GM needs to be Railroaded

[Hypestyles]

Those who live in the state of Michigan bear some of the greatest burdens in light of recent events concerning the automotive industry companies. Indeed, the now-nationwide trend of closing factories and dealerships brings to light just how serious the crisis is. Now that the federal government, via taxpayer money, are majority stakeholders in General Motors, I feel that the engineering and mass-production/assembly resources at GM [[and if possible, Chrysler) can and should be used to help design and implement comprehensive mass-transit systems like high speed rail, light rail, and green-friendly alternative-fuel buses for use both regionally and nationwide.

Weren’t the auto factories refitted during World War II to build tanks and such? The American auto industry’s backyard of Michigan would be great to start pilot projects connecting cities with 21st century transit systems. It would be a means of bolstering America’s workforce nationwide and go a long way toward strengthening the economy. In the midst of public debate on what its restructuring means, I feel that there is a potentially missed opportunity not being explored.

Public Transit systems help lessen the overall fuel emissions made by the vehicles we drive. It also helps those who currently can't afford their own vehicle meet family, work and school obligations. Feel free to contact these elected officials about taking better advantage of GM bankruptcy and restructuring plan to directly address the shortcomings in America's transit issues-

Mr. Barack Obama, President of the United States
1600 Pennsylvania Avenue NW
Washington, DC 20500
www.whitehouse.gov

Mr. Ray LaHood, US Secretary of Transportation
U.S. Department of Transportation
1200 New Jersey Ave SE,
Washington, DC 20590

Mr. Matt Welbes
Federal Transit Administration
East Building
1200 New Jersey Ave SE
Washington, DC 20590
Dept. of Transportation website- www.dot.gov

[casscorridor]

EXCELLENT POST!!!!

This is the only way we're going to save those jobs. Obama needs to get past his "hands off approach" and dig his arms deep in GM to save those jobs, he needs to force them to retrofit the factories to start producing rail. As well as wind turbines and solar panels.

Right now, GM is not "nationalized" as Lou Dobbs and other pundits claim. The government is just a majority shareholder. It could, and SHOULD be nationalized. But don't let anyone tell you it is right now.

Nationalization could speed up this effort [[of tranforming the auto indstury), and ensure that not one more job is lost.

[Det_ard]

Please help me understand what you're proposing by clarifying a few things.

1. What are the size of the markets you refer to?
a. high speed rail
b. light rail
c. alt fuel buses

2. Who are the current competitors in these market? What share do they have?

3. What share in each market do you anticipate GM capturing?

4. What time frame will be required to obtain that market share?

5. How much additional investment is required to establish GM in these new market segments?

6. How many employees will be needed each year for each market segment?

7. How does that compare to their current automotive-based business plan?

8. What would you tell the employees at the companies that currently make high speed and light rail? Is it fair for them to have to compete against
a government-owned company? What happens to those employees if GM takes business away from them?

9. What profit margin can GM expect to earn in each market segment?

10. Would it be more effective to allocate those resources to the companies that already have expertise in these areas?

11. What should GM dealers do? Should they be expected to sell trains and buses?

12. Have you actually through this through?

13. Do you have any competence in this area?

14. How old are you?

15. Why aren't you aware that GM has been producing hybrid buses for several years already?

16. Are you kidding me?

[Stosh]

Thanks for thinking that through, det_ard. Not to mention that there's a general flawed thought process regarding Detroit's automakers and the WWII war changeover.

Also a whole thread that discussed the same thing, generally, in the Michael Moore thread.

[ghettopalmetto]

Det_ard,

You're right that some thought would need to go into such a process. As it stands, there are virtually zero manufacturers of railcars [[light rail or passenger rail) in the United States. Most U.S. transit systems purchase their vehicles from manufacturers Europe [[CAF, Siemens), Japan [[Kawasaki). Amtrak's Acela trainsets were manufactured by Bombardier [[Canada).

It is worth nothing, though, that Alstom has a shop in upstate New York that rehabs rail vehicles, as they are doing for the Washington Metro. CAF built a facility in Hunt Valley, MD, to assemble new railcars ordered by Metro. It reasons that these could be part of full-tilt manufacturing operations. The only sticking point is that we have yet to build sufficient transit networks to justify the capacity. I don't think you can rely on a handful of cities [[Boston, New York, Chicago, DC) to keep all the laid-off [[former) autoworkers employed building transit vehicles. Now, if states step-up and make a commitment to high speed rail and transit funding, that's a different story.

Your questions near the end of the list, though [["How old are you?"; "Have you thought this through?") indicate a level of petulance on your part. You took what seemed like a level-headed response, and changed it to a "HELL NO" platform in a heartbeat.

What's your proposal? Do you really think that we can continue forcing everyone to drive everywhere, for the sake of sustaining a domestic auto industry that can't tell its own ass from a hole in the ground? Or are you just a person who fears anything different than what you've known your entire life?

[Det_ard]

Dan, thank you for discerning my "Hell No" platform in response to the very poorly thought out original post. There's nothing wrong with transit or alt energy but it's so naive to think that GM should just be switched to new green business overnight and "Wow, we solved two problems at once." There may be an opportunity for GM [[or a thousand other companies) but it's better they make an informed albeit risky choice [[risky for them because they have little expertise in the transit market) to target a new industry than to have their square peg competencies forced into a round hole market. After all, we're hoping for a profitable GM for US taxpayers, not a flailing and failing one.

And thanks for your petulant paragraph at the end of your post. I've never expected any better from you.

[ghettopalmetto]

I agree that GM needs to be returned to profitability. But it seems that a big reason for GM's current scenario is [[drum roll) an unwillingness to take risks. How is remaining in such a comfort zone going to revamp the business plan?

If you aren't changing, you're falling behind your competitors. And then having the U.S. Government buy a 60% share in your company.

Some "blue collar" work ethic, Detroit.

[Det_ard]

How about they get the carmaking thing right before they start deworsifying? Do you really think anyone at GM is "remaining in such a comfort zone"? Pal, you haven't been around Detroit much the past few years. No one here is in any kind of a comfort zone. We're all facing such economic upheaval and uncertainty that every day may be the one when you walk out of work with a cardboard box and your coffee mug.

If you've got something to offer you're welcome to bring your entrepreneurial vision, business acumen and your capital and make a difference right here at ground zero.

[Mikeg]

Poorly thought-out initial post, indeed. It's easy to "blue-sky" an idea, it's quite a different thing to put a business plan around it and convince someone to invest their hard-earned money into it - unless it's someone else's money - like the taxpayers.

GM has retired almost all of the high-bay manufacturing plants which were built for the World War II and Korean War efforts and later converted to peacetime manufacturing. The modern auto assembly plants that GM is using have truss heights that are only 20 feet high. This is high enough to accommodate car/light truck assembly equipment and conveyors but not those needed for transit cars.

The only manufacturing processes and expertise that would be transferable are those involved with body building and interiors. The automotive powertrain and chassis equivalents for mass transit vehicles used to be found in GM's Electromotive Division, a business they exited in 2005.

Keep in mind that GM engineers both their new products and the manufacturing processes used to build them. During WW II, just about all of the non-truck military products they manufactured were designed by other companies, not GM. Also, the only way they were able to gear up for the war effort was to stop designing and manufacturing cars and light trucks and there is no way that the "new" GM could afford to to that today if they were told to get back into the mass transit business in a big way by their government overseers.

The number of engineers required to do multiple new automotive programs on a five year basis are more than would be required for a mass transit program that would be freshened maybe once every 10 years and the mass transit technology is low-tech by comparison to the amount of CPU power and electronic apps found in today's modern cars and light trucks..

I could go on and on as to why this is the last thing you would want GM to do if you ever expected them to make money so the taxpayers get their investment back, but it's probably a waste of time with this crowd.

[Det_ard]

Nice analysis as usual, Mikeg.

[detmsp]

GM needs to focus on making better cars more efficiently, not trying to learn entirely new industries. If someone else wants to use old GM/Chrysler plants to build light rail vehicles.... have at it buddy. it's not like they aren't for sale.

[nouthen]

I always find it funny when people think the government can do a better job...what have they ever run that was successful?

[casscorridor]

It is easier to argue to not do something than to do something.

I feel like all of these arguemtns against converting the auto industry to a more broad transportation industry [[or even broader to include wind turbine and solar panel manufacturing) are simply excuses. There is no real reason why this can't happen. With the government in control [[although we'll see if they actually assert this power, as opposed to letting the same execs that ran GM into the ground continue to run be in control), this process could be jumpstarted.

One of the key contradictions in Det_ard's post [[i'd like to reply to each point, but I don't have time right now) is the assumption that demand for mass transit infrastructure won't increase. We must have new deal of sorts in transit so that every major city has a mass transit system on par to the quality of New Yorks. We should all know that the return mass transit investment is huge. Current demand is low. New York and Chicago and a few other cities are the only mass transit systems that are anywhere near adequte so we have a long way to go.

Yes, we can solve two problems at the same time, maybe even more. I'm not going to let people crush my dreams with all these reasons why it won't work. Because when there is a will there is a way. I'll post more later. Gotta go.

[Bearinabox]

Yes, we can solve two problems at the same time, maybe even more. I'm not going to let people crush my dreams with all these reasons why it won't work. Because when there is a will there is a way. I'll post more later. Gotta go.

It doesn't help your credibility much when you bitch about random people on the Internet "crushing your dreams." If they're right, then your "dreams" wouldn't have lasted long in the real world anyway. If they're wrong, and you know it and can prove it because you've done your due diligence, then you have no reason to be bothered by criticism of your idea--in fact, you should welcome it, because it gives you a chance to expound on your idea and explain why it will work.

So quit whining and convince me. There is nothing I'd like to see more in this country than a mass transit revolution that creates jobs in Michigan, but you won't bring it about by duct-taping your critics' mouths and then hoping really hard that it happens.

[ghettopalmetto]

For all I care, GM can make widgets, as long as they return to profitability. This notion that they can continue to make trucks and SUVs, and that every American household will own 2 or 3 gas-hogging vehicles for the interminable future is fanciful and outdated. It's up to the management to finally get their shit together and come up with a realistic business plan, which includes a realistic wage and benefit scale for all parties.

If the leadership fails, I have every confidence that a Certain Representative of the Majority Shareholder won't hestitate to boot their heretofore useless asses into the gutter.

[shovelhead]

Not to be a fly in the ointment, BUT, General Motors did own until a few years ago,
Electro-Motive, a diesel locomotive manufacturing facility. In fact, they were one of the driving forces in the changeover from steam to diesel locomotives.

But with GM under the "brilliant" management of the last 30 or so years the decision was made to get out of everything but passenger cars. Bye-bye heavy truck, transit bus, heavy equipment, Detroit Diesel, Allision Transmission. Except for Bob Stempel, for a brief time, there has only been "bean counters" at the helm since the early 80's. And the Board of Directors rubber stamped every stupid move they could make. I blame the board as much as I blame the Chairmen, each one of them. Fritz Henderson, no blame on him, he is the janitor to clean the mess up. I predict he will be shown the door as soon as reorganization is completed. Scapegoat so to speak.

Why was the decision made to divest of these divisions dealing with mass transit? Short-sightness and the pursuit of profits for stockholders, artificially enhanced by a influx of asset sale funds in my opinion.

I know I'm off track here, but GM lasted through the Billy Durant years [[a roller coaster ride for sure), two World Wars and the Great Depression, to be brought down by mis-management by ineptness.

[gazhekwe]

The thing that is bothering me, and I admit it is still early on in the process, is that GM is closing and apparently mothballing 14 more plants. Are they intending these plants and the already closed ones to sit there deteriorating from neglect? Or is there some other plan for them? 14 plants plus the people that worked in them are a bunch of huge resources, with the workforce needing jobs, transportation in and out already available and also needing to be used, and parts suppliers that will be crying for work.

Why can't these be opened up for other purposes? GM could sell or lease the facilities rather than just abandoning them. Marketing to makers of other products, including innovative new products designed to lead in new directions could put money back into GM without them having to invest any. This could also advance the new direction sought for energy independence and green technology. We don't have to tell them what to make and how to make it from our home computer desk. There have been ample signals from the administration what kinds of new businesses are wanted. What we need to do is support those innovations to our representatives, senators and local leadership. Time for Granholm's business development czar, Gary Peters, L. Brooks and others to get together and start figuring out how to attract and support incoming businesses here and now.

There is a long history of just abandoning the buildings with no concerted effort to redevelop the resources. Time for that to change.

[Mikeg]

I feel like all of these arguemtns against converting the auto industry to a more broad transportation industry [[or even broader to include wind turbine and solar panel manufacturing) are simply excuses. There is no real reason why this can't happen.

They're not excuses, they are reality. The reason it won't happen is that no one is willing to lend GM the money needed to build new plants and tooling that can accommodate the manufacture of rolling stock - as I wrote earlier, you cannot build transit cars in most of GM's existing buildings because they only have a 20 ft clearance under the trusses.

As for wind turbines and solar panels, that would be a completely different line of business for GM, one that is completely outside their product design expertise and which would only detract from what they need to be doing right now - design and built the best automobiles they can and return to profitablilty.

....GM is closing and apparently mothballing 14 more plants. Are they intending these plants and the already closed ones to sit there deteriorating from neglect? Or is there some other plan for them?

The plan is to include all of them in the "old GM" [[only the "new GM" will emerge from bankruptcy within the next 60-90 days). All of the assets in the "old GM" must be sold and the proceeds used to pay GM's creditors. Whoever buys them can use those plants for whatever purpose they want.

[Retroit]

I don't think this is as unreasonable as some of you think. Obama already has said he wants high-speed rail. Light Rail and Alternate Fueled Buses fit right in with the environmentalist leanings of this Administration. Who better to construct these vehicles than GM [[or the Big3 in some fashion)? Build a new factory if the existing ones aren't tall enough. Detroit has plenty of vacant land. Why should we be dependent on foreign manufacturers?

shovelhead, you are right on track. American manufacturing started going downhill when the Harvard MBAs replaced the production engineers in upper management.

[shovelhead]

Do you really expect the Granholm Administration to do anything? Except try to line up a job for herself and the inner circle after her term is up, that's all I can see.

L.Brooks, I have more faith in him being able to attract new business to the county and the state.

On the subject of reuse of manufacturing facilities, I'm not sure of the viability and energy effeciency of reusing these structures. For one thing, the costs of heating and cooling and lighting these has to be atrocious compared to today's new "green" building codes. Look at the interior height of these structures, the are engineered for specialized conveyors, trolleys, lifts, cranes, etc. The more space, utiized or unutilized, the more costs to heat and cool. Not to mention the environmental concerns of ground pollution, lead based paints, asbestos and others.

For example, look at the sheer size of two of these facilities, the Wixom Assembly Plant and GM Powertrain, a.k.a. Hydramatic a.k.a. Willow Run Bomber Plant. Willow Run built during the early war years, Wixom, the mid 1950's. How much maintenance just to keep the physical plant in useable condition? And how large of a manufacturing facility would have to set up there to make it profitable? If Michigan could land some transplants here, at least they could re-engineer these plants to their type of vehicles built. But in this global meltdown, what foreign manufacturer is going to venture that kind of capital expendeture?

It almost seems in my opinion that after a reasonable amount of time the facility has to be either rehabed or demolished, but in GM and Chrysler's case, the money is not there. A Catch-22. How can you make them pay if they are broke? And I'll bet when the good GM is separated from the bad GM, the mothballed facilities become part of the bad GM.

I don't have the answers, GM surely didn't, I don't think the U.S. does either.

[detmsp]

Not to be a fly in the ointment, BUT, General Motors did own until a few years ago,
Electro-Motive, a diesel locomotive manufacturing facility. In fact, they were one of the driving forces in the changeover from steam to diesel locomotives.

But with GM under the "brilliant" management of the last 30 or so years the decision was made to get out of everything but passenger cars. Bye-bye heavy truck, transit bus, heavy equipment, Detroit Diesel, Allision Transmission. Except for Bob Stempel, for a brief time, there has only been "bean counters" at the helm since the early 80's. And the Board of Directors rubber stamped every stupid move they could make. I blame the board as much as I blame the Chairmen, each one of them. Fritz Henderson, no blame on him, he is the janitor to clean the mess up. I predict he will be shown the door as soon as reorganization is completed. Scapegoat so to speak.

Why was the decision made to divest of these divisions dealing with mass transit? Short-sightness and the pursuit of profits for stockholders, artificially enhanced by a influx of asset sale funds in my opinion.

I know I'm off track here, but GM lasted through the Billy Durant years [[a roller coaster ride for sure), two World Wars and the Great Depression, to be brought down by mis-management by ineptness.

Why they sold off those assets is VERY easy to see. GM's bread and butter business, building cars in NA, was hurting. A very key part to turning it around would be heavy investment into new [[and better) product. This costs lots of money... something GM didn't have much of. The reasonable business solution is that you sell off valuable assets to fund that heavy investment. Sure those assets would earn you more money over time... but you need the money NOW. And a sale yeilds you more money now than holding onto the assets and collecting the profits.

I said it once and I'll say it again... GM needs to focus on making better cars more efficiently. The idea that they need to get into other industries right now is ridiculous. That's like saying "I'm a math major and I'm failing because i've taken on too much... So i'm gonna drop calculus and differential equations to just focus on trigonemetry and algebra.... but i'm also going to pick up a second major in spanish."

[shovelhead]

In a rebuttal to a earlier statement about GM starting to build rail and busses. Even if there was no non-compete clause built into the sales/purchase agreement, the costs to re-enter these businesses would be astronomical. Time factor to acquire equipment, design and test product, then to secure a market. In other words, adding a new "player" to a already loaded field. There is only so many units that can be absorbed by the market per year. And with the current crisis, equipment replacement is being deferred until profits return. And you are going up against established companies, albeit you used to own them!

I previously [[last year) worked in what was supposed to be a recession proof business, commercial truck sales/service/parts. When in the space of two years, it would go from "Fix everything, yeah, replace the radio speakers too, they buzz, my driver complains, and put on a new driver's seat too, it's breaking down" to "Air conditioning's broke, too bad, he can roll down the windows, just repair what I need to pass D.O.T." this should tell you a lot.

[shovelhead]

And how many BILLIONS did GM toss away with Hummer, Saab, the creation of Saturn? That could/should of been used to improve the product lines they had? No, I don't buy the premise that they needed the influx of money for North American Operations. They wasted so much money on B.S. in the 80's and 90's instead of fixing the problems [[I speak from dealership experience, GM since 1970, from entry level to management level), don't even get me started. All I will say, it was for lack of a better description, Wow the customer, no substance to what we do.Or, dazzle them with brilliance, baffle them with bull****.

GM went to centralized design staff in the early 70's taking the responsibility away from the division level. This led to brake and suspension systems heavy duty enough for a Cadillac being used on a Chevrolet. And Pontiacs looking like Cadillacs and Oldsmobiles etc. And engineering decisions made on whim, like 2K dollar brake master cylinder/brake boosters for W bodies, intake gaskets failing [[personal experience, 3 sets in a 3.4L engine in less thak 50K) and more. And the hits just keep on coming.

[detmsp]

And how many BILLIONS did GM toss away with Hummer, Saab, the creation of Saturn? That could/should of been used to improve the product lines they had? No, I don't buy the premise that they needed the influx of money for North American Operations. They wasted so much money on B.S. in the 80's and 90's instead of fixing the problems [[I speak from dealership experience, GM since 1970, from entry level to management level), don't even get me started.

OK, so GM wasted a bunch of money in the 70s, 80s and 90s.... and that makes you think that surely they didn't need money in the last decade? That's like saying "i knew a guy who used to blow money on all sorts of stupid crap... how the hell did he ever end up broke?"

[shovelhead]

I agree that in last last decade money became the issue. But it's like the guy that will not add a quart of oil to his engine because he wants to buy a beer instead. So next week, it's two quarts low. Instead he decides he'll wait until payday. On payday, he decided to wait because it's raining. Next week , the engine starts knocking, now he needs to spend a few thousand on a new engine.

If he had taken care of the small issue, it would have been a small expense. Now, big issue, big money.

I can name at least two programs that GM started for dealership personnel that lasted not even a year. How many millions did these cost? Let's not even go there.
A few million here, a few million there, soon you are talking about real money.
Buying Saab and Hummer, starting Saturn, then killing off Oldsmobile. Why wasn't Oldsmobile "reborn"? Because the perception "old". Well, the marketing people won again. Or did they?