GM to announce cuts this morning
 

I don't know how much people in other parts of the country care or follow this stuff, but it's causing a lot of anxiety around here. They have said on the news that for every GM employee laid off in Michigan, 10 jobs are lost in other industries (service, retail, etc.) The rumors last week was that they were going to get rid of Saab, Hummer, Pontiac, Buick and Saturn. The big announcement is at 8:30 this morning and Detroit is sitting on pins and needles. Our state is already such a mess. Personally, I'm hoping they don't get rid of Pontiac or Saturn because I've got my eye on one of each for my next car and I won't get the GM employee discount through my dad on them if they are no longer GM, but that's a relatively small dilemma compared to the number of people who could lose jobs...

More blight in Michigan, I'm afraid...

A few more details on this:
GM to cut jobs, bonuses, and dividend


Moves will raise $15 billion in liquidity by end of 2009



July 15, 2008 - 8:45 am ET

DETROIT (Reuters) - General Motors said today it would cut salaried employment costs by 20 percent, sell up to $4 billion of assets and borrow at least $2 billion in a bid to bolster its liquidity by $15 billion through 2009.
GM CEO Rick Wagoner, speaking to employees before a 9 a.m. press conference, also said GM would suspend its common stock dividend in a restructuring driven by high fuel prices, a shift away from trucks and SUVs, and the lowest U.S. industrywide auto sales in a decade.
Wagoner also said GM would be allowed to wait until 2010 to make its first scheduled payment into the UAW's health care benefit trust fund for retirees. The establishment of the trust fund was a key part of the 2007 contract agreement with the union.

http://www.autonews.com/apps/pbcs.dl...t=emailblast02

https://home.autonews.com/clickshare...-tSdUl7ge/cU-0

http://www.msnbc.msn.com/id/25679520/

Sad. More bad news for Michigan :(

So is GM stock right now a buy? Only $10/share... 50 year low. Amazing.

I think it's probably a buy right now. I think it will go up again long term and could be a very good investment right now, but I'm an optimist. There's an old saying (was it JFK?) "As GM goes, so goes the Nation". Makes one wonder if that's still true as it was at one time. It's definitely true for Michigan though. We're having a tough time. We've had tough times before and fought through it and I think we will again, but it's hard to stay optimistic. Or maybe it just hits home because I was a GM baby, the daughter of a GM upper level white collar guy and GM fed me and clothed me. Maybe I'm just more emotional that it's GM. But when I look down my street at the number of abandoned houses, I'm afraid to see what happens if there become still more.

This announcement wasn't as drastic as what some of the news folks were predicting (GM keeping only Chevy and Cadillac) so I think there's a bit of a sigh of collective relief. Then again, those thousands of white collar jobs are mostly from Detroit and Warren (my home town). And those, yeah, those are going to hurt.

I think GM is making the right move. Cutting out discretionary executive bonuses and white collar staff is essential- and that is where the bulk of this $15B savings will come from. GM is one of the ultimate dinosaur companies with endless layers of unnecessary middle management earning ridiculous salaries.

Selling off a few brand names is good too. Classic basic way to handle a downturn in their business. In growth times you consolidate, in lean times you divest.

Buick?:eek:
Around here, everybody over 70 will panic!:rolleyes:

Believe it or not: Best seller is a Black Buick in China.

They didn't address selling off any brands in this news conference, so perhaps those were just rumors. I was looking at what they're offering for incentives and clearly Hummers aren't selling at all.. they're offering like $7K incentives on them. I could see them letting Hummer go easily, and perhaps Buick but it seems like Pontiac still has some cars that are selling.

Retirees losing their health care benefits is going to hurt the health care system I work for, most definitely, but probably Florida's health care systems even more. White collar folks losing their jobs always hurts health care also. That's just more free care to give away.

Very tough times in this state. Very tough times.

sorry to hear this dee. unfortunately, it's really not much better on the northwest ohio side. boo on a sucky economy...

Chopper said buy when it was at $7 a share. How did that workout?

LOL. Probably depends on how you define "long term". I remember when Kerkorian made the news a month or so ago when he wanted a big buy-in to Ford stock, it rose into the high-$8s then. I'd say it's still a good long-term investment, it's Ford Motor Company, for god's sake. It, like the other big car manufacturers, obviously needs to adapt and change, but it's not going anywhere. Mulally did wonders for Boeing, give him time and I bet he'll deliver Ford too.

What makes you think Ford can adapt?

It looks to me like the auto industry does everything they can not to adapt. The Model T actually gets better mileage than many cars on the road today.
When I think of the Ford boardroom, I picture a bunch of 80 year old guys sitting around waiting for gas prices to drop.

Boeing is in a different position than Ford. Boeing has a virtual monopoly and their only competion is Airbus. Boeing's problem was in production not sales. They could not meet demand. Boeing needed to streamline prodouction and cutout some of the BS custom options and get rid of Stonecipher. They were offering over 100 different shades of white paint.

I'm a fan of Mulally and was impressed when Ford announced his hiring as CEO. I disagree that there's not a similarity between the task of turning around Boeing and turning around Ford. Out of the 3 large auto manufacturers, I think Ford's been making the best management hiring decisions and at the moment, has the quickest potential to adapt and rebuild market-share again. JMO. http://www.busmanagement.com/pastiss...8777&issue=181


ETA: yes, I know it's a blog, but who better to get a pulse from than from real motor-heads, right? http://blogs.motortrend.com/6240683/...-it/index.html

Autoweek had a story covering some of this awhile ago; I may have posted it within another thread-just found it:
http://www.autoweek.com/apps/pbcs.dl...023/LATESTNEWS

Very big difference on what was required and asked for in a vehicle then and now. The above story covers only the past 10-20 years.