General Motors Death Watch 157: The Fog of War
Last November, all GM’s eight U.S. brands lost ground. As the automaker’s pretty much shot its vehicular wad, the falling stats have convinced many industry observers that GM’s turnaround is back in turnaround. Of course, there isn’t a turnaround to turnaround. Not now, and not in the last forty years. Since the sixties, GM’s market share has been on a downwards trajectory. In 1962, The General owned over 52 percent of the U.S. new car market. Today, The Big 2.8 combined can’t muster a simple majority. There’s a reason for that.
GM’s inability to see the big picture has led to its downfall. The irony is stunning– the carmaker that was once the world’s largest has proven itself to be the least capable of anticipating the large scale forces controlling its destiny.
For example, how did GM fail to see that the light truck boom was about to go bust? Years before Hurricane Katrina hit, the canaries in the coalmine were singing like Ethel Merman. Gas prices aren’t cheap! Gas prices aren’t cheap! If nothing else, the fact that Toyota, Honda and Nissan were eating GM’s passenger car lunch should have signaled management that the transplants knew something about making popular products– and money– that GM didn’t.
Never mind the inadvisability of GM putting all its eggs in a body-on-frame shaped basket. GM’s success in the car business depends on its ability to see ahead of its five year model cycle– which is often longer and should be shorter but that’s another story. It’s a sad state of affairs when a company with 99 years of automaking experience and virtually unlimited financial resources can’t predict trends as well as a bunch of pistonheads yakking on the internet.
Whether it’s due to executive hubris or bureaucratic bloat or both, GM has been flying blind for decades. More to the point, they’re STILL in the dark. Saturn gets a sports car. Cadillac gets a sports sedan. Buick gets GMC’s crossover. GMC gets Buick’s crossover. Saab gets bupkis. Chevy doesn’t get Pontiac’s El Camino, while Pontiac gets Saturn’s Aura/Chevy’s Malibu. If a decision is only as good as the information it’s based on, well, garbage in, garbage out.
Even if you set aside the ongoing series of duds failing to fill GM’s sales ledger, there’s no indication of a far more important “awareness” turnaround at RenCen. At the moment, GM blames its American doldrums on the general economic climate; the “falling tide sinks all boats” excuse. This GM genuinely believes, despite the fact that domestic boats are sinking a lot faster and farther than the transplants’. But worse, far worse, they’re telling the world that the tide will raise them up by the end of next year.
As Blogging Stock points out, GM expects the key driver of their profitable pickup truck sales– the U.S. housing market– to recover in 2008. In a recent article in the New York Times, GM execs said they expected the American housing market to pick up in the second half of 2008 and that “the industry would finish that year in better shape." Try and find an independent observer who agrees that the downturn will be over in six months. Most experts agree that we’re looking at a two to three year slump. Where will THAT leave GM?
Without a pot to piss in. Say what you will about the brilliance of the new Cadillac CTS or Chevrolet Malibu or Buick Enclave. Tell me that the new Chevy Volt electric – gas plug-in hybrid is the future of automobiling as we know it. I’m not going to dismiss their prospects out of hand. But the thing of it is, at this point, they are an irrelevance. GM’s eight brand hole is so deep and so wide that no one, two, three or half dozen vehicles can fill it.
Just as GM suffered defeats on all eight brand fronts in November, their survival depends on making advances on all eight brand fronts in the future. To do that, GM has to be smarter, faster and sharper than it’s been in its entire corporate history. To think GM can pull off an octo-brand turnaround with the same management that has singularly failed to anticipate future trends, that says it's waiting for the new Energy Bill before finalizing its products plans, is even more delusional than expecting the housing market to magically right itself.
How’s this for a long term view, from a Business Week article dated May Ninth, 2005: “The only question is whether that reckoning comes in the next year, if models developed by Vice-Chairman Robert A. Lutz fall flat; in 2007, when the union contract comes up for negotiation; or perhaps in five years, when GM may have burned through its substantial cash cushion.” So really, we only have part three of the prognosis to go.
More by Robert Farago
Latest Car ReviewsRead more
Latest Product ReviewsRead more
- UnoGeeks Thanks for the informative article. Unogeeks is the top Oracle Integration Cloud Training Institute, which provides the best Oracle Integration Cloud (OIC) Training
- Varezhka And why exactly was it that Tesla decided not to coat their stainless steel bodies, again? My old steel capped Volant skis still looks clean without a rust in sight thanks to that metal vapor coating. It's not exactly a new technology.
- GIJOOOE “Sounds” about as exciting as driving a golf cart, fake gear shifts or not. I truly hope that Dodge and the other big American car makers pull their heads out of the electric clouds and continue to offer performance cars with big horsepower internal combustion engines that require some form of multi gear transmissions and high octane fuel, even if they have to make them in relatively small quantities and market them specifically to gearheads like me. I will resist the ev future for as long as I have breath in my lungs and an excellent credit score/big bank account. People like me, who have loved fast cars for as long as I can remember, need a car that has an engine that sounds properly pissed off when I hit the gas pedal and accelerate through the gears.
- Kcflyer libs have been subsidizing college for decades. The predictable result is soaring cost of college and dramatic increases in useless degrees. Their solution? More subsidies of course. EV policy will follow the same failed logic. Because it's not like it's their money. Not saying the republicans are any better, they talk a good game but spend like drunken sailors to buy votes just like the libs. The sole function of the U.S. government is to take money from people who earn it and give it away to people who didn't.
- CecilSaxon Sounds about as smart as VW's "SoundAktor"