GM vs Honda
01-11-2006, 07:17 AM
#31
Originally Posted by Chris Stack,Jan 11 2006, 08:01 AM
Dude, read the two bolded sentances you wrote, put down the bottle of Jack, and yank your head out of your ass. Now go look up the words "revenue" and "profit."
Here's an extreme example:
I spend $1 million designing the sweetest, bestest, most wonderful carbon fiber hood eVaR! I did it using $4 worth of carbon fiber, and $2 worth of labor. Then I sell it to a pube-sniffing ricer for $8. Now, according to your logic, how much money do I "make" selling a carbon fiber hood?
A) $8
B) $2
C) ($999,998)
D) I don't know
Your answer of course, is D. GM's answer is B. The REAL answer, and the one that everyone else on the planet cares about is C.
Here's an extreme example:
I spend $1 million designing the sweetest, bestest, most wonderful carbon fiber hood eVaR! I did it using $4 worth of carbon fiber, and $2 worth of labor. Then I sell it to a pube-sniffing ricer for $8. Now, according to your logic, how much money do I "make" selling a carbon fiber hood?
A) $8
B) $2
C) ($999,998)
D) I don't know
Your answer of course, is D. GM's answer is B. The REAL answer, and the one that everyone else on the planet cares about is C.
Not sure of exact numbers, but GM is sitting on, let's say, a $10 BILLION dollar nut every year whether they sell ONE CAR or TEN MILLION CARS. The difference is, if they sell no cars, they lose $10 BILLION. If they build TEN MILLIONS cars, each car costing $10,000 in direct labor and materials and are able to sell those vehicles for $10,500, their net loss is ONLY $5 BILLION.
Remember, right now, GM has the Jobs Bank where if a worker is idled, they still get paid.
What GM needs to work on is that $10 BILLION dollar nut, but selling fewer cars isn't going to help them in the short-run.
01-11-2006, 07:24 AM
#32
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Not trying to add fuel to the fire...or take off-topic:
A few friends of mine who work for GM and Ford.
1.Fork lift operator (union) at Ford, now retired, last year of employment 1996 - earnings form salary, overtime etc. $102,000.
2.Current employee of Ford (union) - panel assembler for Explorer - $98,000.
3.Ford Specialized trade (union) - repairs Fork lift trucks - $146,000
4.GM plant (not sure what he does) he takes voluntary lay-off (union) for 6 months each year in the summer in which he receives 80% of his pay for NOT going to work.
5.Retired 1998 - Ford foreman Saline, MI plant in charge of 300 employees (not union employee) $114,000.
Unrealistic pay/salaries of union employees versus non-union and the protection they receive from the union seems to be a huge factor as why these two are having such problems. Kudos to the union in protecting their employees, but they must realize (soon) that they are contributing heavily to the financial woes of both Ford and GM.
I can only base my opinions/experience with people that I know who work for GM and Ford, both union and non-union. The UAW had a purpose many years ago, now it seems that the UAW is more about protecting the UAW and not protecting the employees of that union.
A few friends of mine who work for GM and Ford.
1.Fork lift operator (union) at Ford, now retired, last year of employment 1996 - earnings form salary, overtime etc. $102,000.
2.Current employee of Ford (union) - panel assembler for Explorer - $98,000.
3.Ford Specialized trade (union) - repairs Fork lift trucks - $146,000
4.GM plant (not sure what he does) he takes voluntary lay-off (union) for 6 months each year in the summer in which he receives 80% of his pay for NOT going to work.
5.Retired 1998 - Ford foreman Saline, MI plant in charge of 300 employees (not union employee) $114,000.
Unrealistic pay/salaries of union employees versus non-union and the protection they receive from the union seems to be a huge factor as why these two are having such problems. Kudos to the union in protecting their employees, but they must realize (soon) that they are contributing heavily to the financial woes of both Ford and GM.
I can only base my opinions/experience with people that I know who work for GM and Ford, both union and non-union. The UAW had a purpose many years ago, now it seems that the UAW is more about protecting the UAW and not protecting the employees of that union.
01-11-2006, 07:24 AM
#33
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Originally Posted by QUIKAG,Jan 11 2006, 08:10 AM
Chris, your comments about domestic lovers being oblivious to the fact that GM/Ford are going to have to make major changes to the way they compensate their labor is short-sighted. While, some Detroit boys are going to be storming mad when their $100hr salary/benefits package is slashed, it's reality and it's going to happen. They're going to have to deal with it.
My dad got fu.cked in the ass by Delta airlines where he was a pilot for 17 years, but luckily he bailed and got something before they went into bankruptcy. Trust me, I see both sides of this coin, Chris. It's a shitty deal all around, but it's reality.
All I hope for the rest of you is that you have a job that is unique and skilled enough that someone from Asia, Africa, or South America can't take it away.
My dad got fu.cked in the ass by Delta airlines where he was a pilot for 17 years, but luckily he bailed and got something before they went into bankruptcy. Trust me, I see both sides of this coin, Chris. It's a shitty deal all around, but it's reality.
All I hope for the rest of you is that you have a job that is unique and skilled enough that someone from Asia, Africa, or South America can't take it away.
BTW, until we start outsourcing the military, I'm not worried
And my future job will be in accounting/corporate finance (not doing other people's 1040EZs, I mean actual corporate accounting) where I'll be doing the outsourcing. I'm not dumb enough to outsource my own job 
01-11-2006, 07:30 AM
#34
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Originally Posted by Chris Stack,Jan 11 2006, 08:01 AM
Dude, read the two bolded sentances you wrote, put down the bottle of Jack, and yank your head out of your ass. Now go look up the words "revenue" and "profit."
Here's an extreme example:
I spend $1 million designing the sweetest, bestest, most wonderful carbon fiber hood eVaR! I did it using $4 worth of carbon fiber, and $2 worth of labor. Then I sell it to a pube-sniffing ricer for $8. Now, according to your logic, how much money do I "make" selling a carbon fiber hood?
A) $8
B) $2
C) ($999,998)
D) I don't know
Your answer of course, is D. GM's answer is B. The REAL answer, and the one that everyone else on the planet cares about is C.
Here's an extreme example:
I spend $1 million designing the sweetest, bestest, most wonderful carbon fiber hood eVaR! I did it using $4 worth of carbon fiber, and $2 worth of labor. Then I sell it to a pube-sniffing ricer for $8. Now, according to your logic, how much money do I "make" selling a carbon fiber hood?
A) $8
B) $2
C) ($999,998)
D) I don't know
Your answer of course, is D. GM's answer is B. The REAL answer, and the one that everyone else on the planet cares about is C.
There is no reason to insult. If I had a bottle of Jack with me I might like to enjoy some of it. Helps the cold.
Anyway, what I said was correct. I may not be careful with my terms but what I said was correct. Many people quote numbers like GM looses $X/car. That's only true as an average. Much like your hood example. You make a profit on each hood. If you sell none you loose $1m. If you sell 1 you loose $999,998. If you sell 10 you loose $999,980. Clearly you are better off if you sell more hoods.
The issue is can you make up the large initial cost. To make your example more accurate you need to toss in some sort of payments to something other than R&D and manufacturing. Say you're R&D is $10,000 but your rent is $100,000. You need to sell 5000 hoods before you have covered your R&D costs but you need to sell 55,000 before you would make a profit.
Now lets assume you signed a 30 lease on your building. Lets assume you can sell 20,000 hoods a year. You will loose money this year (20,000*$2 - ($1m + $10,000) = $-970,000) but you will loose less than if you decided to produce nothing at all. Of course an accountant would tell you to figure out how to lower your rent (long term pension cost, health care costs, labor costs), to make a more profitable item (increase profit per car), and increase sales (duh).
Yes, you can make money on each additional unit while still loosing money on average.
Please pass the Jack!
01-11-2006, 07:36 AM
#36
Originally Posted by Chris Stack,Jan 11 2006, 08:24 AM
I'm not talking about having their ridiculously fat paychecks cut, I'm talking about the 70 y/o retired guy having his pension drastically slashed or eliminated, and his health care go bye-bye. Everyone wants to say that driving a Civic instead of a Cobalt screws American workers, but what are they going to say when GM takes away the only income of retirees? When does it stop being Hondoyta's fault, and start being GM's?
BTW, until we start outsourcing the military, I'm not worried And my future job will be in accounting/corporate finance (not doing other people's 1040EZs, I mean actual corporate accounting) where I'll be doing the outsourcing. I'm not dumb enough to outsource my own job
BTW, until we start outsourcing the military, I'm not worried
And my future job will be in accounting/corporate finance (not doing other people's 1040EZs, I mean actual corporate accounting) where I'll be doing the outsourcing. I'm not dumb enough to outsource my own job So, that 70 y/o retired guy from GM better dust off his tennis shoes and head up to the local Wal-Mart (a whole different discussion) and apply for the greeter position. Life's a bitch.
Now, if everyone had bought Cobalts instead of Civics, GM might not have this problem, or at least the problem is delayed for several more years. But, invariably, it'll come.
Good career path, Chris. My job requires intricate knowledge and application of U.S. laws and regulations, specifically auditing and accounting standards set forth by numerous U.S. government agencies. I don't think my job is going anywhere either.
01-11-2006, 07:40 AM
#37
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Originally Posted by rockville,Jan 11 2006, 08:30 AM
Chris,
There is no reason to insult. If I had a bottle of Jack with me I might like to enjoy some of it. Helps the cold.
Anyway, what I said was correct. I may not be careful with my terms but what I said was correct. Many people quote numbers like GM looses $X/car. That's only true as an average. Much like your hood example. You make a profit on each hood. If you sell none you loose $1m. If you sell 1 you loose $999,998. If you sell 10 you loose $999,980. Clearly you are better off if you sell more hoods.
The issue is can you make up the large initial cost. To make your example more accurate you need to toss in some sort of payments to something other than R&D and manufacturing. Say you're R&D is $10,000 but your rent is $100,000. You need to sell 5000 hoods before you have covered your R&D costs but you need to sell 55,000 before you would make a profit.
Now lets assume you signed a 30 lease on your building. Lets assume you can sell 20,000 hoods a year. You will loose money this year (20,000*$2 - ($1m + $10,000) = $-970,000) but you will loose less than if you decided to produce nothing at all. Of course an accountant would tell you to figure out how to lower your rent (long term pension cost, health care costs, labor costs), to make a more profitable item (increase profit per car), and increase sales (duh).
Yes, you can make money on each additional unit while still loosing money on average.
Please pass the Jack!
There is no reason to insult. If I had a bottle of Jack with me I might like to enjoy some of it. Helps the cold.
Anyway, what I said was correct. I may not be careful with my terms but what I said was correct. Many people quote numbers like GM looses $X/car. That's only true as an average. Much like your hood example. You make a profit on each hood. If you sell none you loose $1m. If you sell 1 you loose $999,998. If you sell 10 you loose $999,980. Clearly you are better off if you sell more hoods.
The issue is can you make up the large initial cost. To make your example more accurate you need to toss in some sort of payments to something other than R&D and manufacturing. Say you're R&D is $10,000 but your rent is $100,000. You need to sell 5000 hoods before you have covered your R&D costs but you need to sell 55,000 before you would make a profit.
Now lets assume you signed a 30 lease on your building. Lets assume you can sell 20,000 hoods a year. You will loose money this year (20,000*$2 - ($1m + $10,000) = $-970,000) but you will loose less than if you decided to produce nothing at all. Of course an accountant would tell you to figure out how to lower your rent (long term pension cost, health care costs, labor costs), to make a more profitable item (increase profit per car), and increase sales (duh).
Yes, you can make money on each additional unit while still loosing money on average.
Please pass the Jack!
But my last post (before I saw yours) and your bolded quote says it all.
Losing Less Money =/= Making Money.
That is the fundamental point I am trying to make.
01-11-2006, 07:45 AM
#38
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Originally Posted by QUIKAG,Jan 11 2006, 08:36 AM
There are no guarantees in life, Chris. My dad was PROMISED full benefits upon retirement and my dad busted his a** for 17 years after putting 12 years in flying fighter jets for the Marine Corps. He was, and is, a highly talented, skilled, and dedicated employee. Delta just fu*ked him in the a** hard. That's life. Luckily, my dad didn't count on promises of corporations.
So, that 70 y/o retired guy from GM better dust off his tennis shoes and head up to the local Wal-Mart (a whole different discussion) and apply for the greeter position. Life's a bitch.
Now, if everyone had bought Cobalts instead of Civics, GM might not have this problem, or at least the problem is delayed for several more years. But, invariably, it'll come.
Good career path, Chris. My job requires intricate knowledge and application of U.S. laws and regulations, specifically auditing and accounting standards set forth by numerous U.S. government agencies. I don't think my job is going anywhere either.
So, that 70 y/o retired guy from GM better dust off his tennis shoes and head up to the local Wal-Mart (a whole different discussion) and apply for the greeter position. Life's a bitch.
Now, if everyone had bought Cobalts instead of Civics, GM might not have this problem, or at least the problem is delayed for several more years. But, invariably, it'll come.
Good career path, Chris. My job requires intricate knowledge and application of U.S. laws and regulations, specifically auditing and accounting standards set forth by numerous U.S. government agencies. I don't think my job is going anywhere either.
Are you a big 4 guy? I skipped that step with the military, hoping to make a smooth transition into a junior controller/treasurer type job in a medium company. Worst comes to worst, future brother in law is an estate planning attorney, if the economy really takes a dump, I'm sure he and I could go into business together. And there's always H&R Block
01-11-2006, 07:55 AM
#39
Oops, it was a loss. Over a billion dollars. Ok....
Let's make it more simple, divide a billion dollars of loss by the number of vehicles sold by GM in the last quarter.
Let's make it more simple, divide a billion dollars of loss by the number of vehicles sold by GM in the last quarter.
GM still managed to pull a profit per vehicle sold, what they were unable to do was overcome massive increases in fixed and non-fixed costs. Healthcare (they are the largest provider of healthcare in the states), pensions, etc.
Re: The Retirees. In many cases they don't deserve what they have, they should be aware of this. Life sucks, and I guess will suck more for them. They remind me of a retired 747 captain from United. His pension was just at 145,000 a year. When United went into bankruptcy they cut that down to ~40 grand a year. All the guy could do was complain and moan. Hey asshole, you had 25 years at an averge salary well above 100k a year to save -- did you really expect to get 145 grand a year to sit on your ass?
01-11-2006, 07:57 AM
#40
Originally Posted by Chris Stack,Jan 11 2006, 08:45 AM
No, obviously there aren't any guarantees. I just wonder if that hard fu.cking millions of retirees are about to get will be looked upon harshly by all the guys (like a ton of people on the Solstice forum) who say that buying Japanese is unAmerican. Or if they will continue to blame the Japenese and their customers.
Are you a big 4 guy? I skipped that step with the military, hoping to make a smooth transition into a junior controller/treasurer type job in a medium company. Worst comes to worst, future brother in law is an estate planning attorney, if the economy really takes a dump, I'm sure he and I could go into business together. And there's always H&R Block
Are you a big 4 guy? I skipped that step with the military, hoping to make a smooth transition into a junior controller/treasurer type job in a medium company. Worst comes to worst, future brother in law is an estate planning attorney, if the economy really takes a dump, I'm sure he and I could go into business together. And there's always H&R Block
Look, I don't fault people for buying the best product out there. Hell, I own two Japanese cars right now. I have also owned some Chevy's and a Pontiac (Vibe GT, which is actually mostly Toyota, anyway...) and the Chevy's I've owned (two trucks and a Vette) were awesome. So, I'm fairly unbiased. Though, a lot of people on this board shit on GM/Ford, etc. just because they're American car makes. That's stereotyping the past.
I was a Big 4 guy. Got a lot of experience and made the jump to industry a bit over a year ago. It's been great so far and I'm still learning a lot and getting to do cool things. You'll be fine, but I would recommend haivng the military pay for any additional education needed to get your CPA. That'll keep you out of the general accountant/bookkeeper ranks.
