GM owes something like $147 billion in legacy costs to retirees. (heath care, pensions, etc).

http://www.medicalnewstoday.com/articles/23430.php

That is absolute insanity. My gf's father works for Ford and they are both pissed as hell that the UAW has all but ensured that he'll be laid off before next year. What's bad is that I feel you DO still need s of some sort in that industry, just not ones which make your business completely non-competitive.

 

But for how long? and when they do retun to salary will it still be in the 10's of millions?

 

http://news.yahoo.com/s/ap/20081204/...congress_autos

 

Dunno but either way I*m not going to cry too much for him, I*m sure he*ll still get nice compensations. Besides, last year, Ford's CEO took home $21,670,674!! I think that should last him through the year lol. Still though, it is a gesture in the right direction. I just do not understand how shareholders can allow any CEO to make over $100 grand a year when the company is losing millions [&:] he should*ve made that "work for a $1" contract not for a gov't handout, but long ago until the company is profitable. That coupled with UAW lack of any concern for the companies profitability (only in it for themselves) was a disaster in the making long before this all started. Anyone here old enough to remember Eastern Airlines?

 

So,the Bailout has Failed...........
This will affect,all of us in the industry ,in all parts of the globe.

 

Well at least they won't dissolve or anything like that. I have a feeling theyll manage to make the necessary changes to keep the companies around

 

Wow, a business having to sink or swim on it's own.

What an amazing concept. I hope the best for everyone, it's possible they can just do what's right and get smart about it.

 

The changes to be made ,take a lot of time,here & the US,The big companies have lost too much ground as it is,without slashing their labour costs on "Re-vamp" ...[if it happens,at all]They will try,but can/never/ever compete to cheaper labour costs of overseas nations.These are dire times trust me!
So many "Icons" of Aussie, have moved offshore to keep the business afloat.

 

This isn´t about a company sinking and swimming on their own. Their failings is not necessarily because of poor business practices, but more of the inability to obtain credit. This is a fundamental problem with the financial market that is severely affecting many companies. You can also say that the undoing is because of the UAW (failure to renegotiate could very well put them many out of jobs instead of letting everyone keep them and everyone suffering a little).

Taking credit out to float yourself for awhile or to expand your business is common. Real Estate does it. You take money out in form of a mortgage with the intention of making money over the long haul.

You may think that the companies were poorly managed. Why? Because they were selling SUVs? Well, SUVs was what was in demand and was what was selling. Due to the high wages, small cars in US Auto industry lose money on each car they sell. The companies made up those losses due from the profits of SUV sales. Sure that is not the best policy...but it kept the companies a float. They can't just pay people lower because of the United Auto Workers (and laws). A u nion can bring a whole company to their knees. Sure, they served a purpose in the past (and still do now), but they do not take in consideration that the companies need to remain profitable.

Keep in mind this...They say that potentially 3 million jobs are at risk. This is too far low of a number. ALL of our jobs are at risk. Micro economies that sustains small businesses are at risk. Especially around the factories. Those 3 million people, won´t have money to spend on extra things. They will have to tighten their purse strings severely. The store owners that rely on them, no longer have the income to maintain the stock. Not maintaining certain levels of purchasing may mean more cost per item, which means higher prices (which is one reason why businesses take out loans). Higher prices, means that people go to Walmart or other discount stores. which leads to the failure of these smaller businesses. Which means even less people spending money for services. Which could end up meaning you losing your job.

We are on a very bad slippery slope right now, because banks aren´t lending. Don´t think you are safe because you are not in the auto industry. You are just as much at risk as everyone else.

 

Exactly!
In short" You can't spend money you don't have"............