GM and its impact on FIRST

[Tom Line]

Originally Posted by CraigHickman

GM won't bring itself out of bankruptcy.

Teams that rely on auto sponsorship may want to find companies with factories/engineering locations stateside that aren't failing, such as Subaru, and others. GM is dying, and what we're seeing is the floundering of a company trying to stay alive.

I suspect you are quite wrong.

Are you aware that portions of subaru applied for bankruptcy in 2000, and they also applied for some of the $25 billion on auto aid loans authorized by the DOE this year?

Originally Posted by Andy Baker

I believe that Craig is very wrong, and GM will emerge from a re-organization as a much smaller company. There will be many changes along the way, making GM a different entity within 5 years.

Here's another way to look at this, from a FIRST perspective:

If any of us are in the market for a new or previously-owned vehicle, why don't we go out and purchase a car that is made by one of the companies who have supported FIRST programs for many years?

Let's see... Chrysler, GM, Ford... they have supported FIRST. Maybe we should support them, eh? I don't see Subaru, Toyota, Honda, Mercedes, BMW, or other non-US-based auto companies being major sponsors of FIRST events and foundations. In this tight economic times, I suggest we support the companies who are supporting what we are passionate about, instead of piling on and giving up on them.

Andy B.

I personally would buy a car for far different reasons than who they gave Charity too. It's all about reliability, efficiency, weight, and performance for me, in that exact order. GM seems to have the opposite order. Yes, they have a few models that are exceptions, but the bulk of their product is heavy cars with good highway power. Americans clearly don't want that type of car, or the sales would be much better. (And yes, I understand that I'm simplifying the issues here, but this is a sponsorship debate, not a Macroeconomics discussion)

Originally Posted by Tom Line

I suspect you are quite wrong.

Are you aware that portions of subaru applied for bankruptcy in 2000, and they also applied for some of the $25 billion on auto aid loans authorized by the DOE this year?

Yep, entirely aware. However, in direct comparison across every factor, Subaru is currently beating GM. Reliability: Win. Efficiency: Major win. Performance: HUGE win in handling, because America is the only one with an obsession for Drag.

I guess I'm plagued by having no customer loyalty to any brand. I'll buy the best out there for the best price, and currently no American car maker (other than Jeep) delivers what in my eyes constitutes as the best.

That being said, I in no way believe that consumers should give up on GM. If they release the volt for a reasonable price, you can bet I'd buy it if I had the money. When a company innovates, I'm all in favor. But that innovation has grown mainly stagnant due to the massive size of GM, and they're currently shedding dead weight. Once the shedding is complete, if anything emerges, the beast will be far different. I have a feeling the company that emerges will remember to cater to the consumer, rather than attempt to dictate what the consumer wants. This isn't the same type of times that Ford has gone through; and GM doesn't have a Crown Victoria to be bought in large enough quantities to keep them afloat. After all, Ford would be long gone had they not repackaged the Crown Vic as the Police Interceptor.

TL;DR - I hope GM recovers and gets back on track with sponsorship, but as things stand now I don't see them returning to the previous potency.

[IKE]

I have said this before, but I think it needs repeating. Buy whatever you feel is best for you. However, if you are in the market to buy, please test drive those vehicles that have supported your programs. I am not asking you to spend money on a car you don't want, but I am asking you to evaluate your options off of experience an not pre-concieved notion, or what the car rags are telling you.
If these companies have donated time and money to a cause you find near and dear to your heart, then go check out their products and compare them fairly to their competition. What you will find is some a better, some are worse, some are better value, some are not.

Also, please be aware that GM, Ford, and Chrysler sponsor more than just teams. They have been major sponsors of awwards, regionals, and FIRST as a whole. If they are not able to contribute to FIRST as a whole, we all should be concerned.

P.S.
Car and Driver and Motor Trend are loyal to their sponsors! If there is a shoot out between several cars, I can tell you who will win based almost solely of looking at the ads in the magazine. Use your brains, not theirs when looing for a car or truck.

[Tom Line]

Originally Posted by CraigHickman

dictate what the consumer wants. This isn't the same type of times that Ford has gone through; and GM doesn't have a Crown Victoria to be bought in large enough quantities to keep them afloat. After all, Ford would be long gone had they not repackaged the Crown Vic as the Police Interceptor.

TL;DR - I hope GM recovers and gets back on track with sponsorship, but as things stand now I don't see them returning to the previous potency.

Craig, where did you get the information regarding the Crown Vic 'saving' Ford? I work for Ford, and I've never once heard that bit of information.

[Mr. Pockets]

Just thought of something. A large portion of GM will now be owned by the government (over 50% if I'm not wrong). If that's the case and GM continues to support FIRST (in whatever way it does) then technically wouldn't that mean that the federal government would be supporting FIRST? Yes? No? I don't know just a thought. Sorry for straying off topic.

[Alex Dinsmoor]

Drifting away from the subjet of what car maker makes the best cars... I feel that we will see many FRC teams tighten their belts for this comming year, even if they aren't a GM team. I know my team (201) has been a GM team for as long as I could remember, and now that we may be losing them we are being extremely careful with our money. So careful that the participation in off season events was on the chopping block. I think we will see many of the teams that go to three or more events maybe only go to two to preserve money. Teams may do this because who knows what company will be the next to go under.

Will the level of play be lowered? Never, even if teams are competing with a fraction of their previous budget.

Just my $0.02

[Andrew Schreiber]

Originally Posted by Mr. Pockets

Just thought of something. A large portion of GM will now be owned by the government (over 50% if I'm not wrong). If that's the case and GM continues to support FIRST (in whatever way it does) then technically wouldn't that mean that the federal government would be supporting FIRST? Yes? No? I don't know just a thought. Sorry for straying off topic.

<off topic rant and personal views, feel free to disregard>
Yes, you have hit the nail on the head to why I simply CANNOT purchase a GM manufactured car as long as the Federal Government owns a majority share in the company. These are deeply held beliefs in the way capitalism is supposed to work, to have a company owned by the government is something that I cannot support.* To purchase a GM car would go against many of my core beliefs should they emerge from Chapter 11 as a government owned company. I apologize if this offends any of you, it makes me sad, every GM car my family has had has served us well. When I got my first car 2 years ago I only looked at American cars and GM was number one on my list, I ended up with a Saturn, a Saturn I enjoy driving. I don't dislike GM, Ive never had anything but wonderful experiences with them. I will consider Ford for my next car purchase because I consider them the last American car company.
</rant>

While I do greatly appreciate the support from GM I personally believe that GM support for FIRST should have been among the first things shed in order to help preserve jobs. I would rather see a dozen FRC teams fail than to see one American job lost. Of course I understand that even 100 teams with $20,000 budgets would have been a drop in the bucket compared to the losses GM was taking. However, understand that often perception is more important than reality, imagine the response of a GM worker when he just got told he couldn't come in to work for the next week because it was too expensive to pay him when he sees a dozen kids using GM owned equipment to build what is essentially (to him) a glorified remote control toy. If I had to worry about how I was going to feed myself or my family so some kids can play with their toys I would be pretty ticked off. We have to be careful about what we ask for, teams will need to cut back and trim the fat out of their teams. I expect this year will be one of the slowest growing years for FIRST, most of the growth that does occur will NOT be within the United States either. Many old GM powerhouse teams will be struggling this year because some of them will have to radically change how they do things. Many other teams will struggle because their primary sponsors are suppliers to GM, Delphi springs to mind as another major sponsor here. One downfall of our current system is that everything is linked into everything else, you would think that being a software programmer I couldn't be jeopardized by a failing in the manufacturing industry but I produce systems for GM suppliers. My point is GM is huge, this will affect our everyday lives for years to come.


Sorry for the novel, now if you will excuse me I am going to put on my safety glasses (Why does he not have a construction helmet on too?) and ride out the comments...

*There are exceptions, obviously some things are just logical to have government run (or at least controlled) Roads, Telecommunications, Utilities are a couple that come to mind.

[Mr. Pockets]

Originally Posted by Andrew Shrieber

Yes, you have hit the nail on the head to why I simply CANNOT purchase a GM manufactured car as long as the Federal Government owns a majority share in the company. These are deeply held beliefs in the way capitalism is supposed to work, to have a company owned by the government is something that I cannot support.* To purchase a GM car would go against many of my core beliefs should they emerge from Chapter 11 as a government owned company. I apologize if this offends any of you, it makes me sad, every GM car my family has had has served us well. When I got my first car 2 years ago I only looked at American cars and GM was number one on my list, I ended up with a Saturn, a Saturn I enjoy driving. I don't dislike GM, Ive never had anything but wonderful experiences with them. I will consider Ford for my next car purchase because I consider them the last American car company.

I don't like the idea of GM being government owned either, but my point was a little different. I was more commenting on the fact that for a long time we've been encouraged to make our elected officials aware of FIRST by say inviting them to a regional or whatnot. I was just musing about whether that will be accomplished through the government owning GM and GM supporting FIRST. Just a thought...

[Kyle]

Sponsors come and go, the real impact that FIRST will see is going to be the loss of amazing mentors as GM closes plants and offices that they work at. Many of those mentors are very dedicated to FIRST but they will have to think more about their families and finding work rather then spending time working with a FIRST team. Here is Delaware the GM plant is closing affecting over 500 jobs, I can't imagine what life is like in some of the towns where the GM plant was the life's blood of the town.

[Beth Sweet]

Speaking strictly from a financial standpoint, a company (such as GM) typically would get tax benefits by supporting a qualifying charity (such as a 501c3 like FIRST) to a monetary extent (it's been a year since I took tax, I don't remember off the top of my head, I'll look it up if you really want me to). To that extent, GM was able to pay fewer US tax dollars by supporting FIRST's charitable actions. Sorta like, giving them the option of doing the general good things the government wants to do, or picking which good thing they want to do. Additionally, the losses that GM has been taking for the last few years will "earn" them money in the coming years. If my memory serves me correctly, a current NOL (loss) can be applied to income as far as 20 years back, and they will receive back taxes for profitable years. (If a company hasn't been profitable in that period, or the losses outweigh past gains, it also carries forward, but I won't get into that)

Now, all of that given as truth, the bankruptcy, because of the extent of government involvement, may make some of those typical financial benefits of charitable support null. Typically (and the likely reason that Fiat bought Chrysler), a bankruptcy does not invalidate the ability to use these losses and charitable deductions, but with the billions in government aid, the media has been making it sound like this won't be your typical Ch 11 (and since they're on the conference calls, I'll trust them).

So, the point of that whole thing is: it has been in GM's best financial interest to support charities such as FIRST in the past, depending on government restrictions on charitable contributions, it may or may not be in the future

[oddjob]

Originally Posted by Jon236

The difference between speculation and investment in the stock market is that you invest for the long term. That is what GM has done with FRC. FIRST provides the feedstock for GM's next generation of engineers.

GM will need far fewer engineers now. They have profitable trucks and other large vehicles that Obama is going to obsolete with higher mpg requirements. The Malibu will survive, everything smaller is not competitive, except maybe for rebadged imports such as the Aveo. I predict GM will become a rebadging company for far east manufacturers, if they survive beyond 8 years to a new administration - assuming Obama is reelected, and poor value for $50B of taxpayer money IMO. They could have gone bankrupt 6 months ago and saved us $50B.

Chrysler will become Fiat-Lite. Fiat just came in dead last out of 28 manufacturers in a survey of new car quality in the UK. Their mediocre cars will not sell in the US, so expect more government handouts there too. Study the 1960's and later history of Austin/Morris to see what the future holds for GM and Chrysler. Poor management, costs too high, epic fail. I had relatives that worked at Austin (later British Leyland etc.) in Longbridge UK. It was a huge site. Went there a couple of weeks ago and it's a big patch of dirt now. The so called UAW "concessions" are not serious, and who in government is qualified to run a car company? I have a really bad feeling about all of this and hope I'm dead wrong. I currently own a Cadillac and two Chryslers and it looks like they will be my last.

Sad to say but any FIRST teams that are dependent on GM money, need to find a plan B. Possibly nobody yet knows if they will be able to fund FIRST but there is a very clear risk they will not.

[Andrew Schreiber]

Originally Posted by oddjob

GM will need far fewer engineers now. They have profitable trucks and other large vehicles that Obama is going to obsolete with higher mpg requirements. The Malibu will survive, everything smaller is not competitive, except maybe for rebadged imports such as the Aveo. I predict GM will become a rebadging company for far east manufacturers, if they survive beyond 8 years to a new administration - assuming Obama is reelected, and poor value for $50B of taxpayer money IMO. They could have gone bankrupt 6 months ago and saved us $50B.

Chrysler will become Fiat-Lite. Fiat just came in dead last out of 28 manufacturers in a survey of new car quality in the UK. Their mediocre cars will not sell in the US, so expect more government handouts there too. Study the 1960's and later history of Austin/Morris to see what the future holds for GM and Chrysler. Poor management, costs too high, epic fail. I had relatives that worked at Austin (later British Leyland etc.) in Longbridge UK. It was a huge site. Went there a couple of weeks ago and it's a big patch of dirt now. The so called UAW "concessions" are not serious, and who in government is qualified to run a car company? I have a really bad feeling about all of this and hope I'm dead wrong. I currently own a Cadillac and two Chryslers and it looks like they will be my last.

Sad to say but any FIRST teams that are dependent on GM money, need to find a plan B. Possibly nobody yet knows if they will be able to fund FIRST but there is a very clear risk they will not.

Having Chrysler and GM go bankrupt 6 months ago would have been disastrous, recall for a moment all the panic and uncertainty last fall, banks were failing, Bernie Madoff had just been arrested for the largest Ponzi scheme in the world. Imagine if on top of all the chaos two of the largest companies in the country announced that they were going into Chapter 11. Now we are not much better off but people perceive we are slightly more stable, Obama has a plan (like it or not) Part of leading is limiting panic, if in the course of 3 months it is announced that not only are major banks failing, fraud on a global scale, AND 2 massive employers are going bankrupt people will panic. IF GM has to die I would much rather it die a controlled death than a massive, painful one.

Your other points only make me think [citation needed] What concessions? Who said anyone currently in the government will run the companies? Not saying you are wrong but I would like some more facts because you make some very interesting points.

[Travis Hoffman]

Well on a day like today, this is unexpected:

http://delphi.com/news/pressReleases/pr_2009_06_01_002/

Living in a community where Delphi and GM are two of the the largest employers, this is certainly an unusual day.

[Chris is me]

I'm personally wondering what's going to happen to the teams sponsored almost entirely by GM. They're legendary FIRST teams... who's going to pick up the tab? Obviously I don't know their books or how much money they make doing various things (other than T3's legendary rennisance faire fund drive), but those aren't teams anyone wants to lose.

[Karthik]

Here's a link to today's GM press release dealing with the bankruptcy proceedings.

GM announces agreement with US Treasury and Canada Governments

For anyone who's interested in actually discussing the issue, it's important that you read the contents of this release to get an idea of what's actually happening.