Who let GM?

In three consecutive quarters of Ltd, at the end of 2005, the world's largest automakers General Motors stock has fallen to its lowest point since 23 years, the Global 500 companies ranked No. 5 in very large enterprises in 1992 the greatest panic. In fact, since 2001, GM's market share — and in its hinterland of the North American market began to continue to shrink, profits fall in line. By 2005, the General who had aspect for many years, no one can out of their right of automotive giant, as if suddenly hit an iceberg, it seems to have ceased to be a mighty battleship, but rather to be sunk in the Titanic.

What makes GM lost heading? big businesses: is it continuing? to Chinese enterprises ' mean?

Layoffs overwhelmed?

If you live in the United States, also happens to be in Detroit, you will be the envy of all. Because this means your work comfort, living up the Middle, there are generous pensions and health protection. If you happened to be in the General Motors (GM), your salary is $ 28 per hour ... Even the factory workers, which is admirable dream job.

But not long ago, this dream was mercilessly tear.

21 November 2005, GM's Chairman and CEO Rick · Wagner announced layoffs rules of General Motors: 2008 General will layoff before, 3 million people, closed 12 assembly plant, as well as spare parts warehouses, and other supportive factory, $ 100 million production capacity. General Motors has cut costs on a difficult step, this large-scale layoffs may just be a universal weight loss.

In fact, "three" (referring to the United States three major auto manufacturers: GM, Ford, Chrysler) enviable comfort treatment, have become a Detroit, in particular General Motors — the world's largest automobile manufacturer's nightmare. Layoffs, universal about employee 11.1 million, only in 2005, the company is serving staff, retired employees and their families pay for medical expenses, expected to reach $ 56. Since the common reported losses of pension and medical expenses caused by the huge cost of "legacy" has been considered one of the main reasons.

Worse, Universal's largest parts supplier Delphi on 8 October 2005 declaring bankruptcy. Although Delphi has moved from universal stripping out, but according to the original agreement, GM still has to assume Delphi employee welfare and pension of billions. This is like a heavy burden for the Universal is worse, and even some people think that down for Delphi is a generic term "lip cold gear dead."

That is the case?

United States Auto Workers Union (UAW) had never considered the cost of the "legacy" is a general loss of curse. They even think: Delphi's bankruptcy, is generic into the UAW negotiations weights of one. Delphi CEO openly stated: if universal cannot reach agreement with the trade unions, the General will step in Delphi's footsteps. While the general collapse in bankruptcy protection period reduced worker and retiree benefits, then the Union will face will be more unemployed workers, and they will lose more benefits and pensions.

October 17, 2005, in Delphi 9 days after bankruptcy, GM announced that it reached an agreement with the UAW, reach a lower healthcare costs of the interim agreement, GM retiree healthcare debt can be reduced by 25%, or $ 15 billion.

General description of a series of actions to reduce costs is Wagner "rescue plan," an important step in. However, layoffs and lightening never seems to really help too generic.

In 1992, the same encounter winter of General Motors will Scepter to Jack · Smith hands, the 40-year-old CEO closed the factory, the reduction of staff, to sell the unprofitable companies ... These seemed really worked, in the economic prosperity of the mid-1990s, General again began to profit. But from a historical point of view, except that a few years, the general sales still have been in decline. "In recent years General has been downsized, but did not get more competitive. "Maryland University Economics Professor Peter · Molly Crvenkovski said.

15 years ago due to workers on strike, GM signed an agreement with the UAW. In the existing labour contracts under the restriction of the fundamental right to the universal officially closed the whole factory. Even though generic let inefficient plant completely cut off, being implicated staff will still be able to enjoy the full amount of wages. For has been affected by the cost of the so-called "legacy" of General Motors, the layoffs may be severed survival. But since the 1990s, large layoffs to universal, is a common staff to keep three heavy burden of retired workers. The latest round of layoffs, can only make the problem worse.