GM swears up, down and sideways that they will not stage a repeat of last summer’s Fire Sale for Everyone discount program. And yet inventories are up, sales are down and if they look sideways they can see their competitors printing up blowout banners. “Value Pricing” be damned. The General knows that every sale surrendered to Ford, Chrysler and Toyota eats into its already dwindling market share, rendering GM’s production cuts less and less effective. Besides, the cuts are expensive. GM needs dealer cash now. So it’s not a question of “if.” It’s a question of “what then?”
This is the GM death spiral: larger and larger production cuts in response to a smaller and smaller market share. When GM CEO Rabid Rick Wagoner stepped-up to the microphone a little over a year ago and announced he was going to cut 25k jobs, the media was aghast. American manufacturing is under attack! Our industrial base is shrinking! These days car hacks and Wall Street celebrate the fact that GM and Delphi workers are rushing for the exits by the tens of thousands. I guess someone stashed that old saw about “not being able to cut your way to profitability” in the wood shed and forgot about it. Well, at least until the next financial quarter’s [delayed] results prove that a corner turned can lead straight to a dead end.
Meanwhile and still, stabilizing the patient is Rabid Rick’s first priority; otherwise the amputations will be a success and the patient will die. A great deal of attention has been lavished on the financial details of GM’s union buyout plan. Little has been said of the timing. While GM’s 113k union members are busy weighing up the pros and cons of trading “secure” employment for cash money and [somewhat] reduced benefits, their factories are busy churning-out vehicles no one wants to buy. Rick’s mob can’t shut off the spigot. All The General can do is whatever it takes to keep the pipeline open.
And that means discounts. Of course, GM will not call the next big US incentive campaign an Employee Discount. For one thing, it won’t be long before they don’t have any employees left. But seriously folks, Rabid Rick has once again given himself enough wiggle room to accommodate Greg, Jeff, Murray, Anthony and their entire international fan base. In a recent interview, Wagoner said GM would stick to its policy of “simpler pricing.” In case you missed it, those are the new code words for what was previously called “value pricing.” It’s the difference between “here’s what you pay” and “here’s what you pay and we’re not offering any discounts.”
Because, of course, they already are. GM’s $1000 “free gas” promotion is already out there, attempting to lure Californians into gas-guzzling SUV’s. And it’s spread to Florida. How long before the gas cash come-on gets a national rollout? Free gas, 0% financing, rebates– whatever you call it, however you dole it out, the money comes off GM’s bottom line. But it’s Hobson’s choice: lose more market share or lose more money. Of course, GM could tell its dealers to hold the line on price, watch inventories swell, and do both. That’s not only the worst case scenario, it’s the least likely. And speaking of timing…
GM has just convinced its banks to lend it additional money to pay for its union buyouts, plant closures, Fire Sales, etc. The loan is fully secured. Hence, S&P has lowered its rating on GM’s unsecured debt to B- . That puts GM perilously close to the point where Cerberus can walk away from the GMAC deal, denying The General the long-awaited cash infusion. Equally important, GM now admits it will draw on this line of credit to meet liquidity needs. The good news for camp followers: GM won’t go bust today. The bad news: the noose is drawing tighter.
And make no mistake, the UAW hasn't stepped off the scaffold. While last week’s UAW convention in Las Vegas had analysts betting that the union bosses are in a conciliatory (a.k.a. “realistic”) mood, when was the last time the UAW made any concessions to the automobile industry? The recent “health care giveback” was actually a $3b union-administered fund. Buyouts are not a concession. If we believe that Delphi is serious about reducing its workers’ pay, if we believe GM can’t fund the difference, the union will have to make concessions. Past history says it ain’t gonna happen dot bomb.
That’s because past history is the only reliable guide to future behavior. When GM launched its Employee Discount for Everyone program last year, the company pronounced it a tremendous success– and waltzed straight into a sales drought and catastrophic financial losses. What’s changed since then? The levels of unsold inventory are higher.
What I’ve never been able to figure out: Why GM hasn’t adopted the Hyundai/Kia/Suzuki 10/100 warranty. Would making that move really cost more than they’re currently paying in dealer cash, incentives, “free gas”, eat a dozen donuts on GM every morning for the rest of your life, or whatever they want to call it?
Yes.
I kinda figured that was the answer. Say what you will about The Rick, he can count to a billion.
How simple do you need to put it? Quality is what is driving buyers away from GM, and quality is what is driving buyers towards imports.
Have any of the GM executives gotten into a Toyota or Lexus recently and seen what people want? GM is beginning to sound like Generic Motors, and the last thing buyer of cars want is to be considered generic.
The Pontiac Solstice is well built and from all the attention I received, when I drove one for a week in the Seattle area, close to the mark of what people want. I let a friend, who is a GM stockholder and owns a 1999 Mazda Miata, 1966 Volvo 122S sedan (with modfications to the engine) and a 1967 Mercury Cougar drive it; with me in the passenger seat. He now tells me he wants to trade in his Miata.
Thing was, when he went to a Pontiac dealer, there was no demo car. That’s why I let him check it out. Where management at GM seems poor is exemplified by my friend’s experience: get a winning auto and then miss the boat on ramping up for the demand.
Meanwhile, they keep trying to produce and unload pickups and large SUVs (hence these weird little pricing games) when everyone, including even President Bush now realizes that the time has passed for such monsters – save for those who are contractors or tow boats for civilian use.
Do you realize that you are comparing a 2006 Solstice against a 1999 Miata? Check out the 2006 Miata to make a real comparison.
In addition, GM is no Mazda, it cannot be saved by a mere sports car. What GM really needs, if GM still intends to hire that many people, are models that go head on against Yaris-Corolla-Camry.
Until GM discovers how to design and make a car that produces a “gotta have” instinct, it will have to focus on pricing. Sadly, I don’t see any “gotta have” in the pipeline. So Rick needs to buy time with financial restructuring to buy time in the hope GM rediscovers how to build a car that doesn’t require bribes to hook the customer. Geez, how do some of GM’s current offerings cars pass the focus group? I think the GM chiefs in product design should spend a week trolling the import showrooms for ideas, because it’s clear they don’t have any themselves. It seems so simple; it blows my mind.
GM doesn't need a "gotta have" vehicle. They need 16 of them. And that's just two per brand.
Suggestions to help GM clear excess stock:
1. Open an outlet mall like the clothing manufacturers use to unload out-of-style stuff and factory seconds they can’t sell any other way.
2. Drain all the fluids and dump them in the ocean to make an artificial reef. Just think of the advertising spin and tax write-offs you could get from that!
3. Partner with the CIA on covert operations. Give every man and woman in North Korea a full-size SUV or pickup truck as a gesture of international good will. In a few months when their petroleum resources are totally depleted we just walk across the 38th parallel and take over without firing a shot.
4. Crush them into solid blocks and sell them to the Air Force to use in training B-52 crews on bombing runs. It would be cheaper and safer than using real bombs.
5. Sell them to Homeland Security and Immigration to build that barricade W wants along the Rio Grande valley.
6. Three words: Oprah audience giveaway.
Only way to save GM, steps in sequence:
1) Build some huge auto malls in major cities and forget about small towns.
2) Produce as many car and truck as possible without lowering prices. Naturally they accumulate at the mall and the dealers.
3) Declare bankrupcy and thus goes all the debt.
4) Cut connection with all dealers, rely on the malls only. Lay off 60% production employee (10% at a time is simply not enough). What can they do about a dead company?
5) Sell all those inventories during the unavoidable strikes. This can last from 3 months to 2 years.
6) When the restructure cools down, start building real cars. Just keep Chevy vs. Scion, Buick vs. Toyota and Caddi vs. Lexus. Shamelessly copy their every model. Make them 90% as good, at 75% the price, not unlike that of Hyundai. In short, know that GM is the underdog here.
7) Focus on small to midsize SUV/trucks, not large ones. And we will go from there.
seems like no one but me thinks Rick and the boys down at the tubes need to go and take their beans with them. they just do not get it, and not much they have done lately points in the direction they have learned anything about cars. it is about the cars and only the cars.
I have owned 2 Chevy Suburbans, a first-generation Hyundai, and, in my youth, a smattering of VWs.
Last year my ’87 Suburban died (240k miles; many of them touring with a band and a trailer). I needed a replacement, but nothing so thirsty. A decent size (I don’t spring for touring anymore, but do have a family), but not huge. As I was looking for something used, reliability and build quality were high on my list.
I did a bunch of research and checking and questioning and did some test drives. And no American products made my short list. Not a single one. I didn’t think about it much at the time, but it is important for GM (and Ford) to understand: Their reputation is so tarnished that they are out of the running before the race even starts.
There is no quick fix for this.
I ended up with a Toyota and haven’t looked back.
– McAllister
I’ve bought some (gasp) 30 cars from age 16 to 48, most of which were used. I tried “sticking” to the GM, Ford, Chrysler and AMC brands rather than “foreign” brands because a) I lived in Michigan for most of my life b) I am a “car-nut” and paid most attention to those cars and c) I had a father-in-law who saw what the Japanese did in WW2 and so had a real problem buying from such people. (Ironic, that many of his generation bought VW Beetles, isn’t it?)
Having bought a new 1997 Chevrolet Cavalier because the prior Ford product was so poorly made, that I decided I had to permanently “give up” on Ford (having only had 3 since the disaster of a 1975 Pinto bought new on my 18th birthday) I found that I’d jumped from the frying pan straight into the fire.
The Cavalier was absolute total junk, and the GM dealer steadfastly refused to correctly repair it – and finally presented me with a bill for $85 during the time of the 36/36 warrantee. I objected. He insisted. I indicated “you choose. Write it off or I write you a check and never buy another GM product – and I’m 45 years old so potentially have another 20-30 years of buying cars in front of me.” He “needed” that check. Fine.
I replaced the crap GM parts (brake rotors – “turned” by the dealer 3 times) with non-GM parts, so as to not be even remotely responsible for the deaths or injuries of the next buyer, and bought a 1999 Dodge Neon.
Well, then, after three head gaskets went, and the car showed its true colors, I came to the sad but inevitable realization that the big 3 (or 2 1/2) could simply no longer make acceptable vehicles.
So I “took a chance” and tried a 2002 Hyundai Sonata, new. Wow. It has been one of the best cars we ever owned. We gave the Neon to our son for college (I died a week or so ago – engine seized solid), and got a 2002 Daewoo Nubira for 1/2 price, taking a “huge chance” – since GM had pulled the rug from under the Daewoo’s USA operations. Wow, it was one of the best cars we’d ever owned. Then, my father bought a used Mercury Villager because he wanted the Mercury brand (he’d worked in their plants during the time of my infancy and before), but he wanted Nissan quality and reliablitly. A light went on over my head.
Then, when the Prius II came out, I was astounded. Prius I was kind of a science experiment on wheels, a great first effort, but not even sold new in my area. Prius II? I had to have one, have had it a year. BEST car I’ve ever owned, bar none, plus it uses literally 1/2 the fuel of the Sonata to do the same work, with the same performance and same room.
OK now I’m totally convinced. Toyota ARE amongst the best. Hyundai, not far behind (come on, Hyundai, get those hybrids to market you’ve been teasing us with).
The “US auto industry” is not dying, but changing. Toyota, Nissan, Subaru, Honda, Hyundai, Mazda, Mitsubishi – they are actually building factories or have built factories and added jobs to the US economy. Wheras, GM, Ford and DCX are exporting jobs as quickly as they can to China, Mexico, wherever.
Yeah, I’ll buy American if I can next time. It’ll probably have a Toyota badge, Honda badge or Hyundai badge on it. Most decidedly, it will NOT have a GM badge, be a Ford brand or DCX brand.
Fool me 30 times, shame on you and me, GM, Ford and Chrysler. No more.
GM claims the new Tahoe,Yukons and Lucernes are flying off the lot.In the Richmond,Va market area I dont see it.We have dealers advertising Gm supplier pricing to anyone and others have had their entire inventory at invoice to move these vehicles.The only GMC,Buick or Pontiac product selling without a discount is the Solstice which from a sales perspective is hard to get excited about because of no availability and low margins.Also another problem for GM is the dealers are losing salespeople due to low floor traffic,small commisions and long hours.All the cheerleading about the turnaround may sound good but it is not translating into sales
Excellent post Glenn. Your story should be a case study for GM and Ford. The reason why they’ve lost so much market share is because consumers like you are turning away due to bad experiences.
Another story line they should follow is that of the “Honda” or “Toyota” family, that always buys foreign, and does not even consider domestic brands. My family would qualify as a “Honda family.” Ever since they came to the US, my parents and extended family have primarily bought Hondas. My first car was a Honda, and now on my second car (not a Honda), would prefer I had not given the first to my uncle’s family. Almost every car in our family is a hand-me-down from 2 or more previous (in-family) owners. Yes, we are cheap, but also find it unnecessary to buy new cars every 5 years, because the old ones just keep running.
Though it would take horrendous products and service to wean my elders off their “Japanese cars are better” bias, my generation is not a lost cause. We have not been stung by poor quality and poorer service, and of course would prefer a little style even with our basic (i.e. inexpensive) transportation. With this window of opportunity GM and Ford could easily gain back lost market share by getting consumers hooked when they’re young. So you can imagine my surprise whenever I step into a recent model domestic and find more areas for concern than praise.
Having lived with Japanese cars my entire life so far, I am baffled by the fact that comparable small GM/Ford cars really are a generation behind the competition. Some of the readouts on GM cars are almost identical to those found on an early 80’s Olds. Why is this switch here? Why is that control there? Where is the truck/gas release? Why is there so much wind/tire noise? Why is this seat so uncomfortable? Why is this trim piece coming unglued? Why are the panel gaps so wide you can stick a finger in them? What amazes me is how many people still buy these products when if they only spent five minutes in a “foreign” car they would never go back.
But the key here is that it could just as easily go the other way. If the quality of Honda/Toyota/Hyundai cars drops, and GM/Ford/Chrysler rises, the next generation of carbuyers would not hesitate to shake off their predecessors’ biases. I don’t want my money going to support another country’s economy if it could benefit my own country’s economy, but I certainly won’t throw it away on an inferior product, wherever it is made. For now, I would rather buy an American Honda than a Mexican Ford.
My number one rant about cars lately has been my personal switch from Saab to VW. To most of you, these are probably two kinds of cars that are way off your radar.
I don’t pretend that I’m normal or that people do or should have my tastes. But I always liked Saabs. Perhaps it’s that I’m Scandinavian. Maybe when I was a kid I just always associated their cars with their jets. I don’t know.
So, for years, I was a Saab person. Until recently, the best I could afford was a base 9-3. My 2000 9-3 was a fun car with lots of room in the hatch, comfy seats, and all of the wierd Swedish gadgetry that I loved so much.
I think GM owned a share of Saab at the time that car was made, but they hadn’t messed with things.
Then I bought my 2005 9-3, loaded. What a piece of crap. I mean, granted, it wasn’t made in Trollhattan–it was made at GM’s plant in Germany, and, therefore was a re-badged Opel. It’s lines were made generic, and the 9-7 and 9-2x disasters aside, this one was about as plain as you could get.
After 10 months, I swapped it for a Passat. GM killed Saab.
Everyone ain’t ever going to buy a Saab. Never were. This isn’t that time anymore, where everyone drinks Coke. They drink Diet Coke, Vanilla Coke, and friggin’ Lemon Caffeine Free Coke.
You need a supercomputer to calculate all of the permutations of a Starbucks order.
Saab had a niche. GM killed it by trying to make something that never would appeal to the masses appeal to the masses.
Are you trying to say SAAB used to have character? (OOPS! Wrong post!)
A Chevy caught my eye the other day – it looked somewhat like an Alfa I had seen in Germany, or maybe a Pegeot 206. 5 door hatchbacks, which aren't too common outside the Echo and Yaris up here at the moment. So I looked it up online annnd…. It's a Daewoo! Meanwhile, the Monte Carlo doesn't look like it's been change since it came out over a decade ago. Except for the odd HHR, I don't feel like I'm seeing new GM products – but then and again, I have been mistaking the Equinox/Torrent for Kia Sportages, so maybe my eye isn't that good. Some further confusion… link 1 link 2 Is it a coincidence?
What a bunch of great comments. Let me add mine.
I had to buy a new car last week. I didn’t want to but a young lady who was talking on her cell phone ran a red light and smacked right into my car. No one hurt but the car was totaled.
I didn’t know what I wanted to buy so my wife and I got up very early on a Saturday and spent the whole day visiting dealerships. We visited 6 different dealerships that day including Ford and Chevrolet dealerships as well as Nissan, Hyundai, Toyota, and Kia.
One of the worst experiences I have ever had in my life was at the Chevrolet dealer. I couldn’t believe how rude both the salesman and the so called sales manager were. This on top of every high pressure sales tactic in the book. I had to get very rude and loud and walk out.
The Ford dealer was also pretty high pressure and only spoke about about rebates and zero financing. The particular salesman didn’t seem to know much about his cars.
The Asian dealers were almost pleasent to be at. Each one took the time to listen to us, show us their product lines, explain the differences in the models, give us test drives, and basically understand our situation and work with us.
We ended up buying a 1 year old used Hyundai Sonada with 11,500 miles on it at a Hyundai dealership. The salesman understood that we hadn’t planned on buying a car at that time but were forced into it because of the wreck. He presented us with several different options for both new models and the used model . There was no pressure and he didn’t try to force us into the managers office when we told him we needed some time to think about it.
We came back and made the purchase on Monday after we visited two additional dealerships.
So what is the point of all this? We spent over 1 1/2 hours at a Chevrolet dealer and all I saw was one Cobalt (piece of trash) and the inside of a salesman’s office. After all that time I really couldn’t tell you what other cars they had because neither the salesman or his so called manager seemed the least bit concerned with what we wanted or was interested in showing us anything else. The brand new (15 miles) car that we drove was noisy, rattled, and the turn signals didn’t work. If this was an example of how The General treats prospective clients and the products they build then they deserve to go out of business. One thing I can say for sure, the next time I go to buy a car I willl stay as far away as I can from anything GM.
My GM story, my company leased two Saturns in April 2005, a VUE and an ION, becuase GM was having an incentive that they would lease two vehicles for $299.00 per month (that amount is for both vehicles). The leases came with 15,000 miles each per year in the agreements. Generally the cars have been okay, but after driving them awhile, interesting things are noticed: 1) The “moonroof” on the Vue leaks terribly going through the car wash (and yes it is closed as tight as it can be closed). 2) The fit and finish in the vehicles is terrible. I had my cell phone charger plugged into the outlet under the radio and when I pulled it out a portion of the plastic trim around the gearshift pulled off also. The gaps in the plastic interior are huge. 3) The wind noise on the highway is rather annoying. I will say the Ion gets great fuel milage. But, get this, though my company has only had these vehicles fourteen months, we received letters two weeks ago from GM offering to pay three months of the lease and throw in another $1,000.00 each if my company would acquire a new GM vehicle. Inasmuch as GM can’t be making much on the leases of the vehicles ($299.00 per month for two vehicles!) and then want to take them back with financial incentives to get me in a new vehicle, and thus putting two nearly new vehicles on the used car lots, that must really kill new car sales. it smacks of sheer desperation on GM’s part. It appears GM and Ford are on thier way to the history books (Anyone notice Ford’s stock closed at $6.40 a share today? )
If you look at the Solstice/Sky, it’s in a very limited market segment. In the US market, there is only one other car that would be in it’s narrow segment, under $25K and a two-seat roadster. Even taking into account recent history, there haven’t been many competitors against the Miata. Knowing all this, GM decides to put two cars in the segment. Once the “newness” of the cars slows down, does anyone seriously believe that GM can sustain both?
We were a GM familly — my father had been raissed on Caddys and Buicks from the 50s, and my Mom had a notorious ’64 Ford Fairlane that was so troublesome, she has sworn Ford off to this day. My early childhood was nothing but Buicks, Chevys, Olds and Pontiacs (fine — the old man had a 280z he kept for weekends).
One day, I convinced my Father to go check out the Acura dealership — I had been reading about what fantastic cars they were (I think Acura debuted in the US in 1989) — my Father however said to me, “No Japanese car can be worth $20,000).
We left an hour later in a brand new gold Integra. Leather Seats and an automatic for $13,000.
From then on up till now, we buy Japanese. Because they are better cars.
My mom’s first Maxima (she’s on her second, eyeballing her third) went 278,000 miles with no engine or transmission repairs of any kind and was finally taken out of service after my friend managed to rear-end a cop with it.
Anyhow, my family’s story is not unique — and it should should not be news to GM or Ford. Practically ever US Citizen over the age of 30 who drives a Japanese or German car was at one time a US customer. And they simply let them go by building inferior products. For decades.
maybe GM should just start buying German and Japanese brnads and treating them like Saab?
An M5 as a rebadged Lucurne? Why not…
I think the BIG 3, or should I say Dwindling 3 could have prevented their present day catastrophes a decade ago. Recently I saw a news segment on a Ford assembly plant getting re-tooled for their NEW Flex manufacturing. Well this so called Flex manufacturing has been used by the foreign competition for years now. I know an engineer at the Honda plant in Alliston, Ontario & told me they can change their car line for example from an Accord to a Civic in under five minutes! Ford is just starting this, kinda sad. Japanese auto makers in particular make it a point to make complete redesigns every 4-5 years, domestics lack this philosophy. This, their quality (which is getting almost par with the foreigners) & their insufficient warranties truly discourage a great deal of potential buyers. If they claim they can build quality cars like their foreign competitors then back it up with a proper warranty!
I have a similar story to Glenn’s.
I grew up in a Chevy family. My first car was a brand new 1991 Camaro RS. Within one week it was back in the shop because all four brakes had locked up. And it was downhill from there for the next five years.
The dealer replaced badly faded red wheels four times and then said I’d have to pay for the next ones even though I was barely into the warranty.
I replaced the starter twice, the alternator four times, brake lines twice and somewhere around 100k miles needed a whole engine overhaul.
So, risking excommunication from my family, I vowed never ever to buy anything from GM again and purchased a Honda Civic. Absolutely loved it!
My dad gave up on the Chevys too and bought a Camry for my mom. As a family, we’re done with ’em. Bad products, hostile customer service and sometimes stupid design (the Camaro’s oil filter was right above the blazing hot exhaust pipe) turned us to the Japanese.
To fix itself, GM should:
1. Hire some Honda engineers at whatever expense necessary.
2. Shut down every one of its plants until new designs can be brought online
3. Introduce its (honestly) brand new products to the public.
4. Offer outrageously long warranties to convince people like me that it really is a new GM, serious about quality.
5. Try not to choke on the piles of cash building up in the company’s hallways.
My first brand new car was a 1982 Buick Skyhawk – the Buick version of the Cavalier. I was a die-hard buy-American man and had a great experience with my parents’ 1971 Chevy Wagon that endured 145,000 city miles and was virtually bulletproof. Something clearly went bad at the General from 1971 to 1982. The Skyhawk’s paint developed a white haze after a few months, the power steering refused to work when the car was cold, the engine would flood at the drop of a pin, the rotors warped at 20,000 miles, the car would not start if it was colder than 20 degrees, it rusted prematurely, the engine died on the freeway, and the car finally bought the farm at 61,000 miles and 7 years of age.
I swore I would NEVER buy a GM product as long as I live. I was 30 years old at the time, so GM lost potentially 50 years of auto sales worth several hundred thousand dollars. I replaced the Buick with a 1990 Acura Integra that gave me 14 great years and 150,000 trouble-free miles. Thus began a long love affair with Honda and Toyota, including a three Acuras and a Lexus. I recently took a small step backward, reliability-wise, with a Mercedes SLK350. It’s no Lexus, but it’s been a pretty good car and a ton of fun. And that C6 Vette that was calling my name when I was looking at the SLK350? Sorry, it’s made by the wrong company. Another lost sale at GM.
Johnny…
I’m 28, and it was the same when I grew up – my Grandparents and parents were Chevy, Buick, and Caddy all the way through the 2 generations. My father is 60 and driving a DTS…he’s never even looked at a foreign car, and neither had my grandfather before he passed a few years back. It was all Caddy or Olds for my entire childhood, all from the same dealership, all from the same sales guy. 4 Olds and 12 Caddies over 21 years of my life. When I bought my first car, I was ushered right to the same place. I encountered a disdain for looking anywhere else from both my father and grandfather. I proceeded to buy or lease my first 3 vehicles there too, from the same sales guy. I’ve always liked other cars, especially Porsche and BMW, from my days working at a country club in high school.
Last year, I decided it was time to break out of the GM crowd. They no longer had a vehicle that was attractive to me. The Cavalier/Cobalt is a piece of junk (and seems to be the default vehicle of Pittsburgh…I hate it), I had a trailblazer but was not thrilled with the avances they had made on it from the first run of it. The new Equinox was a piece of garbage, yet a step in the right direction. I got pushed by the dealer to a CTS, and had to back away from it despite feeling it was the best they had to offer to a late-20’s professional single guy. I’ve always wanted a BMW, but I ended up with an Acura, because of the quality, price, and features.
After 60 years of US autos in my family, I broke free, because there is just junk out there from GM right now. My parents cautioned me against the purchase, citing “high repair costs on those foreign cars”, even as they are paying $120 per tire to get the “air pressure sensors” replaced on their Caddy. I argued “what repairs” and they couldn’t answer. When I finally brought my new TSX home, they both marveled at the quality and ride and all…my father, as GM-loyal as he is, actually asked me “do they have anything this nice that’s bigger?” I nodded, and since then have listened to a man who has probably never driven a car that was made outside of the Northeast US, openly talk about buying a foreign auto.
GM, and to a lesser extent, Ford, have both succeeded in alienating even the most loyal, decades long buyers buy running in place far far too long. It’s high time they get brought down and build back up from the bottom. All the Tahoes and Trailblazers and endless Pontiac lines that all look exactly the same (as opposed to having similar design elements like, say BMW, that distinguish) from multiple angles. The GrandAM looks like G6 which looks like the GrandPrix which looks like the GTO, which looks like the Bonny…what the hell? Make something distinctive. They need a top-down restructuring. Only Cadillac has had some distinction, and even that was minor. At least Ford has the balls to try something different from their usual crap by going a retro with the Mustang and then moving ahead with the Escape and Fusion…but it ends there. I’ve never seen a car in my life that people have such a high opinion and desire for (well, in my age bracket) than the new Mustang. People that aren’t even ‘car people’ want one. People that were born in the mid 80’s when the mustang looked like crap even want one. I personally don’t want one, but I can appreciate the character. GM doesn’t have a car or truck in it’s line (‘vette included) that I would even look twice at in traffic, save for the Caddy CTS-V.
In my opinion, most people buy GM out of almost necessity or habit anymore. Not because they’re an object of desire.
GM are so absolutely desperate, I noted on the TV last night that the local Caddy dealer is offering new leases on Caddys for $229 or was it $239 a month. Way less than the $299 a month posted by hltguy. (Though of course it probably was one of those “unobtainium leases” that nobody can actually get, that Cadillac was advertising, who knows).
Wow. $239 a month sounds like Kia car payments for a Caddy, right? Until you get to the dealer with your “Trailblazer” or whatever GM product you’re currently paying on and realize that the resale value is so pathetic that you’re “upside down”, and the dealer suggests you try to sell it then come on by for his “great lease deal.” Then, of course, you can’t sell it because nobody wants “gashogius-noxious” GM SUVs any more, new or used.
Hah. GM (and Ford) are both about 1/2 a tick from being in the position that Studebaker and Chrysler were in 1963. Chrysler did (barely) survive, only to nearly die-out in the late 1970’s, and again in the mid 1980’s. Ironic, isn’t it, that buying up American Motors (with Jeep) brought in fresh thinking which helped Chrysler survive until the buy-out – whoops “merger of equals” (not) with Daimler-Benz in 1999.
For Studebaker in 1963, sales were falling, causing lack of confidence in the public. How fickle the public is, since Studebaker had done so well in 1959 and 1960 with their compact Lark, and had some gorgeous restyled cars (complete with ersatz Mercedes grills) for 1962. Hardly.
Competitor dealers (i.e. GM and Ford, mostly, since Chrysler dealers had a worse year in ’63 than Studebaker for loss of market share) were bad-mouthing Studebaker (and Chrysler products too) with whispering campaigns about how they would soon be orphans.
Ultimately, people shied away from Studebaker showrooms for fear of buying an orphan, and this became a self-fulfilling prophesy. Chrysler managed to restyle their disastrously down-sized 1962-1963 cars for 1964 and marketed them properly as intermediates instead of senior cars. Plymouth brought back “full-sized” cars in 1965, which (barely) saved Chrysler’s bacon.
Americans did not want down-sized cars in 1953-1954 when Chrysler tried it, and likewise in 1962-1963. (Thus, we can forgive their executives for being nervous about downsizing in the late 1970’s, right? – since the whole concept nearly cost their company its existance twice within 25 years).
Looks like the shoe is entirely on the other foot, now. Re: GM, Ford? Once people start to figure out that the awful smell in the air is gangrene, they’re going to run, run, run away from your products and nothing will stop Chapter 7 bankruptcy for one of you, possibly both of you.
Ain’t paybacks a bitch? Kizmet. Fate. Whatever. The thing is, Toyota and Nissan and Subaru and Hyundai dealers are NOT talking down GM and Ford.
The fact is, the records of each company speak volumes. And people are now listening, and reacting.
Preston Tucker, wherever he might be, must be laughing himself silly.
Save GM? Easy. Kill Saturn. Kill GMC. Sell Saab. Kill Hummer. Rip Corvette out of Chevy’s hands into a stand alone model/division. Reduce the number of models each manufacturer makes. Chevy should have an economy car. A mid-size family car. A large, rear wheel family car. And all of the trucks.
Pontiac takes the sports entries. Four, five models at best. Buick makes two cars…mid-size near luxury and a full size near luxury. Buick can also offer a luxury van and SUV.
Caddy gets the biggest load of cash up front to redo all their cars. EVERY car will be rear wheel drive and have the same fit and finish as Lexus but be consistently priced 10-20% less than Lexus.
All domestic engineers must rotate thru Holden before being given the green light to build a domestic car. And to reward me for my outstanding suggestions, Chevy gets an El Camino based on the Holden version.
Now, any other problems you need solved?
It’s not nice to say but General Motors will not make up the lost ground in our lifetimes, if at all. As well as being hopelessly lacking in innovation and imagination regarding safety features and cabin goodies the utterly awful build quality has helped tarnish previously good brands. The most obvious example is Saab. Today, in England, I sat in a 2009 Saab 9-3 with a view to making a purchase. I’ve always fancied a Saab and now I can actually afford one I don’t think I’ll be bothering. The plastic-y interior and rather flimsy looking steering wheel are in stark contrast to the ones to be found in my friend’s 1999 model, which incidentally has 180,000 miles on the clock and is still going strong. The Saab brand used to mean something – prestige, discernment, all-round reliability and quality. Today’s Saabs remind me of Hong Kong imitations – at first they look like the real thing but upon closer inspection the flaws and the failings become obvious. What is tragic is that this inferior quality has been allowed to invade the entire GM stable and everybody knows it. Shame on you, General Motors. By lowering standards to maximise short-term profits you have brought your empire to the brink of collapse.