General Motors Death Watch 90: Flight of Fancy

Robert Farago
by Robert Farago

Did GM buy a piece of Moller International? The General’s recent TV commercials show its full product range rising off traffic-choked roadways and flying off at tremendous speeds. You can almost hear the Skycar's inventor slapping his thigh and yelling “Now THAT’S what I’m talking about!” Of course, that’s not what GM’s talking about. They’re touting their new five-year, 100k mile warranty. Notice I didn’t say “powertrain.” Neither do the ads, which leave viewers with the impression that GM’s products come with five-year, 100k mile bumper-to-bumper protection. Talk about sins of omission…

Let’s be clear about this. A five-year 100k mile bumper-to-bumper warranty would have been big news. GM’s powertrain warranty only assures buyers that the parts that are least likely to break won’t break. It says GM will fix these parts that shouldn’t break without charge and pick you up from the side of the road for free, should one of the parts that shouldn't break breaks and leaves you stranded. Hang on; is this really a major selling point? And doesn't The General have enough trouble moving the metal without trying to invade Toyota’s turf? Toyota has a twenty-year head start in the reliability business; GM doesn’t have twenty years to catch up.

In his official statement, GM CEO Rick Wagoner asserted that the new powertrain warranty “provides GM customers with an unprecedented level of value and peace of mind.” First and most nit-pickingly, the release specifically refers to “GM customers” rather than “new car buyers.” So, forget conquest sales; just make sure that GM loyalists are happy– er. Considering the automaker’s inexorable market share slide, now reduced to an ironically proclaimed “one out of every four cars sold in America,” Rabid Rick's decision to use a powertrain warranty to recapture lost buyers is, at best, ill-advised and overly optimistic.

Second, Rabid Rick's attempt to stake his company's claim as builder of “value” automobiles thrusts a stake through the heart of its business. Last year’s “Fire Sale for Everyone” program K-Martified the company within the pubic consciousness. Continuing down that road places GM into the worst possible market position: more expensive than the cheapest and less desireable than the best. As an automaker with labor and legacy costs larger than Belize’s GNP, GM can't do cheap (at least not without shipping all the work to South Korea). Going for value– rather than focusing on desirability– makes GM vulnerable from all sides.

And lastly, GM’s attempt to sell its cars based on “peace of mind” is laughable. Again, Toyota owns that mental space. If you widen the concept to include the single largest cost of car ownership– depreciation– Honda kicks GM’s peace-of-mind ass all day long. More to the point, Eric Hirshberg’s claim that his agency’s “Elevate” campaign proves that GM “shed the baggage and went on offense” is just plain wrong. Saying your product doesn’t suck is not the same as saying its better than the other guy’s. And if GM’s vehicles aren’t better than the other guy’s, well, it’s no wonder they’re talking about value for money and warranties.

Of course, it’s hard to see where GM could go these days. In the 40’s, 50’s and early 60’s, GM offered some of the most innovative automobiles in the market, if not the entire world. At the same time, Harley Earl’s sheetmetal captured the hopes and dreams of a nation. While there are some standout niche products in GM’s gi-normous portfolio, the gotta have is gone. The vast majority of GM’s products are… generic. Bland. Boring. Vapid. Unrefined. Uncompetitive. They may not break your heart, but neither do they capture it.

Say what you will about the styling and driving dynamics of a bread-and-butter Corolla, Camry, Accord, Fit, Yaris, etc. Their owners love their cars. (And not just because they’re reliable.) Obviously, GM loyalists also love their motors. But the market share says it all: the so-called imports are winning the campaign for US car buyers’ hearts and minds. Concentrating on the “minds” part of the equation with a new warranty puts the cart before the horse. It’s preaching to the converted. It simply won’t work.

Rest assured, the reckoning is coming. The situation over at bankrupt auto parts supplier Delphi remains unresolved. The UAW is flexing its muscles over at Chrysler, while Delphi’s creditor committee breathes down Call Me Steve Miller’s executive neck and a federal judge's seemingly infinite extensions (on the company’s motion to throw out its union contracts) aren’t. The pickup market, upon which Rabid Rick says his company’s immediate future depends, has tanked so badly that Toyota is scaling back production of its next generation Tundra by a third. Meanwhile, here’s a simple question. If GM could make vehicles that lasted forever, would that be a blessing or a curse?

Robert Farago
Robert Farago

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  • Suohtil Suohtil on Sep 18, 2006

    "refers to “GM customers” rather than “new car buyers." - i like your thinking. if one replaces "GM customers" with "new car buyers" that would imply all new car buyers get the warranty. so the statement should be: rather than "GM new car buyers." that sounds so much better than "GM customers". of course to have the warranty you would have to be a GM customer so even conquests that become GM customers get the warranty. i like that. you showed him.

  • Blue adidas Blue adidas on Sep 20, 2006

    Re: Johnson Maybe GM isn't as reliable as a Toyota today, but so? Toyota is regarded as the most reliable brand. Better than all domestic, European, Korean and other Japanese brands. While that's not my experience, many people sound personally offended that I disagree. And, yes, I do think three experiences is enough to form and accurate judgment. To state that GM is statistically better than most other brands, and Cadillac and Buick are a fraction of a percent below Lexus’s #1 spot in the most common measurement is not an incorrect statement. My disagreeing with conspicuous pro-Toyota and venomous anti-otherbrand exaggerations doesn’t make me a domestic fanboy. It makes me pragmatic. Regardless, the topic is not Toyota or my negative opinions toward that brand, it's GM's warranty. The reality is that GM is not regarded as a quality brand. Someone just the other day told me of the horrible experience they had in a 2001 rental Lumina. I’d have believed her if there was such a vehicle. Whether these are attempts at hyperbole or not, it doesn’t really matter. GM has shot itself in the foot by creating a huge angry and disloyal population of vocal consumers who reinforce and foster each other’s opinions and refuse to believe anything that suggests anthing else. We see it in forums like this one. Changing this popularity slide is exactly why GM is offering this new warranty.

  • Kars This article was about Ford not Tesla - you are clearly confused.
  • Ollicat Those are individual charging stations vs entire gas stations that have 8 - 16 pumps. And gas stations take 3 minutes to fill vs 30 min to hours for a charging station. And gas pumps are much more likely to be working vs charging statins. Nice try with more propaganda though.
  • Richard Poore Sure, as the article itself notes (hence my ire) California has mandated that all new vehicles sold in state be EV by 2035. They require EV or hybrid by 2026. Since the author admits to this mandate it seems that the article title is clickbait... was really hoping that there was some sort of changes in the CA position since the state is sorely behind on where they need to be with charging stations for this sort of requirement.
  • VoGhost When will Audi eliminate the fake, oversized grills that impede aerodynamics?