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Don't think so.
Lewenzas public comments [in your link and the other articles] is among other things an indirect or implicit comment: that GM declining the money is not a good sign.
The further sales drops if anything make closing down in Canada more likely. Personally, I can't see them giving up that top of the line flexible car plant in Oshawa. And presumably they'd keep option the re-opening of that [unlike the trick plant which is gone for good]. But who knows these days.
At any rate, no the sales drop news is not going to make them more desperate for that Canadian bailout money.
you'll notice Lewenza has stopped urging the governements to do something. Its beyond their help.
Personally, I don't think complete close down in Canada is that likely. my guess is that Lewenza is making sure the membership takes this seriously... get them ready for the deep concessions.
I have heard the comment that the reason why GM is 'too old' and should close is specifically because of all its pensioners, which the imports don't have. If the company goes bankrupt they can reopen those agreements.
I was trying to remember though, I guess CAW didn't assume most of those pension liabilities last contract like the UAW did in the States?
Ford is no different. And they can't just walk away from those pensions with bankruotcy. They don't really have any more leverage for pushing benefits down than they already have.
GM doesn't want bankruptcy [management would all be the first out on their ass]. And a bankruptcy only in Canada would be no go- even if they shut everything down here.
Things are getting more critical.
The UAW has broken off talks with GM. That happens, but the deadlines are harder here.
No plan, and GM goes into bankruptcy. And if any one of the union, bondholders, and/or government does not agree, its bankruptcy.
I'm guessing the UAW must have decided that what they are expected to agree to around pension [non] funding, the alternative of bankruptcy is not enough worse to get them to agree.
Brief newswire story today says that GM is considering bankruptcy- but there's no news in what I saw.
They are definitely not going to meet the government deadline of Tuesday. There was some wiggle room on that, but maybe not if they are too far from agreements in this 3 party negotiation [4 when you count guesses of what the Obama government will accept and can get Congressional approval on any changes to the bailout terms].
Updates on the US bailout process.
UAW balks at proposals to change funding for retiree health care
http://detnews.com/apps/pbcs.dll/article?AID=/20090214/AUTO01/902140414/1148
GM, UAW talks break off; Chrysler talks stall
http://www.autonews.com/apps/pbcs.dll/article?AID=/20090214/ANA02/302149978/1128
GM, Chrysler rush plans
http://detnews.com/apps/pbcs.dll/article?AID=/20090214/AUTO01/902140356/1148
Some new information out there on the speculation in the opening post where this might leave the Oshawa GM car plant.
So last year the giant GM Oshawa truck was toast. The hope for Oshawa car is that the plant is much upgraded for "flexible manufacturing", and is geared to the smaller cars central to GM's retrenching plans.
In the first place, much more so with GM that other companies, that word "plan" requires BIG quote marks. They pursue them as if they are plans, but there is a lot of bluster to them. They are, or were, all predicated on using the remnants, or what GM still think remains, of "we're the biggest best most advanced and do the most".
So it is [was] still about 'busting through' their problems on all fronts. Even when they talk 'more focused' and not trying to do everything- their "plans" were at best seen in the industry as ambitious.
A year later and ambitious is gone. The creditors and US government just aren't going to by that. And they must be internally admitting by now how untenable it was even if conditions had been better. Whether they have or they haven't is moot. That is definitely not a go any more.
The problem with that gem of a technological plant at Oshawa car is that it has never been much utilized. The models slated for it change and have not materialized [part of those evre changing "plans"]. The bottom line being GM doesn't have completely designed and marketed product that the plant is most efficient at.
The bread and butter that keeps the plant going is the Impala. As well as knowing that GM has great hopes for that plant, another thing that made it seem a keeper even in these ever worse times is that the Impala has been both a big seller and pretty profitable.
BUT, the Impala is also the kind of model duplication that everyone agrees has to go at GM. It's profitable with lots of incentives that cost, and it canabalisez sales of the Malibu that is agreed to have one of the best futures of GM products.
And whatever GM management may have wanted to do [or not] anyway they MUST show the US government where they are reigning in their do everything tendencies that even they do not deny kills the company's remaining chances.
For example, the Saturn division is still profitable and has stable sales [which is more than you can say for]. But it does that at the expense of other GM divisions. So the consenus seems to have come around [even noises from GM] that Saturn is going to be closed. [And that is all-American production.]
For what its worth, it would be my guess that unlike the majority of assembly plants, Oshawa car has a future even if it does end up being shut down.
And for that matter, my guess would be that it is very likely that GM management would kill the Impala if it felt a need to offer sacrifices, but because of its profits slate the end of production far away... and bring in ad hoc delays later.
Becaue my interest is in what the big automakers are doing with electric vehicles I have payed less attention to GM. [The Volt is all flash for GMs "big plans". Publicity to show how they've changed. The image and sizzle to sell smaller cars (little detail they don't have these small cars yet). Technologically and substance wise the Volt is just a glorified hybrid with a lot of PR.]
So I'm not at all clear how much production GM has in Canada besides Oshawa car. I'd like to hear from others about that.
But it does seem like there isn't a whole lot more to Canadian GM production than Oshawa Car.
I think GM would be tempted to put GM Canada into a seperate bankruptcy. Get away from union contrct obligations, bondholders, and contractural obligations to dealers [which are sizeable].
BUT, Oshawa Car has value in holding on to. Right now people are not buying ANY vehicles- even the mid sized and small ones. Which was the last straw for survival plans of the troubled North American manufacturers.
That not buying ANY cars comes as no surprise to a minority in the industry. North Americans trade in their new cars at a ridiculously early rate. Thats pure consumerism, not necessity. so guess what happens when times get tough.
That trade in time had already been getting longer. So deep recession or not, and even if a huge sector of the population does not get back even close to earlier purchasing power for many years, it will not be that long beofre people are buying a lot of small and mid sized cars.
GM is going to want to keep Oshawa Car. Or in the worst case scenario: seel it or prodice cars for other companies.
I don't see how they can keep Oshawa Car if they seek protection from creditors. They only get that by showing how they are going to continue operations. And without Oshawa Car building cars GM Canada would be a shell company. [Many would say it already is. But what a judge thinks is what matters here.]
It might be worth mentioning at this point that the entirety of GM is now worth just one billion dollars.
http://money.cnn.com/news/newsfeeds/articles/djf500/200902201622DOWJONES...
Isn't that something? GM's stock hit its lowest price in 74 years on Friday!!
You know, Canada could nationalize GM (the whole company) by just buying it for a mere $1.2 billion (that's only $40 per Canadian).
If keeping GM around for the purpose of saving jobs is a key objective, now's your chance to just buy GM and it's yours to do with what you like!!
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Eleutherophobics of the World...Unite!!!
Then let it go bankrupt.
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Eleutherophobics of the World...Unite!!!
True - but unless you're willing to walk on $50 billion (US) in retirement benefits the ultimate cost is going to be a lot more than that. [That figure was before the market meltdown so I'm sure it's a lot bigger number now.]
And that doesn't take into account the fact that the company is still losing money hand over fist so you can expect to pour even more money into the beast in order to keep it running. Of course, if you actually expect it to reach the point of self sufficiency you're going to have to cut a lot of employees and negotiate some pretty tough deals with those that are left.
That's absolutely true. It's a dire picture.
Because GM is probably not viable economically as it is currently structured, bankruptcy is probably the solution (either reorganization or complete liquidation).
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Eleutherophobics of the World...Unite!!!
This is rich irony (from the Detroit News): "Among the eight members named Friday to the Presidential Task Force on the Auto Industry and the 10 senior policy aides who will assist them in their work, [only] two own American models."
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Eleutherophobics of the World...Unite!!!
Agreed fully. Not a pretty picture for suppliers, employees (active or retired) or anyone else.
Not surprising. I personally haven't owned anything made by the Big 3 since my student days and I don't think I'm unusual - as a point of fact if you're going to buy a "foreign" car if you spend even a few minutes chatting with the mechanics at the dealership most of them will happily tell you what model and/or trim package to buy to be sure your car comes off the boat from Europe or Japan.
Yeah, I haven't bought an "American" car for a long time. I just have a lot of loyalty to "Japanese" cars (they are "Japanese" in label only because a large percentage of them are built right here in North America).
I'm old enough to remember how absolutely shitty cars were in the 1970s (and earlier). It would be unusual for a car to last long enough to reach 100,000 miles (and, if it did, it was nothing but a rust-bucket skeleton on wheels). The Japanese came into this market and build reliable, long-lasting vehicles. I'm part of the generation that started purchasing Japanese vehicles at that time and, as often happens with satisified customers, I have returned time after time to purchase Japanese vehicles ever since then.
Today, I think that "American" car quality is fairly close to "Japanese" car quality—but if a person looks at Consumer Reports, the "Japanese" cars still out-perform comparable "American" cars.
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Eleutherophobics of the World...Unite!!!
As of the close of the market yesterday, GM's market value has since dropped further to less than $1.1 billion.
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Eleutherophobics of the World...Unite!!!
Bail it out, let it go bankrupt, they will both be expensive to the public purse... let alone all the indirect costs.
Its not even clear that letting GM go bamkrupt has the virtue of cutting the losses sooner.
"Too big to be allowed to fail" in many ways is a misnomer.
More like "so entwined and pervasive that when/if it goes down, who knows where and when the bottom of the damage will be.
Duck.
How does one "rescue the workers" while letting the company fail? If the company fails, management, debt holders, shareholders, suppliers, and workers are all going to lose.
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Eleutherophobics of the World...Unite!!!
Yeah...what's stunning is that GM is saying that even with the additional billions of dollars in bailout money that GM is now seeking, GM will have to cut 47,000 more jobs!!
Given the tanking market for cars (something like a 60% drop?!?), the biggest threat to GM, at the moment, is its unfunded pension liability. GM simply cannot pay the pension liability with the low level of sales it now has.
My guess? GM will enter bankruptcy, the quasi-government U.S. Pension Guaranty Corporation will take over the pension (and pay a fraction of the pension dollars promised to retirees), current labor contract will be tossed out, and GM will emerge from bankruptcy a mere shell of what it was twenty (or even ten) years ago--all to the benefit, of course, of Toyota.
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Eleutherophobics of the World...Unite!!!
GM looks like its about to writhe in death throes.
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Eleutherophobics of the World...Unite!!!
There undoubtedly were strings attached to the money (and there should be).
But, sometimes "strings" are more like chains.
There is a large bank based here which received several hundred million dollars last November in TARP funds. The government has now, post hoc, added more regulatory "strings" to the TARP funds and the bank, this week, announced it is going to give the money back because the medicine is worse than the disease.
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Eleutherophobics of the World...Unite!!!
From The Atlantic ("GM is Toast"):
"It's time to stop talking about keeping GM out of bankruptcy, and start talking about what measures might be necessary to keep GM as a (smaller) going concern rather than outright liquidation."
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Eleutherophobics of the World...Unite!!!
Well, duh!
Don't expect the writer to know anything about the industry. But if he/she doesn't, at least some elementary research is called for. [Like reading what you can find in the business pages.]
GM is trying to be a smaller company, desperately. The trick is HOW. The writer also seems to confuse bankruptcy and liquidation. Even a cursory reading of what goes by the eyeballs these days would tell you they are not the same thing.
Actually, liquidation is a form of bankruptcy (a subset of bankruptcy, if you will). I'm sure Canadian law is similar to U.S. Federal Bankruptcy Law, which basically is: A debtor can file "Chapter 11" bankrupcty (which is a reorganization) or a "Chapter 7" bankruptcy (which is liquidation).
Almost all bankruptcy filings are made under Chapter 11. The issue is that if the Chapter 11 proceedings are not successful, then they will lead to Chapter 7 bankruptcy (liquidation).
Circuit City, for example, originally filed for Chapter 11 bankrupcty. But, CC was unable to arrive at a satisfactory deal with its various creditors and no third party was willing to purchase CC. So, CC's Chapter 11 bankruptcy converted to a Chapter 7 bankruptcy and CC is being liquidated at this very moment (and 30,000 employees have or will lose their jobs).
I think in GM's case, if something isn't done soon, there is a real danger of liquidation. But, my guess is that if GM files for Chapter 11 bankruptcy, GM will do it relatively soon and many of its contracts will be voided (including labor contracts) and that may give GM sufficient financial flexibility and strength to avoid liquidation.
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Eleutherophobics of the World...Unite!!!
Personally, I'll be amazed if GM isn't in bankruptcy within six months.
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Eleutherophobics of the World...Unite!!!