First, let’s compare a 1991 Camry to a 1991 Grand Prix.

Wow, Grand Prix – flash! Wow, STS version has a modern Dual Overhead Cam V6 with 240 hp! I’m goin’ with the flash and the power – plus GM gave me a deal!

Fast forward 17 years. The Grand Prix is parked in the field, unwanted, by it’s second owner. It’d broken down too much, cost too much, didn’t last 100,000 miles. My buddy buys it for $450 to fix up for his 15 year old when said teen starts driving next year. He’s a mechanic, he can fix it. After all, it started and ran, they drove it for two weeks, the teen even practiced parallel parking in the back yard (a big country yard).

Wrong. Mystery problem after mystery problem. Now the car won’t even go. Can’t find the problem. Hire in an expert, finally. He comes – wow I haven’t worked on these for 10 years. They didn’t last. They only built this engine for 4 years. Oh, once we get it running, you’d better put cam belts on it. It’s an interference motor and when (not if) the cam belt goes bang every 30,000 miles, it’ll collide the valves into the pistons and there goes the engine.

Finally, after dragging half of his portable diagnostic electronic equipment, he can only “surmise” that it probably is the crank position sensor. $50 for the part, but it is an absolute bitch to fix. Oh yeah, to change the back 3 spark plugs (they surely need it), you virtually have to 1/2 remove the drivetrain and jack it up/forward.

After visiting with my buddy while the mechanic was there, I went shopping, bumped into the ex-owner of a bookstore. Visiting. She expressed sorrow at losing her biz, hates working at the little neighborhood store because it doesn’t exercise her mind (for her, the glass is always 1/2 empty – she should be thankful she even has a job!) Why not apply at Borders in town? Oh, my car isn’t reliable enough to go far (15 miles?!). Oh yeah, I think; it’s an OLDSMOBILE, only about 10 years old. Maybe 8. Looks like 15.

Third story. Go back to 3 years ago to my own son. First car, a “flash” Pontiac Grand Prix. $400. I knew it would not last too long, but hopefully would “do” for car #1 – the car which gets all the abuse and minor bangs and scrapes of a brand-new driver. Naw, it constantly broke. I mean CONSTANTLY broke. My son, working part time at a grocery while in High School, spent more on minor engine and other necessary mechanical repairs than the car cost, in a matter of 4 months.

So, exasperated, he went and bought an equally old, equally delapidated (actually, looked worse) car which had already been in the (abusive) hands of at least two college students before him. A Toyota Corolla All-Trac station wagon.

That little car not only hummed along for over a year, with minor and normal replacement part needs and the occasional minor repair from sheer age and prior abuse – but didn’t let he or our eldest son down, on their “big trek” from Michigan to California (to help build Habitat for Humanity houses – as a part-excuse to have a ROAD TRIP while they still can) and the car conducted itself like it was new for the entire trip.

THAT is the reason why GM (and Chrysler) are going down.

After a few decades, and looking at the lowest cost, most used up cars out there and figuring that all else being equal, you can actually depend upon a Toyota, a Honda, a Subaru – while GM and Chrysler products particularly constantly nickle-and-dime (or more to the point, $100 and $500) their last owners near to death.

So when said people move up to “better” cars, after experiencing GM and Chrysler “reliability” in old cars, do you think they’re going to buy new GM or new Chrysler? Me neither.

Every Civic sedan I see on the lot stickers for at least $19,000. Most are in the $20-21,000 range. Given last month’s blazing-hot sales for the Civic, I doubt that you will be able to wrangle a substantial discount on one.

Geeber, I am one of those 50,000 or so people that bought a new Civic last month. No problem getting a deal. I paid less than sticker even after factoring in all fees and the 8.25% sales Tax here in CA. So yes, they are dealing – I contacted 10 local dealers and got offered great pricing from all of them. I was ready to pay cash and had already gotten a written quote that I was OK with when they offered to finance at 1.9% over 3 years with NO money down. Took the cash and stuck it in the bank, I’d rather have the liquidity and pay a total of under $600 for interest over 3 years. So far I am thrilled with the car, it is all I really need. And I consider myself a car guy – overall driving is a lot less fun when I think about gas at $4.50/gal around here.

If it were that obvious, why did the nuns hold GM shares?

I mean, GM’s reliance on trucks was never a hidden agenda planned by Rick Wagoner. Everyone knows that. The GM investor are just as short-sighted as Rick. It is really unfair to criticize Rick for that at this stage.

BTW, doesn’t GM offer the most 30mpg fuel-efficient car models? They should be fine.

Disclosure:
I drive a Civic and I own 400 HMC shares.

Around here (Harrisburg, Pa.) base-model Civics are extremely rare…I don’t know if I’ve ever seen one on the lot. The only Civics I’ve seen are the LX sedans, or the EX and Si sedans and coupes.

Last time I looked on the lot here in town we had base Civics for just under $17k and Fits for around $15.5. The market may have changed a bit, though.

I might be willing to hold my nose and drive an Aveo LS for $12K. Then again, how much does a Kia Rio go for with A/C and cruise?

Yes, downing a XXXX (Fourex) Australian beer after reviewing sales figures might provide temporary relief :-)

I agree that the Civic is a much better car than the Cobalt, but the ones I’ve seen are not cheaper than a Cobalt.

Every Civic sedan I see on the lot stickers for at least $19,000. Most are in the $20-21,000 range. Given last month’s blazing-hot sales for the Civic, I doubt that you will be able to wrangle a substantial discount on one.

GM has two (count ‘em, two) competitive vehicles in relevant classes. They have a fantastic midsize in the Malibu/Aura twins, and they have a pretty good large CUV in the Outacadaclave. I would recommend either of these for anyone looking for a midsize or a family people/stuff-mover. If they could just come up with a decent economical compact and sub-compact, and they just might, they’d have a competitive lineup well-positioned to compete with Honda and Toyota.

That is, if they could ditch Pontiac, Buick, Saturn, and GMC and sell this lineup under one Chevy brand.

Meanwhile, I took a walk around the local Chevy dealer while having warranty work (yippie!!) done on my Malibu. Crapplastastic Cobalts for $17,500? Aveo sh*tmobiles for $16,000???! When I can go across the street and get Civics and Fits for less? WTF are they smoking?

It would be nice if the federal bailout had some strings attached vis-a-vis product. As it is, I’m sure the next gen Aveo and Delta will be much improved, and may even match the Civic. The 2002 Civic, that is.

I’m not holding my breath though.

Some shareholders are frustrated. “You don’t get a sense that the General Motors crowd really gets it,” said Sister Patricia Daly, who represents the Sisters of Saint Dominic of Caldwell, N.J., a religious order that owns GM shares, in an interview on Friday. “Even in the 1990s, it was clear they weren’t going to be able to sell the big SUVs for 15 years without any impact.”

Wagner has gone and pissed of the nuns. This is going to get real ugly – notes sent home to parents, probably a parent meeting at school too.

I can just picture the whole lot of them, out in the quad doing stretching exercises with yard sticks in there hands – just waiting for him….

http://online.wsj.com/article/SB121248991309341065.html?mod=hpp_us_whats_news

Here’s some quotes:

“After three years of restructuring and tens of billions of dollars in losses, General Motors Corp. shifted direction once again Tuesday, unveiling plans to close four truck plants and possibly sell its Hummer brand.”
…
“The abrupt shift, outlined at GM’s annual meeting, is an acknowledgment that Chairman and Chief Executive Rick Wagoner miscalculated in 2005 when he bet big on trucks. That plan, based on expectations of steady vehicle sales and gas prices in the U.S. through 2008, won the backing of GM’s board and helped Mr. Wagoner prevail in a 2006 boardroom battle with then-shareholder Kirk Kerkorian.”
…
“Mr. Wagoner took over as chief executive in 2000. His track record has been rocky. GM’s stock, which closed Tuesday at $17.58 in 4 p.m. composite New York Stock Exchange trading, is now near a 26-year low. GM’s market share in May was about one-third lower than it was when he took over. Its market valuation now stands at $9.87 billion — less than one-quarter of what it was in 2000.

Some shareholders are frustrated. “You don’t get a sense that the General Motors crowd really gets it,” said Sister Patricia Daly, who represents the Sisters of Saint Dominic of Caldwell, N.J., a religious order that owns GM shares, in an interview on Friday. “Even in the 1990s, it was clear they weren’t going to be able to sell the big SUVs for 15 years without any impact.”"
…
“On Tuesday, Mr. Wagoner declined to forecast when GM will return to profitability.”

Says it all, really.

It seems that 2008 is finally the watershed year when the blind see the light.

So, what advice can we give to Detroit now?
My advice: do some planning. Develop scenarios.
What if you want to be able to move your whole fleet to 50 MPG fuel economy?
How would you do it? Could you do it? How are you going to prepare for this possibility? What kind of technologies, product portfolio and corporate flexibility does it require? How would you compete with others? Would your company still be viable?

Interesting times we are in. I don’t even think the government could save GM at this point, our government is just as short sighted, slow and stupid as GM management. I don’t think Congress is going to push that bailout through as quikly as people think when the country is bleeding money from so many places.

1. Honda Civic……53,299
2. Toyota Corolla……52,826
3. Toyota Camry……..51,291
4. Honda Accord……..43,728
5. Ford F-Series…….42,973
6. Chevy Silverado…..37,020

(I get this peculiar urge to shout “Tora, Tora,Tora!” or “Banzai!”, but I’ll contain myself, somewhat.) Full disclosure: I own a 2006 Civic.

I would like to point out that the little Honda Civic, referred to round these parts as a “wee beastie” and a “Dustbuster” just KICKED THE GENERAL”S ASS, ate his and Ford’s breakfast, lunch and dinner. Cleaned his clock, & etc., etc. But I didn’t come here to gloat.

Mismanagement was already a terminal disease in Detroit, but the patients aren’t quite dead yet. Along come supply & demand imbalances in petroleum markets that provoke price rises of a couple of lousy bucks per gallon. Detroit is less structurally prepared to handle this than the Asians are for the time being, but the glory will prove fleeting. In three or four years they’ll be in the same hot water the Americans are now.

http://money.cnn.com/2008/06/03/news/companies/taylor_gm.fortune/index.htm?cnn=yes

I think it becomes a balancing act. As naive and off-base as the federal rules frequently are, WITHOUT government intervention, the automakers would display absolutely no regard whatever for emissions, fuel economy, safety, or public health (e.g., the pernicious effects of leaded gasoline).

I see GM doing a lot of things right finally, late, but right. There are so many factors that have contributed to GM’s current financial woes, some are actually totally outside of GM’s control. I knew many years ago before I discovered an enthusiasm for automobiles that GM’s (And the big 2.8 in general) decision to put all its eggs in the truck basket would be its undoing. I think many people, not just industry watchers could see that one coming. If you wanted a car, look elsewhere, if you wanted a truck, Detroit was the place to look.

Basically, it boils down to addiction. GM could not let go of truck sales because it needed to sustain its unsustainable business practices that included a grossly overpaid workforce that essentially had its employer by the balls for decades. As legacy costs soared and market share sank trucks became ever more important reinforcing a shortsighted business model, and so on.

I suspect that if you took the twelve step program from Alcoholics Anonamous there would be many intresting parellels that could be drawn from the Big 2.8’s addiction to trucks and a drug addict.

The rest of GM’s brands, even Saab, have basically zero value outside of GM to anyone else. GM’s restructure should include the closure of every brand except for GM’s core business which is Chevrolet and possibly Cadillac. HUMMER could exist fine with these two brands if GM properly managed it’s business.

As Robert pointed out HUMMER is a valuable brand. Not only does it have the best customer retention, it also provides more profit to GM per unit sold than anything else they make (though that may have changed) and has a unique, premium image that can’t be replicated by any other GM division or other automakers, again like Jeep.

A leaner GM is a GM that can prosper in these times and can react quickly to shifts in the market. It’s a GM with new leadership, with just Chevrolet and Cadillac and with the resources and talent to make exceptional vehicles for both brands the capitalize on their rich histories and nameplates.

Sadly, I don’t think we’ll ever see this happen before Chapter 11.

- Toyota displaces GM as #1 in retail sales
- Honda Civic is now the best-selling vehicle in America
- Honda Civic by itself probably sold more retail sales than all Chevrolet cars together
- The top 3 selling vehicles in America: Honda Civic, Toyota Corolla, Toyota Camry
- Retail sales rank is probably:
1. Toyota
2. GM
3. Honda
4. Ford