What does GM stand for/Economy Falling
General Motors? Gross Mismanagement?
As the US economic house of cards falls- here is another case in point of a failed economy, and a failed ability to manipulate car owners into buying gas hog vehicles. The auto lobby & the government thought they had hoodwinked this country into buying their environmentally irresponsible low fuel efficiency vehicles by passing legislation that would address the mileage efficiency 13 years later. I’m guessing there was back patting , smoking of cigars & much festivity over their “win”. After all, many of the head honchos in government are oil tycoons, so this in bed together arrangement made US auto makers happy & the oil tycoons could laugh all the way to the bank. A fat & happy win-win situation- or so they thought.
Little did they know Consumers would vote with their dollars & refuse to buy the gas guzzling beasts. They practically can’t GIVE these big trucks & SUV’s away now, as many people witness the price of gas soar, and many openly questioning if they will ever come back down.
MSNBC reports:
General Motors Corp. said Tuesday it will lay off salaried workers, cut truck production, suspend its dividend and borrow $2 billion to $3 billion to weather a severe downturn in the U.S. market.
A large chunk of the reduction, he said, would come from cutting health care benefits for salaried retirees over age 65. Those people would get a pension increase from the company’s overfunded pension fund to help compensate for Medicare and supplemental insurance, the company said.
The company will speed up previously announced closures of some truck and sport utility vehicle factories. GM said last month it would close plants in Janesville, Wis.; Oshawa, Ontario; Silao, Mexico; and Moraine, Ohio, but Henderson would not say which closures would be accelerated or when the closures would take place.
GM said it will suspend its $1 per share annual dividend immediately, which will improve liquidity by $800 million through 2009. It’s the first time the company has suspended its dividend since 1922.
The company plans to raise $2 billion to $4 billion through the sale of assets, possibly including its Hummer brand. It also plans to borrow $2 billion to $3 billion by pledging assets, including stock of foreign subsidiaries, brands, stake in its finance arm and real estate. Wagoner said the company likely wouldn’t seek that cash until 2009.
Henderson said the company determined the credit markets are so inhospitable it would be too risky to raise cash that way, so it focused on internal cost-cutting.
GM and other auto companies have been hammered by high gas prices, the weak economy and a rapid shift in consumer tastes away from trucks and SUVs. GM’s sales were down 16 percent in the first six months of this year, led by a 21 percent decline in truck sales.
Just six weeks ago, GM said it would close the four truck and SUV plants and boost production of the smaller, more fuel-efficient cars that customers are demanding. It also announced production of a new car that could get 45 miles per gallon and would go on sale in 2010.
Some analysts have also speculated that GM would declare bankruptcy, but Wagoner said last week that bankruptcy isn’t a consideration.
“I suspect the vast majority of the reductions will be accomplished through initiatives which do not require involuntary actions,” Wagoner said. “Let’s see how it plays out.”
Yes, we will see how it plays out, indeed. Bankruptcy for one of the *big three* auto makers?
They missed the boat on Hybrids at a time when oil prices soared. Their own negligence & greed came back to bite them in the ass. When I go to used car lots, I can’t help notice all the SUV’s & trucks all lined up, with prices slashed & slashed again.
I guess these questions remain…
Why aren’t those jobless people, or retirees without health care, and those with foreclosed mortgages & closed banks buying new vehicles?
Sphere: Related ContentTop 10 Corporate Abusers, vote for the worst of the lot.
By abusers, the report means companies that run afoul of economic and environmental laws. Corporate Accountability International (CAI), picked the companies and they invite everyone to vote on which ones they think are the worst of the worst. From the CommonDreams writeup:
The eight corporations named by CAI are accused of influencing elected officials, undermining democratic decision-making, and endangering the environment and public health. Global warming, war profiteering, and predatory lending figure prominently in the polls.
In other words, some real smarmy bastards my dear reader. Hang on to your hats, here they are:
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