GM Following Studebaker? <link>

[DEEPNHOCK]

http://ap.google.com/article/ALeqM5j-xB2D6_18k0VIcC3328KT2bMzLAD91UIGE80

One line of interest in the article....

"GM said if it's latest, unoptimistic predictions hold true, it will have enough cash to sustain itself to 2010. But with no guarantee that the economic slump and U.S. sales downturn have hit bottom, the latest addition to a long string of restructuring efforts may not be enough to keep GM from going the way of Studebaker."

[BobPalma]

quote:Originally posted by DEEPNHOCK

http://ap.google.com/article/ALeqM5j-xB2D6_18k0VIcC3328KT2bMzLAD91UIGE80

One line of interest in the article....

"GM said if it's latest, unoptimistic predictions hold true, it will have enough cash to sustain itself to 2010. But with no guarantee that the economic slump and U.S. sales downturn have hit bottom, the latest addition to a long string of restructuring efforts may not be enough to keep GM from going the way of Studebaker."

Obviously written by someone with little understanding of what happened to Studebaker! Studebaker quit making cars and the corporation thrived and the stock went up! If GM quit making motor vehicles, what is left?

(But, as usual, why let the facts get in the way of a good story...?) BP

[4961Studebaker]

Us auto manufactures are moving out, and foreign are moving in. Chatanooga TN is getting a new Volkswagen plant, and Toyota just bought land in Brazil. With the super highway (NAFTA) and the railroad system that is getting ramped up by Kansas City Southern RR, we'll see how long before mass automobile manufacturing exists here in the US as a major industry.

Chop Stu

[JBOYLE]

quote:Originally posted by BobPalma

Obviously written by someone with little understanding of what happened to Studebaker! Studebaker quit making cars and the corporation thrived and the stock went up! If GM quit making motor vehicles, what is left?

(But, as usual, why let the facts get in the way of a good story...?) BP

Bob
I think you're taking it a bit to literally.
His intent is to compare GM to Studebaker, the last [u]major</u> (not Checker, Bricklin, De Lorean, etc.) U.S. car company (not division...i.e. Olds, Plymouth) to shut its doors.

All the public knows is Studebaker went away. Why, they're not sure...but even though [u]we</u> know the background on why Studebaker quit building cars, at the end of the day, they shut the auto divion because it was losing money...because sales weren't that good.

63 Avanti R1 2788
1914 Stutz Bearcat
(George Barris replica)

Washington State

[dictator27]

I read an article by an automotive analyst a while back in which he predicted that by 2012 there would only be a Big 2 in the US. He didn't go so far as to say which one would go down the tubes, though. Considering GM's current situation, maybe that is a lot closer to reality than we might like to think. He also said that by 2025, with the current trend toward mergers and acquisitions, there would only be 6 major automakers left in the world. I have no idea what he based that on, but he seemed quite sure of it. Thoughts?
Also heard recently that Alfa Romeo(read Fiat)is considering re-entering the North American market and is looking for a place to set up an assembly plant. I can think of a few empty GM plants they could look at!
Since GM has a lot of non-automotive divisions, what would happen to them if GM went down? Someone once said that if that happened 20% of the US workforce would be out of work. Scary thought.

Terry Godkin

[Dick Steinkamp]

quote:Originally posted by dictator27

Since GM has a lot of non-automotive divisions, what would happen to them if GM went down? Someone once said that if that happened 20% of the US workforce would be out of work. Scary thought.

GM has about 300,000 employees. The US has 300,000,000 people. GM's employees represent 1% of the population.

http://money.cnn.com/magazines/fortune/global500/2006/snapshots/563.html

Still a big number.

I guess you could add the employees of the suppliers of GM, and I don't know how many that is, but you would have to assume that all of those companies would also go out of business (doubtful). You'd also have to assume that the 10 million vehicles (plus non automotive stuff) that GM makes every year would not be replaced by other manufacturers and therefore not create any additional jobs.

[BobPalma]

quote:Originally posted by Dick Steinkamp

quote:Originally posted by dictator27

Since GM has a lot of non-automotive divisions, what would happen to them if GM went down? Someone once said that if that happened 20% of the US workforce would be out of work. Scary thought.

GM has about 300,000 employees. The US has 300,000,000 people. GM's employees represent 1% of the population.

http://money.cnn.com/magazines/fortune/global500/2006/snapshots/563.html

Still a big number.

I guess you could add the employees of the suppliers of GM, and I don't know how many that is, but you would have to assume that all of those companies would also go out of business (doubtful). You'd also have to assume that the 10 million vehicles (plus non automotive stuff) that GM makes every year would not be replaced by other manufacturers and therefore not create any additional jobs.

Easy, Dick; the 300,000,000 residents of The United States don't constitute the workforce. From that 300,000,000, you have to back out the retirees, the children, the non-workers, etc, etc., so the actual number available for work is much less.

Then, when you add the downstream people whose jobs would be lost if GM quit building cars and trucks in The U.S., you really do wind up with a large number...although I, too, doubt that it would approach 20% of the workforce.

I've often considered the downstream folks, many of whom subsist from paycheck to paycheck. How about hopeful immigrants running a little deli who depended on World Trade Center employees for their customer base before 9/11/01; those poor folks didn't just up and quit eating when 90% of their business was flattened one Tuesday morning!

(Or, more to the point, the proprietor of The Lark Inn across from Studebaker Assembly, whose patrons came to work to assemble Studebakers for the last time just before New Year's Eve in 1963!) BP

[dictator27]

I would have to admit that maybe 20% is out there somewhere, but as Bob suggests, the trickle down effect could take in a lot more people than might be expected.

Terry Godkin

[JBOYLE]

quote:Originally posted by dictator27
He also said that by 2025, with the current trend toward mergers and acquisitions, there would only be 6 major automakers left in the world.

Gee, I hope not!
They said the same thing about airlines 20-30 years ago and look what happened to that industry (aside from the current fuel cost problems).

Trouble is, you then got idiots at small airlines like America West believeing it, so they thought they had to grow to survive...and went from regional 737 service (just like Southwest's) to buying a pair of used 747s and flying to Hawaii...it turned out to be a big money
loser.

Moral of the story...you can do what you think is right and still mess it up.

63 Avanti R1 2788
1914 Stutz Bearcat
(George Barris replica)

Washington State

[studegary]

quote:Originally posted by Dick Steinkamp

GM has about 300,000 employees. The US has 300,000,000 people. GM's employees represent 1% of the population.


Still a big number.

I guess you could add the employees of the suppliers of GM, and I don't know how many that is, but you would have to assume that all of those companies would also go out of business (doubtful). You'd also have to assume that the 10 million vehicles (plus non automotive stuff) that GM makes every year would not be replaced by other manufacturers and therefore not create any additional jobs.


[/quote]

Dick S. - Before Guido chimes in, 300,000 is 0.1% of 300,000,000, not 1%.

Gary L.
Wappinger, NY

SDC member since 1968
Studebaker enthusiast much longer

[curt]

Has Ford made the ture, I thought Ford was in worse shape????.

[curt]

true - turn

[64 Stude]

As far as i have heard ford is hurting quite bad and worst then GM but Dodge is the one that is in serious trouble at the moment, iv heard that they are going to be getting rid of 1/3rd of there models to try and save themselfs. Its not looking good for the american automanfactures at all, just about every new car mag when they compair cars the american car is always worst... Not to long ago i read an artical that listed the 5 best vehicles for gas milage... the number 5 was a mini cooper which they sayed got 28mpg..[V] Now i can think of quite a bit of american vehicles that get better then 28mpg but not a single one was listed... Its a much of bs.

[556063]

Bob Lutz, who is in his mid 70's right now and still knocking heads in the business today as Vice Chairman, Product Development at GM, has some priceless one liners about the car business. He's the guy who put Chrysler back in business in the 1990's, and is responsible for the product comback GM is experiencing right now. You'd never know about that, because of the media bias that would like to see every American Automaker out of business ASAP. But GM is experiencing quite a comeback in passenger cars right now. Problem is, the profit margins aren't as high on cars as they are on trucks. GM as a corporation is quite healthy worldwide. The change in product demand in North America is hurting their North American Operations. The health of their worldwide operations is what eliminates the possiblity they will become like Studebaker.


A big factor hurting the stock price of American auto companies right now is that their large vehicles have dominated the large vehicle segment, and the future of that segment is in question due to the increase in CAFE to 35 mpg. Toyota and Honda sell mostly cars. The Big Three are still the choice for trucks. Since they may not be able to build or will have to dramatically raise prices on Trucks due to Congress's higher CAFE restrictions, it has the markets nervous. Those who need large vehicles for family or business reasons should make note of this now so you know why "what the heck happened?", happened, in the years ahead.

Anyway, my two favorite Lutz's past one liners have been:

"Once you see a scary movie five times, it doesn't scare you anymore."

"If it was the Honda Aztec, the Press would love it." (Lutz had nothing to do with the development of the Pontiac Aztec.)

He said yesterday at the GM Press Conference:

"I've spent most of my career reading in the papers that the company I work for is going bankrupt, and I'm tired of it."



Kevin Wolford
Plymouth, IN

55 Champion
60 Lark VI Conv.
63 Avanti R1

[8E45E]

quote:Originally posted by 556063
GM as a corporation is quite healthy worldwide. The change in product demand in North America is hurting their North American Operations. The health of their worldwide operations is what eliminates the possiblity they will become like Studebaker.

You have hit the nail on the head! Studebaker's problem was from lack of sales, outdated plants, etc. GM HAS the sales, and the plants, but not in North America, it seems. As you have stated, GM in Europe, Russia, and China is doing very well. And they've turned their Daewoo into a money-making operation. If they closed all their plants in North America, and 'imported' new cars from other countries, you can imagine the uproar that would cause![:0] But GM just might start making money again if they did that. They would only be following the lead of other American instituions such as Levis, Converse, Curtis Mathis, et al, but on a much grander scale!

Craig