Yikes! Looks like the news for the General keeps getting worse. How much longer before they (and the rail traffic they generate) evaporate? Rival Ford, while battered, still posted a $2 Billion profit in 2005.
All of Ford’s profit came from Europe though. GM made a profit in Europe too. The North American operations of both companies are a disaster.
Perhaps GM selling EMD was a good thing … from the longevity standpoint of EMD.
According to a news report this morning…GM was losing $2 Millions dollars a day in the last quarter! Wow! I found that mind boggling.
Interesting twist…also according to the report, 30,000+ workers will be layed off in phases over the next several years, however, most of them (at least the union employees) will get severance packages that will provide compensation up to the year 2009.
I don’t know how true this is. But I heard it on an AM 970 WFLA (Florida, Tampa Bay area)
Remember when Penn Central was loosing a million a day ?
…Yes, even though the union side of GM employees are facing a massive layoff, the cost to GM still continues for some time contractually. So there is no easy out for GM…Of course the management side will take a hit too but unclear how much cost remains doing that…It is difficult to see how both GM and Ford are going to pull out of this crisis…A very sad condition our big auto companies are facing in this country. I sure hope a viable solution will emerge…I did almost 40 years of my life in various parts of the auto industry and very much want to see it continue…If it doesn’t it can’t be good news for our great country.
supposedly ford is laying off just as many people, around 30,000. chrysler is laying off 6,000 people, mainly white collar workers (which is how the fat should be trimmed to start with).
as a little aside i knew a few people who worked for LTV in hennepin, IL when LTV went under. most were called back to work when ISG bought LTV out. they say more work gets done with about 1/5 the workforce. i believe they said the per shift number of people working there went from 600 down to about 150, mostly management related people got cut out.
it’s pretty sad really. the diversity as far as jobs go is disappearing. going from white and blue collar to white collar and working poor. yay, walmart for everyone. lol
…The glide path the industry in this country is now sliding down can only last so long until it all collapses…If we soon don’t change our business practice of letting foreign countrys unload products in this country with min. tarrif and in turn we’re stopped from selling in those same countries with excessive tariff’s…It can only last so long…and we’ll not have anything left…Others will have won all the “toys”…It’s not free trade we’re dealing with now…not even close…Our government must soon put their foot down and bring this non sustainable practice to an end or we’re going down the tubes…NAFTA and all free trade policies…and both politics were involved…{so I’m not preaching politics}, is no where near FREE trade and something needs ot be done to correct it…!
the ironic part is that the railroads are one of the few companies that benfit from the exporting of american jobs and the importing of foriegn goods.
GM and Ford’s problems are much deeper than trade policies. Its has more to do with the products they keep churning out. Forget quality, their cars are BORING compared with the foreign competition. As long as they keep churning out cars like the Lumina, the Taurus, the Focus, it is no wonder the foreign competition kicks their butts.
“Hmmm, lets see. Should I choose a Crown Victoria or a BMW 5 Series?” The BMWer costs twice as much but absolutely. Some would argue it is not fair to compare the two. I would agree but in a way that is my point Ford and GM are making cars for a market that has disappeared and are not reacting to the present market. The foreigners are reading the market much better. Cost is not the only factor. Many foreign cars cost more to purchase and are more expensive to maintain and yet they are still selling so it is not all about price.
Its a lot worse that $2 million per day. To lose $8.6billion last year, GM would have to have lost over $23 million per day for 365 straight days! (Per a simple 8.6B/365 days calculation)
Trade policy has nothing to do with GM’s and Ford’s ills. First of all, we’ve tried draconian tariffs before – the Smoot-Hawley Tariff Act, which caused a collapse in world trade. It “imposed an effective tax rate of 60% on more than 3,200 products and materials imported into the US”. Tough enough for you? It turned what was severe recession which was induced by the financial panic of 1929, which would have run its course in a few years, into the Great Depression. Second, the major foreign manufacturers who already have a major domestic presence would hardly be affected. On the contrary, the impact on GM and Ford might be even greater since they import many parts (and cars).
Their most profitable arms were the financing divisions. Because of this Ford was profitable for the year. Specifically, the NA automotive operations are disasters. In you’re into class differences, as some here seem to be (I’m not), you’d have to conclude that it’s the white collar employees in the financing divisions who are bringing home the bacon.
This can’t be a surprise to anyone who has been following business events in even a cursory fashion. Remember in the early '90s when GM tried to outsource some of their work and had a strike? The resolution was that they would pay 90% (I believe it was) of salary to laid-off employees. This totally cancel
eastside…I agree, and I didn’t offer the thought of excessive cost {as being a surprise}, to GM contractually, of course it was a bad decision back when that agreement {payment of 90 plus % while laid off}, was agreed to. On the Trade policy has nothing to do with it…I think othewise…It does have some effect when we can’t export even close to equal amount of vehicles say back into Korea as they have coming this way…Of course it has an effect. It’s not the only reason but it contributes.
Even if GM or Ford could ship as many cars as they wanted into Korea or Japan, what cars do they produce in the North American market that would be even slightly attractive to the Asian buyer? I still maintain their large clunky models(cars and SUVs) are hurting them.
Why dont GM and Ford just make cars that people actually want? …just a thought… [:-^]
andrew…SUV’s…yes, a bad situation now for the American Co’s…Sure made them a bunch of money for a fair amount of years now…but times now are changing. I don’t know if our US Manufactures can weather this problem and come out the other side without being clear different in what they are now…They now are changing and they must. If they don’t reduce costs the game will be over. But they can’t “reduce costs”, themselves out of this mess…it will take fresh product. Hope that is happening now. It better be. But the “free trade” market of the free world must be modified to be “free”…It sure isn’t now.