[Joey'sVee]

When I bought my CTS-V 6 months ago I didn't realize GM was in so much trouble. I guess sells are way down. I know I got my 2004 V new (175 miles) for $40K even. I guess the CTS-V didn't sell as good as they thought either. Anyways, what gives for GM? My opinion the UAW has brought this great American company to it KNEES!!!:rant2:

http://news.yahoo.com/s/ap/20051017/ap_on_bi_ge/earns_gm_3

 

[davesdeville]

Ouch. Their truck line probably took a hit this last quarter.

 

[mccombie_5]

Ouch. Their truck line probably took a hit this last quarter.

And as far as i can precit, will in every quarter, until they realise most people are sick of trucks and SUVs

 

[Kdirk]

I'll concur on the truck/suv bit - the trend is played out regardless of gas prices and GM needs to get heavy on decent sedans, compacts and probably hybrids [though I personally think they are a stupid idea and most sales are due to people wanting to be trendy or from knee-jerk response to shock at the pump] and do it quickly.

I also agree that much of GM's undoing has been the UAW's doing. I hate to sound like a union basher (and possibly incite political arguments here which is not my intent - I try to step very lightly given recent happennings on here, and the closing of CI forum) but they really have cost GM too much to survive under the current circumstances.

I also read yesterday that GM has come to an agreement with UAW to reduce benefit costs - which is good - and will also reduce material costs by $1 billion - which may be bad for vehicle quality. What worries me is that we now have a confluence of different problems coming to a head here. The excessive cost of union contracts at GM is but one component of the problem, albeit a large one. I can see a situation where the retiree beneifts end up being unloaded on the US taxpayer as has been the fasionable thing for large companies to do as of late. See the playbook of some major airlines for this one.

The other issues are the sudden lack of popularity in trucks/suv's, on which GM is entirely too reliant for profits, a still relatively poor pubilc perception of the quality of their products based on years of average and sub-standard vehicles [though that is no longer a real issue, peoples opinions are proving very difficult to change] and the typical American corporate bloat that makes the company too big to react quickly to changes in the market so that they are always a step behind.

If all of the above cannot be changed in short order, there is going to be big trouble in Detroit. Add to all of this the current onslaught of the Korean cars which continue to improve remarkably and the anticipated arrival of Chinese cars on the US market that we will probably start to see here within a decade and things are not looking so good simply due to even more cheap competition.

It took GM 10 years and untold billions of dollars to get Cadillac back in the game after 20 years of decline. They do not have that kind of time and money to turn around the rest of the company before other factors over which they do not have control do more damage than they are currently sustaining.

I hope that there is some PFM lurking in the wings at GM that will really start moving things along in terms of recovery or I'm not sure what will become of them as an ongoing concern.

The negotiated reductions in UAW contract costs are a good [and promising] start but there is much work to be done and I wonder if they can pull it off in time.

KDirk

 

[Sandy]

Kdirk, I read (and re-read) what you wrote. I was also in the automobile business for 27 years. I agree 100% with every point you make. You have hit the nail, squarrly on the head over and over and over.
I have one other "quick-fix" solution. All of the thoughts you wrote take time, some 3 years, others a decade. GM needs two things immediately. Oneof them is relief from the burdon of hundreds of millions of dollars going out to retirees health and social service benefits. Healthcare. Combine THAT with a sudden big boost in vehicle sales, and they will have some breathing room to set about 3 stage plans, i.e. immediate, meaning next 36 months, interrmediate, meaning 4 to 6 years, and long term, meaning 7 to 12 years.
The other thing I am VERY much for is government assistance ~ hoever in a different kind of way. Not a cash handout but rather this: When you visit your accountant with your next tax filing, if you produce a proof of the purchase of a GM or Ford new vehicle purchase during the prior year, and it's in your name or aname of a company that youi can prove you own, you'll get a 10 % tax cut. So, if you have to pay $ 10,000 in taxewsfor the year, it will become $ 9,000. This will light the fire under people to "Buy American and we will not have to say "Bye America" in the manufacturing industry.
I know it's mixing Government & private industry, BUT hey, private industry is what keeps this government moving forward, and certainly pays to keep the country (and government) moving. One hand washs the other....

 

[Ralph]

Sandy has the right idea!!
Believe it or not, that really isn't too much for GM to lose. I saw another link that said health care costs for GM workers is 6 billion every year, so now you probably understand why some people are tired of the union bleeding them dry, and why you see more and more GM facilities set-up in Canada because we are covered by government provided health care and therefore GM saves a ton of money if they set-up here.
So I agree, it's the UAW.
GM really isn't in too much trouble if you want to compare to Ford.....look at today's stock proces for a share of Ford stock.....$8.61 per share to buy...Ford is in SERIOUS trouble right now...

Ford Motor Company F 8.61 -0.38 (-4.23%)

General Motors Corporation GM 27.98 +0.83 (+3.06%)

DaimlerChrysler AG (ADR) DCX 50.94 +0.25 (+0.49%)

Toyota Motor Corporation (ADR) TM 92.11 +0.86 (+0.94%)

Honda Motor Co. Ltd. (ADR) HMC 28.81 +0.47 (+1.66%)

GM is actually on par with Honda, or so it would seem.

 

[mccombie_5]

The unions will do that to ya.......


Sandy and kdirk have pretty much got it....

 

[Kdirk]

Sandy-

You sir are... very astute. I like the idea of a tax break for the purchasers of domestic vehicles. This kind of thing already happens for home buyers in redevelopment areas (urban centers that have been blighted for years and are on the upswing again) so I see no reason that it could not be implemented for car buyers. As well, there have already been tax breaks (state at least, not sure about federal) for hybrid car buyers in some areas. Thus a largely similar precedent has been set. It seems that we need to find a way to heavily persuade people to keep their money in the US and this could be it.

A sudden surge in sales of vehicles [other than trucks and suv's] would be a big help but I fear that the battle for public opinion is not so much in GM's favor at the moment. I'd buy one, but I am but one person who loves his existing GM (Cadillac) product and repeat buyers are not the key here - first time buyers are. We need converts to the GM brands in large numbers if a true recovery is to take place.

Shaking loose the preconceived notions of a whole generation of yuppies and spoiled rich kids [amongst others] who have always driven Euro or Japanese imports is the order of the day, but it will be a very difficult order to fill.

In that regard, Cadillac is making great progress for the young, well monied professional. But what about the other divisions? Buick has some nice stuff but I keep hearing that it is too dull/boring - yet Buick is not a sports car/high performance division, so what did you expect? It's more about mid-luxury and still people don't seem be catching on.

Chevy has some great cars too (including the HHR which is strong now, but _could_ be a flash in the pan ala PT Cruiser if people are buying on looks alone) but they need to draw away the typical Toyota Camry and Corrolla, Honda and VW driver to stay in the game.

Pontiac is making great stuff too, the GTO is a winner. But then for every guy who recognizes true performance and loves it there seem to be 2 that bitch about the looks.

And then there is the plain and simple fact that bashing domestic cars, or domestic anything, seems to be a way of life for so many people. I don't understand Americans who want all the benefits this country has to offer, but cannot take pride in their country, and that includes products that are made here by their fellow citizens.

It has reached the point, literally in the case of cars, that the US made product you do not buy will mean the lost job of another American - one who could even be a member of your family or a friend. Why then is there this continued insistence to sell ourselves out? It was different when the US cars were actually inferior in quality to imports but now we have good stuff on the lots and the public still isn't getting into it in large enough numbers to make the difference.

I just don't get it. Maybe I never will, but I cannot type anymore about this now without frustrating myself and probably ruffling some feathers here.

KDirk - over and out.

 

[lowscola]

GM's situation has gone from bad to worse now that DELPHI has filed for CH 11 bankrupcy. I can say though, that with DELPHI's CEO offering to earn $1 ayear vs $1.5 M, there does seem to be some light at the end of the tunnel.

Regarding government help, the domestics deserve a bail out or two as reward for stepping up to the plate during war time in the past. Many forget that years of regular auto operations were put on hold to manufacture materials for war.

 

[fast66]

Yeah delphi screwed em over, Someone better call an ambulance, because GM needs a doctor

 

[Guest]

The unions will do that to ya.........

And so will incompetent management. There is no question that the unions have scored more than their worth, but it makes no sense to give a free pass to poor leadership that capitulated to the Japanese before they did to the unions. It has been my belied for some time that if the workers take a hit then so should management. Afterall, management makes all the decisions while the workers simply implement them.

And then there is the plain and simple fact that bashing domestic cars, or domestic anything, seems to be a way of life for so many people. I don't understand Americans who want all the benefits this country has to offer, but cannot take pride in their country, and that includes products that are made here by their fellow citizens.

Your description is simply not true. I know of no one who simply "loves to bash America" and it seems to me that you're just saying that to cover to the real fact that for years US car companies made crap....and still do (though not as much as they used to). Quality rankings from the past 15 years show that people who actually work hard for their money will not just throw it away on things that will not work. I certainly won't.

It has nothing to do with hating America, but value for the dollar and this is the area where GM management has for too long gotten a free pass. Build quality and people will buy quality. I go back to Harley-Davidson - my generation mainly will never touch a Harley because they sell an identity instead of a motorcycle, while the Japanese make a superior product that actually runs. The Japanese are superior in EVERY WAY. Now, if Harely ever takes its giant wealth and actually opens up an R&D operation that brings the company into the 21st Century...then maybe they'll get a look.

 

[mccombie_5]

I agree, the workers should not be laid off, its the management, the managers tell the workers what to do, union or no union workers generally do it, it isnt their fault that the manager told them to do the wrong thing.......

 

[ben72227]

I think scourge really expressed how I feel about it too. You can only blame the unions so much, because in the end, the reason GM doesn't do so well, is because of leadership like Roger Smith. They have made and continue to make crappy cars (i.e. the Pontiac Aztek should have been dropped in 2000, not now). And while they are getting better (i.e. Pontiac Solstice) their new cars are just average (i.e. Pontiac G6) and still aren't up to the level of cars like the Camry.

Sure, the Japs may have some pretty BORING cars, but in the end, they hold together, get great gas mileage, and hardly ever have to get repairs because they are durable. And so people buy them rather than get a car from the company that made abominations like the Pontiac Aztek and the Cadillac Cimmaron/Catera.

Even Ford is getting better "bread and butter" cars ($15k to $25k range) than GM. The new Ford Fusion looks....AWESOME for that class. It pretty much blows the Malibu out of the water. I mean, it has a 6 speed auto tranny! On a Ford! that's less than $25k! Gm is lagging behind, and they rely WAY too heavily on Trucks/SUVS. Now their SUVS are (IMHO) GREAT. They finally have interiors that don't look like they were designed by Rubbermaid, but they still don't have the DoD engines yet, and I'm afraid that by the time they arrive, SUVs will have been phased out, which is really unfortunate...

 

[Kdirk]

Points taken. I would point out that I have not placed all blame on the unions, as I also did list product quality and public perception as issues that need or have needed serious attention. While I did not specifically say anything about management, believe me, I do not hold them faultless for the current state of GM.

I probably should have pointed that out before but it seems clear to me by way of inference [after all,who makes the decisions on what vehicles to design, build and market] that management was very sorely lacking at GM for a long time, and still has it's problems.

I too think that the current system of rewarding management (mostly the top-most tier - CEO, CFO, COO) even when the company is failing to meet expectations is just flat out wrong. The term "golden parachute" has been popularized as of late and it rings true time after time, and not just in the automotive world.

If you (as a Chief -whatever- Officer) are at the head of a company that is underperforming and is getting battered by it's competition then you also need to feel the sting financially and not just be given $10 Million and a pink slip that says "there's the door, don't let it hit ya where the good Lord split ya" so the company can find another big-shot to overpay in the hopes that the next quarter's earnings will be better. This is a distinctly American problem that is going to have to be addressed as all the pisants are getting mightily disgruntled [myself included].

As to the popularity of America bashing, I hold my ground on this one. Some would accuse me of blind devotion to America [which is untrue, I have plenty of complaints about my country as does most anyone] and I will agree that US carmakers in particular have made (and still make) some losers.

The problem is that some people will say things like "All US cars are crap and I'll never own one as long as I live". Well, guess what - this is a stereotype based on nothing more than ones opinion. Even if millions of people share this opinion it still isn't a fact. Think about it, millions of people can say "I'll never eat brussels sprouts because they stink and have no redeeming quality" and yet there are millions more who like to eat them, so the notion of completely denying the quality of something because you don't like it is silly.

Equally silly is the notion of giving one's allegiance to one brand of car, blue jeans, bottled water or anything else just because of the name and the image. Some people will buy a certain brand just because it is that brand, or because other people of similar background and interests buy the same without regards to the cost, quality, or value for the dollar. Thus are spawned more stereotypes - yuppies all drive BMW's, etc. And yet there is definately a lot of group-think at play here. Then again, that's what marketing is all about.

Where it become America bashing is when people have such strong opinions against US made cars that it comes across as outright hatred of them. And trying to discuss the merits of US cars with someone who refuses to believe that anything GM or Ford makes can ever approach (much less exceed) the quality of Toyota or Honda or VW (or whoever) will cause them to become irrational and simply resort to generalizations about one vs. the other without providing any factual or statistical basis for their argument.

This happens because they have protrayed their position as a fact, when knowing that is is really just an opinion. Since nobody likes to be wrong, when they are cornered and cannot back up their "fact" [read: opinion] with any solid points they just come out shooting from both barrels.

Of course this seems to have become the preferred method of debate for any issue in the US these days, as there is less and less respectful and intelligent discourse on touchy subjects. This is a shame because tempers flare all to often over trivial issues that don't deserve the kind of dead-horse beating treatment they receive while real problems go unsolved.

For the record, I am not directing any of this towards anyone who has repsonded to this thread thus far, so please don't let this denegrate in to a pissing contest. I am simply sharing my observations on the subject based on how I see people both on and outside of this forum approach the subject. And oftentimes it isn't pretty, that just how it is.

KDirk