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Why a GM Bankruptcy Would Be a Disaster
- Thread starter CountryBoy
- Start date
James48843
Well-known member
Eight major auto supplier companies in Bankruptcy:
http://online.wsj.com/article/BT-CO-20090701-715369.html
and now it appears the PBGC will be taking over the pensions from Delphi-
http://online.wsj.com/article/BT-CO-20090706-714692.html
Delphi is/was the former AC/Delco branch of General Motors, before it spun off in 1999. The company was promised help from GM if necessary as part of the spin-off deal back then. Now it looks like the PBGC will be the ones paying pensions.
http://online.wsj.com/article/BT-CO-20090701-715369.html
and now it appears the PBGC will be taking over the pensions from Delphi-
http://online.wsj.com/article/BT-CO-20090706-714692.html
Delphi is/was the former AC/Delco branch of General Motors, before it spun off in 1999. The company was promised help from GM if necessary as part of the spin-off deal back then. Now it looks like the PBGC will be the ones paying pensions.
James48843
Well-known member
They got dental?
James48843
Well-known member
GM Bankruptcy fallout-
700,000 people lose their dental insurance, local Delta Dental Office lays off 60 people.
http://www.businessweek.com/ap/financialnews/D995RUT80.htm
The loss of vision and dental coverage by hundreds of thousands of retired autoworkers is causing problems for some practitioners and insurance companies.
Okemos-based Delta Dental, for instance, has laid off 30 people and will lay off 30 more now that nearly 300,000 retirees from General Motors Corp. and Chrysler LLC, their spouses and dependents no longer have company-provided dental coverage. The 60 lost jobs are 10 percent of Delta's work force.
Hourly retirees learned a month ago that they'd be losing their dental and vision coverage on July 1. About 292,000 hourly retirees covered by UAW contracts are affected nationwide, as are about 358,000 of their spouses and dependents.
The vast majority of the hourly retirees -- 128,000 -- are in Michigan. Rounding out the top five states are New York with 14,300; Ohio with 29,000; Indiana with 28,000; and Florida with 10,500, said Delta Dental spokesman Ari Adler.
700,000 people lose their dental insurance, local Delta Dental Office lays off 60 people.
http://www.businessweek.com/ap/financialnews/D995RUT80.htm
The loss of vision and dental coverage by hundreds of thousands of retired autoworkers is causing problems for some practitioners and insurance companies.
Okemos-based Delta Dental, for instance, has laid off 30 people and will lay off 30 more now that nearly 300,000 retirees from General Motors Corp. and Chrysler LLC, their spouses and dependents no longer have company-provided dental coverage. The 60 lost jobs are 10 percent of Delta's work force.
Hourly retirees learned a month ago that they'd be losing their dental and vision coverage on July 1. About 292,000 hourly retirees covered by UAW contracts are affected nationwide, as are about 358,000 of their spouses and dependents.
The vast majority of the hourly retirees -- 128,000 -- are in Michigan. Rounding out the top five states are New York with 14,300; Ohio with 29,000; Indiana with 28,000; and Florida with 10,500, said Delta Dental spokesman Ari Adler.
James48843
Well-known member
Orion bids $44M for GM jobs
Township offers automaker incentives to build small cars at Oakland County plant
Robert Snell / The Detroit News
Orion Township has offered General Motors Corp. a $44 million deal to build its new small car there instead of in Wisconsin or Tennessee, a bold bid to stem the loss of auto industry jobs in a state battered by manufacturing losses.
Township officials are offering a 100 percent tax break on new machinery and equipment for up to 12 years, a deal that likely will be sweetened by a grant from the Michigan Economic Growth Authority, township Supervisor Matthew Gibb said. The township is working in conjunction with officials from the Michigan Economic Development Corp. to finalize an incentive package.
The township is willing to forgive $44 million in future tax revenue in hopes of preserving the $2.7 million GM pays annually in local taxes.
It's a monster offer," Gibb said. "I struggled with it because we're talking about funds and public money is so tight for everybody. But if the plant closes, we don't get any tax revenue. I'd rather have the jobs and ancillary business for our small suppliers and big suppliers and party stores and everything else."
GM said it will make a site selection this month.
Its production goal is 160,000 vehicles annually, and it plans to add 1,200 jobs for the new small car plant.
A deal would be a coup for Orion Township and the state and would help offset job losses at seven Michigan plants GM intends to close in coming months.
Gov. Jennifer Granholm's office would not discuss the state's incentive package.
"We are waging an aggressive fight for this project and the jobs it will bring to Michigan and we're going to do everything we can to make this project a reality for our state," Granholm spokeswoman Liz Boyd said. "The governor and the MEDC are fully engaged in this fight for jobs."
Between 2001 and 2007, GM received 10 tax credits from the state worth almost $72.9 million, more than any other company, according to the Mackinac Center for Public Policy.
More: http://www.detnews.com/article/20090613/AUTO01/906130321
Township offers automaker incentives to build small cars at Oakland County plant
Robert Snell / The Detroit News
Orion Township has offered General Motors Corp. a $44 million deal to build its new small car there instead of in Wisconsin or Tennessee, a bold bid to stem the loss of auto industry jobs in a state battered by manufacturing losses.
Township officials are offering a 100 percent tax break on new machinery and equipment for up to 12 years, a deal that likely will be sweetened by a grant from the Michigan Economic Growth Authority, township Supervisor Matthew Gibb said. The township is working in conjunction with officials from the Michigan Economic Development Corp. to finalize an incentive package.
The township is willing to forgive $44 million in future tax revenue in hopes of preserving the $2.7 million GM pays annually in local taxes.
It's a monster offer," Gibb said. "I struggled with it because we're talking about funds and public money is so tight for everybody. But if the plant closes, we don't get any tax revenue. I'd rather have the jobs and ancillary business for our small suppliers and big suppliers and party stores and everything else."
GM said it will make a site selection this month.
Its production goal is 160,000 vehicles annually, and it plans to add 1,200 jobs for the new small car plant.
A deal would be a coup for Orion Township and the state and would help offset job losses at seven Michigan plants GM intends to close in coming months.
Gov. Jennifer Granholm's office would not discuss the state's incentive package.
"We are waging an aggressive fight for this project and the jobs it will bring to Michigan and we're going to do everything we can to make this project a reality for our state," Granholm spokeswoman Liz Boyd said. "The governor and the MEDC are fully engaged in this fight for jobs."
Between 2001 and 2007, GM received 10 tax credits from the state worth almost $72.9 million, more than any other company, according to the Mackinac Center for Public Policy.
More: http://www.detnews.com/article/20090613/AUTO01/906130321
James48843
Well-known member
GM slashes pensions at the top
David Shepardson and Robert Snell / The Detroit News
Washington -- General Motors Corp. is making dramatic reductions in the pensions of some of its outgoing high-level executives -- a move that is expected to cost ousted CEO Rick Wagoner up to $15 million.
GM President and CEO Fritz Henderson confirmed Friday that pensioners whose yearly payments are $100,000 or less will lose nothing.
But those who get more will receive a third of what they had expected in excess of $100,000. No one is likely to lose as much as Wagoner, who was fired more than two months ago by President Barack Obama.
The pension announcement came as yet another high-profile GM executive, Global Purchasing Group Vice President Bo Andersson, announced he is leaving.
Andersson, 53, will pursue other career opportunities, joining a growing list of departures that includes product czar and Vice Chairman Bob Lutz, who is leaving at the end of the year, and Cadillac chief Mark McNabb, who resigned last month.
Andersson joined GM in 1987 as a manager at Swedish brand Saab AB. He also served as executive director of purchasing of electrical and chemical commodities. He was vice president of purchasing in GM's European operations.
Andersson was appointed to his current post in December 2001 and became a group vice president in 2007.
Wagoner, 56, a 32-year veteran of GM, had a pension with total accrued benefits of $22.1 million as of Dec. 31. The pension is to be paid in five annual payments of $4.52 million, with the first monthly installment due upon his retirement.
Wagoner also is owed a $68,900 annual pension. If he is docked two-thirds of the pension beyond the first $100,000 in his combined pensions, the former GM boss would lose $2.99 million a year for five years -- or almost $15 million.
More: http://www.detnews.com/article/20090613/AUTO01/906130322
David Shepardson and Robert Snell / The Detroit News
Washington -- General Motors Corp. is making dramatic reductions in the pensions of some of its outgoing high-level executives -- a move that is expected to cost ousted CEO Rick Wagoner up to $15 million.
GM President and CEO Fritz Henderson confirmed Friday that pensioners whose yearly payments are $100,000 or less will lose nothing.
But those who get more will receive a third of what they had expected in excess of $100,000. No one is likely to lose as much as Wagoner, who was fired more than two months ago by President Barack Obama.
The pension announcement came as yet another high-profile GM executive, Global Purchasing Group Vice President Bo Andersson, announced he is leaving.
Andersson, 53, will pursue other career opportunities, joining a growing list of departures that includes product czar and Vice Chairman Bob Lutz, who is leaving at the end of the year, and Cadillac chief Mark McNabb, who resigned last month.
Andersson joined GM in 1987 as a manager at Swedish brand Saab AB. He also served as executive director of purchasing of electrical and chemical commodities. He was vice president of purchasing in GM's European operations.
Andersson was appointed to his current post in December 2001 and became a group vice president in 2007.
Wagoner, 56, a 32-year veteran of GM, had a pension with total accrued benefits of $22.1 million as of Dec. 31. The pension is to be paid in five annual payments of $4.52 million, with the first monthly installment due upon his retirement.
Wagoner also is owed a $68,900 annual pension. If he is docked two-thirds of the pension beyond the first $100,000 in his combined pensions, the former GM boss would lose $2.99 million a year for five years -- or almost $15 million.
More: http://www.detnews.com/article/20090613/AUTO01/906130322
James48843
Well-known member
58 Michigan dealers axed
Exec gets into details as automakers justify closures to Congress
David Shepardson / Detroit News Washington Bureau
Washington -- General Motors Corp. disclosed Friday it will close 58 dealers in Michigan, as top executives from GM and the Chrysler Group LLC sought to explain the closings of more than 2,200 dealerships to a skeptical congressional committee.
During more than four hours of testimony, GM President and CEO Fritz Henderson and Chrysler Deputy CEO Jim Press defended their decisions to drastically pare back their dealer networks.
GM said reducing its dealers by up to 2,600 by the end of next year will save the company more than $2.5 billion a year. Chrysler won permission from a bankruptcy court to shed 789 dealers -- or 25 percent of its dealer network -- on Tuesday, and the dealers closed the same day.
"This has been the most difficult part of executing our plan: the human story of the people who are affected by the painful but necessary actions," Henderson said.
Press said closings are "gut-wrenching, but it was an absolutely necessary part of our effort to assure the long-term viability of the new Chrysler Group."
GM has sent letters to about 1,400 dealers it is seeking permission to close in bankruptcy court. The automaker expects another 1,280 dealers will voluntarily stop selling during the next year. Some of those include Saturn and Hummer dealers who will be off GM's rolls after the final sale of those brands.
GM has received 856 appeals from dealers it wants to close, and the company has reversed itself on 45. A total of 99 percent of continuing dealers have accepted agreements with the automaker; 96 percent of the 1,400 dealers that GM wants to close have agreed to a wind-down plan.
By contrast, Chrysler closed dealers just 26 days after it notified them of its plan. Chrysler offered no appeal process and no money to closing dealers.
GM is offering up to $1 million for each closing dealer as part of its wind-down agreements. GM also agreed to make changes to its agreements with its continuing dealers to win their support. While closing GM dealers will have until late 2010 to close, they will not be able to order 2010 model cars starting this fall.
Press noted that the average Chrysler dealer sold just 405 vehicles, compared with more than 1,200 for Toyota and Honda Motor Co. dealers. About half of the closed Chrysler dealers sold fewer than 100 vehicles each last year. The 789 dealerships accounted for just 14 percent of company sales.
GM said a majority of its dealerships are unprofitable.
Bankruptcy allows automakers to cancel unprofitable contracts. Dealers are normally protected by state laws. GM had to spend nearly $2 billion to buy out its Oldsmobile dealers after it discontinued the brand in 2004.
GM disclosed the state-by-state breakdown of 1,323 dealerships it plans to close by the end of the year -- including nearly 20 percent of GM's 298 Michigan dealers -- the sixth-highest in any state.
Alaska is the only state that escaped the ax.
Pennsylvania will lose 90 dealers -- the most of any state -- out of its 370 dealers. That's nearly 25 percent. The names and communities haven't been made public.
GM revealed the criteria it used in selecting closing dealers:
• 50 percent of the rating was based sales performance.
• 30 percent was customer satisfaction.
• Profitability and capitalization each counted for 10 percent.
Dealers whose score was less than 70 got termination notices.
Another 400 GM dealerships that sold 50 or fewer vehicles a year also got closing notices. Some selling non-GM brands lost their dealerships even if they had higher scores, as did dealers with brands that are being phased out, such as Pontiac. GM has given its surviving dealers until Dec. 31 to shed the other brands.
The testimony came before a House Energy and Commerce subcommittee chaired by Rep. Bart Stupak, D-Menominee.
A House bill introduced this week to reverse the closing decisions now has 105 co-sponsors, including House Majority Leader Steny Hoyer.
Dealers donate millions to members of Congress and carry significant political clout in Washington. The Obama administration is worried that the bill could gain steam and win passage.
House members emotionally defended hometown dealers.
Rep. Greg Walden, R-Ore., said the decision to close a GM dealership in Burns, Ore., will force customers to travel three hours and 136 miles to Payette, Idaho, to get to the nearest GM dealership.
"That's the equivalent of driving from Philadelphia to Washington, D.C.," Walden said, adding that the dealership closings could cost 190,000 jobs.
More: http://www.detnews.com/article/20090613/AUTO01/906130324/58+Michigan+dealers+axed
Exec gets into details as automakers justify closures to Congress
David Shepardson / Detroit News Washington Bureau
Washington -- General Motors Corp. disclosed Friday it will close 58 dealers in Michigan, as top executives from GM and the Chrysler Group LLC sought to explain the closings of more than 2,200 dealerships to a skeptical congressional committee.
During more than four hours of testimony, GM President and CEO Fritz Henderson and Chrysler Deputy CEO Jim Press defended their decisions to drastically pare back their dealer networks.
GM said reducing its dealers by up to 2,600 by the end of next year will save the company more than $2.5 billion a year. Chrysler won permission from a bankruptcy court to shed 789 dealers -- or 25 percent of its dealer network -- on Tuesday, and the dealers closed the same day.
"This has been the most difficult part of executing our plan: the human story of the people who are affected by the painful but necessary actions," Henderson said.
Press said closings are "gut-wrenching, but it was an absolutely necessary part of our effort to assure the long-term viability of the new Chrysler Group."
GM has sent letters to about 1,400 dealers it is seeking permission to close in bankruptcy court. The automaker expects another 1,280 dealers will voluntarily stop selling during the next year. Some of those include Saturn and Hummer dealers who will be off GM's rolls after the final sale of those brands.
GM has received 856 appeals from dealers it wants to close, and the company has reversed itself on 45. A total of 99 percent of continuing dealers have accepted agreements with the automaker; 96 percent of the 1,400 dealers that GM wants to close have agreed to a wind-down plan.
By contrast, Chrysler closed dealers just 26 days after it notified them of its plan. Chrysler offered no appeal process and no money to closing dealers.
GM is offering up to $1 million for each closing dealer as part of its wind-down agreements. GM also agreed to make changes to its agreements with its continuing dealers to win their support. While closing GM dealers will have until late 2010 to close, they will not be able to order 2010 model cars starting this fall.
Press noted that the average Chrysler dealer sold just 405 vehicles, compared with more than 1,200 for Toyota and Honda Motor Co. dealers. About half of the closed Chrysler dealers sold fewer than 100 vehicles each last year. The 789 dealerships accounted for just 14 percent of company sales.
GM said a majority of its dealerships are unprofitable.
Bankruptcy allows automakers to cancel unprofitable contracts. Dealers are normally protected by state laws. GM had to spend nearly $2 billion to buy out its Oldsmobile dealers after it discontinued the brand in 2004.
GM disclosed the state-by-state breakdown of 1,323 dealerships it plans to close by the end of the year -- including nearly 20 percent of GM's 298 Michigan dealers -- the sixth-highest in any state.
Alaska is the only state that escaped the ax.
Pennsylvania will lose 90 dealers -- the most of any state -- out of its 370 dealers. That's nearly 25 percent. The names and communities haven't been made public.
GM revealed the criteria it used in selecting closing dealers:
• 50 percent of the rating was based sales performance.
• 30 percent was customer satisfaction.
• Profitability and capitalization each counted for 10 percent.
Dealers whose score was less than 70 got termination notices.
Another 400 GM dealerships that sold 50 or fewer vehicles a year also got closing notices. Some selling non-GM brands lost their dealerships even if they had higher scores, as did dealers with brands that are being phased out, such as Pontiac. GM has given its surviving dealers until Dec. 31 to shed the other brands.
The testimony came before a House Energy and Commerce subcommittee chaired by Rep. Bart Stupak, D-Menominee.
A House bill introduced this week to reverse the closing decisions now has 105 co-sponsors, including House Majority Leader Steny Hoyer.
Dealers donate millions to members of Congress and carry significant political clout in Washington. The Obama administration is worried that the bill could gain steam and win passage.
House members emotionally defended hometown dealers.
Rep. Greg Walden, R-Ore., said the decision to close a GM dealership in Burns, Ore., will force customers to travel three hours and 136 miles to Payette, Idaho, to get to the nearest GM dealership.
"That's the equivalent of driving from Philadelphia to Washington, D.C.," Walden said, adding that the dealership closings could cost 190,000 jobs.
More: http://www.detnews.com/article/20090613/AUTO01/906130324/58+Michigan+dealers+axed
Buster
Well-known member
Well you can stop speculating as to how GM's Bankruptcy will go..
...here are the hard facts..
General Motors to close or idle 12 more plants...The closures will displace 18,000 to 20,000 GM employees, the company said.
http://news.yahoo.com/s/ap/us_gm_plant_closures
...here are the hard facts..
General Motors to close or idle 12 more plants...The closures will displace 18,000 to 20,000 GM employees, the company said.
http://news.yahoo.com/s/ap/us_gm_plant_closures
James48843
Well-known member
A couple reasons:
You are missing that the 26% who voted NO are likely the ones that will be losing their jobs entirely as a part of the agreement. The agreement includes permanently ending the employment of an additional 21,000 workers, and shutting down 14 more plants. That's on top of the job cuts announced earlier.
In 2007, there were 71,000 UAW workers who voted significant contract concessions, including a landmark agreement to relieve the company of the retiree health care burden, putting retiree health care into a VEBA run by the Union, instead of GM. The story then told to them was if they gave concessions then (in 2007), then they would be in a position to continue to have jobs, and there would be health care into retirement for them. It was a very big conession for them then, and they voted in favor of giving up concessions in order to save the company and move forward.
In 2007- GM promised to fund the VEBA with cash staring in 2009.
Guess what- It's now 2009- the cash is due , and GM has no cash, so no money for the VEBA.
Now there are only about 53,000 UAW workers left, and many of them felt betrayed by Union leadership in giving away retiree health care obligations in the 2007 contract. Now they are being told that these additional concessions are the only thing that will save the company. But the trade-off is all those who were laid off under the prior contract terms now will cease to be on the list for recall, and are flat gone. No retirement chances, no health care, no extra unemployment benefits. For a lot of people, that is one concession vote too many. Hence the 26% no vote.
Bottom line- for them, a yes vote would have been knowing voting to end their own jobs. Why vote yes when it means that your relationship with the employer totally ends? What is there to lose for them, for voting no? Nothing.
Make sense?
Last edited:
James48843 - You're my resident Union expert, so I'll pose the question to you. Concerning the UAW vote yesterday concerning GM, wherein 74% of the UAW folks voted in favor of an amended agreement with GM, my first inclination was to wonder why the other 26% didn't also vote in favor of it. On its surface it appears as if 1/4 of the UAW are a bunch of ingrates who would rather see the entire company go down in flames than compromise to enable both the company and the workers to survive to work another day. What am I missing here? What are the underlying issues here that would provide a reasonable explanation to someone like me who's looking into the situation from the outside, as to why the vote wasn't closer to 100%?
James48843
Well-known member
Time for a flashback.
The year was 1971.
Honda introduced it's very first car to the American Market- it costs $1,545.
And the first dealerships?
We should have known.
They were just outside Washington D.C.: at Rosenthals' Chevrolet/Honda in Arlington VA:
The year was 1971.
Honda introduced it's very first car to the American Market- it costs $1,545.
And the first dealerships?
We should have known.
They were just outside Washington D.C.: at Rosenthals' Chevrolet/Honda in Arlington VA:
Buster
Well-known member
No sense starting a NEW thread since it's the same topic...
Iacocca losing pension, and car in Chrysler bankruptcy
http://news.yahoo.com/s/nm/20090529/bs_nm/us_chrysler_iacocca
....May we have A moment of silence please
Iacocca losing pension, and car in Chrysler bankruptcy
http://news.yahoo.com/s/nm/20090529/bs_nm/us_chrysler_iacocca
....May we have A moment of silence please
KevinD
Well-known member
But (IMO) this ain't right no matter how you look at it.
Buffalo_Nickle
Member
I feel if the unions chops were busted at the facility i work at and people were paid less than area rate ..probably have a dramatic reactions as well., in reality which of the two is the biggest Sham?
