GM under?

[Texas Proud]

Congrat's Art, your one of the only people in the world that buys a car, trades it in after 6 months and makes money.

You are one smart guy.

In 35 years in the car biz I've never seen that happen.

My BIL did it ONCE... with a truck they really discounted a lot and it was a popular one that people wanted... I could not belive it either... I still think he got taken by the dealer...

 

[73ss454]

Art, I spent the last 20 years of my career at a Ford store and we could get all the V8 mustang GT's we wanted. The only ones that were at a premium were the Shelby's, and specialty mustangs.

You are diff. than I as I wan't to pay cash for a car as you say you wan't to put no money down. You also say that this will bury you in the car. I don't get it but if it works for you, great.

As far as not buying a new car with 30 miles on it, I don't understand that either.
Many of our cars were swaps from other dealers with mileage on them. They were also test driven so most of them had miles on them. Old wives tale you picked up somewhere.

 

[Texas Proud]

Well at least you've gone from saying you've never heard of it in 35 years to saying it's "nearly" impossible.
Again, I'm not suggesting buying new cars to flip, as an occupation. I'm just saying I've done it a few times. More often my goal was to merely get a new car without putting any money down and not burying myself. Of course, nowhere in my original post did I suggest doing it with a new car. I used to buy and sell old corvettes and mustangs and called them my savings accounts I could drive.
BTW, at one time the Jeep Grand Wagoneer was bringing over sticker and were sold in limited supply as "The Cowboy Cadillac" thus holding their value. And Ford has always kept a shortage on their V-8 Mustang GT's intentionally to hold up their value.

If you are saying they are USED... I can belive that... another BIL has bought some from someone that had to sell quickly... drove for a year or two and sold for what he paid.... so that is kind of like 'making a profit'...

 

[mike hall]

I don't believe they had that option when working the line. I'm not saying he was cheated. However, people so cavalierly discuss taking away the benefits these people earned. These people earned their benefits. It's a shame to think they might lose them while they're still alive.

The pensions that many americans are losing, were part of their total compensation for the work they performed for years. In many cases they were part of legal binding labor contracts. Then a BK judge takes them away in a ruling that takes 1 minute. IMHO it's no different that if a BK judge allowed the Mega Corp. to take back 50% of a person's 401K. That money came from compensation too. It's easy for some folks to be "cavalier" until the shoe is suddenly on their foot. Don't ask for whom the bell tolls....

 

[Art G]

Art, I spent the last 20 years of my career at a Ford store and we could get all the V8 mustang GT's we wanted. The only ones that were at a premium were the Shelby's, and specialty mustangs.

You are diff. than I as I wan't to pay cash for a car as you say you wan't to put no money down. You also say that this will bury you in the car. I don't get it but if it works for you, great.

As far as not buying a new car with 30 miles on it, I don't understand that either.
Many of our cars were swaps from other dealers with mileage on them. They were also test driven so most of them had miles on them. Old wives tale you picked up somewhere.

Sheesh, this thread has gone the wrong direction.
When I was with a Ford store, we could never get V8 Mustangs (which at that time were all GT's. I had a friend who was Fleet Manager at a Ford store until very recently and always told me the same. They could get all the four or six cylinders they wanted.
As to the mileage on cars. Yes it's true that some are dealer traded or have been sitting on the lot getting test driven. However, when they come off the truck, if they have miles, they've been re-routed. I've watched them pull cars off the line while viewing many a manufacturing plant, and been told as much from line managers.
If you want to pay cash for a car then that's up to you. However, I'd rather my money be working in the market (well, most of the time I would). I can hopefully make a heck of a lot more than the 4 or 6% I'm going to pay on that car loan, especially when I have no intention of keeping it 'til the end.

 

[al_bundy]

The pensions that many americans are losing, were part of their total compensation for the work they performed for years. In many cases they were part of legal binding labor contracts. Then a BK judge takes them away in a ruling that takes 1 minute. IMHO it's no different that if a BK judge allowed the Mega Corp. to take back 50% of a person's 401K. That money came from compensation too. It's easy for some folks to be "cavalier" until the shoe is suddenly on their foot. Don't ask for whom the bell tolls....

these people had laws passed that allowed them to walk off the job, with job security to "strike" for better pay and benefits. of course it never crossed their minds if the company would be able to afford these pensions.

 

[mike hall]

these people had laws passed that allowed them to walk off the job, with job security to "strike" for better pay and benefits. of course it never crossed their minds if the company would be able to afford these pensions.

what is different between that , and laws protecting or governing 401K's?? Not everone with a pension they earned through years of work had a right to strike.

 

[al_bundy]

in a 401k the employer makes a match and no more liability

in the case of GM and the Big 3, the UAW went on strike to demand the companies assume future liabilities that must be met from future sales.

 

[mike hall]

OK I get it you have something against the UAW. That's OK, but what about
pensions earned but then taken away from people who were not in any labor union? The employee (whoever, in whatever industry) provided services, and the pension was part of their compensation. It doesn't matter whether it is union or not, the result is the same. Other forms of retirement,
DC plans, 401K's whatever are governed by regulations and laws that in the future could meet the same fate.

 

[al_bundy]

where is the money going to come from to pay these pensions? that is the whole point.

 

[HFWR]

Oops, sorry... You were overpaid, underworked, and, well, we were just kidding about that pension... You understand, don't you?

 

[ziggy29]

OK I get it you have something against the UAW. That's OK, but what about
pensions earned but then taken away from people who were not in any labor union? The employee (whoever, in whatever industry) provided services, and the pension was part of their compensation. It doesn't matter whether it is union or not, the result is the same. Other forms of retirement,
DC plans, 401K's whatever are governed by regulations and laws that in the future could meet the same fate.

I understand where you are going with this, but there's a big difference. When a company provides defined contribution benefits (such as a 401K match), its future liability is essentially over. They take the money off the books as an expense for good. When a company assumes liability for a defined benefit pension for another year of service, the impact is also on *future* liabilities -- and what's worth, that "future" amount is unknown. It was that uncertainty -- combined with sometimes poor return in pension funds and people retiring earlier and living longer -- that made DB pensions (and retiree health insurance) a very dangerous promise to make.

It's already repeating itself in state and local governments.

I don't like that a company can just screw its workers by declaring bankruptcy. But then, to *some* degree the UAW and others were insisting that the goose lay too many golden eggs, and the goose's squawking about it largely fell on deaf ears. So I wouldn't say the union is getting what it deserves, but merely that it's a reminder that no amount of sky-is-the-limit future promises is any good if they are bankrupting the business that pays for them.

 

[glinka]

I was a UAW member for 38 years before retiring. I was always concerned that they were bleeding the company, GM, for stupid things that would only slow the company down. Things such as legal benefits, extra personal paid days off, family care, elder care, womans league, minority league and on and on. It reminded me of being part of a liberal socialize government. The UAW didn't take basic economics into mind. They were worried about profit sharing without any care as to profitability. But just like the government they never listened to most of the rank and file members, who only wanted to come to work and make a living. Most members knew their futures were tied into the company making money. The union didn't.

 

[FinanceDude]

As to the mileage on cars. Yes it's true that some are dealer traded or have been sitting on the lot getting test driven. However, when they come off the truck, if they have miles, they've been re-routed. I've watched them pull cars off the line while viewing many a manufacturing plant, and been told as much from line managers.

Once, I had a car come off the truck with 420 miles on it. Pontiac told me it was a "test track car". I called my zone rep, and he transferred it to another dealer. Having seen how "test track cars" are treated, I wanted no part of it.............

 

[CitricAcid]

To go along with the UAW discussion and to chime in with ziggy, the defined contributions such as 401k or 403b are being preferred over time by companies for this very reason. It gives much more clarity to their expenses and allows moer transparency in the costs of benefits they hand out, and once it has been given it is off the books, unlike pensions (/annuities) that are kind of loans taken against yourself in the future, putting yourself in a bind, but also allowing yourself enough leeway to save some present money and keep good workers. I am not saying pensions are bad, quite the contrary, it's just that many employers prefer the up-front no liability defined contributions that 401k offer.

Back to the issue, if the UAW or whomever was trying to force payments onto their constituency from Detroit's future sales, without understanding or compensating for future profitability or future sales, it seems reasonable that they might lose their pension. Either that or they loseit anyway when the car companies go belly-up.

 

[ziggy29]

I was a UAW member for 38 years before retiring. I was always concerned that they were bleeding the company, GM, for stupid things that would only slow the company down. Things such as legal benefits, extra personal paid days off, family care, elder care, womans league, minority league and on and on. It reminded me of being part of a liberal socialize government. The UAW didn't take basic economics into mind. They were worried about profit sharing without any care as to profitability. But just like the government they never listened to most of the rank and file members, who only wanted to come to work and make a living. Most members knew their futures were tied into the company making money. The union didn't.

IMO, it's a classic example of when labor-management relationship is seen as adversarial instead of as a symbiotic relationship. I think both the UAW and the management contributed to that adversarial feel to the relationship. And in reality, the long term success of the UAW and its rank and file could only be assured if the company is financially solvent.

One problem is that sometimes the UAW seemed to insist on sharing in the "upside" (when profits rise, our compensation rises with it) with none of the downside (we want no wage or benefits cuts when GM loses money). In other words, all of the reward with none of the risk. In a marketplace where risk and reward are joined at the hip, that's pretty hard to maintain.

I don't want this to sound like union-bashing, since management certainly made some tactical blunders (not just in labor relations but also in marketing decisions)... but IMO the writing on the wall with respect to long-term unfeasibility of DB pension plans and retiree medical was there for all to see, and both sides needed to work out a way to preserve what was already earned while considerably changing "the deal" in a way that GM wasn't continuing to add on a large amount of future unknown liabilities moving forward.

 

[CitricAcid]

IMO, it's a classic example of when labor-management relationship is seen as adversarial instead of as a symbiotic relationship. I think both the UAW and the management contributed to that adversarial feel to the relationship. And in reality, the long term success of the UAW and its rank and file could only be assured if the company is financially solvent.

One problem is that sometimes the UAW seemed to insist on sharing in the "upside" (when profits rise, our compensation rises with it) with none of the downside (we want no wage or benefits cuts when GM loses money). In other words, all of the reward with none of the risk. In a marketplace where risk and reward are joined at the hip, that's pretty hard to maintain.

I don't want this to sound like union-bashing, since management certainly made some tactical blunders (not just in labor relations but also in marketing decisions)... but IMO the writing on the wall with respect to long-term unfeasibility of DB pension plans and retiree medical was there for all to see, and both sides needed to work out a way to preserve what was already earned while considerably changing "the deal" in a way that GM wasn't continuing to add on a large amount of future unknown liabilities moving forward.

... sounds like the Massachusetts teachers union...

 

[Art G]

IMO, it's a classic example of when labor-management relationship is seen as adversarial instead of as a symbiotic relationship. I think both the UAW and the management contributed to that adversarial feel to the relationship. And in reality, the long term success of the UAW and its rank and file could only be assured if the company is financially solvent.

One problem is that sometimes the UAW seemed to insist on sharing in the "upside" (when profits rise, our compensation rises with it) with none of the downside (we want no wage or benefits cuts when GM loses money). In other words, all of the reward with none of the risk. In a marketplace where risk and reward are joined at the hip, that's pretty hard to maintain.

I don't want this to sound like union-bashing, since management certainly made some tactical blunders (not just in labor relations but also in marketing decisions)... but IMO the writing on the wall with respect to long-term unfeasibility of DB pension plans and retiree medical was there for all to see, and both sides needed to work out a way to preserve what was already earned while considerably changing "the deal" in a way that GM wasn't continuing to add on a large amount of future unknown liabilities moving forward.

Sounds a lot like major league baseball.

 

[CitricAcid]

... union workers are known to have much higher productivity in their contract years!

 

[Midpack]

I was a UAW member for 38 years before retiring. I was always concerned that they were bleeding the company, GM, for stupid things that would only slow the company down. Things such as legal benefits, extra personal paid days off, family care, elder care, womans league, minority league and on and on. It reminded me of being part of a liberal socialize government. The UAW didn't take basic economics into mind. They were worried about profit sharing without any care as to profitability. But just like the government they never listened to most of the rank and file members, who only wanted to come to work and make a living. Most members knew their futures were tied into the company making money. The union didn't.

I have made a career of managing union employees in a manufacturing environment. I can't begin to tell you how many times a good, honest hard working union member came to me to ask me why I couldn't protect him/her from their elected union. They went to union meetings, but sat quietly frustrated for the most part. I am sure there are exceptions but from my experience, mature unions are led by amateurs making false promises and they protect the bad actors and ignore most of the rank and file that make their existence possible. Management is not blameless to be sure, but neither are the unions. I especially liked, as another poster pointed out, the unions insistence on sharing the upside and none of the downside, whether they had anything to do with it or not. We get what we deserve, all of us...

 

[FinanceDude]

... sounds like the Massachusetts teachers union...

Sounds like ANY teacher's union............

 

[mike hall]

where is the money going to come from to pay these pensions? that is the whole point.

If the company was playing by the rules, the pensions are supposed to be funded to meet obligations, on an ongoing basis. These benefits are not
gifts from a benevolent company. The employees work to earn them, just as they do other forms of compensation.

 

[mike hall]

I understand where you are going with this, but there's a big difference. When a company provides defined contribution benefits (such as a 401K match), its future liability is essentially over. They take the money off the books as an expense for good. When a company assumes liability for a defined benefit pension for another year of service, the impact is also on *future* liabilities -- and what's worth, that "future" amount is unknown. It was that uncertainty -- combined with sometimes poor return in pension funds and people retiring earlier and living longer -- that made DB pensions (and retiree health insurance) a very dangerous promise to make.

It's already repeating itself in state and local governments.

I don't like that a company can just screw its workers by declaring bankruptcy. But then, to *some* degree the UAW and others were insisting that the goose lay too many golden eggs, and the goose's squawking about it largely fell on deaf ears. So I wouldn't say the union is getting what it deserves, but merely that it's a reminder that no amount of sky-is-the-limit future promises is any good if they are bankrupting the business that pays for them.

At one time people thought pensions were "untouchable" also. They are supposed to be funded on an ongoing basis. And why does this have to be about labor unions? It has happened to employees of all stripes.

 

[ziggy29]

At one time people thought pensions were "untouchable" also. They are supposed to be funded on an ongoing basis. And why does this have to be about labor unions? It has happened to employees of all stripes.

It's not ONLY about labor unions, but since (a) this thread is about GM and (b) most of the GM pensions and retiree medical benefits which are in question are negotiated by the UAW, it *does* become largely about unions. Don't look for union-bashing where none is present, though; this is just a matter of fact.

The other thing is that highly unionized businesses are mostly the last bastions of pensions and retiree medical. Most businesses that don't have union issues to be concerned with them have already frozen their pensions and many have already scrapped their retiree medical insurance. Many of the ones remaining who haven't, will soon.

These businesses have been able to free themselves from unsustainable future promises and businesses that haven't been able to do so become less competitive in relation.

So it is becoming more and more about unions, albeit indirectly. They have been the ones who have had the most success in getting these promises preserved. The ultimate cost to those businesses (and governments), in some cases, remains to be seen.

 

[mike hall]

OK, first you say it's not about unions, then you say it is. Have it both ways LOL! I don't have a dog in that fight. I understand the accounting issues, and it is obvious that DB pensions are dinosaurs, and will give way to DC retirement plans or 401K's. Many of us (me) started working before there was such a thing as an IRA, let alone a 401K. DB pensions were quite common, now they are being ruthlessly terminated by the Mega Corp's in BK. I'm just enjoying being a voice in the wilderness for the older folks who are getting scr%wed in the transition and don't have enough time left to recoup. When the DB pensions and healthcare are all gone where will the Mega Corp's turn in BK to get some quick cash?