Tash said:
Nah, they'll still cut the jobs, gotta keep the PE ratio high if you want that bonus next year.
c-ba55 said:
GM, in particular, has always been run with employing lots of people well as one of its apparent primary goals. They had 800,000 people last time I looked. Probably somewhat less now. They don't "need" half of that to produce the # of their cars there's demand for.
Good market students know that desperate sales tactics like these "discounts" never come without major job cuts on their heels. Of course, executive's huge bonuses will become even larger for taking these 'tough cost cutting measures', as will their holdings of discounted stock increase. Too bad these people won't be able to afford a car at any price ...
GM Plans to Cut 25,000 U.S. Jobs by 2008 & Close Plants
http://biz.yahoo.com/ap/050607/general_motors_outlook.html?.v=11
"GM now employs 110,000 hourly workers in the United States."
"GM already has closed or discontinued production at several facilities this year. The company shut a factory in Linden, N.J., in April and a factory in Baltimore in May, affecting around 2,000 employees. The company also closed two plants in Lansing, Mich., last month, although those 3,500 employees are expected to find work at other GM facilities in the city."
I wonder how much of one's discount will be taken away by the increased social and federal costs of their neighbours being unemployed and plants closing? Catch-22.
This part was interesting :
"Already this year, GM's U.S. market share has fallen from 27 percent a year ago to 25.4 percent, much of the loss at the expense of Asian automakers such as Toyota Motor Corp. and Nissan Motor Co.
Wagoner focused on four priorities: increasing spending on new cars and trucks; clarifying the role of each of GM's eight brands; intensifying efforts to reduce costs and improve quality; and continuing to search for ways to reduce skyrocketing health care expenses.
He noted that health-care expenses add $1,500 to the cost of each GM vehicle. This puts GM at a "significant disadvantage versus foreign-based competitors," Wagoner said."
IME, comperable Nissans and Toyotas are more expensive than GM, so people are actually buying them because there's a perception of greater value rather than any cost savings. Not to mention most are made domestically so it's a bit misleading to say they're "Asian". Though the "Asian" card does hint at the question of at what cost do we want discounts on things we don't need - the price is our future.
I wonder how many incentives there have been to cutting health care costs by giving people bonuses for losing weight, quitting smoking, more flexibility for taking time off, more variety on the job, providing counselling and gyms at work, etc. etc. By all accounts I've seen/heard, progressive companies who do so find the costs of these incentives are by far recouped in health savings plus morale, efficiency, and quality all go up. Might be something worth trying along with these current measures.
