Interesting story from the AP
General Motors is taking a seemingly odd approach to falling sales of pickup trucks: It's raising prices. The company says the price of the 2014 Chevrolet Silverado will go up almost $2,100. Full S...
Forum Discussion
spoon059 wrote:
GM has outrageous legacy costs to cover thanks to over generous union benefits over the years. This is the reason that they can't make a profit selling a comparable vehicle for a comparable price. At one point I read an article that stated that GM was LOSING MONEY on each vehicle it sold because the cost to procure parts, pay employees and cover the pension and healthcare costs of its retiree's was more than the free market was willing to pay for a GM product. This isn't to say that GM doesn't make a good product, its just that the average consumer isn't willing to pay for all the associated overhead costs that GM is contractually obligated to pay. Hence why I think they should have gone bankrupt... so they could permanently settle and restructure those obligations.
UAW negotiators proposed those contracts many years ago and GM AGREED to the terms and SIGNED the contracts. I've been a union member here in Florida for over 30 years. We don't have such generous contracts because our company's management would never sign such a agreement. As far as prices for vehicles, my union built F250 was $3k less than a comparably equipped Ram 2500HD made and built in Mexico. Clinton lied. The savings of cheep labor are not passed on to the consumer. Market determines price. Nothing else. GM will price their vehicles to maximize profits like anyone else.
