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2009-02-19 Home Front Economy

GM's Plan: Subsidize Our 48-Year-Old Retirees

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Posted by GolfBravoUSMC 2009-02-19 11:56|| || Front Page|| [5 views ] Top

#1 R.I.P. Saturn & Hummer and in intensive care Saab & Pontiac
The Wall Street Journal is reporting that, "Saturn dealers are planning to spin off from General Motors Corp. into a new company that will seek to sell third-party vehicles under the Saturn brand, according to Dan Januska, the owner of Saturn of Scottsdale. Under the new plan, Mr. Januska said, Saturn dealers would be open to selling vehicles made by Indian or Chinese manufacturers that would be sold as Saturns. "There are not a whole lot of alternatives," said Mr. Januska, who is on the Saturn Dealer Council. "Someone is going to see the value of us and I don't know who it will be."

Posted by ed 2009-02-19 12:21|| 2009-02-19 12:21|| Front Page Top

#2 Shame about Saturn. I owned a Saturn SL2 for ten years and the first nine were great. That last year was a tough one.

The whole point to Saturn was to have it teach GM to build cars the Toyota way. It initially worked; cars like the SL2 and L300 were pretty good.

Then GM lost its focus (not a new problem there) and decided that Saturn would sell re-badged GM cars. The Vue (piece of junk up until last year), the Relay (mega-suck), the Ion (just a re-badged Cobalt which sucks) and the Aura (just a Malibu). It was nonsense. GM blew it with Saturn and now Saturn is unnecessary.

Fold Saturn and Buick. Sell Saab and Hummer. Unload everything that doesn't have anything to do with building cars and trucks.

The new divisions, as I would do it if I were in charge:

Chevy: cars and trucks for working people

Pontiac: upscale sporty cars for young people with money

Cadillac: upscale larger cars for middle-aged and older people with money

GMC: trucks in a separate dealer chain

That's all they need and all they can do right now. Re-size the corporation accordingly, remove the 30 year clause, let the union pay their own representatives, eliminate the work rules and the multiple, multiple job classifications and feather-beddng, and unload the many layers of middle management that paralyze the company. In return guarantee the union that the basic hourly wage rate will remain and that health care benefits will be equal to that of the workers at Toyota USA.

Let the engineers be engineers. Put engineers in charge. The sales and finance people work for them, not the other way around.

Tell the bondholders that they'd better accept 17 cents on the dollar in a debt for equity swap because otherwise their bonds are going to be worth zero. Tell the shareholders that they'd better be prepared to be wiped out. Tell the retirees that things are being scaled back: their medical care will be Medicare plus some gap coverage and their pension will be SS plus a stipend over that.

And remove the upper management as conditions allow. They need new blood.

Posted by Steve White 2009-02-19 12:57|| 2009-02-19 12:57|| Front Page Top

#3 Coming from an area that has a good number of the "48 year old retirees", when you ask them if they're getting another job (full-time or part-time) after retirement, the answer is inevitably "No, that will screw up my benefits".

Posted by Mullah Richard 2009-02-19 13:36|| 2009-02-19 13:36|| Front Page Top

#4 Re: Saturn

The unions killed Saturn. I'm sure you're surprised. The production lines were set up like Toyota/Honda, but union intransigence ultimately brought Saturn back into the swamp:

The Plot To Kill Saturn is Working (April 2001)

Posted by Seafarious 2009-02-19 14:47|| 2009-02-19 14:47|| Front Page Top

#5 The Curse of the Opel, Part 1 (Companion piece to the link above.)

Posted by Seafarious 2009-02-19 14:52|| 2009-02-19 14:52|| Front Page Top

#6 Put engineers in charge.

Please, no! I love engineers dearly, as y'all know, but engineers spend money like water on developing really neato cool new stuff if not focussed tightly on making something both appealing to the customer and profitable. Put a marketing guy in charge, with an engineer at one elbow and a really sharp purchasing guy at the other elbow. Explain to the unions that the old job classifications game is over, if they want the company to stay open 'til Christmas... and if not the entire union's last paycheck will be dated Friday, with a few individuals being called in for interviews on Monday. "The list has already been written out, I'm afraid, and won't be modified."

Dr. Steve's recommendations for right-sizing the company sound reasonable to me, but I'm not really qualified to judge.

Mullah Richard, how many of those retirees are working under the table, rather than volunteering at the nearby elementary school?

Posted by trailing wife">trailing wife 2009-02-19 15:08|| 2009-02-19 15:08|| Front Page Top

#7 how many of those retirees are working under the table, rather than volunteering at the nearby elementary school?

Quite a few....quite a few. Lots of 'cash work' in the rural parts of the world.

Volunteer at a school (unless it's for their own child for an hour or two a year)? No, that's 'doing the government's job'.

Very sad.

Posted by Mullah Richard 2009-02-19 15:33|| 2009-02-19 15:33|| Front Page Top

#8 Sea, thanks for the links.

Posted by Steve White 2009-02-19 16:37|| 2009-02-19 16:37|| Front Page Top

#9 Put engineers in charge. The sales and finance people work for them, not the other way around.

Wow! That's revolutionary talk. Does any company, anywhere do that?

Posted by Ebbang Uluque6305 2009-02-19 17:54|| 2009-02-19 17:54|| Front Page Top

#10 while sales and finance would be sh*t without the engineers, I'm not sure you'd want us engineers in charge. F'rinstance, there's be a lot less sales and finance staff as the well-designed products would sell themselves, quality-wise, and do we need that many more unemployable people out on the street?

Posted by Frank G 2009-02-19 17:58|| 2009-02-19 17:58|| Front Page Top

#11 Put engineers in charge. The sales and finance people work for them, not the other way around.

Wow! That's revolutionary talk. Does any company, anywhere do that?

Sun Microsystems, and HP (during the time of Bill and Dave).

Posted by DMFD 2009-02-19 19:15|| 2009-02-19 19:15|| Front Page Top

#12 #9

That would be:
1) Toyota
2) Honda
3) Nissan

Posted by Woozle Elmeter 2700 2009-02-19 21:35|| 2009-02-19 21:35|| Front Page Top

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