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19,000 UAW's accept buyout.
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Lamentations - a once great giant
There was a time (1962) when the biggest fear GM had was that its share of the US auto market would reach 60% and it would face anti-trust investigation. It was the biggest company in the world. A time when a factory job with GM was a ticket to a middle class life, and after 40 years a generous retirement package. A time when Charlie Wilson, the CEO of GM, could say “What’s good for GM is good for the US.” A time when the Dow Jones Industrial average was jiggled about by its correlation to GM stock.
Fast forward to 2007: $39B loss and $10B market capitalization (less than 1/10 of Toyota’s). 2008: 27% drop in sales, lowest stock price in 26 years, analysts’ projections that they likely will be bankrupt by 2010, and the addition of 19,000 UAW buyouts to a long string of 350,000 cuts.
I’m glad the buyouts will help GM become more competitive and I have high expectations for success of the Volt amidst these great struggles, but I have mixed reactions to this sad situation for a once great giant.
There was a time (1962) when the biggest fear GM had was that its share of the US auto market would reach 60% and it would face anti-trust investigation. It was the biggest company in the world. A time when a factory job with GM was a ticket to a middle class life, and after 40 years a generous retirement package. A time when Charlie Wilson, the CEO of GM, could say “What’s good for GM is good for the US.” A time when the Dow Jones Industrial average was jiggled about by its correlation to GM stock.
Fast forward to 2007: $39B loss and $10B market capitalization (less than 1/10 of Toyota’s). 2008: 27% drop in sales, lowest stock price in 26 years, analysts’ projections that they likely will be bankrupt by 2010, and the addition of 19,000 UAW buyouts to a long string of 350,000 cuts.
I’m glad the buyouts will help GM become more competitive and I have high expectations for success of the Volt amidst these great struggles, but I have mixed reactions to this sad situation for a once great giant.
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Tom,
Over a year ago, I remember financial talking heads sitting around a table debating whether the US automakers would be bankrupt in 5 years or 10 years, but there was no doubt that they would be bankrupt. I used to work a GM and two of my brothers still do, so it was sad to see the inevitable.
I believe it was a Delphi plant shutdown in which, through arbitration, the UAW benefit plan was given 71 cents on the dollar as a parting gift, and I thought to myself - lucky bastards, they got the best deal, because when GM shuts down, the rest won't get that much.
I was stunned when the UAW, through their latest contract, chose to accept 71 cents on the dollar against all benefit liabilities, to take the monkey of GM's back, and even more stunned that they allowed GM to hire to workers at a rate slightly above Toyota's and Honda's North American factories. GM also announced the E-REV platform and the federal government passed the 2007 CAFE standards in line with that platform.
With all those changes, I realized that GM has a window of opportunity, in which they can retake significant market share, while creating a product that will help the rest of the American economy, by getting us off expensive foreign oil, and using domestic renewable energy sources. Our trade deficit would balance, making the dollar strong again. It was such a beautiful alignment of all the stars, that I once again hold out hope for GM and the US auto industry.
That said, it is only a WINDOW of opportunity, which I see that GM is doing EVERYTHING they can to catch. Compared to all other automakers, GM is the most aggressively pursing it, and as a result, they are best positioned to succeed. I fear far more for Ford and Chrysler, as they are admitting that they are 2 years behind.
Over a year ago, I remember financial talking heads sitting around a table debating whether the US automakers would be bankrupt in 5 years or 10 years, but there was no doubt that they would be bankrupt. I used to work a GM and two of my brothers still do, so it was sad to see the inevitable.
I believe it was a Delphi plant shutdown in which, through arbitration, the UAW benefit plan was given 71 cents on the dollar as a parting gift, and I thought to myself - lucky bastards, they got the best deal, because when GM shuts down, the rest won't get that much.
I was stunned when the UAW, through their latest contract, chose to accept 71 cents on the dollar against all benefit liabilities, to take the monkey of GM's back, and even more stunned that they allowed GM to hire to workers at a rate slightly above Toyota's and Honda's North American factories. GM also announced the E-REV platform and the federal government passed the 2007 CAFE standards in line with that platform.
With all those changes, I realized that GM has a window of opportunity, in which they can retake significant market share, while creating a product that will help the rest of the American economy, by getting us off expensive foreign oil, and using domestic renewable energy sources. Our trade deficit would balance, making the dollar strong again. It was such a beautiful alignment of all the stars, that I once again hold out hope for GM and the US auto industry.
That said, it is only a WINDOW of opportunity, which I see that GM is doing EVERYTHING they can to catch. Compared to all other automakers, GM is the most aggressively pursing it, and as a result, they are best positioned to succeed. I fear far more for Ford and Chrysler, as they are admitting that they are 2 years behind.
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265 Posts
Jason,
I’m also a graduate of GM. I worked for Delphi doing R&D on Integrated Circuits for Engine Controllers. We came to Florida for a vacation five years ago, saw the sun, palm trees, and water, and bought a house. Providentially, a few months later, I was offered an earlier retirement package that I couldn’t refuse. I loved my work, but my wife and I were ready for a change, so we took the leap.
I’m also a graduate of GM. I worked for Delphi doing R&D on Integrated Circuits for Engine Controllers. We came to Florida for a vacation five years ago, saw the sun, palm trees, and water, and bought a house. Providentially, a few months later, I was offered an earlier retirement package that I couldn’t refuse. I loved my work, but my wife and I were ready for a change, so we took the leap.
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That is great news - I am very happy for you - I love living in Florida, and the short time that I spent in Michigan was miserable - the weather is terrible, and the work environment for engineers in the automotive industry was a lose-lose situation, stuck between an immovable union (late '80's) and an unforgiving market yielding to foreign imports. As interesting as that industry could be, it just wasn't fertile ground then for an engineer.
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