General Motors Death Watch 36: Wattsamatta U

general motors death watch 36 wattsamatta u

To paraphrase Bullwinkle J Moose: "Hey Rocky, watch Ricky pull a rabbit out of his hat!" On the very day when Rabid Rick Wagoner revealed that GM had lost $1.6b during the third financial quarter, The General's CEO announced that he'd cut a deal with the United Auto Workers (UAW). The long-awaited, deeply-desired agreement allegedly reduces the automaker's health care costs. Its announcement had an invigorating effect on the press ("Can UAW deal spur turnaround?") and GM's stock price (up $2.11). What's more, it's quelled the chorus of anti-Rick rumblings. How he gets away with this shit is beyond me.

First of all, the accord's exact details are secret. As of this writing, no one outside of the GM – UAW executive loop knows how this "historic agreement" will lop a claimed $3 billion a year from the automaker's health care costs. The most likely instrument is an increase to UAW member's health care co-pays, premiums and deductibles. Which is why Rabid Rick and union boss Big Ron Gettelfinger are keeping shtum; the UAW rank and file must OK the cuts. Say what you will about Big Ron's leadership, but there's a good chance his membership will tell him to take his increased health care costs and put them where the sun doesn't shine.

So what we have here is a tentative deal; as in a long way from done and dusted. Oh, did I mention that the $3b in savings are before-tax dollars? Give Uncle Sam his due and GM's economy shrinks to $1 billion per year. Hmmm. Let's put that in perspective. This year, GM shelled out $5.6b for its workers health care. So the theoretical savings represent, at best, a 25% reduction. With inflation in the sector running at 15%, you're actually looking at a savings of… 10%. Wow. No wonder GM camp followers believe salvation is at hand.

While we're at it, keep in mind that the General lost $1.6b this quarter after increasing sales by five per cent. (Yes, increasing.) That brings GM's total annual losses in the North American market, so far, to about $4.1b, with current sales dead in the water. If we're conservative and deduct another couple of billion from GM's cash reserves for a piss-poor fourth quarter, we're looking at a $6.1b loss for the year. So, if the UAW deal had been in place this year, GM would have lost "just" $5b. Oh, that's alright then.

Also, lest we forget, GM has this annoying habit of losing a billion here, ten billion there. Forbes writer Jerry Flint reckons GM has already pissed away some $21b on its foreign "alliances"– without figuring the cost of what else GM might have done with the cash. Shuttering Saturn, Saab or Buick (an idea whose time came five years ago) would cost GM billions more. Who knows what other billion dollar bombshells lurk in GM's future? While I don't make enough money to call a billion dollars chump change, forgive me for not considering a billion bucks the difference between life and death for The General.

But wait: it gets worse. Much worse. As you'd expect, the UAW's tentative deal was not a one-sided affair. Again, GM's concessions are shrouded in secrecy, but ye olde sources close to The General report that Rabid Rick agreed to assume Delphi workers' pension costs. Previously, GM had claimed that their liabilities to its former workers might be… nothing. Apparently, Rabid Rick will now ADD money to their pension fund, from the previously estimated high ball figure of $9b to a staggering $12b. What will THAT cost The General on an annual basis?

Alarmist? I don't think so. Anyone who didn't hear that Rabid Rick also announced plans to sell off a "majority interest" in GMAC is deaf. GM's finance arm is it: the cash cow. Sure, the estimated $10b in cash from the sale would see GM through the tough times ahead– right until it doesn't. Think of it this way: if GM is losing $1b plus per quarter NOW, with its factories churning-out HHR's and the like, how much will they hemorrhage during the inevitable Delphi strike, when those factories fall silent?

One person who won't remain silent for long is Mr. Las Vegas, Mr. 10%, GM investor Kirk Kerkorian. You may have noticed that we haven't heard a peep out Mr. Kerkorian's Tracinda Corporation since The Rick and Ron Show pulled the wool over the industry's eyes. Anyone who thinks that's because Rabid Rick's last minute UAW deal– sorry, tentative deal– has rescued his reputation underestimates both Mr. Kerkorian's business chops and the true extent of GM's union-related woes. It's only a matter of time before Rick's forced to say "Maybe I should get another hat."

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  • EBFlex "I've only filled the gas tank three times in 2500 miles"Assuming you went from 0 gallons to full (17.2), you have averaged almost 50MPG over those 2500 miles. 50 MPG in a Jeep Wrangler. To all of you EV nut jobs, tell me again how PHEVs are not the absolute best thing to happen to automobiles since the wheel. And tell me how they don't make EVs look like the awful play toys that they are.
  • MRF 95 T-Bird The Buick 215/3.5-liter aluminum V8 was one of GMs great engines. Unfortunately GM being GM in one of their greatest mistakes was selling off the tooling to BL. If they kept it around and improved upon it it would have been a fine motor for their compacts and midsize models through the OPEC oil crisis.
  • Chris P Bacon Not sure why a '21 is getting reviewed, because there have been improvements to the 4xe. I've got a '22 4xe Sahara. May 2022 build in High-Velocity yellow with a soft top. As soon as it was announced I knew I wanted to try it, not for the fuel mileage, but for the technology. I don't have a Level 2 charger, it charges fully overnight on the included Level 1. I see an indicated range of 27 miles regularly. Today it indicated 29 when I unplugged. I've only filled the gas tank three times in 2500 miles, a full charge costs me about $3 based on my current electricity supplier. I don't experience the rough transitions between electric and gas, so maybe Jeep figured it out? It's stupid fast when using all the power off the line. So much so that it will break the rear wheels loose when you stomp on it. I agree that plugin hybrids are the future. I see no need for a pure electric. This is the way to go.
  • RHD The word B R O N C O written in contrasting paint on the dashboard is quite unnecessary. The passenger certainly knows what kind of vehicle he or she is in. That detail is a big fail. The red and white Bronco looks great, especially with tires that have honest-to-goodness sidewalls on them.
  • Luke42 Aren't those trim levels just different colors of paint?That's what they sound like, at least. 🤷‍♂️