Saving the General
Nearly everyone with a keyboard and opinion has weighed in on the chances for the newly bankrupted General Motors to emerge from its reorganization and prosper. And it’s all but impossible to read one of these opinion pieces without hearing the familiar saw of “building products that shoppers want to buy,” as if the old GM never launched a successful product.
Part of a successful strategy in running any company is financial control. If you don’t have the money to pay people and suppliers and your financial planning is inept, you’ll never succeed, let alone prosper. From that standpoint, GM seems to be more than staffed. Jelly Belly is the only company I can think of with more bean counters than the current General Motors. If CEO Fritz Henderson and CFO Ray Young ever get stuck with a financial issue, they have a deep bench of bankers, hedge fund managers, and assorted Ivy League MBAs that can churn out Excel spreadsheets till the cow’s eyes glaze over.
Then there’s that not unimportant product thing. You know, those I’ve-got-to-have-it vehicles that will bring customers stampeding back into new GM showrooms. Actually, GM is in decent shape on this front. Next week, I’ll drive a production version of Chevy’s new 2010 Equinox, a compact SUV that has been completely remade to go head to head with Toyota’s RAV4, Honda’s CR-V, Ford’s Escape, and Nissan’s new Rogue. When I gave this car a quick examination at GM’s design center last December, it looked like a real winner. It starts with class-leading fuel economy of 22 city / 32 highway and if it drives as good as it looks, Chevy should have a hit on its hands in a tough segment.
Chevy’s Malibu is competitive in the tough mid-size category, the Traverse continues to impress critics like Consumer Reports in the mid-size crossover crowd, and the new Camaro joins Corvette to add some spark to the bow-tie brand. Cadillac’s CTS may be one of the best kept secrets in the universe of luxury sedan buyers who are certain that only Europeans can produce a great driving machine while only Japanese automakers can offer consistent quality. And Buick has focused its lineup down to three models: the full-size Lucerne sedan, an all-new Lacrosse mid-size offering, and the Enclave crossover SUV.
So let’s assume that GM will have a gaggle of cars and trucks that includes very competitive offerings when it emerges from bankruptcy. And it’s assumed that the “new GM” will be armed with the finances and cost structures that level the playing field. What’s less clear is how the taxpayer’s $65 billion investment in this new enterprise will get repaid in a timely fashion, but that’s a subject for another commentary.
To become successful in a crowded, competitive market like North America when the global auto industry is rife with overproduction, GM will have to insure that every vehicle is supported with brilliant marketing. It doesn’t matter if the Equinox or CTS or Lacrosse is better than the competition if the intended buyer doesn’t put the vehicle on his or her shopping list.
There are three (3) big reasons that GM is finished.
[1.] Obama
[2.] Obama
[3.] Obama
End of 83+ years.
End of story.
GM and Chrysler will have to all but give their products away. Even then, Obama has insured at least half of the public will not buy from Obama Motors, ever.
Their workers are just more government workers. One expects true excellence in mediocrity regardless of how one packages it. Lincoln said it best about fooling people. GM, Chrysler – RIP.
I think the stake that killed GM is the UAW itself; they refused to change their contracts as the company had no other choice but to create mediocre cars from indifferent workers subsumed in their mediocrity. Freeing GM from the UAW would have allowed a fresh start & a true new beginning, but President Obama would not allow it given his privates are owned by the Unions.
What killed GM?
*the UAW
*President Obama & the other complicit Democrats given campaign money from the UAW & other corrupt unions.
With unions, the customer always comes last.
I have been a Chevy and GM guy since growing up in the 50′s and 60′s. I have also purchased my last GM vehicle, a special order 2006 GMC one-ton commercial flatbed. It’s a great truck, does all I ask, but will be the last of its kind. Reason? I (still) have a choice, and refuse to support NObama’s forced takeover of an American icon, one that survived the Great Depression and could have survived this recession, had our one-party government not poisoned America’s business, investment and banking communities to the point where even partial recovery is questionable…if not impossible. No private investor will be willing to risk his/her fate with GM, not with Obama choosing who/what lives or dies. Who would buy a car, truck or SUV from a dying entity….with questionable short and long term parts, service and warranty support…not to mention resale value? Goodbye GM, was nice to know ya.
When Michael Jordan was asked why he didn’t make more political statements, he said “because republicans buy sneakers, too.” And yet, nobody in print will talk about who Obama Motors customers are going to be.
I don’t know of a conservative who will buy a car form Obama. How could this not be a part of the discussion of the “prospects” for a GM recoverry?
What GM needs to do is make reliable, safe, efficient vehicles that the general public can afford. Let’s face it, a GM vehicle that is cheaper than a Honda is not that cheap when the costs of repairs over the life of the vehicle are factored in. I am not advocating Japanese made cars and have never owned one but, there is a real reason that Honda and Toyota have a better reputation for reliability.
The Volt is a step in the right direction for those who need a vehicle for local driving. My hope for those of us that live in the Southwest Sunbelt is that there will be developed an affordable combination of electric cars and residential solar panel units.
Consumers will go to imports for small fuel efficient cars and to the big 3 for trucks and SUV’s. Will GM and Chrysler now leave the SUV and Truck market to Ford? Will imports like Toyota move in and take over GM and Chrysler truck and SUV business?
Gasolene price increases will hurt car sales. They did last year. Obama is a rotten apple. His involvement will cause a lot of brand loyal folks to switch. More than ever before.
Unemployment causes people that do not get laid off to postpone purchases. No Obama, laid off people don’t go buy new cars. Humans can also be loyal to certain dealers. I had an employee that owned part of a GM or Ford dealership and switched from Mercededs to vovlo because of dealer preference. He didn’t even buy from the family.
Obama tosses anyone under the bus. He has no concept that dealers had loyal customers. He doesn’t understand loyalty.
One problem that GM faces that nobody seems to mention is that when the economy is bad people tend to hold onto their old cars longer. During the Great Depression many good cars sold poorly because no matter how good a car is people won’t buy it if they don’t have money.
I find it funny that people say Obama will keep people from buying GM cars. Once upon a time Volkswagon sold a lot of cars even though the brand was originally created by somebody who was very politically unpopular. If GM makes great cars people will buy them. Even Republicans.
Now, to that great car problem. GM has to accept the fact that they need a good small car. The company has always believed that because a car company makes more profit selling one $30,000 car than they do selling two $15,000 cars that they should make terrible small cars to compell people to buy more expensive models.
If they can make a good $15,000 car they will sell them. The customers who buy a good small car from GM will be willing to buy the $30,000 car when their needs or income makes an expensive car the right choice.
It is hard to ignore the argument that GM and Chrysler were seized and unlawfully presented to the unions as spoils of the election. The supreme court will have to decide that.
I have to decide the fate of my two GM mobiles since I would never buy that product line again if my choices are federal-union owned and operated with batteries against power and safety.
General Motors only chance for real recovery lies in a great distance between themselves and the Soetero administration. Based on present facts, I don’t see how that is possible.
They’ve sold their souls to the loanshark…and everyone who has ever done business with them knows it.
If we don’t want to deal with the loanshark, we sure aren’t going to want to do business with the loanshark’s hostage.
One of the aspects of this takeover which is seldom mentioned is owner loyalty. I have bought mostly GM vehicles for over 55 years .I know people who swear by GMC and I once had a close friend who drove GM vehicles at the Milford Proving Grounds. ( he must be in torment wherever he is). We all loved GM and its products .
But judging from comment boards and articles I see everywhere most of these people will never buy a GM product again. I really wonder about those farmers and ranchers who have relied on their pick ups and SUV’s for decades . Will they be confident the dealer will stand by the product if they have a problem?
Somehow I don’t believe the clever socialist thinkers at Government Motors have figured any of this out.
I’ve got my eye on a nice little Tundra that’ll look pretty good in my garage. Ah well, sorry Obama.
GOVERNMENT & UNIONS CANNOT SAVE GM
Only the free market can recreate private sector companies.
http://greensrealworld.blogspot.com/2009/06/finally-europe-getting-it-right.html
How exactly did Obama kill GM? Was he in charge of the company? Did he force them to make terrible cars all these years? Was he demanding that they be gas-guzzlers at a time when gas was at record highs?
No. GM did it to themselves. Their arrogance in assuming that Americans are idiots and would continue to buy inferior cars led to their demise.
I say, let them fail. And then, let some young, fresh company with NEW ideas come in and give us a real competitor for the Japanese.
Until then, I’m helping preserve the “free market” by buying the best product: a Japanese car.
It’s a sad day.
Why are you wasting your time? GM is in a death spiral of is own making, propped up only by our money. George Bush should have refused to give it a penny. Obama should have too, but he did the next best thing: he lopped off the useless, cluless management which had done nothing of value anyway and was a captive of the UAW. Then he gave it to the people that owned it–the UAW and kept a piece for the taxpayers.
GM is a joke: People over know GM as poor workmanship, bland design, indifferent service, small tires, and unreliable parts. All made by sloppy, indifferent, benefit-crazed UAW workers whose idea of quality control is to let the customer fix it. Supervised by passionless CPA’s who were let out of the pen and into the executive suite.
People under 50 know GM as those cars that pull up next to you rattling. What you drive when you can’t afford better. Maybe OK for a Suburban driving mom, an Escalade Dad, or corvette son who likes a plastic car with no trunk.
Everyone knows them as the boxy, poor-suspensioned cars you get when you rent. Underpowered. Poor features. The car that makes you really appreciate your car at home.
GM can’t stick with any advancement: The Electric Car, the Saturn, the cadilac sports car from the 80′s…all given up when the going got hard. Its marketing is pathetic: instead of “See the USA in a Chevrolet,” and “Rocket 88″ engines, we get pictures of showrooms and bland cars. And since owes so much to so many who do so little, it can’t spend to upgrade cars, or really market their pieces of junk.
GM’s “management” were gutless, spineless, insightless people. Fools. Unable to fix any of their problems, they thought they could take taxpayer money to subsidize their incompetence and Gulfstreams and stay in control. Who will buy its bonds now? What smart “car guy” will want to work there when he can go to Toyota or Nissan? Stop wasting your time on this compnay. If it survives as anything other than a nuisance, it’ll be a miracle.
Barak Hussein Obama is right on schedule with his adgenda to cut us down to third world statist. The auto idustry is just a part. That’s why after fifty years driving GM,I’ll not buy another.
Someone 75, President Obama fired GM’s CEO. No President of the United States has any business telling a private company what to do; hence, this is the problem in a nutshell. President Obama has also given the UAW more power by giving them the keys to GM & screw over the shareholders & car dealers, again, all linked for political purposes.
The corruption continues to grow like kudzu while GM will continue to not make any money. GM must cut the cord that has been created with the US Government to survive. However, in doing so, GM will die as it should.
I don’t care if they are the cheapest cars in America, I won’t ever buy another GM car. Ever. Same with Chrysler.
I won’t ever buy another GM product. I hate communists and those pansies at GM had this coming. They should have stood up to that damned union a long time ago. Same for Chrysler.
Sheesh.
Remember also that GM’s cars come with full-time satellite tracking and a remote shut-off switch in the satellite system. If you value your privacy and freedom, you will not buy such a product.
Or we could enact the Fair Tax and induce the Japanese automakers to relocate their headquaters here.
JED @ 10: “It is hard to ignore the argument that GM and Chrysler were seized and unlawfully presented to the unions as spoils of the election. The supreme court will have to decide that.”
Good luck with that. Won’t ever happen. Why the sheeple in the US have not risen up to revolt against the destruction of the Republic says why that same republic is doomed to the ashcans of history.
A couple of points:
1. Being unemployed, I found a job selling Chevrolet at a local dealership where a long time acquaintance has been in sales for 30 years now. I thought it a safe bet where I could generate my own fortunes. That dealership has been in business for over 100 years. What I found in the new car sales department: Despite all of the GM generated sales boilerplate of customer uber alles was ALL of the cliche’s of car salesslime. “Buyers are liars.” “Never let the customer get away without being talked to by a manager.” “When you get their keys for the appraisal, make sure they get put in the ‘sales tower’ so they can’t walk away without us letting them go.” Etc. Etc. Thieves, slime and crooked dealings is what I saw in my time there. They treated employees like dirt. I was yelled and cursed at like I was some sort of dog.
2. I bought a GM car in late 2007. I traded a ’95 Ford T-Bird that was a gem but getting old for a ’06 Pontiac Grand Prix GxP that was 10 months old at the time. I did not pay the ‘new car depreciation’. Nice car and I was/am liking it. BUT, GM is killing Pontiac and the value of the car has dropped in half. I now owe more on it than it is worth. I was not upside-down in it before GM announced they were going to kill the brand. Thanks, GM, The 0bamanation and Congress. May you all rot in hell. Bastards.
I was always a Ford guy until I bought the GP. I have had a ’67 Galaxie 500, ’72 Courier pickup, ’85 F-150 Extended cab P/U, ’87 T-Bird, ’95 T-Bird, ’00 Expedition and ’05 Escape. I had an ’87 Dodge Caravan POS and a ’75 Dodge 1/2 ton P/U POS. In the future I will buy Ford, unless they get bought by the gov’t, or a Japanese/Asian car.
What The 0bamanation has done with AIG and the banks, Chrysler and now GM is unethical, immoral, most likely illegal and un-Constitutional. What the hell is wrong with the US? These guys need to be impeached and now.
We need two things in the Republic and right quickly:
1. Term limits for Congress. Short ones. This spells an end to the professional political class.
2. That Congress and Fedzilla employees are ALL forced to use the Social Security system and Medicare system. No more private retirement or healthcare systems for them. Want to see it fixed? That is how. NOW.
3. A 10th Amendment movement amongst the states to limit Federal power severely.
4. Enforce public finance for all Fedzilla electoral offices with very low limits. Force the system to only elect citizen politicians who are forced their know their constituents. Violators should face long, long prosin terms at hard labor.
5. Finally, an amendment to the Constitution that makes a balanced budget mandatory. No more BS.
Oh, one last point:
While at the unnamed slime ball GM dealer, the interest in the Camaro was huge but we never saw one. Can’t sell air, folks.
I will agree with much of what’s been posted, but frankly I’m weirded out how Obama is credited with causing GM’s downfall. I’m not the guy’s biggest fan, but he hasn’t been President long enough to destroy a corporation that big. They’ve been on life support for years. Frankly, I thought the nail in the coffin was a couple of years ago, when the Japanese car companies finally invaded the full-sized truck category. That, and vans (which aren’t used that much any more, except for commercial purposes) were the only areas where the Japanese didn’t compete with American companies. Once the Titan, Ridgeline, and Tundra appeared, I thought they were in trouble. Then the economy went south, and everyone took a hit; theirs was too much for them to take.
The truth is that both the union and management deserve a considerable share of the blame. A non-union shop, with management that clumsy, probably would have fallen on hard times, and a union shop with proper management probably would have collapsed anyway. Those things, plus the bad economy, combined to almost kill the company. I don’t see how the company is going to get out of public ownership yet: who’s going to buy shares in the company, when it’s got such a lousy track record, and has the government trying to influence its decisions?
No# 24 Heres how . When Obama became the decider on who owns or runs the company,he chose the union and the government as the owners and his administration became the operators (managers) They never actually had a plan to manage but rather a plan to divvy up the assets and follow their greener cars agenda. The question of who owned the peripheral assets (dealerships and suppliers) was waved aside as insignificant to be later decided in court.
What he could have done was strenghten the shareholders and executive management position and cut the union contracts and retirement cost burden. All management decisions for the past 25 years have been made with the muzzle of the unions guns pointed at their heads. But he chose the classic communist/socialist solution . Seize the asset and fire the management.
That is why he gets the blame . He doesn’t have the vaguest idea whats make a company profitable and its products desireable
George Bush killed GM and Chrysler. He should have forced them both into real bankruptcies last year – instead of propping them up long enough for Obama to get his hooks into them.
They might have emerged as competitive non-politicized companies that all Americans would have supported. Conservatives were their biggest customers – now as the comments above indicate, they have been seriously alienated.
Of the liberals I know, the only GM vehicles they drive are Saabs – which is soon to be sold or spun-off.
64 Nova station wagon with a 292 inline 6, a 200r transmission, and a 373 differential. 55 Chevy 2 door hardtop 350 with a Muncie four speed. 99 Durango wanted a blazer couldn’t find one for sale. Government Motors hasn’t built a car i didn’t modify. i even put a Cummins 4bta in an 84 short bed pick up. what i’d like to see is a Cummins 6 with an Allison trans in a Hummer.
The old GM & Chrysler were “Dead Men Walking” a long time ago. Neither Bush nor Obama are responsible for their deaths. However… any hope of these companies ever emerging from the bankruptcy process as healthy corporations with a bright future in the automobile manufacturing business has been poisoned by the feckless infusions of taxpayer money, the insertion of our government as a managing partner, and capitulation to the special interests of labor. The new GM and Chrysler will emerge from this bankruptcy process as stillborns.
Just my $.02
To those still wallowing around in Bush Derangement Syndrome : Bush did not seize the company or put a bunch of know-nothings in charge , appoint a Car czar or demand Green cars. He thought it was a financial crisis and money was the remedy. Do any of you think the Republicans or Bush would have been unmercifully and eternally hammered by the Democrat drooling press if he had not made some effort to save the company ?
Now that Obama has driven a stake through the heart of GM he thinks it can operate as a zombie corporation.
So lets give credit where credit is due, this one is on Obama and its about time for the BDS’ers to realize your boy is fully in charge now and he gets the blame.
Dave K just nailed it quickly and succinctly. Well done Dave.
I myself recognize that Obama did not cause GM to fail, he just made sure that GM can never recover. Funny we are in a war in this country between Capitalism and Socialism, and many who voted for Socialism don’t as of yet realize that they did so. The incomplete understanding of our situation is astounding. So while the “right wing” capitalists are condemning the GM deal and vowing never to purchase there products till they again are a free company (and yes I do believe that if by some twist of fate the stock held by the government was sold and GM freed many would once again agree to purchase there products), the “left wing” can’t seem to grasp what the problem is. Just amazing.
God Bless America…..we sure do need it as we sit in this hand basket with only 48% of us knowing where we are going.
Their cost structure is still too high to compete on the low end with the Asians, and their quality culture is still too poor to compete with the Euros on the high end. They’re a one-trick pony, and that’s big SUVs.
As long as the donkeys insist on limiting domestic oil production and carbon-based alternatives, and pushing CAFE to the limits, they’re screwed.
Maybe some Chinese company will buy the trademarks.
With the all new, all different cafe standards, are not the GM trucks & SUV’s an extinct brand? However, this is what sold for GM & what the customers wanted. With the beuarocrats involved, all of this will be washed away for political hacks such as the UAW & the nutty environmentalists to make so-called “green cars.” These will be 35 MPH dangerous tin cans with wheels.
Will Ford be drawn in the quagmire given they use the UAW as well? Ford has to cancel the UAW contracts ASAP to survive.
Meanwhile, the GM brass continues to dazzle us with their understanding of the market:
http://www.autobloggreen.com/2009/06/05/gm-marketing-boss-mark-laneve-apparently-unaware-that-diesel-is/
#31 — They’re a one-trick pony, and that’s big SUVs.
That’s a bit wierd. Detroit outside of the Jeep cherokee didn’t do SUV’s until the Japanese made them popular. We had a 4Runner in the mid 80′s, many years before the Explorer came out. At one time we were one of the few on the road with that sort of vehicle.
With all due respect to Mr. Douglas, marketing can’t solve the fact that Detroit doesn’t innovate. How long ago was Toyota and Honda selling hybrids? SUV’s as we know them were brought here by the Japanese. Current big hit for the younger set? The rolling refrigerator look from Scion and Kia. Not a Detroit vehicle in sight. Marketing can’t fix a lack of innovation.
Douglas’ other point seems to be in that squishy zone of suggesting that we’re all GM buyers, but somehow we lost our way. Tempted by the dark side of Toyota. Some of my age group is that way, but I’ve owned non-Detroit vehicles for some 40 years now. No amount of marketing would cause me to take a Detroit vehicle seriously; I wouldn’t have one for a gift, much less pay for it. Like #15 I’ve traveled a lot more than I care to admit to and have had the misfortune of getting stuck with most Detroit makes/models via rentals over the years. Marketing isn’t going to fix crappy vehicles.
Lastly, my kids all drive, and not one of them would consider a Detroit made vehicle. It doesn’t matter how much Bob Seger (more cowbell!) is used. What did they buy? Two Hondas, a Nissan, and a Toyota. They all share comfort and reliability. Just like the learned inertia that allowed for family lifetime GM buying, the inertia is now no longer in favour of GM. Marketing isn’t going to fix inertia.
Sorry, Mr. Douglas. Marketing couldn’t convince people to like “new coke” and it’s useless here as well.
http://en.wikipedia.org/wiki/Chevrolet_K5_Blazer
Gee, we have a lot of smart people here…
Err…
http://en.wikipedia.org/wiki/Chevrolet_Suburban
#36 — Gee, we have a lot of smart people here…
I’ll say.
I’d said — “SUV’s as we know them were brought here by the Japanese.”
Obviously I was referring not to sparsely selling rolling behemoths based on humongous pickups, but smaller SPORTY vehicles based on the smallish mini-pickups.
Unless of course you’re trying to claim that the gargantuan POS Blazer which sold in dribbles somehow spontaneously and for no apparent reason sparked the revolution.
The SUV as personal transportation was caused by CAFE. Our congress caused the SUV as everyday vehicle. To combat 12 MPG cars, we got 8 MPG SUVs.
And these Einsteins are at it again, only stupider this time.
#39 — The SUV as personal transportation was caused by CAFE. Our congress caused the SUV as everyday vehicle. To combat 12 MPG cars, we got 8 MPG SUVs.
I don’t know where you get this from. Our mid-80′s 4Runner got 25 mpg, and that was with CA emissions equipment. At the same time we owned a Mazda hatchback that got just shy of 40 mpg.
Must be a new memo out from Soros. Now SUVs are nice, clean, green, ecomobiles, and are no longer spawn of the devil. More Calvinball.
landrover is that a japanese brand. suv means offroad, not a 4 wheel drive station wagon for soccer moms.
On Obama destroying General Motors: Nobody is saying he brought them to the point they were at on the day of his inauguration. What we’re saying is that while GM’s well was dry, Obama poisoned it. Bush took water from another well and diverted it to GM. Shouldn’t have, but we get it. Obama has fundamentally changed what that well is, and who can use it. (Not the consumer or the people who lent GM money, but them that supports his regime.)
Once, GM could have been bought out in whole or in pieces by private parties. Now, the only thing we can do with it is swear it off. The UAW, GM and Obama have stolen our wealth for their benefit. The only honorable thing to do, other than toss them out of power, is to boycott their products and toast marshmallows on their smoldering ruins.