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GM closing nine plants

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Posted by PigFarmer1 on Tuesday, November 22, 2005 4:54 PM
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.


I apologize if you have already gotten a response, but I'm not going to read through four pages of pro and anti union comments.[:0] Anywho...GM is contractually obligated to not make these cuts until such a time as was specified in the agreements with the UAW. Even though it sounds crazy, that's the way it goes.
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Posted by SALfan on Tuesday, November 22, 2005 3:53 PM
UP829 - Actually sometime in the '60's or early '70's GM flirted with having 60% of the US market, and they may have made it. In those days, GM products were just built better than Fords or Chryslers.

TomDiehl - In the '50's there were more than 4 domestic automakers. Hudson and Nash combined to form AMC in 1954. Studebaker bought the remnants of Packards sometime in the mid-50's, then Studebaker died in 1966.

My complaint about GM is that all the brands are built on the same assembly lines using the same parts, except for grilles and taillights. What's the difference? Used to, if you paid the extra money for a Buick or an Oldsmobile, you got a different engine at least and different ride and handling characteristics. Nowadays you have to look to tell the difference, because all GM cars are built from the same parts bin.
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Posted by edblysard on Tuesday, November 22, 2005 2:13 PM
I am surprised that anyone would take that statement, and some how turn it into "they got it together", which is not what I said at all.
Re-read it...I said they were not in the toilet...which is altogether different from "having it together"...

American auto makers have to adapt, and get something going on some serious research on the next generation/ hybrid/alternate fuel if they are going to survive beyond the next decade.


Ed
QUOTE: Originally posted by andrewjonathon

QUOTE: Originally posted by edblysard

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.

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 am surprised anyone would point to Ford and Chyrsler as examples of automobile manufactuers who have "got it together".

While Ford's problems may not be as deep as GMs, they certainly still have a lot of their own house cleaning to do. Ford's North American operations lost $1 billion dollars in just the third quarter this year alone. You don't have to search too on the internet to find expert predictions of Ford's own bankrupcty.

As for Chysler, recently their new products may be reflecting the benefits of their merger with Mercedes. However, it is safe to say the marriage with Chrysler has not had the same positive effect on Mercedes. Ever since the marriage, with the company's focus on improving Chrysler, the reputation of the Mercedes cars division has taken a hit, especially in their reputation for reliability. Recently, the combined value of Mercedes and Chrylser slipped below the value of just Mercedes before the merger. I doubt that wasn't a by-product of the merger the shareholders were looking for.


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Posted by Anonymous on Tuesday, November 22, 2005 2:01 PM
There probaly closing the plants because they are puting tomuch in their vehicles for the same price, the GM employee sale which brought in alot of money in the short run but long term investments are fried, people are going to foreign cars more better fuel economy with same power and/or speed,etc...
I saw something in the newspaper this morning but can't recall anything tho.
They need to straighten up and get to making what people want in order to survive.
I dont mean any disrespect but this is what i think.
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Posted by Junctionfan on Tuesday, November 22, 2005 1:31 PM
There is a "mr.fix-it" type guy who is trying to repair the sorry state of Nortel. I can't remember his name-I believe he is from Scandanavian or Swiss. At any rate, maybe GM should get him and chuck the useless executives that caused the company to head for the crappers to begin with.
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Posted by richardy on Tuesday, November 22, 2005 1:28 PM
QUOTE: Originally posted by Big_Boy_4005



Now Chad has me wondering about Oldsmobile, anyone know that story?


2004 was the last model year for Oldsmobile.
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Posted by chad thomas on Tuesday, November 22, 2005 1:28 PM
I just checked GMs website and there is no listings for Olds so I guess it is gone. To bad, I have owned a couple of Oldsmobiles and both were great cars. As I mentioned my last one almost hit 400k, but a rod started knocking and I had an engine fire (my own dumb a$$ fault) and is now history. Now I've got my eyes out for replacement, but a 70s mdl in good condition not a newer one.
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Posted by chad thomas on Tuesday, November 22, 2005 1:23 PM
BTW My moms Olds is a 04' I think.
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Posted by Big_Boy_4005 on Tuesday, November 22, 2005 1:13 PM
Actually Tom, I was aware about who bought who in the Chrysler deal, but I was too lazy to type it that way. [oops][sigh][;)]

Now Chad has me wondering about Oldsmobile, anyone know that story?
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Posted by TomDiehl on Tuesday, November 22, 2005 12:33 PM
QUOTE: Originally posted by Big_Boy_4005

QUOTE: Originally posted by Lotus098

Just for the record who does GM own? Chevy, ...


I'm not sure if they have bought out any foreign manufacturers like Ford and Chrysler have.


Chrysler didn't buy out any foreign manufacturers, they were bought out themselves by Daimler-Benz. They made their new name Daimler-Chrysler as a PR point.
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Posted by TomDiehl on Tuesday, November 22, 2005 12:17 PM
QUOTE: Originally posted by oltmannd

It's interesting that Olds and Plymouth have gone away. Their brand names had such little value that their owners ditched them completely. While this was going on, Toyota lauched an entirely new brand, Scion, Honda started selling full size pickups and SUVs, and Kia and Hyundai sell a full line of cars.


It's called market shift. Going back to the '50's and '60's there were four auto manufacturers in the US, GM, Ford, Chrysler, and American Motors. Foreign auto competition was so small it was just considered a novelty at that time. Starting in the '70's, with the gas prices suddenly jumping to three times what it was, people quickly shifted to wanting more economical running cars. Unfortunately, this coincided with a trend in the US manufacturers toward a better "bottom line" and they did it at the expense of quality, cars literally fell apart off the showroom floor. Imported cars, primarily from Japan, with noticibly better quality and much better gas mileage experienced big sales jumps. Although the quality has equalized, the reputation from this period has been hard to shake. Plus now, there's a LOT more than four companies making and selling cars in the US. So of course, each US company will have a smaller "piece of the pie" than they had when there were only four. And the foreign companies will work harder to get a bigger piece. That's the capitalist system.
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Posted by chad thomas on Tuesday, November 22, 2005 12:14 PM
QUOTE: Originally posted by oltmannd

It's interesting that Olds and Plymouth have gone away. Their brand names had such little value that their owners ditched them completely. While this was going on, Toyota lauched an entirely new brand, Scion, Honda started selling full size pickups and SUVs, and Kia and Hyundai sell a full line of cars.



Not me, I have a 69' Plymouth Sport Fury that I plan on keeping till the day I die.[8D]
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Posted by chad thomas on Tuesday, November 22, 2005 12:09 PM
Vic, are you sure Olds got phased out? My mom just bought a new Olds Bravada.

I must say the best cars I ever owned were GM products. But they were all 60s and 70s models. I racked up almost 400,000 on my last Olds and the only work I had to do was exhaust work (installed headers, a must on all my rides) and I had to re-build my tranny at around 300k. I have delt with a lot of fleet vehicles in the last 20 years and I must say quality took a real dive in the 80s. I saw a lot of late 70s trucks outlast 80s trucks (GM and Ford). They seem to have produced a better quality vehicle (trucks anyway) in the later 90s but in my opinion the 70s produced higher quality then anything sience.

Right now I have 6 chevys and 3 fords in my fleet. For the amount of abuse they take they are holding up very well, the chevys that is. The fords are falling apart. It's always the little things with the fords but it's one thing after another. Not to say the chevys are perfect, when they fail it's usualy something major like fuel injection failures, head gaskets and such. But I would rather have one major failure then constant minor failures like the fords seem to have.

Not that I'm an expert or anything but my experience with work trucks makes me favor Chevys and when I go shopping for replacements in my fleet it will be at a GM dealer.
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Posted by oltmannd on Tuesday, November 22, 2005 11:53 AM
It's interesting that Olds and Plymouth have gone away. Their brand names had such little value that their owners ditched them completely. While this was going on, Toyota lauched an entirely new brand, Scion, Honda started selling full size pickups and SUVs, and Kia and Hyundai sell a full line of cars.

-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/

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Posted by oltmannd on Tuesday, November 22, 2005 11:46 AM
QUOTE: Originally posted by spbed

The point is the plants are being closed cause they are not making enuf sales to keep it open so there will be no shifting of biz from the closed plants to some other open plant since GM admitted they do not have the biz. [:(].

Originally posted by oltmannd
[


No argument, there. It's the "production" mentality that got them there. Wall Sts reaction has been "what took you so long to figure this out"!

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Posted by Big_Boy_4005 on Tuesday, November 22, 2005 11:36 AM
Vic, I was just watching the news, and GM's problem is really a North American one. The Swedes are not really a part of this situation.
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Posted by vsmith on Tuesday, November 22, 2005 10:54 AM
BB re: SAAB

I was kinda thinking of the guys on the assemblyline, I doubt they will be affected by all this but I'm sure their a little nervous now.

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Posted by Big_Boy_4005 on Tuesday, November 22, 2005 10:23 AM
QUOTE: Originally posted by Lotus098

Just for the record who does GM own? Chevy, ...


James, it's not really "who do they own?", it's what brands of cars they produce?
Chevrolet, Buick, Pontiac, Cadillac, Saturn, and GMC. They phased out the Oldsmobile line a few years ago. I'm not sure if they have bought out any foreign manufacturers like Ford and Chrysler have. Something makes me think GM got Saab.

I'm just too slow a typist for my own good.

Vic, at the time of the Saab deal, the Swedes probably made out like bandits, and are now laughing all the way to the bank.[;)]
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Posted by vsmith on Tuesday, November 22, 2005 10:14 AM
Kinda helps to talk about cars after you've owned a few...

GM owns...
Buick
Cadillac
Chevy
GMC
Hummer
Pontiac
Saab (bet theres a bunch of Swede's saying "that was a bad idea")
and
Saturn

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Posted by CSSHEGEWISCH on Tuesday, November 22, 2005 10:13 AM
General Motors produces several brands: Cadillac, Buick, Pontiac, Chevrolet, GMC Trucks, Hummer and Saturn. They are mostly operating divisions rather than separate entities owned by GM. There are also several overseas subsidiaries. Most non-automotive businesses have been sold off.
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Posted by Anonymous on Tuesday, November 22, 2005 9:52 AM
Just for the record who does GM own? Chevy, ...
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Posted by spbed on Tuesday, November 22, 2005 9:26 AM
The point is the plants are being closed cause they are not making enuf sales to keep it open so there will be no shifting of biz from the closed plants to some other open plant since GM admitted they do not have the biz. [:(].

Originally posted by oltmannd
[

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Posted by oltmannd on Tuesday, November 22, 2005 7:54 AM
QUOTE: Originally posted by 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]



Ford and Chrysler may not be as bad off as GM, but they are not exactly a picture of health, themselves.

GM's troubles, like that of big steel 20 years ago, were a team effort. It took the company and the unions, working together, to let things get this bad.

Both are living in the past.

GM still thinks the market share game is won on the production side. If they think they should have a 33% market share, then they plan to build that many cars and trucks, regardless if there are any buyers out there.

The UAW still think the whole game is wages and benefits. But, what really drives wages and benefits in this day and age is employee value. If an employee can get more money and benes across the street, the the company will have to offer up something competitive to get them to stay. The only way to get this to happen is with education and training. The UAW ought to be bargining for continuing education, education sabaticals and tuition aid as the path to higher wages. Employee value drives higher wages, not staring someone down across a table at the local Marriot.

It is not reasonable to think that an assembly line job aquired at age 18 will be there for 50+ years. There are almost no jobs like that anymore. The world & technology are changing too fast. Maybe an assembly line job should be thought of as a stepping stone to the next job.

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Posted by Anonymous on Tuesday, November 22, 2005 7:42 AM
QUOTE: Originally posted by TomDiehl

QUOTE: Originally posted by futuremodal

There are 2.3 retirees drawing benefits for every 1 GM worker. That should tell you something.

That would also tell you that GM's plans for massive layoffs isn't going to change that 2.3 to 1 ratio. GM is not tackling the legacy problem, instead it seems they're just trying to placate Wall Street in the interim.

Maybe they think the feds will bail out the legacy liabilities.


Refering to the article link in the first entry and applying a bit of math:

More retirees (early retirements AGAIN) plus less active employees (downsizing) equals a change in the 2.3 to 1 ratio.

And NOT for the better.

Shortsighted management thinking is just making the matter worse.


According to a report on CNBC, GM went from around 40% market share in the 70s to the 20% range today. Automation is also a factor as less workers are needed to build a car. Chrysler's market share over the same period has stayed roughly the same and in recent years they've actually gained some at GM's expense. The plant closings are supposed to bring production capacity down to what they actually expect to sell. The employee discount program moved a lot of cars, but they lost a lot of money doing that.

Gaining back market share won't be easy and IMO part of GM's problems are structural and related to the shrinking middle class. They've traditionally marketed and sold the more profitable cars largely to middle class buyers, in many cases those same union workers. Wealthy individuals tend to buy a Mercedes, Lexus, or Jaguar. Poorer foks buy imports or the smaller U.S. cars which have very small profit margins due to the legacy costs. Building trades workers buy the more profitable trucks but tend to keep them for a long time. Ford bought Jaguar and Volvo to go up-market and increase their European sales which were aleady significant. GM is trying to up-market Cadillac and according to CNBC they plan to open more plants in South Korea and China.
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Posted by AntonioFP45 on Tuesday, November 22, 2005 7:28 AM
Eric,

That was GM's credo for years.....however the situation has changed drastically. At one time GM was viewed as "The American Machine", jst as in railroad circles, Pennsy's Altoona Shop was the top railroad facility in North America at one time. Altoona and GM are now former shadows of their pasts. [V]

Just my 2 cents. [2c]
I was a loyal GM user for years (and former hot-rodder). However, after repeatedly hearing and reading scores of complaints about quality back in the 80s and 90s, I'm one of those "yahoos" [:o)] that went Toyota. Haven't looked back since. Seems like this is what has happened with thousands of other customers that GM lost as well.

I still remember a friend of mine with a new 1987 IROC Z28 having to order a new rear end for his car.

During the 90s my late father-in-law purchased / traded brand new fully loaded Yukons and a Tahoe within a 5 year period. $30,000 average each! Regrettably, he blew his paltry retirement on these things, died, left his widow in debt. What a waste! No offense to you SUV owners, but man did those things drink gas!! [:0]

His first Yukon had a very noisy rear end that, after 3 trips to the dealership, could not be fixed. Traded it in. The 2nd Yukon was a fuel and electronic system nightmare. Traded it in. His 3rd SUV, a Tahoe, fared better but he could no longer afford to drive it. When I bought my 4 cylinder 1999 Camry new, which we still drive, he asked me then why I didn't buy an GM SUV?! I loved that old guy, but I had to hold back from choking him! [:p]

I did go to a Chevy dealership to purchase a new car for my wife. The salesman treated me like dirt., I guess since I was wearing a T-shirt, jeans and sneakers. [B)][V]That was the icing on the cake. Bye-bye GM. [tdn][sigh]

I understand that GM has greatly increased quality.
Problem: Once you "burn" a customer you're going to have an exceptionally hard time getting him, or her back. Now, add family, friends, and co-workers that the customer comes in contact with! A few years back,upon my recommendation my mother, sister, and wife all purchased Toyotas. That's about $60,000+ in sales that could have gone to a GM dealer! Being middle to lower income, our priorities were to get a balance of BOTH Safety and Gas Mileage. It made me laugh when "status concious" relatives continued to suggest that we get SUVs. Now, I'm so glad that we didn't listen to them. Only idiots keep up with the Jonses. [D)][D)] I'd be livid now if I had to spend $80 to $100 to gas up the family vehicle, like they do.

As for blaming the unions and/or management? Both sides have greatly contributed to the problems, with management being the more significant contributor. There have been countless articles documented where well educated union and non-union workers binded together to provide upper management teams with viable solutions to fix GM's problems. Much of the advice went unheeded.

A leaner, more efficient GM will eventually emerge. I doubt GM will dissappear. Wold not surprise me if eventually there was a merger or consolidation with another major auto maker.

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Posted by TomDiehl on Tuesday, November 22, 2005 6:59 AM
QUOTE: Originally posted by futuremodal

There are 2.3 retirees drawing benefits for every 1 GM worker. That should tell you something.

That would also tell you that GM's plans for massive layoffs isn't going to change that 2.3 to 1 ratio. GM is not tackling the legacy problem, instead it seems they're just trying to placate Wall Street in the interim.

Maybe they think the feds will bail out the legacy liabilities.


Refering to the article link in the first entry and applying a bit of math:

More retirees (early retirements AGAIN) plus less active employees (downsizing) equals a change in the 2.3 to 1 ratio.

And NOT for the better.

Shortsighted management thinking is just making the matter worse.
Smile, it makes people wonder what you're up to. Chief of Sanitation; Clowntown
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Posted by Anonymous on Tuesday, November 22, 2005 5:33 AM
Give some credit to GM's execs for selling EMD when they did. If they tried to sell it now, it would be going for a fire sale price.

Which makes one ask the question, was EMD doing that badly? I thought EMD was one of the few divisions of GM doing fair to middlin well. I figured EMD got sold to private owners simply to allow GM to focus closer on automobile and truck production.

I'm not particualrly worried about GM going away... anyone remember the billion dollar loan guarantee Chrysler got in the late seventies? Also, remember, "whatever is good for GM is good for the United States"...

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Posted by andrewjonathon on Tuesday, November 22, 2005 12:01 AM
QUOTE: Originally posted by edblysard

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.

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 am surprised anyone would point to Ford and Chyrsler as examples of automobile manufactuers who have "got it together".

While Ford's problems may not be as deep as GMs, they certainly still have a lot of their own house cleaning to do. Ford's North American operations lost $1 billion dollars in just the third quarter this year alone. You don't have to search too on the internet to find expert predictions of Ford's own bankrupcty.

As for Chysler, recently their new products may be reflecting the benefits of their merger with Mercedes. However, it is safe to say the marriage with Chrysler has not had the same positive effect on Mercedes. Ever since the marriage, with the company's focus on improving Chrysler, the reputation of the Mercedes cars division has taken a hit, especially in their reputation for reliability. Recently, the combined value of Mercedes and Chrylser slipped below the value of just Mercedes before the merger. I doubt that wasn't a by-product of the merger the shareholders were looking for.

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Posted by eastside on Monday, November 21, 2005 11:59 PM
Oh yeah, a couple of other things come to mind:

QUOTE: Originally posted by Junctionfan

If I'm not mistaken, G.M stocks are near junk status on one of the exchanges.
It's GM's debt that has junk status, not its equity.

1. What's the jewel in the crown for GM? Chevy? Cadillac? EMD? (Oops, forget that one.) No, it's GMAC, GM's financing arm, which will earn approximately $3 billion this year. (Which will be more than wiped out by the expected $4.9 billion loss from GM's North American auto-selling unit.) Not only does GMAC make tons of money financing cars, but they also make a lot from mortgages. (BTW, Ditech is their mortgage arm). What does this have to do with GM's junk rating? Well when you buy a car from GM and finance it through GMAC, GMAC has to go to the capital markets and borrow the money to send to GM in payment. Of course, the people loaning the money to GMAC are no dummies. If GM bites the dust so will GMAC. As a result of GM's problems, GMAC essentially has the same junk rating as GM. That means they pay the same rates as GM would pay. As of the end of '04 GMAC had a balance of $88 billion of short term debt. My guess is that they pay at least $900 million more in interest than Toyota, for example, would pay for the same amount. Another problem is that most investment funds are barred from buying non-investment grade instruments (junk bonds), thus raising GM's interest costs that much more. The obvious answer would be to sell its interest in GMAC so that it would have an independent credit rating, undoubtedly investment grade. The problem with that is that it would a huge loss of face and a loss of a part of the company that has great growth potential. Worse, it wouldn't benefit the stockholders because the unions would likely insist that it be applied to funding GM's pensions.

2. Give some credit to GM's execs for selling EMD when they did. If they tried to sell it now, it would be going for a fire sale price.
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Posted by jeaton on Monday, November 21, 2005 11:47 PM
QUOTE: Originally posted by greyhounds


There is/was no way in The Devil's Kingdom that GM was going to keep its market share - they sure would have if they could have. I'm just glad Janesville didn't get the ax.

Headline in tonight's Janesville paper "WHEW!"

Many GM employees employees commute from here, so a closing of that plant would have had an impact well beyond the Janesville city limits.

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