By on September 8, 2009

Now there’s a question… and here’s part one of DocumentaryHD’s video attempt at answering it.

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39 Comments on “Documentary: What The Hell Happened To GM?...”


  • avatar
    tscurt

    GM left the building 38 years ago with a few exceptions along the way. Why’d the motoring press wait until now to ask this question???

  • avatar
    CyCarConsulting

    What happened?
    1. unions
    2. medical insurance costs
    3. retirement packages
    4. fat executive yes men
    5. big retirement packages and bonuses
    6. A glut of bean counters with no passion for cars, only Wall Street.
    7. A public more interested in getting the latest iphone, than how they got to the store.

    The list goes on.

  • avatar
    seabrjim

    Refrigerators, locomotives, earth movers, diesel engines, the list goes on and on what they frittered away. GM used to make EVERYTHING. Good question, how on earth did they do it? How does one screw up this bad? Could it have been planned?

  • avatar
    Dynamic88

    What The Hell Happened To GM?

    Management. Or lack thereof.

  • avatar
    jmo

    I had an old college buddy visting from Germany, he’s German and an engineer and he for BMW in Munich. He wanted to go to the Apple store to get an iPod he went for the iPod touch and his only comment – “Now that’s some engineering.”

    There are certain products that America makes that are know throughout the world for being the best – the 777/787. Pharmaceuticals, military equipment, nearly every computer in the world runs on Intel or AMD chips powering either Apple or (90% of the time) Microsoft software.

    We can be the best. There was a time when the Emperor of Japan drove(well…was driven in) a Packard.

    Why and how did it all go so horribly wrong in the automotive industry?

  • avatar
    Robert Schwartz

    They should have read TTAC:

    “‘The jobs are gone:Documentary sheds light on human side of GM plant closing in Moraine” By Nick Chordas in THE COLUMBUS DISPATCH on Monday, September 7, 2009:

    Given that almost 1,100 autoworkers in Moraine were about to lose their jobs, it’s hard to believe that The Last Truck: Closing of a GM Plant began in comparatively innocent times.

    “Someone mentioned the possible bankruptcy of General Motors when we started shooting in June (of 2008), and everyone, including us, said, ‘Oh, that’s not going to happen,’ ” said documentary co-director Steven Bognar.

    “The idea of GM going bankrupt was like the U.S. government going bankrupt: It was really inconceivable.”

  • avatar
    RogerB34

    True that GM management and UAW destroyed the product. 70 percent GM management and insistence on Detroit Iron when the market was changing. Other major factor is change of The People. The nation has transitioned to democratic socialism. That’s why Obama and Democrats in Washington. USA is no longer a nation of future optimism. It looks inward and magnifies faults.

  • avatar
    PeteMoran

    What The Hell Happened To GM?

    Denial in every direction.

  • avatar
    seabrjim

    You might want to hold off on the 787 comparison. Its almost 3 years late for a reason. Mainly outsourcing. Many who worked on the project said they will not fly on one. Hey, kinda like GM!

  • avatar

    Actually driving down any American road in ANY vintage car serves as the ultimate ice-breaker. I travel often (and for long distances) in my old Jaguar and it makes friends for me everywhere I go.

    As for what happened to GM? It really boils down to one thing: They have never, ever, been able to muster the corporate will to build anything OTHER than big, RWD cars. They can’t build small cars. They can’t build economical cars. They can’t make anything of quality once off the traditional GM platform.

    –chuck

  • avatar
    Matt51

    Internal politics. Chevy could not stand Pontiac or any other GM division in the 1960′s. Bean counters running the business. Escalating health care costs, when all foreign competitors health care was provided by their government. Arrogance, as Lee Iaccoca pointed out, bad at Ford, but GM invented arrogance.
    American aerospace has not replaced the last generation of engineers to “save money”. According to Aviation Week & Space Technology. The experience is gone. So Boeing’s solution? Outsource. Boeing is probably even more mismanaged than GM. Dreamliner will kill Boeing. Airbus has had tails fall off, as they did not understand composites. So now Boeing wants to do an all composite airliner. Remember Deuce Bigelow’s line when people saw sharks in the water “Hey, this is Mexico, they know what they’re doing”. Just think of GM or Boeing management “They know what they’re doing”.
    Apologies to Mexico, the insult is not directed at them.

  • avatar
    golden2husky

    Matt51: Well said. America no longer holds engineers in high regard. And it starts early on. Kids eschew math and science as nerdy. Engineering is probably one of the most difficult undergraduate programs. The responsibility of your designs places stress on you that most other careers don’t. The pay is not commensurate with the effort required. And outsourcing has destroyed morale in many engineering firms and government agencies alike. Until America wakes up and begins to place proper emphasis on those that make a high tech life possible nothing will change.

  • avatar
    ajla

    They have never, ever, been able to muster the corporate will to build anything OTHER than big, RWD cars. They can’t build small cars. They can’t build economical cars.

    I wish GM would go down by building big RWD cars. At least that way they could claim they died on their feet doing what they do best.

    As it stands right now, GM’s last gasp is filled with ugly compact CUVs, underpowered Buicks, no Cadillac flagship, a $40K PHEV, and Daewoo designs.

    That’s no way to go.

  • avatar
    mikey

    Its a rare moment that I agree with a PeteMoran comment. But “denial in every direction” certainly answers the question.

    I found an interesting stat found in our local union paper. In 2007, Oshawa had three plants running flat out,for a total of eight shifts a day.Just under 4000 cars and trucks rolling off the line every 24hrs.

    Today? Camaro/flex one shift 440 a day. The Impala runs at about 70% of its capacity two shifts at less than a thousand a day.

    To keep your job on the production line you need a seniority date of Oct 1990.

    Yes Pete, Denial is much more than a river in Africa

  • avatar
    PeteMoran

    @ mikey

    We must have agreed on something before, surely.

    How beautiful Canada and its people are perhaps???

  • avatar
    jmo

    And outsourcing has destroyed morale in many engineering firms and government agencies alike.

    The good news is that with the value of the dollar no longer being as manipulated by the Japanese, Chinese and Indians, outsourcing makes far less sense than it used to. When you factor in the time difference, language barrier and exchange rates, many companies are finding that outsourcing has cost them far more than it saved.

    See Boeing as a prime example of that.

  • avatar
    HEATHROI

    Matt51: Well said. America no longer holds engineers in high regard. And it starts early on. Kids eschew math and science as nerdy.

    Its supreme in televised entertainment though. Vince McMahon, Paris Hilton, Miley, Britney and Lindsay are doing their to keep the US afloat.

  • avatar
    derm81

    50 years from now do you think anyone will stop and check out a 2007 Prius on the street and snap pictures of it and drool over it?

  • avatar
    lw

    GM stopped doing things right because it didn’t need to anymore.

    Let’s say the last time they really cranked out amazing / romantic rides was sometime between 1965 – 1975. (I’m being generous with the 1975 as the end of the timeline)

    GM belched crap from 1975 until 2009 before going bankrupt.

    You could have started out of college in 1975 at age 21, made mostly crap for 34 years and retired at 55 with full bennies. You were never challenged to do anything special… Never a worry… GM was rich.. No matter how much crap you and all your buddies belched, another check was just a couple weeks away.

    So 2009 comes and we’ve got problems.. No more cash… oh wait the government fixes that and doesn’t even fire top management.

    So far the joke is on anyone who didn’t find a way to suckle some coin from the GM teet along the way.

  • avatar
    Tosh

    They got sucked into the perception gap?

    (And I mean sucked in every sense of the word.)

  • avatar

    Derrm81 50 years from now the Prius will be viewed by most people as we now view most 1959 mainstream non-exotic, non-sports and non-luxury cars. Something different something out of the ordinary and something you don’t see every day. Yes most people will think it is neat because it will be different than what they are use to but no they won’t drool.

  • avatar
    Aqua225

    I also agree with Pete Moran.

    I saw GM shed off things they dominated over the last 20 years, saying they need to concentrate on their core competency: cars. But while I liked a few of them, and obviously other fellow Americans as well, they were still bleeding market share and not learning from their mistakes.

    It’s hard to imagine that GM once made the dominate diesel-electric locomotive, that singlehandedly killed the steam locomotive market for railroading. They whittled away their own market share to GE in that space (much in the same way they alienated US customers of their cars), not with lack of power, but poor customer service, etc.

    What GM needed was a true bankruptcy threat/actualization. A punch in the gut that would make them puke out the dead stuff inside, and allow the healing to begin. But politics saw to it that that process would never occur. As it is, nothing was learned, and they cannot see their own erroneous approach to business.

    GM will be put to bed, I think, permanently after 2 or 3 more bailouts and subsequent shrinkages.

    I just hope someone buys the Vette name (if it isn’t too eroded at that point) and builds a non-taxpayer-funded version of it and it is once again a world class car. Though I really enjoy my ’02 LS1 Camaro, I couldn’t expect anyone to take the Camaro name along with the Corvette name.

    Of course, I also hang to the smidgen of hope that they WILL learn, and they will become a real power in cars again, but I know this is improbable.

  • avatar
    ZoomZoom

    Aqua225 :

    … What GM needed was a true bankruptcy threat/actualization. A punch in the gut that would make them puke out the dead stuff inside, and allow the healing to begin. But politics saw to it that that process would never occur. As it is, nothing was learned, and they cannot see their own erroneous approach to business. …

    This is priceless and true.

    I liked Tim Allen’s remarks in the video, too. He sounds like a TTAC’er to me!

  • avatar
    ConejoZing

    When my friend was over for a visit, he rented a Chevy HHR. And you know what? It was an absolutely alarmingly ok vehicle (despite the small windows and blind spots). Quiet, fun… had this sunroof thing, fair amount of oomph. Nice steering wheel.

  • avatar
    stars9texashockey

    As mentioned in the video, many/most drivers now consider a car an appliance–an “evil” necessity.

    Car enthusiasts (speaking for myself) are just tired of the whole “how to save GM” story. Ditto for Chrysler. I really don’t care any more. The only real impact on my life will be that my wife’s current Impala company car will most likely be replaced with a
    Camry. Both boring, one a little better built than the other.

  • avatar
    Commando

    I’ll tell you what happened.
    GM itself did not %^$# up.
    When the post WW II, baby boomers grew up and ran America, they were spoiled rotten brats because they were raised in an era where it was almost impossible not to sit back and scheme on how to make a fast buck and find that greed really, really was good.
    This is what the party looks like after everybody has gone home and no one bothered to shut off the lights.
    Now, third world countries look at America and they think that the USA, circa 1961, is the real USA. So they flood into here expecting the land of the gold the same way the Japanese come here wearing cowboy boots and ten gallon hats expecting that the ‘wild west’ still exists.
    America is now the most educated third world country and declining faster than the Roman Empire. You want to be where all the action is. Move to China. Just be prepared to work in the condition that existed in the US at the turn of the century.

  • avatar
    rpol35

    Government involvement/interference will keep any manufacturer, GM or not, from ever building cars that can stir passion like a ’62 Vette. Homogenous, bland designs are what people favor because most don’t know any differently; that’s why the Vette garners so much attention. Undeniably, the newer Corvette is faster, safer and more environmentally friendly but it still as that “Government Approved” look about it.

    As for GM itself, I guess it is the “Peter Principle” at work, one rises to their level of incompetence. It’s truly an amalgam that conspired to knock them down, management, labor, government, competition (not much of a problem when you own 51% of a market)changing societal tastes and they, GM, didn’t react well to the obvious evolution that impacts all organizations. U.S. corporations in particular seem hamstrung by this phenomenon i.e. GM, Chrysler, Goodyear, AT&T, Bethlehem Steel, U.S. Steel, Zenith, RCA, Westinghouse and on and on. GM was so huge and so well recognized globally that their descent and bankruptcy becomes that much more spectacular.

    Great documentary by the way, I’ll look forward to future installments.

  • avatar
    GarbageMotorsCo.

    As mentioned above, GM is a leader of nothing. The Volt could be looked on as a segment buster but by the time it arrives with a 40 or even a 45 thousand dollar sticker price, it (like the Camaro and other concepts before it) will be old news and other automakers will have their offerings available sooner and for less coin.

    And once again Government Motors will throw down the “perception” card and continue to wonder why the rest of the Country decided not to wait up for them.

  • avatar
    Pch101

    I’d have to give the documentary a B-. It takes the kitchen sink approach to the problem by talking about a little of everything, but doesn’t figure out what mattered most or how the pieces fit together.

    It’s fairly simple: When GM beat Ford and rose to dominance, it was because they had nailed the uses of style, features and branding to sell cars. That was a good strategy for thirty years, but GM became arrogant to the point that it was incapable of identifying when that strategy might outlive its useful life and need to be changed.

    The imports — first VW, then Datsun, but ultimately Toyota and Honda — redefined the market toward making build quality and finesse the new priorities, while Mercedes and BMW redefined the high end away from plush and toward handling. GM failed to change to adapt to this new market, losing the ability to rely so strictly on style, features and branding to dominate.

    As the public taste shifted, GM responded first with denial, then by cutting prices with the widespread use of incentives. That’s pretty much was the beginning of the end. When GM lost pricing power, that destroyed its margins, which guaranteed a future of losses. That’s ultimately a management problem.

    All of the other stuff is cosmetics. Had GM maintained both market share and pricing power, the labor costs would have not been an issue, because the profits could have supported them. Had GM been a nimble, responsive company that wasn’t so arrogant or narcissistic, then it would have dealt with the OPEC crisis by changing its strategy to make cars to suit the new market.

    Companies can’t survive if they don’t adapt to change in their environment. The modern world has only sped up the cycles, so flexibility is more important than it once was. Once GM beat Ford, the management stopped evolving and continued to do the same old, same old until it wasn’t going to work anymore. Margins were critical, and they let theirs disappear. It’s ultimately a cultural problem, and everything else is just a symptom of that.

  • avatar

    “The idea of GM going bankrupt was like the U.S. government going bankrupt: It was really inconceivable.”

    That’s GM’s problem–arrogance. Any company can fail.

    John

  • avatar
    Autosavant

    Excellent and very entertaining video.

    Amazing, how the mighty have fallen! It must have taken Humongous Screwups to go from being the Dominant company, and the largest in the WORLD, to BANKRUPTCY.

    It does not take ONE village idiot to do that. It takes, as Hillary might out it, a whole VILLAGE of… Village idiots… a village with almost one million population!!

  • avatar
    geeber

    derm81: 50 years from now do you think anyone will stop and check out a 2007 Prius on the street and snap pictures of it and drool over it?

    If the person appreciates brilliant engineering, yes.

    From a style standpoint – maybe not. But the Prius will still attract attention in 50 years, because, by 2059, it will be “old.”

    Park a 1959 Rambler American on the street, and it will attract attention. Why? Because people recognize it as an old car, and, thus, as a reflection of the way people lived in 1959. People sure don’t look at it because it is beautiful.

    Most GM cars in the 1950s and 1960s are not THAT much more exciting than the Rambler American. For every 1959 Cadillac Eldorado Biarritz or 1968 Pontiac GTO, GM sold a truckload of Chevrolet Biscaynes or Oldsmobile F-85 sedans that were hardly the epitome of excitement.

    But people look at them today because they are a reflection of the technology of that time, as well as the desires and priorities of the people who bought them. Just as people will view a 2007 Prius or 2009 Accord in 2059.

  • avatar
    Commando

    @ Geeber;
    “…Just as people will view a 2007 Prius or 2009 Accord in 2059.

    You just gave me a reason why I’m glad I’ll be dead by 2059…

  • avatar

    Love how when this video finishes, fourth from the left in the YT vid selections is: “When Dinosaurs Roamed The Earth”! :D

  • avatar
    windswords

    “The idea of GM going bankrupt was like the U.S. government going bankrupt: It was really inconceivable.”

    Unfortunately, that’s not so inconceivable anymore.

  • avatar
    geeber

    Commando,

    People were saying the same thing regarding 1950s cars in the 1950s. At that time, purists believed that the only true “classics” were the ultra-expensive, multicylinder cars built prior to World War II.

    Read what people were saying about cars built in the late 1950s when they were new. It wasn’t always very flattering.

  • avatar
    jonny b

    It’s not the unions or management or the government or healthcare costs. It’s design, plain and simple. The competition has simply out-designed GM in almost every market segment for 30 years. Honda and Toyota designed better econo cars. BMW, Mercedes and Lexus designed better luxury cars. Ford designed better trucks and SUVs. It’s not even that surprising. Good design is hard to pull off consistently. It’s streaky. You need to constantly re-commit yourself to good design. Even then it requires a little bit of luck and magic. And if you get out-designed for a long enough time so consistently you lose your credibility. That’s the end of your brand. You musn’t cry about it. It happens every day.

  • avatar
    PeteMoran

    “The idea of GM going bankrupt was like the U.S. government going bankrupt: It was really inconceivable.”

    Unfortunately, that’s not so inconceivable anymore.

    Not a chance. There’s still plenty of good land. You could sell Alaska back to Russia. Hawaii/Guam etc to Japan (they always wanted it).

    Canada might buy Washington State (Microsoft and Boeing would love to move).

    New York could be sold to Israel. Oh wait, scratch that.

    Texas could be sold (given?) to Mexico. How ironic would that be!

  • avatar
    Aqua225

    johnny b:

    I disagree that its design. It’s not. A lot of people buy a lot of bland cars from Toyota everyday. Even with GM in the dumps, a lot of people still buy a lot of bland GM cars everyday, so I don’t think the “design” argument is much of the equation to GM whittling itself away to a non-contender.

    After all, locomotive were GM’s forte, and even as the business dwindled, horsepower and reliability of their locomotives were marching forward (except maybe the SD50 and SD60). They had good AC traction in the game early. Then they gave up… on their customers.

    Reliability was not the problem, but even the best built machine will eventually break. That’s when the quality of your customer service comes in. And in GM’s locomotive division, it was my understanding that GM expected you to buy a 2million dollar vehicle, and if it broke, deal with a bunch clueless people to have it worked on.

    It must say something that the people who EMD now (Greenbriar Capital, I believe) have stabilized the business and they are once again competing with General Electric.

    Also, GM, rather than fixing the problems in the division, just decided to dump it. SO they learned nothing, except ruin something and dump it while the price is good.

    They did that to a lot of things they touched.

    To me, the top management at GM is the one and only real problem, and unfortunately, they haven’t really experienced any damage as a result of the bankruptcy. Many will ride it to the bitter end, and then move on to jobs in other industries where they will spread their disease.

    The engineers (between the labor unions and the management), will suffer slow burnouts as they watch their coworkers layed off in wave after wave, and themselves have to take on more rolls, and take more complaints since their work quality will drop with the increased pressures of the job.

    Meanwhile the union man will get his bailout from the Government.

    The top level management should be marched in front of a judge to make summary pronouncements on their malfeasance, and be condemned to never work as a professional EVER AGAIN.

    I can’t blame the union guys, even though their support of the socialist path is truly annoying, since they only bargained for as much as they could get. It was GM management who did the giving.

    After all GM management sums up all problems at the company:

    (1) Small cars no one wants.
    (2) Union deals that make me want to be a union man.
    (3) Quality problems across the board.
    (4) Bleeding money: GM should have been able to sustain this small economic downturn, had they been prepared. Obviously, they weren’t.

    I just can’t comprehend how these people remained in power or how they sat down at their polished mahogany boardroom tables and just watched it burn, and did nothing.

    On my paranoid days, I think it must be conspiracy. On other days, it just seems like Nazi Germany: the leader is strict and disciplined, so that must mean we need to do what he says (The Wave, anyone?).

    But what I wonder, is that the people at the very top —- don’t they know they could have made a LOT more money running the company successfully? In America, we are the land of the executive overcompensation people. We reward success in a major way — did these guys just have so much, they didn’t want anymore? Were they simply not greedy enough?

    I will bet the demise of GM will be talked about for next 500 years, at least, in economic classes throughout the galaxy (if we get that far by that time). The paradox of it all is just too complex to comprehend or write about in one single post to a blog, or even 1000 posts!


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