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GM Bankruptcy; A question
Tweet Topic Started: Jun 1 2009, 10:11 AM (524 Views)
brumdog44 Jun 9 2009, 07:12 PM Post #46
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Even bigger problems with ISTA now. About 40 employees will be laid off and there is investigation as to whether or not something shady happened with the former director of the Insurance trust fund.

It has yet to be determined with if something other than risky investments has led to a $67 million shortfall. It hit the papers today that the ISTA representative assembly is going to meet and ask for an increase in union membership. Currently the portion of union dues going to the ISTA is $449 (out of about $650 total dues). If there is a significant increase, I fully expect to see a big drop in membership that will offset the increased dues they recieve.

So what happens if that happens? The main watch dog of the TRF will be gone. We already know that left to their own devices, the state of Indiana will not pay their fair share into it.

Long term, if the ISTA goes down, you will be looking at the American Federation of Teachers or one of the other minor unions come into place. And then you are talking about a real bulldog group, a trade union that is part of the AFL-CIO. You would see an increase in teacher strikes while at the same time legislatures going unchecked in terms of bad educational legislation.

NCLB has made strange bedfellows...the ISTA and superintendent's and school administration have largely been on the same side in fighting against illogical legislation. But with only the teacher's unionized, it has fallen on the ISTA to fight the battles with superintendents and administration having to watch from the sidelines. In the old days, it was usually union pitted against administration...it has now turned into union and administration against state government.

At the center of the current shortfall is the funding of a now-defunct long term disability program the ISTA had. There are 650 Indiana teachers on this program and insurance rates have been jacked up...and the ISTA is unable to find a new vendor that will accept them with the pre-existing conditions.
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Mr Gray Jun 9 2009, 08:27 PM Post #47
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Brum, I am very proud of our state for standing up to this robbery on behalf of people like you. What affect do you think this will have on the predominately democrat voting teachers in 2010 & 2012?
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The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism.
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brumdog44 Jun 9 2009, 09:17 PM Post #48
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aaronk2727
Jun 9 2009, 08:27 PM
Brum, I am very proud of our state for standing up to this robbery on behalf of people like you. What affect do you think this will have on the predominately democrat voting teachers in 2010 & 2012?
Not much...the big effect right now is only on Indiana teachers, who chose to become a secured investor in Chrysler. This most likely was a joint decision of the Indiana government and ISTA and as stated was supposed to be limited in risk.
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thePhilosopher Jun 10 2009, 09:11 AM Post #49
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Jun 9 2009, 06:19 PM
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Jun 9 2009, 09:55 AM
I disagree with your conclusion, Brum. Whether we can stomach economic downturns or not, we're going to face downturns like this one and much more severe depressions in the future if we don't follow Ron Paul and Austrian economists and change our ways. This involves repealing the Fed, restoring sound money, drastically cutting gov't programs, and reduce the trade deficit by actually producing things. Now, easier said than done, right? But to say that we just don't live in a Ron Paul market misses the point, I think. I think you're correct in your assessment of our current economic reality, but that's the road to ruin! What we want are real economic solutions, and those can best be created by folks like Ron Paul and defenders of a truly free-market. A nominally "free" market won't do anymore, unless we want to be a third world country, which is where we're headed in a half a century (if not sooner!).
My conclusion isn't on what SHOULD happen, but rather what WILL happen.

Lars -- the 55/23 cent are the numbers based on what the TRF would have recieved under the agreement rather than the amended agreement the government and Chrysler put in place...that is, secured investors would have recieved 55 cents on the dollar in the particular case of Chrysler's bankruptcy rather than 23 cents on the dollar in the case that was negotiated with the government. The numbers are given for this case only.

If the law had been followed, the TRF would have recieved about 55 cents on the dollar rather than about 23 cents, when secured credits were given less priority. There isn't a law that says 'secured investors recieve 55 cents on the dollar;' rather, under the given law and Chrysler's financial situation, that is the approximate amount that the TRF would have recieved.
Let me clarify. I don't think the leadership will come to its senses and realize that the bailouts and gov't intervention is all for not. If this is what you mean by "what will happen," I agree. However, whether we like it or not, the global market forces will not allow us to act like we are indefinitely. I think there will be a change, and it will be either voluntary or we can fight it all the way, but our economy is headed for a serious downturn for the foreseeable future.

Thanks for your informative updates, btw.
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Mr Gray Jun 11 2009, 07:48 AM Post #50
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http://www.news-sentinel.com/apps/pbcs.dll/article?AID=/20090610/NEWS/906100332

Quote from this article: "GM said its 6,000-dealer network is antiquated with many dealers competing with each other in close proximity, driving down prices."
:banghead: :banghead:

Am I in fucking bizarro world all of a sudden. Now competition driving down prices is a bad thing? Yeah, I can see why we wouldn't want the industry to move more cars and the consumer to save more money during a recession. Once again....WHAT THE FUCK IS GOING ON???
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The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism.
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boilergrad01 Jun 11 2009, 09:07 AM Post #51
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Jun 11 2009, 07:48 AM
http://www.news-sentinel.com/apps/pbcs.dll/article?AID=/20090610/NEWS/906100332

Quote from this article: "GM said its 6,000-dealer network is antiquated with many dealers competing with each other in close proximity, driving down prices."
:banghead: :banghead:

Am I in fucking bizarro world all of a sudden. Now competition driving down prices is a bad thing? Yeah, I can see why we wouldn't want the industry to move more cars and the consumer to save more money during a recession. Once again....WHAT THE FUCK IS GOING ON???
AaronK,

I do not get why they are closing dealerships either. Tight economy, credit crunch, company went belly up and raising prices is the answer?????

Trying to figure out the Chrysler and GM mess is mind boggling.

Nothing beats an Astronaut
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yawnzzz Jun 11 2009, 10:57 AM Post #52
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Quote:
 
http://www.news-sentinel.com/apps/pbcs.dll/article?AID=/20090610/NEWS/906100332

Quote from this article: "GM said its 6,000-dealer network is antiquated with many dealers competing with each other in close proximity, driving down prices."
:banghead: :banghead:

Am I in fucking bizarro world all of a sudden. Now competition driving down prices is a bad thing? Yeah, I can see why we wouldn't want the industry to move more cars and the consumer to save more money during a recession. Once again....WHAT THE FUCK IS GOING ON???


I'm not sure what's hard to understand. The dealerships are competing against themselves. While the consumer doesn't like companies making profit, it's terrible for a dealership. If customer A is set on buying a Corvette, and he can pit GM Dealership #1 and GM Dealership #2 into a bidding war against each other, then the loser in all of this is GM. They're still only going to sell one Corvette, except now they made almost no profit on it. It's true in every business model that the last competitor you want to face is yourself because you always lose. Now you take two dealerships, decrease the profit, and split it amongst them, and it's going to be hard for either dealership to compete for clients that are interested in other brands of cars.
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boilergrad01 Jun 11 2009, 11:26 AM Post #53
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Jun 11 2009, 10:57 AM
Quote:
 
http://www.news-sentinel.com/apps/pbcs.dll/article?AID=/20090610/NEWS/906100332

Quote from this article: "GM said its 6,000-dealer network is antiquated with many dealers competing with each other in close proximity, driving down prices."
:banghead: :banghead:

Am I in fucking bizarro world all of a sudden. Now competition driving down prices is a bad thing? Yeah, I can see why we wouldn't want the industry to move more cars and the consumer to save more money during a recession. Once again....WHAT THE FUCK IS GOING ON???


I'm not sure what's hard to understand. The dealerships are competing against themselves. While the consumer doesn't like companies making profit, it's terrible for a dealership. If customer A is set on buying a Corvette, and he can pit GM Dealership #1 and GM Dealership #2 into a bidding war against each other, then the loser in all of this is GM. They're still only going to sell one Corvette, except now they made almost no profit on it. It's true in every business model that the last competitor you want to face is yourself because you always lose. Now you take two dealerships, decrease the profit, and split it amongst them, and it's going to be hard for either dealership to compete for clients that are interested in other brands of cars.
Yawnzzz,

I totally disagree. GM could care less how much the dealer sells it for because GM doesn't own the dealership. GM ust sold a Corvette. The dealers might pay the price. That is like saying limiting the number of grocery stores in a town because they must compete. I can think of 4 Kroger's within 6 miles of each other in Indy. Should they shut down if they are all making money?? The dealer whom owns the right to distribute the cars should decide to stay open or not. The dealers pay GM for the cars then resale them for a profit. I say limiting dealers hurts sales over all.
Edited by boilergrad01, Jun 11 2009, 11:48 AM.
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boilergrad01 Jun 11 2009, 11:26 AM Post #54
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Yawnzzz what political label would you attach to yourself??????

Nothing beats an Astronaut
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Mr Gray Jun 11 2009, 11:29 AM Post #55
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yawnzzz
Jun 11 2009, 10:57 AM
Quote:
 
http://www.news-sentinel.com/apps/pbcs.dll/article?AID=/20090610/NEWS/906100332

Quote from this article: "GM said its 6,000-dealer network is antiquated with many dealers competing with each other in close proximity, driving down prices."
:banghead: :banghead:

Am I in fucking bizarro world all of a sudden. Now competition driving down prices is a bad thing? Yeah, I can see why we wouldn't want the industry to move more cars and the consumer to save more money during a recession. Once again....WHAT THE FUCK IS GOING ON???


I'm not sure what's hard to understand. The dealerships are competing against themselves. While the consumer doesn't like companies making profit, it's terrible for a dealership. If customer A is set on buying a Corvette, and he can pit GM Dealership #1 and GM Dealership #2 into a bidding war against each other, then the loser in all of this is GM. They're still only going to sell one Corvette, except now they made almost no profit on it. It's true in every business model that the last competitor you want to face is yourself because you always lose. Now you take two dealerships, decrease the profit, and split it amongst them, and it's going to be hard for either dealership to compete for clients that are interested in other brands of cars.
you obviously are once again trying your best to play devil's advocate, but this time you just made yourself look very uneducated.
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The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism.
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HoosierLars Jun 11 2009, 12:57 PM Post #56
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aaronk2727
Jun 11 2009, 11:29 AM
yawnzzz
Jun 11 2009, 10:57 AM
Quote:
 
http://www.news-sentinel.com/apps/pbcs.dll/article?AID=/20090610/NEWS/906100332

Quote from this article: "GM said its 6,000-dealer network is antiquated with many dealers competing with each other in close proximity, driving down prices."
:banghead: :banghead:

Am I in fucking bizarro world all of a sudden. Now competition driving down prices is a bad thing? Yeah, I can see why we wouldn't want the industry to move more cars and the consumer to save more money during a recession. Once again....WHAT THE FUCK IS GOING ON???


I'm not sure what's hard to understand. The dealerships are competing against themselves. While the consumer doesn't like companies making profit, it's terrible for a dealership. If customer A is set on buying a Corvette, and he can pit GM Dealership #1 and GM Dealership #2 into a bidding war against each other, then the loser in all of this is GM. They're still only going to sell one Corvette, except now they made almost no profit on it. It's true in every business model that the last competitor you want to face is yourself because you always lose. Now you take two dealerships, decrease the profit, and split it amongst them, and it's going to be hard for either dealership to compete for clients that are interested in other brands of cars.
you obviously are once again trying your best to play devil's advocate, but this time you just made yourself look very uneducated.
Yep, thought the exact same thing.
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yawnzzz Jun 11 2009, 01:37 PM Post #57
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Quote:
 
I totally disagree. GM could care less how much the dealer sells it for because GM doesn't own the dealership. GM ust sold a Corvette. The dealers might pay the price. That is like saying limiting the number of grocery stores in a town because they must compete. I can think of 4 Kroger's within 6 miles of each other in Indy. Should they shut down if they are all making money?? The dealer whom owns the right to distribute the cars should decide to stay open or not. The dealers pay GM for the cars then resale them for a profit. I say limiting dealers hurts sales over all.

How often does one Kroger's have a sell that another Kroger's doesn't also have? They're not competing against each other. People on the west side of a town go to the west side Kroger's and people on the east side of town go to the east side Kroger's. Completely different beast. When someone shops for a car, they'll look online and go to dealerships very far away to find a good deal.

Everyone has a right to disagree with my opinion, but this one isn't a complete devil's advocate. I don't necessarily agree that it's always the best approach, but it's not an uneducated response if you dig deeper. I've worked with cabinet manufacturers that have had this exact same problem. Customers wanted cabinets, and they're only going to buy one set of cabinets no matter the cost. This is similar to the car industry because you're not going to see someone save money on a car, and then turn around and buy another car with the extra cash. They're going to buy one car period, just like in the industry I worked with, they're only going to buy cabinets for one house period. The time between purchases and the price paid is also so large that the analysis of purchasing decisions showed that getting a good deal on a previous kitchen is one of the last things on the person's mind on their second purchase.

Now, what ARE they going to care about? Two things, quality of product and service. Now what's the first thing that suffers when a dealer's profit is cut into? Service. So yes, GM will likely sell the same number of cars for the first go around, but do you think they have repeat customers? I know in my current town, the only dealership going under is the one known around town to have the worst service. It's also why my mother-in-law who works for a GM dealership had to build an entire new building when Toyota became part of their offering. Why? Because they required a state-of-the-art service center for you to offer Toyota's because their reputation is on the line.
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HoosierLars Jun 11 2009, 01:49 PM Post #58
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Ok, I could see dealerships underselling each other, and hurting their customer service as a result, also hurting Chrysler's image. Generally speaking, though, it's the franchises that hurt each other more than the car manufacturer.
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Mr Gray Jun 11 2009, 03:58 PM Post #59
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Jun 11 2009, 01:37 PM
Quote:
 
I totally disagree. GM could care less how much the dealer sells it for because GM doesn't own the dealership. GM ust sold a Corvette. The dealers might pay the price. That is like saying limiting the number of grocery stores in a town because they must compete. I can think of 4 Kroger's within 6 miles of each other in Indy. Should they shut down if they are all making money?? The dealer whom owns the right to distribute the cars should decide to stay open or not. The dealers pay GM for the cars then resale them for a profit. I say limiting dealers hurts sales over all.

How often does one Kroger's have a sell that another Kroger's doesn't also have? They're not competing against each other. People on the west side of a town go to the west side Kroger's and people on the east side of town go to the east side Kroger's. Completely different beast. When someone shops for a car, they'll look online and go to dealerships very far away to find a good deal.

Everyone has a right to disagree with my opinion, but this one isn't a complete devil's advocate. I don't necessarily agree that it's always the best approach, but it's not an uneducated response if you dig deeper. I've worked with cabinet manufacturers that have had this exact same problem. Customers wanted cabinets, and they're only going to buy one set of cabinets no matter the cost. This is similar to the car industry because you're not going to see someone save money on a car, and then turn around and buy another car with the extra cash. They're going to buy one car period, just like in the industry I worked with, they're only going to buy cabinets for one house period. The time between purchases and the price paid is also so large that the analysis of purchasing decisions showed that getting a good deal on a previous kitchen is one of the last things on the person's mind on their second purchase.

Now, what ARE they going to care about? Two things, quality of product and service. Now what's the first thing that suffers when a dealer's profit is cut into? Service. So yes, GM will likely sell the same number of cars for the first go around, but do you think they have repeat customers? I know in my current town, the only dealership going under is the one known around town to have the worst service. It's also why my mother-in-law who works for a GM dealership had to build an entire new building when Toyota became part of their offering. Why? Because they required a state-of-the-art service center for you to offer Toyota's because their reputation is on the line.
on your Kroger analysis: In Indy you will see Meijer, Walgreens, CVS, Marsh, and Kroger all within pissing distance from one another, all selling Wonder bread, Pepsi, & Coke. They are essentially dealers of this product. Do you think it would be better for the consumer and the manufacturer if Walgreens, CVS, & Marsh were no longer allowed to carry Wonder, Pepsi, & Coke?
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The body knows what fighters don't: how to protect itself. A neck can only twist so far. Twist it just a hair more and the body says, "Hey, I'll take it from here because you obviously don't know what you're doing... Lie down now, rest, and we'll talk about this when you regain your senses." It's called the knockout mechanism.
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yawnzzz Jun 11 2009, 08:18 PM Post #60
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Jun 11 2009, 03:58 PM
on your Kroger analysis: In Indy you will see Meijer, Walgreens, CVS, Marsh, and Kroger all within pissing distance from one another, all selling Wonder bread, Pepsi, & Coke. They are essentially dealers of this product. Do you think it would be better for the consumer and the manufacturer if Walgreens, CVS, & Marsh were no longer allowed to carry Wonder, Pepsi, & Coke?
I don't think there's a comparison... at all. The average person shops for groceries based on what's closest to their home. Time is worth more to the average person than the price differences between small items. While there's always a few people examining all the coupons every week, they're not the majority. Most people just go to a store, and barely glance at the price tags for items under a couple dollars. They're not going to drive across town because Marsh has a 24-pack of Coke for 30 cents less because they'd waste more than that on gas. If Marsh is underselling everyone and therefore selling more bottles of Coke, when they're only able to afford to have a 1/4 of their checkout lines open, you don't wait for 45 minutes thinking, "I'm never buying Coke again." You place all the disgruntledness of the situation on the store versus the Brand.
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