Gas Prices: Who's to Blame?

[TheMercenary]

HA! Someone please pass the popcorn. Thanks.

[tw]

Originally Posted by Flint

I think I know what tw meant. Maybe the more efficient engines were developed as a concept car that was never offered in production.

The 70 Hp/liter engine was developed and listed for production in 1975. I obtained a production list of GM engines. That year, seven Quad Four engines were listed. Only two contained the seventy Hp/Liter technology.

That new technology requires better machine tools. Whereas many machine shops can do tolerances of 0.001 inches, the 70 Hp/liter engine requires parts closer to 0.0001 inch variation. Why do you think Toyotas, Hondas, etc are quieter and last longer?

GM is not run by car guys - people with driver's licenses. New machine tools mean reduced costs to car guys, and increased costs to bean counters. Instead, GM kept obsolete technology machine tools and sold obsolete technology engines. Engines that requires more cylinders - increased costs - lower gas mileage. Why does GM need SUVs? Any crappy engine can be dumped in an SUV to be sold at a $5000 profit. GM's profit margin on cars (due to inferior technology) is probably below $200. Many models are rumored to sell for a loss. Exactly what cost controls do. So GM will do anything to sell more obsolete technology SUVs built with 1968 technology tolerances.

No problem. GM can hype an SUV with a V-8. It has less horsepower, requires more parts, has lower gas mileage, makes more noise, and wears out faster than a standard technology V-6. But that parameter does not get measured on spread sheets and get ignored by an SUV owner. After all, it makes more noise. Therefore it must be tough - according to the naive. Why do you think pickup trucks make so much noise? Obsolete technology (more noise) makes the owner feel his penis is bigger. That literally is the image.

GM would not upgrade factories to current technology and hid behind myths such as ""Buy Americans", legacy costs, or "blame expensive unions". Sycamore reiterates what GM needs everyone to believe. Sycamore is posting mom, apple pie, and baseball as proof of intelligence? No. He is hiding behind more myths. Chevy was called the "Heart attack of America". (For those oversea, Chevy would advertise as the "Heatbeat of America".)

A Wall Street Journal article some years back noted how the air conditioning industry addressed these same innovation challenges. By reducing tolerances from 0.001 to 0.0001 inches, the air conditioning industry created a significant increase in air conditioner efficiency. Of course, few of these massive improvements get measured on spread sheets. Air conditioner industry remained profitable and without oversea competition because they implemented current technologies.

The economic analysis (if I remember) meant the American air conditioner industry increased the actual American GNP by 8% over ten years simply by implementing tighter machine tolerances. Unlike GM, the air conditioner industry bought those new technology machine tools making a more efficient and longer lasting product. Most of that 8%productivity was due to less energy consumption by air conditioners. America became more productive using the same technology machine tools that also make a 70 Hp/liter engine possible.

Why did GM stifle innovation in America? GM bean counters cannot measure, appreciate, or understand product innovation until after that product is not longer innovative. Tighter tolerances only mean higher costs - according to bean counters.

The Los Angles Times reported this same GM problem long ago. See Kill the Messenger - this time the LA Times. GM attempted revenge by bankrupting the LA Times. GM does not like reporters exposing their spin with technical facts. Learn why GM products cost more to build. GM top executives still refused to buy the new technology machine tools even after touching the advantages in their own Mona Lisa room. Bean counters know 'it would increase costs'. Therefore GM must downsize again while contributing to Americas excessive oil consumption.

Innovators could not put standard technology engines - a technology ready for production in 1975 - in 1990s GM products. It required engineering. It required new technologies. Assets according to car guys. Increased costs according to a bean counters. GM has not been lead by a car guy since the 1960s. Every top GM chairman is from finance – a bean counter.

Machine tools that routinely do +/- 0.0001 inches will only increase costs according to spread sheets. Increased productivity cannot be measured on a spread sheet until four or ten years later. Therefore I never found a single GM car with those two 70 Hp/l Quad Four engines. They were marketed - just not sold. Finance people only make decisions using today’s spread sheet numbers - not the ones that matter - tomorrow's. So Sycamores new Cobalt is the world standard technology from 10+ years ago.

If you bought 100 shares of GM stock on Jan 1976, today you lost money. GM stock dropped another 6% today. 100 shares of GM stock in 1976 was worth more than the same 100 shares today because GM products are that poor. No wonder GM has opposed simple solutions to America's problems such as increased gasoline mileage. GM bean counters must purchase current technology machine tools. Instead, they have Sycamore preaching their praises.

There is no reason for every vehicle to be doing 30 MPG routinely. But that means innovating. Most every significant GM innovation over the past 30 years was required by or resulted from some EPA regulation. No wonder GM routinely opposes better mileage standards. The bean counters would have to innovate. GM still does not put the 70 Hp/l engine - an old and no longer innovative technology - in every vehicle. Increase gasoline mileage without corporate welfare or required by a Federal law? Why should GM innovate? Those 70 Hp/l engines were production ready in 1975.

[HungLikeJesus]

So, are you saying that GM is to blame for current gas prices? You could have just said so.

[TheMercenary]

No, Kia is responsible.


Wait, wait....



I thinks it was Opel.

[Griff]

Originally Posted by TheMercenary

I thinks it was Opel.

Subsidiary of GM, try to keep up.

[elSicomoro]

It was Griff, trying to build his stupid compost toilet or whatever it was...he's responsible for my $4 gas!

[lookout123]

If you bought 100 shares of GM stock on Jan 1976, today you lost money. GM stock dropped another 6% today. 100 shares of GM stock in 1976 was worth more than the same 100 shares today because GM products are that poor.

January 2, 1976 GM closed at 58.38
June 18, 2008 GM closed at 14.89

If you had invested in 100 sh on that date and held it until now your investment value would have fallen from $5838 down to $2978. That is a loss of $2860. Good job TW, you have pointed out the very obvious fact that a troubled company has seen stock value drop.

Of course, if you gave the rest of the pertinent information the story would look a little different. During that time GM paid dividends on a regular basis. They also had a 2-1 stock split in March of 89. That 100 share investment produced $7872.50 in dividends which must be factored back into current valuation of $2978. So your investment of $5838 is now worth $10,850.50 for a gain of $5012.50.

Those are raw numbers, the return would have been better had dividends reinvested rather than left raw the way I have done.

I don't like GM as a company for their products or their investment potential, but if you're going to make your case using facts and figures it would be helpful if you used all of the pertinent information rather than treating reality as a smorgasbord, just picking and choosing as you move along.

I'll assume that your mistake was accidental rather than an intentional lie. I'm that kind of guy.

[Flint]

Sorry, that was ME lying when he posted that. This is the new Cellar.

[lookout123]

I blame it on the footfunguses es's. they're spreading i think. because UT wants them too.

[tw]

Originally Posted by lookout123

Of course, if you gave the rest of the pertinent information the story would look a little different.

lookout123 added information to only confuse the bottom line. Irrelevant is ROI (which includes dividends). We are discussing GMs market value. GM refused to innovate. GM routinely stifling innovation also is a major reason for today's high oil prices.

Dividends are irrelevant to corporate value. Accurately demonstrated, GM's 1976 investors reaped a loss of corporate value when a stock investment should have averaged a 1,170% value increase.

Previous figures also included the various stock splits. Why confuse others with dividends that were not relevant and stock splits that were already included? lookout123 says he will take any oppurtunity to attack this poster; honesty be damned.

Had the same investor bought 100 shares in 1990, then his $38,000 corporate value has decreased to $14,000 - again due to inferior products. An average company would have increased to $151,700 in those 18 years. Why negative growth? Occurs when a company does as stock brokers promote. "Greed is good". "The purpose of a company is its profits." Therefore GM does not innovate (except when required by government standards), makes products that achieved no energy conservation, cries about unfair foreign competition, blames unions, blames our education system, blames tax laws, enriches their management, shorts their pension funds for $7 billion to claim higher profits (and claim a 'legacy cost' myth), and does not even have the 70 Hp/l engine in all products 30+ years later.

GM demonstrates a major reason for higher oil prices and why more jobs go overseas where finance people (ie stock brokers) do not hinder product innovation.

Irrelevant to the bottom line is lookout123's post. Topic is GM's value - not dividends. Topic is about how GM played money games to maximize profits while stifling innovation. Therefore GM created a company with less value.

Numerous investment management firms conclude that GM is probably worth more if broken up. Why? Breaking up GM would eliminate a reason for its low market value AND the major reason for so much stifled innovation: top management. How ironic that Sycamore would praise GM products when those bean counter designed products clearly are a major contributor to higher gas prices.

When innovative companies average 11.7 times more value, GM has lost value. GM is worth less to a Jan 1976 investor for same reasons why GM products consume so much energy wastefully. If GM had been patriotic and loyal to its stock holders, an average GM product would probably do something approaching 40 MPG AND contain technologies that other nations (manufacturers) must purchase. Instead, GM used cost controls - a bean counter mentality.

[BigV]

Originally Posted by tw

--snip--

"Your lips move, but I can't hear what you're saying."

[lookout123]

lookout123 added information to only confuse the bottom line. Irrelevant is ROI (which includes dividends). We are discussing GMs market value.

hey dumbfuck?

If you bought 100 shares of GM stock on Jan 1976, today you lost money.

is what you said.
i simply pointed out that you were incorrect. inadvertent mistake, i'm sure. my point was that you shouldn't BS your way into making a valid point because then people discount your whole point because they can't trust what you say.

You can reframe your assertion now to suggest you only meant the actual dollar value of one share, but that isn't what you said. A person who purchased 100 sh in January of 1976 has not lost money if they still hold those shares.

GM sucks, but being a lying bastard sucks more. Now bugger off or I'll have someone tough like Jinx kick you in the cunt.

[God]

May peace, goodwill and oil be with you. And in these recent times of turmoil, perhaps some self defense weapon as well.

I voted Federal Reserve. Sure, there are many groups of people trying to be as powerful as me. There are only a few that come close.

The Fed is the closest.

[tw]

GM products are so bad that GM took another new low today. Had an investor purchased stock in 1975 - one year earlier - then a 1975 stock holder's capitalization is now negative. Or, in simple terms, so that any financial adviser can understand it. If he bought 100 shares in 1975, then his market value today is negative. This does not include additional losses due to inflation.

How to keep selling cars? Mortgage the future. GM is again offering cars with zero percent financing. Losses due to loans without interest will not affect today's spread sheets. Therefore GM losses today don't look so large.

GM products are so poorly designed as to be expensive. Their inferior products must be all but given away. But then 1/4 of GM sales are now discounted to employees, et al. More money games (zero percent financing) avert those losses for years on spread sheets. However even Wall Street sees GM real market value. The 1975 investor has now lost money - now owns a company that is worth less than his original 1975 investment (again - ignoring that the $1 in 1975 has also dropped to 25% of its value). The company called GM has a negative capital return over 35 years assuming today's dollar is same as the 1975 collar. Meanwhile those invested dollars also decreased to 25% of its 1975 value. Just to break even with inflation, the $1 investment in 1975 must be worth $4.

How bad are GM products? Those facts were posted previously. Even the accounting demonstrates GM products 10 years ago and today are both crap - facts directly contradicting emotions of other posters.

How curious. Automakers did this same thing back in the 1970s - make crappy products that got worse gas mileage every decade.

[lookout123]

GM products are so bad that GM took another new low today. Had an investor purchased stock in 1975 - one year earlier - then a 1975 stock holder's capitalization is now negative. Or, in simple terms, so that any financial adviser can understand it. If he bought 100 shares in 1975, then his market value today is negative. This does not include additional losses due to inflation.

Good boy, you've managed to make a point without altering facts. you're learning. *sniff* so proud.