Cafe Ruling

[mc25t190]

Gm killed the engine plant that was planning to build the new Cadillac engines. Cafe requirements are trying to squeeze the new era of muscle cars just when we are all excited to get them back. Modern day muscle may get a tight squeeze. Not that it will affect what is already being built, but, future development of some of our old dream cars is sure to curb innovative ideas and development. That really sucks. Look at the last 2 years, Shelby, Corvette, Challenger, Camaro, will anything follow?

[YENKO DEUCE REGISTRY]

They can always build them elsewhere, this is what happens when there is excess capacity in their mfg. Not to sound like a 'beancounter', but generally when costs exceed revenue - you tend to go out of business!

[Unreal]

[ QUOTE ]
generally when costs exceed revenue - you tend to go out of business!

[/ QUOTE ]

I didn't think that was true in the auto industry. Seems like the big boys are always reporting losses!

[king_midas]

GM is a victim of it's own actions, and only has itself to blame in regards to the current status. Compare what was being made domestically to the rest of the world in 1980, and it can easily be said that Rip Van Winkle was at the corporate helm for a while...

Take the way-back machine 20 yrs. earlier to 1960, and GM didn't have a global market to worry about, and could make and sell what they pleased. At that point, the consumer was getting what the consumer wanted, which was exciting styling and performance, with little regard to economy or safety. Nash/Rambler had cars that get better economy in the 50's than the cars of today (whoa...), and also advertised safety, but guess what-- Nobody cared.

There is no reason that GM cannot produce exciting cars that are also fuel-efficient. It's called progress, and your post seems to go against it.

MB and BMW both have production diesels that have over 420 ft/lbs of torque from turbocharged engines that go 0 - 60 in 6 seconds, are 50-state legal, and already meet the fuel efficiency standards of 2025. This is in addition to other exciting offerings from the rest of the world-- We live in a global economy these days, if you haven't noticed.

It's called R&D, and R&D doesn't mean shoe-horning a Boss 429 into an engine bay that it doesn't belong in any longer.

Honestly man, not trying to start a fight here, but this could be THE BEST time for automakers to develop the most exciting products ever, while also positively impacting bottom lines and helping the overall economy, rather than bemoaning the "good ol' days" (which if they were really good is debatable), or loss of musclecars in general.

[YENKO DEUCE REGISTRY]

[ QUOTE ]
[ QUOTE ]
generally when costs exceed revenue - you tend to go out of business!

[/ QUOTE ]

I didn't think that was true in the auto industry. Seems like the big boys are always reporting losses!

[/ QUOTE ]

Very true. The current day net losses are booked to an account generally known as 'Retained Earnings'. That account is also where all the net profits have gone from prior years. So, if people ever wonder why GM has not gone under after the last several years, it's bec/ they have 'retained the earnings' from prior years to offset the current years of losses. Obviously, they can't continue at this pace, which is why companies in this situation have management shakeups, stock price volatility, debt reorg's, union contract 'discussions', executive compensation investigations, etc..... This is not an Enron situation, it's just a tough business to be in! My loyalties are still with the American auto makers though.

[COPO 70 RS/Z28]

I had read that GM's losses were mainly attributed to the US Market and that there overseas market share was increasing dramatically.

?????????

[ANDY M]

GM has offered a buyout to all 74,000 hourly workers. The current cost of union personnel is killing GM. I am NOT anti-union, but the UAW has been overpaid for years. When unskilled labor can make more money and get better benefits than most non-union skilled labor, something has to give. The money it takes to support all of the retired UAW people is killing the Big 3, not to mention the non-union workers.
GM hopes to replace the workers they buy out with lower paid new workers. The issue is money, not productivity.
Walter Reuther was quoted once back in the 60s as saying that the American auto industry was the only industry in the world that had to raise it's prices to stay competitive.

[mc25t190]

I was thinking more along the lines of them not developing new cars. I agree that they can have power and fuel economy. I just hope they don't stop what seems to have started with the production of these powerful cars. I understand the accounting, if it doesn't make sense, don't build it. I just hope this doesn't curb innovation of the design of cars. I know they can figure a way to build them with power and fuel economy, just don't slow down building them or creating them.

[Unreal]

I know in my little company, we spend 11 months trying to maximize profits, and then spend December trying to find ways to reduce them. (particularly in "non-cash" ways) Profit is what you pay taxes on; Cash is what you pull out to spend. So you want to minimize profit, while maximizing cash, which usually means a hit to the balance sheet (of little consequence, unless you are trying to borrow money, or sell the company)

[YENKO DEUCE REGISTRY]

'a hit to the balance sheet'??