So how will this news affect the rest of the GM supply chain?
Will this mean cutting Supplier Quality Analysts (auditors, etc.)?
If GM is laying off folks, are they also cutting way back on their purchases?
Is GM overstaffed? (Will job cuts have big or small impact in operations?)
If the white collar guys get cut, what happens to the hourly wage earner?
Will we even hear about job cuts lower in the supply chain?
GM to Cut N.American White-Collar Workers
NEW YORK (Reuters) - General Motors Corp. (NYSE:GM - news) plans to cut its North American white-collar work force, the Wall Street Journal reported on its Web site on Sunday, less than a week after the automaker warned that 2005 earnings would fall short of its target.

The cuts in salaried staff could be as deep as 28 percent in certain functions, according to the newspaper that cited industry officials and analysts. The paper did not specify a time frame for the cuts, nor did it provide an overall number for the expected job cuts.

"We've had a fair amount of natural attrition for a while," said GM spokeswoman Toni Simonetti, "From time to time we've accelerated attrition. But there's no broad based across the board target."

In some areas of the business, the company is looking at reductions of as much as 28 percent, she added, but noted that those cuts were in the works prior to last week's profit warning.

The company said last week that earnings this year would be 80 percent below its prior forecast as a result of slumping North American auto sales.

The newspaper called the cuts a prelude to health-care concessions that GM would seek from its largest union, the United Auto Workers (news - web sites).

Asked if GM has opened negotiations with UAW, Simonetti said, "Suffice it to say, we have an ongoing and open dialogue with the union."

The rest of the supply chain has known for years that the future of the automotive market is overseas. I’m happy to see that the 5 – 6 % that every company gives them. each year is working.

“The company said last week that earnings this year would be 80 percent below its prior forecast as a result of slumping North American auto sales. “

Unbelievable !!!!!!

80 % below its forecast….what year is it 2001…Do they think it’s a telecom company.
:mad:

It will affect businesses which do business with GM, but not any more so than is happening all across the US at *most* businesses - Even those unrelated to GM. So no - I don't think it's a GM phenomena.

It's just an aspect of the increasing flow of business out of the US. For the first time since the early 1930's, over the last 4 years there has been a net decrease in jobs in the US. I believe this trend will continue for years to come.

In my opinion, '... you ain't seen nuthin' yet ...'. If this surprises anyone, they haven't had their eyes open for several years or more.

My WAG, based upon personal experinece of the downturn in the industrial gas industry in the 1989 recession - cut the engineers, development is an extended period activity & they can be reduced with immediate positive impact to the bottom line and negative impact (slower introduction of new models, possibly poorer quality planning, etc.) is delayed for 1 or 2 years. Then you can replace them with new engineering graduates/less experienced engineers for a long term cost saving.

Count me as slightly cynical, and wondering when/if this will stop at some reasonable point.

The question is - What is a "reasonable" point and by whose definition?

And.... China is just getting into the automotive market here in the US and from what I've read they will be selling their cars at about 30% less than comparable cars sold here already with comparable quality. Are the US auto manufacturers, for all intents and purposes, ready for their final decline into oblivion? Not to mention automotive suppliers? Not to mention TS 16949....

I guess that I'm viewing this from a little different perspective. I see this announcement as a good thing (can you tell that I'm NOT a GM white-collar worker).

GM for years has had one of the fattest, most over-bloated, bureaucracies in the world. Change, if it happened, was slow to non-existent unless it was directly arrived at by and driven from the top of the heap (e.g. changes in Pontiac since the arrival of Robert Lutz). With all of the bureaucratic layers that suggestions had to go through, it took a crisis before things could happen.

By eliminating some of this bureaucracy this should allow the voice of the workforce to be better heard, as well as eliminate some of the weightier overhead that this company has had to deal with for years.

It's about time that GM started to deal with the REAL issues, instead of putting more of their hourly employees on the unemployment line. Increasing "productivity" can only gain you so much, if you haven't dealt with the boated management structure.
:mad:

I mostly agree with you David, I just hope that the ones who will be leaving are the ones who create the "bloat" and sluggishness. But being the sarcastic cynic that I am, somehow I think the ones who cause the most problems are usually the ones who know how to play the game.

Well when you miss something by 70% then somebody should lose their job.
Unfortunately it will be the line workers and the Tier one, two, and three plants that stretch across the United States.

The sacrifice, the cuts, and the paperwork that is needed to keep these automotive contracts are never ending. This isn’t about the white collar worker in Detroit losing his/her job. It’s about small companies from Massachusetts to Illinois closing their doors.

Think about the amount of inventory that has been built!


The writing was on the wall for two years. The price of gas is over $2.00 a gallon, the country is at war and GM thinks we all need to have another SUV. Mean while proactive companies have a waiting list a mile long for smaller Hybrid vehicles.

But what do I know I’m just a grunt.

This thread, on its own, could be looked upon as very troubling. I feel for those who are going to lose their jobs and be displaced. But, my intuition tells me that there may well be a silver lining, especially if some of these posts are true.

Ok, let's say that, indeed, GM (and lots of other big firms, especially those formed by M&A) is bloated and bureaucratic. The people within the company are stifled by the excess layers of management, to the point that diseconomies of scale are realized. As a result, the company loses competitive advantage, and some of the people are let go.

Sure, there is pain, lots of it, borne by those displaced, and that pain is no reason for us to celebrate. But, How many of those people will take the bold step and go out on their own, or form small businesses? They know what NOT to do, because they have seen it.

Here in the Cove, and in other places recently, I have seen folks state that the good old USA is losing her competitive advantage because she has lost the ability to innovate, R & D budgets are being cut, and what research spending is being done is focused on the short term. Well, here’s hoping that the white collar workers displaced at GM and other places not only don’t give up, they innovate their way back to, and beyond, where they were. They may not have a job right now, and I know it hurts, but maybe the freedom from bureaucratic constraint will allow them to excel in a different environment.

Most of the real innovation IMHO, is not going to come from the big guys. Not in the USA, anyway. Its the small businesses that find a way to make things work better. When combined with flexibility and willingness to take risks, they can have an advantage over the big organizations.

Take a drive through Rockville Illinois and see the ghost town that was the cold form heading industry.

Or drive down 128 outside Boston and see what was the telecom industry, lots of buildings to buy or lease.

We have been spinning off on this silver lining for years….A lot of these companies were started by the entrepreneurs who learned from their mistakes the big companies had made.

The question isn’t who has the Initiative
to “innovate” the question is who do you ship to.

Take a drive through Rockville Illinois and see the ghost town that was the cold form heading industry.

Or drive down 128 outside Boston and see what was the telecom industry, lots of buildings to buy or lease.

We have been spinning off on this silver lining for years….A lot of these companies were started by the entrepreneurs who learned from their mistakes the big companies had made.

The question isn’t who has the Initiative to “innovate”, the question is who do you ship to.


I agree that there are a lot of empty buildings, but...

Who were the Telecom guys "shipping" to? Has that market dried up?

Who is Google "shipping" to?

There are some new ways of looking at business now. To me, it seems that many tangible goods (and services for that matter) have evolved to the point that they are commodities, with the pricing and competitive structure that goes along with that territory. Quality (capitol Q) has a lot to do with that, BTW. When I hear "service based economy", I think not just of tax preparers or plumbers, but also the people who provide the service involved with the delivery of goods. That service can make or break an enterprise.

"Who to ship to?" is not a new question. Neither are "what should we make?", "how should we price it?", nor "who is our market?". Succcessful business people have been asking and answering those questions since the days of the guilds, if not before. Only the answers have changed.

A lot of good points Craig.

A good portion of telecom dried up on February 16, 2001

When Lucent, Nortel, and JDSU took a look at there inventory. Lets just say I say 22 Mil of business get cancelled.

I understand your points regarding a "service based economy" and a lot of people agree that its all good thing. But I beleive that we need to do everything possible to keep some manufacturing in this country.

cnc

I, too am worried about the decline of manufacturing. Like I said, though, many products have become commodities, or are becoming so.

I likely am going out on a limb here, but take cars (and pickups, and SUVs). IMO, they are becoming more and more alike in several ways. For starters (sorry, couldn't resist the pun) people do not put up with lousy quality like they used to. Unless a company brings reliability to the game, they won't be around long. Lousy quality, Yugo. Out of business. 100,000 miles used to be it for a car. Now, that's middle age. Cars are looking more and more alike, too, IMO. But, what is one of the hottest areas in automotive right now? Hybrids. If someone was to start a car company with hybrids as the primary product, and they had a good design, what do you think their chances could be?

Manufacturing has become less and less labor intensive. Why invest in 5 employees when we can hire 1, and he takes care of a machine that does the work of 8? Therein lies the key. That one person is critical, and will likely not be someone you can just hire off of the street.

For this reason, the decline in manufacturing employment does not bother me as much as the lack of importance of education to many in this country. We need more engineers, and we need them badly. I don't think we can work ourselves out of this situation. We CAN think our way out of it, though.

Just MHO.

Well, off of the soapbox.

This will be my 27th year in the automotive business working for an interior supplier. To say things have changed over that time would be an under- statement.

During the 80's, you could not park a Japanese car in our parking lot. If you did it would have been towed. The maintenance supervisor at the time OK'd the lease of a Toyota forklift for a trial...he was fired when the lift hit the inside of the plant. The founder of the company, which was started in a single car garage, tried to fight the future as long as he could.

Do any of you know how many US automobile manufacturing plants there are in Japan? If you know of one let me know :mad: But we let them come here and build their plants. In fact, the tax breaks they get are mind boggling. And how many of those plants are unionized? How many of their suppliers came along for the ride? How many carry the same medical burden as say...GM?

Free trade is a farce as far as China, India and Japan are concerned. And IMHO...quality is a perceived notion when it comes to cars and trucks. They are pretty well equal at this moment, but the Japanese do one heck of a better job advertising their vehicles.

In fact, the tax breaks they get are mind boggling.
Most new industries moving into an area get tax breaks, even US industry, that is why most areas have economic development plans...to encourage new growth. Heck, my company got incentives to build our plant where we did and we are USA all the way

And how many of those plants are unionized?
What difference does this make? Are you saying that union plants should have some sort of preferential treatment over non-union? I'm not trying to get into any union/non-union fights here, I just am not sure that I understand what you are saying or why?

How many of their suppliers came along for the ride? How many carry the same medical burden as say...GM?
When we move our businesses outside the country, how many of our suppliers go along for the ride? Do we pay the employees in say, India, the same as what we were paying in the USA? Yes, I expect that they have preference for some suppliers, but I also believe that they very well could build the economy and help existing businesses. As for a medical burden, I assume that you are talking about insurance benifits? I guess that if they are finding employees to work for them, the benefits package must be acceptable?

Just wondering, in no way trying to argue with what you say.

Sure, there is pain, lots of it, borne by those displaced, and that pain is no reason for us to celebrate. But, How many of those people will take the bold step and go out on their own, or form small businesses? They know what NOT to do, because they have seen it.Please do give us some ideas for some 'small' businesses. I have to assume that you are suggesting that the thousands of people 'displaced' can easily start a 'small' business.

Ummmm, let me think for a few minutes.... OK - Finished. I loose. Can't think of many at all. Please suggest the 'topics' all these people can address. What are all the 'small' businesses people can get into when their job is outsourced?

It's very easy to tell someone to "... get a job ..." or "... start your own business ...". It's not that easy. If it was, we'd all be rich and not have to work.

As for a medical burden, I assume that you are talking about insurance benifits? I guess that if they are finding employees to work for them, the benefits package must be acceptable? Not necessarily. If you need a job - Any job - Benefits are generally not an issue. Especially not medical benefits. In the US it's who can pay get's medical treatment. E.g.: Walmart - Sick employees get... ??? To fend for themselves. And now that catastrophic medical expenses are no longer an excuse for bankruptcy (unless you're rich and can shelter your assets), 'everyman' in the US is - Well, if you can afford medical treatment, great. If not....

Who is Google "shipping" to?Excellent point! Me when you're nice enough to visit an advertiser...

During the 80's, you could not park a Japanese car in our parking lot. If you did it would have been towed..
By golly - I remember those days! Didn't help, did it...

Do any of you know how many US automobile manufacturing plants there are in Japan? If you know of one let me know :mad: But we let them come here and build their plants. In fact, the tax breaks they get are mind boggling. And how many of those plants are unionized? How many of their suppliers came along for the ride? How many carry the same medical burden as say...GM?

I really don't think the workers at the plants for Nissan, Honda, or Toyota are all that upset that they are working for a foreign company. Nissan, sad to say, is owned by the French which upsets me more than anything.

There were some interesting facts thrown out in an editorial in Machine Design (http://www.machinedesign.com/ASP/viewSelectedArticle.asp?strArticleId=57948&strSite=MDSite&Screen=EDITORIAL&catId=401) regarding a few of the car manufacturers:

Amount Nissan made on each car produced in 2003: $2,402.
Amount Toyota made on each car produced in 2003: $1,742.
Amount Honda made on each car produced in 2003: $1,488
Amount Chrysler lost on each car produced in 2003: $496.
Amount General Motors earned on each car produced in 2003: $178.
Amount Ford Motor Co. lost on each car produced in 2003: $48.00.

That's a pretty big disparity there, and I'm sure we all have our personal opinions on why that disparity exists.


And IMHO...quality is a perceived notion when it comes to cars and trucks. They are pretty well equal at this moment, but the Japanese do one heck of a better job advertising their vehicles.

I usually try to keep close tabs on what the Japanese auto manufacturers are doing, especially since we usually get the watered down versions. Nissan had Skylines and Silvias (the Silvia was available was a 200sx and then a 240sx, but the engine was missing the turbo/s available on the Japanese models or the engine was watered down and not the RBD26TT version), Honda had Civics available with turbo options, etc.

But look at the Consumer Reports and JD Power information released. Ford had a decent run a few years back with the Taurus, but it isn't what it used to be, although the Focus has received some good ratings. What about the "American Made" vehicles that are manufactured in Canada. It's somewhat comical when vehicles from foreign carmakers fall more into the "Made in America" category than products from our own domestic manufacturers. Heck, the engine for my Dad's Ford Ranger was assembled in Germany.

I remember hearing the phrase somewhere, "If you don't have a competitive edge, don't compete." The real question is why and how did America lose that edge, and how do we get it back? I'm a firm believer that we can produce a vehicle as good any Japanese maker, or any other product for that matter, it just isn't happening.

Wayne

When I came to live in USA 9 years ago, just outside of Detroit, it did not take long for me to get that odd feeling of deja vu when I observed what was happening. I knew nothing about American makes and models of cars on the market so I set about finding out. I visited every American brand in the showrooms, examined the products, test drove many. I spoke to people I met about their cars and experiences. My (American) wife born in Dearborn, raised in Michigan knew plenty about American cars.

Eventually I came down to a short list of two. I bought a Nissan, not the Ford. Still driving it at almost 100K miles with original shocks, brakes and everything. Never a whimper from it. My wife's new Chrysler sounded like a bag of bolts before reaching 40K; her subsequent new Buick has been in and out of the garage for the same repetitive faults in the engine management system (and other problems). She has always driven American cars but openly states she will no longer trsut her hard earned cash to buying one; various friends (American) cars have all had exasperating problems - an increasing number are saying much the same. Everyone has their view.

My deja vu occurs because I witnessed the demise of British manufacturing and engineering industries as quality deteriorated, competitive edge was lost, management became inept, unions too unrealistic, government (national and local) giving priority to the wrong policies and so forth. For the last several years I have been commenting to people, whenever the topic arose, that I hear the same speeches, arguments, complaints, sophistry, exhortations of xenophobia, jingoism, appeals that "government" or "they" must support industry/ do something/ subsidise it (and so forth) and such emanating here in Michigan as I did in the UK, notably around Glasgow, Liverpool, Newcastle, West Midlands etc that took place through the 70's. From that I am betting the same outcome will occur before a renaissance happens: people are people, regardless of nationality.

The British-owned car industry is no more. Famous names have disappeared: Morris, Austin, Humber, Sunbeam, Lanchester, Armstrong Siddeley, Wolsely, Riley, Hillman, Alvis and so on. Morgan, Bristol, TVR still remain as very small niche makers. But, the Brits are genuinely thankful for the implants: Nissan, Honda, Toyota who have created thousands of jobs directly, for a robust supply industry and for the inevitable economic multiplier. Of key importance has been their management techniques, patient quality improvement efforts that have permeated what is left of British manufacturing, improving international competitiveness thereby.

Having lived in an area where there were pockets of male unemployment reaching almost 30%, it is not a pretty sight or experience. It is not one I wish to see here in Michigan, but who knows. Though those implants may take home a portion of their profits to Japan or wherever, the vast proportion of the revenues they earn are spent in their host country on salaries, suppliers et al. And if it takes foreign direct investment to create jobs here in America, I will most willingly welcome those making it. How nice that some foreigners are willing to risk THEIR money creating jobs for Americans. We Brits were grateful for the FDI our country received.

It is sad to see what is happening to the Detroit car industry. But, perhaps we might reflect the adumbrations of problems to come arrived in the 1970s, Detroit has had 30 years to get its act together; John DeLorean (for all his faults) was indicating some of the executive/ strategic problems in his book, "On a Clear Day You Can See General Motors", written in 1979.

Though there will be endless arguments, finger pointing and playing the "who is to blame-game", what really matters is where does the economy go from here? It is not a time for saying, "we are different" or "It can't happen here": look at historical events affecting other nations, look at economic histroy and the various tectonic shifts that have occurred over the milennia and profit from them. America is facing change and must accept it. It is a nation that is quite capable of doing that. Individuals, though, may have difficulty accepting it: that is tragic.

Toyota is investing more money here in Michigan. I would hope to see it (or another implant) open an assembly plant, but given the local climate and circumstances, prudent management would not make that decision if the same conditions and business environment besetting GM etc were to prevail. Michigan desperately needs the jobs, revenues and taxes such a plant would bring to the State.

Please do give us some ideas for some 'small' businesses. I have to assume that you are suggesting that the thousands of people 'displaced' can easily start a 'small' business.

Ummmm, let me think for a few minutes.... OK - Finished. I loose. Can't think of many at all. Please suggest the 'topics' all these people can address. What are all the 'small' businesses people can get into when their job is outsourced?



Marc, I most certainly DID NOT say it was easy, quite the contrary it can be quite difficult. I have a few small business ideas that I am going to try out, but at this point I most certainly won't broadcast them on the internet. Even then, I doubt that they will make enough $, at least initially, for anyone to live on. But, you never know.

The thing is (call it a copout if you like, but it is the truth) I cannot even begin to offer decent suggestions for a particular person with out knowing their background. And, that great and common dream of opening a restaurant is usually not a great alternative, unless the person in question knows the food business.

I can come up with several ideas for myself that I could do without opening my own business, but that is because I know what my particular experiences are. An obvious one (and no, boss, I am not thinking of leaving) would be to get certified as an ISO 9000 auditor and seek a contract with a registrar(s).

I have known several people who have been let go. Many worked at the company I worked at before I moved to my present position. I jumped, they were pushed shortly thereafter. Anyhow, I cannot think of a single one of those people who are not better off, and much happier, now that they have moved on. Some went into business on their own, others didn't. Many of them went through some very painful times, but now, a few years out, they are doing well.

My point is that many large companies have reached the point of realizing diseconomy of scale, and the resources, especially the people, within those organizations would be much more productive unconstrained by the bloat.

I certainly don't have an answer to any of what is happening. But what I see is, in my opinion, disturbing and scary. Over the years we have all met people who neither have the resources (financial or mental) to start and maintain a small business be it house cleaning or patching and taring asphalt. Most of the people who visit here are relatively 'savvy' and probably can come up with some sort of money making venture. And, I would bet that most of the people who visit here (particularly those in the US) have some money set aside to be able to take a chance and have something to fall back on (at least for a while) because, as we all know, it is the rare business which is rolling in profits from day 1.

As to large companies shedding resources, I think that is to be expected as time progresses and technology provides the means to accomplish things in more efficient ways. But how they got that way is just as easy to understand. As a company expands a loss of control of the 'details' happens by the nature of the size and increasing complexity including increased specialization. I've been in a lot of very large companies, as I'm sure many here have. I have never seen one which runs as efficiently as a small company of say 20 people. We can easily condemn big companies for their 'bloat', but put yourself in the CEO's place. You have 30,000 employees word wide. How does one control that company and ensure that only the resources necessary are used? Even 'smaller' companies (let's say 1000 employees) have a hard time. You either have too many people (equipment, whatever) or too few and the balancing act is a difficult one.

Even more important is the aspect of competition. While competition is applicable to all companies, if a small company doesn't do well and fails it's nothing like GM or Ford so much as faltering as GM has recently done. When I was at Motorola I had a number of conversations with folks about the fellow who predicted that cell phones would stay with a particular standard. As is well known today, Motorola made a mistake in listening to the fellow and thus they lost their control of the cell phone market. But I have to say if one looks back to the time, and one considers everything, Motorola did what most compaines do - They listen to an expert, the expert gives their opinion and the result is not always what the expert predicted. Typically it's a crap shoot.

I know in years past much of the stuff I saw at big corporations was 'interesting'. My first automotive experience was with Ford in the 1980's troubleshooting an electronic module and a radio-cassette assembly as a consultant. When I went to their R&D facility on Rotunda (?) back then we spent the morning discussing the issues at hand, lunch was in a really nice executive dining room and the afternoon and evening was strip clubs in Detroit (moved to Windsor by 8 PM or so for the 'real' stuff). We were drunk by 5 PM for all intents and purposes.

To me it was lucridous. I don't like strip clubs (I don't care that there are strip clubs, I just don't particularly like to go to a strip club), but my partner did so I typically went. I thought the whole thing was a waste of time and money. And I watched as cuts were made at the manufacturing level while the big boys wallowed in 'good times'.

And don't get me wrong. It's not all an issue with the upper management. I did some work as a QE for GM back in the early 1990's and I remember one fellow who 'worked' in receiving. He had a big cardboard box he slept in when things were slow (which was quite often). And he sold snacks. He had a small refrigerator he put a lock on and sold drinks from it and he had a big wooden box with a big lock that he sold chips, sandwiches, etc. from. He had a swell business going all the while being paid by GM. I still wonder how he got that refrigerator in there...

I guess my point is, I think this is pretty 'standard' for big businesses. And I don't condemn them for bloat. It's easy for one to complain about bloat. It's another thing to control it in a large company. One company I did some work for cut the number of quality engineers because of 'bloat'. The result was predictable to most of us - quality suffered. Lines went down more often, and stayed down longer, than before. The answer for upper management was the quality engineers left should be doing more. Umm, sounds nice but there are only so many hours in a day.

That's why I like the restaurant I invested in - it's small enough to be able to manage the resources. I don't have a say in it's operation, but the fellow who runs it and I have had long discussions (he was here yesterday for a couple of hours - we get together at least once a month) where I pick his brain and, probably more often, he talks to me about everything from staffing to supplies in part to get my ideas and in part to vent his frustrations. The interesting part to me is that this fellow worked for a large multinational in the development of the early ink jet printers. He was a tech in their R&D laboratory. He had no college degree and could not get ahead. He felt that the organization was fighting against its self internally and he got tired of working in an 'insane' environment. So - He found a few investors and started a restaurant. And succeeded. But - He's a smart cookie. Two of the original investors were (are) not as smart and they are about to loose most of what they've saved over the years (potentially all of it) and in, at most, 1 1/2 years they will no longer have any stake in the company nor will they have their 'jobs' managing the place. I don't feel sorry for them, but that's because I don't like them personally. They made bad business decisions.

No - I don't have an 'answer' for any of what's happening. I don't think anyone does. My response was mostly an emotional response because I feel sorry for many of the 'little' people displaced and I think a lot of them will have a difficult time. Not eveyone can start a successful small business. But I keep hearing that from every corner - Start a business if you're out of work. For many (most?) people, it just isn't an option.

I have lived most of my life during what I would describe as a 'good time' in the history of mankind. Other than political proxy wars, there has been peace. Living in the US I have had a relatively high 'standard of living' with many more luxuries than the majority of the people in the world could dream of. What I lament is that in the future it will be more and more difficult for 'everyman' to survive. I believe the people in the US are in for some real shocks over the next 20 years or so. Continually declining wages and the evaporation of the middle class are only two of many worriesome aspects.

Along with that goes the aspect of large corporations 'loosing their way'. Why is GM doing so badly? Is it really car styling? Is it reliability? Is it price? Is it in part that people are less and less able to afford 12 Hummers like Arnie has? I haven't bought a new car since 1978 when I bought a Subaru (which was a GREAT car). That car had, essentially, a motorcycle engine and got great mileage - Which was why I bought it. My current car is a Pontiac Bonneville SSEi which a friend sorta talked me into buying. I like it, it has about 160,000 miles on it, and I plan to keep it for a few more years. So - I'm not making GM (or any car company) much money. While I could 'afford' a new car, I'm too much of a cheapskate to want to buy a new car at what - US$20K and up? I did check into a 'new' used car about 4 months ago. When I called the insurance agent my rate would have gone up another US$500 a year. I added everything up up and being a cheapskate, I decided what I have is fine, thank you. I put 275,0000 miles on my 1989 Mazda without any major mechanical work before I finally sold it, but I don't expect that from my 1995 Bonneville. And I'll probably not buy another GM car when I do get another used car. I miss my Mazda....

Anyway - I don't know what will happen. I have no answers - Just thoughts. It is interesting watching it all. A company like Apple, which 'lost its way' for some years, and which was cast for years as a 'loser', is doing fine here in 2005, while GM can't sell cars. Not so long ago a relatively small company named Nokia took most of behemouth Motorola's cell phone business. Then Nokia made some mis-steps. Microsoft is rolling in money and employees but can't design an OS which is secure. What will big oil companies do as oil becomes more and more scarce? It's interesting to watch. As to the 'little' people involved, well - I guess it's every person for themselves. What ever it takes to survive.

Well, Marc, I was expecting to argue with you, but I really agree with what you are saying. Believe it or not, for all of my macro theories, I really do care for the "little guys", and most every lost job brings with it agony on a very personal level.

There are indeed many things to be afraid of now, and as I pointed out I usually am a little on the cynical side. I do hold on to my hope, and desire, that everything is going to be ok, in spite of it all. But, as you said, it should be interesting, indeed.

"May you live in interesting times" - Ancient curse

I wasn't looking it as an arguement topic. I was trying to bring in the aspect of the fact that it is neighbors, friends and family we're talking about, as well as the 'little' guy (those who do not have the resources we have).

I know I wouldn't want to be a CEO, either. I wouldn't want that responsibility. And I don't see myself as visionary. To some extent this thread is linked to the recent thread on Innovation: Is The US Done Innovating? (http://elsmar.com/Forums/showthread.php?t=11069). I had that thread in mind somewhat as I wrote.

Things are changing at what seems to me to be an ever increasing rate. It can be difficult to keep up. Maybe I'm just getting old. And the world continues to 'shrink'...

I apologise for taking this thread so far afield. To restate the topic focus:
So how will this news affect the rest of the GM supply chain?
Will this mean cutting Supplier Quality Analysts (auditors, etc.)?
If GM is laying off folks, are they also cutting way back on their purchases?
Is GM overstaffed? (Will job cuts have big or small impact in operations?)
If the white collar guys get cut, what happens to the hourly wage earner?
Will we even hear about job cuts lower in the supply chain?

As for a medical burden, I assume that you are talking about insurance benifits? I guess that if they are finding employees to work for them, the benefits package must be acceptable?

Health care costs for current and retired workers add as much as $1500.00 to the cost of every new car and truck produced by the Big 2 1/2 in this country.

Toyota on the other hand spends $186.00 per car and truck built globally.

All you need to do is look at the average age of the workers for each company and the reason becomes clear.



What difference does this make? Are you saying that union plants should have some sort of preferential treatment over non-union?

Personally, I'm not a big fan of unions. But isn't it strange that the transplants have blocked the unions from entering their plants?

Health care costs for current and retired workers add as much as $1500.00 to the cost of every new car and truck produced by the Big 2 1/2 in this country.

Toyota on the other hand spends $186.00 per car and truck built globally.

All you need to do is look at the average age of the workers for each company and the reason becomes clear.

Ok, I see what you are saying now. But, is the health care costs for current and retired workers adding nearly 10 X the cost for US manufacturers part of the reason that suddenly these companies realize they have to reorganize to stay in the business? I hate to see anyone lose their job, but what happens if entire corporations fold because they do not change now? Many more will be unemployeed if we lose a GM, Chrysler, or Ford corporation to their inability to compete. I am looking at this as a distinct parallel to what happened (and is still happening) in the steel industry in 2000 - 2003 or later. Big steel refused to change its ways, unions wouldn't allow them to change their ways, and suddenly melt shops were being permanently decommisioned. The whole process is still evolving, we haven't seen the last of it yet.


Personally, I'm not a big fan of unions. But isn't it strange that the transplants have blocked the unions from entering their plants?

I really don't think you can blosck the union from entering your plant...your employees can though by not taking part in the unionization attempts. But, yes, your company can influence their employees to not get involved with unionization.

I just see a new organization coming for how pensions, insurance etc. are handled for employees. I believe that smaller corporate pension plans with more employee focus on 401k's etc. will be the wave of the future. Good, bad? who knows, I am certanly not a great brain when it comes to economics or business management. To some extent, we have created the problem ourselves by becoming too sucessful. is that an oxymoron, or what?

Best wishes to anyone caught up in this restructuring. I certainly don't know what I'd do in this situation.

I was having a conversation with a large TS registrar last week. he said that based on current knowledge GM will not be around as we know in 5 years.

Just the beginning of changes of GM if they want to survive. Rumors have it that a buyout may happen if their downward spiral does not stop.

Rumors have it that a buyout may happen if their downward spiral does not stop.

I highly doubt that will ever happen. Even Toyota doesn't have that much cash laying around. And I doubt they would even consider taking on the debt, over-capacity and health care costs which currently burden GM.

he said that based on current knowledge GM will not be around as we know in 5 years.

Hopefully that will be the case. 2007 will be the turning point when the contracts come up. Either the unions make some hefty concessions or there will be one long strike which will get ugly. Another advantage of the Japanese...no contracts to renegotiate with a union. They can pretty well do what they please.

Let's face it...a 60+% share of the automotive market by one company will never happen again. Too many new manufacturer's coming into this country. GM and Ford need to adjust to that reality by downsizing capacity, stop investing in niche vehicles for the few and learn how to design cars and trucks people want. And keep on working on quality.

I was having a conversation with a large TS registrar last week. he said that based on current knowledge GM will not be around as we know in 5 years.

And based on the way things are going with registration maybe the "large TS registrar" won't be around as we know in 5 years either! Maybe TS will be gone together with the mandated requirement for registration etc.