Is GM throwing in the towel?

Well easy to take something out of context when all you have is one quote in the conversation. Of course they will try to maintain the number 1 status, but I believe they are more concerned with making the company profitable and that is very hard to do when you become a behemoth. Toyota is feeling growing pains by trying to become number 1 and GM is tired of the burden that comes with that status. I know for a fact the GM would be happy as #2 and be very profitable.

The numero uno spot is not the status symbol that consumers look up to. BMW, Porsche, MB are very desirable and are not number 1 contenders.

I was reading a few articles about the problems of GM's burden as compared to toyota. The biggest issue that GM is facing is the labour union laws and pension plans which was established int he early 1900's. the article was comparing Toyota and GM stating that because Toyota didn't have these guidelines and rules to follow for their union, the company as a whole made much more profit and could distrribute their revenue into better use, marketing, reliability test and r&d. While Gm was basically stuck in a catch 22 situation.

Being Number has its drawbacks, especially when it needs to set industry standards for its workers and as a big corp the unions would ask for more and more. I am nto saying unions are bad, but seems like they have taken advantage of the ideology behind unions. Their pay is quite well and has quite a lot of benefit and pensions so why complain and keep on askign for more? A lot of people are not protected by union laws and gets a way lower salary, but they still work for a living.

The problem is that the union has convinced generations of workers that they will take care of them and that they should never comprimise.

Examples:

1. Job security: If you get laid off, no worries we have a GM sponsored job bank. You still get paid 100% but don't need to work until they call you back. Come on down to the union hall, and play checkers. We will fight until you are back on the job.

2. Health Care Costs: No worries GM will pay 100% of it (they have plenty of money!), and if you retire they will pay it too! The union first balked at it members paying having to pay $752 a year for family coverage! They said it was outrageous. That is 1970's rates!

3. Wages: you get raises every year no matter what you do, or if the company does poorly or not. Plus we will pay you a hefty hourly rate for a non skilled job. College is a waste, dude you are in the union!

4. Retirement: No problem we will give you world class pension and benefits until you die!

All of these great things and you are still unskilled labor making 50-100k a year.

Rarely is anything close to this seen outside of the industry.

I think GM will regain #1 pos eventually. Everyone knows they just have to get their acts together by reducing model line up, cut costs, etc. Its just not as simple as it sounds.

You hit the nail on the head about education:

Case in point Toyota had to resort to using pictures in training of assembly plant workers in Kentucky due to illiteracy.

It is no wonder if you Google the topic, you see numerous Toyota sponsored literacy programs wherever there is a Toyota plant. Very smart, Toyota is no fool..
They are investing now, to make savings in the future.

I bet many of those workers at one time had delusions of UAW salaries dancing in their heads. Until reality set in. Hint number one, you need to spell everything on the application correctly to be hired.

look like generic rent-a-cars. Look at they Chevy line-up. GENERIC CITY!

Maybe some Law forbids GM from using overseas/Euro designers. Maybe there is another union within the design department of GM, where at least 60% of the jobs must be inhouse and they can only hire a few outsiders or use other design companies.

I was rather surprised to see so many messages above try and blame the unions. These must be the same people who

Its not the Unions - its the leadership. Leadership makes decisions on product portfolio, interior and exterior design, marketing messages, plants, etc.etc.

GMs executive leadership group is primarily a dismally pathetic band of aging and/or ineffective men. This group will use every effort to divert attention from its own record of mediocrity and failure.

Would the company be more flexible without unions? - probably, would the company make any more money and would the company have a dramatically enhanced product portfolio? - I doubt it.

Those same unions have supported buying Detroit products for decades even when the products were CRAP. Without the union leaders its likely that GMs market share would have tanked much further and much faster. So you lose on higher labor costs but gain on higher sales - its probably a wash!

Leadership buckled to the Union, but without tthe union GM would may be in a better place.

Why have a jobs bank when no one else does?
to avoid a union strike...

Why pay 100% healthcare when no one else does?
to avoid a union strike...

Why give 100% pension when most of the US doesn't
to avoid a union strike...

Piss poor leadership had done it to be sure, and Wagoner inhertied a lot of it. However without the union these drains would not be there.. It is endemic to the UAW... There is more blame to pass around, but no easy fix.

Lutz said something to this effect a year or two ago, that Toyota was probably unstoppable. I took this to mean they had already thrown in the towel then. Quite disheartening.

Hmm if it were me, those type benefits would go to teachers, police and firemen. People that make an actual difference and sacrifice to ensure the quality of life of all of us. Not some one on an assembly line doing a mind numbing activity.

America has always been a place where you better yourself through effort and hard work. Is the plant work hard? Yes it is. The problem is they routinely hire individuals that are really not qualified for anything other than fast food and retail, and elevate them to some exalted level. If you work as the rank and file you typically get rank and file benefits, not executive perks. That is the way of the world.

The UAW just now realizes their years of backing the big three into a corner, has now place them all in a precarious position. The house of cards is stacked but will it fall?

I personally would not have that looser attitude but faced with very real competition from Toyota he seems to have come to terms with the harsh reality. There is absolutely nothing he can do to prevent it. So rather than compete and eventually get surpassed by Toyota he is now switching his focus and relinquishing the top spot.

This is like a 100 meter runner quitting the race halfway down the track rather than finish it LIKE A MAN, when he sees Carl Lewis coming from behind.

This only reinfoces my negative opinion of Wagoner, but really and more directly the GM machine.