GM mulling thousands of job cuts, sale of brands: report

[UpInArms]

Source: Reuters

(Reuters) - General Motors Corp (GM.N) is planning to cut thousands of white-collar jobs and is considering whether it should sell or stop production of more of its brands, The Wall Street Journal said, citing people familiar with the matter.

Both moves are part of a broader re-evaluation of the company's strategy and of its ability to meet an internal projection of returning to profitability in 2010, the people told the paper.

The job cuts are likely to be approved when GM's board of directors meets in early August, the people said. The reductions would be in addition to earlier announced cuts.

Management may also present the board with options for raising additional cash, they told the paper.

<snip>

The company, hit by rising oil and raw material prices, the credit crunch and the housing downturn, will need to raise as much as $15 billion in cash to shore up liquidity and bankruptcy is "not impossible" if the U.S. auto market continues to slump, Merrill Lynch had said last week.

Read more: http://news.yahoo.com/s/nm/20080707/bs_nm/gm_jobs_dc

[LiberalFighter]

1. They need to implement operating procedures that are more cost effective.

Operating procedures that work better in the past than the current procedures.

They need to fire all the dumb ass management idiots that think they know what they are doing. They need to quit putting recent Purdue graduates or any other graduates in charge of the industrial engineering department until they have gained the experience.

Most of all they need to shake up those at the very top.

[llmart]

6. Isn't that the truth?

I worked at an auto supplier for a short time in the HR department and they'd take these 22-year old graduates from prestigious universities, Purdue being one, and bring them on board and pay them $30,000 more a year than the people who had been in the field for 20+ years. They would throw perks at them left and right and the most these students had ever done in life was go from high school to college on their parents' money. One guy had never worked anywhere in his life but as a caddy on a golf course and this supplier felt he was worth $100,000 a year. However, we later found out his uncle was in top management. Surprise, surprise.

[whistle]

9. Where does a dead fish rot first?

....In the head.

GM needs a Lee Iaccoca type asap

[UpInArms]

14. GM CEO Rick Wagner's 2007 compensation: $15.7M

http://www.mlive.com/business/index.ssf/2008/04/gm_ceo_rick_wagners_2007_compe.html

DETROIT -- General Motors Corp. Chairman and CEO Rick Wagoner's compensation package for last year is valued at $15.7 million.

That's 64 percent more than 2006 when the package was worth $9.57 million.

<snip>

Wagoner earned $1.56 million in salary and no bonus last year, but he received $1.8 million in incentive awards and stock options valued at $11.7 million.

GM lost a record $38.7 billion in 2007, largely due to a charge for unused tax credits. Without the charges and other one-time items, the company lost $23 million.

[pokercat999]

25. Oh POLEEEESSSSE give a striped monkey $1.5B and he

could have turned Chrysler around at the time. Where is it today.....Iaccoca was totally overrated and his legacy proves it.

[Auggie]

2. Wow -- "GM has put its Hummer brand up for sale"

From the same article: "GM has put its Hummer brand up for sale to prospective buyers thought to include Mahindra & Mahindra (MAHM.BO), but the SUV brand is expected to fetch far less than $1 billion in any sale."

Also: "In the past few years, as GM has run up massive losses, some board members and some executives have on occasion raised questions about its plethora of brands, only to be rebuffed by Chief Executive Rick Wagoner, the paper said, citing people familiar with the matter."

I always thought the same thing -- too many similar models.

[Kolesar]

10. GM *did* acquire Hummer, Saab, and Subaru

GM created the Saturn brand in the 1980s, all of which led to "too many brands" for a company with declining market share. Deleting Geo was appropriate.

[Auggie]

15. Chevrolet, Buick and Oldsmobile (while it was around) all made many models

based on the same wheelbases. Just the cosmetics were different (as was the marketing). I never understood it. Same thing with the trucks, vans and SUVs (GMC and Chevrolet) more recently. And yes, the Saturn decision is still a head scratcher, though the initial marketing and advertising created by Hal Riney & Partners (A different kind of car, a different kind of company) seemed to offer a glimmer of hope that something was indeed different at GM.

[Kolesar]

16. As long as the customers were happy

I never met a disappointed Saturn owner.

BTW, my Chevrolet never left me stranded.

[lithiumbomb]

17. it used to make more sense

When GM owned 50% of the US auto market 40-50 years ago it made more sense to have a large number of brands. Sadly they haven't had that huge a chunk of it in a very long time (I believe under 25% these days), their division model is very very outdated.

Saturn is an example of their problems. Saturn at the moment has some good products, all clones or at least heavily based on Opel models (though only the Astra is imported). But why import the Astra, which with the exchange rate they're surely losing money on, when they have the Cobalt sold by Chevrolet? They're the same class of car. Both of the Saturn SUVs are available from other divisions with different nameplates, their larger sedan is well regarded, but Chevrolet makes one as well. Why have two competing with each other? There is no class of vehicle in a Saturn dealership that cannot be found in a Chevrolet dealership.

Saturn, Buick, Pontiac, and GMC should probably die. Buick will live on in China, amusingly, where they're quite popular and now mostly china market specific models.

To be fair, Ford needs to kill off Mercury and perhaps even Lincoln.

One new sales model which might work is to roll nearly everything into a GM dealership. Chevrolet is still the primary car brand, but they could still sell a Buick, and a Pontiac. But not a full line of either of those, and no reason to have an entire car division devoted to those brands.

I bet GM will sell Saab. Cadillac does very well for GM and will likely remain unchanged.

I'm not sure how well the Hummer brand will be transferable. AM General (which makes the humvee and other military vehicles) manufactures the H2 with GM parts but the H3 is made entirely by GM.

[CRF450]

26. The H2 is basically a Tahoe, I dont see how AM General...

is manufacturing the H2. The H1 was the real humvee that was civilianized by AM General. And no, GM doesn't need to kill Pontiac, they actually have some good cars! The G8 being one of them, and its a damn fine vehicle!

[AndyTiedye]

34. Even the Military is Looking for Something that is Less of a Gas Hog

[LeftyMom]

36. Saturns used to be separate with most parts, etc. The idea was to create a car to compete with Japan

They're very good for that- maybe a bit boring but utterly reliable. I have a '97 SW1, I beat the hell out of it and it's never given me a problem. As with all 90's Saturns, there's no equivalent Chevy or Pontiac model, there aren't even all that many parts in common. The body design, which was built to use lighter, more durable polymer panels instead of steel, is totally different than other GM cars of the era. Now? Now most (all?) Saturns are just different trim levels on Chevy or Pontiac cars, even though those are the makes who were getting spanked by the Japanese.

[lithiumbomb]

18. GM did not aquire Subaru

They owned 20% of Subaru for a time, which they sold to Toyota in 2005.

[Kolesar]

19. Another reason not to buy a Subaru

thanks for the info

[lithiumbomb]

21. why? nt

[Kolesar]

23. I would love a wagon, but I don't want "all wheel drive" ...

Reliability suffers...

[lithiumbomb]

24. i don't get the connection

Between AWD reliability concerns and Toyota's 20% stake.

[CRF450]

27. I agree, what does reliability have to do with awd's?

Thats just stupid.

[Kolesar]

30. More shit to break, and Subaru's reliability ain't that great

[lithiumbomb]

31. humor me. :)

I admit I'm being a pain. However here's the path:
Person: GM bought subaru.
Me: No, they owned 20%, sold their share to Toyota
You: Another reason not to buy a Subaru.
Me: Why?
You: All wheel drive.

Ok, fine, but that doesn't explain your point that Toyota owning 20% of Subaru is a reason not to purchase a Subaru, that's what I'm trying to get at. :) If it's a "I think toyota sucks" then that's fine too. :) I'm just trying to find some logic here.

[Kolesar]

33. Toyota's supplier sucks

I used to work with one of them in my previous job. Bunch of liars

[AndyTiedye]

48. I'd Think AWD Would be Helpful in the Snow

[CreekDog]

39. Subarus are made in the USA

and get relatively good mileage for SUV capabilities.

[ContraBass Black]

42. Don't they still produce the Saab 9-2x, which is a restyled Subaru Imprezza wagon?

[grahamhgreen]

3. We have a failure at the top in this county - in our govt. and our boardrooms, the olny goal they

have is to steal from the companies/countries, and stuff money into their own pockets.

[Gman]

4. You nailed it...

They will often use fudged (at best) and fraudulent (at worst) internal numbers to justify management bonuses.

[WriteDown]

5. The bonuses have nothing to do with it in this instance...

I know I'll get flamed for this, but the Japanese have done an excellent job of fooling the American people into thinking that their executives survive on a pittance. Executive compensation is so shrouded in mystery in Japan that its impossible to tell how much their CEO's are really getting paid. They can afford many luxurious perks though, so you know that they are not starving. If you want to compare Japanese to American attitude, just look at their print and TV marketing ad. Generally, companies like GM and Ford will have a scene or picture with hardworking union personel assembling a vehicle. Honda, Toyota, etc, will have a series of robots.

[closeupready]

8. Regardless, the disparity in pay between highest and lowest paid employees is far less in Japan

in terms of national data than the US. Why would Japanese auto companies be different?

[WriteDown]

12. You do know that...

Japanese executives don't have to abide by the SEC? Their true compensation is a mystery considering that Japanese reporting standards are far below the U.S. That being said, the entire japanese business culture is run like the the old shogunate. You are supposed to be completely obedient/subserviant to your master/manager. That is what leads to so many business related suicides in Japan.

[Ian David]

7. All Your Innovation Are Belong to Us!

You have no chance to survive...



Make your time!


Toyota to install solar panels on Prius
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3384122&mesg_id=3384122

HA HA HA HA!






What you say???

[Kolesar]

11. What stupid concept

Just install the PVs on the car shed.

[OneBlueSky]

13. what's that old saying? . . . oh, yeah . . . "As GM goes, so goes the nation." . . . n/t

.

[Bozita]

20. Here's the AP story on the same topic ...

http://www.freep.com/apps/pbcs.dll/article?AID=/20080707/BUSINESS01/80707033

GM ponders scrapping brands, cutting more jobs

BY TOM KRISHER • ASSOCIATED PRESS • JULY 7, 2008

General Motors Corp. may get rid of some brands, speed the introduction of small cars from other markets and make further white-collar job cuts as it tries to deal with a shrinking U.S. auto market.

A person familiar with the company's discussions said today that all the options are being considered as GM tries to cope with the dramatic shift in consumer buying habits from trucks to cars and crossover vehicles.

The person asked not to be identified because no decisions have been made.

GM announced last month it would close four truck and sport-utility vehicle plants and boost production of several existing car models.

more...

[Psephos]

22. The schadenfreude is as thick as peanut butter in here.

Despite the secret glee at the fall of an American icon, many progressives are forgetting about the permanent loss of tax revenue (and the good things we could do with that revenue) as we turn to foreign companies to sell us automobiles. Kinda like the same thing that happened with oil.

What could have been done with those billions?

Meanwhile, the destruction of hundreds of thousands of middle class GM jobs, and the wreckage of the cities in which those jobs once existed, continues unabated, over the chortles of "progressives" who think the only important thing is that GM fat cats are getting their just deserts.

[brentspeak]

28. Where's this "shadenfreude" you're mentioning?

The GM fat cats are NOT getting their just desserts; they're getting bonuses. Many of the posts preceding yours' are pointing this out.

[fascisthunter]

29. It's Incredible How Fat Cats Screw Things Up for Company Employees...

and then get rewarded for it..

[Psephos]

32. Yet you remain utterly silent about the job destruction, tax loss, and city wreckage

cuz the fatcats are the focus

[AndyTiedye]

35. Everyone is Pissed at the FatCats for Wrecking the Company

I don't think we would begrudge them that kind of compensation
if the EV-1 were now in full production, and an EV-2 and 3,
and the also had a fleet of hybrids for sale,
and they were making lots of money selling fuel-efficient cars.

Wagoner and his crew have wrecked the company.
They drank Cheney's Kool Aid and believed oil would go down to $28/barrel.
They bet the company on it and lost.
and their workers lost, and their suppliers lost, and the cities they live and work in.

I suppose we are venting at them because none of us have any idea what to do
about the big hole that is developing in the economy where GM used to be,
or the people who are falling into it. Do you have any suggestions?

[Psephos]

37. Good post

I do have one suggestion, and I've put it out there a hundred times.

We as progressives need to quit treating cars as political fashion statements, and US-made cars as fashion disasters. Every nasty unfounded comment about US-made cars we inject into the culture works to destroy the livelihood of US autoworkers and kills the cities in which they live. Meanwhile, well-founded critical comments *should* be made - but made constructively. For example, I can think of several things to criticize Obama about - but I won't do it the way a freeper would. Same idea here.

I can't think of anything less progressive than job destruction in the name of political fashion. The truth is, it's the red-staters who are holding what's left of the domestic business together. To our shame.

There are good choices among cars made in the US but you wouldn't know it from this site, Kos, MyDD, or other progressive bastions. Meanwhile, I drive my Saturn every day. It looks and runs like new, its twin-cam motor is fun to drive, its fiber composite body will never rust, and it gets over 30 mpg around town and 38 on the highway. It's nine years old.

There are a range of other US-made choices, but the deniers (who haven't set foot in a US dealership or read an auto mag since Reagan was President) not only deny it, but ridicule anyone who says different.

I note that the Chevy Volt will be in production late next year. It's way better than the EV-1, so in a way it is the EV-2 you mentioned.

Also, the following article is interesting to say the least. A diesel Beemer outgreens a Prius. Yet we enacted draconian diesel fuel laws here a couple years back that make diesel (supposedly a cheaper, less-desirable distillate) a fifth more expensive than even gasoline. Despite the fact that (other factors held equal) diesel produces 25% less C02 per unit of energy delivered than gasoline.

Where are the calls for a ramp-up in the domestic diesel business? Where are the calls to make something new and productive and job-creating out of the still-incredible base of engineering, assembly, and manufacturing talent resident in domestic carmaking operations? (Crickets....)

http://driving.timesonline.co.uk/tol/life_and_style/driving/used_car_reviews/article3552994.ece

I'm pissed at the fatcats too, AndyTiedye. Do we have to destroy a foundation US industry and permanently outsource hundreds of thousands of manufacturing jobs to give them what they deserve?

I can't believe I have to even ask this. We run Congress. Pick off the fatcats. Leave the workers alone. Better yet, improve their lot.

[AndyTiedye]

38. GM is Too Closely-Identified with Hummer for Its Own Good

We as progressives need to quit treating cars as political fashion statements, and US-made cars as fashion disasters.

Some of them ARE fashion disasters. The Hummer comes to mind. The esthetics of a Borg spacecraft. Ugly, overbearing vehicle for ugly, overbearing people.
GM figured the war(s) would stay popular, and people would continue to want fake military vehicles, so they made it their flagship. Ooops.

Some are quite a bit better.

You drive a Saturn, and seem to get much better mileage than any of their current models' EPA figures. What model (and year) is it? Got pictures?
The EPA mileage figures for the current Saturns look pretty dismal.

According to the EPA, the most fuel-efficient American car is an SUV: The Ford Escape Hybrid. We own one, and highly recommend it.

We also have a Prius. Nobody else makes anything like the Prius. The most fuel-efficient American midsize burns almost twice as much gas.
Even the most frugal American econoboxes don't do any better than the Ford Escape Hybrid, and don't come close to the Prius.

I note that the Chevy Volt will be in production late next year. It's way better than the EV-1, so in a way it is the EV-2 you mentioned.

Their http://www.chevrolet.com/electriccar">web site says end of 2010. Is it really coming out next year? (They need it, like, yesterday).

A diesel Beemer outgreens a Prius.

I think the mileage on the Prius is hurt more than on the Beemer by going 75-80 mph. Beemers are made for the Autobahn. The Prius, not so much.
The Prius still pollutes less. That beemer is a German car, of course, and I don't think we can buy the BMW diesels here.
As you point out, diesel fuel is even more expensive than high test gas.

we enacted draconian diesel fuel laws here a couple years back that make diesel (supposedly a cheaper, less-desirable distillate) a fifth more expensive than even gasoline.

The US changed over to low-sulfur diesel, is that what you are referring to? Isn't that the same as what they have been using in Europe for a while?

Where are the calls for a ramp-up in the domestic diesel business? Where are the calls to make something new and productive and job-creating out of the still-incredible base of engineering, assembly, and manufacturing talent resident in domestic carmaking operations?

I thought most diesels were unable to pass EPA pollution regs for cars. Did the new fuel formulation change that?

[CRF450]

41. I dunno, but the current BS regulations need to be changed

So we can get some good cars that get good fuel milage.

[AndyTiedye]

50. They Could Do A Lot Better Under the Current Regulations

Sounds like they WERE doing a lot better a decade ago.

I'm still curious just which make/model of Saturn you are driving, because they don't have anything now that gets anywhere near that mileage.
Other posters here indicated that the fuel-efficient Saturns that were built in the 90's have been replaced with Chevrolet clones.

Though they seem to have found a clue lately…

Looks like they may be moving up production of the Volt even further, http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3386515
GM needs to update their own website if this report is accurate. http://www.chevrolet.com/electriccar/ still says end of 2010.

It would be helpful to know regulations you believe are hurting our automobile industry.
The ones they complain about the most are the mileage standards, which are the only reasons they build any cars at all that get better than 15 mpg.
Those regulations have to a limited extent saved the auto industry from themselves.

The regulations on sulfur content of diesel may have raised the price, but it allows diesel engines to burn much more cleanly.
This also means that some vehicles that have not been available here before could now be offered.
It is likely that that diesel BMW in the article you cited requires low-sulfur diesel, as that is the standard in Europe.

Our safety regulations do keep a number of small and very efficient vehicles off the market.
There is a category between motorcycles and cars that falls through the cracks,
and is ideally suited for the last few miles from the transit station to one's home.

[ejbrush]

49. Ultra Low Sulfer Diesel

The new diesel fuel is now what has been in use in Europe for quite some time. Previous generations of European and Japanese diesels were not imported (save MB and VW) because our higher sulfur fuel raises serious hell with catalytic emissions equipment. The new stuff is A-OK.

Our draconian diesel emission laws center specifically around particulates (soot/solid carbon) and Nitrous Oxide (NOX) emissions, where the European emisssion laws are concerned more with CO2 and Sulfur Dioxide emissions. Without going into great detail about injection timing, compression ratio, etc., reducing particulate emissions and NOX requires some severely detrimental engine tuning and expensive, fancy emissions magic boxes. The emissions rules are the same for a tractor/trailer rig hauling 40 tons of potatoes and a 4 door sedan, which I feel is damn short sighted.

So what, right? Here's what. Go to Ford UK, Vauxhall (GM UK), Chrysler UK. Look at their lineup. A diesel Focus gets up to 60mpg, and not imperial gallons. Real gallons. Chrysler minivan with diesel? 30mpg. Jeep Wrangler Diesel? 30mpg (our 4cyl. Wrangler pulls an honest 19). Ford Ranger Pickup? 32mpg. Look up Opels, which are the inspiration for most of Saturn lineup. Check out the Honda diesels.

Prius? Pffft. Give me proven technology, biofuel ready to boot.

[AndyTiedye]

51. Hybrids Get Comparable Mileage and Generate Less Pollution

The Ford Escape Hybrid gets over 30 mpg, and a hybrid the size of a Focus should be able to get 60.
With regular gas, which costs a good bit less than diesel these days.
Hybrids also pollute far less than diesels.

I suppose the price premium for diesel engines is a bit less than for hybrids, and you can use biodiesel.

Now if you apply hybrid technology to diesels, you ought to get something better still.
Diesel engines do best running at constant speeds, even more so than gas engines do.
A hybrid power plant allows them to do that.

Diesel/electric has been used in locomotives for years, but usually there is no battery in those systems, afaik.
Some locomotives can run off of overhead wires or diesel (which generates electricity to power the electric
wheel motors).

There are diesel-electric hybrid transit buses which do incorporate batteries and have regenerative braking, etc.
Some interesting stuff about diesel-electric hybrid buses here: http://www.dieselforum.org/fileadmin/templates/whitepapers/diesel-electric.pdf
Looks like NYC is seeing a 59% improvement in mileage and 40-60% reduction in pollution.

Would the use of diesel-electric hybrid technology make the EPA particulate and NOX targets easier to meet?

Not sure we should be relaxing environmental standards here. NOX is not nice, and particulates
tend to get inhaled disproportionately by bicyclists and pedestrians (cough).

[okieinpain]

40. even better post.

[lutefisk]

43. Google should buy GM and use it for a "Manhattan Project" for alternative energy vehicles

Google could use the petty cash account to scoop up GM, save 1000s of jobs, and go flat out engineering and marketing earth friendly vehicles. Hell, make Al Gore the CEO and pay him a billion a year.

Kind of crazy...but not really

[BrotherBuzz]

44. You're thinking outside the box, that's for sure

I like. :thumbsup:

[lutefisk]

46. Call me crazy, but GM's market cap is just over 5B$ and Google's is over 170B$

Think of all the marketing opportunities for Google!

Every vehicle could have a built in search engine instead of a built in fossil fuel engine, for example.
:hi:

[high density]

45. "(Reporting by Pratish Narayanan in Bangalore; Editing by Kim Coghill)"

I think it's time for GM to dump Buick. They had such good and popular cars with the Century and LeSabre, then failed to keep them fresh and lost customers. Now they have three vehicles on the lineup, one is huge nastiness and the other two are crap built on platforms that originated in the 1980s. When it comes to cars, people usually don't want to buy the same crap over and over again.

[michreject]

47. 2010 is when VEBA kicks in

and the UAW takes over medical benefits. I can't wait.