General Motors [GM] announced today that they will be cutting about 30,000 US jobs and trimming about $7 billion overall to try to get profitable. [See story] A couple of thoughts from an outsider. I am no expert… but I can pretend to be one on my own site!
– This seems like a bandaid. The big problem in GM is pensions… massive pensions that hold the company back. Unless they can figure out a way to restructure the pension plans they cannot compete with companies like Honda and Toyota who have lower overhead.
– A brain transfer needs to happen. Here in Romeo we are surrounded by the brains of GM. Engineers who know are deep in knowlesge of the cars, history, design strategies, on and on. But they are also aging baby boomers. In the next 5-6 years, if GM doesn’t get real serious about transferring the knowledge, they are in big trouble when the brains start to retire and hand it over to a group of people under them that are ill-equipped.
– Michigan needs Toyota. [See story] The bottom line is that we have a highly trained workforce and a highly efficient delivery system here in Michigan. Michigan needs to do whatever it can to lure Toyota to build a plant here in Michigan that is union free and profitable.In doing so, this will put more pressure on the Big 3 to get their employee costs under control.
– GM would be protected. There is no reason to think that the government would allow GM to go under. More likely, the Big 3 will end up just like the airline industry… most of them losing money, in and out of bancruptcy, but kept afloat by the government because of the jobs provided and the goods delivered.
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