Did GM buy a piece of Moller International? The General’s recent TV commercials show its full product range rising off traffic-choked roadways and flying off at tremendous speeds. You can almost hear the Skycar's inventor slapping his thigh and yelling “Now THAT’S what I’m talking about!” Of course, that’s not what GM’s talking about. They’re touting their new five-year, 100k mile warranty. Notice I didn’t say “powertrain.” Neither do the ads, which leave viewers with the impression that GM’s products come with five-year, 100k mile bumper-to-bumper protection. Talk about sins of omission…
Let’s be clear about this. A five-year 100k mile bumper-to-bumper warranty would have been big news. GM’s powertrain warranty only assures buyers that the parts that are least likely to break won’t break. It says GM will fix these parts that shouldn’t break without charge and pick you up from the side of the road for free, should one of the parts that shouldn't break breaks and leaves you stranded. Hang on; is this really a major selling point? And doesn't The General have enough trouble moving the metal without trying to invade Toyota’s turf? Toyota has a twenty-year head start in the reliability business; GM doesn’t have twenty years to catch up.
In his official statement, GM CEO Rick Wagoner asserted that the new powertrain warranty “provides GM customers with an unprecedented level of value and peace of mind.” First and most nit-pickingly, the release specifically refers to “GM customers” rather than “new car buyers.” So, forget conquest sales; just make sure that GM loyalists are happy– er. Considering the automaker’s inexorable market share slide, now reduced to an ironically proclaimed “one out of every four cars sold in America,” Rabid Rick's decision to use a powertrain warranty to recapture lost buyers is, at best, ill-advised and overly optimistic.
Second, Rabid Rick's attempt to stake his company's claim as builder of “value” automobiles thrusts a stake through the heart of its business. Last year’s “Fire Sale for Everyone” program K-Martified the company within the pubic consciousness. Continuing down that road places GM into the worst possible market position: more expensive than the cheapest and less desireable than the best. As an automaker with labor and legacy costs larger than Belize’s GNP, GM can't do cheap (at least not without shipping all the work to South Korea). Going for value– rather than focusing on desirability– makes GM vulnerable from all sides.
And lastly, GM’s attempt to sell its cars based on “peace of mind” is laughable. Again, Toyota owns that mental space. If you widen the concept to include the single largest cost of car ownership– depreciation– Honda kicks GM’s peace-of-mind ass all day long. More to the point, Eric Hirshberg’s claim that his agency’s “Elevate” campaign proves that GM “shed the baggage and went on offense” is just plain wrong. Saying your product doesn’t suck is not the same as saying its better than the other guy’s. And if GM’s vehicles aren’t better than the other guy’s, well, it’s no wonder they’re talking about value for money and warranties.
Of course, it’s hard to see where GM could go these days. In the 40’s, 50’s and early 60’s, GM offered some of the most innovative automobiles in the market, if not the entire world. At the same time, Harley Earl’s sheetmetal captured the hopes and dreams of a nation. While there are some standout niche products in GM’s gi-normous portfolio, the gotta have is gone. The vast majority of GM’s products are… generic. Bland. Boring. Vapid. Unrefined. Uncompetitive. They may not break your heart, but neither do they capture it.
Say what you will about the styling and driving dynamics of a bread-and-butter Corolla, Camry, Accord, Fit, Yaris, etc. Their owners love their cars. (And not just because they’re reliable.) Obviously, GM loyalists also love their motors. But the market share says it all: the so-called imports are winning the campaign for US car buyers’ hearts and minds. Concentrating on the “minds” part of the equation with a new warranty puts the cart before the horse. It’s preaching to the converted. It simply won’t work.
Rest assured, the reckoning is coming. The situation over at bankrupt auto parts supplier Delphi remains unresolved. The UAW is flexing its muscles over at Chrysler, while Delphi’s creditor committee breathes down Call Me Steve Miller’s executive neck and a federal judge's seemingly infinite extensions (on the company’s motion to throw out its union contracts) aren’t. The pickup market, upon which Rabid Rick says his company’s immediate future depends, has tanked so badly that Toyota is scaling back production of its next generation Tundra by a third. Meanwhile, here’s a simple question. If GM could make vehicles that lasted forever, would that be a blessing or a curse?
For total accuracy, they should show Kias and Hyundais flying at twice the altitude.
And someone needs to develop a video game where flying GM cars try to shoot down Kias and Hyundais. Once you got to a certain level you’d get to take on Toyotas and Hondas.
Where do they get this “Best warrenty in America” jazz when the warrenty on the Sonata in my garage is effectively double what they offer? My Sonata, the first LS delivered in Austin, was assembled in the US of mostly US made parts, the principal exception being the transmission.
I’m 74 and my Sonata is hands down the best assembled new car that I have ever bought and that includes Mercedes, Audi, Acura, VW, BMW, and virtually all domestic brands. 15,000 mile service this morning. Delivery defects = 0; subsequent problems = 0.
I saw this spot while watching NFL this weekend. My first thought (after I snickered at the content): “I wonder how long before the GM DW is next written? One-thousand one, one-thousand two…” Thanks for not disappointing.
We are all as tired of weak – even adequate – offerings from the 2.5 as we are by the ironic hubris touting “one in four” instead of the nearly 50% share GM enjoyed a few short decades ago – or, “this forged axle will not snap for 100,000 miles, amazing, no?”
It’s like watching a 70-year-old boxer trying to mix it up with some young contender with everybody watchin’. Dude, grab some pine.
Sadly, this advertising will indeed impress many americans who don’t read the fine print. To the educated masses, we’ll see through the thick smoke and warn as many as we can. The inability for GM to advertise without deception is indeed something worth taking notice of.
Does anyone advertise without deception?
What I can’t wait to see is how the General follows through. More marketing BS.
Knowing the General, they will encourage people to do the longest possible fluid changes, like doing the oil every 15K, and then claim “severe service” actually required more frequent changes when they have the chance to eat an engine. Hey it’s worked for them with Saab which had sludge issues due to dealers and GM telling owners 10K oil changes were fine on turbo motors. Saab and GM sure aren’t buying too many engines on their sludge deal thanks to fancy footwork around a few exclusions.
And according to my local AAMCO tranny guy, GM cars are some of his best under 100K mile customers. Ford is second.
I figure GM will use the new warranty to sell a bunch of cars. At least a third will be leased. The leased cars won’t get enough service so the warranties will be voided, so GM won’t have to pay a dime to fix those. The rest will be treated like average Americans have always treated cars–with total ignorance and break-fix service rather than maintenance. Most will miss enough maintenance visits to void the 100K warrany by about 50-60K. So GM will have to cough up very little money to fix cars approaching 100K miles. Remember, the company is driven by bean counters.
They do know how to play this game. So does Hyundai. There’s a ton of fine print in the Hyundai-Kia warranty. Don’t miss a single service is what I’m hearing from some techs I know.
GM’s new advertising is reminiscent of Ford’s “Quality is Job 1” campaign a generation ago. It talked the talk but didn’t walk the walk.
In my opinion, this article is not worthy of the GM:DW title. GM’s new warranty program was discussed ad naseum last week in a dedicated editorial. This article is simply rehashing what was said in that editorial.
Saying that, I am curious as to how GM intends to fund this extended warranty. I mentioned it twice before and I’ll mention it again here. RF wrote in an editorial a while back that GM reduced their annual warranty claim liability in order to reduce operating expenses. Now they extend the powertrain warranty by 2 years. It seems to me that their reduction in their annual warranty liability was to fund this program, resulting in no net savings (just conjecturing).
I believe that this is a step in the right direction for GM and a rather large one (relatively speaking). Is it large enough though? I don’t believe so.
On false advertising: GM does not sell flying cars. Point taken. GM is lying about their warranty. Point not taken.
It’s a half-truth (third-truth, 4th truth, whatever), but no one advertises their weaknesses. GM doesn’t say that the warranty is only powertrain. Florida Orange Juice doesn’t advertise “0% of recommended daily intake of Vitamin A”
GM advertises “100,000 miles”, Florida OJ advertises “100% Vitamin C”. Fair enough for me.
In my mind Toyota’s current ad campaign is more deceptive and hence more reprehensible. Their ads insinuate that Toyota’s vehicles are more environmentally friendly and fuel-efficient. They essentially are using Prius and Yaris as environmental halo cars for their FJ, Highlander, Tundra, etc. because as a fleet, their vehicles are NOT more environmentally friendly OR fuel-efficient than other makes.
Speaking of the Tundra: The cut in production certainly is due in part to market conditions, but give credit where credit is due; GM’s accelerated release of their new Silverado/Sierra couldn’t have helped Tundra’s cause.
You wanted an improvement in warranty. And you got it. JUST ACCEPT it and stop trying to define it as if it is bad news somehow. Shortly after the news was released GM hit a 52 week high stock price but I’m sure you will not read about it here.
NO ONE HAS an unlimited 100K mile bumper to bumper warranty. And don’t tell me the Koreans do… they have a non transferable warranty after 60K. If that does not scream “deception” I do not know what does. Even your buddy at Edmuds said so. Where do they disclose that in there advertisement?
In all fairness about GM hitting a 52-week high, it only made $0.17 over its July 26 posting (which was the previous 52-week high).
July 26: $33.06
September 12: $33.23
From July 26 though, it lost over a dollar a share. Part of the increase was also due to the falling price of oil, which increased the confidence of investors in GM’s SUV sales.
“Continuing down that road places GM into the worst possible market position: more expensive than the cheapest and less desireable than the best.”
Mr. Farago,
I agree with your description of GM (more expensive than the cheapest and less desireable than the best), but disagree with your assessment (worst possible market position).
One word: Target
They’re no Saks Fifth Avenue, nor are they Wal Mart. Best possible market position.
Granted, the car business is very different. But you said yourself that GM would have a hard-time chasing Toyota’s reputation, so it’s only logical that GM pursue different niches.
GM’s market positioning is OK. It all depends on execution now, and that is a whole other story which will be told on TTAC I’m sure. =)
Keep up the good work.
KTM,
I’m sure if GM cured cancer you could find a way to spin that negative to.
“Say what you will about the styling and driving dynamics of a bread-and-butter Corolla, Camry, Accord, Fit, Yaris, etc. Their owners love their cars. (And not just because they’re reliable.) ”
Interesting point. Speaking as someone who has always been fascinated by the reasons why people buy the cars they do, I ‘m not sure that description is accurate for the camry and corolla. My experience has been that most camry owners are either:
1. Seeking the relative annonymity that comes with driving a camry.
2. Like the “I am a sensible type/d’ont care about cars” statement it makes.
3. Are excited about it ‘s reliability and resale values and not necessarily the car itself.
4. Buy a camry because nothing else in the family sedan segment excited them.
I think all around Toyotas generally appeal to people who d’ont care about cars (other than a safe reliabe means of transport). That said their money is a good as anyone else’s and whether Toyota
wittingly or unwittingly created that brand image they have been phenomenally successful with it.
I think you need to do some more reading and put your bias aside.
I said I think the warranty is a relatively big step in the right direction, but I believe that it is not big enough. They do not offer the leading warranty in the industry. They simply got with the times. When Hyundai came out with their 10-year, 100,000 mile warranty it was ground breaking. GM needs to do the same (ground breaking strategy, not simply me-too). My personal opinion.
As for the 52-week stock issue, I am simply providing the convenient facts you left out. It’s great that it hit a 52-week high as investors are gaining confidence. However, it hit a 52-week high in July ($33.06) and promptly loss over a dollar per share between then and September 12. Most likely due to the rising fuel prices.
On September 12 it hit a new 52-week high of $33.23 (at closing) based on the new warranty program news and falling oil prices. Granted, the warranty program has more to do with the jump in share price than the falling oil prices. However, it only made up $0.17 over the July price.
It’s not about a negative spin. It’s about evaluating the data and understanding what it is really saying. I do this all day long as part of my job. I just completed a rolling 5-year capital planning exercise for 8 facilities under my jurisdiction with a total capital budget exceeding $150 million dollars. I tracked unit costs and quantities for projects with budgets as small as $50,000 up to projects with budgets exceeding $25 MM.
Agree with doubleE.
I think typical Yota or Honda buyers view cars as transportation appliances. They may want a car that has some eye appeal, but are satisfied with styling that quickly becomes as bland as that of their refridgerator. As long as it works, is reliable, and they don’t have to think about it things are just fine. And since they don’t drive hard enough to find out their machine’s shortcomings the car is perfect for their needs.
There’s nothing wrong with this approach, and I have friends who buy Yotas or Hondas or Nissans or Subies for just those reasons. They don’t care about the thrust of a turbocharger, superb brakes, predictable handling at 30 mph over the speed limit on a back road in the rain, steering feel, transient response, gear ratios, suspension travel, rubber compounds, or any of the other things us gearheads think about. Many, maybe most, of them don’t even like to drive. And even when they do, their idea of “fun to drive” is a whole lot different than those of us who late brake into a downhill corner looking for an early apex.
But Japan Inc knows are a lot of these folks out there and how to keep them happy. Meanwhile, Detroit plays smoke and mirrors with warranties.
yawn….
Gearhead: and if GM followed up decades of poor management with … more poor management, you would defend it.
How many American jobs has Wagoneer and friends lost this year? Over 20,000? over 40,000?
GM is making steps to make come back. If you can’t recognize that things are not turning out as bad as predicted (deathwatch #whatever) than all you are trying to do is preserve the status quo.
When GM Death watch started the GM stock price was about $25 and now its $33. After all if this is “Death Watch 90†than shouldn’t have GM died a long time ago?
doubleE
My sister and her husband are Toyota devotees. Since theit first new car, they have bought nothing else, will drive nothing else, and Toyotas are what they aspire to.
My B-I-L, an enthusiast, loves his old FX-16, Supra Turbo, late model MR2, and looks forward to the pending Toyota road car coming in ’09.
My sister loves Corollas and Camrys. She likes their conservative design, their engineered competence, their overall reliability.
Whereas I am one to experiment with different brands with each purchase (although my new cars must be Japanese branded, in as I’ve been burned twice with domestics and it won’t happen again….), my sister and her husband sort of remind me of how faithful my dad was to Fords, and my grandfathers were to Buick and Chrysler respectively.
Starting in the mid-70’s, the Big 3.5 gambled away their future. How sad.
Most, as in excess of 50% of people don’t really care about the car they drive. The want it to be comfortable, not too bad looking, get good gas mileage and have some go while it remains reliable for many years. Why do you think Toyota sells so many cars? Toyota gives the public exactly what they want.
I drove a 07 Camry for the day while mine was in for service. It wasn’t bad looking, was roomy and got me from point A to point B. Was it boring and forgettable to drive? Yes. But then the actual act of driving does not appeal except to the enthusiast. Driving for the regular Joe is something that needs to be done not something that they want to do. Do you enjoy taking the garbage out to the curb? No, its something that needs to be done but not something you’d want to do. Apparently 500,000 Camry owners for 2006 would agree and that is just one model.
The GM warranty has nothing to do with their current lineup, it was an opportunity to say “Hey we think our cars are of good quality and we are putting our money where our mouth isâ€. Now if they had a 6yr/60k B2B and a 10yr/100k powertrain then it would have worked. Would it sell GM vehicles in droves? No. It would however give average Joe the comfort of coming back to the fold and consider a GM product in the future.
GM needs bankruptcy and a good plan to become profitable. The problem with filing chap 11 is it would adversely affect the entire US auto market and to some extent the US economy. It also makes anyone considering a GM product go to a competitor. Honestly would you buy a car from a bankrupt company in the midst of restructuring?
Its one thing to fly a bankrupt airline, you just need the plane to take off and land without crashing and you are done. But buying a car is a long-term commitment knowing you won’t be able to resell it you would need to buy it for life. Hmmm buy the Aura or Malibu with no chance to resell it without losing serious money or buy an Altima that has none of those concerns…
I’m beginning to side with Rabid Rick, bankruptcy isn’t an option, it may be inevitable but it certainly isn’t an option.
Toyota, Honda and Nissan all have had 5yr/60k powertrain warranty for years. For the majority of drivers, the difference between 60k and 100k is minimal since the average miles driven per year is around 12-15k. So really, GM is celebrating the fact that they’ve merely caught up to everyone else. It also really feels like they’re trying to make people think it’s a bigger deal than it really is by not mentioning that it’s powertrain only. When I first heard the announcement I was very impressed by GM because I thought that it was bumper-to-bumper. Once I found out it was powertrain I let out a big yawn…
Jonny,
TTAC complains about a bloated over paid workforce and yet when the fat is trimmed it’s time to alert the “death Watch” Oooo. No kidding captain obvious, what did you thing was going to happen?
Noley:
I wouldn’t paint Honda, Nissan and especially not Subaru with the same brush.
Dave M:
My comments was not meant to disparage Toyota or their cars in anyway. I was just sharing my personal observations as to whom they most appeal. Sure there will be exceptions. My point was simply that I had not come across too many “car” people who would describe themselves as fans of toyota cars including many who respect the company and it’s success.
Robert,
I do believe this Death Watch has been one of your fines.
noley –
Substitute Toyota/Honda/etc. with, say Buick or Lincoln, your entry still makes a lot of sense. Except that Buick & Lincoln sales aren’t up 10% every month this year over last.
Sorry – somewhat OT but seeing these comments about Corolla as a transportation appliance….
…drove one recently. It was harsh, fussy and tinny. I didn’t pass my test for an “applicance” so I don’t care how reliable it might be.
Drove an Impala from Detroit to CA a while back (after 9/11 the only way to get home from Canada). Relaxed and smooth though for other reasons I wouldn’t own one.
Horses for courses…I just can’t think of a single course for a Corolla.
Rant over.
And the armchair analysts will continue to complain. Newsflash, many GM vehicles are already of better quality than Toyotas and Hondas. GM ranks, as well as almost every domestic brand, well as above most Japanese brands. One of the chief problems GM is experiencing is the disparity between perceived quality and measured quality. During most of my lifetime, over a span of over a quarter century, GM has built some seriously horrendous vehicles that have earned them the reputation of building poor quality cars. I see twenty year old VWs and Hondas regularly, but I haven’t seen a Chevette in at least a decade. That says something about the quality of design. GM’s reputation is well deserved.
But the thing that is clearly evident in both mainstream media and homegrown online publications is a boneheaded inability to recognize change. No one wants a rose-colored opinion of the domestic automotive industry, but c’mon. Where readers expect these automotive “authorities†to be critical thinkers and to provide insight, we get ongoing bias supported by conventional wisdom. This is why a miserable vehicle such as a Camry continues to be the benchmark… just because it was last year. Yuck! Other brands clearly have a problem being able to produce a vehicle as insipid as a Toyota Camry.
I am no GM fanboy, but there is no Toyota being built today where there isn’t a better GM vehicle. GM offering a 100,000-mile warranty on the most costly components of their vehicles is reassuring. Now that GM’s measured quality, styling, and tactile interior quality is arguably the new benchmark, the warranty will only help close the perception gap.
RF,
Please, enough with this dead horse that doesn’t seem to want to die. Negativity is easy to sling, even easier than a spinning GM la-la-land commercial. How about if you give the broken record a rest, and give us readers what we want – you, behind the wheel of everyday cars under 50k that most of us are driving, and the straight stuff… you know, the truth.
Articles like this are certainly the truth, but are not telling us readers much we didn’t already know.
wstansfi
The perception gap is a myth. Anyone who’s driven a wide range of GM and non-GM products knows what’s what.
Admitting you have a problem is the first step to recovery. You know, if you have any resources, guts and talent to recover.
Whoa… when did it become bizarro land around here.
Blue Adidas — how about mid-sized family sedans and/or mini vans? GM doesn’t even sorta, kinda compete in either segment.
I thought the 10/100,000 warranty was a no brainer for GM, I just thought it in May of 2005. (I have a blog if you don’t believe me…), so I guess it is a step in the right direction. But GM is dead. My proof is partially anecdotal: My wife walking into the Chevy part of an auto show and stating VERY loudly such that all four people in the Chevy exhibit could hear: “I will never buy a Chevy”. My 77 year old mom (with my dad, Chevy/Buick owners from 1948 until the early ’80s) stating last weekend “I would never a buy a Chevy”, and then relating her dissatisfaction with a recent rental Chevy, and finally my 21 year daughter whose visions of cars relate exclusively to Audis, Hondas, and BMWs. That’s three generations folks. Wagoner, read it and weep…
Last year’s “Fire Sale for Everyone†program K-Martified the company within the pubic consciousness.
Teehee!
Come on R.F. a little credit where it due.Sales are up,stock is up we are building the best cars we have made in years, and backing it with a great
warranty.You can transfer the warranty to 4 owners [in canada].
G.M. in some opinions are bland,I think thats subjective.A lot of folks share that opinion about TOYOTAS.
The new line of trucks will blow TOYOTA away,they know it and thats why they cut production.
Real truck people buy real trucks SILVERADOS,RAMS and F150s,with the price of gas going down watch them fly off the lots.
gearhead, you are right that GM stock has gone from $25 a share to $33 a share since the DW series started. Yet I do find it odd that respected business magazines like Fortune (see the February 20th issue) comment on the same problems as TTAC. I agree that RF does belabor the point sometimes, but much of what he is saying is being said in other camps.
Do you not agree that GM needs a small, fuel efficient vehicle?
Do you not agree that GM needs to refocus and possibly trim some of its product line to reduce redundancy between makes?
Do you not agree that GM can not use the GM of old as a comparison of their quality, but that of their competitors? They need to set their sights on a target and actually hit it!
Do you not agree that GM must exceed their competition, not simply match them?
If so, then you agree with the basic premise of the DW series.
I’ll add one more just to illustrate how deep GM’s problems are: My sister has owned and operated only Chevies -new and used – since the early 1970’s. (Really, her husband stopped evolving in 1968 I think.) She recently bought a Kia. It is the best automobile she has ever owned according to her! The likelihood of her ever going back to Chevy? Zero. Notice I haven’t even bothered to mention the males in the family.
It’s a half-truth (third-truth, 4th truth, whatever), but no one advertises their weaknesses. GM doesn’t say that the warranty is only powertrain. Florida Orange Juice doesn’t advertise “0% of recommended daily intake of Vitamin A”
GM advertises “100,000 miles”, Florida OJ advertises “100% Vitamin C”. Fair enough for me.”
You aren’t doing a fair comparison there. If Florida OJ advertised 100% of your recommended vitamins…then you’ve got a great example. But they don’t…they mention the exact vitamin…GM should have mentioned what the 100K part of the warranty covered…cause it’s certainly not all of the car. :)
I am no GM fanboy, but there is no Toyota being built today where there isn’t a better GM vehicle.
Sigh. So, why is there a Sienna instead of a GM CSV in my garage? It must be my lack perceptual abilities.
CliffG – here’s my (small) extended family’s count: 11 vehicles. Toyota: 7, DCX: 2, Honda: 1, Mazda: 1
The older generation stuck with Detroit 2.5 cars well into the 1990’s before going Honda/Toyota, the younger one has owned very few.
I point to the year 1973 for the current state of GM. The combination of increasingly restrictive emissions requirements on the OPEC embargo. It’s been downhill ever since.
From 73 to the early 90’s the cars were horrid, with some exceptions. Boring is the order of the day. Uninspired designs. Technology that doesn’t keep pace.
Mangement is a problem. Pension obligations. Union obligations. GM needs to cut its losses and file for bankruptcy. Trim some fat. Build some cool cars.
It’s ludicrous that some people are coming on here saying Toyota owners and drivers aren’t passionate about their cars… as if GM drivers were!
Toyota is successful because they’ve out-GM’ed GM. They make the kinds of appliances people want, just like GM did 40 years ago. A Cobalt an exciting drive? Even the SS supercharged model is widely regarded as a driver’s disapointment compared to less powerful sporty coupes. The Malibu exciting? huh? Buick Rendez-Vous is like a baby Cayenne? riiight. Other than a few tuned models, GM’s lineup is about as big a snore as Toyota’s.
I think attending any racing event or car show gives a pretty good idea of who is passionate about their cars: Subarus, Hondas, Mazdas, Fords, BMW’s, VW’s. These companies got through, hit a target and got loyalty by offering something unique. They make mistakes, but their DNA comes through to an extent that many people are more willing to forgive.
I’ve personally yet to see a Corvette participate in an autox, yet I’ve seen much rarer (lower production) cars far more often (obviously I am not talking about the same car several times). I think that kind of thing says a lot about how much GM owners *really* care about what they are driving. Sure, you dont need to convince enthusiasts to run a successful (profitable) car company, but ragging Toyota for lack of passion is the pot calling the kettle black.
Nice to see Rick Wagoner, er Mikey, commenting on this site, but I find it interesting that the comment ends with a discussion on trucks. If GM has any prayer of maintaining a market share they are going to have to produce a car that makes money. Building “close enough” cars* is simply not going to do, and that is the whole point of DW.
* A “close enough” car: Motor is not as smooth as a Honda? Close Enough!
Interior 3 steps below Audi? Close Enough! 4 speed auto rather 5 or 6? Close Enough! Build quality not quite Toyoto-ish? Close Enough! Etc.
“I point to the year 1973 for the current state of GM. The combination of increasingly restrictive emissions requirements on the OPEC embargo.” – Caffiend
And these problems don’t/didn’t affect the Japanese manufacturers?
“I am no GM fanboy, but there is no Toyota being built today where there isn’t a better GM vehicle.” – blue adidas (a/k/a/ GM FanBoy)
Puh-leeze. Not only is that patently wrong (think Aveo vs Yaris or Corolla and work up from there, lingering over Lucerne vs Avalon), Toyota offers cars GM doesn’t have at all (e.g., a real hybrid anything, the xB and the Rav4, for a start).
Hey thanks CLIFF,Rick and I have one thing in common,we both get our pay checks from the same source.I suspect Ricks is bigger though.
We do share a passion for G.M, its employees and the products.
My views will never change
And on that happy note, no more baiting, no more rebating. Let’s move on dot org.
Interestingly enough, the Canadian version of this ad (which I just saw) clearly states a 160,000 km powertrain warranty. Bumper-to-bumper is not implied at all.
As a “young urban professional’ as the marketers say, I can tell you GM’s warranty ‘experience’ is the reason I drive Japanese sedans now and for the forseeable future. I bought a new, ’03 Pontiac Bonneville (I know it’s an old man’s car, but I like big). It was in the shop for warranty repair 25 of the first 42 days I owned the car. Body seal cracked, transmission cable snapped, fuel injectors replaced…twice. My repeated requests to exchange that obviously poorly manufactured Pontiac was met by GM’s response of “We meet all minimum legal requirements for sale and warranty of new vehicles in NJ.” That was from Pontiac corporate, not the dealer.
It’s not that the car was crap, any complex manufacturing process can and will create defective units. It was the arrogance of GM and the dealer in their refusal to stand by their vehicle. I don’t expect perfection, but I do expect a new vehicle to function for at least 10 days before failing on the road. Adding insult to injure, two of the (GM) loaner vehicles they gave me while my car was in the shop both failed (one with cracked rotors and one with a defective ignition switch). My comment that I have several decades of car purchasing ahead of me that will be influenced by how the dealer stands by that specific car was met with derision and an angry request to never return to their dealership again.
The net result, my used, ’02 Mitsubishi Diamante has been rock solid over 30K (and counting miles), my Ranger (with it’s 80’s tech chassis and 90’s interior) just keeps going (and going and going), just purchased a Mazda derived Fusion for mom, and for the next 40-50 years of my car purchasing life I will never step foot on a GM lot again. And neither will my friends and family. All because of GM’s warranty experience.
I admire the Generals warranty. I believe GM produces some pretty good looking vehicles, I just never trusted them after the 3year/36,000 mile warranty. I wouldnt trust any vehicle without an extended warranty.
It is a sad case of to little to late. Worst case scenerio, in a year GM will be the number two automaker behind Toyota. Nothing lasts forever.They will always be in the top two.
GM has a vast measure of in house overhauling. The sad fact is that GM feels they are still right on course. Just like the Titanic.
Toyota is having its moment in the sun. But a time will come when it will set on them also. Today Toyota will take over the world, tomorrow…NASCAR.
It’s funny…I thought GM’s “Rocket” Division (Oldsmobile) performed a nice faceplant right into the earth.
I guess I’m glad GM’s at least trying to elevate itself again.
But you know what? Everything GM enacts is a half-measure:
A nice warranty (I suppose), but second to Hyundai. You know, Hyundai…the car company who went from “crap” to “anonymous decency” to “respectable” in the time GM could have gone to the moon and back. If only…if only…!!
The same GM who removes their “GM badges” years ago, and somehow finds a “Marketing” opportunity and decides to bring them back. Only this time around, something mighty conspicuous is absent-
“The Mark of EXCELLENCE”.
Truth be told, in the 70’s when that was applied…even THEN most people with a lick of sense knew better….didn’t we?
GM, you see Ford going down the toilet. What is it going to take for YOU not to join them? Are we eventually going to be witness to the “Big 0.5”?
I actually come from a GM family…one of those rags-to-riches stores actually holds true for a member of my family. But you know what? It has come at someone expense. I think the American public has had enough of your crap over the years to where most people really DON’T care if you go belly up.
I don’t. I no longer support what you stand for. I don’t give at the office any longer, nor do I give to “family” when all family does is take…never to give a damn thing in return. I’ll never pay another $1000 repair bill for one of your transmissions, engines, whatever…it’s not gonna happen.
How many plants are you planning on closing down within the next couple of years? Well…all I can say is this:
If you think this “warranty” will stem the tide a little, you’r smoking some mighty potent lithium grease.
When you bring back “The Mark of Excellence”…AFTER (not a moment BEFORE) it actually has any meaning, then maybe I’ll step into one of your show rooms. Until that time comes…coming from “family”…my solution is Tough Love.
You have a problem- now fix it.
Funny about all the Toyota/Honda = boring talk, when GM’s lineup isn’t much different (more specialty cars maybe, but the family cars are all dull to look at and drive, more so than the Hondas and some of the Toyotas).
But anyway, how did Hyundai’s powertrain warranty do so much for them if this won’t do much for GM? (I think Hyundai’s warranty was a big part of their revival… do you disagree?)
“[H]ow did Hyundai’s powertrain warranty do so much for them if this won’t do much for GM?” – carlisimo
Because Hyundai put a real 10 year warranty on a really inexpensive car. This launched them. You could buy a Hyundai for very little and you’d have wheels for several years after the loan got paid. Guaranteed. This was a real attraction for people looking to minimize transportation costs and don’t have the money to get into a Toyota or Honda (which delivers economical transportation through longevity and, in part, high resale values).
carlisimo,
Everything dhat* says is true. There’s also one other difference:
One is top down (GM) and one is bottom up (Hyundai).
It goes like this: GM has been a bully for so many years. They have been the Thug of the auto industry. Go back far enough and you’ll know EXACTLY what I’m refering to. If you wanted to buy a car, you either bought GM, Ford, or Chrysler (maybe a Euro if you were well to do…but let’s just stick to the middle class for this discussion). Of the three, they ALL sucked! So what do you do? You buy what you can, and Either three of them treated you like a dog! But since GM had the largest market share, they treated you ESPECIALLY well (tongue in cheek!). So there is an ENTIRE generation out there who knows nothing BUT arguing over warrantees, getting to know the “Service” (ha) Manager by name, and one screw-job after the next.
So now GM comes along and say’s “Well, please give us one more chance. We know we’ve screwed you countless times, but NOW we wish to set things right. As “proof”, here is out lovely “Warantee”.
Hyundai on the other hand started out at the very BOTTOM…as LOW as you can possibly be….an in effect asked one simple question:
“How can we EARN your business?”
You see a difference here? I sure do!.
Legal Footnote. In a Chapter 11 proceeding, the debtor (such as GM) has the ability, with court approval to jettison burdensome obligations, such as long term warranty contracts.
Summary: GM warranties are not worth more than the paper they are printed on.
Freud thought that a dream about flying was an expression of sexual desire. Am I the only TTAC reader who got a “special feeling” watching this commercial? Now, be honest.
Rastus – absolutely right; GM is doing this to restore credibility while Hyundai did it to create credibility. Same goal, coming from two opposite ends. My first thought when I read about this new warranty program (which in fact was my first thought when I originally read about the Korean warranties): “just because it’s warrantied doesn’t mean it won’t break, it just means you won’t have to pay money to fix it”.
Extending warranties like this on 07’s essentially won’t affect costs at all until the old warranty period is passed – so for another 3, 4 (?) years, this will cost GM absolutely nothing. Nice.
Robert Schwartz:
Legal Footnote. GM has 10 times the liquid capitol vs. Debt. GM could not claim bankrupsy even if they wanted too. GM could loose money for the next 20 years and probably not be eligible for C11.
Actually, they don’t. Their exact liquidity position is a BIG question mark. There is considerable evidence that GM’s runing on fumes; they need a $10b pad just to do business.
Suffice it to say, they wouldn’t have sold everything that wasn’t nailed down if they were flush, now would they?
Do you not agree that GM needs a small, fuel efficient vehicle?
You are talking about the yaris and stuff like that? The misconception is that GM does not make fuel efficient vehicles, they do. When you compare like vehicles by size, cost, HP, GM is even up or better MPG. Vehicles like the yaris are designed around 1 basic thing, fuel economy. At first it seems like the responsible thing to do but after all the initial feel good the reality sets in that it’s just a little ugly car that I can’t do anything with but move myself. People that are going to make a statement about their lives by buying such a thing are not going to by a domestic car anyway.
GM would rather focus its energy on building fuel efficient vehicles that are useful rather than spend the time and effort on a vehicle that sacrifices utility in the name of fuel economy. GM would rather strive for a balance.
GM makes vehicles with competitive fuel economy without the sacrifice of power or practicality.
Do you not agree that GM needs to refocus and possibly trim some of its product line to reduce redundancy between makes?
Yes, I know some things about this issue at GM but I cannot comment.
Do you not agree that GM can not use the GM of old as a comparison of their quality, but that of their competitors? They need to set their sights on a target and actually hit it!
The target is taking a direct hit and it’s not my opinion either.
I know it’s a conspiracy! But JDP numbers state that GM has comparable quality to the competition. Ranking most of their brands above industry standard and several in the top 10.
Do you not agree that GM must exceed their competition, not simply match them?
Yes, but this comes with time. GM is much more headed on this path than before death watch 1.
RF,
You can read all about the amount of cash that GM has, it’s released in a public statement to stock holders. If you do not believe it and you think something shady is going on… well than that’s fine… theorize about whatever you want, but at the end of the day you still will not actually know.
gearhead455 is going to have very little to defend once and if the Bancruptcy Judge out east cancels out the UAW contract for Delphi next Monday.
Let’s assume he finally loses patience with the non-going (rather than on-going) UAW head-in-the-sand crew, and Delphi (and GM) “bargaining” (BS) sessions and says – the UAW’s outa there. Contract cancelled, so that Delphi can come out of bankruptcy and have some slim chance of profitability rather than closure.
Mr gearhead455, you and I and everyone else knows that once that Judge says “contract void” the UAW is going to walk. Yep, GM and the other Delphi customers have had time to find alternative product, but GM particularly is going to take a hit in some of it’s North American production.
What nobody is thinking about is this: When Delphi folds (no workforce), and the UAW are shown to look like the neadethals who shut down GM because they think it is still 1960 by the mass hysteria/media (and the economy starts to do an immediate short-term recession), the buying public are going to do for themselves re: GM what GM car salesmen in the 1950’s made sure to do “for” the “independent” automobile manufacturers, which was to insinuate that “those companies are not stable – you’ll end up with an orphan” – which became a GM-fulfilled prophesy.
So now it will be the shoe on the other foot, but it won’t be the competition doing it – it will be the media and the buying public itself.
Thus: Even if GM has “only” some production disruptions (which they will), it will reflect more harshly on them because they are in such a precarious position (as evidenced by TTAC GMDW as well as dozens of other sources).
Personally, I don’t know if GM will actually survive, although as much as I cannot stand the culture of the company (“we’re right, you’re just a customer – yeah, you’ll come back and buy another”) but needless to say, I don’t want them to go kaput, if only for the personal economic disruption it will cause for so many people (myself not included).
Plus “those in the know” watched MG-Rover (which as recently as 10 years ago, built two of the top ten selling cars in the UK) go flush down the toilet and with it, every buyer’s new car warrantee, as well.
GM, “kizmet” has a long memory and what goes around, comes around. Hope you survive to actually attain a healthy attitude and become humbled by the whole experience, but I suspect your days – are – number. Like in three days to your first reckoning, and counting.
From TTAC's Deep Throat:
One thing that needs to be addressed in the DW series is explaining why the stock price is going up yet GM remains still vulnerable. GM’s goosed everything with its zero percent for deadbeats, the warranty gimmick, and of course manipulating earnings. The real problem is that if GM doesn’t stabilize its market share, the recent structural savings won’t make a difference. What really needs to happen is that GM needs to sell more profitable vehicles – eg gain market share – if it ever wants to be truly profitable again. All it’s done so far is lower its cost basis to meet its demand basis but it won’t translate into profits unless it can sell vehicles on a more profitable basis and I don’t see that happening.
Dear Nostradamus,
GM has all of there ducks in a row as far regardless of Delphi.
GM has had time to adjust to the scenario
GM is not tiny little Rover
I have the ability to see things that you do not.
[In response to GM needs a good fuel efficient small car] “Vehicles like the yaris are designed around 1 basic thing, fuel economy. At first it seems like the responsible thing to do but after all the initial feel good the reality sets in that it’s just a little ugly car that I can’t do anything with but move myself.” – Gearhead455
Gearhead, you should go over to Edmunds.com and read some reviews of the Yaris’ older brother, the Echo. Look at reviews for the 2001; people were still writing highly favorable reviews of that car in 2005 and 2006. Count how many times they use, “love,” “peppy,” “plenty” and smilar positive words. Then look at how many people get better fuel economy than the EPA rating suggested.
That’s complete customer satisfaction, in what many consider to be Toyota’s worst and cheapest crapmobile. Now go read the reviews for the Yaris. Take along tissues, you’re going to cry.
GM needs a good – GOOD – fuel efficient small car. The Aveo gets poor fuel economy, compared to what Toyota and Honda are delivering.
GM needs more fuel-efficient large cars, too. GM wants you to focus on cylinder count and displacement because GM can compete and win on those measures. Consider the Avalon and Lucerned. GM wants you to think the NorthStar-equipped Lucerne “wins” a comparison with the AValong because the Lucerned has a larger engine with more cylinders (“V-8 Power!”) but it’s the Avalon that’s quicker AND it gets better fuel economy.
Some 75% of Camry owners are satisfied with the performance of their 4-bangers and happy with the fuel economy. Why can’t GM build a car that matches the performance and fuel consumption of a Camry? Why didn’t they put a good I-4 into the base Aura?
I’d like to make a distinction about the impact of warranties. The 10 year Hyundai warranty didn’t improve Hyundai’s fortunes in the US. The fact that Hyundai radically improved the quality of their vehicles — to the point that new models are in the same league as Toyota/Honda — improved their fortunes.
The impact of the warranty was to bring attention to this improvement. In effect. Hyundai was saying, “we think we’re as good as Toyota, and if we’re wrong, we’ll pick up the tab.”
GM has similarly improved its quality over the past few years, and is using this warranty to highlight that improvement. Chrysler tried it with the 7/70 campaign, and then retracted it because consumers didn’t care.
It’ll be interesting to see the impact of this decision on the showroom floor. At least it’s better for GM than huge rebates.
1) I think the warranty deal can’t hurt GM.
2) If GM wants to survive, it has to build a car that beats tha Camry and Accord. Not “comes close”, not “equals”, but BEATS Camry and Accord. If they do thtat, they’ll succeed. If not, they’re doomed.
Everything else is just noise surrounding the main event.
Simple as that.
Isn’t the point of advertising to remember and talk about the product, hasn’t this succeeded in that? Of course it has. It’s not like Toyota and Honda have been honest with what they do, hidden findings from accidents to prevent recalls?! come on isnt that worth jumping down their throats too. I get the feeling from having read the posts on this web site that whatever Ford or GM do, you guys will never be happy. period.
Anyhow, when’s the Chrysler Death Watch starting anyway, more poor results and market loss, soon there will be the big 0.0, surely if you yanks are gonna bash your own companies you might as well jump on chrysler too.
KTM, Don Whitefield:
Under threat of being banned, I am no longer able to reply under “GMDW”.
GM is as dead as a doornail and I look forward to gearhead455 and friends apologies that they simply did not see it coming when GM finally folds and declares BANCRUPTCY.
Speaking of Chrysler…
One of my co-workers, a great pistonhead in his own right, was telling us of his experience with the local Chrysyer dealer where he dropped off his car for the free inspection. He goes to pick up his car and is told that they could not put the sticker on it because it needs new rear brakes. He went ballistic and took the service counter drone out to the car to have him personally look through the rear allow wheels to see for himself how much brake pad was left. He got his sticker.
And this is not the first time stunts like this have happened either.
Which brings me to my point. If GM wants to truly change the public perception of the quality of its cars it’s going to have to start getting medieval on its dealer network. That is where the majority of customers will form their opinions about the quality of their cars, and if the dealership is making it a habit to rip off customers with unnecessary repairs in most cases the customer is going to start blaming GM for making “such a crappy car” rather than accepting the reality that the dealer has been playing them for a fool all this time. They need to run covert ops on their own dealers and then slam them hard when the dealer is caught playing dirty. Fine them hard and pull their franchise if need be. If a dealership network that sells Toyota, Honda, and GM gets their GM franchise pulled by GM for QA issues you can bet that will make a statement and a half.
If GM can’t do that, then their huffing and puffing about the new warranty is meaningless. Especially when dealerships have found it more profitable to con the customer into believing that the warranty doesn’t apply so he’ll pay them directly, and then for all we know probably filing the warranty claim with GM anyway. Once that happens, all the good will GM got from offering their sweet warranty just flew out the window and that customer will be trading that GM car in on something not made by GM as soon as they are able.
September 14th, 2006 at 6:50 pm
blue adidas: I am no GM fanboy, but there is no Toyota being built today where there isn’t a better GM vehicle.
starlightmica: Sigh. So, why is there a Sienna instead of a GM CSV in my garage? It must be my lack perceptual abilities.
blue adidas: Okay, looking back, maybe what I said was an overstatement. Toyota, Honda and Chrysler are the three automakers that have built a successful minivan business. Kia appears to be joining in on the party. All the other brands don’t have the formula down yet. If I were forced at gunpoint to purchase a minivan, I’d go for the Honda.
“Newsflash, many GM vehicles are already of better quality than Toyotas and Hondas”
Newsflash … no they are NOT. And what exactly do you mean by “quality”? If you look at Consumer Reports, GM still trails Honda and Toyota by a wide margin. Look at JD Power, GM overall still trails Toyota and Honda, and I’m talking about JD Power’s 3 year VDS, more-so than their 90 day “initial quality” marketing exercise.
Look at just about *any* quality survey, or extensive quality comparison from around the world. Don’t take my word for it, actually go out, search around, and find all of these international surveys and comparisons.
What you will find is that Toyota and Honda *consistently* rank high in quality, mo matter what survey it is. In Britain, Toyota and Honda rank high in both ownership experience and quality. In Germany, same case for Toyota and Honda. In China, Toyota and Honda rank high in quality.
The “perception gap” between GM and Toyota/Honda some of you talk about IS a myth. Some of you claim that Toyota and Honda’s reputation for overall quality and reliability is a myth. You could not be more wrong. Outside of domestic forums and fan circles, nobody else seems to talk about this. Could it all be a conspiracy like some of you claim, and that EVERYONE is wrong, yet the small minority of you are right? Or could it be that some of you are simply ignorant, with your heads in the sand, that you will not, or cannot see the reality?
Yes, GM’s quality is improving, but that does not mean that Toyota and Honda are staying completely static, and not improving. Honda is working to improve quality, and with the mess of recalls and the public humiliation that Toyota received in Japan, quality is now at the top of the list of priorities for Toyota, even though they continue to be ranked very highly for overall quality and reliability. Toyota is so worried about improving quality, they have assigned two senior executives for quality, including a quality master from Toyota Europe, and a member of the Toyoda family to directly oversee quality.
With the Toyoda family getting directly involved with quality, that’s sign Toyota is dead serious about improving quality. Just as a historical fact, the last time the Toyoda family was directly involved with high level decisions was in the early 80s, when chairman Eiji Toyoda gave the orders to start the Lexus brand. Then, in the early 1990s, Eiji Toyoda gave the orders to begin a secret project which eventually became the Prius. The Lexus brand and hybrid cars, two of the major accomplishments within Toyota that were directly influenced by the Toyoda family.
As for what many of you are saying, most people are not car enthusiasts, or sports car drivers … so what? Fact is, Toyota is giving American consumers exactly what they want, and that is why they continue to see their sales increase at such a rapid pace, and why the Detriot automakers continue to lose marketshare. Bottom line is Toyota makes a hell of a profit giving consumers what they want. GM can’t say the same.
Keep in mind that GM’s B2B warranty has *not* changed. Sure, it’s the same as Toyota’s or Honda’s B2B warranty, but the onus is on GM, not Toyota or Honda, to prove themselves. It is GM that must beat Toyota and Honda, and show proof to customers that they are confident in their own vehicles, and that they believe they can match Toyota and Honda in quality.
This GM warranty essentially only matches Toyota and Honda, and also comes after Ford has increased their warranty. 5 years or 100K miles, which ever comes *first*. For the vast majority of drivers, the 5 years will come first, and that makes it no better than Toyota’s or Honda’s warranty. On top of that, Toyota offers an 8 year/100K warranty on their hybrid system, and we’re talking about a full warranty here, not some deceptive Hyundai warranty. Merely matching Toyota and Honda will hardly give GM conquest buyers, as that gives import buyers no real, tangible reason to consider a GM vehicle over a Toyota/Honda. Even Hyundai’s hyped 10 year warranty has done very little to stop the war machine that is Toyota from increasing sales, as well as profits, at a mind-boggling pace. Right now, the only thing that will slow down Toyota’s growth is Toyota themselves, merely so they can focus more on quality.
Will GM also have an increased warrantly when their hybrids come out, or will it simply be the same standard warranty? That is the question. Will GM have enough confidence in it’s new, jointly developed hybrid system to match, or beat Toyota’s hybrid warranty? Toyota sure has enough confidence in their hybrids, despite being first to market with hybrids (internationally). In fact, Toyota will *pay you* to give them hybrid batteries once they are depleted.
EDIT: just to clarify, Toyota is NOT scaling back production of the new Tundra. Here is the proof:
http://transport.seekingalpha.com/article/16811
http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=google&guid=%7B146E9F7F-43B6-4EF0-9545-37E192D63611%7D&keyword
Legal Note: In the 1980’s, the Johns-Manville corporation was allowed to declare Chapter 11 on the basis of potential liability for products liability lawsuits (asbestos) while the company was still flush with cash. So I don’t think actual poverty is a requirement.
Now, as to whether this will or could apply to GM, I’m not sure. I don’t think the situations are analogous, because in the JM case, the future liabilities were a near-certainty based on lawsuits that had already been won and on the involvement of the company with asbestos. OTOH, future losses and/or labor problems are much more speculative in nature.
Radimus brings up an interesting issue. Just how much of GM’s perceived quality issues are actually real versus dealer generated?
As an aside regarding GM, the last place to look for its’ future prospects is in the stock price. One anecdote will do, at the time of Enron’s literal implosion, most Wall Street analysts had buys or holds on the stock. GM is a major institutional holding, a large piece of the S&P 500, and therefore a REQUIRED purchase by the vast mulitude of index funds. Also, given that investment banks are loathe to issue “sells” on clients there is not going to be any pressure on the stock from that angle. There really is only one thing you need to know upon examining GMs last five years of results: Car manufacturing/sales has NOT been a producer of excess cash flow, it has been a USER of excess cash flow produced primarily by GMAC. Nothing has changed in that respect in the last couple of quarters. Be vewy vewy careful out there folks.
Johnson:
I don’t entirely disagree with you. However you have to have to be drinking the Toyota Kool Aid not to know that many GM vehicles rank higher than many Toyotas in many JDP surveys. Am I trying to say that Toyotas are poor quality vehicles? No way. Lexus ranks first in the most recent dependability survey and Toyota ranks fifth. Most impressive. But Buick and Cadillac both rank better than Toyota, so GM clearly knows how to build a car. The differences in long term quality between the top ten brands are in the fractions, so these anecdotal examples of automotive nightmares with modern GM vehicles are not supported by data. Personally, I have experienced Toyota “quality.†Others have also, sludge and all. Regardless of what I think about Toyota and what you think about GM, the reality is that the measurable difference in quality between GM vehicles and Toyota vehicles are negligible.
So what is GM’s real problem? As I’ve stated, GM has built such bad vehicles for so long, and the wrong vehicles at the wrong time, that they’ve lost customers. These customers are vocally peeved and are unlikely to return to GM showrooms. That was then, this is now, and new customers are born every day. Times have changed and the quality of Toyota vehicles are proving less than the hype has promised. Don’t attempt to tell me that a Camry or Corolla are the benchmarks that automakers must follow. I’ve driven them, rented them and sat as passengers in these awful cars. If these two vehicles had a Ford or GM badge on them instead of a Toyota badge, they would be ridiculed and mocked in every automotive publication.
GM was arrogant in the 70s and 80s. Toyota mirrors that arrogance today. It’ll catch up to them. GM is on the right track with Cadillac and Saturn. Buick too. Chevy needs work and so does SAAB. Hummer, whatever, apparently their customers don’t care about quality because they barely rank above Kia. The net is, by GM providing a 100k warranty on the most expensive components of their vehicles, this is a smart move that will only help sales.
Ever since I got burned with a new GM Lemon in ’97 I have been driving Hondas. I would never again drive a GM, even if they oferred 10/100 btb. This is b/c the GM dealers MAY find a way to void your warranty. “They are all like that” and “it is your fault – you abused the car” is what the Pontiac dealer used on me repeatedly to try to wiggle out of any warranty work.
In other words, no warranty from GM, not even a 100/1,000,000 btb, would persuade me to buy a GM product.
If other people have had a good expereince with GM quality that was acceptable to them then they would be foolish to switch to Honda or Toyota or whatever, based on quality alone. And I am sure that there ARE many people who have had a good enough expereince with GM products that they are repeat customers.
As rational human beings we tend to repeat behavior that lends itself to a good outcome for us. I believe most people can understand this. This is why I buy Hondas, while other people buy GM’s. There really is no other reason for these two different buying behaviors other than the fact that it is based on people’s previous expereinces with certain brands. If you are now driving a GM b/c your previous car was a Honda lemon then I salute you. Your change in purchasing behavior is both perfectly rational and understandable.
However, having said this much, let me add more fuel to the fire.
A know a man in my hometown who owns the local Avis franchise that rents mostly GM’s. He tells me that the various makes of GM dealerships in town are ripping him off on paid repairs. So if Mr. Goodwrench (in my home town) can not fix your car when YOU are paying for it, then what makes me think that Mr. Goodwrench (again, in my home town) can fix it when THEY are paying for it?
Now, I can not condemn ALL GM dealerships simply b/c the 5 or 6 GM dealerships in my home town are crap. This is not a representative sample of all of the GM dealerships. Many, many, many readers know this and can give personal testimonials. (And I KNOW that the Honda dealer in my home town is crap, which is why I went to a larger city to buy my Honda.)
But this does make me wonder about GM products. Does this mean that GM and its vast dealership network is essentially a very dishonest organization that does not believe in good faith business practices? Or am I just jumping to conclusions and simply repeating a wrong but widely held belief or conventional wisdom about GM? I do not know.
The products that I purchase for my own personal use does not matter. At the end of the day, what does matters is what consumers in the aggregate purchase. This is called market share, and so far the market share statistics imply that GM has not done a good enough job while other companies have been doing a good enough job.
So is this 10/100,000 powertrain warranty going to make a difference for GM? I think not, but only time will tell for sure.
Toyota Kool Aid? I’ve always been curious as to who came up with this “Kool Aid” talk, and why do I keep seeing people use it? It sounds like a schoolyard saying really.
How do you define “many”? Is it just a few, or by many, do you mean the majority of categories or sections of JD Power’s quality surveys? If you mean the majority, then you are most certainly wrong, and I’m quite sure I don’t need to spoon feed you JD Power stats to prove it.
Further, apart from JD Power, I also mentioned Consumer Reports. There are also other publications out there that do not put Buick or Cadillac in the best light. Furthermore, Buick and Cadillac are not entirely international brands, and in many countries where other GM brands exist, they too trail Toyota in terms of quality. Do you think GM’s european Opels match Toyotas in quality surveys overseas? I’ll answer that for you … they don’t.
Again, what constitutes “long term quality”? Is it JD Power’s 3 year VDS? The answer is no. The VDS is used by many as almost a quality bible in a way, but 3 years still does not tell about longer-term quality. Once upon a time, JDP did do 5 year quality studies, but has long since stopped it because after 3 years, bumper-to-bumper warranties for many vehicles expire. Consumer Reports tracks quality for 8 years last time I checked, but it is claimed to be very biased and inaccurate. Fact is, you will never get something truly accurate, and if anyone can name me a survey that’s as overall comprehensive, broad, and detailed as Consumer Reports, I would love to hear it. JD Power does track very specific information like powertrain quality, but that is not released to the public. In Consumer Reports, after 3 years, the quality/reliability gap widens between GM vehicles and Honda/Toyota vehicles.
Your personal experience hardly means anything in this case, as we are looking at the big picture overall. There is a reason why I am not mentioning personal experience, because by itself, it means very little.
Yes, GM does have a bad perception, no thanks to *decades* of incompetent decisions, and bad vehicles. Meanwhile, Toyota and Honda both have years and years of a reputation for quality and reliability, thus leading to their good perception. For GM to change perception, they must BEAT Toyota and Honda wherever they can, and that includes this warranty. Problem is, a lot of GM’s historical incompetence is biting them in the ass right now, and also coming back to haunt them. Right now, I don’t see enough effort from GM. They are hardly beating, let alone matching, Toyota and Honda in most categories. GM themselves considers Honda right now as the benchmark when it comes to powertrains. Last year, GM considered Toyota as the benchmark, based on some internal study it did. Save for the Corvette, which is quite lonely in it’s class, and GM’s new SUVs, GM is not really leading much of anything.
Toyota quality is not matching the hype? What hype? The media hype? The media, as with everything, tends to exaggerate, but Toyota quality is hardly hype. It seems you have stuck your head in the sand and refused to look for the information I referred to where Toyota remains one of the best for quality on an international scale, even today, at this moment. International surveys, and quality studies all around the world continue to show that Toyota quality remains high, and that it has not really faltered any.
I don’t have to attempt to tell you anything, if you refuse to accept reality, so be it. Fact is, Toyota’s Camry V6 has the most powerful V6 engine in its class, and is tied for having best fuel economy in its class, tied no less with a considerably less powerful sedan. The Camry currently is the only car in it’s class to offer a hybrid powertrain, and the Camry’s rear seat accomodations are almost unanimously acknowledged as being best-in-class. The Corolla remains a very reliable, comfortable, high quality economy car with good interior room, and excellent fuel economy, which the Cobalt can only dream of. Again, nobody really cares all that much whether or not you hate Toyota, or about your personal experiences with these cars.
What me, and others are showing is the big picture, or the reality.
GM was very arrogant in the 70s and 80s, and somewhat in the 90s. Even now, GM is still a bit arrogant in some decisions, and fundamentally, it’s corporate culture remains the same as it has been for a long time.
Toyota is all of a sudden mirroring GM’s arrogance from the 70s and 80s? You seriously need to get back to reality, to September 2006, and to make sure you’re not dreaming. Where do you people come up with this stuff, because it’s just ridiculous.
Sorry to say, but this is not some fantasy “anti-Toyota/anti-Honda” world, where Toyota and Honda quality is dropping, their vehicles are overhyped, and where GM has rapidly increased quality, beating Toyota and Honda at almost every level. Hmm, would this dream also include sustained and consistent profitability for GM as well? And why not throw in losses for Honda and Toyota, just for the heck of it?
The new GM warranty is nothing more than marketing, and merely catching up to Toyota and Honda, not to mention most recently Ford, in offering this 5 year powertrain warranty. GM powertrains for the most part are pretty reliable, and the powertrain generally is the least likely part of the car to go belly up. This warranty simply covers components that have always been pretty reliable, as a result, will rarely break or go belly up before 100K, or 5 years of ownership. If GM really was so confident about the quality of it’s new vehicles, then it would *beat* Toyota and Honda’s bumper to bumper warranties … but the fact is, GM wouldn’t do that, because costs would go up and GM likely doesn’t feel their vehicles are there yet.
“However you have to have to be drinking the Toyota Kool Aid not to know that many GM vehicles rank higher than many Toyotas in many JDP surveys.” – blue adidas
“Toyota Kool-Aid?” I hear that a lot, too.
I’ve got 4 Toyotas. I had poor experiences with GM, bad experiences with VW and worse experience with Ford (talk about arrogance!). I used to think Volvos were reliable and I was pretty happy with them. Then I bought my first Toyota. I’ve had 4 right now, their average mileage is close to 90K. None has ever been in the shop for a problem; all are rattle-and-squeak free and look great. Each gets excellent fuel economy for its class and offers what I consider good to excellent performance.
Everybody else I know who has a Toyota is similarly perfectly satisfied with his car. Most are repeat owners and the others will be.
If that’s the “Toyota Kool-Aid,” you can pour me another glass.
—-Which brings me to my point. If GM wants to truly change the public perception of the quality of its cars it’s going to have to start getting medieval on its dealer network. That is where the majority of customers will form their opinions about the quality of their cars, and if the dealership is making it a habit to rip off customers with unnecessary repairs in most cases the customer is going to start blaming GM for making “such a crappy car†rather than accepting the reality that the dealer has been playing them for a fool all this time. They need to run covert ops on their own dealers and then slam them hard when the dealer is caught playing dirty. Fine them hard and pull their franchise if need be. If a dealership network that sells Toyota, Honda, and GM gets their GM franchise pulled by GM for QA issues you can bet that will make a statement and a half.
If GM can’t do that, then their huffing and puffing about the new warranty is meaningless. Especially when dealerships have found it more profitable to con the customer into believing that the warranty doesn’t apply so he’ll pay them directly, and then for all we know probably filing the warranty claim with GM anyway. Once that happens, all the good will GM got from offering their sweet warranty just flew out the window and that customer will be trading that GM car in on something not made by GM as soon as they are able. —-
My sentiments exactly.
Unless the dealers change their attitudes, GM is screwed.
—Toyota Kool Aid? I’ve always been curious as to who came up with this “Kool Aid†talk, and why do I keep seeing people use it? It sounds like a schoolyard saying really. —
Jim Jones, the head of the “People’s Temple”, lead a mass suicide of his followers who blindly drank poison laced grape Kool-Aid in Jonestown, Guyana.
New car in the family;
2007 Cadillac STS 3.6 with all wheel drive, nav, sunroof, etc, $52,000 sticker, leased for 39 months at $490 a month with $2,000 out-of-pocket.
Say what you will, but there is a certain segment of the population that this car and deal will appeal to. The “logic” behind this deal was that my dad feels the STS is a “higher” prestige vehicle that is only a little more a month than a regular car. His leasing it with little up front money insulates him in case of any GM problems or warranty issues that might arise.
Re: Johnson
“Toyota Kool Aid? I’ve always been curious as to who came up with this “Kool Aid†talk, and why do I keep seeing people use it? It sounds like a schoolyard saying really. “
It’s not. The saying is pretty much common knowledge. Look it up.
How do you define “many� Is it just a few, or by many, do you mean the majority of categories or sections of JD Power’s quality surveys? If you mean the majority, then you are most certainly wrong, and I’m quite sure I don’t need to spoon feed you JD Power stats to prove it.
I referenced a couple of the most common JDP stats that support my comments also. Cherry-pick whatever data you wish.
Further, apart from JD Power, I also mentioned Consumer Reports.
Which, as any analyst will tell you, is flawed. If you survey your own readers, who tend to read publications they agree with, then you get skewed results. Consumer Reports is better suited for information on TVs, an item where people don’t generally hold such strong opinions. Not the automotive industry, where people act like automotive brands are their firstborn. Toyota vehicles rank higher, even with the identical GM/Toyota NUMMI produced vehicles only have different badges. Again, it’s Perception vs. reality.
Actually, Johnson, you can write a post as long as an encyclopedia if you want. You aren’t going to change your mind no matter what anyone says. And I don’t care enough to refute your comments. I own a Volvo S60R and have been very pleased with Volvo as a brand since I was a kid. The proof is in the pudding… Toyotas recalls are skyrocketing and allegations of Mitsu-style coverups are as well. My perspective comes from not one, but two Corolla jalopies and a neighbors ES whose engine seized. GM is at least attempting to create some goodwill with their customers with their new warranty. They need to because, as you show, people have written them off.
—Toyotas recalls are skyrocketing and allegations of Mitsu-style coverups are as well. My perspective comes from not one, but two Corolla jalopies and a neighbors ES whose engine seized. GM is at least attempting to create some goodwill with their customers with their new warranty. They need to because, as you show, people have written them off.—
When you speak of the perception gap that exists between customers and GM, the question you should ask yourself is why that is and why does it continue despite GM building a better product? If you read the responses, what you’ll find is that the service at the DEALER LEVEL doesn’t inspire confidence in the product.
Mechanical things will break. The difference with Toyota and Honda dealers is the confidence they give a customer that any and all problems will be taken care of. THAT is the perception of superior quality that GM needs to overcome.
Let me ask you, after you drop 50 large on a Corvette and you take it in for warranty work, do YOU want to hear the excuse that your car has over 10,000 parts that even if it’s 99.9% percfect there are still 100 parts that could be defective, when they can’t fix it for a month? You just want it fixed quickly without the drama and excuses.
And tell me all you want about GM quality and the extended warranty. The fact is that the GM dealer experience both at the sales and service level still SUCKS big time. That includes Cadillac dealers, at least in my area. The only GM dealers that don’t follow along are the Saturn dealers where the experience is noticeably more pleasant, even though they’ve taken to marking up Skys and Auras, but won’t “dicker” otherwise.
Thanks nino for the info, had never heard about this “Kool Aid” phrase ever before.
The saying is pretty common? Where exactly? On fansites? Honestly, I don’t frequent fan sites all that much, and I’m not one to childlishly bicker with some automotive fanboys, so no, to me and many others, this isn’t common knowledge. This must be an American thing, as I’ve never seen or heard anyone use this phrase.
What exactly did you reference? The JDP VDS, the IQS? On average, GM is *still* below Toyota. And it’s not as though you mentioned something obscure like the JDP powertrains survey I mentioned, because that isn’t public knowledge, and is private. And cherry-pick my data is exactly what you’re doing, as you still refuse to acknowledge the international surveys that I keep mentioning; head in the sand.
I mentioned more than just Consumer Reports or JDP, cherry-picking indeed.
I’m not going to change my mind? Or did you mean your mind? In which case, I’m not trying to change your mind, but trying to prove a point. This site is the TRUTH about cars, and the content on this site mostly is truth. Some of you may not like it, may disagree with it, but that doesn’t change reality.
As for perception, GM needs to beat Toyota and Honda like I said. At best, they are only matching Toyota/Honda, and only in some areas, not all. For perception to start to change, GM needs to beat Honda and Toyota in key areas, and to be consistently beating them before people take notice. Problem is, GM has not been doing that, and Toyota and Honda haven’t been sitting around or getting complacent like GM did historically.
Allegations of Mitsubishi style cover-ups? You may dream that Toyota is falling apart, and boy what a wonderful dream that must be for die-hard domestic automaker fanboys, but lets get back to reality shall we? There has only been *one* allegation against Toyota involving a coverup in Japan, for which Toyota’s CEO himself greatly apologized and the Toyoda family, like I mentioned previously, was also sadly dissapointed, and vowed to improve quality. When was the last time you saw ANY automaker show such concern and response over an allegation of a cover-up? The Mitsubishi cover-ups involved people getting *killed* over a number of years due to faultly and unsafe vehicles, and Mitsubishi never had the reputation that Toyota has in Japan.
Quite an extensive and varied perspective you have to be criticizing Toyota quality. A total of three cars, and you seem to be convinced that your personal experience is analogous to Toyota quality as a whole, overall. Talk about a fallacy.
I’ve had experience with a large number of cars, including a good numbers of GM cars, and for the most part, the GM cars overall have been inferior to comparative import models. Even so, I don’t base my knowledge on my experience, but on quality surveys worldwide, warranty claims for automakers, along with word of mouth from mechanics and varied people I know that work at automotive plants. This brings me closer to the reality of things than personal experience alone ever could.
you’re awesome Farrago. So when is the last GM Death Watch? You prolly knew the day you started how many it would take so what is the number? At DW 103 GM will be gone? i need to know because it is so cool how you know stuff.
“refers to “GM customers†rather than “new car buyers.” – i like your thinking. if one replaces “GM customers” with “new car buyers” that would imply all new car buyers get the warranty. so the statement should be: rather than “GM new car buyers.” that sounds so much better than “GM customers”. of course to have the warranty you would have to be a GM customer so even conquests that become GM customers get the warranty. i like that. you showed him.
Re: Johnson
Maybe GM isn’t as reliable as a Toyota today, but so? Toyota is regarded as the most reliable brand. Better than all domestic, European, Korean and other Japanese brands. While that’s not my experience, many people sound personally offended that I disagree. And, yes, I do think three experiences is enough to form and accurate judgment. To state that GM is statistically better than most other brands, and Cadillac and Buick are a fraction of a percent below Lexus’s #1 spot in the most common measurement is not an incorrect statement. My disagreeing with conspicuous pro-Toyota and venomous anti-otherbrand exaggerations doesn’t make me a domestic fanboy. It makes me pragmatic.
Regardless, the topic is not Toyota or my negative opinions toward that brand, it’s GM’s warranty. The reality is that GM is not regarded as a quality brand. Someone just the other day told me of the horrible experience they had in a 2001 rental Lumina. I’d have believed her if there was such a vehicle. Whether these are attempts at hyperbole or not, it doesn’t really matter. GM has shot itself in the foot by creating a huge angry and disloyal population of vocal consumers who reinforce and foster each other’s opinions and refuse to believe anything that suggests anthing else. We see it in forums like this one.
Changing this popularity slide is exactly why GM is offering this new warranty.