GM closing nine plants

[railroad65]

How much will this impact the RR's (NS for sure)?

http://www.usatoday.com/money/autos/2005-11-21-gm-closures_x.htm



HOW MUCH WILL THIS IMPACT ALL OF US?

[oltmannd]

Moraine and Doraville are NS served. I guess the impact depends a bit on where the production gets shifted to.

[richardy]

They have been telling us for years that OKC would close and the last word was 2007. I don't know for sure but it seems the plant will go idle first, that is probably the early 2006 date. Either way it will have some impact on BNSF and the local employees.

[TomDiehl]

There was a map of the current railroad traffic from auto plants and their suppliers in Trains about a year or so ago.

Guess that will have to be updated.

[SALfan]

Did anyone else notice that the map had South Carolina highlighted, presumably to correspond with the Doraville plant? Doraville is in Georgia (just outside Atlanta), not SC. Looks like "McPaper" needs to crack open a geography book once in a while.

[Anonymous]

I told you that if Unions keep trying to get higher wages and benifits people would lose their jobs. Sad [sigh]

[Anonymous]

QUOTE: Originally posted by Lotus098

I told you that if Unions keep trying to get higher wages and benifits people would lose their jobs. Sad [sigh]

It's not entirely about the unions. It's about American auto industries not being able to compete with the Japanese, Germans, and whoever else exports their garbage to us. We wanted cheap this and cheap that, well now we got it!

[nanaimo73]

QUOTE: Originally posted by Jim_White

QUOTE: Originally posted by Lotus098

I told you that if Unions keep trying to get higher wages and benifits people would lose their jobs. Sad [sigh]

It's not entirely about the unions. It's about American auto industries not being able to compete with the Japanese, Germans, and whoever else exports their garbage to us. We wanted cheap this and cheap that, well now we got it!

The perception out here is that Hondas and Toyotas are designed better.

[CSSHEGEWISCH]

In the 1970's, the Japanese manufacturers had a deserved reputation for better quality than American manufacturers, especially in fit and finish. The quality gap has since been closed but the original reputation persists.

Lotus has obviously never appreciated the difference between union and non-union wages, unless he intends to support a family on a Wal-Mart wage scale.

[Anonymous]

Paul,

Businesses have to think of wages as a cost, like steel. A company is not going to over pay for supplies; neither are they going to pay for high wages. Now because of it (and other factors) none of these people have jobs, a lot of good those unions did, and are earning nothing instead. The money to pay people more has to come from somewhere, in this case the price of the car. If you are in such favor of Unions I suggest you always pay the highest price for everything, since odds are that has the most Union people to pay. Raising wages, be it minimum wage, or by unions, is like inflation, it really doesn't get anyone any more money, since the people earn more, but also pay more for goods. Unions had their place historically, but have outlived most of their usefulness, becoming collections places for a certain political party, in fact did you know that the ACLU was founded by communist?

[TomDiehl]

Right in that report I can see another bad management idea being put forth again: early retirements. Although this may soten the blow to the people taking the early out, it also means the company will be paying them a retirement salary for a longer period of time, a period where they will contribute nothing to the company's output of products or services. This idiocy has a lot to do with their current financial situation, they started this in the '70's as a way to downsize. Now it's coming back to bite them in the financial butt. The article refers to them as "legacy costs." On top of that, they're proposing doing MORE of the same this time around, but I guess they don't care that the same thing will happen in about another 10 or 15 years. After all, the current BOD and big wheels will be retired with their "golden parachutes."

Was I the only one that noticed that there's no mention of cutting any of the multimillion dollar salaried big wheels that made these bad decisions in the first place? I guess they'll just reward themselves with big bonuses for firing all these people and saving the company so much money.

[Scoobie9669]

QUOTE: Originally posted by TomDiehl

Was I the only one that noticed that there's no mention of cutting any of the multimillion dollar salaried big wheels that made these bad decisions in the first place? I guess they'll just reward themselves with big bonuses for firing all these people and saving the company so much money.

The sad part about this is if they (big guns) would take a pay cut or get layoff they could save the plants and some (or maybe all) of the employees.

[Scoobie9669]

Just image on how much of an impact this will couse to the communities that these plants are in?

[Anonymous]

The UAW for many yrs has been the most powerful of any industry union. Their members have enjoyed totally 100% covered health care costs by their employer for a long time. This is the sign of a very powerful collective bargin process by the union. Now it appears this is coming to an end. I have no problem, at wages like you make in an auto plant, (some union positions pay well over what rr jobs pay) for a10-15% out of pocket monthly cost to pay for health care. This is a very expensive cost for any employer and by paying a small percentage yourself, people will really be thankful for what they have and not take it for granted.

[edblysard]

The current Union contract was negotiated over a decade ago...its not like the Unions got up last week and said we demand this and this...
Place the blame exactly where it belongs...GM Management made bad decisions, produced a so-so product, sat on their fannys as their US competition made big changes in the type of car they built, and how they go about building them.

GM knew years ago how much it would be paying out in all those “union” perks and such….its not like they don’t have accountants and such.

Same unions work at Ford and Chrysler, and those two are not in the toilet...
As for foreign autos...most of your Toyotas and Hondas are made right here, in Tennessee and Kentucky, and Toyota is building a plant here in Texas.
All built by American auto workers, all paying those extreme union wages.

Ford and Chrysler both took a look at what they would be paying out in retirement, benefits and such well over a decade ago, and decided to buy out who they could right then, and replace them with robotics and automated manufactures, then streamlined how they build cars, introduced new designs, and instituted quality controls that makes GM’s look so shabby by comparison.

Honda and Toyota, Nissan, most of the established "foreign" makers also got their quality control way better than GM over a decade ago...my neighbor is still driving his 1975 Datsun B1500 pick up…well over 300 thousand miles on it.

So, two of the big three paid attention when they should have, one of them decided that business as usual was the way to go...
Daimler Chrysler is blowing GM away, Ford Trucks out sell GM...Go figure whose management teams were on the ball and looked ahead, and whose were more worried about their green fees than their business...

I mean, my god, who in their right mind would buy Fiat?

Ed

QUOTE: Originally posted by Lotus098

I told you that if Unions keep trying to get higher wages and benifits people would lose their jobs. Sad [sigh]

[bobwilcox]

It is amazing that GM is going to take over three year to make these cuts. They are not facing bankruptcy in three years but this year.

[Anonymous]

Ed, the voice of intellect, fact and reason. You are such a jerk ruining that little queen Lotuses anti Union rhetoric wtih fact. Lotus, put a sock in it. By the responses you get, can you not see that more than a few of us think that you are a little dork. Go away!

[JoeKoh]

yes gm has screwed up big time and they now have the federal govt looking in their books too.I just hope the retirees dont loose their money and the other workers can keep working to feed thier families.
stay safe
joe

[AztecEagle]

I Agree With You Guys.Yes,I Think That There's A Lot Of Union B.S. Involved,But There's Just Way Too Much Management B.S. as Well.If They'd Quit Giving Out All These Bonuses To Upper Management,Maybe A Lot More Companies Wouldn't Be Going Broke!!

[eastside]

Not exactly a bolt from the blue. The sales of highly profitable SUVs masked GM’s deterioration for the past several years. Now that sales of SUVs have tanked along with total market share, GM is suddenly faced with its day of reckoning.

GM has a highly profitable financing operation (GMAC) and foreign auto operations are doing moderately well. Its Buick operation China, which sells entirely to the internal market, has been notably successful. Despite this, for the 3 quarters so far this year, GM has lost $3.8 billion, mostly attributable to domestic auto sales.

The reaction of business analysts to GM’s announcement seems to be pretty tepid. Most seem to feel that it’s a minimal first step that doesn’t address its core problems: pension costs and neglecting to diversify its product base (e.g. hybrids). GM is coming to market in 2006 with a bunch of new models -- you guessed it -- SUVs planned years ago. The huge cutbacks in the ‘90s, under an agreement with its unions, loaded GM with about 3 retirees per active employee. The immediate effect of the closures will bring that ratio to about 6 retirees per employee. I’m not certain that any corporation can remain viable for long under such an enormous burden.

Cutting management and management benefits will save a few tens of millions, but we’re talking of many billions that GM must cut. A mere gesture, IMO.

QUOTE: Originally posted by bobwilcox

It is amazing that GM is going to take over three year to make these cuts. They are not facing bankruptcy in three years but this year.

At the rate GM is burning through its cash, I’d give it closer to two-and-half years, unless it takes some pretty drastic steps. The PBGC is another stellar example that no good deed goes unpunished, especially when it comes to acts of government. Congress meant to save, at least partially (note), worker pensions, but the unintended effect was that it also gave corporations additional incentive for entering bankruptcy, sooner rather than later. The PBGC is broke already. How do you think taxpayers will react when they realize they’ve been left holding the bag?

[AztecEagle]

Lotus;Quit Listening To All The Windbags On Talk Radio and Get Out Here In The Real World!!!You Seem To Have The Mindset That "Unions Have Outlived Their Usefullness.If We'd Just Let The Free Market Take Matters In Hand,Why Everything'll Be Just Nice and Bright and Sunshiny!!".Long Ago and Far Away,I Figured Out That That Conservatives,Like Liberals,Tend To Live In Their Little Ivory Towers and Beleive Everything Theyr'e Told And Follow In Lock Step!!Do Charles Manson;Jim Jones;David Koresh and Hersh Applewhite Come Into Mind??You Know,Some Of Us Ain't Gonna Drink The Poisoned Kool Aid or Shoot It Out With The Feds Just Because "Fearless Leader"Says It's So!!Attention Both Sides:Bill O'Reilly and Rush Limbaugh Ain't Looking Out For You!!Neither Are Al Franken and The Nameless Yammemers On Air America!!!Just emember,When Some Coroparate Raider Buys Your Companyand Moves It To China,Don't Come Begging To The Rest of Us For A Morsel of Food While Wer'e Bundling By The Fire In Some Hobo Jungle!!If You Beleive In The Coroporate Survival of the Fittest,Then Don't Be Sad When You Die By The Corporate Survival of the Fittest!!! John T.Patterson.Wasting Technology Since 2001."When The Legend Becomes Truth,Print The Legend."-John Ford.

[garr]

Ed,

Wasn't the last UAW contract actually negotiated with Chrysler? And, as has historically been done, GM and Ford agreed to the terms of this negotiation. IIRC, the three US automakers rotate on the UAW contract negotiations and the two automakers not in on the negotiations agree to the terms reached.

Fuel prices were the catalyst in the GM problems. What we are seeing today was eventually going to happen, just not as fast. WSJ reports say that GM's problems of today actually started 5 decades ago. One big problem was GM management not saying no to union demands of 100% insurance coverage for current and retired employees. Each GM vehicle has around $1,500 of its sale price going to health care costs. Ford's and Chrysler's is a little less, IIRC, $1,100 to $1,300 per vehicle and Toyota's only in the $400 range per vehicle.

I am as close to middle of the road on the pro/anti union/management debate that one can get. I own my own company and am its only employee. My customers are both union and nonunion companies and I enjoy working with both. But my one question from your post is, in those decade+ ago negotiations, wouldn't it have been better for the unions to bend on the health care premiums so that more people would have stayed employeed at Ford and Chyrsler?

I believe GM's 0% marketing campiagn had a lot to do with America's economic recovery after 9/11. And I am proud to say that I have only bought US made autos.

I am 43 years old and have only had 3 vehicles in my life. The first 2 were GM, both of which went well over 200,000 miles, and my current, bought new, '96 Ford Explorer with 210,000 miles on the odometer. None of these three vehicles had anything but routine maintenance done to them. For those who say foriegn brands' quality is best, my wife's 2001 Lexus had its master seal replaced at 60,000 miles.

Jay

[Anonymous]

Merry *(&*@##$@!!!ing christmas GM workers [V] They should at least let them work until after the holidays, i mean these people have familys...[V]

[edblysard]

Eastside...
How true.
Even if GM tanked all of its upper management, and banked their salaries, bonuses and such, it would make such a minuscule dent as to almost be un-noticeable.

The real problem isn’t salaries, both management and union... but the basic way GM does business.
They are so stratified and hidebound that even if they did come up with a world beater in design, something like this century's version of the Vette, they still couldn’t get it in production for 4 to 5 years, too late to make a difference.

Not to toot the horn of my car, but take Chrysler's concept car, the Dodge Magnum.
Built as a one off based on the 300, for a trade show, it sparked enough interest that Daimler Chrysler put it into production at Brampton, Ontario...marketed it through their fleet and truck sales, (its called a multi purpose utility vehicle) even though its a station wagon.
Its sales accounted for 1/4 of Daimler Chryslers American sales...so they added another line to the LX platform, the Charger.
Predictions are the LX platform, Magnum, 300s and the Charger will keep Chrysler in the black for the next 3 to 5 years.

All in less than 3 years, from concept to sales floor.

GM can’t do that.

Ford has, take the Mustang, old name, brand new car underneath.
From concept to sales, in about 3 years also.
Prototype unveiled in 2002, sales began last quarter 2004.

GM failed to recognize that the auto business had to adapt to a new set of technologies and a new type of consumer...nor did they make plans to capture any of them.

Ed

[edblysard]

Jay,
I agree, had the unions had access to the same data as the auto makers, and applied a little common sense, both sides would have realized this was coming.
I also agree that the makers should have bargained harder, and offered less.
But at the time, based on what they were looking at on the surface, it was good, so...

Not a 100% Union fan either, although I do think they serve a good purpose, and I do belong to the UTU.

But both sides bear some of the "blame”, had they worked together this could have been stopped.

GM has been top heavy for a long time.
Iacocca made sure Chrysler wasn’t.

Ford has been quietly modernizing their plants for over a decade, and allowing natural attrition to pare down their work force.

Yes, I think the last contract was negotiated by Chrysler...

Ed

[Junctionfan]

GM makes me mad. This garbage is just another reason why St.Catharines' economy is going down hill. They closed down the foundary in St.Catharines which recieved awards for efficiency; they pretty much reduced all the jobs at the Ontario Street plant and I don't even know what is up with the Welland Avenue plant-looks barren to me.

The government gave GM basically a bribe to thrive in St.Catharines which was our major thing and in return, we got zilch. Some ROI indeed.

I think St.Catharines needs to start finding more industries and tell GM to go screw themselves so the workers won't get their hopes up for their layoffs to be only temperary. This way those workers can get a decent job hopefully in their trade, and hopefully gain some job security too-something they would not be used to as of late.

As for railroading goes. In St.Catharines, this doesn't effect a thing. All plants stopped rail service sometime in the early 90s that I can remember. The spur to the Ontario Street plant was removed thanks to some idiots in city council and Welland Avenue plant I don't think ever recieved rail despite being so close to a spur. The foundary stopped getting rail service because of CN (before Harrison). For some reason, the railroad decided to want to stop shipping them coke and autobox cars.

[Big_Boy_4005]

Actually, unless GM reduces the number of total vehicles it produces, the railroads may see little net loss in shipping revenue. Parts still need to reach assembly plants, no matter the country of origin. And finished automobiles still have to be shipped to dealers.

The railroads might actually benefit, having to move freight further than under the current arrangement.

[CrazyDiamond]

QUOTE: Originally posted by garr

I am 43 years old and have only had 3 vehicles in my life. The first 2 were GM, both of which went well over 200,000 miles, and my current, bought new, '96 Ford Explorer with 210,000 miles on the odometer. None of these three vehicles had anything but routine maintenance done to them. For those who say foriegn brands' quality is best, my wife's 2001 Lexus had its master seal replaced at 60,000 miles.

I am 34 years old, am on my 3rd GM truck, and I can tell you I will never buy another GM vehicle ever again. I have nothing but continous troubles with these things. My latest truck, is 1997 GMC Sierra, 90,000KM, and I baby this thing. I have had the following go wrong with it:
#1 Front wheel alighnment 7 times, (never been 4x4ing either)
#2 Two sets of front tires destroyed
#3 Front wheel bearing replaced
#4 Gear shift defective from factory
#5 Tail gate defective from factory, when lower it rubbed the bumper and in weeks wore off the paint.
#6 Intake manifold coolant leak
#7 Front end transfer case leak
#8 Power steering troubles, dealership can't find problem.
#9 Charging system troubles.
#10 Wiper motor failure.

But what really poisioned me....was the fact the experts at GM Goodwrench cannot fix my vehicle in the fist visit. I got to make at least 2 or sometime three trips to get it right.

Now, my wifes Honda Civic.....1995, over 200,000 KM.....one muffler replaced....and they did it right the first time.

.....I'm not the only one who knows this....the market knows this, and that is why their sales have plumeted, and now need huge discount sales to move their vechicles. What really saddens me, is that I actually love driving my GM truck...I am really confortable in it, I like the vehicle....I just hate its high maintence requirements and crappy service.......its cost me too much. [V]

How will this affect us? Will, one could argue that this will put a lot of people out of work, and this will cool the economy a little, and this will see less people buying less stuff, which means less freight being moved, which means a few less trains! Who knows?!

[Anonymous]

QUOTE: Originally posted by ironken

Ed, the voice of intellect, fact and reason. You are such a jerk ruining that little queen Lotuses anti Union rhetoric wtih fact. Lotus, put a sock in it. By the responses you get, can you not see that more than a few of us think that you are a little dork. Go away!

Ed, and I are not a total disagreement here; and the facts are not in disagreement with what I said either. Naturally it is a very complex issue, I was just pointing out one of the prominent reasons, bad management, high benefits (from the unions perhaps), and of course a lousy product, are still very much to blame. Also the unions haven't ruined any other car companies, since most autos factories are not outsourced, most are built like Honda, as mentioned right here in the good ole US because of shipping costs, so outsourcing isn't a problem. But, it should also deserves to be mentioned that something is up when a company starts to pay so much in benefits (part of wages). I had foreseen trouble for GM back when the employee discount kept getting stretched out; a warning sign that the company needed money. Aztec Eagle, I was only wondering, unions have their place, I will grant that; but could you please explain the flaws in my statement. Ed, I thank you for keeping a level head, were you just testing me last time?

If my ideas are so absurd they should be easy to disprove, and have hold water like a sieve, but mine ideas are fairly reasonable. I am not against all union, but people can strike without an organization telling them to, the management of such a thing doesn't have to be union, thought they were/are quite good at it. Not to try and drag us too par off the subject, as I too am wondering very much how this will effect the railroads, I will give you this quote to ponder out of a book I once read. The book, What Would Thomas Jefferson Think About This? by Richard J. Maybury, who has been called the “new Tom Paine” by some. In the book he takes the statist dogma most people take for granted and applies, logic, basic economics, and quotes and letters from the founding fathers; while pondering this please keep in mind this is a short excerpt from a book, it is very simple and may not apply to every case, I just thought I would share it with you people.

---

Unions Saved Workers

Satist Viewpoint
Businesses refused to grant higher wages or better working conditions to workers until the workers formed unions and forced these changes.

The Other Side of the Story
Unions did not bring better lighting to the factories, Thomas Edison did. A hundred years ago the new systems of scientific management found that workers produced more when they had better lighting, ventilation and other amenities. A soon as these were invented, the more progressive businesses began using them to gain a competitive advantage over the less progressive businesses.
Unions do raise wages, but in doing so they also cause more unemployment. An expensive is a worker likely to be replaced by a machine or some other innovation. If the wages are forced up very much, the firm might even close down and move out of the country.
A worker with a $50,000 hydraulic backhoe can dig more ditches and earn higher wages than one with a $20 shovel. The only way to achieve a real, lasting improvement in wages and working conditions is to accumulate the tools, training, raw materials and other factors to be more productive. Unions have little to do with it, but they take the credit.
The best – some would say the only – real protection for workers is a free market in which employers must bid against others for labor. Competition. Good workers will have a choice about taking their wages in the form of cash or in the form of health plans, pensions of other benefits. Bad worker will have the choice of either earning bad wages or becoming better workers.
Unions have been helpful to workers, this is true. But the help has been exaggerated. If all the costs, hidden and as well as unhidden, were weighed against benefits, the results would likely not be encouraging.

---

Now I am not blaming the unions wholly for the GM’s trouble, I have seen management run companies into the ground, and still earn millions of dollars. Look at what happened to Albertson’s, or HP, I won’t ever buy another piece of HP equipment.

Crazy Diamond, customer service is the boon to many a business.

[Big_Boy_4005]

Gee, I've got over 209,000 miles on my 93 GMC Sierra. The only major work was rings and valves at about 115K, and 2 trannys, for which they are notorious. The rest has been routine. Maybe I'm just lucky. I've never owned a non GM car, but I also never bought a new one.[;)]

This one is only my sixth vehicle in 28 years, and two of them were with me for over 10 years each.