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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (438817)	12/7/2008 2:05:55 PM
From: tejek	Read Replies (1) \| Respond to of 1574281

And legacy costs are not direct labor costs either. Legacy cost is a term invented by the reporting entity to mean what they want it to mean. In the case of GM, it means DIRECT LABOR COSTS for former employees. You can't just ignore them; they are part of the cost of building cars. How you treat things when putting the company's finacial sheets together is purely an accounting practice. Duh. You laugh but up above you admit "Legacy cost is a term invented by the reporting entity to mean what they want it to mean". That means it could also be treated as an overhead cost by the reporting entity, depending on how they want to present the cost. In a very practical sense, legacy costs are not a direct cost in building cars. If GM stopped paying its legacy costs, it could still build cars. If GM stopped buying sheet metal or tail lights or paying labor on the factory floor, it could not build cars. Therefore to then turn around and lump legacy costs under labor costs, is an unfair application IMO. Would we compare GM's goodwill to TM's we would find it lacking. Toyota has a much better rep in this country and probably in the world. Do we deny GM a loan because its goodwill is not as good? You might try but I suspect you won't get very far. Obviously, you don't have a clue what "goodwill" reported in a company's balance sheet is. It has nothing to do with a company's "reputation". You really are making a fool of yourself, at least to any accountants who may be listening. I know damn well what goodwill is. It typically reflects the value of intangible assets such as a strong brand name, good customer relations, good employee relations and any patents or proprietary technology.........those "assets" include its rep. Now GM has much worse legacy costs than TM.........at least here in the US. That's because it has many more years of retired employees. They do have, but it is because GM's insane contracts with UAW call for GM to pay employees far beyond any reasonable retirement benefit. Its a problem that has to be offset in some way because it puts GM at a cost disadvantage when selling its cars. Yes, and the way you offset it is to dump the UAW and to provide retirement benefits that are appropriate for the labor in question. Dumping the UAW is the nuclear option. There are other options just as effective. Just like with goodwill, you don't turn down help to GM because it has higher legacy costs but you find a way around the problem. You find a solution that neutralizes that cost. It will take the cooperation of mgmt and the union to make it happen. What you understand about these issues would fit comfortably on the head of a pin. Your posts, PARTICULARLY about Goodwill, leave me screaming with laughter. You are a T-Total Dolt. I see......you are boxed into a corner again and so you start the name calling. You are pathetic. That's why you continue to be part of the problem, not the solution. Why don't you limit your posts to school teaching, which I assume you must know SOMETHING about? Why don't you go into basket weaving.......its a good occuption for someone so anal.