Discovery Channel’s “Mythbusters” takes on urban myths that have been circulating through the culture. The show’s producers go to great extremes to prove or disprove the stories, and establish a coherent, no-nonsense scientific basis for their conclusions. Although copyright prevents them from using the term, GM has decided to play Mythbusters. Their new “GM Facts and Fiction” website claims to rectify analysts and commentators (including this site) who have been trash talking The General and its wonderful products. Unfortunately, their “busting” consists of a lot of hyperbole. Their responses are short on facts, and constantly cherry-pick the stats they deploy in their defense. Let’s take a closer look, to separate fact from fiction.
Myth: GM didn’t anticipate the growing demand for fuel efficient cars
GM says: Early this decade, GM put a major focus on improving its cars and expanding the number of crossover vehicles that it offers. As a result, of the last 13 new GM products introduced in the U.S. 11 have been cars or crossovers. Of the next 19 launches, 18 will be cars or crossovers.
The Truth: “Crossover” vehicles are barely more fuel efficient than the SUVs they’re supposed to be replacing. Of the “last 13 new GM products introduced in the U.S.,” four are variations of the same vehicle (Lambda), two were based on an existing platform (Malibu, Aura), two were large pickups (Silverado/Sierra), and one is a re-bodied captive import with a gas-guzzling V8 (G8). As far as truly “fuel efficient” vehicles go, the only fuel-efficient car GM has on the horizon is the Cruze, which we won’t get here until two years after it debuts in the rest of the world.
Myth: GM quality is not competitive
GM says: GM quality is very competitive, and it continues to improve, according to both our internal measures and independent surveys. For example, in the most recent J.D. Power and Associates Initial Quality Study, Chevy Malibu and Silverado were the highest ranked midsize car and large pickup in the industry. GM’s 5 year/100,000 mile powertrain warranty reflects our confidence in the durability of our vehicles, as does our 12 month/12,000 mile bumper-to-bumper warranty on GM certified used vehicles.
The Truth: Yes, GM’s quality has improved, especially compared to what they produced in the 80s and 90s. However, so has everyone else’s. The General brags about having two cars as “highest ranked” in the Power IQS. That’s out of over eighty models they sell. Also, as we’ve discussed time and time again, the IQS survey only covers the first 90 days of ownership, when very few problems show up. If GM’s quality is so high, why don’t they offer a 10 year/100k warranty like some other manufacturers, instead of cutting off coverage at five years?
Myth: GM can’t make money selling cars
GM says: Well before the recent dive in truck sales, GM was moving to increase the profitability of its cars and crossovers. This starts with stronger products. Recent entries like the Cadillac CTS, Chevy Malibu and Buick Enclave have won praise from the press and public. Customers are willing to pay more for them, and they are selling strongly, even in a very weak market. Chevy’s next generation small car, the Cruze, should further strengthen GM’s presence in that important segment.
The Truth: This claim that “GM was moving to increase the profitability of its cars” should come as a surprise to the UAW. The fact that GM couldn’t make a profit on cars was the justification for union concessions. So was GM lying then, or are they lying now? And since they won’t be introducing the Cruze here for another two years (at least), how does GM know it’ll be profitable?
Myth: GM is looking for a government bailout
GM says: We are not asking for a bailout, or a handout. The program under discussion – part of major energy legislation signed in December 2007 — is intended to lower borrowing costs for carmakers and suppliers who are investing in energy-saving technologies. This would be done through direct loans, which must be repaid in full, with interest.
The Truth: The only “carmakers and suppliers” who will benefit from these loans are The Detroit Three. The legislation is written to specifically exclude the transplants. If this $50b loan isn’t a bailout, if it really is for carmakers to invest in “energy-saving technologies,” they should be available to everyone. The “loans” are at a much lower interest rate than anyone would give these companies. And if they “must be repaid in full,” what penalties are in place for late payment or nonpayment? And if “early this decade, GM put a major focus on improving its cars” because they anticipated “the growing demand for fuel efficient cars,” why do they need all this money at this late date? What happened to all the development they’ve been doing for the past ten years, and how did they pay for that?
Myth: The Volt is vaporware
GM says: While we can’t comment on the efforts of others, we can assure you, the Volt is for real. On June 3, GM announced that production funding for the Volt had been approved, and that GM’s Detroit Hamtramck plant has been selected as the assembly plant, pending government approvals. Meanwhile, development of both the car and its lithium-ion batteries continues apace. For the latest information, please see our Volt website.
The Truth: OK, they’ve announced the the plug-in electric – gas hybrid Chevy Volt is approved for production. They’ve named a plant that will produce it. They’re developing batteries. So when do we see a road-worthy version of the powerplant and the batteries? Oh, that’s right… they’ve just now decided who’ll produce those batteries for them so they don’t have any to install. And they’ve leaked photos of the headlights of what the “production” version. So where’s the rest of the car? And if they have one, why are they using the concept in all of their commercials? Define vaporware.
Myth: GM still doesn’t make cars that people want to buy
GM says: In 2007, the Saturn Aura and Chevy Silverado won North American Car and Truck of the year. In 2008, the Chevy Malibu was named North American Car of the Year, The Cadillac CTS was Motor Trend’s 2008 Car of the Year. Customers have responded just as enthusiastically as the critics. Despite a very tough market, GM cars and crossovers have enjoyed significant sales increases so far this year.
The Truth: COTY awards have no relevance to sales (e.g. Saturn Aura). GM’s “debunking” lists several cars, bragging about their sales increases this year. However no fewer than two of every ten Vibes and Auras built the first half of this year went to fleets. With the Cobalt and Malibu, it was more like three of every ten. And the G6? Almost half. The hard fact is that GM’s sales for the first seven months of this year were down 26.1 percent from last year and their market share dropped 3.6 percent over the same time, regardless of how well a few individual models sold.
Myth: GM has too many brands
GM says: GM has grouped its eight U.S. brands into four retail channels: Chevrolet, Buick/Pontiac/GMC, Saturn and Cadillac/Saab/Hummer. This allows GM to offer the broad range of choices that customers want, while streamlining product development and back-office operations. GM has announced a strategic review of the Hummer brand, which will study options ranging from revamping the product portfolio to selling the brand. GM is also using its global operations to develop distinctive new products for its U.S. brands. Fact is, to continue growth, many carmakers have entered new segments or added new brands as the market has grown and fragmented. The number of brands is not the key, but rather GM’s ability to provide strong products and efficient marketing support for them.
The Truth: GM has more brands in the U.S. than Toyota, Honda and Nissan combined. All they’ve done by creating these “retail channels” is enforce the point that they have about twice as many brands as they need. Their “streamlined” development and “efficient marketing” of their “strong products” seems to consist of degrading brands by giving everyone versions of the same car or bringing cars from overseas. Other carmakers may be adding brands, but none of them approach GM’s brand complexity, lack of coherent ideentity and model overlap.
Myth: GM opposes higher fuel economy standards
GM says: GM fully supports new national corporate average fuel economy (CAFE) standards of 35 mpg by 2020, a dramatic increase of 40% over previous standards. Along with other interested parties, we will work with the government throughout the rulemaking process on details of the new regulation. GM continues to believe that a single set of tough national fuel economy standards is the best way to focus the industry’s efforts and to reduce fuel consumption and CO2 emissions nationwide.
The Truth: When the new CAFE standards were coming up for vote, GM and the other automakers lobbied Capitol Hill not to pass the new standards. Once again, they protested that the new standards would mean the end of the auto industry as we know it. Now, suddenly, when they see a chance of getting a multi-billion dollar handout for “investing in energy-saving technologies,” they’re the perfect corporate citizen, standing behind the new standards. If they truly supported the standards, they wouldn’t be trying to influence the “rulemaking process on details of the new regulation.”
There are several “myths” that GM forgot to bust. The “myth” that they are the victims of an unforeseen rise in gas prices, and related shift in consumer tastes. The myth that their current business model is sustainable– but for a few hit products. The myth that the Volt could possibly compensate for lost pickup truck and SUV profits within the next five years. And the myth that federal money will not disappear down a rat hole. Then again, I guess that kind of mythbusting is best left to someone who’s willing to tell The Truth About Cars.
Kari is still the best part of mythbusters. Hard to believe she is 33 YO
If their quality is as good as they brag, why don’t they offer a 10 year/100k warranty like some other manufacturers do, instead of cutting it off at five years?
Cough – Hyundai – Cough
The first myth, “GM says: Early this decade, GM put a major focus on improving its cars and expanding the number of crossover vehicles that it offers.”
Frank, you missed something… you should have taken them to task on “early this decade,” as it was in this decade that Wagoner and Lutz publicly renewed GM’s commitment to fullsize vehicles. As recently as 2007, they made a conscious decision to push the GMT-900 program forward faster than originally planned. That program probaly got underway in ’03 or so. If they’d started the Cruze at that time, where would they be, now?
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GM also doesn’t bring up the inconvenient fact of world cars that aren’t. Lutz was interviewed, in Daily Tech, I think. One of the things GM now seems to want is a waiver or cancellation of crash testing. If they don’t have to go through that, they can bring in more small cars from overseas, faster.
Why? Why would they build a small car overseas without taking the probability that they’d want to import it into the US into their plans? Why shouldn’t the Cruze be US-ready from the get-go? Why did it take $100 million to develop the Astra for import (in tiny quantities – this program must be a loss)?
Frank – this is an excellent summary. The real tragedy is that GM could see this coming more than 30 years ago (after the first oil shortage) and has not in the intervening time put the development into building a profitable (or decent) small car. They have had a California factory with Toyota for years and one would assume that someone’s making money there or it would have closed. Or is that just a loss-leader for both?
I keep trying to convince myself to look into a Traverse or Outlook, but just can’t bring myself to support this company.
My neighbor has a Caddy and a Silverado, both something like 02. As soon as the warranty ran out, you guessed it! New engines and trannys and….etc. etc. Barely 100k miles on them. Looks like GM quality has really improved.
John
GM screwed themselves when they decided to stop selling the Corolla based Prizm, and go with the Matrix based Vibe instead. The Prizm was the only good small car they ever had. Funny thing is that the Corolla outsold the Prizm 5-1 during the years Chevy sold them. Even though they are the same car just having the Chevy name on the car hurt sales, and hurts resale value too. That says more about GM’s “Perception Gap” than anything else.
Frank, sometimes you scare me. I’m sure that you have your pulse on the exact ‘Heartbeat of America’ as it applies to an enthusiast’s view on GM’s woes.
Three things need to happen even before we can remotely contemplate what is in essence a bailout.
1) Upper management needs to be replaced
The insular culture that fostered all these decisions needs to be eliminated.
2) GM should have only two brands in the U.S.
North of 25k, Chevy and Cadillac are the only two brands most Americans will consider. Both of them are still fully capable of selling a premium vehicle (Corvette, SRX, Escalade) while the other brands struggle in this respect. Chevy can already handled the lower end as well, which leaves most of these brands as little more than supplemental and cost draining.
3) The stakeholders will ALL have to give in substantial concessions.
The UAW’s pension and medical care costs are untenable given GM’s current state. GM’s white collar staff will need to greatly reduce and/or eliminate their perks. Dealers will have to consolidate and/or voluntarily close their operations. The auto finance firms that deal directly with GM may need to give them a stronger foundation should certain sales and residual metrics be met.
What I’m describing is barely a small fraction of what needs to be done. But it all comes down to the idea of working together… which will require leaders far more capable than RW and BL.
You were completely on the spot until you got to: If they truly supported the standards, they wouldn’t be trying to influence the “rulemaking process on details of the new regulation.”
If a group of lawmakers and bureaucrats are known to be writing regs concerning autos, then they better send in lobbyists or they deserve to get fired.
Everyone likes to smear lobbyists these days, but think what kind of nonsense our legislatures might produce without them.
Everybody, don’t panic! GM has a plan. It includes:
1) The NEW G3!
2) Two more fuel-efficient cars by 2012!
3) More incentives with CEO Pricing!
and finally
4) Hope IS a strategy!
I too went to the website in question and had some trouble stomaching their “Facts” (note the quotations). There were a few explanations that particularly had me shaking my head in disbelief:
“MYTH: GM DIDN’T ANTICIPATE THE GROWING DEMAND FOR FUEL EFFICIENT CARS”
Though here Williams focuses on the lack of fuel efficiency of Crossovers, I believe that, in a much larger sense, GM simply should have seen a shift in consumer preference based on historical evidence. The gas crunches of the 70s should have opened up the General’s eyes, but was only addressed over the years by building uncompetitive small cars and “import-beaters” only when fuel prices actually spiked. The fact that the article points that GM is “the only U.S. based company to offer a subcompact car, the Chevy Aveo,” makes me nauseous. Though truthful, GM should not be bragging about the Aveo, a car so lacking in amenities and class I hated it before my buttocks reached the seat – and laughed when the salesman asked if I wanted to test drive!
At the risk of sounding like an egotist, but I quote my comment from GMDW 194: “Had GM invested as much time and energy into even one competitive small car program as they had a single SUV program earlier, I believe they would be in a substantially better position today.” At a time where the people are demanding a competent fuel efficient car, GM offers us the Aveo, which I wholeheartedly believe was designed to be a car only for first time buyers with shallow pockets (hence the lack of amenities), and now they are trying to advertise as a fuel-efficient car (and remember, they had it when small wasn’t in!). With the Cruze and Volt still years away, and the Chevrolet Beat off*, GM finds itself with its pants down while consumers go to Honda and Toyota. Which is exactly what happened in the 70s. Which is exactly why GM should have seen this coming.
“MYTH: GM HAS TOO MANY BRANDS”
Frank Williams’ rebuttal here hit’s the nail with the hammer. GM explains their ownership of EIGHT brands by saying, “Well, they’re in four different sales ‘channels,’” whatever the hell that means.
“Fact is, to continue growth, many carmakers have entered new segments or added new brands as the market has grown and fragmented.” – Someone please inform GM that their market share is shrinking, and has been for at least four decades. Eight brands may have been acceptable when GM had complete dominance over its competitors, but now that Toyota has surpassed their (steadily declining) market share, they need to trim the fat and become leaner. I’m trying to find some hard statistics, but the fact is GM is operating with the same amount of brands (if not more, Saturn, Saab, and Hummer weren’t always around/under GM) as they did when their market share was much higher.
Sadder still, eight brands might be justified if each had its own niche, and/or had Sloan’s original “car for every purpose and purse” not been pissed on so badly. But many of the General’s products are badge-engineered messes, with each brand having tons of vehicles stepping on the other brands’ collective feet. Pontiac used to be GM’s performance-based division; now they offer an intriguing array of rebadges (G3 when it comes, G5, G8, as good a car as it may be, is still a Holden). Now that most of GM’s brands have lost their identity, it’s time to focus on the brands that aren’t as badly damaged. This is one of GM’s fundamental problems, and needs to be addressed, post haste!
“MYTH: GM QUALITY IS NOT COMPETITIVE”
Granted, GM’s quality has increased greatly, but what GM conveniently ignores is their history. I’m sure this myth was added in to address the perception gap GM is now facing, a myth they undoubtedly helped to start by building crappy cars in the first place. Of course, it didn’t help that the imports were producing autos of overall better quality at the same time. And now the perception gap has become such a problem there are many people who will not even consider a car from the Big 2.8. The perception gap may be the toughest hurdle for the American automakers to clear, as it has been chiseled into the public’s psyche for decades.
Of course, there is so much more, but I’ve been writing for some time so I’ll leave it at that. For now.
*Apologies for the crude pun!
I was talking to a customer who’s retired from GM here in Michigan, this morning, and he was not management but a tool & die maker. He retired in his early 50’s after 31 years in. He figures he probably will continue to get most of his pension as promised (wishful thinking?) – but he indicated that his mother in law, who’s now deceased husband had been management at GM, was now losing virtually all of her dental, vision and prescription benefits and most of her medical benefits. GM just “said so”. Presumably for all management retirees.
This speaks volumes. Does it not?
Landcrusher
You were completely on the spot until you got to: If they truly supported the standards, they wouldn’t be trying to influence the “rulemaking process on details of the new regulation.”
If a group of lawmakers and bureaucrats are known to be writing regs concerning autos, then they better send in lobbyists or they deserve to get fired.
Everyone likes to smear lobbyists these days, but think what kind of nonsense our legislatures might produce without them.
Oh, I agree with you completely. However, GM states they’re totally behind the standards, then says they’re going to do what they can to influence the implementation. That indicates they aren’t totally behind them. Otherwise they’d let them stand as written. So why didn’t they just say that?
Menno: The mother inlaw got an increase in her widows pension to partially compensate.
She will NOT!give up all her benifits.
Your story is heresay and distorted, mine is fact,now we know why the website exsists.
Frank,
You do us a real service by calling GM on their BS.
But I do believe the Volt is real. Overhyped certainly, late, absolutely, but still real. Check out the Car Connection for pix of the production model.
Frank,
It’s not really a stretch to say they are “totally behind the standards” and still stay involved in whatever details are still being hashed out. You have caught them in the obvious trap, but the other routes also have traps.
When fighting the legislature it’s often lose-lose-lose. I think the problem is that they are so duplicitous that we are now unwilling to look at their position in the best light and let it pass.
Wouldn’t we all prefer they now get behind the standards? It’s the best thing after the battle is fought to accept the new decision, and try to move forward together.
Let’s say the feds decide to limit the percentage of seedless oranges grown by the farmers because of some environmental cause (of course this is fiction, but stay with me). We would expect the citrus farmers to fight it tooth and nail. Afterwards, they would likely support the new standard because they don’t want to anger the feds and risk their subsidies. Wouldn’t we give the orange growers a pass on this?
Basically, you are giving GM a zero on the exam, and I am saying you should give them a 5. That still leaves them 65 points from passing!
Landcrusher:
Wouldn’t we all prefer they now get behind the standards? It’s the best thing after the battle is fought to accept the new decision, and try to move forward together.
No, because now they’ll use the standards to justify why they “need” the bailout: “We accept the standards you forced on us but we can’t meet them unless you give us the money to do it.”
I keep trying to convince myself to look into a Traverse or Outlook
They are nice, I have to say. But they are BIG. I was surprised that they could be succesfully positioned as downsized SUV. Most people I know would regard it as a big vehicle. So, if you do look into it, I hope you have lots of parking!
NickR
I keep trying to convince myself to look into a Traverse or Outlook
They are nice, I have to say. But they are BIG. I was surprised that they could be succesfully positioned as downsized SUV.
With the exception of height, they’re within a couple of inches of a Tahoe/Yukon in external dimensions.
A minor nit, but I think “Capital HIll” should really be “Capitol Hill.”
Cute girl. I take it she’s the Mythbusters Girl? (I don’t watch it; maybe I should!)
Yeah, they are nearly as big as Tahoe/Yukon.You got all wheel vs 4 wheel.The Yukon is body on frame the Outlook is unibody.The Yukon is in love
with gasoline.The Outlook just wants to be friends with the gas pump.
ZoomZoom
A minor nit, but I think “Capital HIll” should really be “Capitol Hill.”
Cute girl. I take it she’s the Mythbusters Girl? (I don’t watch it; maybe I should!)
Fixed the typo. Thanks.
Yes, that’s Kari Byron, one of the Mythbusters.
Probably nobody in GM management is compensated based on long-term results.
I will never own a GM car (though the new Corvette is pretty sweet). I still remember what GM did to all the Diesel Oldsmobile customers back in the late 1970s/early 1980s. My parents were among the people who could ill afford the financial hit of owning a car that never should have been released into the wild.
That’s right, GM, three decades later I still remember. I have never even set foot on a dealer lot, and I never will.
Bullshit baffles brains.
I keep trying to convince myself to look into a Traverse or Outlook
They are nice, I have to say. But they are BIG. I was surprised that they could be succesfully positioned as downsized SUV. Most people I know would regard it as a big vehicle. So, if you do look into it, I hope you have lots of parking
They really ARE big – about 202″ long – part of the reason we bought the 4Runner. At 189″ approximately the same length as the wife’s 2002 Camry.
Myth: GM quality is not competitive
Well, these 2 links would suggest otherwise….
http://www.reuters.com/article/domesticNews/idUSN0844350020080908
http://www.reuters.com/article/topNews/idUSN2942792520080829
The Volt may be “Real” but its not “viable”.
Honda plans on selling 100k of their new Insights, at a base price south of $20K each. You want to bet they plan on making money on every single one of them?
GM is talking, what, 10k volts at $40k each? You want to bet that at that production rate, GM would be losing money on every single one of them?
Recalls are not an indicator of short/long term quality.
Frank,
“No, because now they’ll use the standards to justify why they “need” the bailout: “We accept the standards you forced on us but we can’t meet them unless you give us the money to do it.”
Of course they will. I am the last guy who wants to see them get a bailout; however, I certainly expect them to try. I don’t think many people fault them for it either.
Maybe we should start a boycott?
” he indicated that his mother in law, who’s now deceased husband had been management at GM, was now losing virtually all of her dental, vision and prescription benefits and most of her medical benefits. GM just “said so”. Presumably for all management retirees.
This speaks volumes. Does it not?
Yes, to be competitive with the imports that have no retirement burden young companies in US or high paid pension benefits more of this will have to happen. Also, thanks to US government age descrimination supported by law workers comp and health insurance are higher for an older work force such as the BIG 2.8.
OR, the US levels the playing field and for every dollar the US automakers have to kick in for social welfare benefits the imports or assemble it here imports will have to as well. This will have to include the extended costs of engineer it there, build parts there, machine build there and finally hire a low paid factory work here and call it built in the US. We are not that stupid!
This is a non sequitur, but I just can’t stand Mythbuster Adam Savage. I dunno, maybe it’s the banshee laughter at just about everything that’s just, to me, borderline funny. Jamie’s alright, if a little bit dull, and of course Kari is pretty easy on the eyes.
The one myth that hasn’t been examined: Is it really Rabid Rick or is that Buster? They both keep getting blown up. After all, the two haven’t been seen in the same place at the same time. Hmmm…
I think I have two Myths that GM forgot to address.
MYTH: General Motors needs new management.
That is true. GM’s management is all insiders (except Bob Lutz, but one man can only do so much when working against the tide) who think everything will be aight if they keep everything the way it is. Thus why GM is fucked.
To see what a difference new management will make, all you need to do is look at Ford. Bill Ford Jr has stepped aside and let an outsider take his position at CEO. Ever since then, Ford is the only one of the big three to have a concise plan to return to profitability, only Ford has products in the pipeline that are practical and can live up to the hype, and Ford is becoming the only one that people believe will survive.
MYTH: General Motors was mismanaged into the ground by idiots.
See:http://en.wikipedia.org/wiki/Roger_Bonham_Smith
If GM’s quality is so high, why don’t they offer a 10 year/100k warranty like some other manufacturers, instead of cutting off coverage at five years?
That’s a really good question. Hyundai did it. Kia did it. Mistubishi did it in Canada (and it’s the only reason they sell anything, from what I can tell). Toyota probably could do it, but doesn’t need to. Ditto Honda.
Why won’t GM? I have no idea. When your adoption problem is, according to your own spin, the result of a perception gap, you want to give every impression that you fully believe in your product. This is exactly what Hyundai did: “We know you don’t trust us because we made crap like the Excel and Pony, but we’re so sure we make awesome stuff now that we’re going to insure it for a decade. Go ahead, buy a Sonata. We’re so sure it’ll work that we’ll put money on the line to prove it.
And it worked. GM’s problem is exactly the same, so why isn’t the solution? Near as I can figure, either a) the accountants are being dicks about future costs, b) they don’t believe they’re on the level of Hyundai and/or c) they really don’t think they’re making cars that well.
OK Mikey, now I “get” the side comment he made about her getting $200 extra per month. So, the widow of the GM management guy gets NO CHOICE in the matter but is told she’ll get $200 extra a month instead of medical, dental, vision and prescription care. And she’s like on 18 prescriptions, being in her 80’s, which is likely to cost her $500 to $1000 a month extra.
Doesn’t sound like a brilliant “deal” for the management retirees of GM to me. I think he said she only gets about 55% of what her husband would have gotten had he lived, he wasn’t sure about that.
He DID say he thanked God that he continually turned down management at the GM plant and was happy he stayed a tool & die maker in the union.
So for him the UAW has worked out. Until and if it doesn’t, that is.
Do you think the UAW is going to manage well the funds they’ve been given? It proves to be seen…
We can all hope that they do, for the sake of goodness only knows how many ex-UAW members.
$2k worth of repairs were recently required on my friend’s well maintained ’05 Impala at just over 50k miles. Fuel injection system problems and transmission problems. Typical, in my experience, for a slightly out of warranty GM product.
Myth: GM vehicles are not as fuel efficient as comparable imports. A visit to the EPA fuel economy site shows that, segment for segment, GM vehicles are competitive with any vehicles in the market.
GM currently has more models with EPA highway ratings of 30 mpg or better than any other carmaker, 18 in total.
Truth: GM can’t count accurately. GM has eleven models that get 30+ mpg (the Aveo, Cobalt, HHR, Malibu, Classic [the only-sold-to-fleets-because-it’s-really-the-old-Malibu-with-a-rebadge model], G5, G6, Vibe, Astra, Aura, and Vue). To get to 18, you count every bodystyle separately (coupes, sedans, 3-doors, 5-doors, with windows, or without). That still doesn’t total 18; you have to count hybrids separately, too. By that logic, Honda doesn’t have three models that hit 30 mpg (Fit, Civic, and Accord). It has six. All that this number really means, though, is that GM cannibalizes its own sales. The Honda Civic, for example, outsold the Cobalt, G5, Aura, and Vibe combined.
More on the “GM still doesn’t make cars that people want to buy” so-called myth
Truth: Williams is right that COTY selections prove nothing; ask Ford how much good the selection of the Thunderbird as MT’s COTY did for them. Moreover, even counting fleet sales, the “award-winning” Malibu and Aura still have made fewer sales, combined, than the Camry so far this year.
It’s a good sign that Malibu sales are up strongly. On the other hand, perhaps one can see where they’re coming from: Impala sales are down 19% on the year, through August. G5 and Aveo sales are actually down (1.4% and 1.8%) on the year, which is problematic, given gas prices (almost as inexplicable as Toyota’s continuing sales slowdown with the Corolla). The bit about the Enclave being up 156% is a stretch. It was introduced in April, but had limited supply out of the gate, that wasn’t solved until GM added a third shift later in summer.
A much worse sign for GM is found in the broader picture of SUV/truck sales. Escalade sales are off 32%, Chevy TrailBlazers down 38%, Tahoes down 26%, Suburbans down 32%, Silverados down 25%, and on, and on. Even the most fuel-efficient Hummer, the H3, is down 46%. In CUVs, the SRX is off by 21% on the year; the Torrent is down 32%. The only good points in GM’s entire CUV/SUV/truck/van portfolio are the aforementioned Enclave, the Acadia (up 9%), and the Vue (their most efficient SUV, up 4%). The imports show declines for many of their own such vehicles, too. However, GM is far more dependent on truck/SUV sales for revenue, and their losses are thus worse, especially given the company’s parlous finances. Perhaps the better statement would be, “GM doesn’t make cars that people want to buy anymore.”
In the end, GMFAF is an exercise in corporate CYA that demonstrates the roots of GM’s problems: an inability to face a difficult reality with directness and honesty. If Wagoner and his people spent as much time addressing problems as denying them, perhaps GM would not have fallen so far.
It may no be the auto/truck business that causes the death of GM.
There are internet rumors that GMAC is in possible bankruptcy mode due to it’s Residential Capital business. Together with losses on SUV and truck residuals the end may be near for GMAC.
http://ml-implode.com/viewnews/2008-09-09_GMACinpossibleBankruptcymode.html
Williams is right that COTY selections prove nothing; ask Ford how much good the selection of the Thunderbird as MT’s COTY did for them. Moreover, even counting fleet sales, the “award-winning” Malibu and Aura still have made fewer sales, combined, than the Camry so far this year.
This is because most people aren’t swayed by publications that they don’t read/trust. Most people don’t really care what MT, R&T, C&D, etc say about new cars because they don’t read those magazines. Plus how many awards are there now? There’s JD Power, Strategic Vision, the various car magazines, Consumer Reports, etc. At this point, it’s kind of like T-Ball for six year olds; everyone who plays the game gets an award. Consumer Reports is probably the publication most people, i.e. non-car people, will use in helping them decide which car to purchase.
Let’s put it this way, if you’re in need of a refrigerator, what publications do you look at? Are you looking at Fridge & Freezer and Refrigerator Monthly or Consumer Reports? Unless you read one of the car magazines, it’s awards are unlikely to sway your opinion.
menno, the reason the widow was given “no choice” when GM gave her an extra $200 a month but ended most of her medical-related benefits, is that management benefits are discretionary. The UAW got a contract but management’s benefits are “subject to change at any time” as typically stated in employee handbooks.
I’m prepared to be sympathetic to this elderly lady’s situation, but first I’d want to know more. How much does she now get as an employee’s widow? What is her Social Security income? Has she enrolled in a Medicare supplement insurance plan, and if so, how much does that cost? Has she enrolled in an insurance plan to supplement her Medicare Part D (prescription drug coverage? Is so, how much does that cost? What is her net out-of-purse prescription drug expense?
My guess is the lady is still better off than 90+% of her age cohort. There’s a reason GM was called “generous motors.” When it had half the US market, could set prices to suit it, was reaping big gains in productivity and retiree/health expenses were not burdensome, profits gushed and life was sweet for those in the revenue stream. That’s all gone, along with stockholder equity–the price of a share is now simply a bet that GM might crawl out of the pit. Belatedly, management has decided to take cost-cutting steps it should have taken years ago.
I know we beat this horse every few months, but MT awards actually seem to have a negative correlation with sales success. If I were a manufacturer, I would threaten MT not to dare nominate my product for an award.
Landcrusher:
You couldn’t be more wrong. The Toyota Camry and Toyota Prius won the award a couple of years ago. Both are wild sales successes and show no signs of stopping.
Ford’s Taurus won the award in 1986. It would turn out to be a wild sales success that would win back customers from the imports as well as dinging GM and Chrysler in the knee Tonya Harding style. It would later become the bestselling car in America, and is still in production after 22 years, which I think is the longest that an American manufacturer has kept a mainstream car nameplate in use. (not counting sports/performance cars)
The Dodge Caravan won the award in 1996. It too would be a large sales success that almost completely redefined how a minivan is built. Minivans went from wood clad boxes to slick probes. (Ok, that came out wrong). The Chrysler Minivans are still the bestselling minivans in America. (I think.)
I do get your point though about how some COTYs became nothing more than damp squibs. The 1989 Ford Thunderbird, the Chrysler Cirrus and 300 come to mind. Well, the 300 sold well at first, but its success was short lived. It was nothing more than a fad, really.
I think that the North American COTY award is the REAL kiss of death to a cars sales success. Saturn Aura. Need I say more?
Hey, great job! Your friends, Kari, must love your constructive criticism!
When’s the Toyota Mythbusters? I’m totally looking forward to it!
Run,
If you are going to claim I couldn’t be more wrong, you will need to bring a stronger rebuttal.
I offer the following evidence in my favor:
2002 Ford Thunderbird
2000 Lincoln LS
1997 Chevrolet Malibu
1995 Chrysler Cirrus
1994 Ford Mustang
1993 Ford Probe GT
1992 Cadillac Seville Touring Sedan
1991 Chevrolet Caprice Classic LTZ
1990 Lincoln Town Car
1989 Ford Thunderbird SC
1988 Pontiac Grand Prix
1987 Ford Thunderbird Turbo Coupe
1983 AMC / Renault Alliance
1981 Chrysler K Cars, Dodge Aries / Plymouth Reliant
1980 Chevrolet Citation
1979 Buick Riviera S
1978 Chrysler, Dodge Omni / Plymouth Horizon
1977 Chevrolet Caprice
1976 Chrysler, Dodge Aspen / Plymouth Volare
1975 Chevrolet Monza 2+2
1974 Ford Mustang II
1972 Citroën SM
1971 Chevrolet Vega
1970 Ford Torino
Over half the cars since 1970, are losers. Even the few that sold in decent volume turned out to be crappy cars. I would also include the 300 in that statement, but it seems to have a few fans.
I was surprised to see how much better they seem to be doing lately though. My opinion on this was formed in the 80’s and I haven’t yet seen enough improvement to change it. Maybe in another five years.
Landcrusher :
1983 AMC / Renault Alliance-COTY
1980 Chevrolet Citation-COTY
1977 Chevrolet Caprice-COTY
1988 Pontiac Grand Prix(WTF?1?)-COTY
1981 Chrysler K Cars, Dodge Aries / Plymouth Reliant-COTY
1976 Chrysler, Dodge Aspen / Plymouth Volare-COTY
1974 Ford Mustang II-COTY
HOW? WHY?
Yes, the Alliance.
This was the car that made me question the COTY award to begin with. They used to put a sticker on the cars that was HUGE. Every car was a rolling billboard for MT COTY until the owner removed the thing. Two years later, when the last Alliance was officially retired to the junk yard after only 24,000 miles I started to question the whole COTY thing.
Okay, that’s hyperbole, but it really was a pile of junk.
Frank: another fantastic article. Thanks!
Who the hell writes this GM shit?
We salute you, GM spinmeisters.
You are true masters of bullshittery.
Anyway, I’m so glad you guys put up a picture of my mistress on your website. Gee, I hope that my wife (Angelina Jolie) doesn’t read this comment!
Runfromcheney: It would later become the bestselling car in America, and is still in production after 22 years, which I think is the longest that an American manufacturer has kept a mainstream car nameplate in use. (not counting sports/performance cars)
“Taurus” may be the longest-lived nameplate that is available today, but the two longest-lived nameplates of all time among regular American passenger cars are still the Oldsmobile Ninety-Eight and Chrysler New Yorker, both of which were first used prior to World War II and were phased out in the early 1990s.
Runfromcheney: I do get your point though about how some COTYs became nothing more than damp squibs. The 1989 Ford Thunderbird, the Chrysler Cirrus and 300 come to mind.
Can’t agree with that assessment. The 1989 Thunderbird was a very nice car (built like a tank) with styling that has held up very well. The main problem was that the market for large coupes dried up in the 1990s, as potential buyers switched to SUVs.
The Chrysler 300 was also a good car with handsome styling, good room and a respectable level of performance for the price. Quality was also much improved over the original LH cars.
The Cirrus was a nice car when it debuted, with handsome, distinctive styling, decent handling and a roomy, comfortable interior. Unfortunately, Chrysler didn’t take the Toyota approach and fix the problems while emphasizing the good parts – which can be laid squarely at the feet of Daimler.
Landcrusher,
I can’t agree that the 1977 Chevrolet Caprice, 1979 Buick Riviera S, 1987 Thunderbird Turbo Coupe, 1989 Thunderbird SC and 1994 Mustang are losers.
The 1977 Chevrolet Caprice was a huge sales success and the public loved it (and still does – people still seek out those big rear-wheel-drive GM cars from the late 1970s and early 1980s). They are tough, comfortable, reliable cars, and when equipped with the F41 suspension package, suprisingly good handlers.
The Buick Riviera S was a brave attempt at maintaining performance while improving gas mileage over a V-8 via turbocharging. It laid the groundwork for the revered Buick Grand Nationals of the 1980s. While the public didn’t exactly cotton to the idea of a turbocharged Riviera, the V-8 Rivieras were solid, comfortable, reliable and extremely popular with the public.
The two Thunderbirds attempted to do the same thing as the Buick Riviera, with more emphasis on handling and the “aero” style. The 1989 models, in particular, where quite stylish and built like tanks.
The 1994 Mustang was a very good attempt at keeping the Fox platform alive while improving interior comfort and performance. The car’s popularity then and now shows that it hit its target (which wasn’t BMW 3-Series or Honda Prelude drivers).
Geeber,
Your idea of reliable is far from mine.
Landcrusher,
All I know is that I see plenty of post-1976 Caprices still on the road (and not show queens, either), along with plenty of 1979-1985 Buick Rivieras. Mustang GTs are pretty tough, too.
As for the others, reliability isn’t a criteria of the Motor Trend awards, and it really can’t be, as cars must be new that year to be eligible. They don’t have a track record.
All of the cars I mentioned were pretty popular in the day, and still have a following.
Contrast this with the Renault Alliance, which was popular at first (second best-selling small car in 1983), but soon fell from grace, and has been basically forgotten outside of websites like this.
My perspective here . . . .
The last time I admired anything GM did was their initiation of the “downsizing” in the late 70’s in reaction to the first ‘oil shock’ . They decresaed the size & weight of all their lines with no loss of function or interior capacities. I remember they stated that they would make no car that weighed more than 4000 lbs.
The snag was that the quality & reliability was abysmal, that is when the Japanese brands got their kick start with small models and high quality. GM then lapsed into total mediocrity and loss of vision in the 80’s. It has been downhill for them ever since.
Did they actually try to deny that GM has too many brands? Eight brands!
The Saturn Aura should be reason enough to only focus on Chevy and Cadillac. It is essentially the same car as the new Malibu without the advertising budget. GM made a great car that nobody knows about because GM can’t afford to maintain eight brands. EIGHT BRANDS!
Imagine how great (and how quickly) GM could make the new Chevys if they did not have the distractions of fighting to support the other brands.
GS650G :
Kari is still the best part of mythbusters. Hard to believe she is 33 YO
WOW a whole 33 years old?! Seriously?! As in, three three??? OMG. You must still be in diapers. 33 is just getting started, so try to get some perspective.