Saving GM

Yes, this is one case where Miata is NOT the answer.

From someone who works for the General:

GM's problems have little to do with the products , but more the perception of them. The media doesn't help either because a lot of you just eat it up.

"If GM built better cars they would sell more""

The problem isn't with sales , they are still # 2 to Toyota. The way a few of you portrait them is as if they sell 1000 cars a year. Not the case, look at world markets and beyond your own backyard. GM sold 665,000 units in China alone last year

The problem with GM doesn't lie in quality , you look at JD power and they are right up there. The do need to align their product more with current economic conditions and they are making the necessary changes to do so , but it does take time.

GM has always built big cars for the North American Market , Toyota has always built smaller cars (predominantly) So when the economic climate changes it's understandable that GM gets caught with it's pants down. Don't believe me . look at your parents cars , mostly big RWD North American cars.

Debates centered around the XYZ import you drove a billion miles without having to do maintenance vs the one american car you had that blew up is not an accurate way to determine quality or success. I have heard my fair share of import problems (I sold them for 4 years)

You can't look from the outside and see what GM's problem is , work here (and yes I do) for a week and you will see the problem with the company lies in it's infrastructure.

Too many brands , too many dealers and overhead in general is killing GM , not the quality or design. Sales of Malibu's and Cobalts are up over 140% vs previous Generation. It's not Toyota Camry caliber sales, but for a manufacturer to have that kind of substantial growth from one iteration to the next is monumental and a definite sign that people will buy American made cars , and that they are more then capable of building quality cars people want.

GM in North America has 7000 Dealers , Toyota has about 2000. I come back to toyota because they all strive to be like them, and rightfully so.

It's hard to build a perception of quality in a product when so many people are selling it. In the Buffalo area alone there are 18 GM dealers in a 30 mile radius.

The next problem is an over bloated portfolio of vehicles. It's easy to say " Get rid of GMC, Buick , Saturn" But then much like 10 years ago as Ford experienced , Dealer principals get pissed and start suing people.

They are already making the right moves to get rid of Hummer and offering dealers buyouts.

The oldest vehicle in the saturn Lineup is the Sky. There is talk of taking the Opel based Astra and the upcoming Opel invicta (Saturn Aura) and re-badging them both as Pontiac's and dump the G-Series fluff from the lineup. This would keep pontiac dealers happy as they look at the potential phase out of Buick in North America.

Currently GM produces over 50 different vehicles. I am one of the tech editors for brochures Toyota makes 17 (Im pretty sure) different models.

Mis-management and the inability to forecast market conditions of even the greatest companies can cause financial turmoil. Thats how GM still sells a ton of cars , yet is unable to turn profits.

GM sold 4,540,409 unit's last year, toyota sold 4,8xx,xxx It's not the cars that are killing GM's profits. Volume isn't an issue , management is.

JM

Well said Autoxr.

If you look at the OTHER cost issues with GM they are not just a GM problem, they are a market problem.

Fuel and energy costs rising, health cost management and the loss of value of the greenback.

Everyone is experiencing these problems.

Autoxr, another way to view GM's problems: how many plants do they have to turn out that 4.5 million vehicles and how many plants does Toyota use to turn out 4.8 million? How many plants does each have that are shut down but are still a drag on their assets?

GM has shuttered plants as part of their restructuring to meet the changes brought on by $4/gallon gas. Toyota has merely changed the truck plants to produce Prii. Has GM revamped any plants to produce Cobalts, etc? Not as far as I know.

In short, Toyota's management took a long view and realized that they could not be certain of demand, so they had their plants built to be flexible. GM didn't, and they are facing the results of that shortsightedness now.

Years ago we did a project for GM, and they were by far the most frustrating company we've ever dealt with. There were so many levels of buracracy, and no one could make a decision about anything. I can see why they need to restructure.

Autoxr has some interesting points. Very good stuff. I would argue that those inefficiencies in the system were brought about by years of good products and little drive for innovation and competition(same thing happened to all US auto manuf).

I will also argue that it is still a product issue. What is GM's core competency? They build and design cars. All else is ancillary. So design and build good product.. get lean with all ancillaries and it'll right itself.

It always comes back to the product, period. why else are they in business.

ignorant wrote: It always comes back to the product, period. why else are they in business.

Uh, maximize shareholder value? They're not too good at that either.

It's sad , but the vast majority of great GM cars aren't available to their core market (North America)

Dr. Hess wrote:

ignorant wrote: It always comes back to the product, period. why else are they in business.

Uh, maximize shareholder value? They're not too good at that either.

maximizing shareholder value is a result of good product management.

AutoXR wrote: It's sad , but the vast majority of great GM cars aren't available to their core market (North America)

Why is this? I'm sure that there are a lot of small reasons why GM sells certain vehicles here and not there, but what is the primary absolute reason?

Many times there are emissions and safety reasons for not selling a certain car in a certain market. The bean counters count the projected beanage income, weigh it against how many beans it will take to have a certain vehicle meet a certain market's requirements and if the pile of beans left isn't big enough the head bean counters go thumbs down.

Sometimes they go for it anyway and get burned, look at the GTO for instance. Neat car, GM put a lot of effort into it, it turned out to be a sales flop. Damn shame. I personally think it was because the car was priced too high.

...and why can't their non-US market cars be flexible enough to use parts from the US market cars and be US legal if needed. I mean why don't they try to reuse the same parts which not only lowers their cost but also makes the cars modular and flexible...maybe I've spent too much time in IT.

non-us markets such as europe, will not accept such a low level of fit and finish in the interior. They will also not accept the same cheap interior materials. Go sit in a euro focus then find a US one. crazy difference.

Ford tried that with the original FWD Escort, they called it the 'World Car'. The hood ornament looked like a squashed globe (if you squinted hard enough). Problem was, there were so many compromises it didn't really make anyone happy. I mean, if you were a Brit used to the original RWD Escort and then they tried to pawn this thing off as the replacement, wouldn't you squawk? There's a lot of things that go into putting cars in certain markets, not the least of which is cultural differences.

good point about the escort. I think if you look up the word "downgrade" in the dictionary, there is a picture of that car.

Jensenman wrote: Sometimes they go for it anyway and get burned, look at the GTO for instance. Neat car, GM put a lot of effort into it, it turned out to be a sales flop. Damn shame. I personally think it was because the car was priced too high.

It had a lot to do, IMO, with the initial dealer markups being pretty ridiculous too. Pontiac dealers finally had a car people wanted again after the demise of the TransAm and they didn't know how to handle it properly. Not many people were willing to pay a premium for the GTO but dealers around here still had "market adjustments" added on more than a year after they came out.

Not to mention the design was far from "driving excitement". I love the car, and understand that its design concept was similar to the original GTO (regular looking car with great performance), but it seems like GM didn't put any effort to integrate any sportiness into its ascetic cleanliness.

I had an '06 Impala that was nice. I now have an '08 Trailblazer that was a throwback to GM's old days.

I was born into a GM family (Oldsmobile) and married into a GM family (Fisher Body - WIllow Springs, IL) and I bought a couple of Nissan's along the way.....

I have to admit the GM appliance cars are mediocre, but I have had 5 GM cars that average 30,000-40,000/year and I really never have any problems. Of course, they only want to lease them for 2 years before they blow up!!

My problem with the big 3 and not just GM specifically is that they put the majority of their eggs into the SUV basket.

Talking a bit out of my ass here, but SUVs seem overpriced, (luxury SUVs anyway that everyone loves like the Escalade and Navigators and whatnot), and underengineered. Place a ton of metal around the passengers and the theory is you don't have to spend as much money on engineering structural integrity into the vehicle.

Ok, so SUVs make executive bean counters explode in their pants, this we know. And before I go any further, let me say I'm not one of those all SUVs must disappear nutcases, I just think that the market was oversaturated with them.

So this high oil price thing finally hits America, and the Big 3 are surprised. I hate to say it, but I can't empathize. Analysts everywhere were saying this would eventually happen. But the Big 3 are akin to those shiny happy persons driving on the freeway, when they see a sign saying "Lane ends. Merge". Instead of merging as soon as safely possible so traffic can flow smoothly, they stay in their lane trying to pass as many cars as possible, then slam on their brakes at the last minute.

The analysts, and anyone with common sense talking about oil prices going up are like the road signs, and GM, Ford and Chrysler ignored them.

I mean come on, oil is a finite resource. It is going to get more and more expensive with a few fluctuations here and there.

So I don't blame the bean counters for trying to make a profit with SUVs, but they should have seen this rise in fuel prices coming and prepared ahead of time for it.

The thing is, they sold so many of them, they couldn't imagine not selling them by the bushel.

I guess the point of my poorly structured rant, (it's really early), isn't the product itself, it's the attitude of the execs.

This whole idea that they were "caught with their pants down" is bullE36 M3.

Another analogy:

Hours before that Tsunami hit on Dec 26 a few years back, a scientist reported a massive deep sea quake, and warned that a tsunami was coming. The government of whatever nation got hit worst, (Thailand? My memory is a failure), told him to keep his damn mouth shut, because that would kill their tourism industry.

Then the media was all reporting, "oh this tragedy came out of no where" and whatnot, but no, a lot of people's lives could have been saved had the government there not been a bunch of jackasses.

If the Big 3's bean counters hadn't commited similar but less deadly jackassery, they wouldn't be balls deep in E36 M3. Maybe only ankle deep like all the other big name automakers.

I agree with whoever else it was that said that there aren't enough car guys in executive positions.

Some time back (maybe 15 years ago), one of the car mags said the #1 problem with the manufacturers (they used Ford as the prime example) was they referred to their cars as 'units'. I have to agree, when the product quits being cars and starts being units for profit the slippery slope gets even slipperier.

That still does not negate the fact that the #1 sellers for all the manufacturers are the 'boringmobiles', and those subsidize the enthusiast cars we all love. I think maybe Mazda is the only one who can truly claim the Miata actually makes money all by itself. I guaran-damn-tee you the RX8 is subsidized by all the 3,'s, 5's and 6's sold.

MitchellC wrote: The thing is, they sold so many of them, they couldn't imagine not selling them by the bushel.

After the fuel crises of '73 and '79 they should have seen it coming. When those hit, they were also caught with a line-up full of large, gas-guzzling vehicles. It's history repeating itself.

As I have said before, GM needs a sign hanging over every door that says "Good Enough Isn't!!! Stop Making Crap!!!"

Now, their current crop of cars may very well be up to average quality, except for the interiors, of course. But they still have that 30 year history of making garbage to live down. Families used to be "Chevy" or "Ford" but after that first B210, Rolla and CVCC came over, people started to realize that cars didn't have to fall apart Bluesmobile style at 90K miles.

Will GM survive? I think so. It's gonna hurt. Us, mostly, as usual, but I think GM will survive. I think Ford will survive too, but top management is going to have to get back to thinking about what the company should be doing (making cars) and less about this month's numbers. The energy crisis we are in now should not have been a surprise to these people. We haven't built a refinery in 20-30 years. The PG is going up in flames and has been since 9/11. Duh, oil prices are going to go up. Then there's Albert Arnold Gore Jr.'s "Global Warming" hysteria which is really a BS tactic to get the US off of oil. I don't mind getting off of oil, I just don't like being BS'ed. So that's 7 years advance warning they had to bring out a smaller car than a monster SUV. And GM has the technology. They make cars all over the world: Africa, Far East, etc. They know how to do it, they just choose not to.

Oh, and what good are those GTO's when some 18 year old 4 cylinder English car can walk around them on the interstate?

I am not saying the problem with GM is Executive pay, but this is rather interesting from 2005

http://www.companypay.com/executive/compensation/general_motors_corp.asp?yr=2005

http://www.gm.com/corporate/investor_information/corp_gov/officers.jsp#