A Research Paper Done on Futuristic Home
General Motors, historically a giant in the automotive industry in America, is facing a financial crisis that threatens not only its workers and employers, but the economic fabric of America. Should the U.S. provide funds to keep General Motors (GM) afloat? I believe that it should in consecution with imposing certain expectations and requirements. GM was founded by William (“Billy”) Craps Durant in 1908. Billy already owned Buick and he came up with the idea that if he owned a bunch of car companies instead of one, he would make more money. By offering different types of cars, Billy believed he would sell more cars and make more money. So he bought out Oldsmobile, Cadillac, and Pontiac. William (“Billy”) Craps Durant had a strategy to form an Automotive Conglomerate, to produce better cars to sell more of them. He insisted on good working conditions so that his workers would work hard to keep their jobs, and make the best cars on the automotive market. Billy believed that he could control the major market of auto sales throughout the USA, and he was correct between 1908 and 2000. But, around1999 GM's troubles started.
There are several issues that have affected the decline of General Motors Corporation. Some of those issues are: Asian and European import cars coming from over seas; high gas prices that a lot of people can not afford right now; GM's lack of futuristic thinking in automotive planning to address competitive issues; high GM auto prices; and the failure to manufacture hybrids and automotives that use less gas. GM has not remodeled its plants to reach competitive goals which would allow GM to produce a better and less costly automobile.
Other big issues are high salaries and health care costs. I believe that to address these problems, the United Automotive Workers (UAW) should be forced to accept lower salaries for their union members. They should also accept a reduced healthcare benefits package which is one of GM's most costly outlays of money. Organized labor forces (Unions) have long protected the average working man and woman, and this has been a good thing; but salaries and health costs in the automotive industry have gotten too high, and it has hurt, GM Corporation. These high costs have been reflected in higher prices for their autos, and forced GM to cut back on quality to meet Union demands. I think it would be better to have more people working for lower salaries than to have thousand of people laid off from their jobs. There should not be any threats of labor strikes from the Union or its workers but rather, they should agree to some reasonable cutbacks so that GM can grow strong again. Currently, GM cannot compete with the quality or cost of import cars and it needs to be competitive with the Asian car market in order to survive.
American workers who are members or the UAW and work for GM have experienced massive lay offs. The GM workers have also suffered job transfers. Some of the GM workers have been transferred so many times that they are called "gypsies". Many of the gypsies have been transferred eight or nine times. Gypsies have to endure things like changing schools if they have kids, finding new houses, the cost of moving, and leaving their friends and family members. That results in a big financial hardship on a family because of the cost of relocating. A lot of these GM gypsies as take pay cuts when they are transferred.
When the head of a house hold loses his or her job, it is a terrible thing. There is a loss of income, as well as health care benefits. Also, some families might lose their home because they cannot pay their mortgage. Thousands of people have lost their jobs because they were fired from GM. When many people in the same town lose their jobs, it has a great impact on the local community. Local stores will be affected because they will not have as many paying customers coming into their stores to buy food, clothes, and other necessities for their families. Local banks will also be affected by having many GM customers that can not make loan payments or mortgage payments, and they may have to foreclose on local homes. In the long run, all these things will cost banks money. Other local service people in the community are also affected because thousands of GM workers immediately stop being paying customers. Those unemployed will no longer put additions on their homes and hire carpenters or plumbers. The will not have their cars detailed, or hire a pool service company. Local service people will be hit hard with this loss. Local malls will suffer, too, because GM workers that used to go to the mall and spend money will no longer go because they can't afford it. If mall sales drop dramatically, and store workers could lose their jobs. Local real estate markets would also be impacted by foreclosures and a drop in buyers and home values. Realtors could then lose their jobs.
The main issue in controversy right now is should the federal Government "bail out" General Motors Corp? The government could help bail GM out by lending them money to get back on their feet, referred to as a "bail out." General Motors would need to submit a plan of remedial action to the government that would contain all the new things GM would do to make the corporation profitable again. Bail out money from the government could be used to design new fuel conservative automobiles, pay off existing debts, pay for remodeling of factories to produce newly designed cars, and increase fuel efficiency. GM would also need to train its employees to run the newly remodeled factories. In addition, the government could temporarily reduce GM's taxes so that it would have more money to get problems solved. Another thing the government could do to help is provide all American automobile manufacturers with government scientists and engineers who could help to develop and create new types of fuel efficient autos. If there are no scientists and engineers in the government who can do that, the government needs to give GM and other American auto manufacturers money to hire such technical people. Of course, the oil companies would be against this; but, it would be good for Americans in the long run.
Right now, my position on things is that the government should help bail out GM. One reason is because of the GM worker's plight. Another important reason the government should bail out GM is because of the economic suffering of local communities. When the government bails out GM, the real estate markets will begin to recover, because people will now have money to buy new houses or pay off existing mortgages and loans. Without the government stepping in and helping out GM, things can only get worse. GM should ask the government for help, but so far it has refused to do that. GM has said that it can fix all their problems without any help. I believe GM could go bankrupt and close if it does not get help from the Federal Government. Then all GM workers would lose their jobs. By working together with the government and getting financial help, things should get better for families of GM workers. As soon as this happens, there will be great economic improvements in local communities.
There are a couple of reasons why some might be opposed to my position. For years GM made billions of dollars and ignored obvious signs that changes were needed. GM also ignored the gas shortage problem and made too many large gas-guzzling vehicles like SUV's and “muscle” cars. Some of the “muscle” cars made by GM are the Camaro, Firebird, Cutlass, Corvette and the GTO. GM should have been more concerned with making autos that were fuel conservative, such as its Japanese counterparts. In addition to these important facts GM did not modernize their automotive plants to compete with Asian markets. GM never invested in the future of its company, by investing in new and progressive methods of making automobiles. So it is very reasonable to argue that GM deserves all the problems it has created for its self. GM tried to continue making billions of dollars without looking at the realistic needs and wants of Americans, and this didn't work out very well. Even worse, GM continued to pay its Executive Officers millions of dollars in salaries and bonuses, ignoring the future of its own well being. It ignored the fact that its outdated autos would stop selling and faithful workers would end up with no jobs. GM failed to adjust to today's competitive and even-changing world.
My proposed solution for remedial action is for GM to address a number of issues in connection with received federal bait out money; but first, GM must be truthful with itself.
GM cannot fix a problem until they acknowledge its existence. Therefore, GM needs to identify and confront all of its issues. All employees should be invited to brainstorming sessions to make suggestions for positive improvement and propose solutions. Good ideas and progressive solutions must be brought to management's attention and their put into motion. Often people at lower levels of a company really know where money is being wasted and how to create savings.
In addition, GM needs to enter into continuous negotiations with the UAW to find financial solutions to issues that benefits both workers and the GM Corporation. The need for GM to be able to meet its budget is extremely important as is the need for GM to pay its workers a fair salary and benefits package. GM and the United Auto's Workers Union must come to a mutual agreement that will satisfy both sides. GM must become profitable in order for auto workers to keep their jobs and benefits. Together they can make this happen. Another very important financial savings can be accomplished by making cuts the GM executive officers salaries and bonuses.
It is extremely necessary for GM to study and implement solutions to compete with the Asian automobile market. GM factories have long been outdated. GM cannot produce autos at the rate and cost of Asian markets, and the Asian Market is its largest competitor. GM needs to study and improve upon the methods being used by Asian companies, and begin using some of the better Asian manufacturing and design methods. The research and design of new futuristic automobiles that are more fuel conservative is essential. These autos could be hybrids, improved hybrids, or a completely new type of vehicle. GM needs to develop a plan for redesigning their auto plants and it needs to set a reasonable time frame for the completion of such plants.
When all of these new plans are completed, GM must present the plan to the government and ask for government assistance in the form of a "bail out", just like Chrysler did in 1979. The government could help GM by providing loans with extremely low interest rates. It could finance a workers training program to prepare auto workers for the production of cars in new plants and factories. The government also needs to supply and fund a reasonable financial and medical package to assist auto workers who have lost their jobs and homes. In summary, General Motors needs a complete modern overhaul, and it needs the United States Government to help it achieve this plan. The government could also help out GM by lowering its taxes until there is a profitable turnaround. In addition, GM and all the other American auto makers should ask the government to restrict the importing and manufacturing of Asian Cars in America and stop sending Automotive jobs to third world countries.
In conclusion, I know the United States Government will not do all the things I have suggested to help General Motors Corporation. However, I strongly believe that if we can send billions of dollars in foreign aid to other countries every year, then we should be helping our own American businesses and our own American citizens! We should not be allowing American families and communities to suffer while sending billions of dollars to help foreign nations.