From the BBC website...
US carmaker GM has reported a third quarter operating loss of $4.2bn (£2.66bn) after Ford announced it lost $2.98bn during the same period. GM said it would run out of cash in the first half of 2009 if economic and market conditions did not improve. GM said it would cut jobs and costs and has also suspended merger talks with Chrysler to focus on current issues.
Ford meanwhile said it would cut salary-related expenses in North America by another 10%.
GM and Ford burned though $14.6bn in cash between them in the quarter.
|
They messed up years ago - assuming big/basic/profitable trucks in the US would bring in profits. And then it stopped. They are also both crippled by healthcase payments for previous employees which is not fair - how many companies in Europe would commit to that? I know we have a healthcare system.
This is also why Ford sold Jag/LR and may sell Volvo and/or their stake in Mazda.
I personally hope they all survive as the consequences are not worth thinking off. Then again the USA took over/bailed out banks for a lot more than these need... Obama... where are you.
Edited by rtj70 on 07/11/2008 at 18:45
|
|
Worth watching a film called "Sicko" tells you a lot about the US Healthcare system - and how remarkably good ours is !
|
Lets put this in perspective shall we?
Huge losses?
In 1993 IBM posted a Q2 loss of 8 billion dollars US. That's 15 years ago when 8 billion was a lot of money. A record loss for a US blue chip company in fact,
They are still alive and thriving.
|
Quite true, AE.
But the computer market was undergoing a rapid expansion. There are already more than enough car manufacturers to satisfy demand even with a bouyant market, and at the moment car sales have collapsed with no sign of a recovery. The manufacturers customers are the dealers, and they are falling like flies.
|
|
Hope none of these companies do go under. The present workforce will face difficulties in finding new work, retraining, relocating etc... but what of the poor individuals who invested thirty or forty odd years of their lives in these places who are 100% dependent on them now in their golden years ?
|
I have relatives living in the US and apparently there is a lot of concern about company failures/redundancy and its impact on healthcare. Apparently about 2/3 of Americans get their (family) health cover through employment, so if they lose their job the health cover ceases too. A premium for a family of four now exceeds the income from a minimum wage job, so an employee 'downsizing' to a low grade job with no healthcare effectively has no chance of medical coverage.
Health costs have shot up so much that a lot of companies are either withdrawing cover or scaling it right back. This is becoming a massive drag on the US economy and an even bigger ball and chain on companies like ford and GM who have legions of pensioners who are supposed to receive medical cover.
|
|
|
|
Lets put this in perspective shall we? Huge losses? In 1993 IBM posted a Q2 loss of 8 billion dollars US. That's 15 years ago when 8 billion was a lot of money. A record loss for a US blue chip company in fact They are still alive and thriving.
yes but don't forget they got out of mostly hardware manufacturing and instead turned themselves into a global IT services company. Hard to see how GM/Chrysler could imitate that!
|
|
|
|
Worth watching a film called "Sicko" tells you a lot about the US Healthcare system - and how remarkably good ours is !
I remember watching that movie in Canada quite a while before release here. It dellivers a very one sided view of the world; as do all the movies made by that particular director/presenter. From what I remember they don't talk much about uk health care, more about people getting refunds on their transport costs to the hospital.
The likes of Ford and GM have to pay considerable amounts for health care but its there own fault for agreeing to certain things when they were making huge amounts of cash years ago. VW are making huges loses in the US too, almost a third of their HQ workforce is going and they don't have a US factory, so don't have to pay huge health care costs. They are planning to build one in the USA, but that'll be built in a right to work state with lower costs.
Edited by carl_a on 08/11/2008 at 21:10
|
|
|
|
|
As Altea Ego says, let's put this into perspective.
Ford are investing £70 million at their Bridgend engine plant, so that's one piece of good news. tinyurl.com/6dbxgl
|
Why the concern for car makers abroad?
There was no concern for car makers over here when they collapsed !
Free market economy it was called? Still is!
If you want free market economy, you have to put up with problems like this!
My sincere sympathies to all those who lose jobs because of it; but I wanted support for our car makers too !
|
Why the concern for car makers abroad?
GM own Vauxhall. When America sneezes...
|
GM own Vauxhall. When America sneezes...
But what is Vauxhall? A sub-brand of German subsidiary Opel, with very little genuine work in this country.
Big deal if they go splat -- some other company will be around to pick up the pieces and take over the profitable bits.
|
sq
3000 employees at Ellmsmere Port might think it's a big deal. And optimistically thinking someone else will be round to "Pick up the profitable bits" is ignoring both the fact that Vauxhall is not exactly a cash cow and every other car manufacturer is looking nervously at their account books too.
Edited by Pugugly on 09/11/2008 at 11:19
|
|
That's 3000 directly employed - the knock on effect of that one plant closing would be a disaster for the North West's economy.
|
|
Sadly the rot set in years ago. In the seventies British car manufacturers were turning out inferior carp with poor build quality and an abysmal main dealer customer service attitude. The British motoring press at the time derided the Japanese imports with their garish chrome trim and whitewall tyres, forgetting what impact the Japanese were having on the British motorcycle industry. With the Japanese cars you got a radio, tinted glass and reliability as standard. By way of contrast a 1975 Jaguar XJ12 5.3 litre I had the misfortune to own didn't have tinted glass (extra cost option) and the build quality was terrible. Jaguars' flagship model. Ha ha. Fast forward a couple of decades and most cars on the road are either German, French or Japanese. The British motoring public don't seem to have the same support for a home grown product as, say, the French. Go to Paris and it's mainly Peugot, Citroen and Renault. Strangely enough, Jaguar build quality improved dramatically when they they were taken over by Ford, an "inferior" American car manufacturer. How curious! ;-)
|
|
|
"That's 3000 directly employed - the knock on effect of that one plant closing would be a disaster for the North West's economy."
Shame there wasnt the same sympathy for the midlands when Rover collapsed and Peugeot pulled out !
|
Shame there wasnt the same sympathy for the midlands when Rover collapsed and Peugeot pulled out !
There was, but there's a difference. When Peugeot pulled out and Rover went belly up (again) the unemployment rate was very low indeed. Most of those people will have found jobs--maybe not the jobs they wanted, but jobs all the same--pretty easily. That's not going to be the case in the next few years.
|
|
|
|
That's 3000 directly employed - the knock on effect of that one plant closing would be a disaster for the North West's economy.
I would actually say that GM being broken up would probably be better for Ellsmere Port than the current situation.
As it is, GM are going to be looking to cut costs. Ellsmere Port is probably already surplus to requirements -- it's not the only place making Astras -- and if GM's woes get worse it'll be top of the list for closure.
If a healthier, European or Japanese manufacturer takes over Opel I actually think they'd be more inclined to keep the factory going than GM would.
And if it does close, well that's just one of those things really -- I wouldn't want it to close any more than I would want Nissan in Sunderland to go, but if the economic situation forces it, that's life I'm afraid.
|
|
I believe that the European arms of Ford and GM are profitable. It's the US side that drags them down.
|
A lot of Japaneese cars are made in the UK amd they are some of the most efficient car plants in the world. The UK is actually very very good at making and designing cars. We just seem to be useless at running car companies.
Slightly OT but does anybody know how FIAT are doing these days? The roads would be a much duller place without FIAT.
|
|
Fingers crossed, but Fiat are in a better position than many regarding low taxation bands.
|
I see the UK car manufacturers are going to the government cap in hand soon asking for support. Personally the only help I think they should get is the reversal to the unfair VED charges about to be forced upon us. I am getting a bit tired of all these companies wanting help off the taxpayer - since when has this been a communist state where everything is state run and funded all of a sudden. Yes times are hard but if you had run your businesses properly you will be prepared for the tough times. Or don't tell me they actually believed Gordon when he said there will be no more boom and bust.
This begging bowl approach in the UK has got to stop. Alternatively maybe we are entering a new era of private profits and public debt.
|
|
I agree with Mr Pendlebury. I remember great resistance by the banks to windfall taxes on their excessive profits not so many years ago...if only they'd put some aside for a rainy day eh?
|
|
|
|
