General Motors

[time]

General Motors bankrupt.

It's hardly a surprise, but seeing this bald headline about an hour ago brought home the enormity of it.

I tried to imagine how people would have viewed such a headline in previous decades. The famous quote is: "for years I thought what was good for the country was good for General Motors and vice versa". Meaning of course, that GM was a critically significant employer. It's now a critically significant pension funder, but I doubt that anyone here really believes it can be successfully reinvented as the government hopes.

GM is hugely important in Australia as well, but even with the most popular model in the country, the local arm is on life-suport. Almost all carmakers are taking a beating, but GM is in no shape to weather the storm, even with a bankruptcy restructuring - IMO anyway.

 

[CougTek]

According to one local economist, the main problem with GM's viability is the fact that even if it is well reorganised, it will probably fail eventually anyway because less cars are being sold than just two years ago and it won't reach past sale rates for several more years. In 2007, 17 million vehicles were sold. Last year, mainly due to the economic crisis, only 10 million found a taker. And it should not climb to 15 million units sold for at least five years. There will be far less space for GM in the market than there used to be and most of the competition is in a better shape than the american giant.

The only thing I can see saving GM is if Americans start buying their cars for patriotic reasons. That and the realisation that they will own 60% of the new GM so in reality, a car bought from GM will give back cash to the American citizen. Some of their cars are not half bad so someone wanting to help its country should be able to find a potent car in GM's lineup.

The new Camaro is a damn good sport car for the money they ask for it. The Volt, however, will be a fiasco IMO (still too expensive at 40K$). The new Cruze better be a very competitive car for GM because small cars will be the bread and butter of car companies in the upcoming years (people don't have as much money as they used to).

 

[Mercutio]

GM needs to make cars people want. It's just that simple. They need to make a Civic and an Accord, in at least the associated level of quality. People talk all day long about the "cars Americans want" with their big engines and enormous interiors.
But Americans buy Civics and Accords. They would rather have a smaller car with a hassle-free maintenance than a large but poorly made vehicle.

And until somebody at GM can figure that out, they will continue to have problems.

Also, I found out over the weekend that Chrysler's Detroit HQ building was designed in such a way that it could easily be converted into a shopping mall. What a statement of confidence THAT is!

 

[Stereodude]

Also, I found out over the weekend that Chrysler's Detroit HQ building was designed in such a way that it could easily be converted into a shopping mall. What a statement of confidence THAT is!

Around here everyone knows that. It was built during the period when Chrysler was in bankruptcy last time and it was unknown if they would survive. However that might not have been the best move. The last thing that area needs right now is another shopping mall.

 

[Stereodude]

The only thing I can see saving GM is if Americans start buying their cars for patriotic reasons. That and the realisation that they will own 60% of the new GM so in reality, a car bought from GM will give back cash to the American citizen. Some of their cars are not half bad so someone wanting to help its country should be able to find a potent car in GM's lineup.

They shouldn't count on that. Even if there is some of that, there will be an equal number of people who won't but a GM car for the same reason.

What might save GM will be the gov't effectively forcing people to buy their cars via legislative manipulation. With the current crowd in Washington I wouldn't put it past them.

I still want someone to explain to me how closing dealers will help make GM and Chrysler more profitable.

 

[paugie]

O.T.

"Indicators" of the global financial crisis in this part of the world:

1. Enrollment in private schools is DOWN! Parents are transferring kids to public schools inspite of them being overcrowded, with over-worked and underpaid teachers. They just can't pay the tuition and would rather have the children cope with sub-standard learning conditions.
2. Enrollment in Trinity University's Nursing College has dropped from 30 sections last year to 10 this year. This school is perceived to be an adjunct to St. Luke's Hospital, touted to be among "world class" hospitals when it comes to care and equipment. Please note that this is in a country known for "supplying" nurses and caregivers to the world.
3. Enrollment in pre-schools we know has dropped. In our church pre-school (which is quite popular in the community because of its reputation of turning out kids who love to learn and who excel in grade school due to a superior educational foundation) still has only 40 enrollees 12 days before classes start. We are hoping for 55 enrollees.
4. My sister's glass-aluminum installation business is struggling. A few competitors in the neighborhood have closed shop.

 

[Bozo]

Overall the quality of American cars is just as good as anyones. If Hondas are so good, why do they have repair shops attached to the dealership? And, why do you have to wait a week or more to get an appointment with the service department?
The reason I switched to Japanese cars is the US auto makers complete lack of service and support after the sale. I'm tired of being lied to and made a fool of. If it's broke, fix it, don't tell me 'they're all like that'.

 

[Mercutio]

My ex had three transmissions AFTER the original one put in her Ford Focus, in 175,000 miles. The AC died at 80k. The power steering went out at 87k. I bought that car new for her. It was never in an accident. It was just a POS. I don't even want to THINK of putting up with something like that in a vehicle.

Why take the chance?

 

[CougTek]

GM needs to make cars people want. It's just that simple. They need to make a Civic and an Accord, in at least the associated level of quality.

While they don't have anything to counter the Civic, the Malibu with the new six-speed transmission is nearly on par with the Accord.

 

[Tannin]

I've owned 4 GM cars, two made in Australia, two made in a variety of places and bolted together in Spain. Two Japanese cars, and one German.

Build quality wise, I'd rate the Japanese ones best, followed by the 4 GM ones, with the German car last .... but very little in it. None of them was a lemon, they were all goodies. I've never owned an American-built car and probably never will, but I'd happily buy a GM poduct tomorrow if I needed a car and GM made the sort of car I wanted. (They don't, but I have fairly specialised needs, so I don't think that's really a criticism.)

The two smal GM cars I've owned, both quite recent models, were truly excellent products: well-made and brilliantly designed, with outstanding attention to detail at the design level. I dunno what GM do in the States, but internationally they get a lot of things right.

 

[Handruin]

I've never owned an American-built car and probably never will, but I'd happily buy a GM poduct tomorrow if I needed a car and GM made the sort of car I wanted. (They don't, but I have fairly specialised needs, so I don't think that's really a criticism.)

Even though you say it's not really a criticism, it's a mutual feeling I share with you. GM doesn't make a car that meets my needs either and my needs are less specialized than yours. That still says something.

 

[ddrueding]

My needs are fairly specialized as well, you'll be seeing something in the "don't want to buy a used car" thread soon, but the current winner is an Audi Allroad 2.7T Quattro. I suspect that would work well for Tannin as well.

 

[Chewy509]

I've owned 4 GM cars, two made in Australia, two made in a variety of places and bolted together in Spain. Two Japanese cars, and one German.

I own a Holden badged vehicle (but is made by Isuzu), and my work car is a Holden Commodore Sportswagon.

My personal car, build quality and performance, I have had no issues with. The Holden while all flashy on the exterior, when you get underneath the finishing and gloss, is a different story.

All the rest of the cars I've owned driven have all been Japanese made, and have no issues with them. Since I travel a bit for work, I get to drive a few rentals, and as a rule I've found the Japanese made cars to be the higher end of build quality, followed by Australian made, then European made, then Korean coming out on the bottom. Haven't had an American made vehicle to drive, (except a military Hummer when I was serving in the army, but that's a little different).

As a side note, my boss owns a Jeep, and in the past 3 years has had in the shop for some major repair work, eg loss of power steering, loss of aircon, some minor electrical fault, etc. Plus his fuel usage is rather high, at around 15l/100km on the highway, and upto 20l/100km in city traffic.

 

[ddrueding]

Something else the American mfgrs need to realize. They had a really bad build quality rep for a long time. I believe they have fixed it now, and are in fact building cars that are equivalent to some euro/asian cars. The problem is that they have a huge amount of momentum and reputation to deal with; simply being comparable isn't good enough. The Americans need to do what the Japanese did and the Koreans are doing; be cheaper and better, win over the customers.

 

[Handruin]

They could also try what Kia/Hyundia have been doing for years and extend the warranty to 10 year/100K miles to try and build some more confidence. Even if the cars break, it eases the pain a little bit when it can be repaired for free.

 

[Fushigi]

IIRC GM does offer a 5 year/100K warranty on at least some vehicles. But one problem right now is consumers wondering if the warranty is even any good. Perhaps GM needs to additionally provide 3rd party or government backing for the warranty. Maybe extend the warranty service provider network to include select national chains like Meineke and Firestone to raise confidence in the wake of dealership closings.

Also, if I were to buy an "American" car today, I'd probably lean heavily towards Ford. Sure, they aren't without financial problems but at least so far they've managed to avoid taking bailout money, which as a taxpayer represents my money and potentially my future debt responsibility via the federal deficit. GM & ChryCo can't say the same. Yeah, I know, we should buy GM & ChryCo cars to help them repay the money, but I'm more pissed that the bailout was needed in the first place.


I quoted "American" as that's a fuzzy term WRT carmakers. Personally, my preference is a car that was built in America regardless of the label. So a Canadian Chrysler and a Mexican Ford get less consideration than an Ohio Honda, Tennessee Toyota, Illinois Mitsubishi, or Alabama Hyundai. I'd rather support the labor force building the car, something I can directly observe as contributing to the US economy, than worry about where the corporate profits go. Especially since the profits go to the shareholders who can and will be internationally diverse.


Since Chewy mentioned Jeep, I'll note that Chrysler is doomed unless the Fiat influence can do something quickly. Chrysler has 3 vehicles, last I checked, that get 30MPG. Nothing gets higher. One of the three is a Dodge rebadge of the Chrysler version. Pretty pathetic IMO, especially when others have midsize & full size sedans (both the Hyundai Sonata and sans-sunroof Honda Accord are full size) than get over 30, let alone what their compacts get. And that's w/out including hybrids. Also, Chrysler's love affair with retro styling is fine but they need to realize it limits the appeal of their vehicles.

 

[Stereodude]

The gov't is backing GM's and Chrysler's warranties. Obama announced that months ago.

I will certainly be less likely to buy a GM now. I was never a fan of Chrysler.

There are a few GM cars I like and I can afford to buy them, but I don't feel buying them would be a prudent course of action with the economy what it is.

The Pontiac G8 GXP is pretty nice, but...

 

[time]

You do realize that the Pontiac G8 GXP is an Australian-designed and built car?

 

[Handruin]

Buying American really is a misnomer. I've had this argument countless times with my family members because they are dedicated American car buyers. Their Chrysler product was built in Mexico. I bought a car from a Japanese company, but it was built in majority by workers in Marysville, Ohio. I feel like it's a win win for me to get the Japanese car I want, and workers in the US get paid to build it for me.

 

[Will Rickards]

Assembly is probably a small part of the car process. You need to look at where the parts came from, where the raw materials for those came from, where the testing facilities are, where the design facilities are, where the money goes when you buy the car. But I wouldn't bother with that myself, I'd be looking to a journalist to produce that type of information.

 

[Mercutio]

The big Japanese companies have a lot of their engineering done in the US, too.

 

[Howell]

Even Lexcorp is affected by the current financial crisis.

http://www.funnyordie.com/videos/f26c4046b0/lex-luthor-bailout-with-jon-hamm

 

[Howell]

You do realize that the Pontiac G8 GXP is an Australian-designed and built car?

I was wondering if Oz "GM" had design capabilities. When you combine that with your earlier statement that "GM" is very present in Oz then it surprises me that the option of selling that portion of the company is not on the table.

You know, shrink the company back down to something that's not "too big to fail".

 

[Stereodude]

You do realize that the Pontiac G8 GXP is an Australian-designed and built car?

Yes, I realize that... Just like the GTO that preceded it.

 

[Handruin]

This is an interesting article titled: When GM First Messed Up.

 

[Fushigi]

Before reading the article I was going to say the Chevy Citation, but I think the author is right in that it started before even that.