29th Sep 2010, 11:39
Wrong. Ford is taking in billions in profits and GM has already repaid the government loans and is also turning a VERY healthy profit. Stock sales are returning the government's investment in GM stock and will result in a nice profit for U.S. taxpayers. On the flip side, the news this week revealed that the car sitting on lots the longest before sales was the problem-plagued Toyota Camry and the vehicle moving off dealer lots the fastest was the well-built and redesigned Chevy Equinox. The revelation of poor quality, shoddy build practices and disdain for the consumer is finally catching up to the Japanese auto industry. And it's about time.
29th Sep 2010, 00:06
In a strange twist, the unions allowed the domestic auto companies to build overseas factories because they were counting on profits generated there to support their future pensions and health care benefits.
Profits are used to fund development of new vehicles, which then provide more jobs in the future.
Ford, GM and Chrysler all got into positions where they had to abandon certain categories of cars, because they had no profits to fund their development. Same for new engines. But the unions preferred to get money sooner, and did not care that new vehicle development was strangled.
Also, do not forget that many of the auto workers are shareholders also.
That being said, I also am dismayed at some of salaries being paid to CEOs and board members across many types of industries. And some of the bond holders of GM were getting some outrageous payouts. They interviewed some of them on the network evening news programs, with them being absolutely clueless to the fact no one was sympathetic to their whining, when they had already pulled out way more money than they invested, and they were expecting the money to just keep rolling in.