Transterrestrial Musings

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And, of course, GM's bankruptcy will put them in a position to better compete against companies that weren't as mis-managed, thereby penalizing those companies and their workers. No company is an island. Poor management and poor productivity hurst everyone.

Posted by Dave Shearon at April 21, 2005 06:21 PM

Which is why GM and Ford (as well as many older companies, particularly those with large unions in the employ) are such enthusastic supporters of HillaryCare, or something identical to it.

Posted by Addison at April 21, 2005 06:28 PM

GM's problem traces back to terrible management and a poor labor quality.

Executives at GM for the past 25 years have been out of touch reality. They have LED the design, development and manufacturing of autos that they would not own if they were forced to pay with the entire cost. Financially driven management with only a lust for money but without a passion for excellence is a major cause of death.

Wagoner is a fool that missed a golden opportunity to turn the company around in the late 90s by his utter stupidity. The brand marketing logic cost a fortune and destroyed value for shareholders. What about the cars?

GM executive simply do not understand that cars are fashion goods that must be fashionable. Advertising is an accessory not the outfit.

Labor at GM has helped dig a deep grave by their low commitment to quality. They have not cared for the consumer they served.

It saddens me to see such a great company die such a horrible death. The greatest company in the world has been destroyed by impotence of will. What a legacy to destroy.

I would be ashamed to be a GM executive or employee. They have failed and let the nation and consumers down.

Posted by simon at April 21, 2005 06:31 PM

I grew up in a solidly GM family. My father bought an Olds every two years, my grandfather bought a new Buick every year......my first car was a Pontiac Tempest.....so it deeply saddens me to say that I would not buy a GM car now regardless of the price.

Last week, I pulled up to a stop light and noticed something odd about the car in the next lane over...the seam between the front door and the front quarter panel was big enough to stick your hand in...no kidding..........
it was a new Saturn with a dealer tag.

GM is the most mismanaged company on the face of the earth. They have absolutely no clue about the auto business and no real interest. They will NOT be around in twenty years and I think that that will be a good thing. Ugly and shoddy hurts my eyes.

Posted by Tom Smithdeal at April 21, 2005 06:37 PM

Very interesting perspective, Rand. I agree with you wholeheartedly.

GM is a destroyer of vast amounts of value, partly because of its business structure and partly because the products it offers aren't any good. The last time I rented a car, I climbed into a Chevy and the impression was instant -- this car is a $20,000 piece of junk. A couple hundred miles on the odometer and it wasn't fun to get into. It might be a much more reliable piece of junk than what GM was putting out 20 years ago, on the other hand.

Here's food for thought. Google, after announcing stellar earnings figures this afternoon, is worth more than 4 times what GM is worth.

Posted by Daniel Schmelzer at April 21, 2005 06:41 PM

Gee Guys have you even looked at the GM,Ford,Chrysler quality figures in the last 25 years? They are slightly below the Japanese and have been so close for a decade that as a non-automotive person like yourselves you wouldn't know the difference. GM's problems are the same as every other manufacturer in this country, just bigger numbers. The laws, regulations, taxes in this country are all based on when we had a closed market and over 50% of the workforce worked in manufacturing. Now 13% work is in manufacturing and we have to compete against the rest of the world but none of the government costs have changed except for the worse. About the time all the baby boomers retire the last manufacturing job will leave this country, it will take 200 dollars to buy a yen and wages will be about what they are now. Have fun!

Posted by John Surratt at April 21, 2005 07:15 PM

A "non-automotive person like me"?

"Quality figures" have nothing to do with how a car feels in a curve, how it accelerates, how the pedals feel, how the steering wheel fits the hand, and transmits the road to your arms.

What a pompous ass. I know good cars from bad, regardless of arbitrary "quality figures," and GM (and Ford, and Chrysler, and American Motors before they went under, which is why the entire American auto industry is in trouble) has been largely making boring, poor-quality cars for my entire life, because they perceived they had a captive audience.

Posted by Rand Simberg at April 21, 2005 07:34 PM

Let's shed some light on a dirty little secret that tells you a lot about GM's executives, past and present. THEY ARE ACCOUNTABLE TO NO ONE FOR THE SHAMELESS WAY THEY REWARD EACH OTHER with hundreds of millions of dollars each year.

The great fear in the GM executive suite is a bill that has been introduced in Congress that would limit the pension of any executive past or present of a bankrupt company to no more than that paid to the highest paid hourly worker and it would require that payments to executives do not even start until all hourly employees have been paid first.

If GM is to go bankrupt it must do so before this bill gets enacted, or the unaccounatable executives who steered the comapny to ruin will be accountable.

Everyone should write his congressman and senator asking them to fast track such a bill, so that the taxpayers will not be robbed to pay the self-serving incompetents who have run these comapnies into the ground.

Posted by Jack Lifton at April 21, 2005 07:39 PM

Part of the problem with GM seems to lie in excessive centralization. In Peter Drucker's classic analysis of GM, he credited them with introducing the concept of "federal decentralization"...multiple product business divisions, each with its own marketing, engineering, and assembly operations. Once upon a time, running Chevrolet or Pontiac really meant something. Now, if I correctly understand what's happened, these jobs are basically glorified brand/product manager positions.

The argument for centralization always looks compelling in terms of cost and "synergy" but too often, important things--closeness to the customer, agility--are lost in the process.

Posted by David Foster at April 21, 2005 08:18 PM

In the not so distant past, I worked for a financing arm of GM. I was involved in a system that took in great detail the monthly numbers of every GM dealership in the US and distributed it to a vast array of internal finance people. When numbers didn't consistently balance as they should have, I asked why this info was so important, being that the data was so unreliable. The answer I received was that GM made money on financing and lost it on manufacturing/distribution/sales. My interpretation was that the cars sucked, but loansharking was still profitable.

I felt like I was feeding grapes to a dinosaur stuck in a tarpit.

Posted by ICantSay at April 21, 2005 09:00 PM

GM fail, right, that will happen when Santa Claus and the Tooth Fairy get married and serve Easter Bunny for dinner. Which POTUS will sit back and not cut a deal while a hundred thousand deer-hunting union members in swing states lose their jobs?

I'm with Rand that a big part of the problem is that GM is building appliances instead of cars. I drive a white 1998 Ford E$cort* coupe, and if you offered me a brand-new G6 for just the taxes, I'd tell you to keep it. I have a perfectly good car-flavored automobile and if you want me to replace it, you need to give me a good reason.

The Solstice looks like fun actually, but it's a shame they put it under the Pontiac name, which is just throwing good money after bad. Of course, when you spend twenty years building bland 4-door McCars named "Bonneville," you don't have the right to be surprised when people write you off without a second thought. Chevy at least managed to hold the line on the Corvette, which deserves to be a better car than it is. Cadillac pobably came closer to getting it across the board than any other badge, but it doesn't seem to have done them much good. Look at the cars! The 300C shows there's still a market for a great American car, and the CTS could have been that car, but they goofed. Goof after goof, that's pretty much the GM story.

LOL- If I type E-cort with the 'S' it won't let me post it due to "Questionable content."

Posted by the snob at April 21, 2005 09:06 PM

What's really sad is that GM is so close in some of its lines.

Caddy has completely turned itself around through both design and engineering, and I am the happy owner of an Escalade ESV. The CTS-V is legitimately keeping BMW and Audi execs awake at night, the SRX is a well-regarded crossover and the XLR has a lot of potential. Even the STS could contend, although it clearly needs some work.

GM has other good cars, too. For the price of a stripped BMW I could buy a Corvette Z51, although I'm waiting for the Z06 (which will be a steal even if they can't keep it under 70k). The new GTO isn't for me, but the platform is a keeper (Aussies love their Holdens). And the new Saabs don't completely suck.

The problem is all the other cars. The Chevy Cobalt? Please. The new Saturn? It's an American Yugo. Anything with a Buick badge? You couldn't get me - or Tiger - into one at gunpoint.

It can't happen short of bankruptcy, but GM needs to shed its underperforming products - at the division level if necessary - and focus on what works: Caddy, GMC, Chevy trucks, sporty sedans and Corvettes. As a much smaller company, it could kick butt. Otherwise, it will likely kick the bucket.

Posted by ronbo at April 21, 2005 09:13 PM

Ronbo,

Assuming GM follows your suggestion, there is still the "little problem" of over 3,000 dealers (read distrubution channels) in the US alone, many of which won't make it when thier brand is eliminated. The labor force in the distribution channel is roughly equal to GM. So if GM cuts 30,000 jobs in Detroit, there are potentially an additional 30,000 jobs cut across America just in distribution/sales/support/repair. (Can anyone give us figures in the manufacturing/supplier side? It adds to the equation.)

Remember, the other losses aren't included GM's numbers as they are all "independent companies".

When GM politely sneezes, the rest of the economy emits a smelly flatulence. That's GM's ultimate gamble.

Posted by at April 21, 2005 09:39 PM

I predict that GM will be bought in a firesale by the Japanese, leaving only Ford as a truly American car maker. I personally think that Daimler has done a decent job with Chrysler.

Posted by Jeff Arnall at April 21, 2005 09:47 PM

Nope, they'll be bought out of bankrupcy by a Chinese company (they're all quasigovernmental or quasimilitary orgs) with dollars.

Posted by Otis Wildflower at April 21, 2005 10:06 PM

I know good cars from bad, regardless of arbitrary "quality figures," and GM (and Ford, and Chrysler, and American Motors before they went under, which is why the entire American auto industry is in trouble) has been largely making boring, poor-quality cars for my entire life, because they perceived they had a captive audience.

Whilst I wholeheartedly agree that Mr. Suratt is a pompous wet blanket, I would like to point out that merely making "boring" cars is no impediment to success, as Toyota has demonstrated aptly with the Camry and the Corolla -- both utterly snooze-inducing, and insanely popular cars. Though in fairness, Toyota cars are generally the very opposite of "poor-quality."

Posted by E. Nough at April 21, 2005 10:32 PM

I grew up in a GM family. From the time I can first remember (roughly 1960), until 1982, my dad bought nothing but GM. Mainly Pontiacs, later Buicks (because his good friend who was a car salesman switched dealers). My first car was a 1967 Pontiac Tempest that my dad gave as a graduation present (in 1973) because I earned a college scholarship. My summer job through college was in the parts department of a Buick dealer - a job that my dad's car salesman buddy helped me get. And the first new car I bought after I graduated was a turbocharged Buick Regal Grand National. Furthermore my dad hated the Japanese - he'd fought them in the Pacific during WWII (Purple Heart on Guadalcanal), and never seemed to forgive and forget. I thought my dad was going to have a cow when my sister bought a new Volkswagon Rabbit in '76.
But all that has changed. That Buick Grand National was the last GM car I ever bought. In 1982, my Japanese hating dad, a lifely GM guy, bought a SUBARU (if I'd had any GM stock I would have sold it that day!). Since that day, no one in my family has bought a new GM car (although I do have a GMC Savana Van I picked up used). My dad passed away several years ago, but my mom has since bought two cars - a Mazda 626, then after that was totaled when she was rear-ended, a Honda Accord.

Why? Because GM builds boring cars. The reliablity may be good, but the cars are not interesting. In fact I wonder if part of GM's success in trucks is that people don't expect their trucks to be fun to drive. I'm a 'car guy' - I expect my car to be fun to drive, and the bottom line is that if I was in the market for a new car, not a single GM car would make my short list. The new Caddy's are interesting, as is the new Corvette, but they're out of my price range. Honda, Mazda, Toyota, and even Ford make cars in the $20k - $30k range that I find interesting. GM doesn't......

Posted by tdracer at April 21, 2005 10:52 PM

My family has had poor experiences with Detroit cars in general. The first new car my family bought when I was a kid was a '77 Dodge Aspen, a car that raised the definition of trash to new levels. Then we went Tokyo for a while and the reliability was much better. My parents tried an Oldsmobile in the late '90's and TWO trannys died. My Saturn was reasonably reliable but didnt age well and had troubles as it got old. My sister had fairly good luck with her Mustang and my Brother in law has an adequate GMC pickup, but Toyota has been the star for us. My "boring" Camry is over 80K miles with a taillight being the only problem so far. My parents have a similar story.
A mechanic friend of mine told me that Detroit just doesnt care about making robust reliable cars the same way as Tokyo. Detroit things "good enough" and Tokyo things "make it better".

Posted by eric at April 21, 2005 11:19 PM

I have to disagree about the milage nowdays. My wife drives a 1993 Tahoe with almost 200,000 miles. Still going strong. Before I moved to the snow, my 1990 Mustang GT was still going strong at 98,000, and was hardly well taken care of. And to top if off, they probably required less maintainance than a Japanese car that needs the timing belts replaced, etc. The problems I see are two. One, is gimicky crap. Instead of quality in the cars, they put a few gimicky little things in, which seem cool at the dealership, but after a while don't add much. I return, the rest of the interior is low quality, and there's just tons of other little annoyances. My father too, a diehard GM guy, no longer buys GM. All the little crap finally added up to too much. For me, I put of with the crap as I can get the car cheap, but beleive me, once we no longer have to, we will not be buying GM (unless it's a Saab badged Subaru that GM has at firesale pricing).

Posted by IdahoKid at April 22, 2005 05:55 AM

Welp, I've got a 'McCar' of the Bonneville persuasion, the '99, currently with 176K+ on the clock and still plugging away and have had absolutely no problems with it over 5 years of 110+ mile/day commute. Okay, I fibbed, I'm about to pick up the 3rd replacement set of tires.

It's good enough, it gets the job done and it's not a visual embarrassment.

Now if you really want to talk boring, how about a '78 Fairmont...

And there's a little MGBGT ragtop sitting forlornly in a lot downtown that keeps calling out to me...maybe if I can convince my wife that it's really a golf cart...

Posted by JSAllison at April 22, 2005 06:29 AM

My family was also a GM family. Dad loved big Chevys--he owned 3 Monte Carlos, a Luv truck, and a full-size pickup over a 15 year period, and still has a Chevy Blazer, then bought Pontiacs--3 Grand Prixs,2 Firebirds. My mom drove a Camaro. Mom's dad--GMC and Chevy trucks, and a Chevy van for trips. My mom's 1st cousins consist largely of GM dealers and salesmen.

Right now, I don't own a GM product and can't think of one I'd be tempted to buy. Why? Oh, all the same complaints as everyone else. My grandmother, rest her soul, bought an 86 Cavalier--a dealer demo mod--when I was in school. It was CONSTANTLY in the shop..it even threw a rod at 44000 miles. She traded it in on an 89 Subaru which gave 15 years of trouble free service. In 15 years it was never in need of major repairs--save for when the gaskets needed replacement. In 2 years her Cavalier was in the shop at least 15-20 times, sometimes for weeks at a time.

I live in the mountains and drive a Toyota Highlander--5 years old 65K+ miles, NEVER in the shop for any reason, exquisite fit and finish. Compared to my dad's Chevy Blazer--it's a whole different animal. The quality in my vehicle trumps that of dad's Chevy by a long shot. His is uncomfortable, noisy, rough, comes off really as just poorly assembled. I've rented GM cars and trucks, Trail Blazers, Chevy Trucks, Luminas--only the truck inspired me to say "this is a quality product".

I'm an American car buyer favorably disposed to the GM legacy. If they aren't motivating me--they've got problems.

Posted by dude at April 22, 2005 06:41 AM

Quoted by ronbo: "The new GTO isn't for me, but the platform is a keeper (Aussies love their Holdens)"

The GTO is not really the car for a lot of people. It has very bland styling so it losses appeal to the younger crowd. As Car & Driver described it, 'as a fat Cavalier.....like Grandma drew angry eye brows over her eyes'. I'm not certain but the people that do like the GTO seem to older mid life crisis men. People who want high horsepower without all the bling, bling styling of a Subura WRX or the "Hey copper I'm over, here pull me over" looks of a Corvette.

Posted by Josh "Hefty" Reiter at April 22, 2005 06:58 AM

Sitting on my father in laws used car lot last month was a late 80's a-body,Pontiac 6000.I looked at it thought of all the money spent in design,engineering and marketing this classic.GM should just sell off the bad parts,and try to make great cars that inspire folks to go to their showrooms.The poor suckers who paid top dollar for that 6000,not to mention the higher interest loans at that time and less of a rebate.If GM can't bribe people into buying their junk,they should slip under the waves!How many people bought that 6000 and traded it in for another GM gem?They're all driving Toyotas and Hondas I bet.

Posted by alan agauas at April 22, 2005 08:46 AM

My family has owned three Toyotas over the last two decades -- a Camry, a Corolla wagon, and a Sienna. Wonderful vehicles, all of them, reliable and comfortable. We still have the last two; my older daughter is getting the Corolla after she gets her license.

The US-made vehicle we've had have all been flawed in comparison. For example, the Taurus we inherited from my late mother-in-law had a very annoying electrical problem (took them three tries to fix it). The visibility is terrible, important indicators on the control panel are obscured by the shift lever, the gas mileage poor, and it just feels clunky. I guess we should have sold it immediately, but the Taurus depreciates very rapidly.

The only GM cars I've ever owned were Chevettes (one bought decades ago, the other also inherited). I remember hitting a pothole in one of them and having one of the front shock mounts break (weak weld), slamming the top of the shock up into the hood. Oh, and the three starter motors the things ate.

I want a Prius (or whatever hybrid Toyota is making at the time) when I ditch the Taurus.

Posted by Paul Dietz at April 22, 2005 09:04 AM

Sorry, folks, but you're now going through what we in Britain have gone through already. In our case, car industry management was awful, partly (this is my personal guess) because the unionised labour force was so bloody-minded that no engineering student of any sense would want to work in that industry when he graduated. Now we see that the reliability figures for Mercs and BMWs are falling, so perhaps the German industry will be on the way out too. Toyota and Honda are what you buy for reliability and value. And that too shall pass away.

Posted by dearieme at April 22, 2005 09:10 AM

Which POTUS will sit back and not cut a deal while a hundred thousand deer-hunting union members in swing states lose their jobs?

The one who didn't win their state in the last election.

Posted by Anthony at April 22, 2005 10:31 AM

Interesting comments.

I wonder if the problems didn't start back in the early part of the 20th Century. Unions came about at least in part because the work force was being screwed so royally by management. Unions might have made things better for awhile. There's evidence to suggest that the way the workers were treated in early industrial capitalism was actually damaging to the company. Unions fought for a better deal, got it, and then went overboard because they didn't trust management. A similar dynamic could explain some of the damage that government has done of late.

My current car is a Chevy Camaro. I really like it quite a bit. It also meets my current needs. I don't like trucks. A really small car doesn't have much carrying space. I have to admit, though, I got the car at a deep discount. Because the company I worked for was a part of the GM empire, I got an employee discount. Because I was aware of the employee discount, I signed up for a GM Mastercard -- and paid for practically everything with it. That added up to a nearly $2K additional discount. Finally, there was a promotion the week I bought the car. I think I paid around $13K total.

What will I do when this one wears out? Damned if I know. The only GM car I currently like is the Corvette. But it is out of my price range. I really don't like trucks.

Posted by Chuck Divine at April 22, 2005 11:15 AM

I worked for a GM division for 10 years-Hughes Aircraft Company, a Division of GM Hughes Electronics. GM took over a cutting edge Aerospace company, with lots of high technology that should have transfered easily into automotive products (like Forward Looking Infra-Red and other night vision technology, Heads Up Displays and Laser Range finders to name a very few), ran by engineers who worried more about quality and technology while making a small profit, investing most of the money into R&D to stay on the cutting edge.

GM turned it into a company run by bean counters more interested in the bottom line than turing out high quality, high technology products or investing in R&D. Also, they could never quite figure out how to transfer the technology (probably because it would have impacted the bottom line to much if they transfer it).

Hughes was finally sold (for the most part-GM kept some of the Non-Military parts) to Raytheon and Boeing. After seeing first hand what GM did to Hughes I'm not surprised at all what is happening to them now. At the time they tended to think more about how to make something cheeper than worrying about the quality of the product. It ended catching up with them in the end at with Hughes and looks like it's finally happening to their core business.

Posted by lplimac at April 22, 2005 11:47 AM

My grandfather was never a GM fan, moving to Imperials when he needed a new car after Packard quit, but my father was mostly a Buick man (despite having had a Stutz Bearcat in college in the late 1920's) and a great uncle bougth only Cadillacs. My first car was a '33 Buick series 90 7 passenger sedan which had been my father's, and it was probably the most reliable GM car I recall our owning, despite the truly awful gas mileage.

As an adult I've had only European and (a couple of) Japanese cars, ranging from the fun, but unreliable TR-6 to the safe, not really so boring Volvos and Saabs we now drive. I must say it's almost inconceivable that I would ever buy an American car. They're not comfortable for me and the styling either stinks or is impractical: think of the hideous new Cadillac sports car (XRL?) or the hot new Chrysler that looks like a '52 Hudson that's had the roof chopped and has tiny windows. Argh!

Posted by Rob at April 22, 2005 12:21 PM

GM's bad management has deep psychological roots. Anyone interested might like to check out my paper "Narcissism project and corporate decay: The case of General Motors," on link at (www.sba.oakland.edu/faculty/schwartz/papers.htm) This paper is part of a more general exploration developed in my Narcissistic Process and Corporate Decay: the Theory of the Organization Ideal (New York University Press, 1990), which contains several chapters on similar processes at NASA.

Howard Schwartz

Posted by Howard Schwartz at April 22, 2005 02:31 PM

"I wonder if the problems didn't start back in the early part of the 20th Century. Unions came about at least in part because the work force was being screwed so royally by management. Unions might have made things better for awhile."

That's a theory. It's not correct but it's the one unions tell during labor negotiations. In fact organized labor has been nothing but a disaster for the American labor force and business. Compare Wal-Mart, which is violently anti-union to GM which all but grovels at the feet of organized labor: Which company is going out of business?

What people don't realize about GM is that they are not in the business of making cars so much as selling them. The poster above who was told GM makes its money on financing was close to the truth. In a typical auto loan you pay off most of the interest in the first 12-18 months or so. If you buy a new GM car every year then over your lifetime you NEVER, EVER pay off the first car you bought bought from them. There's no reason to build a reliable car because that just encourages you to hang onto it longer.

In GM terms buying a new car year is GOOD. Hanging onto that car until it's paid off is BAD. Running it until the wheels fall off is VERY BAD. They may very well have a point: If you look closely at Toyota, Subaru, Rolls, etc., all those car companies that have gone all-out to build reliable cars, they're not all that profitable, either, and in fact some of them are doing as badly if not moreso than GM. My wife drove her Toyota until they had to peel her out of it with the Jaws of Life. The Honda she replaced it with just rolled over 200K miles. Good for here but Toyota and Honda have sold her *1* car respectively each in the last 20 years. That's really not good for their bottom line. My parents, who as True Blue Americans only buy "Made in the USA" have averaged one new GM car every 2 years. As soon as something expensive goes wrong with one of their cars they're back to the dealership. They've been VERY good for GM.

Posted by Orion at April 22, 2005 03:02 PM

Several posters have expressed interest in the Corvette but balk at the price. One suggestion: buy used. The first two years' depreciation is pretty steep, so it is possible to get a pretty good deal if you are patient and willing to look.

In 1993 I bought a 1990 Corvette with 25k on it. I still have it, still love driving it, and have not had any major trouble with it. This year the fuel injectors finally gave out, but after 15 years and 75k, that's not bad.

In general, I'm not a GM fan, but I think most people would have to acknowledge that the Covette delivers the most performance per dollar. It is surely one of the GM brands that "works".

Posted by Eric C. at April 22, 2005 03:52 PM

I'm now 50 years old, and the last American car I've owned was a 1969 Camaro that I got about 1974. The engine mounts and the rear leaf springs broke (Check the records, both were quality recalls - not the result of teenage rage).

My folks last American car was a 1978 Malibu... on which we discovered the rear axle was mounted crookedly (left tire more forward than the right). My dad dumped it and bought a Honda Accord. He loved it. I remember him saying excitedly at one point that he'd put 90,000 miles on it and nothing had broken. A big deal in those days, when Consumer Reports was publishing the GM production codes so you could avoid cars built on Fridays or Mondays (again, you can look it up).

I mentioned my foreign car buying history at a party a week or so ago, and was surprised to find that 3 other people in the conversation (all younger) said the same thing. GM may build cars as well as the Japanese, but the interiors look like the junk they used to be, and frankly they're going to have to build spectacular cars to lure people back.

Chrysler has been doing a great job of this over the past few years, so it can be done. The Chrysler 300, although a Mercedes love-child, is a great looking American car.

The question is: Can GM make the leap that Chrysler has? The Vette still works but how many spiritual relatives does it have at GM? Don't wave the Cadillac flage at me - the CTS and STS are ugly. The Escalade is just another SUV....

I have to say that my money is on Pontiac folding, and the GMC. I think that GM will survive the next 20 years, but will be smaller than Chryser by that time.

Posted by Lokki at April 22, 2005 04:18 PM

Chrysler has been doing a great job of this over the past few years, so it can be done. The Chrysler 300, although a Mercedes love-child, is a great looking American car.

I have to say that my money is on Pontiac folding, and the GMC. I think that GM will survive the next 20 years, but will be smaller than Chryser by that time.

Posted by at April 22, 2005 04:18 PM

[...] Volvos and Saabs we now drive. I must say it's almost inconceivable that I would ever buy an American car.

Inconceivable? Apparently so... as that (to a degree) is what you're driving now, when you take into account the platforms and components shared between Ford-Mazda-Volvo and GM-Subaru-Saab over the last 5 to 8 years.

These aren't "American companies", folks, these are global conglomerates with brands... some of which need more help than others. No, they're not going to eliminate Buick -- especially since they just cut Oldsmobile -- as such a move would give them nothing between Chevy and Caddy.

Pontiac needs to return to its sporting image and offer true performance, not gimmicks with plastic cladding. Branding the Solstice as a Pontiac will help Pontiac more than it will hurt the Solstice. Of far more concern for the Solstice is GM introducing the Saturn Sky (Vauxhall Lightning) as it will more than likely scavenge Solstice sales.

Many believe the key to future success lays with niche vehicles, and this should be reflected by the brands, the identities to which they adhere, and their offerings. A brand of a conglomerate like GM should not try to offer everything to everybody (excessive stratification through models and trim levels), but rather target specific needs and specific demographics, and steer customers toward another brand within the conglomerate if none of their offerings meet that person's needs. Let Chevy be the basic people carrier, Caddy be a true luxury line, and Buick fill the midrange and minivan needs in between. Market the "greenest" vehicles through Saturn, and the sportiest vehicles through Ponitac.

If GM focuses on customer needs, makes more cars unique (in function, performance, style, and price point) and continues to improve quality, they'll be in a much better position when it comes time to address healthcare plans and pensions issues.

Posted by Steve at April 22, 2005 05:04 PM

lplimac,

I worked for the same company. It was interesting watching things go down hill at Goddard. Some of it was local management, but still things went down hill.

Howard Schwartz,

I'll check out your paper in the next week. If I can get your book, I'd like to check it out as well. My educational background is unusual. I'm the only person I know who's done grad work in physics and social psychology. That's a long story. I might be able to offer a few more insights. My work at Goddard was in information technology.

Orion,

Walmart's doing well. The people who work there are not. Personally I suspect Walmart's business model has huge flaws. There's a human tendency to dismiss people outside their group as flawed and inferior. Have unions always been bad for members? That's a dubious claim made by management. Similarly, some claims made by unions are also dubious. Still, though, the idea that unions are always bad for their members is doubtful.

Posted by Chuck Divine at April 23, 2005 09:34 AM

"Pontiac needs to return to its sporting image and offer true performance, not gimmicks with plastic cladding. "

Cut Pontiac some slack, plastic cladding has been on the decline. Grand Prix ditch the cladding back in '97. G6 doesn't sport any and the new mini van does not either, though it's still is appearance challenged...

Anyway. I agree the brands need to focus as you mention. But I think there is a problem with too many brands to try and make sufficient differences between them. I see Cadillac- Luxury (Lexus division); Chevy - plain Jane car company (Toyota); GMC - Trucks/SUVs (don't know why, but I like the GMC name plate over Chevy for these vehicles) and maybe Saturn - green/young fun car (Scion). That's all they should need at the most. Works for Toyota, Toyota/Lexus/Scion, and Honda, Honda/Acura and it works for Nissan, Nissan/Infinity. No reason GM needs 13 or what ever brands of cars.

GM has some nice features but they are spread out among all these brands. Consolidate the brands to concentrate the good features. Why does one car have a cabin filter and the sibling of an other brand does not? Why does one have gas shocks to hold up the hood and the other has the prop rod. One has a electro chromatic mirror, the other a plain old day/nigh flip switch. Remote Start! An option in Pontiac and cheap Chevy's, but not on the GMC Envoy or even the Yukon Denali? Come on. In the drive to try and differentiate the product line, they have taken a pool of good ideas and sprinkled them about. So diluted are these ideas the cars become lackluster/ordinary and not the class of the field. I love the HUD in my Grand Prix, why not in my Envoy? Instead I have headlamp washer that I find of no use except to drain my reservoir.

Reliablility? Two Grand Prixs I've owned have been great, depsite a lack of effort on my part to keep them running. Olds mini van - A nightmare, but when we talk to other people who own one of these vans - it's been great for them.

I think they are building some decent cars, but they need really up the bar to get people to notice and start buying. I just don't see that happening unless they make some major changes..

Posted by Chuck A at April 24, 2005 10:52 AM

I have never been a GM fan but I think the cars and trucks they build now are of good quality. I have several friends that have had good luck with Oldsmobiles in the past few years. My family has driven Fords since 1960 and have had good luck with them. I just got an '05 Mustang and have had a grin on my face ever since. The Japanese build good cars there is no doubt. The difference is that just like the Japanese electronic industry, their auto industry is subsidised by the government. Nissan was on its butt a few years ago but was bailed out by the Japanese adminstration. I dont even like GM but every single one of their cars is better looking than any new Nissan. Toyota and Honda are both boring to look at but not as gross as Nissan. IMO

Posted by AP at April 24, 2005 06:16 PM

Quote by Eric C.: "Covette delivers the most performance per dollar"

Actually the newer corvettes are hanging onto their resell values better. I've seen 2-3 year old vettes still hovering around $35,000-$40,000. Right at the moment one of the better bang for the buck cars performance wise is the Subaru WRX STi. Brand new about $35,000 will get 13.2 1/4 mile and 18-22 mpg. If you get one a year or two old they drop down to about $18,000. Thats if you like driving turbo-charged rice boxes with huge spoilers on the back.

I think one of the biggest problems with GM is the price of gas has hit them really hard. One of their best sellers is there Chevy 1500 truck which only gets about 12-15 mph. They've tried developing a hybrid but its only gotten them an extra 2 mpg improvement. Also, they move a lot of Suburbans which gets much worse mileage then that. Problem is that they really don't have a mid-size or compact size car with better gas mileage to fall back on like Chrysler does with the Seabring or Neon. Likewise, with Ford which has the Focus and Mustang with there high reliability and (excluding Mustang) better fuel economy.

Posted by Josh "Hefty" Reiter at April 25, 2005 07:59 AM

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