The Truth About GM
An important reminder from NRO:
Admirers of the GM bailout should bear in mind that it was the Bush administration that first decided to intervene at the firm, offering a bridge loan on the condition that it draw up a deeply revised business plan. President Obama’s unique contribution was effectively to nationalize the company, seeing to it that the federal government violated normal bankruptcy processes and legal precedent to protect the defective element at the heart of GM’s troubles: the financial interests of the UAW. It did this by strong-arming GM’s bondholders into taking haircuts in order to sweeten the pot for the UAW. The Obama administration also creatively construed tax law to relieve GM of tens of billions of dollars in obligations — at the same time that Barack Obama & Co. were caterwauling about the supposed lack of patriotism of firms that used legal means rather than political favoritism to reduce their tax bills.
Cadillac is doing OK, thanks to a multi-billion dollar revitalization program begun a decade ago. But much will depend on the success of the new XTS full-size sedan, which GM was just forced to halt sales of due to a software glitch. It’s a quick fix, but does nothing to help the sullied reputation of the brand once known as “the standard of the world.”
Chevy’s record is mixed, but losing $49,000 per Volt has got to make the company grateful that they don’t sell many of them.
There’s no way an honest bankruptcy would have allowed the GMC marque to survive. It’s a vestigial of GM’s Bad Old Days of badge-engineered crap — GMC doesn’t produce a single model of its own, merely rebadged Chevy trucks. That hurts GM’s economies of scale, and also requires duplications in its expensive marketing efforts. Instead of making one truck, you have to pretend to make two. And instead of selling customers on one truck, you have to sell them on two. That also puts one of GM’s divisions in direction competition with another of GM’s divisions. This is a big part of how GM got into this mess, starting 30 years ago.
Speaking of duplicated efforts: GM has not one, but two luxury brands. We can’t forget Buick, which is big in China but less well-respected here. GM seems to have positioned Buick up against Lexus, and Cadillac against BMW. If sales are anything to go by, consumers aren’t buying it (ha!) about either brand. Again, an honest bankruptcy would have forced GM to jettison Buick (keeping it alive in China, of course) so they could focus on making just one damn decent luxury line. GM’s engineers are among the best in the world — but there are only so many of them. Diluted efforts lead to diluted results.
Just about every other carmaker in the world has one retail brand, one luxury brand, and maybe — maybe — a truck/SUV division. GM has two not-very-luxurious luxury brands, one retail brand which also makes trucks and SUVs, and a truck brand which only pretends to make trucks.
What a confused (and confusing) mess.
Bingo, Vodkapundit, great analysis.
GM cars aren’t that bad really, assuming you can get them at a great discount – that’s the problem though isn’t it?
An honest bailout wouldn’t just have dumped the union, it would have allowed new, private ownership to restructure the company; to prune it rather than trying to save every branch.
They spun off SAAB (into oblivion more or less), tried to sell off Saturn, and finally shuttered Pontiac 30 years after destroying one of the all-time great American muscle brands. They tried to sell Hummer to the Chinese, but if I recall correctly, that didn’t go anywhere.
So they pruned, which they needed to do. But what was required wholesale restructuring and rethinking what it means to be General Motors. That’s what didn’t happen.
And again, this is before we even get to their now-permanent and court-mandated death alliance with the UAW.
I still remember those late night “different kind of car company” Saturn infomercials back in the early ’90′s.
GM knew back THEN, they were hopelessly bloated, top-heavy and over unionized to the point they couldnt design and build a decent, affordable “new car” unless they built a whole new “company”.
Then Saturn just got absorbed by the Black Hole that only does one thing…Eat.
All I could say about their collapse was “gee, what took so long” followed by “why, oh God why did you let them LIVE!”
And thats coming from a guy that used to Bracket Race Small Block Chevies against Fords and Mopars just after the First Fuel Crisis, when V-8′s were “going away” and Econo-box rattle traps were the machines of the day….
I always respected the superior design of the Small Block, its a slice of America at her best. Love how you see them in even in Fords… ’32 coupes, Lead Sleds, T-buckets, Cobra projects…horsepower per dollar, reliability, ease of maintenance, it was and still is, King…so I’m no Chevy-hater.
But that infected disease called GM needed to just die. The Un-dead Union Zombie that now feeds on our blood as we sleep, is an abomination.
My last boat was a Bayliner 3058 with twin Mercruiser GM 305 4V. Working on those engines was like being re-united with an old lover! A decent “shade tree” mechanic could work on anything on them except mine did have electronic ignition; all you could do with that was replace it. You could run them at 3200-3300 rpm, staying just out of the Quadrajets’ secondaries, and run all day at 25 – 27 smph. Depending on sea state, you could keep them under 20 gph combined if you weren’t too heavily loaded. I had over 2200 hours on them when I sold it and they still had good oil pressure and compression. Great old engine!
Remember when nobody wanted a Quadrajet and you could get a Holley 650 on sale for less than a hundred bucks? These days, the only things using carburetors are hot rods and boats and the prices have skyrocketed. Saltwater use takes a toll on carburetors and even with the best fuel filters, the zamac or other white metal alloy rots pretty fast, so you need new/rebuilt carbs every few years. You can’t buy new Quadrajets and there isn’t a marine cast iron intake manifold for a Holley for the SB unless you want to do some fairly expensive or clunky mods, so I bought rebuilt Quadrajet automotive carbs converted to marine – for $300 a piece! Not so long ago you couldn’t give Q-jets away.
My Dad, a WW-2 Liberty Ship Merchant Mariner, got the a deal of his life on a 1950′s 28 foot Pembrook, in 1976…clinker built hull, mohogany transom, a real beaut…
It was only because the Gray Marine Fireball V-8 (that needed tons of mechanical work) was so similar to a GM/Chevy that me and my brother (16 year old twins at the time)were sure we could do it ourselves….so our modest family was able to join the “boat-set” we otherwise were in no social/financial position to be in.
Dad took a chance with every penny he had, and let his boys re-build the top-end from cam to carbs
(a pair of Rochester 2 barrels with our own progressive linkage design),
while we all pitched in on the wood and brightwork…
It was really something for dad to finally live the dream of getting “back to the sea”
when he was sure he’d never afford it…
Never would have happened but for my love of Chevy V-8′s,
and dads confidence in me and my brother to pull it off.
It was a great 4 or 5 seasons, until we learned this Nautical Truth:
A boat is a hole in the water, to which you pour money.
Buying, and fixing was no problem.
Owning and maintaining it was impossible for dad, with tuitions and retirement comming all at once.
So again, its not easy to accept the truth…
I love Chevy, but I have to put ‘er down…
cause its the only right thing to do.
I had a 24′ Trophy with a 351 Ford 4V, good little fishing boat and OK for a couple for a weekend or four for a fishing afternoon unless somebody’s plus sized. I started looking and talking about the 30′ flybridge sedan with twins. A buddy told me that I should go down to the dock every day, throw a fresh, crisp hundred dollar bill in the water, and watch it float away. If after a month or two I liked the feeling of doing that, I should buy that boat. I didn’t throw away the hundys but I did buy the boat.
It really wasn’t as bad for maintenance as boats are made out to be but there’s sometimes a fine line between maintenance and upgrades and you can sure find some cool toys for a larger boat. Mine looked like I’d been through the West Marine catalog with a magnet – except the stuff wouldn’t have stuck to a magnet because it was all stainless steel or fancy electronics. The summer of ’08 really tried us with the gas prices. I put a total of 47 hours of personal/family use on it that summer when gas got as high as $4.80 at the marina. I was doing some charter work but a lot of it was on reservations we’d sold back in the winter and spring when gas was hardly half the price it was by summer; could barely pay for the gas even with a full load, six because it isn’t inspected. Another reason to hate Comrade Obama and the people who destroyed the US economy in order to install him. Anyway, sold it when we moved to Anchorage because it was too much of a hassle and cost to get it here and ANC isn’t really a good boating town, at least not saltwater boating. In Juneau, the boat was five minutes from the house and twenty minutes from the office. In ANC, if you can get a slip, the nearest is a couple of hours away. Kinda thinking of getting an old wooden runabout for a lake boat that I can trailer, but it sure isn’t the same as a bigger boat in a marina.
My dad was 4F because he’d been born with clubbed feet. Courtesy of the Shriners he had pretty revolutionary surgery for the ’20s and he could get around but not well enough to be a soldier. He spent WWII building Liberty Ships at Southeastern Shipyards in Savannah, GA. Most of the men were from rural Georgia and few had ever seen a boat bigger than a wooden skiff for a farm pond and had to be trained from scratch. My dad was pretty well educated for the place and time, some college, so he wound up with a lot of administrative duties and with doing the math for laying the guns on most of the 80 or so Liberties Southeastern built during the War. We still have his union card and button, his ID, and some of his pay stubs; he was taking home $75 – $100 bucks a week, incredible money for rural Georgia in the ’40s and more than most blue collar laborers in the South were making even into the ’60s. I have a 1/350 model of a Liberty and a book with some good pictures of Southeastern Liberties and its on my “to do” list to get it built this winter.
Oh, and Europe is an even bigger mess. GM is in the multi-billion dollar process of trying to introduce Chevy over there, while Opel is getting its clock cleaned by VW. Instead of putting the money into saving their established European brand, GM thinks it can launch Chevy. While Opel starves, Chevy struggles.
But I don’t WANT to own 50-odd percent of a failing car company…
Shut up and eat your peas. They’re good for you.
I love my GMC!
But yeah, it doesn’t make tons of sense to sell (almost) the same vehicle under two different names. It does, however make sense to reuse platforms for different models that are targeted to different uses and customers. Brand is a funny thing. People for better or worse, do have an affinity for brand that goes beyond rationality. But all this is only a small part of what is wrong with GM. Their cost structure is out of whack and until that is fixed, all the brand tinkering in the world won’t save them. Bottom line – Mitt was right. They should have gone bankrupt, renegotiated with the unions, creditors to come up with a structure that would ensure long term viability. Obama made a $50B punt on this one and almost no one is calling him out on it.
Having GMC as a brand made sense when GM controlled 50% of the US market. At under 20% marketshare, GMC stops making sense.
Brand loyalty worked back when brands meant something. My grandfather bought Buicks his entire life because when he upgraded to his first Buick it really was a very good car and quite a bit better than a Chevy, but not so flashy as a Cadillac. Plus, the dealers tended to be better than the mass-market dealerships (we used to get our Mustang serviced at a Lincoln dealership for that very reason). Brand loyalty based on feature-segmentation was destroyed during the 80′s when they started rebadging in order to minimize capital investment.
The dealer liquidations of 2009 destroyed the only remaining brand-loyalty mechanism, and I don’t think they figured that into their calculations at the time. For example, by ditching their local Lincoln dealership, Ford probably lost a chance to get my wife as a life-long customer. Their service department was great with her Mustang, and she’d have been likely to go back for another car.
But American auto companies prefer to compete for every customer, every time, I guess.
And then they really diddled the chicken with the Cadillac Cimmaron. What an embarrassment.
My dad ended up with one of those for a commuter car when he was working out of state in the late 80′s. I used it for 2 months when my car broke down (blown engine).
It was the biggest pile of crap ever made. 1.8ltr automatic with 500 extra pounds of non-working elctronic luxury.
Best thing that ever happened to that car was in got shredded !
An old timer in East LA told me that back in the day when he was a bookie it was incumbent on him to drive a Cadilac, the prefered automobile of those in the undergroud economy.
Ford did some rebadging back in the 70s/80s with its Mercury brand, didn’they? I remember the Mercury Monarch was the same as the Ford Granada, the Mercury Bobcat the Pinto, and a few other models as well. Seems the last cool call Mercury ever made was the Cougar in the 60s.
Much like Shaq in that Buick LaCrosse, Obama tried to squeeze too much Magic into to little company.
Shaq’s shoes are larger and more stylish…and worth more than GM’s future.
Obama has a favorite shoe as well. Flip flops.
I drove a Buick Lacrosse for a couple of weeks last year, a Hertz rental with most of the bells and whistles. Ok, it is a pretty enough car, rides and handles OK, and actually turns heads, but I swear to God, the people who designed it must never have driven the thing. It does you no good to have all the “good stuff” if you can’t find it, can’t reach it without taking your eyes off the road, can’t see it in the dark, and at night the whole windshield is just a mass of glare and reflections. I can see how someone might buy one on a favorable impression from the standard short test drive, but if you do buy one and have anything like a sense of what a car should be like, you won’t buy another one. The difference really is in the details and the details are awful.
I drove a Chrysler R/T with a Hemi for a couple of weeks this year. There are things not to like; rear vision foremost, and I’m not real fond of the seats, but once you get used to it, the ergonomics are very good, everything falls to hand. And once you drive with the adaptive cruise control and blind spot indicators, you’ll want them on any car you have. I will say that with new cars with all the bells and whisles, you are well advised to spend some time going through the owners manual before you pull out of the rental lot or you’ll really struggle finding and using things at first.
I owned one Buick in my life.
This car was such a lemon, I left it one day on the side of the road hoping it would be stripped, vandalized, or stolen.
Not for the insurance, for revenge against this beast. I was in my 20′s, could not afford to keep fixing it and they would do nothing about the serial disasters this car would produce. I walked and took public transportation.
Never in the next 35 years have I owned or driven a GM product.
I swore I would never let them take my money again.
Little did I know…they would find a way.
Was it a real Buick, or a Chevy in Buick drag? One of the worst cars I ever had was an ’81 Skylark X-body car. It was basically a Chevy Citation with a trunk. BINO. Buick In Name Only. It had all the issues you’d expect with a Citation.
74 Buick Century. Blech.
CF,
C’mon dude, dont be so haten’ on the Buick…a seventy-four ANYTHING was Blech
Supposedly, the Chrysler 300/Dodge Charger was designed during Daimler-Benz’ ownership of Chrysler. I think it shows in the overall decent basics of the cars.
BTW, the R/T is a model of the Dodge Charger, not the Chrysler. I test drove one this weekend and was favorably impressed too. Now, buying one is betting on lower gas prices though.
Yeah, I know, brain fade. I had a Chrysler 300M. Kept it for ten years until my wife pulled out in front of a guy and he t-boned and totalled it. It was a great car with some German influence but a comfortable American car feeling. I drove 300Cs, the Daimler-Benz period one and didn’t like it. Even Mercedes gave up on low-line M-Bs with trim like a taxicab; seats too hard and straight, beltline too high, windows too small and hard to see out of. Most of them you see now are all blinged out with black windows and 22s and often fake Bentley grills. If I could make myself buy another car owned by the Fix It Again, Tony company, I might consider a Charger R/T but now I’m happy with my teenaged Mercedes ML 430.
No wonder I drive a Honda.
BTW, GM has been selling off divisions for decades to try to keep itself afloat. Frigidaire, Detroit Diesel, Allison, …
That $49K/Volt number is bogus by the way, and leads one to draw exactly the wrong conclusion. That includes up-front development costs, and GM would want to sell MORE of the car so as to amortize those costs across more frames. On top of that, some of those costs went to peripheral components (like electric pumps and fans) that will now start to show up in other non-PHEV vehicles just because they work better.
The actual damning number for the Volt is $39K–the sky-high sticker price for a cheesy little car, at which price neither the consumer nor GM will ever come out ahead of an equivalent $15K gas-engined little car.
Under normal times, a portion of the R&D costs for a vehicle would be amortized based on projected sales. For example, if you spent $1 billion to develop the car and projected to sell 100,000 cars over the coming years, then you need to add $10,000 to the price of each car to cover the R&D costs (not counting the cost of the money for R&D). If you project to sell more cars then the per-car cost would be less.
Of the $49,000 (give or take) price of a new Volt, how much is the actual cost to produce the car? How much goes to cover R&D costs? How much goes to other things like UAW employee health benefits (reportedly over $1000 per car GM sells)? If they’re having to sell the car from what it actually takes to build it, you’ve got a problem. If they have to sell it for less than the full cost (all factors considered), then they have an even bigger problem.
Unless they can get their way sales up, that’s a real number. You can’t afford a billion dollar development budget if you’re only going to sell a few hundred units a month. R&D is real green money.
The problem is that news outlets–OGH included–are claiming that GM should be happy they’re not selling more Volts, since they’re losing $10K per car. That’s not true–in order to recoup their costs, they would need to sell a LOT more. Unfortunately they can’t, since the price point is deterring buyers. As Stephen has pointed out previously, I believe, Toyota has brand loyalty in the hair-shirt environmentalist market. GM just ain’t going to compete in that space.
They are loosing money, and R&D cost is built into everything on the planet that is an engineered product. The fact is we all know they are loosing money because they wasted time and money to make somthing that was not really up to speed.
And the cars “aint all that” so they may loose more in the future on them.
One of the unintended consequences of Obama peeing all over contract law in order to benefit the unions is that investors (those evil capitalists) stopped investing in industries that were unionized because they didn’t want to take the next “haircut” and not get paid.
And they lost the pissing match with Boeing. Slowly, the machinists are going to lose their grip on commercial aircraft because of that. Brilliant, guys.
I hope you don’t think Boeing voluntarily reached its “settlement” with the IAM. Part of Boeing, the defense side, does business almost exclusively with the US Government, the other part, the commercial aircraft, is heavily regulated by the US Government. In other words, Boeing is totally at the mercy of the IAM and the Government. Somebody whispered in Boeing’s management’s ear something along the lines of, “nice aerospace company you have there, be a shame if something happened to it.”
Back when the World was still sane, a big, rich company like Boeing or GM when faced with labor strife and even a Democrat NLRB would have said, “See you in Hell or Court” and taken an adverse finding to the USSC and had it reversed. Boeing would almost certainly have prevailed on the merits and embarrassed the NLRB in the process if they’d gone up. They never even really started the appeal process; there’s a reason.
we live in a fascist country
obama doesn’t want to run anything. Too much work for a man of his interests. He has basketball brackets to pick and bowling techniques to perfect.
He much prefers to shake a club at one of his 50 or so capo companies, and have them jump to do his bidding. This, btw, is the reason that he is so intent on destroying small businesses. Too many little cockroach business people scurrying around to control. Way too much effort. 10 to 100 is a much more manageable number. It has nothing to do with economics; everthing to do with concentrating power.
This has been the way the world has worked for millenia, long before corporations were even invented.
As you say, it is essentially the the mafia method of doing business, on t-rex steroids. Best part? He didn’t even have to invent t-rex. It was just there fo the taking; all fluffed up with bureaucrats eager to do whoever’s bidding maximized their own power.
What company wouldn’t be saved with a blank taxpayer-funded check.
Even inefficient, uninspired, low-quality, stuck on stupid companies that had managed to convert once-desirable products into cash cows for unions would survive and be “saved”.
Which is exactly what happened.
But, given the flexible definition of “saved”, who can deny that it is one of obama’s big “successes”, another flexible word put to multi-purpose use by the revolutionaries. Just like they saved Russia and turned it into another big success.
The problem with GMC is a little more complicated, because GM (like Ford) still attempt to compete with Navstar and that whole bunch in making commercial frames. They could probably just sell them as Chevy, but as you say, a bankruptcy court would have told them to get out of that market altogether (or just import Isuzu commercial trucks under the Chevy badge).
GM has serious management problems. But that’s expected. When the most important skill for an executive is how well they schmooze with politicians and labor leaders, you’re probably not going to have very many execs who actually know anything about running a real business.
Ross Perot was talking about management incompetence 20 years ago. This isn’t exactly a surprise to anyone who was paying attention.
Oh yeah, probably goes back to the 60′s. I forget who said it, but someone made the point a while back that GM wasn’t a car company as much as it was a pension fund that happened to own a car maker. 90% of the energy at the top had to go into managing the benefits package, increasingly for retired workers, and nobody really had time to think about cars.
Which all gets back to the sham of Obama’s cronyism. What GM needed was to be freed from the onerous union contracts of the past. Everybody should have taken a haircut – investors, bond holders, management and the union. They all collaborated on an unsustainable financial setup. Give the assets to someone else with a fresh start and it could have had a chance.
Way back when, back in the 50s and 60s, GM was pretty much five different automobile brands under one banner. Each brand was basically the same but there were many differences. Pontiac was at the bottom of the bunch,made a bit cheaper, not quite as good interior, engines were great though. They made four or five different models each a little better. Chevrolet came next. They were slightly better quality than the Pontiac. They both had comparable models and features but Chevy was just that little bit better in each category. Next came Oldsmobile. Same thing, better interior, more features, ect. Then came Buick. A poor man’s luxury car. Many features, great ride, better interior, great car. And then, of course, came Cadillac. The top of the line. True luxury.
This division went on for many years. People could choose the standard they wanted and could afford. Then, some pencil pusher at GM asked hey, why are we making three or four different engines that are almost the same? Like the 350, why not just drop the Caddy and Pontiac 350s and just use the Chevy 350 in all of them? This went over well with the bean counters so the word came down, Let it be so. This went over real well until the first time a Caddy owner had to have some work done on his very expensive baby and found out it was flying under false colors. I worked for NAPA when that first started and can remember the confusion when someone came in looking for a part and I had to ask which engine they had. They would answer oh, a 350 and I would say yes, but which 350? Answer, blank stare and a huh? Then it got worse, body parts became interchangeable, models all started to look the same, and quality went out the door. And they wonder why GM went down the toilet.
I miss Pontiac!
Most of their stuff was dreck but they started to Americanize and import cars from their Australian division, Holden, and they were REALLY good cars.
My 2004 Pontiac GTO had a Corvette drivetrain in a very classy and comfortable couple. I wanted to trade that for a 2009 Pontiac G8 GT four door sedan, again with a Corvette engine but with a better 6 speed automatic. but GMAC closed shop just as I was shopping so leased a VW CC instead.
Test drove a used G8 GT this weekend against a new Dodge Charger with a Hemi and the G8, in spite of being 4 years older, was the better car (although the Charger ain’t bad!)
I suspect that GM’s decision to abandon the Australian imports were based on two factors. First, Pontiac was far too damaged a brand by 2004 to regain consumer interest and trust and secondly, the UAW had a “not built here” attitude.
What GM did to SAAB was a crime.
The days of the GTO are long gone. Pontiacs are for strippers.
Actually, I retired from the Chippendales about 20 years ago. Does that count?
According to Steve Ratner, the Obama’s man in charge of the GM bankruptcy, the manufacturing cost of the Volt (i.e. labor and materials) is almost the same as the retail price (i.e. about $40,000). The $1.2 billion in Volt development costs get added on top by dividing the number of units by 1.2 billion. If we project 20,000 in annual sales over 5 years that means 1.2 billion / 100K units = $12,000 per Volt. Thus GM’s cost is at least $52,000 per car that retails for $40,000, and GM does not get the $40,000 because the dealer also get a profit and/or they are subsidizing leases that imply a price that is much less than $40,000. This means the bottom line is a loss of at least $20,000 per Volt at better than current sales, and more marketing expenses and/or lowering the price to increase volume will only make the losses higher unless volume is literally tripled or better.
I miss an honest economy.
When people walked from St. Louis to California, there was a widely held truth; If you wagon was made by Studebaker, there was a reasonable chance you would not die along the way, due to a break down. (Disease and hostile Indians were another matter.) The company tried to adapt to the horseless carriage, made many of the stoutest war trucks in WWII, but missed the peace time market, due to many factors. GM was one of the earliest amalgams of competitors, invented a superb overhead valve V8 for the popular market, and displaced Henry Ford’s car as the American automobile. But organizations, like people, evolve from survivors to spoiled brats, to bankrupts. It is the human condition.
GM, in an honest America, would have undergone a normal bankruptcy. The dummies in mahogany row would have been fired. The union contracts which they negotiated, on the basis of their near monopoly, would have been torn up. Obsene terms and conditions, unknown to other working Americans would have been realigned with reality. That is life.
What occurred is almost theft. Bondholders, and non union retirees lost their shirt. Old men, now eat dog food, because of this flim flam. It cries out to heaven.
The VW bug was developed under Hitler; it was a good vehicle. I bought one. I will never buy another GM product in my life time. They owe me, and every American something north of $50 Bn, due to crony politics.
I miss an honest economy.
I watched some Mecum Muscle Car Auto Auction this weekend on the Velocity channel. The cars GM made in the 50s and 60s are sheer works of art, relics of a golden age of cool. The Impalas, Chevelles, Camaros, Vettes and the like just blow you away.
Born too late.
I had cousins who used to come visiting during the summer in the late ’60s. They always drove muscle car convertibles.
We would counter with my Dad’s convertible Cadillac.
We’d drive around listening to the Beach Boys.
What the hell is cooler than that?
This place sucks worse for people like me. We know what America could do. We watched John Glenn when we were toddlers and Neal Armstrong when we were in Jr. High. We drove fast cars and powerful boats. We used to waterski with just a tiny little waste belt so when we drowned, they could find the body easier. We drove as drunk as possible without having an accident. We used to swim across to the beach in the middle of the night, because there was never a lock on it. We used to chop down trees on vacant lots (when we were 8) with tools our Dads gave us TO CHOP THEM DOWN (“fer chrissaks, don’t ever tell your Mom. YOU STOLE them! Now go, and try not to chop any body parts off!”).
Where did it all go? A nation of sissy crybabies who can’t even wipe their own butts and who NEVER EVEN go outside! Our Moms used to send us outside in the rain (GO PLAY! Yo’ skin don’ leak!)!
Those schmucks deserve Obama. Just tell me where I can go to hide, ’cause this place sucks! It’s full of idiot children, who are simp;y waiting for Obama to tell them how he’s going to help them…with YOUR money.
These little pussies wear enough safety gear when the ride a bike, fer God’s sake, that it can’t possibly be any fun at all. Little Baracky never even LOOKS happy on his weenie bike rides with the ever charming Moochelle, and he looks like the douchebag in chief, with a helmet and kneepads (JFK must be rolling like a GE turbine in his grave at Arlington. Can you imagine him wearing such pussified gear to RIDE A BIKE? He’d a’ sailed a rowboat in a Hurricane without a helmet, with WFB at his side, just for the thrill. The old Kennedys might have been idiots, but weenies they never were)! You show me the sissy that votes for him, and I’ll show you a guy my 80 year old Mother-in-law could beat the hell out of…and WOULD!
Boy, a World War would really come in handy right now! I’m not fretting, though. I hear Baracky-weenie is working on it.
Whew! I need that. Thanks for listening.
I am offering a prize of one attaboy for anyone who can tell where the sentences in the middle should actually be spliced to make any sense.
Also, what did I do to get a smileyface on there?
I was not even aware that such a feature existed!
I think you get the smiley face if you type an 8 followed by a parentheses. Let me try: 8)
How about the video where CEO of GM is extolling the virtues of producing 70% of their vehicles out of the US. And the plans being implemented to move their R7D to China. Cadillac sponsored a Communist Party Propaganda Film that extolled the virtues of Mao’s Revolution. Check out the video. http://www.youtube.com/watch?v=Lvl5Gan69Wo&list
You know, Stephen, every time I begin to think you’re just another kinda amusing, slightly witty, sorta pretty face, you write something that shows me you are also a smart and really perceptive b-stard!
Imagine if you didn’t waste all that brainpower thinking. Then you’d surely be a STAR at Fox!
Obama destroyed integrity in bankruptcy laws and bond holders rights . How sick I feel when I hear Obama and Biden toot their horns because GM is”alive “. When the truth is GM is no longer an American icon. It’s a shame most of those union workers will support Obama because they believe he saved their jobs , it’s rediculous , they’d still have their jobs had it went through normal bankruptcy channels. Here is one way , no auto worker will have their job and that is UN AGENDA 21 . It’s already being implemented quietly in many cities , in incremental steps. When Agenda 21 is complete auto ownership will be illegal throughout America and throughout the world. This is why we see Obama increasing CAFE standards to unreasonable levels and this why they want to spend billions upon billions on bullet trains to nowhere despite the fact we are broke .
Which UAW workers are those? The ones in Indiana, which is going for Romney, or the ones in Michigan, which is a toss-up? Or maybe you meant the out-of-work UAW members in Janesville, who keep voting for Paul Ryan.
Obama bailed out the union leadership and their cronies. I’d guess everyone else is feeling the heat right about now.
America somehow survived when American Motors (AMC) went belly up. We’ll survive when GMC goes belly up too. Let’s put GM out of its misery. It will save America a lot of misery too.
I heard that something like 60% of their sales are to the US government. I’m also assuming that was here in US. Could that possibly true? Just wondering. Thanks.
Nothing like 60%, no. Although, like Chrysler, GM has long been dependent on fleet sales to government and rental companies.
GMC doesn’t produce a single model of its own, merely rebadged Chevy trucks. That hurts GM’s economies of scale, and also requires duplications in its expensive marketing efforts. Instead of making one truck, you have to pretend to make two. And instead of selling customers on one truck, you have to sell them on two. That also puts one of GM’s divisions in direction competition with another of GM’s divisions. This is a big part of how GM got into this mess, starting 30 years ago.
Thanks to Mr. Green for giving props to my automotive alma mater, TTAC, but I’d like to clarify a few things. Actually, GMC has been a GM brand for almost a century, not just 30 years, almost always selling badge engineered Chevys. GMCs were always a bit fancier than Chevys, but their main purpose was to give non-Chevy GM dealers a truck line they could sell. If anything, badge engineering, as they call it, actually improves economies of scale since they are, if it works right, selling more vehicles. One strategic advantage the domestic automakers have over Toyota and the other import brands is that you can’t find an import dealer in a small town. Toyota will not put a dealership in a city with less than 100,000 people. When the Big 3 cut back on the number of dealerships (Chevy alone had 4500 stores to Toyota’s 1500 or so), more dealerships were closed in large cities (where intra-brand competition was driving down transaction prices) than in small cities. Those Pontiac, Olds and Buick dealers in small towns served a more rural market and they needed trucks to sell. If GMC is needed in 2012 is an open question but it made sense for a long, long time. GM still has hundreds of Buick/Cadillac dealers in smaller markets and those dealers want trucks to sell. Chevy dealers would not be happy seeing the bowtie logo on Buick sales lots.
Alfred Sloan’s business model of a car for every purse and purpose worked for the better part of a century. Chevrolet, Pontiac, Oldsmobile, Buick and Cadillac provided an aspirational ladder and the divisions only competed with each other at the margins (also, to correct a point made earlier in a comment, Chevy was GM’s entry level brand, not Pontiac – Chevy was one of the “low priced three”, competing with Ford and Plymouth for the mass market). Today, when even a Kia has the same general toys and features that you can get in a BMW, it’s harder and harder to distinguish brands. Within the last month I’ve reviewed a $45K Chrysler 300 and a $69K Jaguar XF Supercharged and the options and features were almost identical. Both cars are fine cars but I had to give at least a little thought if that $25K difference was worth it (it is).
Having a mid level brand or what we today would call entry level luxury made some sense but was always problematic. DeSoto had that role at Chrysler (in between Dodge and Chrysler brands). Mercury served that purpose at Ford Motor Co. GM’s divisions though were a bit more distinguished from each other, with fewer shared components until the late 1960s and early 1970s. DeSoto was dead by the early ’60s.
Sloan’s model started going away in the late 1960s and early ’70s when Chevy started offering the Caprice, a fully loaded Chevy. Before then GM was careful to keep some features exclusive to its upmarket brands, but you could order just about every luxury feature on the Caprice. Later, when GM downsized its full size cars in the late ’70s shared sheet metal and drivetrains made the brands between Chevy and Caddy seem redundant. Sloan’s model can work, but you have to work it. GM stopped working Sloan’s model and ended up competing with itself.
It’s possible that selling both near-luxury and luxury models under the same brand ultimately taints the luxury models. If you note, while Daimler makes and sells compact and subcompact cars under the Mercedes Benz brand in Europe, where M-B’s haven’t always been thought of as uber luxury cars and where the taxicab you ride in might be a four cylinder diesel powered Mercedes, M-B hasn’t yet imported one of their smaller cars to North America where that brand is associated with true luxury models. BMW uses MINI to sell cars cheaper than their 1 Series.
The Chinese are very status conscious so killing Buick in the US might have damaged the brand there. Besides, Buick is the heart of GM’s corporate culture. Buick was GM’s first brand. After Billy Durant took control, he used profits from Buick to acquire other brands. Losing control to his backers, Durant then started Chevrolet and used profits from that venture to reacquire (with the help of the DuPonts who later abandoned him) control of General Motors. So it would be very hard for GM to let go of either one of those brands. Cadillac is the company’s prestige luxury brand. Buick never had that cachet. From the beginning Buick was a “doctor’s car” (actually, the first car David Buick sold was to a doctor, physicians, because of house calls, were early adopters of the motorcar), sold to successful business people, not necessarily to rich folks. Yeah, some Buick owners could afford a Caddy but didn’t want to be ostentatious. So maybe there is a mid-level segment.
Unlike BMW and M-B, Toyota has tried to use Lexus to serve both the luxury and near luxury markets, with the Camry based ES selling big numbers and the LS flagship going up against the 7 Series and S Class cars from BMW and Mercedes.
Managing multiple brands isn’t a guarantee for disaster. Right now the Volkswagen Automotive Group owns VW, Audi, Seat, Skoda, Porsche, Bentley, Lamborghini and the Ducatti motorcycle company. I might have forgotten a VW brand or two. All those brands haven’t hurt VW which is currently one of the stronger global car companies. Their cars share many components across brands. Bentley Continentals, Audi A8s and Volkswagen Phaetons all roll off the same Dresden assembly line and they all share architecture and a variety of components.
The trick is distinguishing the brands from one another in consumers’ minds and giving each brand a raison d’etre. Still, the bottom line is product. If GM gives Chevy, Buick and Cadillac good product, they can all thrive. GMC is a different question but for now they’ve run the numbers and it’s more profitable to have the brand than not.
Ronnie Schreiber
http://www.carsindepth.com
This is a superb treatise of the marketing and brand development of products. I, an engineer, primarily consider technical developments e.g. individual hydraulic brakes, overhead valves, automatic transmission, killer apps in today’s lingo. Each made a company. In the 1980s, when government regs grew teeth that dominated design, the engine compartment looked like someone had shoveled components under the hood. Service was impossible; you had to pull some engines to replace the spark plugs. Electronics, On board diagnostics, OBD, late 1980s – 1995, took control with mixed success. OBDII, in 1996, made everybody’s systems work the same, so one computer could serve any car. The coming OBDIII, will call a cop if your emissions systems go out of spec, and he will have the power to shut your engine off. (A little honest environmental political debate please.) And everybody now knows their grandkids will pay for any GM Volt that is sold. Some where back up the road, America lost the basics of competitive product design. Engineering judgment became worthless. Regulatory lawyers hold the whip.
Our current election choice is simple; big government, or big business, will control everything. I vote for Studebaker, and against EPA, because I may have some chance, in a few years. A car once meant freedom; today it means slavery.
No one mentions the 20,000 jobs lost at Delco and the hundreds of dealerships shut done,some of which had been family owned for decades. Lost jobs of salesmen, mechanics,staff, and supporting companies must number in the thousands.
Oh, and how I would love to see a list of dealerships closed, broken down by political affiliation.
Methinks we’d see some interesting patterns.
Assertion lacking evidence.
Fanboyism aside, GM produces junk.
25 years ago I installed car electronics for a living. GMs were well known for having lousy interiors. They just didn’t hold up as well as Ford or Chrysler. They might look pretty when you first buy them, but they just didn’t hold up.
Fast forward to a couple of years ago. I took a company vehicle in to have some electronics installed. I got to chatting with the business owner (he ran a small, independent shop – you know, one of those people who didn’t build it himself). I told him my background, and asked him about GMs interiors.
He said he sees the same thing today.