Today is General Motors’ one hundredth anniversary. Ironically, GM reached the century mark in the same year that it ended its reign as the world’s largest automaker. More importantly, the American automaker’s status as the world’s most profitable private enterprise has long been consigned to the scrapheap of history. The former economic powerhouse is now worth less than it owes, as it slouches towards bankruptcy. While The General’s camp followers may wish to set aide this day to bask in past glories, it’s the perfect time for the ailing American automaker to draw a line under the past and face the future.
To begin, GM must abandon its dreams of world domination. The automaker’s well-traveled centurions must surrender their multi-maniacal global ambitions. “World platforms” or no, GM will never again achieve international supremacy, let alone dominance. Not in the UK, China, India, Russia, South America or the United States. Not as Chevrolet or Opel or Saturn or any other of the company’s many guises.
Today’s GM lacks the focus, drive, determination, savvy and resources it needs to mount an all-conquering assault on any of the world’s major territories. Toyota, on the other hand, doesn’t. Hyundai doesn’t. VW doesn’t. Suzuki doesn’t. Not that it matters. All of these car companies (and GM and more) face each other in their international fight for survival. In today’s global economy, everyone is a niche player– even if some “niches” are more equal than others.
Ostensibly, GM has already made this jump from hyperspace. When Toyota wrested the world’s largest crown from Motown’s mavens, CEO Rick Wagoner and his Car Czar Bob Lutz both hummed hakuna mutata. Profits were the new black. Wrong. GM must face a future without profits. I repeat: GM must realize that it can’t make money in its current, bloated, Byzantine form. And it’s not going to make money for a long, long time.
Once GM files for Chapter 11, the automaker will enter the proverbial wilderness. Customers will run for the hills. Dealers will die. Executives will flee. Unions will attack. Regulators will interfere. Opportunists (i.e. lawyers and rivals) will pick at the entrails. Even so, a plan for GM’s emergence from C11 protections will arise. Whatever it is, it won’t be quick. The General’s recovery will require at least two product cycles, maybe more. It may not succeed. But the plan’s backers will, by necessity, take a long term view.
To make that work, GM must sever its ties to its historical business model. Death to CEO Alfred P. Sloan’s formerly transcendent strategy: an ascending range of automotive brands offering a car for “every purse and purpose.” GM must embrace the new paradigm: a wide price range of vehicles within one coherent brand structure (BMW, Mercedes) or two (e.g. Nissan and Toyota, discounting the Scion debacle).
In fact, General Motors as such must disappear, so that Chevrolet and Cadillac may rise from the ashes. And even these brands must be liberated from the weight of the past to find new resonance in the popular imagination. What separates a Chevy or Caddy (made anywhere) from any other existing brand’s products? Reliability? Longevity? Beauty? Opulence? Power? Comfort? Choose one. By euthanizing dead brands and gaining focus, the non-general General can fully capitalize on its squandered and stifled world-class talents.
But most of all, GM NA has to distance itself from GM of old.
No matter how invalid its foundation, the “perception gap” afflicting Buick, Chevrolet, Cadillac, GMC, Pontiac, Saab, Saturn and HUMMER products is a Grand Canyon-class chasm. In other words, GM is already dead to at least two generations of buyers: those who experienced the brands’ horrific quality and indifferent (to say the least) service, and those who never owned a GM product because they’ve always considered the automakers’ octo-branded handiwork deeply and completely undesirable.
Again, this effort requires reinvention rather than re-dedication. GM must be able to speak to customers about the “new” Chevrolet and Cadillac with factual sincerity. They must explain why these brands are different, now. America loves a comeback kid. But it will not tolerate, for lack of a better phrase, the same old shit in a different wrapper.
Of course, the full realization of that task would require GM to come clean about the mistakes of the past– if only internally. And that would mandate at least a notion of the meaning of accountability.
It is this deficit that defines GM’s recent history. For the last fifty years or longer, GM’s been a company in the thrall of executive ignorance, greed, arrogance and hubris. In that sense, the only worthy celebration of GM’s past would be one where the automaker’s guardians could finally declare that its culture of entitlement and insularity has been sent off into the woods to die, alone and unloved. Gone, but not forgotten.
Amen
I’ve seen that Durant Park entrance and walked through it.
Happy birthday to General Motors. May you survive so many may have work and benefits, may you survive so you can become what you can be rather than what you became over the last 1/2 century, through hubris, greed, and foolishness.
Well said, Robert.
“America loves a comeback kid. But it will not tolerate, for lack of a better phrase, lipstick on a pig the same old fish in today’s newspaper.“
There, fixed it for you.
Nicely done, Mr. Farago.
It’s amazing the execs at GM still have jobs. Any other company would have tossed them. Why is this?
I agree the perception gap is fatal. Many people don’t consider GM a quality car and nothing is going to change that. No one wants to get raped with transmission troubles. And resale reflects that, causing a second rape when it’s time to trade. 15 YO Honda Civics sell for more than anything GM built, and that is a shame.
I’ll be in the market next year for a car and GM is not even on the list. Most likely it will be foreign, or a Mazda (if that counts as a American owned brand) but in all likely hood a transplant built by Americans that are actually content in their jobs. I think the unhappiness of all the UAW workers will be reflected in the cars, only good engineering can counter that.
The Volt is the best example of what is wrong at GM. Even with it’s breakthrough Non-technology it is too expensive and has far too many asterisks next to it to be seriously considered. Only a few people will take a chance on it, for chance is what it is. I’m not spending 48K on a battery powered car built by them, no sir.
What you need is a USA meltdown series. GM is the Canary in the coal mine.
GM just did a fake news story in honor of the 100th anniversary called “GM’s 10 Most Important Cars”
Half are over 50 years old, and 9 out of 10 (including a 1950 Saab) are pre-1964. The lone representative from the past 45 years (i.e. roughly half of the General’s history): the EV1 that they ignominiously crushed.
It’s amazing the execs at GM still have jobs. Any other company would have tossed them. Why is this?
Why are the managers that have brought about the downfall of GM still there, because they all suffer from the same “Kings New Clothes” syndrome, if you are at GM for a while you begin to believe that you are so big that you make the rules. Suppliers always bowed down or bent over, employees knew that they would never make such good money for so little work anywhere else and were told so regularly and government’s hob knobbed with the GM heads of state. The, “we are too big to fail” is not a new mantra.
A good friend retired from GM several years ago, taking his 30 and out package now at 54 years old he is counting on his GM pension to keep paying his rather large mortgage for another 15 years. We have some pretty interesting discussions kicked off by some of the TTAC writings. He is thoroughly convinced that no one really knows just how big GM is, and that when push comes to shove they will simply reveal another tentacle of the company that they are hiding that makes lots of money and cover their losses. All of this losing money stuff every month is just creative accounting not to appear to successful while the other car companies are failing. In a lot of ways my friend is not a fool, but I have to believe that he was just in the GM fold for so long that he really believes what he is saying, anything contrary is just from those that have no faith.
What you need is a USA meltdown series. GM is the Canary in the coal mine.
Bluecon, I wished to hell I could find one reason to disagree with you. With yesterday’s business news (and more to come) we have fallen off the embankment and are tumbling down. The only question is far down the embankment will we go before we right ourselves? Or are we simply going to fall all the way to the bottom and lay there battered and bruised, trying to figure out a way to save our asses?
GM just did a fake news story in honor of the 100th anniversary called “GM’s 10 Most Important Cars”
Half are over 50 years old, and 9 out of 10 (including a 1950 Saab) are pre-1964. The lone representative from the past 45 years (i.e. roughly half of the General’s history): the EV1 that they ignominiously crushed.
I’m surprised they didn’t put the Volt on the list just to advertise it more.
The list of 10 Most Important Cars is just begging for a parody. Where would the Cadillac Cimarron rank on the parody list?
GM does not have brands. It has labels that offer nothing unique or sufficiently appealing to attract consumers. Most are associated with a society and values that are as long gone as the straight-eight.
Okay, Robert. We’ve all drunk the Kool-Aid.
The question now is: What should Chevrolet and Cadillac actually sell?
Chevrolet:
Vibe (as new Nova?)
Cruze (but with a new name, please, from Chevy’s past; Chevelle?))
Mailibu
G8 as new Impala
Solstice (with a “new” name from Chevy’s past; Corvair?)
Corvette
Volt (in 2010, ‘natch)
mid-size truck
full-size truck
mid-size CUV
full-size CUV
full-size SUV
Cadillac
CTS (and I think it needs a new name from Caddy’s past; Eldorado?), coupe and sedan
STS (with a new name, please; DeVille?), coupe and sedan
DTS replacement; RWD; V8; with a “new” old name — Fleetwood?; sedan only
XLR (with significant interior upgrades, a less cartoonish exterior and, again, a new name; Evoq?)
(and V-series variants of each)
mid-size CUV
full-size CUV
NO SUVS
NO TRUCKS
As the glass full guy that I am,I see some positives for the domestics.I wonder does anybody else see protectism creeping in?
We are witnessing huge companys going T.U.thousands out of work.Government bailouts at the taxpayers expense.Our wonderfull standard of living being threatened.
So GM puts on a big show with 55 Chevys and Dinah Shore touring the USA in her Chevrolet.
Even those that wern’t born then are reminded that it wsn’t allways this way.
Yeah..yeah I know Honda has a US assembly plant as does Toyota and Kia and other transplants.But they are not perceived as American and the profits go back home.
The Honda workers are no more content working the line than the Ford workers.Assembly line work sucks,no matter what car you build.The transplants
have kept the UAW out not because ther’e nice guys.They match the wages and benifits pretty darn close.
Oh yeah its been the in thing to do, drive an import show the rest of the world just how smart you are.If truth be known there ain’t whole lot of difference,between one modern car and another.
GM, Ford and Chrysler are American based companys that feed a lot of money back to America and even Canada gets a few bucks along with a lot of jobs.
Its seems American icons are droping.I just can’t see Americans and America standing idly by and watching GM Ford or even Chrysler join thier ranks.
Happy ONE HUNDREDTH birthday GM ,may you live to see many more.
Yeah..yeah I know Honda has a US assembly plant as does Toyota and Kia and other transplants.But they are not perceived as American and the profits go back home.
Mikey,
The profits aren’t what matters to you or I. Why should we care where GM’s profits go, because, quite frankly, we’re not seeing a dime of it.
I’ll use Oshawa as an example because it’s close to me: the “profits” GM makes from the vehicles made there don’t go to anyone in Oshawa (except perhaps as bonuses to few guys over at the HQ building). The costs involved in making the vehicle (the wages paid to the workers, the dollars for parts, the taxes to the city, province and county, purchases from local suppliers, etc)–those are what are staying in the community.
If GM sold the Oshawa assembly plants lock, stock and barrel to Toyota and they started cranking out Camrys and Tundras, it wouldn’t make a lick of difference to the community’s economic health, provided wages and employment levels didn’t change as part of the transition, and if Toyota used local suppliers (which they usually do). All that would change is the name on the employees’ paycheck, which they’d still spend in exactly the same way.
And yes, the profit would probably go back to rich guys in Japan instead of rich guys in the US, but the average folk, really, wouldn’t care.
And no, I’d really do not care if engineering and design jobs move because, really, what’s more important to a community, a handful of suits or hundreds (thousands?) of blue-collar jobs?
My point is that I believe that we might see bunker mentality with car buyers in the United States and Canada.It just might not be so fashionable to have a import in your driveway.
If GM was to close Oshawa your property value would plummet.Ontario would go into deep recession
If GM was to cease operation in the US can anybody imagine the ramifacations,the havoc in the US economy?Japanese cars are going to lose a lot of thier lustre
I’ll stand by my post this cloud may have a silver lining.
Of course, the full realization of that task would require GM to come clean about the mistakes of the past– if only internally. And that would mandate at least a notion of the meaning of accountability.
Doing this loudly, and publicly would be huge. Most people are suckers for a heartfelt apology (myself included).
With yesterday’s business news (and more to come) we have fallen off the embankment and are tumbling down. The only question is far down the embankment will we go before we right ourselves? Or are we simply going to fall all the way to the bottom and lay there battered and bruised, trying to figure out a way to save our asses?
I’m reading Kevin Phillip’s book “Bad Money”. He describes how we got here; I’m not into where we’re going yet. Several interesting points: Our private debt has soared; no news there. The feds screw with things like CPI so they can hold down payouts to social security and TIPS bonds; no news there. What did surprise me was what’s known as the PPT (plunge protection team), which is made up of people from Treasury, the FED and others. Their charge to to keep things stable by whatever means. They do stuff like buy stocks, futures, currency, etc. to stop downward trends. Notice how often the market will be having a severe down day and suddenly most/all the loses will be undone in the last hour or so. I guess the point is that the feds are now close to pushing on a string. From the news this morning, AIG needs to raise $75-$80B within the next two days. Meanwhile their stock is down over 95%. And the topper is that AIG is too big to fail. So it’s about to blow, and AIG isn’t the end of it.
The list of 10 Most Important Cars is just begging for a parody.
TTAC, don’t fail us. That is definitely worthy of an article or another contest. Hilarity would ensue.
And no, I’d really do not care if engineering and design jobs move because, really, what’s more important to a community, a handful of suits or hundreds (thousands?) of blue-collar jobs?
psarhjinian, First off, I couldn’t agree more with your statement. I work for a Tier 1 Honda supplier and just our company alone employs roughly 5,000 in North America, only 2% which are Japanese transplants. Honda is a huge employer in Ohio if you look at direct Honda employees as well as all the suppliers that feed them.
Secondly, you mentioned all the engineering and design jobs, actually we employ our own Designers and Engineers as well as Honda. There are many U.S. models that are developed from start to finish using mostly U.S. work force. Even with the global models the U.S. employees work on them. So, overall the Transplant companies that really have taken hold in the U.S. (Honda, Toyota) have really helped fill the jobs, both blue and white collared workers, that are being lost by the Big 2.8.
But there HAS been a heartfelt apology, Tulsa_97sr5.
GM did come clean about the past, not only internally, but in their own advertising, RF.
It was a painful and short advertising campaign called Road to Redemption, circa 2003.
The mea culpa didn’t last too long, as it was quickly killed and those responsible rebuked.
Road to Redemption, which ran a few times on TV, but more often in print, admitted to subjecting consumers to 30 years of product misery. And that GM vehicles didn’t do so hot in a recent survey of new car buyers.
But, we’re working hard, continued the ad. About to turn the corner. Coming out with really good stuff real soon.
And ended with: The longest road in the world is the road to redemption.
So having admitted failure and promising to do better as recent as five years ago, what’s changed at GM?
Nothing but the balance sheet, it seems. And not for the better.
Domestic Hearse :
But there HAS been a heartfelt apology, Tulsa_97sr5.
It was a painful and short advertising campaign called Road to Redemption, circa 2003.
The mea culpa didn’t last too long, as it was quickly killed and those responsible rebuked.
As long as Red Ink Rick, Lutz, Henderson, et. al. are still roaming the RenCen, there will be no change in corporate behavior.
And so long as that group remain in charge, any “apology” GM has made or will make will be classified as yet another piss poor PR stunt.
Apologies aren’t about words. They are about changes in behavior. I have yet to see a change in behavior at GM. And for that reason, they will remain on my “never darken the doorstep” list.
Bruce
Rick Waggoner was interviewed on CNBC this morning, said twice “we have to make sure we marshall our assets properly”, he also said it is time for the feds to release the $25 billion (to the auto companies and suppliers) that was in an energy bill last year. Funny, the interview that CNBC conducted just prior to the one with Waggoner was with U.S. Senator Richard Shelby who said when asked about the feds helping the american autmobile companies, “No Way!”.
Regarding Mikey’s comments about what being fashionable in the driveway of an American, I can’t speak for the rest of the country but where I live in California, with the exception of pick up trucks for work (I live in an area of lots of oil fields and agriculture), most, I mean most, new cars people are driving are not from the Detroit makers. What is particuarly interesting is tha seemingly all the late model and new cars being driven by younger people are not Detroit made.
GM just did a fake news story in honor of the 100th anniversary called “GM’s 10 Most Important Cars”
Half are over 50 years old, and 9 out of 10 (including a 1950 Saab) are pre-1964. The lone representative from the past 45 years (i.e. roughly half of the General’s history): the EV1 that they ignominiously crushed.
I googled to see GM’s top 10 list. If it gets blogged here, I have a few nits to pick with it myself.
All in all a fine group of like minded people.
All falling in line and in lock step with a common theme.
Well is Gm any different than any business that has gotten gubment help this week? NO.
It’s been said that it’s very difficult to teach an elephant to tap dance.
Has the management really tried to steer the boat away from the iceberg? From all indications, yeah. Are they just going to curl up in the fetal position and put a thumb in their mouths? Not at all. Really appears that they’re readying some decent products (ammo?) for a longer than penned existence.
Can a suite full of armchair QB’s do better? sure, just ask them!
I’m going to stick with the home team a bit longer. Like a standard blue chip stock, you stay in it for the long haul. Not the quick return…
MB,
How appropriate you use the term “blue chip stock” in comparing your auto buying propensities with stock market investment strategy — when it comes to GM…
Seeing as GM was recently booted from the S&P 100 and risks being delisted from the DJIA.
https://www.thetruthaboutcars.com/sp-500-drops-gm-dow-jones-next/
Just sayin.
P.S. I have two GM vehicles myself. I also cheer for the home team. But like all loyal fans, my “tickets” give me a right to boo them when they stink up the field.
My point is that I believe that we might see bunker mentality with car buyers in the United States and Canada.It just might not be so fashionable to have a import in your driveway.
I see things a little differently, Mikey. Chevy’s American Revolution is quite old, by now. In the past, GM (and the other two) have gotten a lot of benefit from Americans not wanting to see the home team fail. But that horse, has bolted. As the president would put it: “Fool me once, shame on you. Fool me twice… I can’t be fooled again.”
People are voting with their wallets. Every month Frank Williams scores the latest round of voting. The results are there for all to see. You can see what’s fashionable. And what is not.
Well is Gm any different than any business that has gotten gubment help this week? NO.
I must have blinked. Who got gubment help this week? Lehman Bothers certainly did NOT. Merril Lynch did NOT. AIG is still holding onto the begging bowl, they DID get some help from the state of NY. So, yeah, go ahead Uncle Sam: Say NO to GM, too!
Has the management really tried to steer the boat away from the iceberg?
Care to explain that statement? As I see it management has been partying it up in the Captain’s Cabin, while purposefully ignoring “Iceberg Ahead!” calls from the bridge.
Are they just going to curl up in the fetal position and put a thumb in their mouths? Not at all.
You’re right about that. As the ship starts to go down, they’ll plunder any remaining silverware, before drifting off on golden parachutes.
I’m going to stick with the home team a bit longer. Like a standard blue chip stock, you stay in it for the long haul. Not the quick return…
Best of luck with that. No matter how I look at it, I don’t see a blue chip stock. Quite another color.
Giving GM a low interest, taxpayer sponsored loan would be swell if taxpayers believed they would get repaid on the loan. Anyone here think that would happen?
Your not alone monkeyboy,I back the home team 100%.Three GMs in the driveway the new one is 5yrs old.As long as I have a driveway there will be a GM parked in it.
Becurb,
My bringing up the Road to Redemption was making just that point…
The fact upper management pulled the campaign within several weeks of launch,
And that the GM team and ad agency that created and approved those ads were soundly spanked,
Means that those at the very top of the food chain don’t believe in the message that RtoR tried to convey.
They weren’t about to admit anything. Not even past quality or service sins. And Wagoner and team certainly weren’t aplogizing, either.
RtoR was to become GM’s “umbrella” campaign –plans were to flesh it out over time, showing proof of the company’s improvements and touting its sincerity and commitment to customer satisfaction were well in the works.
But it was killed. Quickly. Quietly. Secretly.
Poof. Gone.
Back to business as usual.
And you can see where that’s gotten Rick and friends.
Hear! Hear! Well said, Robert!
Shame that anyone who really needs to believe this so that things at GM can change, have their ears blocked with lies and damned lies of their own creation so that they can keep believing they are doing the right thing.
I know most people would like to help out (bailout) the Detroit 3 out of respect for all the workers’ lives a bankruptcy would ruin. A lot of people seem to think that it’s just one more business that needs to get bailed out during this financial crisis.
The reality is that GM as a business has been unhealthy for a long time and now that they can no longer continue to borrow against the future to pay for today they will go out of business.
Contrast that to the investment banks that got greedy and pushed the mortgage lending rules beyond the envelope. They’ve long since stopped the bad practices, however, there isn’t enough income to support all the banks holding the bad debts. So now those that need access to more cash to back up their assets, per regulatory requirements, can’t and are going under.
If GM had to do that, (back up their assets with additional liquidity), I submit to you that they’d have been out of business 4-5 years ago. Also, GM hasn’t stopped ANY of the bad practices that have driven it to bankruptcy.
Thus, they don’t deserve our help and all of us working in the auto industry will just have to suck it up and find work elsewhere. Things will be tough, much like for former Merrill Lynch employees, former Lehman Bros employees, former Bear Stearns employees, etc. But at least whatever emerges will be a viable business and has a shot at growth and survival.
NickR:
The list of 10 Most Important Cars is just begging for a parody.
TTAC, don’t fail us. That is definitely worthy of an article or another contest. Hilarity would ensue.
Well, let’s get things rolling with a list of nominations, shall we?
Chevy Vega
X-cars
J-cars
Chevy Corvair
Saturn Ion
Pontiac Aztek
Opel Kadett
…more?
I have owned many excellent GM cars over the years and I hope Mikey is right… but this editorial was right on the money. GM is already dead to many.
Mikey, for the sake of discussion, let’s imagine a scenario which I hope doesn’t happen: Oshawa assembly is nationalized by Canada if GM goes down. What cars will be built there, and how will they be sold (dealer network)?
GM is dead to me, and most of the people I know. I’ll never buy a GM product. What good reason is there to buy one besides brand loyalty, or insane incentives?
I have older relatives that keep buying GM products, but once they die, they’ll never be buying another GM product. I’ve got a friend that only buys Toyota products as a result of his dad buying GM products. His dad had a brand new ’97 Lumina and the alternator failed multiple times in the first 2 years of owning it.
From the perspective of younger people, there’s no valid reason to buy a GM product. Resale sucks due to their nasty fleet sale habit, reliability is still questionable, build quality and durability is questionable, and fuel economy is still horrible across their model range. Incentives and older, loyal buyers are the only thing that’s moving vehicles for GM, and neither one can last forever.
psarhjinian :
The profits aren’t what matters to you or I. Why should we care where GM’s profits go, because, quite frankly, we’re not seeing a dime of it.
Au contraire. Corporate income taxes currently represent about 12% of federal revenues (individual income taxes are about 40%, the remainder of federal revenues are from tariffs and fees including mining/drilling). Foreign owned subsidiaries generally break even, shifting profits and taxes back to the home country. When GM (or Ford or Chrysler) turns a profit, that profit is taxed first as corporate income tax and then a second time when American shareholders declare dividend income. Very little of the profit Toyota makes selling cars in North America is taxed here.
If the Detroit mfgs fail, of course other businesses will step in to supply the market and they will build many of those cars here and employ many Americans. Do not, however, think that the net loss of tax revenues to foreign governments will not affect you. The money to operate the federal gov’t will come from somewhere and if corporate tax revenues go down, that means that individuals will bear a larger percentage of the tax burden.
I believe in free trade and allowing 100% foreign direct investment, but I also recognize that there are benefits to buying locally.
Studebaker, in 1952, was the first automaker to celebrate their 100 year anniversary (they began building wagons before automobiles). By 1954 they were practically bankrupt and jumped into a merger with Packard that ended up killing Packard. In 1963 they closed their U.S plant and moved production to their small Canadian plant which closed a few years later in 1966.
Let’s hope that GM’s 2nd hundred years works out better than it did for Studebaker.
To make that work, GM must sever its ties to its historical business model. Death to CEO Alfred P. Sloan’s formerly transcendent strategy: an ascending range of automotive brands offering a car for “every purse and purpose.” GM must embrace the new paradigm: a wide price range of vehicles within one coherent brand structure (BMW, Mercedes) or two (e.g. Nissan and Toyota, discounting the Scion debacle).
I agree that GM needs to pare down to one (or two) brand(s) becaue they don’t have the money to deal with several.
However, I don’t agree that GM’s current situation is the result of adhering to Sloan’s strategy. In fact, one could argue that GM is in a world of shit because they abandoned Sloan’s strategy.
Today, a Buick doesn’t cost significantly more than a Chevy. It isn’t significantly more comfortable, or powerful, or bigger. There’s so much price overlap today that a high end Chevy can cost almost as much as a low end Caddy.
Sure, cars today can’t be differentiated merely on wheelbase or horsepower, nor on features, but there are other ways. The problem isn’t multiple brands per se, in fact just the opposite – there really aren’t 8 brands. There are, perhaps, 3. If that.
Aside from that, excellent article.
Mikey, for the sake of discussion, let’s imagine a scenario which I hope doesn’t happen: Oshawa assembly is nationalized by Canada if GM goes down. What cars will be built there, and how will they be sold (dealer network)? – friedclams
Too late! General Motors Death Watch 85 confirmed GM’s entire Canadian operating unit, all plants and property, are included in the assets put on the table to secure credit.
In the unlikely event the Canadian government was silly enough to acquire the Oshawa plant, who would want it? Ford and Chrysler are closing plants. Ontario labor legislation gives current CAW employees successor rights to jobs on the site, meaning Toyota and Honda would run for the hills. Local reports say Fiat isn’t interested.
That pretty much leaves a start-up Red Chinese car manufacturer. They’re Communists, not crazy! Why would they pay CAW workers $50/hour and endure a Buzz Hargrove Mini-Me’s morale and profit sapping nonsense when their own workers are paid something in the order of $1/hour with few benefits?
It may have been acceptable for GM to have five brands when in had a majority share of the U.S. market, but that is no longer the case. Now that GM has a much smaller percentage or that market, simple math says it needs fewer brands. In reality, GM has even more than when Sloan was running the show!
I agree with almost everyone at TTAC that GM needs to drop some brands. That’s a no-brainer. But it was GM’s mismanagement that made them obsolete in the first place! Sloan’s system was downright brilliant, but by the Eighties that system was gone. Not because the system had become archaic or nonfunctional, but because GM had thrown out the original idea of “a car for every purse and purpose.” By bringing Cadillac downmarket and stepping on Buick and Oldsmobile’s toes. By making top-of-the-line Chevrolets that competed with their upper-tier companions. By making Pontiacs without any performance aspect. I believe to truly recapture some of their former glory, GM needs desperately to reinstate Sloan’s original ideals (minus a few brands, if possible) and have little to no product overlap.
This is why I am so adamantly against the creation of the Cadillac BLS – it would push Cadillac FURTHER downmarket into a price bracket covered by others. Cadillac should equal luxury; anyone with $25,000 shouldn’t be able to buy one new. I believe Caddy should push upmarket ASAP, otherwise there’s no way it can regain a significant foothold in the luxury game again.
I know many are pressing for the GM of the future to consist of only Chevrolet and Cadillac. But I wonder sometimes: if Buick had been killed in 2000 rather than Oldsmobile, and Olds was allowed to continue its revival (started with the Aurora in ‘95), could a Chevrolet – Oldsmobile – Cadillac triumvirate arise from the ashes of Chapter 11? Maybe in a parallel universe…
The former economic powerhouse is now worth less than it owes, as it slouches towards bankruptcy.
Mr. Farago, You’ve got a way with words. I can’t look at your hilarious use of “slouches” without laughing out loud. Talk about capturing the essence of a company in a single word!
This really is the best car site, bar none.
“GM must embrace the new paradigm: a wide price range of vehicles within one coherent brand structure (BMW, Mercedes) or two (e.g. Nissan and Toyota, discounting the Scion debacle).”
The same plan that all of it’s overseas operations/subsideries do> (Opel,Vauxhall,Holden,GM South Africa)
As a side point, how would GM’s descent in NA affect these operations?
There was nothing wrong with Sloan’s strategy nor with his deft management of the tension between top-down control and decentralized control. The problem is that he didn’t develop a good system for training his replacements. They have invariably been narrow minded financial guys (yep, all guys).
FYI, Sloan also wasn’t an MBA. Sloan graduated from MIT with a degree in Electrical Engineering.
Sloan was hardly a perfect man, but GM’s branding problem began with absurd overlaps between the competing brands to the point that today they have no meaningful market segment distinction between themselves. You can buy similar sized, similar priced clone cars from Chevrolet, Pontiac, Buick and Saturn … so what exactly is the point of having all four of them? Sloan retired from GM in 1956 and they were the world’s largest AND most profitable company at that time. GM’s products set the standard not only for automobiles, but also for locomotives (Electro-Motive), passenger buses, heavy duty diesel engines (Detroit Diesel), and refrigerators (Frigidaire) !
But it will not tolerate, for lack of a better phrase, the same old shit in a different wrapper.
I bet at least 40% of the country will, come November.
I may not always agree with you, but I admire your tenacity. 198 GMDWs and the GM Execs still won’t listen to you. A lot of work to wait and asy “I told you so”. I’d have given up a long time ago. Then again I know the GM execs won’t listen to me or anyone else so why bother.
Sloan was hardly a perfect man, but GM’s branding problem began with absurd overlaps between the competing brands to the point that today they have no meaningful market segment distinction between themselves.
To understand what a dumb-ass Sloan was, you have to look at this from the dealer’s perspective. E.g. say Pontiac sold only sporty sedans. Who would want to be a Pontiac dealer in the current economic climate?
Inevitably Sloan’s idea was DOA: when SUVs sold like hot cakes, ALL eight brands wanted a part of that action. Now that SUVs have fallen by the wayside, ALL eight (well seven at least) want a small car.
Meanwhile over at Toyota, one Yaris is all it takes.
The 10 worst from GM:
Cadillac Cimarron
Cadillac Catera
Cadillac 1981 Fleetwood V8-6-4
Cadillac 1978-85 Seville Diesel
Chevy Chevette
Chevy Vega
Chevy Citation
Chevy 1982 Camaro 4cyl “Iron Duke”
Olds 1997 Achieva
Pontiac 2000-04 Aztek
The Big 2.8 are looking for 25 to 50 billion in government bailout loans, and Congress will adjourn on September 26th. A loan will just postpone the day of reckoning.
I’m sticking with the home team. No foreign cars in my driveway. Ever.
Worst GM car I owned – 1978 Olds Delta 88. 1972 Nova was a good car. 1975 Camaro had shitty paint and some unnecessary part failures. 1978 Olds had the worst build quality, worst paint, terrible electrical system, and a transmission which failed at 50,000 miles. After a class action suit, GM agreed to pay for transmission repairs but only if they were done at a GM dealer. I never bought another Oldsmobile.
Overall GM went downhill after 1973 and has never really recovered to what they once were.
GM dealers of the 1970’s were universally rude, arrogant, and never wanted to fix problems with the car on warranty. As Iacocca said, GM defined arrogance.
10 worst GM cars:
1. Vega/Monza
2. Late 1970’s Oldsmobiles (Olds diesel was pathetic)
3. Xcar/Corsica/Beretta
4. Chevette/T1000 – defined cheap, as in low quality.
5. Original Lumina – actually took all the fun out of driving
6. Buick Reatta (overpriced)
7. Cadillac Allente (overpriced)
8. S10/Bravada (proved to me there is unintended acceleration)
9. Dust buster minivans (yeah I owned one). Terrible interior, poor steering and handling.
10. The last Cavalier model – a truly shitty car.
Some good GM cars:
1973 and earlier GM cars.
Most Buicks 1989 and later.
Full size GM trucks any time, including Suburban.
Current GM cars are now good, but looks like too late.
Of course, people are free to do as they like – but I’d like to point out that the “home team” people … are anti-capitalist.
The point of a capitalist system is that companies that fail to provide what the market wants are forced to either reinvent themselves or fail, making room for a company that will. This assumes, however, that customers will be looking for the best product at the best price. Insisting that certain makes are out of consideration for reasons unrelated to product suitability, quality, service or availability skews the whole system.
I drive Hondas. Why? Because they’ve been impeccably reliable, and my experience at dealerships (and more importantly – service facilities) has been great. The idea that “all modern cars are about the same” is just not true – and the corporate experiences are VASTLY different. (Granted, I’ve heard hellish stories about Toyota dealers as well as GM service departments.)
I started out with a new Ford, gifted to me as a go-to-college car. Starter motor failed at 15k, engine computer failed sometime later stranding me when I was headed home from college for Christmas. I’ve happily driven Hondas ever since, and I wouldn’t touch anything GM makes if they were paying me to take it.
To even have a chance at me (or people like me), whatever’s left of GM or Ford or Chrysler after the coming catastrophe will have to generate at least a 10-year track record of reliability, innovation and service that meets the standard set by Toyota and Honda. I frankly don’t see that happening – EVER.
Gardiner is correct, “GM does not have brands. It has labels that offer nothing unique or sufficiently appealing to attract consumers. Most are associated with a society and values that are as long gone as the straight-eight.”
GM would do better to kill all 8 blighted and irrevocably damaged nameplates and simply produce “GM” vehicles. It’s all they are or have been for decades, anyway. Time for a fresh start, if they are to do anything at all.