The US Big Three automakers are having hard times.  And for GM, the biggest of the three, its terrible management decisions have come home to roost.

Here is what happens when management puts all its eggs into SUV's and pick-up trucks and ignores the warnings of economic, environmental, energy, health care, and labor union experts, to play ostrich and deny the facts.

From the NYTimes: "General Motors said Tuesday that it would reduce labor costs for salaried workers by 20 percent, eliminate its quarterly dividend and further reduce truck production to ensure that it has enough cash to finance its turnaround for at least two more years.

"The moves, which include selling at least $2 billion in assets and borrowing as much as $3 billion, are expected to raise about $15 billion by the end of 2009, the chief executive Rick Wagoner said.

"Mr. Wagoner said the automaker would stop providing health care coverage to salaried retirees at age 65, offer buyout and early retirement packages to reduce its salaried work force and freeze base pay for salaried employees through 2009.

"In addition, G.M. executives will no longer receive discretionary cash bonuses.

"Mr. Wagoner said G.M. would eliminate a total of 300,000 units of truck production capacity by the end of 2009, double the reduction it announced six weeks ago. The additional cuts will be achieved both by closing some plants sooner than previously plans and through other steps that he did not detail."

Speaking of health care coverage,  GM and other business leaders in Canada praise single payer, universal health coverage but in the US keep their mouths shut.

From Nieman Watchdog:  "Is it a wonder, then, that thanks to single-payer, the Big Three auto manufacturers produce a car in Canada for many hundreds of dollars less than they produce the identical car at home? DaimlerChrysler has supported single-payer. "A lot of people think a single-payer system is better," vice president Thomas Hadrych told The Washington Post in 2004. His counterparts at GM and Ford may agree but are mighty quiet about it. In the United States, that is. In Canada, however, GM and Ford executives love it, openly. In 2002, Michael Grimaldi, GM Canada's president and general manager, hailed it as "a strategic advantage for Canada."

 

"Grimaldi spoke to reporters after he, top Canadian executives of Ford and DaimlerChysler, and the president of the Canadian Auto Workers union signed a "Joint Letter on Publicly Funded Health Care." While providing "essential and affordable healthcare services for all," the letter said, single-payer "significantly reduces total labour costs...compared to the cost of equivalent private insurance services purchased by US-based automakers" and "has been an important ingredient" in the success of Canada's "most important export industry."

 

"For GM's and Ford's CEOs, here's a particularly compelling question for reporters—and shareholders—to raise: If single-payer is great for the auto industry in Canada, why isn't it great for the auto industry in the United States?"

 

Bullseye!  Why don't they and what's your answer Mr. Wagoner?