GM loses 2.5 billion & Ford $129 million

[silvermist99]

uh oh... the giants are going to pull everything down with it.
http://www.citynews.ca/news/news_28916.aspx

There probably won't be as many new models coming in the next few years.

[Unoriginalusername]

i hope the governments spread some of the love around for them too

[x_o_k_x]

Its devastating to see such a huge company in North america going downhill. And its not the first time we hear that they loosing money and cutting jobs. I hope that new Chevy Volt comes out. Im really excited to see how it will do. Maybe it'll bring the company back on its feet or open new possabilities.

[Wild Weasel]

i hope the governments spread some of the love around for them too

What for? Just to prolong their deaths?

There's a lot of talk going around about how governments are bailing out the financial sectors but not others like the auto industry or just regular people.

The problem with this is that banks use money to make money. That's their business and most of them are good at it. In order to lend money though, they need a certain amount of assets on hand to back up the money they lend out. There's generally a certain ratio they need to keep of assets to outstanding loans so they're not just lending out money they don't actually have.

When something happens to reduce the value of those assets, then they can no longer lend out money. That's what's happened recently. When they can't lend money, then they can't make money and the people that need to borrow money can't get their hands on any.

Everything goes to hell.

A valid short term solution to this situation is to inject more money into the system. If you simply give banks more money to lend (while obviously trying to stop whatever happened to devalue their assets in the first place) then you can get them up and running and profitable again.

Other industries are a whole different story. GM doesn't make money with money. They make money by selling cars, and if they don't make good cars, they won't make any money. You might argue that giving them money will allow them to develop better cars, but really there's not much of a precedent for that over the past couple decades. They've had money all that time and continually produced sub-par products and lost market share. What makes anyone think that's not just going to continue to happen?

GM's problems won't be solved by giving them more money.

[Walrus]

Unions are part of the problem as well..

[Wild Weasel]

Yes they are, and a very big one, but not really the deciding factor I don't think.

Hell, just look at what a union is doing right now to York University to see how out-of-touch with reality they can be!

[silvermist99]

The only way I see GM & Ford surviving this is to downsize & kill the union. Downsizing will kill research, quailty control, technology etc which will kill sales. Not sure how this is going to work...

My cousin used to work at a GM plant near London, the workers who put bolts on cars starts at almost 30/hr + OT and a ton of benefits.

[Walrus]

It's not just the unions at the car plants, it's at the tier suppliers as well. With work, any time I visited a Delphi plant, I would always chuckle and ask 'Is it break time right now? Everyone is moving slow and hardly doing anything'. The customer's response was always 'no, if it was break time, they'd be moving a lot faster (to the lunchroom)'

[Unoriginalusername]

What for? Just to prolong their deaths?

There's a lot of talk going around about how governments are bailing out the financial sectors but not others like the auto industry or just regular people.

The problem with this is that banks use money to make money. That's their business and most of them are good at it. In order to lend money though, they need a certain amount of assets on hand to back up the money they lend out. There's generally a certain ratio they need to keep of assets to outstanding loans so they're not just lending out money they don't actually have.

When something happens to reduce the value of those assets, then they can no longer lend out money. That's what's happened recently. When they can't lend money, then they can't make money and the people that need to borrow money can't get their hands on any.

Everything goes to hell.

A valid short term solution to this situation is to inject more money into the system. If you simply give banks more money to lend (while obviously trying to stop whatever happened to devalue their assets in the first place) then you can get them up and running and profitable again.

Other industries are a whole different story. GM doesn't make money with money. They make money by selling cars, and if they don't make good cars, they won't make any money. You might argue that giving them money will allow them to develop better cars, but really there's not much of a precedent for that over the past couple decades. They've had money all that time and continually produced sub-par products and lost market share. What makes anyone think that's not just going to continue to happen?

GM's problems won't be solved by giving them more money.

An unregulated wall street has cursed america's home values and ability to operate day to day while executives have authorized millions of dollars of bonus payouts for themselves.

The auto industry founded a big part of the economy, has employed and pays out benefits to hundreds of thousands of workers either directly or indirectly through associcated suppliers etc.

So helping out the automakers is much the same reason the government is helping out wallstreet.

I agree, GM hasn't made a profit in the US since 2004 and a cash pile isn't going to solve the problem but bailing out the benefits packages for example to keep the thousands of retired workers recieving their benefits might help alieviate the cash crunch and allow the US car companies to compete more fairly with import cars that have 75% less cost built into the model before anyone touches the car.

Free trade isn't so much free trade either... looking at the balance of trade with other countries vs. what the government allows in is another area that a government plan could help.

[Go_Habs_Go]

My cousin used to work at a GM plant near London, the workers who put bolts on cars starts at almost 30/hr + OT and a ton of benefits.

It's definitely a part of the problem but breaking the unions won't solve ALL of GM's or Ford's problems. I think they need to change their corporate culture (from the CEO down to the guy putting bolts on a car). But GM is like a massive Boeing 737, how do you change the direction of a company that size when it's in full flight? It's almost impossible and it would take so long to do that it would be too late to have any impact.

I think they will have to break themselves up. Spin off divisions and let them go on their own and hope they make it. Sell of Cadillac or Saturn or something and with the cash they raise from the sale, try to save the rest of the company.

Anyway I'm no financial expert! :)

[Wild Weasel]

So helping out the automakers is much the same reason the government is helping out wallstreet.


The problem is that helping them out by giving them money just isn't going to help. It's just going to let them have a bigger debt when they go under.

Despite the reasons for their downfalls, giving money to wall street actually gives them what they need to do business and start turning a profit again.

This just isn't the case for a car company that doesn't know how to be a car company.

[Unoriginalusername]

The problem is that helping them out by giving them money just isn't going to help. It's just going to let them have a bigger debt when they go under.

Despite the reasons for their downfalls, giving money to wall street actually gives them what they need to do business and start turning a profit again.

This just isn't the case for a car company that doesn't know how to be a car company.

Obama wants americans to have healthcare... letting ford, gm and chrylser go bankrupt will wipe out retire benefits and health care for hundreds of thousands of people.

If the government were to help the auto makers compete on level ground and focus their bailout on pension/benefit relief along with loans to support capital expenditures it would help both the near and long term viability of the NA auto company

[Fobio]

erm...so when is Chery buying out Chevy? :chuckle

I'm so waiting for the GM fire sale in a year or so to get the G8 GXP for $35K OTD...

Guys, you don't want either one of the Big 3 to fail...keep in mind how many cars are produced in Ontario by the Big 3...

[Flagrum_3]

Guys, you don't want either one of the Big 3 to fail...keep in mind how many cars are produced in Ontario by the Big 3...

Not to mention all the supplier companies! If GM goes under in Canada that's 170,000 jobs, and for every job lost, it's estimated 7 jobs elsewhere...Do the math that's over a million jobs hanging on what happens! :whoa ...and most of them in Ontario.

WW, I don't believe the the Car manufacturers are asking for (cash hand-outs) or bail-outs...but for loans.


_3

[chinsterr]

You know it's bad when GM is handing out "Production Line Supervisor/Manager" Roles to coop students here at waterloo for $25-30/ hr (which is way above the average) ...

and you know shit has truly hit the fan when there are only 2 applicants for 5 GM Supervisor jobs! When I was in first year (2004), there were 400 applicants for 2 GM jobs !!!

[kevcol74]

My cousin used to work at a GM plant near London, the workers who put bolts on cars starts at almost 30/hr + OT and a ton of benefits.

Just curious, what plant was this?? There are no GM auto plants near London!
(LAV - Light Armour Vehicles don't really qualify, and they DO make money there)
GM = Generous Motors... part of their problem ,and Fords, is that they were too generous with Pensions and benefits in the auto boom of the 50's-60's... and the workers are still alive collecting this money. I know, my dad is a retired Ford worker....

If they didn't have that debt, they wouldn't be doing THAT bad... Ford for one has come a long way, they make very reliable cars now, but still have the stigma attached to them... GM still relys on the name brand and sales volumes... but that obviously has caught up with them too.

If GM and/or Ford skid big time, then Toyota/Honda/etc will pick up the slack. Just think, where is the corolla and matrix built? Cambridge. The Camry? Georgetown, Kentucky... Civic? Alliston.. Accord? Marysville, Ohio... I coud name a large amount of plants in North America! They ARE contributing to our economies! How many new jobs did Toyota just open up in Woodstock?? 2500 or so in their plant alone, let alone the trickle effect or tier 1 and tier 2 suppliers!

"Out of the job yet? Keep buying Foreign"... that sticker cracks me up, they are the uneducated ones that have no clue! Put it this way... Toyota is the main reason I've been employed for the last 5 years, and now Honda will be a big reason in my future as well! They are paying OUR company, one based here in Ontario, to do work for them... How is this bad??

[silvermist99]

Just curious, what plant was this?? There are no GM auto plants near London!
(LAV - Light Armour Vehicles don't really qualify, and they DO make money there)


its the cami car plant. This one here:
http://www.wheels.ca/reviews/article/461123

[Mazda3_06]

im a electrician doing and my company is doing a massive job for Karmax...aka Magna
they make they press the 300, Charger, Flex, Mazda 6..anyways with all the lay offs thats going on in there we are gettin the boot with only half the job completed. Alot of the workers in there are worried about there jobs.

[kevcol74]

its the cami car plant. This one here:
http://www.wheels.ca/reviews/article/461123

I guess I grew up close to London, and I wouldn't consider Ingersoll close... but from the GTA, yes, Ingersoll is close. My apologies there. And I also heard about the layoffs there, but once again, its what is made there that is hurting in sales. SUVs are not selling, and they make the Pontiac Torrent, Chevy Envoy and Suzuki XL7...Look at Honda in Alliston, they just built a new engine casting plant = jobs... They are shifting production away from the Ridgeline/Pilot to almost all Civics, yet they can't keep up with demand.

[lazykeren]

With all the lay offs I'd be lucky to get one. Did anyone read the Focus article on 10facts? http://www.10facts.com/article/Autos/Cars/Ford/Ford-Focus.html

[5_Alive]

With all the lay offs I'd be lucky to get one. Did anyone read the Focus article on 10facts? http://www.10facts.com/article/Autos/Cars/Ford/Ford-Focus.html

Most of this information relates to the Euro-spec Focus. The one we have here is a nice car, just not as nice as the one across the ocean.

[jaimie08mazda3]

yep. im now done. i got told today that they dont need us anymore due to this bullshit. DAMMIT WTF now im out of a job. great

[Flagrum_3]

yep. im now done. i got told today that they dont need us anymore due to this bullshit. DAMMIT WTF now im out of a job. great

That's sad news buddy....I'm not going to assume what type of work you prefer, but keep your eyes on the TTC.ca site in the job oppurtunities section.They will be posting their annual 'temp positions available' soon...99% of temp positions become full-time!! They will be looking for alot of people this year to fill in for people that will be tranferring due to the upcoming construction....plus they're still short of drivers....like in the hundreds!


_3

[jaimie08mazda3]

wow really ron???? cuz i wouldnt mind im currently looking and i can do alot, i have a forkift licence i can drive, and im a general labourer too so im sure they would have something like that. im gonna check that out. thanks man.

[McGuyver_3]

At first i was happy GM was going down hill but now i look at it and if they go down so many outsourced people go out of work as well like the manufacturers and stuff like that so in the long run we should help them but that CEO at GM needs to be LAYED OFF as he is the main problem IMO.

[Go_Habs_Go]

At first i was happy GM was going down hill but now i look at it and if they go down so many outsourced people go out of work as well like the manufacturers and stuff like that so in the long run we should help them but that CEO at GM needs to be LAYED OFF as he is the main problem IMO.

it's true that GM going bankrupt would have large ripple effects across the rest of the economy, but in my mind it will happen sooner or later. We can't keep throwing good money after bad in trying to save these companies.

Instead of giving GM, Ford et al 4 billion dollars why not invest that money in attracting new industries and re-training the workers that lost their jobs due to GM's closure to be able to work in these new industries?

I know it's easy to say this when I'm not the one who is losing my job but at the same time a government and a country need to look at the big picture and at the long term future that best suits the needs of everyone when investing 4 billion dollars.

Tough choices, that's for sure...

[McGuyver_3]

^ if you try and reteach people a new job i think thats going to cost alot more then 4 billion as alot of older people need more help in understanding. the older you get the longer it takes to understand something. I do understand and it seems like a good idea but i think it will take more then that. For GM to design and produce better cars that will cost them billions aswell so their only choice is to perfect their problems and maybe people will show some more interest in their products