National News When you overpay employees to make crappy cars this is what happens...

[Army_of_One]

GM Posts Biggest Annual US Auto Loss
Tuesday February 12, 10:53 am ET
By Dee-Ann Durbin, AP Auto Writer
GM Posts Record US Automotive Loss of $38.7B for 2007, Offers Buyouts to Hourly US Workers


DETROIT (AP) -- General Motors Corp. reported a $38.7 billion loss for 2007 on Tuesday, the largest annual loss ever for an automotive company, and said it is making a new round of buyout offers to U.S. hourly workers in hopes of replacing some of them with lower-paid help.

The earnings report and buyout offer came as GM struggles to turn around its North American business as the economy weakens.

But GM Chairman and Chief Executive Rick Wagoner said that the company made significant progress in 2007, reducing structural costs in North America, negotiating a historic labor agreement and growing aggressively in Latin America and Asia.

The Detroit-based automaker said it was offering a new round of buyouts to all 74,000 of its U.S. hourly workers who are represented by the United Auto Workers.

GM won't say how many workers it hopes to shed, but under its new contract with the UAW, it will be able to replace up to 16,000 workers doing non-assembly jobs with new employees who will be paid half the old wage of $28 per hour.

Ford Motor Co. and Chrysler LLC already have announced similar buyout offers.

GM shares rose 24 cents to $27.36 in morning trading.

GM's annual loss of $38.7 billion largely was due to a third-quarter charge related to unused tax credits.

The 2007 loss topped GM's previous record in 1992, when the company lost $23.4 billion because of a change in health care accounting, according to Standard & Poor's Compustat.

Excluding the tax charge and other special items, GM lost $23 million, or 4 cents per share, for the year, compared with a net income of $2.2 billion in 2006, beating Wall Street's expectations. Analysts polled by Thomson Financial expected GM to post a full-year loss of 95 cents per share.

For the fourth quarter, GM posted a loss of $722 million, or $1.28 per share, in the fourth quarter, compared with a net income of $950 million in the year-ago quarter. Fourth-quarter charges included $622 million to Delphi Corp., GM's former parts division, for its restructuring efforts.

GM reported $181 billion in revenues for the year, down from $206 billion in 2006. Its automotive business saw record automotive revenues of $178 billion in 2007, up $7 billion from a year ago thanks to growth in emerging markets and favorable exchange rates.

GM was profitable in every region outside North America. GM's Latin America, Middle East and Africa division reported a record $1.3 billion in earnings, up 140 percent from 2006. GM's Asia Pacific division earned $744 million, up from $403 million in 2006, while GM Europe reported a profit of $55 million, down from a profit of $357 million in 2006.

But GM's North American division continued to struggle, posting a $1.5 billion loss for the year, nearly identical to its $1.6 billion loss in 2006. GM's North American division also reported a loss of $1.1 billion in the fourth quarter, compared with a loss of $129 million in the year-ago quarter.

Wagoner said the weak U.S. economy and high commodity prices hurt turnaround efforts in North America. He said GM's decision to reduce low-profit sales to daily rental companies by 110,000 in 2007 also affected U.S. sales.

"We're pleased with the positive improvement trend in our automotive results, especially given the challenging conditions in important markets like the U.S. and Germany, but we have more work to do to achieve acceptable profitability and positive cash flow," Wagoner said in a statement.

GM's results also were dragged down by its 49 percent stake in GMAC Financial Services, which lost $2.3 billion in 2007. GM reported a $1.1 billion loss attributed to GMAC.

GM barely retained its title as the world's largest automaker in 2007, selling just 3,000 more vehicles than Toyota Motor Corp. GM sold a total of 9,369,524 vehicles worldwide, up 3 percent from the year before.

[Highwayman]

When you overpay employees to make crappy cars this is what happens...

Yeah, but it will get you on the preferred Patriot Corporation list.

I've talked to Barack a lot about his Patriot Corporation Act, which is not trade per se, but it's certainly part of the economic package around globalization. The Patriot Corporation Act has not gotten the attention that I would hope it would. But, basically it says that if you play by the rules, if you pay decent wages, health benefits, pension; do your production here; don't resist unionization on neutral card check, then you will be designated a "Patriot Corporation" and you will get tax advantages and some [preference] on government contracts.

There is so much here that's profoundly objectionable. On card check, it's "patriotic" to support the elimination of the secret ballot in the workplace? It's "patriotic" to pay an employee $14 an hour, but not $13.83? Play by the rules? What does that mean?

The most striking offense here is the idea that the federal government would be defining patriotism, company by company. And if the federal government defines a company as a patriot, than it will be defining -- if only by omission -- the companies that are not patriots.

A terrible, terrible idea.

Government-Defined Patriotism

[Army_of_One]

Originally Posted by Highwayman

Yeah, but it will get you on the preferred Patriot Corporation list.




Government-Defined Patriotism

So they FORCE you to join a union (check card), manufacture your products here and pay at least $14.00 to be a Patriot Corportation?

We know unions typically vote Dem so that stinks already. Like you said what if my company is non union and I pay $13.00 an hour....Company A will get get preferred treatment. Personally I like globalized competition because as a consumer I win.

[Army_of_One]

and speaking of unions...The unions have finally priced themselves out of a job. GM is "buying out" 74,000 hourly workers jobs. Then they are going to hire people back to do the same job for half the wages. I wonder if this will be non union work? The automakers union has squeezed the automakers for more and more until they can't even come close to making a profit. When you pay employees way to much to make a piece of shit you can't sell then well.......you have the exact problems GM is having right now. They are literally starting over.