Saturday, May 30, 2009

GM 'Money Back in 5 Years'--Really?

Gummint Motors is a 5-year payback for the taxpayer, according to Gummint.

The United States would recover most of its planned $50 billion investment in General Motors within five years, according to a preliminary Treasury Department estimate...

But according to others, .....meh.

Brian Bethune, chief U.S. financial economist for IHS Global Insight, called the assumptions "extremely optimistic" given the risks in the economy and the challenges facing the company...

Gummint Motors projects a 16 million-vehicle sales year in 2012 and that GM will only lose 1.1% in market share between now and then (Hummer, Saturn, and ??).

Calculated Risk has a graph which seems to show 15 million vehicles/year as the average since 1985.

The UAW contributed:

...the United Auto Workers ratified contract changes yesterday that will help General Motors cut more than $1 billion in labor costs. ...Under the deal, the union's cost-of-living increases, performance bonuses and some holiday pay will be suspended to offset health-care costs.

And a no-strike clause until 2015.

But as most people know, it isn't really the pay--it's the Rules. Generally speaking, "the Rules" govern who does what, when, and for how much on the floor; this severely reduces the flexibility of applying labor to the need, a key component of Lean Manufacturing under the Toyota system. What you have with 'the Rules' is built-in overhead cost on the floor in ADDITION to the GS&A overhead and design overhead.

1 comment:

Beer, Bicycles and the VRWC said...

Obese Fornicating Probability. Unlesss TCO and The Pelosi and No Balls Harry Ried require everyone to buy a GM car.