When I was growing up in Rhode Island, the state was run by the mafia. Politicians, police, priests, judges, juries, firemen, trash collectors, teachers, unions– anyone who had power owed that power to Raymond L.S. Patriarca. Period. In the last forty years, the mob’s stranglehold on the Ocean State has dissipated– even if the stench of corruption remains. But it’s too late. The mob-controlled unions and their corrupt enablers destroyed Little Rhody’s industrial base. The state will never be a locus of, well, anything. And yet people call talk radio and wax lyrical about “the good old days.” Justice was for sale. Racism endemic. Violence systemic. Priests buggered little boys with impunity. “But at least you could walk the streets without fear.” This, Detroit, is your future. And you can thank your godfather, GM.
You can almost feel the anger coming from Detroit these days. The sense of betrayal radiates from hometown journalists like heat off a desert parking lot. How could Washington turn its back on us? How could they treat us like goombas? Don’t they know who we are? Yes, they do. And they don’t care. Why kow-tow to yesterday’s boss? But that’s not really the point. Detroit’s anger is fully justified. Something bad has happened. Something that could have been avoided. Should have been avoided. But this animus, this furious indignation, is entirely misplaced.
It is GM that betrayed Detroit, not Washington. Instead of sorting out their business, GM’s capos spent the last four decades dining at fancy restaurants, smoking fine cigars, flying around in Gulfstream jets and doing… nothing. And then, when they finally grasped the fact that their goose was cooked, they ran to Uncle Sam and said, “Let’s do a deal.” GM CEO Rick Wagoner faced the Senate and told Dodd et al that he’d agree to anything to secure the bailout bucks. Oversight? Car Czar? Deadlines? “I think we would could live with that.”
As a friend of ours likes to say, there is no honor in this. GM’s CEO should not have come crawling back to D.C. in a Malibu hybrid to beg for a taxpayer handout. At the very least, Wagoner should have resigned after his first, disastrous Congressional appearance. Either that or he should have poured bankruptcy expert Jay Alix a stiff whiskey and told him to file for Chapter 11. Wagoner would have spared his employer the final indignity of watching Congress and the executive branch remove GM’s ability to determine its own fate.
“But no one will buy a car from a bankrupt automaker.” Excuse the profanity, but who the fuck cares? GM is bankrupt. Its liabilities currently outweigh its assets by a factor of ten. A government loan will simply add another creditor to a long list. Head of the line, back of the line, big whoop. The fed’s $13b will keep GM on life support for what? A month? Three? And then what?
As there’s nothing GM can do to generate the profits it needs to cover its overheads, as any real turnaround would take over $100b and at least five years, sooner or later, GM is headed for more public humiliation. How much more of that can GM take?
It’s one thing to get steamed at a politician for pissing away $700b of your hard-earned money for his or her best buds on Wall Street. All you can do is not take out a loan from TARP-blessed banks (that won’t give you a loan anyway) and/or vote the offending politicians out. You know; later. But if a carmaker is blowing your taxes, retaliation is easy. You don’t buy their products. You want my business? Sorry, but I gave at the office.
Mark my words: if GM uses taxpayer money to stave off bankruptcy, and then comes back for more, executive haircuts and public equity stakes won’t do squat to mollify an enraged public. There will be a consumer backlash that will make bankruptcy seem like a J.D. Power Award.
Meanwhile, GM and its camp followers are dazed and confused. Just like the little old ladies who used to promenade up and down Atwell’s Avenue without a care in the world, they don’t understand why things have changed. They will never understand that they sat atop of a pyramid of abusive exploitation. In the same sense, GM’s customers subsidized Detroit’s sense of wealth, safety and entitlement by buying shoddy vehicles. But only because they had to.
As soon as they didn’t have to, they didn’t. And then it was only a matter of time before the old corrupt system collapsed. Reform? The man who could have created life-sustaining change for GM through C11 (albeit three years ago) is in federal custody. Powerless. Someone somewhere else is large and in charge. Depending on your perspective, you might even call it progress.
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Superb editorial.
Geez Robert, don’t hold back next time.
I fail to understand how this whole bailout thing works. We put in 30 billion and this gets us to…March? May? Then we put in another 30 billion?
Robert,
You should email a copy to the Free Press, they are in great need of some reality therapy.
so just let them go eh?
and probably chrysler, maybe ford too.. then what, what do you thinks going to happen? yeah, its great, the NA auto industry is dead, woohoo,
but what happens, the last large industry..gone.
maybe 3000000 out of work,maybe more, party time!
if the economy hadnt already been screwed over by the bankers, maybe i could say let em go. but things have changed, it wont be pleasant. if you think it wont affect you, you are dreaming.
be careful what you wish for..
Yes indeed, there will be a backlash by consumers, for taking taxpayers’ money to fund the status quo.
Much like the 90’s when Generation x’s turned away from NA car companies, (as opposed to turning to imports)because of poor products, consumers will resent the Government ‘loans’.
Another backlash I would mention is the one against a dealer network that for too many years took buyers for granted to the point where consumers polled said consistantly that they considered extensive dental work more appealing than visiting a new car dealer.
Nice read, Robert. They reap what they sow.
“The sense of betrayal radiates from hometown journalists like heat off of a desert parking lot.”
Whoee. I’ve got about 100 good blogs bookmarked and none even come close to TTAC for setting it straight.
Excellent.
Nice debate with Ronnie earlier on. Bottom line: yes, government has meddled a lot with the industry and sometimes it isn’t fair, but in the end you have to man up and do what it takes to serve your customers just like everyone else–or else get out.
Justice was for sale.Priests buggered little boys with impunity.
Glad to hear they got a handle on that kind of behaviour in RI. One state down, 49 to go…
It’s one thing to get steamed at a politician for pissing away $700b of your money for his or her best buds on Wall Street. All you can do is vote them out of office. You know; later. But if a carmaker is blowing your taxes, retaliation is easy. Just don’t buy their products. Hey, GM. You want my business? Sorry, but I already gave at the office.
The same can be said for the banking industry. Most of the TARP recipients have retail banking operations that have healthy competitors. Why are people continuing to do business with TARP recipients? Will they move their money and mortgages out of banks and institutions that are TARP recipients and into safer, smaller regional banks or credit unions? I doubt it. I guess people like bankers more than car salesmen. All I know is that I’ve never had a car dealer lock a door on me as I reached to open it at closing time.
Yes, Detroit has paid and will pay for it’s sins. The poor quality of their vehicles 15-20 years ago, the UAW, CEOs and management, etc. There’s blame a plenty. None of these things, however, brought the market down from 17 million units a year to an annualized 10 million units.
The economic crisis has.
Toyota will post a loss next month. Honda, and every automaker, is cutting production. While the Big 3’s products pile up at parking lots across the Midwest, the imports are being warehoused at the ports.
We are in a major recession, approaching a depression.
I cannot believe a few Southern Senators would put the shiv in their fellow countrymen in order to attempt to accomplish some sort of false ideological victory over organized labor. Probably more to the point, they think they’ll gain more import factories in their Darwinistic wastelands if GM, Ford and Chrysler expire.
Like it or lump it, this Detroit, is your future. And you can thank your godfather, GM.
You should really come and see Detroit now. Only someone born and raised here (as I was) can love this place. But love it I do. And it’s hearbreaking to see what’s happened in just the past 30 years.
But if you think it’s only “Detroit” that will (continue to) suffer if the Big 3 die, you’re delusional.
But if a carmaker is blowing your taxes, retaliation is easy. You don’t buy their products….There will be a consumer backlash that will make bankruptcy seem like a J.D. Power Award.
Pardon my saying so, but that’s quite an empty threat coming from people who would never, ever consider a GM product.
If you want to see a “backlash,” sit back and watch as at least hundreds of thousands — very likely millions — of people become instantly unemployed.
George W. Bush is a horrible President. But even he isn’t dense enough to watch our domestic manufacturing base die without trying to do something to save it. We’ll likely see some sort of loan package coming out of the TARP funds early next week.
For now, we in the rustbelt have received the message loud and clear that we are on our own. We’ve finally caught on that we are not all Americans, that it’s each State/region for itself. We’ll be tasking our Senators with cutting off the Southern welfare states, and bringing our Federal tax dollars back to us where they are surely needed.
Sorry Alabama, but you’ll have to pave your own roads, fund your own schools, etc. Maybe Mercedes-Benz will do that for you, but your “Fellow Americans” (har-har) are not going to do it any longer. You’ll just have to sink or swim.
Incredible job Robert. I shudder at the financial pain it will cause millions of Americans (and it will), but C11 is necessary. Anyone who thinks different is unrealistic.
Altrhough I know you have some grave difference with DeLorenzo, he forsaw a lot of the foundation crumbling back in ‘01 when GM launched the “Keep America Rolling” campaign. It went on…and on….and on, culminating with the “Employee pricing” program of 2005. Yes GM sold a lot of cars….but the permanent discounts in fact took all the value out of GM cars, and thus people bought the deal and not necessarily the car they wanted. What GM car do you aspire to today? Maybe the Corvette, or CTS? Anything else?
Any chapter of institutional longevity closing is always sad…..but often necessary. Perhaps a good time (under C11, folding a few Pontiac models in a generic GM showroom) for a new Pontiac Phoenix…..
Robert, I remember those fine old days in RI (born and raised there myself). I used to pedal by Raymond Patriarca Jr’s farm on the way to my girlfriend’s house when I was in high school. Good times…
Good points made in the editorial. The Detroit auto makers (GM particularly) just don’t have any good will left, really. The cheerleaders for Detroit don’t help either — when you insult your potential customers (I’m part of that coastal intelligencia after all, even though I live in Utah now) they respond by ignoring your product, no matter how good those products might be.
Detroit Todd:
Yes, Detroit has paid and will pay for it’s sins. The poor quality of their vehicles 15-20 years ago, the UAW, CEOs and management, etc. There’s blame a plenty. None of these things, however, brought the market down from 17 million units a year to an annualized 10 million units.
As other commentators have pointed out, GM’s quality is still sub-par. And GM was bankrupt long before the current downturn.
You and I can debate what constitutes our “domestic manufacturing base,” but southern politicians are simply doing what GM’s politicians have been doing for over a hundred years: taking care of their own. It is the nature of the beast.
Again, direct your ire at GM’s management. They rammed this ship into the iceberg. Not their competitors. In fact, the U.S. market was GM’s to lose. And lose it they did.
There will be taxpayer revolts where people have exhibitions to destroy an old big-3 car with a sledgehammer.
I advise anyone annoyed at this bailout to mail tea bags to their local GM dealer, Ren Cen, UAW headquarters, etc (i.e. Boston Tea Party). It can create quite a spectacle.
There is still talk of the Bush administration working out orderly bankruptcies, but if the big-3 are bailed out I will definitely be boycotting. I doubt I will be alone.
The Deathwatch is over. The big-3 are dead.
This is now Weekend at Bernie’s watch. For billions of dollars the taxpayers can keep Bernie nodding and waving, but he won’t come back to life.
GM, Ford (or perhaps F–d until it buys its name out of hock) and Chrysler will never be profitable again unless they get rid of their dealership, UAW worker and corporate debt liabilities in a way that can ONLY be accomplished with bankruptcies.
If the big-3 are kept on life support it will only be for two years; after that the Democrats will be punished for bailing out the failed, bloated industry by losing one or both houses of Congress, and the plug will be pulled.
Moderate Democratic principles, much less Republican principles, advocate letting failed companies fail. However, there is a bit of Rove strategery in letting Bush take credit for “saving” the auto industry now AND setting up the Republicans to take back Congress when the public tires of the endless payouts to special interests.
I would like to see the bankruptcies be orderly, but the really scary thing for Detroit isn’t how much the overall American economy will be effected if the big-3 have disorderly bankruptcies, but how much it won’t be.
The sun hasn’t gone out over Britain.
What is sad is that there are a few things that Detroit does very well. And there is a market, but not a huge market, for those products.
No matter how much GM wiggles and dances, it can’t avoid the simple fact that it owes too much money and is too large for the market it owns.
BK, then emerge a fraction of the size selling only a small number of their best products… it is the only way.
If we taxpayers are forced to fund “make work” for the benefit of Michigan, then there are more productive uses of that labor. Hell, Obama said that we will need more boots on the ground in Afghanistan. As long as we are paying their paychecks can’t we have a say in what they work on?
If we tax payers are paying a laid off GM car worker to do nothing, then they can work for us in Afghanistan, Africa, or even help us rebuild our own roads, bridges, and schools.
As other commentators have pointed out, GM’s quality is still sub-par. And GM was bankrupt long before the current downturn.
Yes, there are certain models that remain uncompetetive, but this is no longer 1990. GM today turns out very high-quality products, not only in the N.A. market, but the world over. While GM may no longer dominate the N.A. market, they still command quite a large share. What has GM’s trajectory been on quality? Upward, for at least a decade.
And GM was bankrupt long before the current downturn.
This is simply untrue. Perhaps they should/could have sped up their reorganization in order to be in a more advantageous position in the event of a downward turn in the market. But a drop from 17 million annualized units to 10 million in the N.A. market alone is not just a downward turn — it’s a major recession. If the smart asses on Wall Street didn’t predict it was coming, how could GM, or any other automaker?
It is undeniable that the instant cause of the auto industry’s collapse is the financial crisis. Using that backdrop to advance an anti-Detroit/anti-UAW bias, such as Sens. Corker and Shelby have done, is quite disingenuous.
I own a small construction company. Over the years, I have watched unions salt various companies in the trades, especially air conditioning and sheet metal companies. The union salting has driven a number of companies under. We purchase 3-5 work vehicles per year. In the past, I was forced to purchase union-made trucks and vans. And each purchase made me sick to my stomach because I knew that I was supporting dishonest union goons. Now that I can buy pickups from Toyota and vans from Daimler, I will never buy another UAW vehicle for my company. The auto industry in general and the UAW in particular are reaping what they have sown.
Change. Plain and simple. It’s awful for people, and we shouldn’t loose sight of it.
I think the description from Pch101 is the best way to rationalise what is clearly bad policy;
“We’re just trying to keep the plane aloft for awhile longer, in the hopes that it crashes into an empty field, instead of in the middle of a city full of people. The money is meant to minimize the damage, not to prevent the crash.”
I wrote these words elsewhere in response to an auto worker who thought I was heartless;
I work for a global organisation that advises manufacturers in efficiency, quality, marketing and all too frequently, restructuring.
I meet employees who hate us because they feel we eliminated their jobs. Sometimes it’s true, but mostly it’s true because of management failure to recognise and address structural problems or to innovate into other sustainable business areas. Those failures are also with their governments too by allowing industry that just can’t continue in the form it exists.
I personally think it’s a disgrace that these depressed auto areas have gone from day to day with nothing but “hope” for decades that these incompetent companies might survive, with Government fiddling on the fringes.
Something has to be done for the people. The balance is all wrong when the corrupt criminal gamblers on Wall Street can pocket everyone else’s hard earned. It’s affecting the whole world.
@Detroit Todd: Having grown up in Detroit and having lived and worked there (for GM engineering) until earlier this year, I agree it’s sad to see the place decline ever so slowly.
The way I see it, this is Detroit and Michigan’s opportunity to do a major overhaul so that they can compete with the rest of the world. Bust the unions and their stranglehold on city and state government. But also get rid of the lousy management, particularly at GM. Wagoner needs to resign–he’s about as useful to GM and Blagojevich is to Illinois.
Better that then to constantly complain about the South and their “foreign entities” like Ronnie does. Toyota’s stlll building its engineering center in Ann Arbor, last I checked. The transplants would gladly locate factories in Michigan and provide jobs for those unable to enjoy free Viagra and Cialis through their union employment at the Big 3.
There will be taxpayer revolts where people destroy big-3 cars with sledgehammers.
I certainly hope it wouldn’t come to that, but it would be amusing to see someone hop out of their Hyundai Excel and threaten a person in their F-150.
Detroit Todd:
The financial crisis is just a convenient scapegoat. Even before the financial crisis the big-3 were carrying staggering debt loads and losing money frequently.
And some of the sloppiest lending that led up to the financial crisis was done by GMAC, Ford finance and Chrysler finance.
The Tribune company just went Chapter 11. It could whine about the economy, but the truth is that the recession simply called out its failed newspaper based business model.
GM, Ford and Chrysler have failed business models with too many dealers and brands, and employees that cannot be laid off. The recession has just called them out.
Re: The sledgehammers – they won’t be destroying cars that belong to other people, just having the kind of exhibitions where they bang up an old big-3 car, just like when people used to have exhibitions to bang up “rice”.
If the smart asses on Wall Street didn’t predict it was coming, how could GM, or any other automaker?
Forbes did an interview with Red Ink Rick. In Feb of 2007. The conclusion of the article? GM would be bankrupt in Oct 2008.
Perot knew this day was coming, long ago.
Anyone NOT living in fantasyland, or the state of denial otherwise known as GM saw this coming.
There was a reason they bought Ross Perot off the board. As well as Kerkorian’s boy. Both of them saw what was coming clear as day. But the rest of the meat puppets on the BOD would have nothing to do with actually even acknowledging they had a serious problem. Let alone actually addressing it.
@porchespeed,
Can you cite me an article where anyone predicted that N.A. annualized unit sales would fall from 17 million to 10 million?
Detroit Todd: “You should really come and see Detroit now. Only someone born and raised here (as I was) can love this place. But love it I do. And it’s hearbreaking to see what’s happened in just the past 30 years.”
The economic crisis is just the past few months, at most. What was happening to Detroit for 29 years prior to that? Why didn’t you stop it?
The same applies to GM, Chrysler and (maybe they’ll dodge the bullet) Ford. They’ve been swirling the drain for a long time.
If Congress and the Administration don’t act, then there’s going to be some real unpleasantness. Is that Congress and the Administration’s fault? Of course not. It’s down to the automakers themselves.
Sure, you might be able to make the argument that the real architects of the disaster are already gone and beyond punishment but I think there’s a better case for the current leadership being part of the problem.
RF: “GM’s CEO should not have come crawling back to D.C. at 55mph in a Malibu hybrid to beg for a taxpayer handout. At the very least, Wagoner should have resigned after his first, disastrous Congressional appearance.”
Man, that is so true. And the Malibu hybrid itself is a sign of the current leadership’s failure. It’s a regular Malibu with an oversized starter motor. Big whoop. And this is GM’s counter to the Prius. This is GM’s state-of-the-art midsize hybrid, dribbled reluctantly onto the market whenever they feel like building a few, 11 years after the Prius hit the streets and 4 years after the Prius went fully mainstream in North America at better than 10K/month.
This is just pitiful. And the guy who laughed at the that Toyota is selling at a profit is still employed. And he’s been licensed to build an uneconomical “competitor.”
This is crazy. Leaving the current management to run GM is crazy. They’ve got to go.
@ Detroit Todd
Can you cite me an article where anyone predicted that N.A. annualized unit sales would fall from 17 million to 10 million?
It doesn’t matter. Strong businesses plan for the worst, mostly by having their future obligations/debt in order.
Yes, even Toyota may have been surprised, but it’s a company of hefty assets and well managed obligations.
Hasn’t the recession called out everything about our way of life? What is the difference between the failures in Detroit and the recession itself? Which industry should we be looking to for an example of good business? Not the financial industry (30 percent of the economy). Besides government defense contracts and farm subsidies, what are we proud of economically? Our higher education industry? Our healthcare sector? Our oil companies? Please, tell me what we have in our economy that could support the number of people who need to work and earn a living. Detroit may not be deserving. Detroit may have been ravaged by greed and incompetence, but we need to find a way to save them even if it means giving GM government contracts to build tanks, ships, planes, passenger trains, buses, and subway cars.
GM hasn’t made a dime since 2004, WAY before the current recession. Yes, they should have seen this coming; as I’ve said before, GM really had 35 years notice, ever since the oil spigots were turned off in the fall of ‘73.
Just for the record, it is sales dropping from 17 million to 13 million that has bankrupt GM and Chrysler.
10 million is a future projection that the taxpayers are expected to carry the big-3s’ excess workers and dealers through.
This is an interesting article on the UAW work rules. It’s not just the pay, it is that unecessary workers cannot be laid off and that that there is a huge web of inflexible work rules that is killing the big-3, only BK can let them escape:
http://www.slate.com/blogs/blogs/kausfiles/archive/2008/12/12/where-do-unproductive-work-rules-come-from.aspx
carlos.negros:
Wasting resources on a failed companies is not how a country makes itself great. The way to save the big-3 is bankruptcy, either they will reorginize under Chapter 11 or their factories and workers will go to companies that can use them better. Without the burdens of the UAW and their bloated dealer networks American auto companies could compete against anyone.
Detroit Todd,
Drop me an email to rokem@netzero.net.
KixStart.
http://www.bizjournals.com/louisville/stories/2008/12/01/daily27.html
prius is in the dumper too. down 46%, thats worse tham GMs average drop. lol
At least the tree-huggers will be happy that there will be less cars/trucks on the roads.
Detroit Todd :
This is simply untrue. Perhaps they should/could have sped up their reorganization in order to be in a more advantageous position in the event of a downward turn in the market. But a drop from 17 million annualized units to 10 million in the N.A. market alone is not just a downward turn — it’s a major recession. If the smart asses on Wall Street didn’t predict it was coming, how could GM, or any other automaker?
It is undeniable that the instant cause of the auto industry’s collapse is the financial crisis. Using that backdrop to advance an anti-Detroit/anti-UAW bias, such as Sens. Corker and Shelby have done, is quite disingenuous.
You might wanna check the data: http://finance.google.com/finance?fstype=bi&q=NYSE:GM
At the end of 2004, GM’s Total Equity was at $27 billion, 2005 it was $15 billion, 2006 $-6 billion, 2007 $-37 billion and right now, we’re at $-60 billion.
Do you see a trend there? It started way before the credit crisis. The current financial meltdown might speed up the process, but no company can survive with negative equity in the long term, especially not when they’re that deep in the shithole.
“It is undeniable that the instant cause of the auto industry’s collapse is the financial crisis.”
Hey, Todd, you are so far off base you are not even at the correct ball park. Let me tell you something…I have witnessed this downward slide for over 2 decades. I knew something was amiss when my Chevy Silverado, which was NOT used as a work truck…blew a transmission at 80K miles just going down the freeway. This was back in ‘85. Ok, now let me also tell you this: This is NOT a unique story. GM’s ENTIRE business “MODEL” (if you will) was based upon MONOPOLY and PLANNED OBSOLESCENCE(ie, building JUNK which falls apart). If you deny this, you are not dealing with reality. Your Pom-Poms are blocking your vision while you so happily “cheer” for the home team.
My Chevy Truck was JUNK!
Yet, we are to believe this is a SUDDEN “CRISIS”? No, my son, you are not thinking clearly. You’ve read the 30+ year career of the Parts and Service Manger, haven’t you? If not, do so. Any (ANY) company which is so heavily “leveraged” (ie, in DEBT) to where they can’t weather a little “crisis” is not a “going concern”, now is it? No, it’s a company living by a thread, much like the over-extended home “owners”. One month of unemployment puts them out in the street.
A company 100 years old which can’t grow “organically”, ie, from internally funded projects…is a company which has NOTHING to show for 100 years! No, in that case, the BANKS have everything to show for the past 100 years!!!
To point the finger an anyone other than GM’s “management” is beyond foolish.
Tonight on CNN, Lou Dobbs had a honoured guest Bob L from GM, This executive type said that all of us that in our 50’s 60’s have had our share of bad vehicles from the likes of the Detroit three and we have poisoned our “kids” telling them to stay away from any of the Detroit three and Lou Dobbs agreed that GM now makes quality vehicles?
I have owned both, several in my lifetime, for many years I tried to purchase North American vehicles till I got wise, I am still learning, there seems to be a lot of misconceptions out there of the quality or lack of same in many vehicles, I still prefer my Toyota product over my current GM product, for many reasons, mostly the down time with the GM and no down time with the Toyota. Life goes on!
I’ve been reading “alternative economics” blogs, web news, gold bug sites, etc. for several years and put TTAC in the same category. So, no, not “everyone” was blindsided by this “sudden” recession/depression.
Talk to any Ron Paul supporter, Libertarian, Constitutionalist, and ask them how long they’ve been aware that we had been living in an unsustainable economy. You’ll get an earful.
Just another gem for everyone;
In the mid 1990s I was at petro conference for a presentation from Richard Heinberg (look him up). The message was really simple; there’s oil around the place but it’s going to get more and more expensive to get to. Mix in a bit of growth from China and it wasn’t rocket science, it wasn’t about “running out” of oil, it was just economic logic.
Talking to some Detroit engine guys afterwards (I don’t know why they bothered, they resented being there), they couldn’t care less. “What message are you going to take back to your people?” “It’s bullshit”.
Maybe the Prius guys were sitting in the audience.
Actually, it might not have been Richard Heinberg, but anyway, the point is the same.
@Ronnie Schreiber
All I know is that I’ve never had a car dealer lock a door on me as I reached to open it at closing time.
It happened to me once – sort of. My Expedition was scheduled for one of it’s numerous warranty visits on a Saturday. When I arrived at the dealer, during the process of checking it in they noticed the dealer badge on back was from an out of state dealer. They informed me they were canceling my appointment because only cars purchased from their dealership were allowed to schedule Saturday appointments. This is just one of a long list of reasons I despise these companies.
@Detroit Todd
Yes, there are certain models that remain uncompetetive, but this is no longer 1990. GM today turns out very high-quality products, not only in the N.A. market, but the world over. While GM may no longer dominate the N.A. market, they still command quite a large share. What has GM’s trajectory been on quality? Upward, for at least a decade.
If only that statement were true. Working at a certain bankrupt formerly-part-of-GM parts supplier gives me particular perspective on GMs problems since I’m usually advising co-workers on how to fix them.
-Failing intake manifold gaskets on V6 engines (which GM knew about for years before implementing a fix) which can cause severe engine damage.
-Dashboard backlighting bulbs which burn out after a few years (conveniently out of warranty) which can’t be replaced unless you are very handy with a soldering iron
-Gauge cluster stepper motors which fail causing tachometer or speedometer failures and are expensive to fix.
-Digital displays which completely die preventing the use of the climate control, odometer, or gear selector indicator.
-Suspension bushings which fail causing odd vibration and handling problems
-Steering columns that fail or make excessive noise
-Transmission solenoids which clog causing malfunctions including stalling and harsh shifts
-4WD drive sensors which die early and often preventing engagement when you need it
-Power window motors and regulators which fail every 3-4 years
-Seat heaters that fail after 3 years or earlier and keep failing
-EGR valves which carbon up often, causing drivability problems
-Door handles which break so often the aftermarket has made stronger replacements
-Door hinges which wear to the point that the door no longer lines up with the latch striker
This on vehicles built since 1998, not really all that long ago for modern cars. There are numerous stories I hear about at work of GM vehicles only 4-5 years old which have unacceptable failures. Yet there are many people who still hold allegiance to GM and continue to buy their cars not because they are good, but because GM used to provide their paycheck. Unfortunately, it seems that is the only group of people left who still blindly “buy American”.
You can opine all day about “competitiveness” of GM vehicles, but no amount of JD Power surveys can change the truth about their quality.
@Detroit Todd:
tom’s right about GM’s financial decline. Did you not also notice GM selling off assets over the past few years, e.g. equity positions in Isuzu, Suzuki & FHI/Subaru? And GMAC, the real cash cow for GM? And Allison Transmission Division?
With regard to quality, I am the owner of a 1998 Chevy Astro van which within LESS than 50,000 miles (all highway on-road non-work miles by the way) had two new front ends, new alternator, new air con compressor, 2 x new brakes, and 3 significantly expensive electrical problems… That’s half the story… The other half is the near contempt I sometimes had to deal with at the dealer…
It seems to me that the mangement of GM & the UAW live in their own world and assume it’s the ONLY world out there. That’s a huge problem I doubt GM management can fix on its own. The over dealer situation is also huge and in the current situation must almost be dealt with on a state-by-state basis with lots of cash – which GM does not have…
How did GM get here? By not having enough cash to deal with its huge problems. And why does it find itself with not enough cash? By NOT building cars people want FAST enough… And why haven’t they been faster? Because the company has been run by financial types who analyze the heck out of cars seeking first and foremost the most financially profitable vehicles – which really turn the finance guys ON, but unfortnately have turned the car buying public OFF…
Remember the huge boat of a Chevy the D or B car? Well, I have actually heard GM finance people say, “They (the public) will LEARN to like it…” On paper the car was probably a great financial success: leverage the platform from a Buick Boat, use the same glass, same seats, same interior trim materials… Great FINANCIAL concept. Butt ugly car… True story.
I am afraid that what happened to England will happen to the U.S. There is no loger an indigenous car company in that country. Why? They made cars that were sub-par to the rest of the industry. End of story. If you make a product that is not as good as your compeditor for the same (or even lower) price, they will stop doing business with you.
I work for a company that supplies to ALL auto makers. I know what goes into the development at each car makers… Chrysler = How cheap can it be done for? GM = What does the committee say and how cheap can it be done for? Ford = What does Toyota do? Can you make it cheaper? Toyota = This is what you must make and how it shall be. We know your product better than you since we have fully evaluated the inner workings. Honda = This is what we believe it should be, do you have better ideas? We want to work with you to create a better product. Nissan = This is what we need and how it must perform.
I drive a Honda for a reason. It is even one that is MADE IN THE U.S.A. by American Workers! It is a better product than Detroit 3 could ever have put into production.
<em210delray :
December 14th, 2008 at 9:47 pm
GM hasn’t made a dime since 2004, WAY before the current recession. Yes, they should have seen this coming; as I’ve said before, GM really had 35 years notice, ever since the oil spigots were turned off in the fall of ‘73.
After countless restructures and cost-cutting by the same GM management, over the last 2 decades, to expect this time things will be different is that not the definition of insanity.
to ijustworkhere
well said, and if you have a Civic, it could be made in Canada too. Buy the way I drive a Mexican built Sunfire and my next car will be built where I live.
@ ijustworkhere
Hilarious. While I’m not in autos, we see that all the time. You just know which of those companies are going away real soon when you hear it.
“The man who could have created life-sustaining change for GM through C11 (albeit three years ago) is in federal custody.”
Could someone explain?
Rhode Island is a mafia state? How dare you tell such a filthy lie. It’s common knowledge that nobody out goombas New Jersey. I mean, come on, for 3 decades the mayor of Jersey City was addressed as “Boss” — no, Springsteen was not the mayor of JC, look it up.
@ 50merc
There’s a hint in the article, Jay Alix, therefore Alix Partners, so it would have to be…..
Bernard Ebbers????
RF, what do I win??
Detroit Todd:
GM hasn’t turned a profitable year since 2004. If you will forgive the metaphor, GM has AIDS. This recession is just the secondary infection that is polishing the weakened victim off, not the primary cause of death.
And once again, we get the bailout=save GM equivalence.
Please Todd, explain how 15 billion dollars is going to do jack to save them?
I think the death of GM & Chrysler will suck hard for everyone in the country, hell, in the whole world. I don’t deny it. But I also don’t think there is anything to be done to fix it that would be acceptable to Detroit boosters, because what it will take to fix it looks a lot like what will happen when they die. It will be terrible. But it’s too late in the day to stop the doom of Detroit.
And the bankers— well the reason they wanted to bail out the banks is because when the banking system freezes you get things like the secondary death of GM by way of credit cruch. I don’t know if the bailout was the right idea or not, but I can see why they got it— at least in theory it would mitigate the consequences of massive bank failures which would have made the death of GM look like a minor kerfuffle. Given the rather stark choice they were given, whether it was true or not, of a bailout or Great Depression Part II, I can see why they went they way they did. GM, on the other hand, is a money pit who needs the bailout to avoid the embarrassment of bankruptcy. GM’s bankruptcy does not necessarily signal the end of the company, especially if the government provides financing for the bankruptcy (which I think would be acceptable to many. What anti-bailout people want is for the money to accomplish what is necessary for GM to come out of this healthy). While it will doubtless be very painful for everyone in the country, the consequences will be several orders of magnitude smaller than massive bank failures (and also rather unavoidable if GM is to have any real future). So I see the two as rather different situations.
You and I can debate what constitutes our “domestic manufacturing base,” but southern politicians are simply doing what GM’s politicians have been doing for over a hundred years: taking care of their own. It is the nature of the beast.
Southern politicians are doing what they’ve been doing since colonial days, resenting the industries and merchants of the north, it’s the nature of the beast. Japan, Germany and the South were defeated by US industries and it looks like they managed to defeat the Arsenal of Democracy. Most wars are lost, not won. He who makes the fewest mistakes in war wins. Detroit made a lot of mistakes.