“Our goal has never been to sell the most cars in the world.” For those who’ve been following GM’s fall from grace, this statement– following the revelation that GM has ceded its "world’s largest automaker" title to Toyota– probably comes as no surprise. Or maybe it does, because it arrived via Toyota spokesman Paul Nolasco. Or maybe it doesn’t. Toyota achieved this monumental victory by focusing on a process that led to a goal; whereas GM has been all about the money, for quite some time. And therein lies the tale.
You don’t need to compare long and short term business plans to understand the difference between Toyota and General Motors; although if you did, GM’s recent inability to devise a coherent platform strategy or develop a world class economy car would certainly give you pause for thought. All you have to do is sit in a few cars.
You can argue that the relative quality of GM's interior plastics don’t make no never mind. You could say that a four-speed gearbox is plenty of cogs, given their robust engineering, adequate performance and reasonable mileage. You could prevaricate over pushrods or defend GM's value-for-money vis-a-vis the competition. You could conclude that there isn’t any significant, appreciable difference between a current Toyota and an equivalent GM product. Not now. Not anymore. And you’d be wrong.
Don’t take my word for it. In the first three months of this year, Toyota sold 2.348m vehicles. In the same period, GM sold 2.26 million vehicles. All of these buyers had a choice. They chose Toyota over GM because they believed the Toyota product was superior. Yes, “believed.” Even if the “real” difference between a Toyota and a GM product exists entirely in their minds, well, it's still a product-related reality.
Automaking is not the French Revolution. GM can’t simply tell car buyers to forget the past, history starts here. No wait, here. OK, here. Consumers remember their past experiences with an automaker’s products. Just as a carmaker can build a reputation with years of consistent quality and service, bad quality and lousy service can destroy it by the same process, only faster.
Which is just as it should be, and exactly what GM has done. After years of alienating customers with shoddy, non-competitive products and indifferent (or worse) treatment, they’re reaping what they’ve sown. It’s a perfect example of a free market in action, or, if you prefer, simple Darwinism.
Here in the world’s biggest automotive marketplace, GM has provided a textbook example of de-evolution. When I started the GM Death Watch in April ’05, the company had a quiver full of domestic products ready to counter all those lingering bad vibes and “progress” its turnaround.
Including badge engineered products, GM launched the Saturn Sky, Aura and Outlook; Pontiac G5, Torrent and Solstice; Buick Enclave and Lucerne; Chevrolet HHR, Hummer H3 and Cadillac DTS. They updated the Chevrolet Tahoe, Suburban and Silverado; GMC Yukon and Sierra; and Cadillac Escalade.
While some of these models have created a buzz in the U.S. market, none has generated the predicted, mission critical market share uplift, or a return to profitability. How could they? With an estimated 7123 dealers for eight brands selling 42 models, no one model can possibly make up for the dogs, or significantly elevate earnings.
Meanwhile, in the same time period, Toyota has launched two new models: the Yaris and the FJ Cruiser. They’ve updated the Camry, Avalon, Tundra, RAV-4 and Lexus IS, ES, GS and LS. Toyota has less on its plate, and so (arguably) makes it better and (inarguably) keeps it fresher.
Why wouldn’t they? With 2422 dealers for three brands selling 30 models, the company has the development money, marketing budget, healthy dealer network and low cost structure it needs to stay ahead of the pack.
Make no mistake: Toyota knows exactly what it’s doing. It will continue on its current trajectory until GM’s world domination is a distant memory. Not that The General’s destruction is their goal. As company spokesman Nolasco said, "We simply want to be the best in quality. After that, sales will take care of themselves."
The truth is GM has cleared a path for Toyota. GM blurred its once proud brands through botched badge engineering, and then tried to fix the problem by adding brands rather than retrenching. Its fate was sealed. Given that GM’s now wearing two straitjackets– one with a union label and one enshrined in U.S. dealer franchise law– it cannot escape the consequences of its arrogance and short-sightedness. All that’s left is the unraveling.
Its the Truth About GM, plain and simple.
This is one of the most concise editorials on the GM-Toyota Saga I’ve read.
All of GM’s applogists fans can make all the excuses they want, but the fact is GM is in decline and has done nothing significant in the last five years to change it.
Great article. The parallels to what happend in the UK in the 1960s-1990s are striking. The UK auto industry was mostly forced together into the British Leyland fiasco. Too many brands, shoddy quality and horrid labor issues combined with management idiocy came together to level a once vibrant industry. The UK’s government involved itself heavily in the whole process as well. So far the US government has stayed mostly on the sidelines while GM and Ford strangle themselves, but other than that the similarities are striking. The last bits of the native UK auto industry can be seen in the Chinese buyout of the scraps left of MG-Rover, itself the remaining scraps of the British Leyland empire.
Perhaps we will live to see that day when GM’s 50% partner in China turns around and consumes whatever is left of the beast. GM’s position in China is made quite precarious by the fact that at any time the Chinese government could simply change it’s mind and send GM packing, thanking them for the training and technology provided along the way.
Agree – concise and to the point. To paraphrase a Ford spokesman from about 2 years ago: “One quarter does not a trend make.” But the trend for the past 8 or so years has not been good. Once Toyota surpasses GM for a full calendar year what will they say?
Housing market still tanking, gas prices wildly fluctuating, UAW chest thumping in a contract year, unending war in the Middle East, climate chaos, the “Green” movement, etc. The perfect storm. Even if their vehicles and strategy were world class they would still struggle. Scary.
Sure, but that mighty backlash against Toyota is going to come crashing along any minute now. Huge. Tsunami like. Grapes of wrath stuff.
There will be no backlash against Toyota. Who is going to do the lashing? Customers vote with their feet, the cars are made in the US now not imported, the facts are there: too many brands too many dealers, too many fleet sales.
Backlash against Toyota! For what exactly? For making reliable vehicles which hold their value and that customers really like? For building the best selling hybrid in the world?
The UAW has been trying for years to get a toehold into Toyota’s plants (besides the Nummi joint venture with GM) and has never gotten more than a dozen or so angry employees to join their cause. There are more UAW members fighting mad at the UAW than there are Toyota USA workers ready to organize Toyota.
The major southern and coastal urban areas of the US continue to grow strongly while the rust belt continues to rust. Outside of the rust belt you find very few consumers with any loyalty to GM or Ford, and those you do find are in the final years or decades of their lives. I participate in a local antique car club where 90%+ of the old cars being restored, shown and driven are US brands …. and the vast majority of the modern cars these same people use for daily drivers have names like Toyota, Honda, Infiniti, Mercedes or Lexus on the hood. GM has never demonstrated loyalty to it’s customers, so there is no reason to expect it in return. Loyalty is a two-way street.
Dreams of a backlash are fantasy. “Grapes of wrath” … tell me you are joking.
If GM were to stick with only Corvette (performance-should be a separate brand anyway), Caddies (lux), Chevy (mainstream + trucks + SUVs), and Saturn (budget), they would be much more focused and more appealing.
Why compete among your brands (Pontiac v. Chevy) when you can barely keep up with the competition?
Why import foreign-made cars and rebadge (Pontiac) to kill your domestic brands? Why take on useless born-from-jet craps? Why made 3 different versions of the same Chevy SUV (e.g., Buick, Saab, GMC, etc.)?
There maybe 31 flavors at Baskin Robbins, but we all know that only about 3 to 5 flavors will sell. The rest are craps. Focus on quality, not quantity.
For what it’s worth, Toyota appears to be inflicted with this same disease, albeit at only its earlier stages. I still can’t fihure out why they need to have 5 different SUV’s in their fleet (Landcruiser, Sequoia, 4runner, FJ cruiser, Higlander – not to mention the various RAVs).
Robert – this was a good piece, but typically I count on quotes from GM execs to make me giggle, and there weren’t enough of those in this piece.
I don’t want to have to surf phatphree.com…I prefer to get my automobile fix and humor fix in one place.
You couldn’t stick ONE little quote from Lutz in there?
My backlash comment was sarcastic.
I doubt people will give GM a mercy you-know-what just to keep them afloat, especially if it means having to drive GM’s junky, clunky, the loud sucking sound you hear is the resale value product offerings. The GM ownership experience also guarantees you’ll get a healthy dose of GM’s notorious take it and shove it dealer service network.
Good point jthorner.
I wonder if, everytime a customer considers extending some goodwill to G.M. and buying local, he thinks about stinkbombs like the Chevette.
Then he says “why the hell do I owe these guys anything?”
That’s for the old crowd, the ones whose loyalty GM has pissed away by cutting corners.
The new kids like me, well, let me tell you a story. When I was at the NY Auto show with a few friends, the only Detroit car I could get them to look at was a Corvette. It’s already ingrained in their heards that American Iron is junk. This may or may not be true, but the perception is what counts (as RF highlighted in his article).
They’ve already lost the battle for my generation.
I always compare reputation to the game of golf; you can spend seventeen holes building up a steady lead, then blow it all by slicing your ball into the water off the last tee. GM are currently in a bunker hacking away with their sand wedge while Toyota are in the 19th buying everybody drinks.
Toyota’s success simply lies in three S’s
1. Steering
2. Suspension
3. Sound Insulation
for day to day commuting, toyotas are best.
Notice that I am not including “sport” as Toyota’s strong suit and for average consumer, that is not an issue.
Kudos Robert on a great editorial. The best quote:
“Consumers remember their past experiences with an automaker’s products. Just as a carmaker can build a reputation with years of consistent quality and service, they can destroy it by the same process, only faster.”
This should be on a sign hung up in the boardrooms, cafeterias, factories, offices, cubes, heck even the bathrooms of EVERY automaker.
My other favorite:
“Even if the “real” difference between a Toyota and a GM product exists entirely in their minds, well, that’s still a product-related reality.”
Now to the numbers. Does anyone know if GM’s efforts to reduce fleet sales and Toyota’s (apparent) increase in fleet sales made the difference this quarter? Because the difference is what, 88-90 thousand vehicles?
Excellent editorial. What a sad state of affairs that has befallen the 2.5. No one truly knows the future but there is nothing, absolutely nothing on the horizon, near or distant that would indicate the 2.5 futures are not going to be bleak, and perhaps finalized. As one writer commented in one of the responses to this editorial, the perfect storm is now upon the 2.5, and their leaking boats are going to get it from all directions. People will not or cannot borrow against their houses as much in the future to buy a new car. Debt is at out of sight levels with consumers. Here in California, fuel prices are averaging $3.30 plus a gallon and all experts are saying the prices are going to continue to climb. What is Ford’s response to all of this, oh yeah, the Ford Edge and some tricked out parts on their existing line of vehicles? Pathetic. There will be no backlash against Toyota, in some ways it is more American now than the 2.5, they are building plants here, not shipping the work to Mexico or elsewhere. Meawhile the “leaders” of the 2.5 continue to enjoy their private jets, huge perks, millions of dollars in salaries, bankruptcy proof retirements.. and the union members have enjoyed way above market wages and benefits for too long. Sad, very sad.
TeeKay: “I still can’t figure out why they need to have 5 different SUV’s in their fleet (Landcruiser, Sequoia, 4runner, FJ cruiser, Higlander – not to mention the various RAVs). ”
The same argument could be made about cars why do you need Yaris, Corolla, Camry, and Avalon and all manner of Lexus and Scions. The answer is size and price point. Although I agree there does seem to be some overlap in their SUV’s, but I am not an SUV guy so they all seem the same to me except for the RAV4 and the FJ.
“Darwinism”? Aren’t we talking about intelligent design here?
Good op-ed Robert, thanks.
And now Automotive news report that Chrysler has overtaken Pontiac for highest percentage of fleet sales compared to overall sales. Looks like the Chrysler excess inventory lots have moved to Avis lots!
Really spot on article Robert, my take is that you have been highlighting two separate yet related problems for GM. One is their flawed business model and the other is their less than stellar vehicles many of which are a result of their flawed business model. Too few resources to support too many brands. If they are to fix their product lineup they must fix their business model.
Some of GM’s cars are not so bad when they are new, but the problem they have is that these days lots of people finance cars and for a long time. Some loans are as long as 5 years.
If they had to drive a 5 year old US made car they would realize that by that time they are more then disgusting (wear, rattles, repairs, etc), not just GM, Ford and Chrysler are even worse.
Even inexpensive Japaneses cars are not much worse then new after 5 years and at least stay together as long as the loans on them.
People don’t have to understand long and short term strategies, they can feel these things in their own wallets. It’s the old “you can fool some of the people some of the time, but …….”
And now we have Toyota building its cars for the US market in the US, while GM is trying to save its bacon by foisting foreign built (read China ideally) cars on its home market.
I am personally of the opinion that GM management, from the early 90s onwards, have been tasked with destroying GM.
GM really needs to Beat some Trax to get back in the Groove.
Sorry, had to be said.
Toyota has six SUVs. Each serves a specific market purpose.
First category: The “real” off-road SUVs
Small: FJ Cruiser
Medium: 4Runner
Large: Land Cruiser
Second category: The wanna-be, “CUV”, car-like SUVs
Small: RAV4
Medium: Highlander
Large: Sequoia
Granted, that’s a lot, especially for a company that is more known for thier cars than thier trucks, but each one has a specific market position, and, for example, adding the FJ Cruiser didn’t cause sales of the other five to drop much, if at all (no canibalization).
That sound you hear are nails being hit on the head. Not too much point in continuing the death watch on GM – as said all there is left is the unravelling.
The similarity to the fate of the once proud British motor industry is almost spooky.
Stein X Leikanger if you have ever worked in an organization full of yes men where telling the boss the truth is seen as not being a team player and where being a kissass is rewarded then you would not think they are deliberately destroying GM. I hate to use this analogy but the best one I can think of is Hitler and his general staff during the last few years of the war. Telling the truth and being right were punished and just going along with delusional thinking was rewarded.
Maybe a subject for the next Deathwatch but it’s being reported that GMAC’s exposure to the sub-prime mortgage meltdown is greater than expected. Surprise surprise.
GM only has 49% ownership, but they were still counting on GMAC for a steady stream of cash to keep the lights on. The article also alluded to the fact that Cerberus was sh!^^!ng a brick, but the official Cerberus party line was “We did more that due diligence before making the deal.”
Like I said – Scary.
Very accurate and concise editorial.
My twenty Eurocents. There are plenty of examples of car companies that have pulled themselves up by their bootstraps. Toyota is excellent but GM doesn’t have to be as good as the best — it only has to be good.
As soon as an even mediocre car maker comes up with something that is sexy and useful, people forgive and buy. Look at the 300C; look at the Grande Punto. These are not particularly worthy cars (and I wouldn’t dream of buying one of them) but somehow people are attacted to the underdog if he looks good enough.
So where are the good-enough GM cars? Which ones are both sexy and useful? Damnit, I can’t think of one.
Now if you could just throw in some comments about how the unions have contributed to the failure you would have covered it all quite well.
“This is one of the most concise editorials on the GM-Toyota Saga I’ve read.”
Ditto. Well done RF. GM NA is a vampire sucking the life-blood out of itself…Thanks mostly to US government laws I might add which will only get worse for them.
This year’s intersection of the Toyota and GM vehicle sales lines is a notable indicator of the 2.5’s decline. Even the mass media may pick up on that particular factoid.
Less publicized but revealing: According to financial statements as of 12/31/06, both GM and Ford have negative equity; that is, their liabilities exceed their assets. GM: minus $5.4 billion; Ford: minus $3.5 billion.
Negative equity is one way to define insolvency. A century of operation–and no net worth (at least as the accountants’ measure it.)
Yet both continued to pay dividends last year. When there are no earnings, dividends have the effect of further cannibalizing a company. One can hope that directors, management and the UAW now accept that survival is at stake.
The FJ Cruiser, as many people reading this site know, was simply an update on the vintage FJ-40. How many sold and what it might have contributed to the numbers which made Toyota number one in sales, were probably minimal; but as editor Farago noted, it is, after all, about perception.
GM has missed an opportunity that it could retrieve. EMI, a company in Sterling Heights, Michigan, is making a replica body of the 1957 Chevrolet two-door convertible – the car which is such an icon, it has appeared everywhere from within the lyrics of an Eric Clapton song (“I get off on ’57 Chevies/I get off on rockin’ guitars”) to Virginia Street in Reno, during Hot August Nights.
EMI’s 150 employees made the prototypes for the current Ford Mustang and the F-150, as well as the Pontiac Solstice. GM might want to consider marketing the 57 Chevrolet convertible via select GM dealerships; placing one on the showroom floor and having salespeople on hand to explain what a “glider” is and how interested customers could spec-out their own.
It might be a chance for GM to change the entire way that the auto business is done, using customer input to build cars, as needed and as they want them – truly and completely.
Yeah, it’s a gamble. But at this point, a little creative thinking might take the General a long way.
“We simply want to be the best in quality. After that, sales will take care of themselves.”
I loved this quote. Pretty much says it all. And has for many years. Why oh why does it always have to come down to this? And why don’t others get it?
Great editorial Robert F. I will say this about the Toyota FJ Cruiser — I’m not big on SUVs…but that one sure does interest me. I’m kinda too tree-friendly to go off-roading…but man that’s a cool SUV.
I agree with the last paragraph. GM waters down their rbands with pointless badge engineering, and when nobody wants to buy it, they kill the brand. Oldsmobile is a perfect example of that.
Hey look at this Toyota leads in a different category also.
533,417 vehicles recalls so far this year.
The Chevy beating Tundra?allready been recalled.
In 2006 JD Power shows Mercury,Buick and Cadillac beat Toyota in a list of dependable cars.
Toyota has recalled 9.3 million vehicles in the last 3 years.
2.26 Million vehicles in the first 1/4,and the General is going belly up soon?
After reading 40+ comments some great,sherman Lins was right on the money and very true.I thought I better put some arguements in from the other side.
All in the name of balanced debate,don’t you know.
mikey – I don’t think recalls are a good metric of quality. Recalls (unless they’re forced by the NHTSA) are when the company ADMITS they screwed up and offer to fix the problem for free. Lack of recalls does not imply lack of problems. It just means that the NHTSA hasn’t forced anyone to do a recall, or that the company is covering up known problems so that they don’t have to pay fix it. (e.g. Ford didn’t put out a recall on their cruise control issues until a few houses burnt down).
Cudos to Robert for sounding the alarm earlier than most. Boo for not mentioning the incredible sums of japanese taxpayers yen and govt collusion that has allowed their auto industry to blow by the U.S. They have effectively cheated the game for the past 60 years. There are many books on this – look them up!
Seth: a very astute observation. I would also point out that new, a Toyota or Honda just plain looks better – exterior and interior.
GM has for decades gotten away with reacting to the market, remember the original Mustang was out for over 2 years before GM jumped into the fray. Watching GM bounce up and down on rwd autos over the last couple of years reminds us that the default mechanism of GM remains reaction. If Gm is no longer the world’s largest auto manufacturer, who exactly are they? They no longer have the market dominance, sophistication and money to react to other’s moves. Yet they pretend they still can. I think they will pull a Hoover, and move their entire operation off shore while pretending they are still an American company. If they last long enough to accomplish the feat, that is.
Blautens:
You couldn’t stick ONE little quote from Lutz in there?
This isn’t Lutz, but almost as good – Rick Wagoner. How about this oldie but goodie from an interview with Automotive News last November? We’ve used it once, but it bears repeating:
Wagoner concedes that trends indicate that Toyota will surpass GM in global vehicle sales in the near future.
“Is it inevitable?” Wagoner said. “No. No it’s not inevitable.
“Trends don’t last forever. The only question is — when do they change, and who’s involved in the change? I don’t think it’s inevitable, but I can’t argue that if you keep drawing the trend lines, your conclusion is correct.”
“If Toyota passes us, I guess they pass us,” Wagoner said. “Do I like it? No. Am I willing to take us off our plan or to sacrifice our profitability or the implementation of our marketing strategy here?
“No, I’m not willing to do that. If we’re going to stay ahead, we’re going to stay ahead doing it the right way and a sustainable way.”
I don’t think recalls are a good metric of quality. Recalls (unless they’re forced by the NHTSA) are when the company ADMITS they screwed up and offer to fix the problem for free. Lack of recalls does not imply lack of problems.
Recalls are recalls. If the NHTSA is involved, it was a ‘recall’. If the manufacturer is ‘just being nice’ (i.e. trying to avoid a recall) it is a ‘campaign’. Your point appears to be in favor of Toyota’s situation, but could indeed be a condemnation just the same. Toyota tried to avoid recalls for years (think sludge) and has been unable to avoid them lately (think ball joints). No big deal, every manufacturer has them. But Toyota is no longer the Teflon Don it once was.
North American capitalism is geared towards short-term gains. Accordingly, the domestic automakers think short-term, not long-term. Capitalism should be about designing and producing reliable quality cars people want to buy, not manipulating the books and stock prices to satisfy the Wall Street gods. Change will come only if executive compensation is tied to long-term company performance and returns. Management stock options should not be guaranteed, but instead tied to company performance over a decade or more.
Thanks for the good report. I myself am immensely pleased that Toyota (quality manufacturer) has taken over GM (garbage manufacturer) for the top spot. GM has been screwing up for a while now, and they don’t deserve that title anymore.
“I think they will pull a Hoover, and move their entire operation off shore…..”
I think you are right. GM, in ten years time, will de-list from US exchange and HQ in a, um, more business-friendly place (Bermuda? UAE?) and manufacture in India/Asia and maybe Central/South America and Africa. GM liabilities exceeding assets is not a good thing and I doubt they can turn this around. When EPA starts limiting CO2 and thus wrecking their high-margin vehicles market, GM is toast in the US.
“Trends don’t last forever. The only question is — when do they change, and who’s involved in the change?”
Yes, Rickypoo, I’ve been asking that VERY SAME question for …..oh, ….just a tad over 30 years.
Sir, when exactly WILL this “trend” of yours end…and MORE IMPORTANTLY….*WHO* is going to change them???
Toyota, I’m having a nice cold Budweiser right about now in your honor. Cheers for a damn well executed effort.
You see, every one wants a “magic pill” (57 Chevy, please…it might sell about as well as that Corvette-engined retro pickup they just canceled about 6 months ago).
When even Hyundai is bringing out world-class sedans, …the TOTAL LACK of EFFORT by GM’s management is not only obvious, but GLARINGLY so!
Negative equity, huh? Excellent…I always knew GM was morally bankrupt.
Toyota tried to avoid recalls for years (think sludge) and has been unable to avoid them lately (think ball joints). No big deal, every manufacturer has them. But Toyota is no longer the Teflon Don it once was.
Another one of the huge recalls, I believe, was for seat track grease on the Tacoma.
Concerning the engine sludge thing, once the ball started rolling Toyota went nuts with replacing engines or giving discounts.
A motor vehicle is a very complex thing, much more so than even 5 years ago. Yes, recalls are inevitable….but it really depends on what is being recalled.
Hate to be pessimistic, but 10 years from now it will only be GM left of the “Big 3”, with Jeep being cherry-picked off from the scraps of Chrysler, and Ford ultimately getting sucked into someone more successful.
Crazy times, these. Two years ago I thought RF was crazy to start the Death Watch series. Sadly….he was not.
Two years?
Try *18* years, my friend:
http://www.amazon.com/Rude-Awakening-Struggle-Recovery-General/dp/0060973420/ref=sr_1_1/104-5850995-8926319?ie=UTF8&s=books&qid=1177461228&sr=8-1
Read it today and see if M.K. is was not dead on 18 years ago. She sure as hell was!!
I think today, April 24, 2007 it can be said in all honesty that GM has finally had a “Rude Awakening”.
…and I quote: “sorry industrial saga”.
How can one not love that??? That’s priceless my friends!! :)
kaisen – I’m not trying to be a Toyota fan boy or anything. I’m just trying to say that recalls are not a good metric for quality.
Rastus — I based a lot of this editorial:
https://www.thetruthaboutcars.com/?p=3442
On Maryann Keller’s books about GM.
I believe that the only thing that can save the US 2.5 would be to follow the Hyundai model. Produce an acceptable basic car with all safety features at an modest price point, give it a true 7/100,000 bumper to bumper. Produce such a car for 2-3 buying generations (7-10 years) and then maybe people will believe the hype. The 2.5 have at least 30 years of sins to atone for. Impossible to do no, will it happen very unlikely.
Just to add to the head spinning news, today the Wall Street Journal reported that “yesterday GM told United Auto Workers negotiators that it put plans to roll out the successor to the Chevrolet Cobalt in 2009 on hold”.
So now GM officially has put the next Impala redesign on hold and the next Cobalt. Lucky for the Malibu that it’s next generation design is already done. Chevy only has three cars which sell in any volume, and two of them are in limbo. Can anyone imagine Toyota or Honda making these rookie moves?
Wow, I sure am glad that I don’t work in GM’s design or engineering sections. The mental whiplash would kill any remaining vision or drive.
“mikey:
April 24th, 2007 at 5:07 pm
Hey look at this Toyota leads in a different category also.
533,417 vehicles recalls so far this year.
The Chevy beating Tundra?allready been recalled.
In 2006 JD Power shows Mercury,Buick and Cadillac beat Toyota in a list of dependable cars.
Toyota has recalled 9.3 million vehicles in the last 3 years.
2.26 Million vehicles in the first 1/4,and the General is going belly up soon?
After reading 40+ comments some great,sherman Lins was right on the money and very true.I thought I better put some arguements in from the other side.
All in the name of balanced debate,don’t you know.”
jus sayin…it’s funny that the more cars they produce/build in the USA, the more recalls they encounter. Hmmm.
I’ve owned a honda, a GM, two Chryslers, a Ford, and now…two Toyotas.
Let me just say…after 130,000 miles and ZERO issues, and coming out to my Toyota after pumping gas, and not being able to tell if the engine was running because it is still smooth afte my abusive driving and high mileage…after it was wrecked, and I went straight to Toyota and bought a new version of the old model.
Screw the recalls; if American corporations can sell America out, I can do the same…A 5 year or 6 year loan on an American car? AHAAHAHAHHAAHAHA I’m sorry to say that..because I do like like some models of the US manufacturers, but for someone who is value concious, with my pay increases becoming smarller and smaller with each year that the ecomony is “doing so well” in, I’ll take the sure thing every time.
I consider this fact everytime I see people driving an American car; my thoughts are 1)I hope they paid for that with cash, 2)if not, I hope the loan length is short, 3)or..why would you buy something that doesn’t hold together after a length of time? That 2001 Toyota with 135,000 miles, had not one rattle nor creak, and ran as smooth as the day I bought it. You can go with aesthetics if you can afford it, BMW, whatever else..but I’m happy with my Solara.
Yes indeed jt horner Cobalt and Impala sales are rolling along quite well.
So if ain’t broke why fix it?
And there you have it: GM’s attitude to product excellence.
Next?
Destardi
Where I work 95% of the cars/trucks are GM products If I was in charge it would be 100%,anyway we got folks that drive 60 miles one way.
Most of em drive used cars and car pool with other guys Impalas, Sunfires,Regals ,lots of minivans.They buy em at the 1 or2yr mark and drive em to the ground.
Ive seen 400 k klm [about 250 k miles] through 5 or 6 southern ontario winters.
Now I,m not saying the Jap cars arn’t capable of this [cause nobody in thier right mind would car pool into GM with one]
What I am saying is some of the most maligned GM vehicles are running up and down that highway everyday,
with very few mechanical problems.
Personaly I’m not a commuter but got a 7 yr old Firebird long since paid for still looks and runs like new, [summer driven only].A 6 yr old Grand Am used and abused all year,
looks almost as good as the day it rolled off the line.
So don’t buy into the myth that all domestics are junk. A liitle TLC and preventive maintainance goes a long way
.
RF
In your article you state GM brought out all kinds of new models while Toyota only changed two
So GM takes a page out of the Toyota book,and doesn’t screw around with the Impala or the Cobalt,and that is somehow a bad thing?
With all this Death Watch talk one should consider when the executives of the “last 2” come for their government bailout/handouts. I really do not think the “last 2” are going away anytime soon, as they have not even got into the “milk the government mode.” Just think of the arguments FOR the handouts: national security, independence, etc. They are still just playing around… and we will pick-up the tab.
Anyone remember Chryler?
Mikey,
Would you please explain to me and the crowd reading this forum how one performs “preventative maintenance” on the synchros of a manual transmission?
You see…I don’t want my synchros to go out at 3000 miles anymore. I would love for you to explain to me what it is exactly I’m doing wrong.
I…and perhaps many other thousands out there.
…kindly awaiting your reply.
Rastus
Somewhere somehow in the assembly process of your tranny somebody screwed up.
I’m thinking it should have been noticed at roll test ,but it didn’t
The dealer should of picked it up at P.D.I. oops somebody else made a mistake.
Nothing you as a customer could have done would of prevented your tranny from going for a s–t
There is not one car company in the world domestic or otherwise,that builds every car perfect everytime.
I hope that answers your question.
Look at it this way at least it was under waranty
mikey:
April 24th, 2007 at 11:35 pm
RF
In your article you state GM brought out all kinds of new models while Toyota only changed two
So GM takes a page out of the Toyota book,and doesn’t screw around with the Impala or the Cobalt,and that is somehow a bad thing?
Toyota continuously improves their products. GM tends to build the same car for years without fixing problems or any updates. Just look how long the despicable Cavalier and it’s clones were built. Change the trim a little and call it improved.
@ Sherman Lin
On Kiss Ass Organizations.
I have actually had the completely frustrating experience of being an outside marketing advisor to GM in Europe, on the Saab brand.
GM manager’s attitudes to that brand, as well as the others they were in charge of, can only be described as sheer disinterest in brand values.
I have never met a more prejudiced group of clients.
The contact lasted over a number of years, and through a series of Saab models, and from year to year it just relentlessly got worse as an experience. The GM managers were obviously awarded according to how many cross-platform savings they could inflict on the brands they were in charge of, and they were completely oblivious to, or even derisive of, inherent brand markers.
In Saab’s case, we were charged with turning it into a luxury car — and in spite of strong opposition from us, to the point where we eventually were told to leave the account in 2001 — we were instructed that the aircraft and rally/performance/ingenious car heritage was of no interest to the market. (This was when that heritage still had some relevance to the cars being built). And it wasn’t only Saab – the GM brand “killing hand of death” was expert at smothering any make it got in contact with.
If one of GM’s competitors had hired fifth columnists to destroy GM from within they couldn’t have done a better job.
Bill Wade you got part of it right in my opinion. Yes GM did not update or continuously improve the Cavalier as it should have however consider the following. Now I am going by memory but I remember either Car and Driver or Motor Trend specifically lauding the J cars in 1982 as setting a good precedent. The words were something to the effect that GM has been known for world class large cars (don’t laugh they were in comparison to their competition) and with the J cars they will be known for world class small cars.
At the time early 1980’sand that is the key part, the Cavalier was a very good car although the first year it was considered underpowered because I believe it came out about 300 lbs over the initial design desired weight. It was a revelation in comparison to the Vegas, Monzas, Chevettes and Pintos of the prior generation. They cut tolereances in half and boasted of using lasers to align the body panels I believe. The styling and size were right. They finally designed a small car instead of a small large car. They had bucket seats instead of a bench. There was a time that GM threw a bench seat into everything no matter how stupid it was for doing so like in a chevette.
The problem in my opinion was that GM simply thought well we have a good small car now and since its so hard to make money on these little cars we won’t spend much to update it because we finally have a good small car. The world simply passed them by. I had a Cavalier it was a good car. I got my moneys worth but after I had owned a Honda there was simply no comparison. I got 100,000 miles relatively problem free before virtually everything broke. The Cavalier is and was a shitty car towards the end of its life cycle because by then it was competing with Hondas and Toyotas that had gone through several generational upgrades.
Just my opinion
“maxrent:
April 24th, 2007 at 11:37 pm
With all this Death Watch talk one should consider when the executives of the “last 2″ come for their government bailout/handouts. I really do not think the “last 2″ are going away anytime soon, as they have not even got into the “milk the government mode.” Just think of the arguments FOR the handouts: national security, independence, etc. They are still just playing around… and we will pick-up the tab.
Anyone remember Chryler?”
While you may be very right about GM and/or Ford eventually coming to the government with hand in hand, I also remember the details of the Chrysler bailout. Chrysler didn’t ask for corporate welfare, they asked for a loan. And they paid it back in full, with interest, ahead of schedule.
Stein X Leikanger
I don’t disagree with your conclusions. I have two jobs. One I do for little money working for my friends small website design and printing company, the other is a well paying union job in a very very very large governmental organization. I have always seen parallels between GM and where I work. The middle managers learn through experience not to rock the boat and you will have a much better carreer and more pleasant job experience. Group think is the norm. You quickly learn what the right group think norms are and you flat out ignore anything and everything to conform to the main group think norms.
@Sherman Lin
I didn’t read your post as being in disagreement with me — just wanted to fill in some blanks, though regular readers here will have caught those volleys previously.
Isn’t it amusing that what we admire in industry is when people strike out on their own, with ingenious ideas. At one point even Henry Ford’s assembly line was a revolutionary invention. Then come the “managers” who force, as you say, group think on the enterprise.
I can understand the need to turn ideas into a business, but I will never accept that business success must mean not nurturing new ideas.
Steve Biro
If my memory is correct Chrysler simply had the Government guarantee the loan in case they defaulted. I could be wrong but I believe they never borrowed directly from the government but that the banks refused to lend Chrysler the money unless the government gave them a guarantee of repayment in case Chrysler defaulted. I also believe the precedent that they were relying on was something similar that occured with Lockheed Martin when they had problems with the L1011? commercial airliner. Lockheed was a major defense contractor which foolishly tried to enter the commercial aviation field. Lockheed was a matter of national defense interest. Chrysler at the time also made the M1 Abrams tank which they latter sold off.
Interesting story…
I was on a cross-country flight on an L1011, and when we landed, I’ve never experienced again what I experienced then:
The landing was SO SMOOTH, the entire flight burst out into applause. No lie…it was the coolest thing I’ve experienced on a flight. You could not even tell we hit the earth..and 200+ people simply burst out in applause :)
Too cool!!! You see..when things are done RIGHT, people instinctively know what’s good…and it comes from the heart.
When you buy a GM, you make excuses for your “sorry purchase”.
Interesting how that works, huh?
The sad truth is that GM is even worse off than suggested here and Toyota is better off. GM is counting vehicle sales optimistically and Toyota is underplaying their influence.
GM’s sales number includes lots of vehicles produced by GM Daewoo and GM’s Chinese joint ventures.
Those are not wholly-owned subsidiaries. GM owns only 30% of Wuling, so why are they counting Wuling’s 500K sales as GM sales?
By the way, those Wulings and Daewoos are incredibly cheap and therefore bring in little revenue and profit. GM may be selling more vehicles in China than Toyota, but if GM is selling Wulings for $5K each and Toyota is selling Camrys for $25K each, I know which of the two I would prefer to be.
What really counts is total global automotive revenue and operating profit. But those numbers are only published for consolidated subsidiaries in which GM or Toyota have more than 50% ownership. Chinese subsidiaries are excluded from consolidated numbers. Likewise, Toyota’s important NUMMI factory in California that produces 400K vehicles is not consolidated (because both GM and Toyota own 50% each, so neither consolidates it). It’s not published how the profits of NUMMI are allocated between GM and Toyota, but I bet most go to Toyota.
Toyota has a similar factory in Europe with Peugeot/Citroen that is not consolidated and produces 300K vehicles.
Anyway, despite the distortion of consolidation, we can look at consolidated automotive revenue as a benchmark (which, again, excludes China and some other important ventures). In the Q4 2006 quarterly report, Toyota was already about 15% ahead of GM in that respect.
Why is it important who is the biggest? Despite GM’s sudden pooh-poohing, being the biggest is incredibly important to achieve the best economy of scale, that’s why.
The bottomline truth: Toyota was already ahead of GM, and their pole position will allow them to break away from the rest even faster.
two ferrivores that have different attitudes to car manufacturing-
1.toyota – we manufacture cars ourselves, we don`t buy foreign brands,we create our own parts.
GM- we pretend to manufacture cars ourselves, we make joint ventures, where all engineering is done by other parties,we buy other foreign brands because logically they are higher quality, and we pump out their platforms dry.we create only simple parts, what refers to complex engines, gearboxes, actuators, digital screens, we push that to our foreign brands.
2. toyota- our models share our own platforms, but we don`t share exteriors.
GM- we share everything, and rebadge everything, even imports get the same exteriors and are rebadged under domestic brands.
3. toyota- we add new models, if one is dropped, at least one takes the place. we add body types to the model line.
GM- we replace 2 old models with 1 new one, then rebadge it among divisions to fake diversity. we limit body types as much as possible.
4. toyota- we add new technologies and engines, comparatively to competition.we add new gearboxes.
Gm- we increase displacement of old 40 year old OHV and call them new ones, we make some new gearboxes until any foreign subsidiary gets a better one, then we use that instead.
5.toyota- we improve reliability through harsh quality checking methods , we squeeze gap tolerances, and improve material texture.
Gm- what the hell is a material texture? we squeeze gap tolerances too, and we try to improve quality too through quality checking methods as much as it is possible using spanish or rap slogan. reliability is improved buy cutting out our own components in cars, more foreign parts, more reliability.
6. toyota- we introduce every next generation of cars every 4-7 years.
GM- we introduce every next generation of cars whent he last drop of profit has been squeezed out of the old one, and if the slogans,like this is our country.. don`t help any more.
7. toyota- we don`t like chatting, internet paradigm, generation x-appeals , market caanibalization of models within a company, or dealers psychology for that matter. we concentrate on cars, the sales will take care of themselves.
Gm- we try to fault everything except our own products, we have input in multimedia, music stars, internet awareness, we put nice names , slogans, colours and if time allows engineer or regrille some cars.
8.toyota-we proliferate, because we take pride in our hardware.
GM- we go extinct, because we have only short term money making goals, cars are not considered an achievement.
jurisb,
That sounds about right. In short, you might say it’s a contrast between the systematic development of the next generation and desperate, stopgap measures. I don’t think I need to say who is who.
Sherman Lin:
April 25th, 2007 at 1:23 am
Steve Biro
If my memory is correct Chrysler simply had the Government guarantee the loan in case they defaulted. I could be wrong but I believe they never borrowed directly from the government but that the banks refused to lend Chrysler the money unless the government gave them a guarantee of repayment in case Chrysler defaulted….
You are correct they were government gaurantees on loans by private banks (think student loans). No taxpayer was harmed in the saving of this company. While this may be a model for a future a guarantee program there are some differences:
1.) None of the domestics to my knowledge makes any defense related products.
2.) Chrylser had a very specific and understood recovery plan that Lee was able to sell to Congress. And it had the right car at the right time to lead the recovery (K-car). You can’t say that about any of domestics now. I don’t see a force of personality like Lido, and I don’t see a plan based on some new revolutionary product.
3.) It’s one thing to guarantee loans to one major industrial corp, but three? At the same time, or near the same time? Even a Democrat Congress might balk at that as they considering the prospect of a default.
Another thing to consider is that Congress will not be able to help itself and will impose all kinds of restrictions and qualifications on the domestics in return for guaranteeing loans. Some, like a limit on CEO pay, will be welcomed by the public at large. But others, like a demand to produce 45 mpg, super low emmisions, 6 passenger auto, designed and engineered by disabled, transgendered, economically disadvantaged, minority engineers might not be technically feasible. The point is they think they are experts at things just because they got elected, and if they start dictating how the domestics should run their business they might make worse decisions than the sorry mgt that is running these companies now. How would you like GM to look like Amtrack?
My backlash against Toyota was to buy several Nissans.
Windswords I don’t believe any bailout will be in the works for several reasons. First, I agree with you that I don’t believe that there are any more defense contractor related business. Good going GM selling off all the family silver like Hughes. Of course there is Hummer.
Contrary to the many protests of those in Detroit, GM, Ford or Chrysler’s demise are not national defense related.
In case anyone is wondering what happens to defense needs in times of war one only has to look at history. GM and Ford were multnational companies in the 1920’s each established overseas manufacturing plants to support their forien sales. GM purchased Opel in the 1920’s as an example. When war came the location of the factory not the location of the parent company determined whose defense needs were met. GM and Ford were not only a part of the arsenal of democracy but also of the axis as well. When the German army moved they did so on the Opel Blitz (and horses). When war was declared between Germany and the US, all american civillians nationals were exchanged with German nationals in America. Germans ran GM and Fords european operations and the profits (yes GM and Ford made money selling to Nazi Germany) were held in trust for GM and Ford until the war ended. I believe although I might be mistaken that GM and Ford even filed claims against the US for damages from airforce bombings of their european operations.
Platform sharing/badge engineering with a lot of brands (GM) has disadvantages (as mentioned often by RF).
But there is one advantage that never seems to get mentioned. In the future when Toyota sells 1 million Camry’s and a million Corolla’s a year, people will want alternatives (after all not everyone wants to drive an appliance). So if GM sells 1 million mid-size cars, they will be spread out over 5 brands with 5 different designs.
People will learn to hate Shopping mall parking lots when they can’t find their car in a sea of silver and gold.
Excellent article. Twenty years ago, I was involved in a two-year project (not automotive)that involved a group of Japanese and American engineers. We got to be a pretty close group. One night while sitting around drinking, we got to discussing the education of engineers.
We made an interesting discovery regarding the philosophy by which the two groups of engineers were taught to approach their work:
The American engineers were taught to look at an existing part and think: “ How can I make this part the same quality and reduce costs”
The Japanese engineers were taught to look at an existing part and think: “ How can I make this part BETTER quality and not increase costs”
Of course neither engineer ever completely succedes. Over time American quality is going to fall. Over time Japanese costs are going to increase. In the end though, the Japanese part is increasing in quality or utility while the American part is declining in quality.
After this revelation, I knew that GM was ultimately doomed; it is just a matter of time.
It would take a complete rethink of their engineering training to save them.
Sherman Lin,
I wasn’t making a case for a bailout. Actually I ended up (unintentionally) of making a case for not having a bailout. You make a good historical point about multinationals in a time of war. I didn’t know about what happened to the nationals of each country who were in the other when war started. I assumed that the Nazis just took over the Opel factories for their war production either by nationalising them or declaring Opel no longer a part of GM.
Lokkii
You are absolutely correct. That is the On-the-job training we engineers in the US get and have for a very long time. It is the result of big business in this country being run by the bean counters. Will GM change? No. It cannot change fast enough. The momentum is too great and wresting the power from the bean counters would take a palace coup. Not gonna happen
Frank Williams –
Thanks for the Ranger Rick quotes. Good stuff. I’m familiar with them, but like a lot of good humor, it’s aging very well.
As to this exchange:
mikey:
April 24th, 2007 at 10:41 pm
Yes indeed jt horner Cobalt and Impala sales are rolling along quite well.
So if ain’t broke why fix it?
Robert Farago:
April 24th, 2007 at 10:55 pm
And there you have it: GM’s attitude to product excellence.
Next?
That was definitely responsible for water on my keyboard – fortunately, ThinkPads actually have drain holes for such incidents. I think there’s an ad in that idea “ThinkPads – Certified For TTAC Use”.
My sincere thanks to all parties involved in those posts.
Great comments guys!
Engineering is about selecting the best materials/methods that Scientists create and figuring out how to reduce costs and commercialize. This is counter to bean counter mentality of if it aint broke, dont fix it…Or it is good enough…Or cant you use a less expensive (obsolete?) material/method. With Sabanes-Oxley law and other SEC crap, the bean counters are/will be secure at the helm of public-owned/traded corporate America. Yep…Government to the rescue.
I like that Windswords: “No taxpayer was harmed….”. Cant say that about Ethanol.
“ThinkPads – Certified For TTAC Use”.
LOL…My computer becomes a food/drink-free zone when visiting TTAC…The people at ThinkPad are thinking.
Mikey, I’ll speak up in your defense. GM definitely makes cars that get the job done. An outfit I once worked for assigned my unit two 1989 Celebrity 4-cyl. wagons. Both were driven over 90,000 miles with no problems. Later on, we used 2003 6-cyl Malibus, and the only problem I recall is that one car needed brake work under warranty. All were inexpensive, basic cars, that car buffs looked down upon. However, I could comfortably drive 500 miles a day in the Malibu or Celebrity and always got about 30 mpg.
But Sherman Lin’s experience with a Cavalier is on point, too. Apart from marketplace anxiety about service life and major repairs, new models soon fall further behind Toyota et al due to the 2.5’s failure to make updates and remedy design flaws. My favorite example is Chrysler. For decades their cars had weak door checks–you’d push the door open and it would bounce back and bruise your hand or leg. Consumer Reports cited this over and over. Chrysler had to know about the flaw, and the cure would have been cheap and easy. So why was that aggravation allowed to continue? One can only suspect it was HQ’s attitude of “good enough.”
mikey:
April 24th, 2007 at 10:41 pm
Yes indeed jt horner Cobalt and Impala sales are rolling along quite well.
So if ain’t broke why fix it?
I think I recognize “mikey” from previous usenet postings :). The idea that as long as the current product is selling ok one need not be developing the next generation is so foolish that it can be left as an excercise for the student to figure out why in a competitive market that is the wrong answer.
Hint: Camry had a complete redesign last year and was the #1 selling car in the US before the redesign and after the redesign. Accord is #2 and gets it’s all new design next year.
Neither the Impala nor the Cobalt have been #1 or #2 retail sellers in their segments anytime in the past decade.
Blautens, here’s your quote from Bob Lutz, from this morning’s Detroit News…
Reached Wednesday, GM Vice Chairman Bob Lutz offered a curt response to Toyota’s outpacing GM in the first three months of the year: “My reaction is ‘So what?’ “
Oh how the once-mighty have fallen. I can’t help but mention all those affiliated with GM that shouted from the rooftops there was no guarantee that Toyota would overtake GM in global sales; that GM would be able to fight and keep the top spot.
If a large number of GM workers and those affiliated with GM were so focused on this idea, keeping in mind the mountain of problems that GM has on it’s hands, then it’s easy to see how the end is near for GM.
While GM is so focused on sales numbers, and makes a committed effort to show the media that it’s not concerned in the first place, Toyota keeps it’s head down. In fact, now that Toyota has the #1 spot, they are even more worried about their quality than before.
There is the old saying that many GM loyals are clinging to … “when you’re at the top, you can only go down”. While that may be true, there is another perspective. When you’re at the top, it’s possible to stay there.
Apart from continuing to compete with other automakers, including up and coming automakers from China and India, Toyota also is competing with itself in a way. Toyota is always picking apart and critiquing it’s own cars, and looking at how they can make them better.
Frank Williams:
Blautens, here’s your quote from Bob Lutz, from this morning’s Detroit News…
Reached Wednesday, GM Vice Chairman Bob Lutz offered a curt response to Toyota’s outpacing GM in the first three months of the year: “My reaction is ‘So what?’ “
I happen to know someone who’s a fairly successful professional comedian (relatively speaking)…he’d kill for material like this.
Thank you, sir….best laugh I’ve had all day.
They chose Toyota over GM because they believed the Toyota product was superior. Yes, “believed.” Even if the “real” difference between a Toyota and a GM product exists entirely in their minds, well, it’s still a product-related reality.
The quality superiority of Toyota cars over GM cars is as true as the handling superiority of BMW cars over Toyota or Lexus. Most believe so; others thinks it’s just hype.
I know 'm late on this but. Chevy Trailblazer, Buick Rainer, Olds Bravada, GMC Envoy, Isuzu ascender, Saab 9-7x…GOOD LORD that's a lot of the same truck….I've always thought that the TrailBlazer fiasco….by itself….showed what's wrong at GM….At least they held themselves back a little and didn't make an "exciting" Pontiac version…
Being Number Too will be the best thing that has happened to GM since Alfred Sloan became President in 1923. Indeed, there is much to be done, but Rick Wagoner has so far played a weak hand well enough to have picked up some better cards. In 2006, GM decided to take the volume hit required to successfully raised transaction prices and reduce fleet sales (yes, really). In addition, they trimmed headcount significantly, and ran Kerkorian’s pack of wolves back into the woods. There’s lots to do, and the UAW and the dealers are going to fight like hell to keep what amounts to all of the profits in the GM family. It’s going to be High Noon for Wagoner, but he’s on the right side of principle. Meanwhile, Lutz has given Design the momentum it needs, so he needs get out of his comfort zone and get the advanced engineering into production.
GM ought to appreciate the Toyota ascent; first of all, the sky didn’t fall (except in blogland), and second, someone else gets to wear the bullseye for a change.
mikey:
Since you are so obsessed with recall numbers, let’s talk about them. Even though I don’t think that’s a good metric of quality—Honda recalled 1 million user mannuals last year.
2004: GM 10.8M Ford __5M, DCX 5.8M, Toyota 1.1M
2005: GM ___5M Ford __6M, DCX __1M, Toyota 2.2M
2006: GM _1.6M Ford 1.7M, DCX 2.4M, Toyota 0.8M
In any given year, Toyota’s recalls are less than half of the GM or Ford recalls.
Given the one-shot nature of the recalls, it makes more sense to compare a moving average line of one model cycle (i.e. 4 or 8 years) and then read the results.
Well put article, Robert. I remember to this day the GM District Manager telling he wasn’t warranting my 2 year old Buick Century when the front wheel fell off saying “we won’t warrant your car because I can’t believe the car left our factory this way, you must have tampered with it”.
That is the last GM car I and my family will EVER buy and the last they will see of my car. I realize now that I am not alone in matters like this.
Though I am not a fan of Toyotas (I’ve had problems with them too), it’s good to see a company know where their problems are and work to resolve them regardless of the bottom line. A company that doesn’t build product just to be competitive but to be the best at what they do, deserves to be in business and at the number one position too.