There really are a lot of similarities....

mule_eer

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May 6, 2002
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Correct...all true Mule_eer. So why do we ask the taxpayers to subsidize their mismanagement?

You correctly point out, GM made a strategic decision regarding those legacy contracts. Their failure to invest just as you said, streamline their product mix, and restructure their manufacturing operations led to them bleeding red ink...

The "too big to fail" argument sets a dangerous precedent because it's not the Federal government's role to recapitalize every poorly run company no matter how big it is.

And as I pointed out to countryroads89, nothing was really solved. We just handed them a check to cover up their mismanagement.

Ford faced the same problem, but Ford refused to go crying to the taxpayers. Ford executives issued a challenge to company management.

Let's re think how we operate. Let's restructure our labor costs. Let's streamline our operations. Let's develop more exciting products which will make our company profitable.

Ford went to its dealers, suppliers, labor leaders, and investors with a remodeled business plan that emphasized better business practices and better products by renegotiating contracts, prices, retooling its machinery, and closing non productive operations.

Results?

Ford erased it's debt and become profitable in a very short time. Ford now builds products equal to or superior to its competitors, and Ford didn't take one dime from taxpayers.

That's the way to rescue a struggling company, and short of that you accomplish what Ford did through the bankruptcy laws or you simply fold up and go out of business.
Like I said before, I'm torn on the bail out. Bankruptcy may have been a good option too. It's hard to prove that now though. GM did make some significant changes. They cut some brands and significantly reduced the redundancy of their product lines. That was a positive outcome that has improved their profitability. They may have done the same in bankruptcy. I think the primary reason the government went the loan route was to keep GM, and possibly Chrysler, from unloading their pension liabilities onto the PBGC. That's a government corporation in the mold of the FDIC. It's not funded by our taxes. It's funded by the premiums it charges against defined benefit pension plans. Not bailing out GM and Chrysler likely meant that the government would have to bail out the PBGC to the tune of about the same amount.
 

MountaineerWV

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Sep 18, 2007
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Why do you do that? Every time someone clearly shows you are wrong, you continue to argue some stupid nonsense from a fake news site.

The government bailout was clearly the better option as I previously pointed out; creditors get repaid, retirees get their full pension and the federal government has been repaid.

It's an "I hate Obama" thing. Your life must be really miserable to have to constantly twist the truth and scour for fake news to justify your hatred for Obama. I feel sorry for you (I sincerely mean that, not just board smack).

What they hate is unions, or anyone attempting to help the "little man", they hate the minimum wage.....because in their world, we are nothing to them but employees.....who should bow before them and pray they give us an "honorable" wage and should just be happy we have a job.......while their executive buddies get multi-million $$$ golden parachute retirement packages.....all while they pull the health insurances and retirement benefits from the workers......
 

TarHeelEer

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Dec 15, 2002
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Were you aware that Henry Ford was awarded the German Cross, and I believe may be the only American citizen to have ever been granted that....just a little bit of history for some on here......

I was not aware of that. I thought the Rockefeller's had some ties to Germany, but wasn't aware of Ford. Interesting.
 
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Why do you do that? Every time someone clearly shows you are wrong, you continue to argue some stupid nonsense from a fake news site.

The government bailout was clearly the better option as I previously pointed out; creditors get repaid, retirees get their full pension and the federal government has been repaid.

It's an "I hate Obama" thing. Your life must be really miserable to have to constantly twist the truth and scour for fake news to justify your hatred for Obama. I feel sorry for you (I sincerely mean that, not just board smack).
And tell me countryroads89 why do you get to decide my opinions are "stupid"?

You certainly have that right, but that doesn't automatically make it fact.

I have an opinion that bankruptcy would have been better for GM in the long term both for the company and taxpayers.

It's OK to disagree with that, but why am I "stupid" for believing that?

What are the results?

Is GM "healthy"?

No.

Did the bailout "save" the company money or save taxpayers?

No.

GM remains mired in debt.

Is the company able to operate profitably?

Not really.

Those legacy contracts for older workers and funding their health care as well as pensions for their Family members will continue to place pressure on GM's bottom line.

The Federal government cannot afford to step in and "bail out" companies that are either run poorly or are hopelessly inefficient as GM was.

That's what the bankruptcy Laws are for, and if GM survives it will be in spite of that bailout not because of it.

Your opinions aren't stupid but you refuse to EVER concede that you may be incorrect or failed to consider an alternative view. It is really not fun to debate with you because you are never wrong.
 

atlkvb

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Your opinions aren't stupid but you refuse to EVER concede that you may be incorrect or failed to consider an alternative view. It is really not fun to debate with you because you are never wrong.

Yes I am...you Leftists just have a hard time proving it with facts. But if you point out where I'm in error (factually) I can accept that and I do.

The problem comes when you folks on the Left think your opinions are facts. That might work for you because you all are so emotionally driven by what you believe, but that doesn't work for me.

I need data, and at least a preponderance of the evidence or enough logic to see errors in what I believe or think.

That's something I find most Leftists have hard time accepting (facts & logic) especially when they challenge your emotional assumptions about reality.
 
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wvu2007

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Jan 2, 2013
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Bernie Sanders must Disavow the violence his supporters continue to be a part of.
 

mule_eer

Freshman
May 6, 2002
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Yes I am...you Leftists just have a hard time proving it with facts. But if you point out where I'm in error (factually) I can accept that and I do.

The problem comes when you folks on the Left think your opinions are facts. That might work for you because you all are so emotionally driven by what you believe, but that doesn't work for me.

I need data, and at least a preponderance of the evidence to see errors in what I believe or think.

That's something I find most Leftists have hard time accepting (facts) especially when they challenge your emotional assumptions about reality.
The issue is that we are all speculating on what the impact of going the bankruptcy route would have been. It might have been favorable in the long run, but it's purely speculation.
 

atlkvb

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The issue is that we are all speculating on what the impact of going the bankruptcy route would have been. It might have been favorable in the long run, but it's purely speculation.

I agree with that. For all we know, GM may have failed declaring bankruptcy. But that's life in the big Leagues. They may also have survived it and become a better company than they are situated today after the taxpayer funded bailout.

Ford made it. Many foreign manufacturers are operating profitably here (Toyota, Kia, BMW, Nissan, WV) so maybe GM would be in even better shape than they are now.

I know one thing, all of those other manufacturers I mentioned who are doing well making their cars here have one thing in common.

No Unions. (Nissan has a small local, but membership is optional)

That's why they are doing well in my opinion...in addition to the fact they're building great products that people want.
 

atlkvb

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What they hate is unions, or anyone attempting to help the "little man", they hate the minimum wage.....because in their world, we are nothing to them but employees.....who should bow before them and pray they give us an "honorable" wage and should just be happy we have a job.......while their executive buddies get multi-million $$$ golden parachute retirement packages.....all while they pull the health insurances and retirement benefits from the workers......

See this is the type of Leftist post that is loaded with emotion but not supported by the facts of economic reality in the free market.

Minimum wages are not driven by arbitrary numbers. They are based on the labor pool's worth in the free market (unless Government steps in and mandates wages higher than the labor is worth). When Government does get involved, it only makes labor more expensive and thus services cost more and the end result is less people with entry level skills can be hired and businesses that depend on entry level labor can't grow. (Small businesses drive more than half of our hiring)

Unions are fine, as long as they do not force the companies they depend on for their wages into fiscal insolvency. Again labor and wages are determined by an individual's net worth to the company, and that is primarily determined by how valuable the worker's skill sets are. Unions often demand arbitrary wages across the board for all workers regardless of an individual's competence or skills or productivity and that means less workers can be hired or those who are needed are often times paid more than their labor skills are worth. This puts pressure on the company's bottom line because without profits, no company stays open for long.

What is an "honorable" wage? when I delivered newspapers as a tyke I thought my 2.50 a week I earned in 1967 was "honorable". No one gave it to me, and I earned it. Yes that's not much money, but for a 10 year old kid who was essentially poor it sure bought a lot of penny candy for me every week. How hard is it riding a bike slinging newspapers? It was worth 2.50 cents a week, and I was happy to get it.

Executive compensation is based on many factors, but the bottom line is no one can arbitrarily set a limit on those remunerations nor should they. Executive management gets paid for the value they add to the company's bottom line. No one forces companies to offer their executives the compensation packages they do, and for some Leftists to come in and suggest they're being paid "too much" or their compensation packages should be "capped" is nothing more than jealously or pure State controlled Socialism.

It's the same thing with the company benefit packages. My company offers a generous benefit package in part because it helps retain good employees. The company rewards those employees who help it maintain its competitive position in the marketplace. Often times in the auto business, price pressures force Dealers to compensate their staff in other ways that don't immediately effect their cash flow...such as PTO(paid time off), Demos to drive home for personal use, discounts on personal purchases for parts or accessories, retirement insurance packages, and yes even health insurance. All of these things help Dealerships retain motivated productive staff but they are not required to offer these perks. It's part of the cost of doing business.

Now many of you on the Left will no doubt argue with my take on this, and that's fine. However in the business world raw hard numbers driven by the need to remain profitable so the business can grow dictate most decisions that are made.

When you are driven by emotions such as this poster displayed, is it any wonder we have such a hard time getting Government out of the business of dictating how companies are run based on emotional desires rather than on what they can afford to remain profitable?

This is why I have a hard time being talked out of my positions because in the Capitalistic free enterprise competitive business world I operate in, these are facts not opinions based on Leftist emotions of "fairness".

You Leftists get mad at me for not being easily talked out of my positions, but unless one of you can show me how any of this works economically any differently or even any better (say if you had your wishes and the Government ran everything) I'm sticking with what I know about how our free market economy operates best.
 
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atlkvb

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You wouldn't know a fact if it bit you in the ***.

You are the one that said GM wasn't making profits.

You can show me otherwise?

Post their last several quarter's proxy sheets for me, I want to buy some shares if they're making money.
 
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You can show me otherwise?

Post their last several quarter's proxy sheets for me, I want to buy some shares if they're making money.

Already posted their profits twice in this thread...you know the two posts where you were too embarrassed to acknowledge.
 

atlkvb

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You wouldn't know a fact if it bit you in the ***.

You are the one that said GM wasn't making profits.

They're making money but if you look at their overall financial picture they are not "healthy". Their operating profits are only a portion of the picture. I will admit they are "making money" but so much of that goes back into R&D, capital expenditures, paying off debt, Investors, funding legacy contracts etc. All of those things are funded out of their profits.

All of this goes onto their proxy statements for investors and THAT'S what ultimately determines if they can grown and remain profitable.

Companies and investors look at all of those factors countryroads89. Operating profits (linked) is only a portion of their overall financial picture.

But you are correct, they are at least making some money now and I'm happy for them but they are not "healthy" because their stock offerings are not increasing and that's because they are not long term profitable.


http://www.freep.com/story/money/cars/general-
motors/2017/02/07/gm-2016-profit-sharing/97572540/
 

atlkvb

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Already posted their profits twice in this thread...you know the two posts where you were too embarrassed to acknowledge.

Sorry been away. Haven't seen it. I just responded to your last post so let me go back and take a look.
 
Sep 6, 2013
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Their operating profits are only a portion of the picture. I will admit they are "making money" but so much of that goes back into R&D, capital expenditures, paying off debt, Investors, funding legacy contracts etc. All of those things are funded out of their profits.

Is the company able to operate profitably?

Not really.

You seem confused. You say they are making money but they are not operating profitably.



I have never claimed to be a financial expert or a business expert, but don't profits get calculated after all expenses are covered?

Anyone?
 

atlkvb

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Already posted their profits twice in this thread...you know the two posts where you were too embarrassed to acknowledge.


OK countryroads89 went I back and saw your your GM numbers and yes you are correct they did post record profits in 2016.

However if you go back and read what I posted I explained that they are not long term healthy nor profitable.

Let me try to explain why I said that.

Companies have both short term and long term financial reviews. For instance for a while they can carry debt (or take some on) to finance capital equipment purchases or expansion.

That doesn't mean in any one year they are losing money, it's just for that "snapshot" they are running an operating deficit vs revenues.

GM right now is showing decent positive cash flows on its operating revenues. These are monies left after their expenses are met.

However out of that money their investors must be paid, their debt must serviced, their legacy contracts and other fiscal obligations must be paid. Their profitability is based on what's left after those expenses are also met.

When I posted that they were not "healthy" in post #34 of this thread this is what I was referring to in terms of their long term health, which I've said in my opinion would have been better had they declared bankruptcy.

They have indeed shown some profits in the last five or six quarters, and they are currently beating expectations in 2017 which is good.

But GM's long term profitability is still very much in question because of the things I've mentioned in this thread that make up a company's total overall financial health.

But facts being what they are, you have correctly pointed out and I accept that they are indeed now making money and I sincerely hope they can keep it up.

If you heard me suggest they are losing money, you either misread me or you are putting words in my mouth because all I said is that they are not ''healthy" and they are not profitable (meaning overall long term health).
 
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atlkvb

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You seem confused. You say they are making money but they are not operating profitably.

correct countryroads89. Because their profitability is not determined by snapshots of their quarterly operating profits.

Companies often move into and out of debt. As I explained, they often take on some short term debt for long term gains. That doesn't mean they are losing money or are not profitable when that happens, it just means they are operating on some short term debt in hopes of improving their long their long term profitability.

Understand?
 

atlkvb

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You seem confused. You say they are making money but they are not operating profitably.



I have never claimed to be a financial expert or a business expert, but don't profits get calculated after all expenses are covered?

Anyone?

Yes, that is correct countryroads89. You correctly pointed out GM is currently making money, but they are still not long term profitable.

I hope I explained it to you in the earlier post. It is an important distinction that often gets lost when assessing a company's overall health which is what I was commenting on in relation to GM's financial picture after the bailout.

They still carry way too much debt, they still have way too much excess capacity in their operations, and they still have way too high labor and other fixed operational costs.

But as you pointed out, they are at least "making money" right now, and as I said that is a good thing.

The question is can they turn that into long term profitability?

(by the way I like that little Dude you posted questioning my analysis of GM's financial picture)
 

atlkvb

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As a generality, remember "expenses" do not include liabilities.

Yes, correct because they do not have to be addressed right away. However in terms of effecting a company's overall financial health they most certainly do factor into the price of shares and more importantly long term earnings on those shares.

Why?

Investors try to hold onto their stocks as long as possible to earn as much as they can on them. A company's proxy sheet indicates if a long term investment in that company will pay dividends on that share of stock and part of that analysis involves the company's liabilities (exposure) to long term debt financing or other fiscal obligations like pensions.

This is where GM is still not "healthy" as I've explained.
 

WVUCOOPER

Redshirt
Dec 10, 2002
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OK, so, are profits calculated after all expenses and liabilities?
No. Profits are calculated after expenses. Liabilities are to be paid in the future. They come from 2 different sections of a financial statement (liabilities are on balance sheet, expenses on income statement).

BTW, in no way am I commenting on GM - even though I'm pretty sure I own some GM.
 

atlkvb

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OK, so, are profits calculated after all expenses and liabilities?

After investors are paid, and all debt serviced, and all assets counted and balanced against all current and future obligations...THAT is their profitability.

Look at it this way country. Operating expenses first (labor, supplies, machinery) Capital expenditures next (this is why companies raise money in the stock market, so it can finance these operations) debt serviced and all other bills are paid (legal obligations etc) legacy contracts are funded, investors are paid, and what's left is the company's bottom line "profits".

Over a long period of time assuming the company is run well and those monies are properly invested in stocks and other assets....that determines if the company is profitable.

Countryroads89 is gonna go buy some GM stock now![winking]
 
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atlkvb

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No. Profits are calculated after expenses. Liabilities are to be paid in the future. They come from 2 different sections of a financial statement (liabilities are on balance sheet, expenses on income statement).

BTW, in no way am I commenting on GM - even though I'm pretty sure I own some GM.

Exactly Coop.
 

atlkvb

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Like I said before, I'm torn on the bail out. Bankruptcy may have been a good option too. It's hard to prove that now though. GM did make some significant changes. They cut some brands and significantly reduced the redundancy of their product lines. That was a positive outcome that has improved their profitability. They may have done the same in bankruptcy. I think the primary reason the government went the loan route was to keep GM, and possibly Chrysler, from unloading their pension liabilities onto the PBGC. That's a government corporation in the mold of the FDIC. It's not funded by our taxes. It's funded by the premiums it charges against defined benefit pension plans. Not bailing out GM and Chrysler likely meant that the government would have to bail out the PBGC to the tune of about the same amount.

All of this is true, however in my opinion the greater risk to GM was those long term costs associated with health care. Remember they don't just cover their Union members, those "Cadillac" contracts (pardon the pun) also pay for extended family members too.

What you say about the PBGC is certainly correct, but if GM had declared bankruptcy they would not be obligated to pay those contracts now.

They ostensibly could have offloaded those obligations either on the Government, or had them settled in bankruptcy court as their assets were sold off under reorganization and their long term financial health in my opinion would have been better than it is now carrying those obligations.
 

atlkvb

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The government bailout was clearly the better option as I previously pointed out; creditors get repaid, retirees get their full pension and the federal government has been repaid.

That of course is your opinion and you are certainly entitled to it. However in my opinion GM would have been much better off declaring bankruptcy (they still could have stayed open for business) unloaded their bad debt, reorganized, and been in much better long term financial health after having done so.

It's an "I hate Obama" thing

Again, that's your opinion. I don't "hate" anyone. I don't know Obama. I most certainly disagreed with his Socialist economic philosophy, and his lack of respect for America's place in the world. "Hate" to you on the Left is simple honest disagreement.

Your life must be really miserable to have to constantly twist the truth

I'm not sure what you think I'm "twisting" but considering you're on the Left I know I'm not entitled to my thoughts or even my opinions.

scour for fake news to justify your hatred for Obama

I never said one word about him except in response to this post. I said I don't "hate" him, I simply think he was a disaster for the country because his policies didn't work and caused more harm than good.

I feel sorry for you (I sincerely mean that, not just board smack).

Since you took liberties assessing my state of mind I'll return the favor to you. I think you hate me. You hate me because of the way I think, what I've expressed as my firmly held beliefs, how I express myself, and most importantly because I don't agree with you that Big Government is the answer to all of our problems.

In fact you hate me because I think exactly opposite of you about that (Big Government). I see it as the biggest impediment to our Freedom outside of our own ignorance. For that you despise me because you and the rest of the Left worship it (Big Government)

Just my opinion since you were so sure about who I hate. Now that I've told you what you really hate, take my word for it.
 
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