GM filing for bankruptcy - Page 5 - Mercedes-Benz Forum

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post #41 of 44 (permalink) Old 05-19-2009, 11:01 PM
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Originally Posted by bottomline1 View Post
Again, percentage of what? Yea, and I should be taller.

I believe that it was Rick Waggoner, when he took over GM, remarked something like, " While I signed on to run a car company, I didn't realize I was also running a pension fund and a healthcare enterprise."
A percentage of the whole.

And when haven't you heard a CEO or GM make excuses when he wasn't getting the numbers that he hoped/promised/prayed he would be able to get? He had to blame somebody for lack of profits. It surely couldn't have been the management decisions of either his team or him.

And did Waggoner mention the genesis of the pension system in the auto industry? Think of it as a bet they never thought they would have to pay.

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General Motors established its pension in the “treaty of Detroit,” the five-year contract that it signed with the United Automobile Workers in 1950 that also provided health insurance and other benefits for the company’s workers. Walter Reuther, the union’s captain, would have preferred that the government provide pensions and health care to all citizens. He urged the automakers to “go down to Washington and fight with us” for federal benefits.

But the automakers wanted no part of socialized care. They seemed not to notice, as a union expert wrote, that if Washington didn’t provide social insurance it would be “sought from employers across the collective bargaining table.”

Detroit was too flush to envision that it would ever face a financial strain. Ford and Chrysler signed identical pacts with labor, so all three automakers were able to pass on their costs to customers. Besides, the industry’s work force was so young that few workers would be collecting a pension any time soon.

But pension commitments last forever. They far outlived Detroit’s prosperity.

General Motors got into the dubious habit of steadily increasing worker benefits. In 1961, G.M. was able to get away with a skimpy 2.5 percent increase in wages by also guaranteeing a 12 percent rise in pensions. Such promises significantly burdened the company’s future. As workers lived longer, the cost of fulfilling pension commitments rose. And health care costs exploded.
http://www.nytimes.com/2008/07/10/op...owenstein.html

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post #42 of 44 (permalink) Old 05-19-2009, 11:49 PM
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We are only soothing an ailing beast. We must soothe as it is the most practical thing to do. We all know American made cars are going, there is simply no other choice. Our current global car building model cannot exist in a 1rst world country. Germany will be the next to falter, then Japan, as the companies can only exist with cheap labor in the current idiom.
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post #43 of 44 (permalink) Old 05-20-2009, 07:40 AM
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As much as I laughed out loud when I heard Fiat of all companies was going to be the saviour of Chrysler, I've been thinking about it. It almost makes sense.

With the new CAFE and emissions standards just announced, Fiat may actually be the ideal partner. Chrysler's small cars are really shitty. The NVH is appalling. My daughter had a Neon and the cheapness was scary. They cannot make a fleet of fuel efficient cars that people will actually buy.

Fiat on the other hand actually makes some quite appealing cars that are well built and very efficient. Small cars are not an afterthought, as they are with Chrysler. It's what Fiat does, and evidently the quality has improved dramatically over the past 5 years.

The Fiat 500 diesel actually gets better than 56mpg. It meets the Euro 6 emission standards, not sure about the new US standards just announced. The 1.2 liter gas engine gets 46 mpg.

Well built, fuel efficient small cars are what Chrysler needs right now. I just don't know if two financially sick companies can help each other out of the ditch.
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post #44 of 44 (permalink) Old 05-20-2009, 12:25 PM
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Thinking out of the box is the only way any of them will survive. Both Fiat and Chrysler have skillsets that can be worked with, but former Chrysler heads kept the previous generation mentality regarding what was "mainstream". They thought "this quarter" instead of next 24 quarters.

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