tax burden. These are mostly small businesses, young growing companies, or failed businesses.

I am talking about the big corporations, and they all pay taxes if they make profits. Microsoft, GE, Intel, Exxon Mobil, Goldman Sachs etc. If you are making billions, then you are going to pay taxes.

[Hannah Bell]

63. do you read?

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/0...

"about a quarter of large corporations - ones that had more than $250 million in assets or $50 million in gross receipts - paid no taxes. In 2005, for instance, 3,565 large U.S. companies and 998 large foreign-owned companies operating here did not pay any income taxes."

[gravity]

64. They weren't making profits

Companies can have over $250 million in assets or $50 million in sales and still not make a profit.

If you have $100 million in sales but spend $101 million to run your business, you don't pay taxes because you lost $1 million that year.

[Hannah Bell]

69. 82 Major Firms Paid No Federal Taxes while they reported more than $100 billion in U.S. profits

http://articles.latimes.com/2004/sep/23/business/fi-biztax23

By Emma Schwartz
September 23, 2004 in print edition C-3

Eighty-two major U.S. corporations paid no federal income taxes at least once in the last three years, even while they reported more than $100 billion in U.S. profits during the years they paid no taxes, a study released Wednesday found.

Authors of the study, the liberal policy groups Citizens for Tax Justice and the Institute on Taxation and Economic Policy, said the finding reflected a broader trend of increased tax breaks that had allowed corporations to pay a smaller share of the nation’s total tax burden.

Among the companies cited: AT&T Corp., Boeing Co., Prudential Financial Inc., Time Warner Inc., Caterpillar Inc., Pfizer Inc. and Walt Disney Co."


You just say things. You have no information as to the facts, just your bias.

[Hannah Bell]

70. Now lets look at a corporation which supposedly paid "lots" of taxes: exxon.

http://finance.yahoo.com/q/is?s=XOM&annual

It's all over the internet. Poor exxon, paid soooooo much in taxes.


Let's see: 404 billion in revenue, less 232 in "cost of revenue" (= materials, labor, depreciation, etc. - basically, costs of production).

Gross profit of 172 billion. Not too shabby, that would pay nearly half of 1 year's social security - the living expenses of more than 50 million people.


But wait, what's this? 100 billion more in deductions?

88 billion in "selling general & administrative," or 22% of total revenue?

12 billion in "other" (= deductions) for a combined 25% of revenues?


Then another .4 billion in interest deductions?


Leaves adjusted *profit* of about 70 billion to tax & give to shareholders.

Lots of ways to book low profits.


Where did the 100 billion go, really?


http://finance.yahoo.com/q/is?s=XOM&annual

[gravity]

73. They made 70 billion in profit and paid 30 billion in taxes

I don't see your point.

[Hannah Bell]

80. Depends on how you define "profit," don't it. And how much $ you

stuff into which column.

And how many nice "deductions" the gov is giving out this year.

The gross profit is revenue less costs of production: labor, materials, depreciation.

The gross profit was 171 billion.

The next 100.5 billion was overhead - fat corporate salaries & bonuses, for starters - & government-sponsored tax deductions.



"Still, Mr. Raymond's package for 2005 stands out, even stripping the $98 million lump-sum value of his pension plan. He received $19.9 million in salary, bonus and other incentives for 2005.

He made $21.2 million on options he exercised last year. And he was awarded 550,000 restricted shares, bringing the total he owns to 3.26 million, with a value of $199 million, at $61 a share, an average of Exxon's share price since March 1. Some of the restricted shares vest in 5 and 10 years. He owns more options that hold a value of $69.6 million."

20 million is 2% of 1 billion. That's base pay for 1 guy.

[gravity]

79. If you want to know what all of the expenses are

then dig in: http://ir.exxonmobil.com/phoenix.zhtml?c=115024&p=irol-SECText&TEXT=aHR0cDovL2NjYm4uMTBrd2l6YXJkLmNvbS94bWwvZmlsaW5nLnhtbD9yZXBvPXRlbmsmaXBhZ2U9NTQ5OTMwMiZhdHRhY2g9T04%3d

[Hannah Bell]

90. doesn't tell me much more than my own post.

except for the 3 billion in outstanding exec stock options.

[Hannah Bell]

68. "Ingersoll-Rand, the venerable machinery manufacturer,

has been an American company since its founding, a century ago....Yet, when it comes to paying taxes, Ingersoll-Rand is not an American company. It's Bermudan... this is enough to save the company forty million dollars a year.

Ingersoll-Rand is not alone. Among the many U.S. firms that, since 1994, have decided to reincorporate in Bermuda are the giant conglomerate Tyco, the electrical-parts manufacturer Cooper Industries, and the hardware maker Stanley Works....

If Ingersoll actually wants to leave the United States and set up shop in Bermuda, so be it...But Ingersoll-Rand doesn't want to leave. Its executive offices are in Woodcliff Lake, New Jersey. Its C.E.O. and all its top officers live here in the States. It wants the benefits of U.S. citizenship; it just doesn't want to pay for them."

http://www.newyorker.com/archive/2002/04/22/020422ta_talk_surowiecki

[StreetKnowledge]

71. And how does this affect the American Auto Industry?

Because GM's legal headquarters is still Detroit, Michigan. Ford is still legally based in Dearborn, Michigan. Chrysler is still based in Highland Park, Michigan.

[Hannah Bell]

74. The immediate point was: corps who don't pay taxes, & tax dodges generally.

ya gotta keep up.

[StreetKnowledge]

76. I did keep up

But this thread last I checked was about the US auto industry and your accusation that they were not paying taxes or lying about their profits.

[Hannah Bell]

81. I think if you go back & review, you'll find the tax sub-thread began

as a discussion re corporations generally.

[jakefrep]

18. Do you have any clue at all about the global car market?

GM (and many other carmakers) are building plants in Russia, China, and India - why? Because the market for cars in those places is growing, and it makes more sense to build them there than to build them here and ship them over.

[Hannah Bell]

20. gm sells 9 million cars in the us, in a bad year. a million or less in china.

less in india. compare the disinvestment here to the investment there: your "loss".

[jakefrep]

21. So what's your point?

What is so terrible about building manufacturing facilities in growing markets?

[Hannah Bell]

24. 1. the investments are bigger than the current markets. they're investing in cheap labor, not

current sales.

2. they're spending billions on this investment while cutting benefits, salaries & outsourcing & laying off here: saying that their "losses" justify it.

3. they're able to make fuel-efficient vehicles overseas - but not here.

4. There was no "growing market" in china until us, european & overseas chinese funded one. How do you think *markets* are created? They're created by the people who have the *money*. They move it here, they move it there, & you pay coming & going. do you think *growing markets* spring up like magic toadstools?

[Cessna Invesco Palin]

30. They're investing in "cheap labor"

...because nobody is going to buy a piece of shit American car imported from the United States when they can buy a locally produced piece of shit car for half of the price. If you want to export cars, you have to build cars that aren't pieces of shit (See: Japan, Germany) Nobody in Russia is going to pay an arm and a leg for an imported Chevy. It ain't gonna happen.

2. they're spending billions on this investment while cutting benefits, salaries & outsourcing & laying off here: saying that their "losses" justify it.

Investing isn't bad in the long term. And you're not "outsourcing" if you're building a plant in a country that would never buy your products anyway if they weren't affordable because they're locally produced. Renault and several Chinese companies right now are making money hand-over-fist selling cheaply manufactured cars made out of dead goats and recycled human hair to people in countries where GM hasn't had a market presence in forty years.




3. they're able to make fuel-efficient vehicles overseas - but not here.

So are the Japanese. And they make them so that they don't break. Why would I buy Chevy's interperatation of a Corolla? Corollas are already cheap.


4. There was no "growing market" in china until us, european & overseas chinese funded one.

They bought cars when they could afford to buy cars. 'taint rocket science, and it's got nothing to do with us "funding" them. The Chinese have money because we are buying their stuff. Ergo, they spend their money on other stuff. Like cars. Or car manufacturing plants.

[Hannah Bell]

44. 1. "If you want to export cars,"

"We" don't have to export them. The US is the biggest market in the world. I have no problem with chinese building cars for china, europeans for europe, etc.


2. "Investing isn't bad in the long term."

non-seq. "investing" is bad for us workers if you're cutting their jobs, wages & benefits & taking their tax $ while you're doing it. GM, Ford, etc. aren't "our" companies. We should not have to subsidise "their" investments, nor facilitate them through our laws. GM is the #1 auto co in china, contrary to your post.



3. "So are the Japanese." another non-seq. *GM* is making fuel-efficient popular vehicles in europe & china, but can't manage it here, for the last 30 years. Gee, what's up with that?


4. "They bought cars when they could afford to buy cars."

Why were they suddenly *able* to buy them, do you think?

"The Chinese have money because we are buying their stuff."

Why is that, do you think? Whose $$$ financed the chinese "miracle," & why then? (Same folks who brought us the japanese, korean, british, dutch ad infinitum *miracles*.)

[Cessna Invesco Palin]

48. What?

We" don't have to export them. The US is the biggest market in the world. I have no problem with chinese building cars for china, europeans for europe, etc

Yes. This is working out *so well* for us at the moment. The not exporting thing. Let's just throw up a lot of trade barriers so it's financially unfeasible for anyboy to import cars into the United States, or open a manufacturing plant for their own cars in the United States, thereby creating a captive market for the American automobile companies. That will fix everything, no doubt.

[Hannah Bell]

50. Scuse me, this is the biggest auto market in the world. If US makers

sold to US, Chinese to china, etc. - where's the problem?

"Free trade" doesn't work for anyone but the rich unless there's wage equivalence.

"We" don't own the auto corps; more exports do "us" no good, except to balance imports of slave labor goods.

Make it here, let them develop their internal markets, which is the only way any widely-shared prosperity has ever occurred.

[Cessna Invesco Palin]

53. Well, that's good, then.

I'm glad you realize that exporting is bad.

[Hannah Bell]

56. I'm glad you noticed you don't have a defendable argument, just a slogan.

[DainBramaged]

77. Cadillacs and Hummers outsell BMW in Russia, FYI genius

[yawnmaster]

42. point number 4. do you believe supply side economics works? eom

eom

[Hannah Bell]

46. point number 1) what us, european & overseas chinese *investors* have done in china

isn't "supply-side economics".

[Cessna Invesco Palin]

54. There's no point in asking.

She actually believes that all trade between countries is bad. It's beyond ridiculous.

[Hannah Bell]

57. he can't defend his argument; thus the resort to personal disparagement.

[Cessna Invesco Palin]

60. I've addressed your argument before.

So I'll address it again, but I must admit this is getting rather tiring. To recap: You want to make it impossible for Americans to buy automobiles from other countries. And you at least seem to think, in theory, that China should only sell cars to China and nobody else, Europe should only sell cars to Europe and nobody else. Basically, you seem to be fundamentally opposed to allowing countries to trade with another, at least in the case of the automobile industry.

Putting aside for the moment the fact that implementation of such a worldwide scheme is at least very, very improbable, if not completely impossible, let us look at what the effects would be if the United States were to unilaterally implement such a policy for its own trade, barring export of American cars abroad, and import of cars into America:

1) Relatiation against our exports by other nations, severely weakening any American company that relies on exports. What if other countries did the same thing to our airplanes that you want to do to their cars? The collapse of Boeing might not be as severe a problem as the collapse of GM, but it wouldn't be a good thing.

2) Hikes on export duties to the United States, raising the cost of imported goods here (assuming you're not *completely* against all imported goods, but you haven't made that clear.)

3) A large increase in unemployment due to all of the above.

And all that follows on from that. Not good. Not good at all. No respected economist would ever support such a plan. No politician would implement such a plan. I do not think it is worth discussing this idea any further.

[Hannah Bell]

62. To recap:

"You want to make it impossible for Americans to buy automobiles from other countries."

Your assumption, not what I said.

Pretty much blows the rest of your comments, based on your false beginning assumption.

[SmileyRose]

49. The UAW audited GM and Ford both

[Hannah Bell]

58. yes, uaw, good friend of l abor. ho-ho.

[DainBramaged]

78. You obviously aren't

(I love arguing with 'experts' who think they know more about my company than I do).

[Hannah Bell]

82. i am, indeed, a friend of labor.

unlike the false friends who shut down every strike & allowed 1/4 of employees to be replaced by $14/hr hires.

[Donnachaidh]

10. so WE get to pay for their business stupidity?

Oh yeah - we also have to pay so they can expand jobs in other countries.

HELL no.

[backwoodsbob]

7. you really think all gm's losses are phony?

if we don't help them and they go under..amazing.

You are willing to risk a full on depression to screw a few execs

[Tansy_Gold]

11. As a former cost accountant with a background in

standard cost analysis, I can assure that it is VERY VERY EASY to "manufacture" huge losses while still hauling in billions in revenue.

And the larger and more complex the organization, the easier it is to "manufacture" those losses.

Look no further than Reagan and PATCO and you'll have your motive.

It might be worthwhile to call some people's bluff. After all, it's never been done before. Would the execs who have been making billions want to see their cash cow get slaughtered and ground up into hamburger patties? Let's see if they do. . . ..


Tansy Gold, who thoroughly enjoyed cost accounting

[Hannah Bell]

12. i was around for the chrysler bailout. since then, i've paid attention.

scam.

tell me about the jobs the chrysler bailout saved.

jobs down more than 30% since 1980, production up more than 60%.

who financed the japanese auto industry, & who finances the chinese?

global labor arbitrage.

[Donnachaidh]

13. Let the exec's GIVE UP their salaries and perks

If they want to show that THEY are serious about keeping their business going.

The way these companies act, they'll continue to f*ck with the employees and find excuses to take jobs overseas.

Let's see some blood from the execs FIRST.

[SammyWinstonJack]

47. Let the American taxpayers bail them out so they can expand their international market, shall we?

:eyes:

[StreetKnowledge]

65. The American market is not getting any bigger

And a massive chunk of the media gives Detroit a big "fuck you" no matter what they do. You surprised by this? Has it ever occured to most of you that the company expanding its (profitable) overseas business is a good thing for their bottom line, making any bailout smaller?

It's not a matter of shafting US workers. If they were importing cars here, you could make that argument. But they aren't. The only imported GM US cars are the Chevrolet Aveo/Pontiac Wave (built in a Korean plant which has been just shut down) and the Pontiac G8 (made in Australia). That's it, aside from one Mexican plant and Canada.

[Hannah Bell]

84. but the population is. how's that work?

i wonder if it has anything to do with 30 years of flat wages?


"the company expanding its (profitable) overseas business is a good thing for their bottom line, making any bailout smaller?"

gee, i think they've been moving overseas since nixon went to china, & making profits many of those years - yet here we are.

1. Taxpayers have no obligation to bail out a private company unless they get ownership or contract individually to do so. You write as if bailout is our duty, a fait accompli.

2. There is no reason to bail out companies whose obvious game plan is more job cuts & wage & benefit reductions here. Why should we pay to offshore production? It's not "our" company.

Anyone who thinks a bailout will hold jobs here is dumb. You want to keep jobs here, you use the law, politics & activism, you don't throw money at the crooks.

[Indy Lurker]

9. Your numbers are off

You are right on the revenue (181 Billion)

But your assumptions are off,

After paying overhead, and retiree benefits, etc. the company lost 23 Million.


Throw in the cost top spin off GMAC and settle off other debt, build plants in China, and India, and they lost 38 Billion.

[Hannah Bell]

14. yes, on paper, they "lost".

[GoesTo11]

16. You could buy 100% of GM's stock now for $1.65 Billion.

If they were making $45.25 Billion per year in profit, I suspect someone greedy would see the bargain and bid the stock price up a little bit.

The cost of materials is a much higher percentage than you suggested - they buy tires, not unprocessed rubber. And the cost of salaries and benefits is something above what you suggest, even after the UAW has given up a lot and the white collar workforce has been reduced pretty quickly.

Nope, this is a company in serious, serious trouble.




http://www.sec.gov/Archives/edgar/data/40730/000095012407001502/k11916e10vk.htm#111

[Hannah Bell]

19. and we all know how the stock market accurately determines real value.

if the costs of tires is so high, it's the same cost to ford, honda, toyota, et. al.

you think gm's holdings, in real estate & equipment alone, = 1.6 billion?

please.

[GoesTo11]

23. What do you think the game is here?

Are they trying to go bankrupt so that they get a huge gov't bailout so that they can then make a whole lot of money? If this would be as profit, then, yes, plenty of investors would see this price as such a bargain that they'd bid it up. The company is priced at 1% of REVENUES. That's unheard of low. The stock reached 5 in 1929, 50 or so by 1950. Now it's under 2. If not to get $ to turn into profit, do you think they're just trying to get $ to hand to Lutz and Wagoner? Doesn't work that way - these guys make salaries that would be a huge amount of money for you or me, but are really low compared to other CEO level executives because they are reporting these losses and the stock options are all in the toilet. What do you think they're trying to accomplish, and why don't you think investors are willing to pay more for the stock? In fact, if you believe GM is really making such profits, then you ought to buy their stock and eventually make $100 for each $1 you invest. I've got friends working there. I guarantee you, they think this is for real, unfortunately. Yes, it's possible to cook the books, but this is not an Enron type business. It's not so hard to track where the money goes.

Toyota isn't making a 50% profit margin either, actually about 7%, and that's pretty good for this over-capacity'd and pretty competitive industry. They do have a more efficient cost structure and lower pension obligations than GM and they also make a car that's worth more from the same inputs due to better designs and manufacturing. Beyond that, no one expects them to be going bankrupt, so their stock isn't as depressed.

I believe the gov't shouldn't let them fold completely - that would cripple the US economy for 1-2 decades. Better to use the dire financial straits to twist their arms to become good corporate citizens. They have no choice if no one else will loan them the money.

[Hannah Bell]

27. I think: 1) To satisfy total global demand for autos would only take a couple

of corps, probably less than a million primary workers, world-wide. Consolidation has been on the agenda for a long time & going on.

2) The corps are just vehicles: the behind-the-scenes is *who* will control the remaining production. He with the most $$$ wins. If the corps are destroyed, so are their "legacy costs," for the most part.

3) Why did Nixon go to China? Global labor arbitrage. Which Bush relatives were in China as soon as kissinger & nixon came home....

[Selatius]

26. By that logic, if the gov't bought all GM shares, GM would be the BIG loser. However...

If the government could nationalize all of GM with only 1.65 billion, you could then reorganize the company into a labor co-op. Once the new decision-making structures are in place, you could then turn over ownership of the company to UAW from the federal government. The workers would become worker-owners.

The big losers would be the existing executive management and the shareholders.

[Hannah Bell]

28. yes, you could - & a bargain at the price. Not on the table, oddly enough.

[Selatius]

31. Because it's considered a form of socialism. That's why it's not seriously considered. nt

[Hannah Bell]

34. Bailouts are socialism too, but they're being considered.

Running the industry as a cooperative isn't being considered because there's nothing in it for the big boys.

[Selatius]

38. I don't consider it socialism, especially given the alternative.

The alternative, of course, would be the workers getting ownership. That is what I consider socialism. Giving loans to bail out a company run by a private individuals who are either corrupt or absolutely incompetent is just corporatism, the same sickness that the world paid dearly to try to defeat in the last world war. If they truly believed in the notion of free markets, then they would be allowed to fail.

[Hannah Bell]

39. that might be what *you* consider socialism, but at least until two months

ago, what the ptb considered *socialism* was different.

hypocrisy, of course, but that was the spin.

now the spin is different.

in fact, *money* has no ideology. that's all for the peons. the capitalists fund communists & fascists, as it suits their interests of the moment.

they just never fund control by peons.

[StreetKnowledge]

67. Unbelievable

There already has been a case of a company being nationalized. It's called British Leyland. That company sank incredibly fast, because the workers always got more money for less work, producing probably the worst built pieces of crap to ever roll down a road. By bad, I mean wood trim coated but not sanded, power locks that trapped people in cars, trim pieces falling off, engines not working rolling off the assembly lines, horrible paint, cars showing up without window glass.

You want product quality to get worse? Most of the UAW doesn't give a rat's ass about the cars as long as they get paid and go home after 8 hours of work. Build quality starts with them, and they clearly don't give a fuck, so no wonder the cars turn out badly.

And you want to turn the company over to them?

[Hannah Bell]

85. who are you taking to? cause your post has nothing to do with mine.

but, hey, that "nationalization" seemed to work ok when it was for war.

clue: the british "nationalization" of its auto industry was supposed to fail. just like US auto companies are, & have been for the last 30 years.

global labor arbitrage.

[gravity]

29. The government would buy GM's liabilities too

GM has negative $60 billion in equity, and that eventually has to be paid off.

[Hannah Bell]

35. Thus the magic of bankruptcy & other such maneuvers.

split off the good, parcel it out, leave the debt & destroyed lives for "society" to deal with.

[Selatius]

37. Fine, make it 61.65 billion. It's still a lot cheaper than what happened with the banks.

I'm tired of bailing out the same executives who got themselves into the mess.

[wtmusic]

83. The stock market determines "real value" by definition.

Stock = equity = ownership. Buying stock in a company means you are willing to pay that price for a piece of the pie.

Liquidated assets make up a fraction of the value of a company.

[Hannah Bell]

86. "definition" isn't reality, & neither is the stock market.

as i thought most people learned in the dot com boom.

but i guess new fools are born every minute.

[wtmusic]

87. No, the stock market price is the very real value of a company.

It's what people are willing to pay for it, hence it is the value.

Common misconception.

[Hannah Bell]

88. no, the common misconception is to confuse stock prices with value.

the same kind of people buy tulip bulbs & beanie babies as "investments."

do you know how much real estate GM holds?

Just one of their *former* properties recently sold for over 2 billion.

http://www.iht.com/articles/2008/05/25/america/25gm.php

But putting out the word that GM is worth only 1.6 billion while selling off shares is a good way to tank the market & force debt crises.

Has very little to do with real *value,* anymore than my selling you a rock painted gold does.

The rock is still a rock, no matter what you paid.

Productive assets are still productive assets, no matter how little prospective vulture buyers say they're worth.

[wtmusic]

91. A gold-painted rock which sells for $200 is worth exactly $200.

Whether the buyer has been deceived or not is irrelevant. You can argue until you're blue in the face about what a company "should" be worth, or ask as many people as you want. Doesn't matter one iota.

[Hannah Bell]

93. & you can continue to argue shit is gold if someone is willing to pay the price.

tain't so.

[wtmusic]

103. It's not only that you don't understand value

but you don't want to. I'm done. nt

[Hannah Bell]

104. your analysis exemplifies circular reasoning & the neo-con party line.

& you say *i* don't want to understand.

i understand very well. the slogan is simplistic for just that reason, so everyone can *understand* & parrot it.

but not useful beyond that - keeping the parrots in line. not useful for understanding markets, price, value, social dynamics, history, or our present situation.

"'value' is what people will pay! sqwak!"

[hfojvt]

25. is $60,000 gonna be enough?

What is the starting wage at a GM plant? (myself I worked at a non-union parts plant making $7.15 an hour in 1997.) Suppose it is $20 an hour. That's $40,000. Then add $3,000 for FICA taxes, $5-8,000 for health insurance, and maybe a few thousand into a retirement fund. That's $50,000 for one of their lowest paid. Since it is a good-paying job, people keep them and the plant probably has lots of people with ten or more years, who have moved up the pay scale. Then there are various management levels, who presumably make more, shift managers, line foremen, human resources, safety, plant managers, finance. All those people are bringing the average up. Not to mention the CEO, CFO and other super-management salaries.

Presumably GM's foreign workers and retirees are bringing the average down, but maybe or maybe not. If an $80,000 a year line worker retires after 30 years, he/she might get a pension of $40-50,000 plus insurance benefits. Pretty close to the average.

But all my numbers are wild guesses rather than actual data.

[Hannah Bell]

32. better than nothing, or the $1800/year for health care one of the majors is now paying

their retirees.

My point: the legacy costs aren't the big problem - though we're told they are.

Hey, according to one of the pro-industry folks here, 70% of revenues go to non-labor costs.

[hfojvt]

40. that might easily be true

At one Kraft plant, where I made jello desserts, I put cups into a machine. Even on a slow machine, I'd do 6 boxes an hour. If the boxes cost $5 each (and I think 2,000 plastic cups would cost at least that much, that's .25 cents per cup) then the cups were costing at least $30 an hour while my wages were only $7.5 an hour plus the $3 an hour or so that they paid to the temp service.

[Hannah Bell]

41. yes, it's an old problem, outlined by marx & other classical economists.

cost of constant capital comes to outweigh cost of human capital = no profit.

solution: destruction of capital & consolidation (& futher destruction of labor cost): our present moment in time.

[ContinentalOp]

43. You can make $80,000 a year working on an auto assembly line!?

With Detroit's low cost of living? :wtf: Wow, I'm in the wrong business. $50k a year pension plus benefits? I think your numbers might be wrong.

[hfojvt]

52. it's a wag, but perhaps an underestimate

http://mjperry.blogspot.com/2007/07/uaw-pricing-themselves-out-of-market.html

In another article, the big three estimated costs at $70 an hour, but that included retirement and health care costs. That article also said that Ford was buying out workers, paying them half their current salary for four years and that that averaged $25-30,000. Since Ford was presumably buying out workers with 10-20 years at their plant, my estimate of $80,000 a year for a worker with 30 years at the plant does not sound far off. They said full pension after 30 years, but I am not sure what "full" means. Usually about 50% of final salary is typical, but is that a "full" pension?

One trouble is that if a person starts at age 20, they have 30 years in by age fifty and can retire, leaving the auto company to pay retirement benefits for 30 years if they live to be 80. Where I work, OTOH, you cannot collect until you are 60.

[Hannah Bell]

61. according to GM: average TOTAL compensation: $46/hr in 1998.

That included wages, benefits, gov't payments (e.g. fica), profit-sharing, overtime, healthcare, & that was the average of ALL workers, not just lineworkers.

New hires today start at $14/hr + benefits.

Average base-wage of a line-worker = about $20/hr.

http://www.media.gm.com/division/uaw/gm_wages.htm

[DU GrovelBot]

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36. K&R nt

[DainBramaged]

75. What's your point? The Japanese and Koreans and Germans transplanted

factories here starting in the 80's. GM opened plants in China India and Russia because they are expanding markets, and profitable markets. The best selling American car in China is the Buick line, and it outsells Buick's in America. Strangely, we cannot build plants in Korea and Japan, because they don't feel our cars can meet their 'standards" (which is protectionism).

What is your point?

[Hannah Bell]

89. how did those places come to be *expanding* after centuries of being

*impoverished*?

did the market fairy suddenly wave her magic wand?

look behind the curtain.

[DainBramaged]

99. Y ou aren't a student of 20th Century history, are you?

And to what nation have we been sending billion and billions of dollars to for the past two decades for the cheap crap they make, improving the living standard of their population? A captive market of three billion people (China and India) is too good for any manufacturer to pass up, and even the Japanese and Koreans are there.

You aren't any fun, you have no idea what you are talking about. If you were in charge of the books at any of the big three, we'd be talking about the Big Two long ago.

[Hannah Bell]

102. I am, you're not. 1984, beginning of GM-Toyota collusion/joint venture.

>>Specifically, the feisty Chrysler chief charged that the GM-Toyota venture to assemble, with many Japanese built parts, 250,000 small cars a year in California would lead to a rise in everybody's car prices, reduce product choice and promote collusion between the two largest domestic and foreign car manufacturers.

excerpts from turbo-charged Iacocca's testimony that left more than one person in the hearing room gasping:

"GM is the domestic price leader and Toyota is the import price leader. Ford and Chrysler target their domestic prices on GM. It’s been the head-to-head competition between Toyota and GM that sets the pricing pattern for the entire industry. Do you think that pattern is going to stay the same when GM and Toyota sit down together and set prices, as they already have? And when this competition disappears, do you think the American consumer will have lower prices? I don't."

Iacocca heaped ridicule on the Federal Trade Commission, which by a vote of three to two, approved the joint venture saying,in effect, that a giant with a net profit of $10 million every day, needs Toyota's help to compete effectively. He accused GM of trying to weaken the fuel economy standards "so it can continue to build large cars and make even more money." He charged that GM lobbied for an increase in import quotas so that "it could pick up 300,000 small cars from Suzuki and Isuzu, and -- in the real world -- lay off its small car production base to Japan." He said that GM "wants to get rid of the Chevette, which contains 95 percent domestic content, and substitute a car that has 40 to 50 percent domestic content."

In a nutshell, Iacocca was exposing GM's clever plan of ABANDONING ITS SMALL CAR PRODUCTION in America to its overseas affiliates' factories for re-import or re-assembly into this country.

Iacocca was not just warning; he was promising that this GM shift overseas WOULD FORCE FORD & CHRYSLER TO SHIFT MORE OF THEIR PRODUCTION ABROAD. He said if the GM-Toyota deal is not judged unlawful under the antitrust laws (Chrysler has already sued), he will look for still more Japanese partners. "By the time the rest of us get through following GM's lead just to stay alive, U.S. AUTO PLANTS ARE GOING TO FALL LIKE DOMINOES," along, he added, with several mid-western cities. He estimated a net loss of 300,000 American jobs as a result of the repercussions from the anti-competitive GM-Toyota deal.

On that day, February 3, 1984, before the House Committee on Energy and Commerce, Lee Iacocca was a true public advocate. (Chrysler Corporation ..Detroit, Michigan, will send you a copy of his testimony.)

http://www.nader.org/index.php?/archives/780-Iacocca-Warns-Public-of-Danger-in-GM-Toyota-Deal.html




<<And to what nation have we been sending billion and billions of dollars to for the past two decades for the cheap crap they make, improving the living standard of their population?<<


You're a fool. Yeah, just suddenly, miraculously, China started making "cheap crap" (& high tech equipment). and stupid us, we just suddenly started "sending them money".

These things just happen, for no apparent reason, through no one's will. Just the mysterious diktat of the all-powerful market.

[Lumpsum]

92. Read this.

http://www.financialpost.com/story.html?id=935684

Bailing out these horribly managed companies may not be the "right" thing to do - but we may have no choice.

[Hannah Bell]

94. "we" may not have a choice (since real democracy is inoperative where the people won't use their

power), but "choices" there certainly are.

also, you might remember - not everything you read in the paper is true.

nor is everything people tell you when they're trying to steal your money.

[Lumpsum]

95. Not everything is a lie.

I think I'll give the Financial Post the benefit of the doubt when they say losing almost 3 million American jobs would be bad for the economy. Doesn't take a doctorate in economics to figure that one out.

[Hannah Bell]

96. tell me: say we give a few billion to the US car corps.

will more people buy cars?

people are not not buying cars because GM doesn't have enough capital.


This is the finance bailout all over again. Same scare story, same phoney reasoning.

Same fools saying "*We* MUST do this!!!!"

[Lumpsum]

97. I wouldn't give them a penny without...

Demanding greener technologies and a much higher degree of quality from GM/Ford.

And yes, that's one reason people aren't buying cars. Another reason is because people just don't have the financial means to buy a car. Another reason is because European/Japanese cars are built with a higher degree of efficiency and quality. I can go buy a 1994 Honda and it will outlast any new vehicle from GM/Ford, cost less and get drastically higher gas mileage.

Like I said, the quagmire that GM/Ford is in is their fault - not the economy's. They've been poorly managed for decades. Same reason Circuit City went under - piss poor management.

I'm with you, I don't like the idea of this bailout. I don't think we should "reward" horrible management and oversight. But at the same time, I don't want to let GM/Ford die and deliver a killing blow to whatever is left of our economy.

Personally, I think when Obama takes office he WILL give the auto makers the bailout, but only if the incentives I stated earlier are met.

[Hannah Bell]

98. for the most part, the hondas & toyotas are built in the same places

the gms & chevys are.

so if i buy a saturn v. a toyota, no net job increase.

the us (& world) automakers WILL be consolidated, bailout or no.

& jobs WILL be wiped out in the consolidation.

i would bet real money on it.

[DainBramaged]

100. Another clueless statement

Which makes and models of Japanese cars are actually built here, which are imported?

Don't answer, you've proven your utter lack of knowledge of the Domestic auto industry already, goodnight.

[Hannah Bell]

101. nope, you're clueless - & rude besides. but that's par for the course,

for those whose goal is to promulgate a party line.

[guardian]

105. OK genius

from where did you get the 50% profit...just pull that out of your ass?

[Hannah Bell]

106. first clue: "assume"

if you're literate, you'll get it.