Tweet
GM's problem right now is that it has dished out too many retirement and health care benefits: it will spend around $5 billion this year alone on employee health care (~5% of its total revenue.) GM also has a ratio of 1 to 2.5 of active workers to retirees (420,000 total retirees) so it is having to pay pensions to all of them. On top of all that, Suburbans and other large SUV's are not selling due to high gas prices and models like the Cobalt and G6 aren't performing to expectations.
As of 2003 pensions and other post-retirement benefits accounted for 8.5% of GM's total liabilities. This is the BIG reason why the company is flopping around right now in the face of disappointing sales.
Pensions cost GM $8 billion in 2003, net income was $3.8 billion. Imagine what the company could do if they cut HALF those costs. Their biggest problem is that they won't negotiate with the United Auto Workers union (UAW) and re-negotiate all those pension and health care plans. The company is going through a lot of problems right now, but that doesn't mean there won't be a new Camaro in the next few years. Their strategy is to cut costs and try to sell more cars, while at the same time keeping development of new models on schedule. The Camaro is not the ONLY rumored GM rear-drive car to be in development. From what I understand there have been several others. Have patience, the way GM is going with these pension liabilities there may not be enough resources to make the Camaro unless measures like this are taken.
In response to the posts about keeping your f-body forever, being tired of them, etc: I will keep this car for as long as I can, I hope that is forever. There's a lot I can do for the car, and I'll be out of college in 3 years or so: that's not enough time for my Camaro to wear out, especially the way I take care of it. With the parents helping out on maintenance it will last. If you make a reasonable amount of money and want to spend it to keep the car looking and driving well then you will do it. Its all about how much the car MATTERS to you. If it has bad looking paint after ten years, has a failing transmission and some leaky seals, then you garage it and spend the money to slowly build it back up: get a new paint job, make it run well: what else are you going to do with it? Trade it in? Resale value on these cars is crappy. You can always get another car to drive around while the f-bod is down. People that don't keep their cars that they love either legitimately don't have the means or simply don't want to keep the car enough to spend money on it.
[ March 22, 2005, 06:15 PM: Message edited by: Camarorulz ]
As of 2003 pensions and other post-retirement benefits accounted for 8.5% of GM's total liabilities. This is the BIG reason why the company is flopping around right now in the face of disappointing sales.
Pensions cost GM $8 billion in 2003, net income was $3.8 billion. Imagine what the company could do if they cut HALF those costs. Their biggest problem is that they won't negotiate with the United Auto Workers union (UAW) and re-negotiate all those pension and health care plans. The company is going through a lot of problems right now, but that doesn't mean there won't be a new Camaro in the next few years. Their strategy is to cut costs and try to sell more cars, while at the same time keeping development of new models on schedule. The Camaro is not the ONLY rumored GM rear-drive car to be in development. From what I understand there have been several others. Have patience, the way GM is going with these pension liabilities there may not be enough resources to make the Camaro unless measures like this are taken.
In response to the posts about keeping your f-body forever, being tired of them, etc: I will keep this car for as long as I can, I hope that is forever. There's a lot I can do for the car, and I'll be out of college in 3 years or so: that's not enough time for my Camaro to wear out, especially the way I take care of it. With the parents helping out on maintenance it will last. If you make a reasonable amount of money and want to spend it to keep the car looking and driving well then you will do it. Its all about how much the car MATTERS to you. If it has bad looking paint after ten years, has a failing transmission and some leaky seals, then you garage it and spend the money to slowly build it back up: get a new paint job, make it run well: what else are you going to do with it? Trade it in? Resale value on these cars is crappy. You can always get another car to drive around while the f-bod is down. People that don't keep their cars that they love either legitimately don't have the means or simply don't want to keep the car enough to spend money on it.
[ March 22, 2005, 06:15 PM: Message edited by: Camarorulz ]
Comment