Then who would have the money to purchase the goods and services supplied by a good portion of the country? Who will eat out 4 times a week when they make $10.00 per hour? Who will buy new cars? Who will buy more that the barest necessities? Put GM out of business and the effects will be felt everywhere.
When everything is outsourced, who will have the money to buy anything?
Look at it this way. Who is the largest employer where you live? If they went out of business, what would be the effect in your area?
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Retired Shop Rat: 14,647 days in a GM plant. Now I can do what I enjoy: Large Format Photography
On 10/10/05 11:31 am MoPar Man tossed the following ingredients into the ever-growing pot of cybersoup:
We're paying more than that (i.e., more than $1000 *USD* per *month*) for health insurance and still have significant co-pays.
In Australia (so a businessman from there was telling me recently) the most anybody pays for health insurance is 2.5% of income -- and that covers the retired and unemployed as well.
First Delphi....then GM....and then Ford in 2006..... Just WATCH AND SEE. Oh, all you GM and Delphi retirees had better get used to no health coverage or that nice monthly check in a short time also.
Here is a DIRECT Quote from the IF Newsletter 5 Months ago:
"You may not want to believe it but our economy has been in disintegration since 1989 and only one trick after another has salvaged it. Just look at the dollar. It is only reflecting the collapse of a once great economy. Soon the US dollar will cease to be the world's reserve currency. We have major corporations on the verge of bankruptcy, GM is a good example. As GM goes, so goes America and what is good for GM is good for America. Its debt will shortly be junk. Its supplier, Delphi, along with GM, is under investigation and will precede GM into bankruptcy. Potential retirees and pensioners are going to be in for a big surprise - l ike the loss of 65% to 75% of their pensions. GM has $50 billion in debt to refinance over the next 20 months. We do not believe the market can or will want to handle it. The market cannot even handle the Treasury refinancings. That means interest rates have to move, jeopardizing the future of the housing market and complicating and increasing the cost of debt service. There are many more complicating factors that are going to be moving into the forefront in the weeks and months ahead. Prepare yourself - it will be a difficult journey. "
(The above was written in June of 2005)
DELPHI USA IS DEAD - GET USED TO IT UAW BUNKIE !!
GMAC, General Motors Acceptance Corp., contributes about two-thirds of GM's profits. After three years of $5,000 rebates per car, which was double the sector average, car and truck sale growth is falling. GMAC's $260 billion debt is larger than all of that of the auto division combined. As you saw in the last issue, GM's euro bond issues are trading at a yield of over 11%, which is certainly junk quality. The money maker GMAC is faced with declining vehicle sales and has been a major investor in Fannie Mae and Freddie Mac mortgages, thus, as interest rates rise and home prices fall, paper quality will come into question and mortgage volume will dry up, especially in cash outs and home equity loans. GMAC is facing a double-edged sword. At GM the most profitable sales unit is the SUV and with today's gasoline prices, they will suffer. Sales overall for January and February were off 11% despite having lowered prices in February. As you can see, the market is simply saturated with vehicles. GM lost $2.6 billion in Europe last year via Vauxhall, Saab and Opel and is laying off 12,000 workers. Since 1980 the auto workforce has shrunk by 70% due to deliberate de-industrialization and, of course, thousands of smaller firms supplying the industry have been phased out with massive job losses.
In 2006, GM either will pay off or refinance $44.7 billion in debt and Ford has to do $37.1 billion or $174 billion in debt. Can the market handle that at junk levels or will they want too? That could be bonds with a 13-14% coupon. Will financial firms, such as GMAC continue the hobby of producing cars? We don't think so. Can you see how deadly offshore production, outsourcing and free trade and globalization has been for America? Our industrial heartland has been destroyed. Fundamentally both GM and GMAC are on a path to destruction as is Ford. Borrowing costs have just jumped from 7.5% to over 11%. Can they generate cash at these levels and still make a profit? Delphi, the GM parts spin off, is now embroiled in an Enron-type fraud scandal, which could indirectly reflect on GM. Delphi has already informed 4,000 of its salaried and retirees that it is ceasing to pay their health care plan. GM and Delphi layoffs are over 10,000. Suppliers are already at junk level and can only borrow from GMAC to stay in business. Ford's Visteon is in the same boat. The UAW is on a two-tier wage system to save money and avoid layoffs.
If all of that wasn't bad enough GM's pension fund is underfunded by $17 billion or is only funded to 80% of its obligations. This comes as George and the neocons push pension reform, better called, funding your plan. This is a debt bomb and Washington knows it. If reform passes Congress for the benefit of the Pension Benefit Guaranty Corp., many companies will achieve junk status. GM wants to split off GMAC hoping to save GMAC. If that happens this year it is guaranteed GM will go into bankruptcy. PBGC is already $23 billion in debt and can not absorb the obligations to GM's hundreds of thousands of pensioners. This is a disaster of major proportions. Plus, they'll lose GM's pension insurance premium payments. Even if GMAC is spun off we do not believe they will escape attachment by PBGC. It should have been spun off three years ago.
(Of course Delphi Mexico and Asia will still be in business. Delphi USA and it's retirees are going into bankruptcy. Enjoy the ride folks! Money is GOD)
Top executive salary increases at these rates have been going on for years...long before Bush took office. Was it "Clintonism" then. Of course not. The problem is what is going on in the board rooms, not the Oval Office.
Funny how these 2 anonymous posters, who we have never heard from in these NG's prior to this message, send their messages through remailer software! When you try to trace these freaks, you get this message: "This message did not originate from the Sender address above. It was remailed automatically by anonymizing remailer software. Please report problems or inappropriate use to the remailer administrator at ." That tell us a lot about their intent.
I've read a lot about stock manipulation over the years and this is a typical method used when some jerk wants to short-sell company stock.
My advice is to ignor this thread completely, so we don't fall into their self-serving trap.
"Daniel J. Stern" wrote: "When we vote for politicians who sell off America's jobs in bulk to the lowest offshore bidder, then yes, that is exactly what we deserve."
Every President for the last 30 years has help sell off America's jobs. Free trade agreements without requiring them to meet better environmental issues and safety for its employees is part of the problem.
Not true at all. I will be you a whole ton of money that the computer you typed that on would be massively more expensive to purchase had it been 100% made in the USA.
Certainly not all of the cost savings of off-shore production ends up in the end customer's pocket, but a goodly portion of it does.
Have you noticed that those products which are primarily made in asia have been on a long term downward price trend while those few thing which are not easily imported into the US keep getting more expensive?
Go right ahead, call a general strike of all unionized employees in the US of A. Keep it up for at least 12 months. At the end of that game there will be no union jobs left and the country will simply go on just fine.
That is a complete bargain. I own a small retail business, and it costs over $800 per month to provide bare bones health insurance for our employees. That comes out to over 12% of our monthly payroll costs and many of the employees are not in the plan because they get better insurance from a spouse's job.
I wouldn't worry much about that. A Bankruptcy court has total and complete authority over all company operations, and can legally void any contract it wants to. And that includes the golden parachute contracts that self-serving execs vote for themselves.
Once a company goes banko all the investors know they will not get even their principal investment back, and that anything they can convince the bankruptcy court to cut will result in less of a loss for them. And execs that mismange a company into bankruptcy aren't easily going to find another job. There's plenty more execs out there available who can raid the company coffers just as well.
Back in the first part of the 1900s we had a huge and serious global problem which resulted in 2 world wars and numerous smaller ones, to put simply, government imperialism. At that time industry did not have the economic power it does today, national governments could do as they pleased.
We solved that by making these multinational corporations who ended up with so much money and so many interests spread all over the place that these corporations found it very unprofitable to have these wars going all over, so they stopped them.
For example, imagine anyone trying to put together a Civil War in the United States today. The big companies have offices all over the country, if some group of states were fool enough to attempt to seceed, the companies wouldn't stand for it, and the politicians attempting to do so would have no funding for reelection, and the media empire which is basically controlled by the big companies, would propagandize the populations of those states into tossing those politicians out on their ears. And the Civil War was barely 150 years ago. The media empire today teaches us it was all about slavery and economics and now that slavery is gone and the South is industrialized those problems are solved and we are just one big happy family. But the real truth is that the root cause of the Civil War was Southern attitudes were very different from Northern attitudes, you can see that by reading Southern and Northern writings of the time. And despite 150 years of trying to change that, this is STILL true to this day - the differences in societal attitudes between North and South still exist, although those differences are not as important as they once were, not enough to start a war again.
And imagine another Mexican American war. We just had one about 160 years ago, imagine what would happen if either the Mexican or US government tried declaring war on each other again? Once again, the big multinationals have too much money invested, they would band together and take care of the problem.
And imagine a German/US war, or a Japanese/US war. We just got out of those about 60 years ago, there's still people alive who fought in those wars. Do you seriously think that GM and VISA and the other big companies would permit either government to even get anywhere close to that sort of thing today?
Now obviously this solution doesen't work everywhere, there's still some Mid East areas that are not under multinational corporate control. Although I will point out that Saudi Arabia which has the largest oil reserves in the world, is very close to being under complete corporate domination, if not already. And China is, of course, a long way from that still. But I think in my lifetime we will see China become yet another government under control of the multinationals.
Literally within another century, the GLOBAL power sharing will be between the national governments and the multinational corporations. Each will act as a check on the other. It will be messy, and a lot of parts of it will not be democratic, but it will be pretty damn close to the idea of a government of checks and balances. Thus we will in a space of about 300 years, gone from a world ruled by despots, with absolute control, and who regularly started wars that killed millions of people, to a world ruled by corporations and governments each who have vested interests in NOT starting wars that kill millions of people, and who have internal mechanisms in place that flush out the very types of people who would want to start these wars. And with nuke weapons available, we pretty much have no other way to go.
The key here though is that the multinational corporations cannot exert any control over a national government that does not govern a nation of consumers. That is why rogue governments can exist - because they do not allow their citizens to get more than sustenence level, thus those people never can exert ballot box or other control over those governments, and since those people are not consuming the products of the multinational corporations, those corporations have no control over those people and cannot propagandize them with movies and media and news to affect the national governments.
That is why jobs are going from America to the rest of the world. Not because any of those companies WANTS to move AWAY from the US. It is because those companies WANT to move TO the foreign job markets. Big difference there.
Think of the time it took the US population to move from an early industrial society of a bunch of piss-poor people in cities working shit jobs in factories, with no child labor laws, and the profits all going to industry barons, to a society of people who had unions and labor laws that divert a good chunk of those profits back into the workers pockets.
The places like India and Pakistan and China are where the US industry was at back in the early 1900's. Not in terms of technology, because you can always buy technology. But in terms of what the members of those societies expect is right and fair.
Workers in India and Mexico are happy to have a job, any job, that is true. And maybe those workers will be like that the rest of their lives. But what about their children? And those children's children? The Mexican workers are what they are now because they grew up in a country where there was no hope of them getting a job. But when those workers end up spending their lives working in some American factory in Mexico, their children will grow up with a hope of getting a job. And as a result those children -won't- be perfectly contented to take the worst and most menial jobs for little pay. And so it will go in Mexico until in another century, the Mexican population will all have environmental laws and labor laws and TV sets that will be used to propagandize them into consuming, believing, voting, and acting the way that the multinationals want them to be, just like the US population consumes, believes, votes, and acts just like the multinationals want us to act. And the Indian population too. And the Chinese population, and as many other national populations as can be converted will be.
One day, very very soon, in fact in a blink of an eye when measured by the total length of human populations existence on the planet, there will be no part of the Earth on which people do not work any different than any other part of the Earth. Oh, they will all still have their quaint local customs, but they all will own cars that all cost the same, they all will work at jobs that pay comparably the same, they all will spend money on the same things others spend money on. At that time there will be no more of this complaints of companies moving jobs away, simply because there will be no job markets anywhere left on Earth where you can get people who work for next to nothing. All of them will be wanting roughly the same money.
You can already see this if you do a lot of traveling. Take any US citizen that lives in any US city and drop them in any major city in Europe and they won't be able to tell the difference except for the language.
Until this all comes about, the unfortunate fact is that the people who have rich societies, like the US, are going to lose money. We are paying for those undeveloped societies to be rushed into being developed societies, because the quicker they can be brought along, the quicker they can start getting significant amounts of unallocated spending money that they can use to be good little consumers, under the control of the multinationals.
If all of this repels you, then you can refuse to be a good little consumer, and buy locally made and locally grown. It will be more costly, and you will not be able to have as many things as your neighbors who buy cheap Chinese knockoffs. But you will have the satisfaction of knowing your throwing a monkey wrench in the plans of the large multinationals and big governments. But unfortunately, most of your neighbors won't be able to let go of the teat on the TV set, and so your efforts will be like spitting in the ocean. But, if it makes you feel better, do it by all means!
You fail to factor in terrorists whose intent is to set up sharia governments, establish dhemma status and collect jizya where they can, and otherwise to disrupt and either convert or kill millions of people and destabilize economies whenever possible.
Bill Putney (To reply by e-mail, replace the last letter of the alphabet in my address with the letter 'x')
They should be cracking down the health care industry to as it is out of control on prices. Somebody has got to be sucking a LOT of fat off of those fees.
Bill Putney wrote in news:dig4go$204$ snipped-for-privacy@news.isdn.net:
Well, put, Bill.... They ARE the common enemy because they DO see the world picture and are in a life/death struggle. If the world society isnt worn down to the point of accepting a return to feudalism, the glorious "Caliphate" model is dead.
And Ted, I DO see the big picture!
That's exactly what I meant. Like Bush and many others before him say... countries whose wealth depends on trade dont shoot at each other.
your cause and effect is a little c*ck-eyed... the Civil war WAS about trade and other nations chose sides in the conflict BASED on which outcome would affect them most.
As long as there is separation between civil governemnt and corporate government, we will be okay. Enrons and Worldcoms are bad.. sure enough.. but the saving factor is they will be found out either by their shareholders or the government or both.
Currently that doesnt happen easily in China... but there's a growing populist resistance there that dukes it out with Beijing on one side and World Socialists on the other.
The dangers lie in de-facto National Socialism or a regression to central planned economies using confiscated corporate resources to compete (Venezuela)
On the domestic front... if Unions had tended to their knitting and acted more like a guild than a labor agent, we wouldnt have a lot of this mess.
My whole family is GM/Harrison/Delphi... my dad and brothers retired from Dayton plants.. (fortunately opted for GM retirement over Delphi).
EVERY family dinner involved a 'preaching to the choir' litany about the waste and corruption in the assembly lines. The unions were self- centered and corrupt when I worked there in the sixties and it only got worse.
The locals in Dayton are more concerned with appealing the cases of their members caught dealing drugs than helping Delphi find a way to keep the plants open.
And NO, my family WASNT management they were line workers.. and my brothers both were foremen at one time then gave it up because upper plant management didnt care about trying to eliminate waste and low productivity......
Bottom Line for automotive middle management: "Dont rock the boat"
It's pretty common for (Canadian / Ontario) companies to arrange for a private health and life insurance plan (above and beyond what the gov't health insurance provides). Such plans require 100% participation (for everything except dental, which can be "opt-outable" if the employee's spouse is covered with their own plan).
Such supplementary insurance consist of accidental death/dismemberment, drug plan, physiotherapy, appliances such as orthotics, crutches, braces, possibly a life insurance component, etc. A typical cost for a plan like this is $150 per month per employee. 75% of the total cost of a package like this is paid by the employee (deduction from pay), the other 25% paid by the employer.
Some persistent problems with health care in Ontario is:
1) long waiting times for planned or elective orthopedic surgery. There are so many senior citizens that are injuring themselves (breaking their hips) that they are taking up much of the orthopedic surgical resources.
2) lack of a familiy doctor (ie General Practitioner or "GP"). Many people go to walk-in clinics (or hospital emergency departments) because they have no family doctor. This is because the cost of a medical education in Canada is low compared to the US, and as such med students in Canada tend to continue into a medical specialty after their initial 4 or 5 years of medical education, while in the US a greater percentage of students do not have the financial resources to continue into a specialty and hence become GP's in order to start paying down their debt. This problem is compounded by more females entering med school, and they (more than males) are likely to not work full time (or drop in and out of the work force as their life circumstances change). Since med school enrollment numbers are highly regulated, every student that enters and does not participate fully in the medical work force is a liability or a wasted resource. Also, many do not find that a GP is a rewarding career or lifestyle, and would rather specialize and spend their time interacting with technology (scans, surgical instruments, computers, robots) than dealing with the messy issues that pertain to dealing directly with patients (as GP's do). A high percentage of a GP's workload is either babies/kids or old people (you've really got to have a love for people to deal with either group).
It would never happen. Rail unions can't get out on strike as the govenment would step in and has. Hell, look what happened to PATCO. The friend of the working man fired them.
delphi as well as all us auto plants pay about $65 per hour in wages and benefits to hourly employees. the hourly and salary folks are not worth anywhere near that amount of money.
On 10/11/05 05:38 am Ted Mittelstaedt tossed the following ingredients into the ever-growing pot of cybersoup:
On a much smaller scale, Australia had this, but I think that it's been demolished to a large extent in more recent years (I no longer live there). Many, if not all, States (no matter whether the ruling party was conservative or more socialist) had State-run enterprises in competition with privately run ones. There were State banks in competition with private ones, offering checking and savings accounts and home loans; there were State insurance offices in competition with private ones, offering motor-vehicle insurance, life insurance and homeowners' insurance; there were State Housing Commissions/Trusts in competition with private builders and property developers, offering homes for sale as well as for rental. At the Commonwealth (federal) level, the Commonwealth Bank competed with all the other banks, and a government-run domestic airline competed with the only other nationwide one, which was private (there were other private intrastate ones).
The private enterprises had the advantage of being less bureaucratic but had to pay shareholders. The goverment-run enterprises had the advantage of not having to show a profit (as long as they did not lose money), but tended to be more bureaucratic: you have to have more people to keep track of how "public money" is being spent -- but these people probably got paid less anyway.
All in all I thought it worked pretty well. Each kept the other on its toes.
MotorsForum website is not affiliated with any of the manufacturers or service providers discussed here.
All logos and trade names are the property of their respective owners.