Tonight (8/6) @ 9 PM est on CNBC we can all find out what happened and what they are trying to do to repair the former leader of the industry.

ss

They will slash jobs, union and middle management. Then they will ask congress to give them tax dollars too cause you know our government is awash in cash. Seen this one before.

I posted a link in another thread from Fortune Magazine. That link detailed a time line for GM. The time line said GM's fall began in 1984...The General went from a 43% market share in 1985, down to to 19% in May of 2008. If that doesn't say it all, I don't know what does.

The solutions sound simple,but are harder to implement.

First and foremost, we all agree that GM needs to build cars that people want. They need fuel efficient cars that meet the consumer's needs at a competitive price with a high level of product quality. They need to do all of this and somehow turn a profit.

GM and other domestic car companies are facing the soaring costs of steel,fuel,and all components made with oil. Combine this with escalating employee health care/benefit costs ,and a very weak US dollar,and components bought overseas with US dollars effectively cost even more. The employee benefits alone add more than $1500 per car over and above what an Asian car company needs to invest per unit. Its tough to compete like this.

They have made some good first steps. They have shed their heathcare costs by paying the union billions in advance to manage the healthcare costs for its employees. This effectively gets the healthcare gorilla off of their backs. They have also taken massive layoffs and plant closings, all in an attempt to cut costs and become profitable.

At the end of the day, the US companies are playing catch-up. For years, the management and workforce infrastructure has been very bloated. The Asian makes have faired very well- Why? Because they have always had fuel efficient,reliable,high quality cars. These products are ideal for the high-priced fuels we use today. In short, while Ford, GM,etc. were pushing big SUVs with $10K rebates, the Asians were already there with the right products for the times we are in.

I'd love to see GM be out of the gate first with products that used fuel cell technology or some alternate fuel source at a competitive price. Talk about increasing the market share! I think with the right product(s) and marketing, people would beat a path to their doors again.

It'd be nice to have the foreign companies play catch-up for a change.

They should lobby the gas companies for a bail-out. After all, they have been supporting the gas companies for years by building and promoting big gas-guzzling trucks and SUV's. Perhaps they can merge with Exxon-Mobil.
EM-GM has a nice ring to it.

GM has been making HUGE investments in China. Billions from what I understand. It ills me to say it, but it will not be long before Chevy's and other GM car lines are made in China.

GM has been making HUGE investments in China. Billions from what I understand. It ills me to say it, but it will not be long before Chevy's and other GM car lines are made in China.


I have more than few Chinese parts on my 67 since my resto.

GM sells more Buicks in China than they sell in the US.

ss

The solutions sound simple,but are harder to implement.

First and foremost, we all agree that GM needs to build cars that people want. They need fuel efficient cars that meet the consumer's needs at a competitive price with a high level of product quality. They need to do all of this and somehow turn a profit.

GM and other domestic car companies are facing the soaring costs of steel,fuel,and all components made with oil. Combine this with escalating employee health care/benefit costs ,and a very weak US dollar,and components bought overseas with US dollars effectively cost even more. The employee benefits alone add more than $1500 per car over and above what an Asian car company needs to invest per unit. Its tough to compete like this.

They have made some good first steps. They have shed their heathcare costs by paying the union billions in advance to manage the healthcare costs for its employees. This effectively gets the healthcare gorilla off of their backs. They have also taken massive layoffs and plant closings, all in an attempt to cut costs and become profitable.

At the end of the day, the US companies are playing catch-up. For years, the management and workforce infrastructure has been very bloated. The Asian makes have faired very well- Why? Because they have always had fuel efficient,reliable,high quality cars. These products are ideal for the high-priced fuels we use today. In short, while Ford, GM,etc. were pushing big SUVs with $10K rebates, the Asians were already there with the right products for the times we are in.

I'd love to see GM be out of the gate first with products that used fuel cell technology or some alternate fuel source at a competitive price. Talk about increasing the market share! I think with the right product(s) and marketing, people would beat a path to their doors again.

It'd be nice to have the foreign companies play catch-up for a

change.

Bob, excellent analysis. If GM built cars that are on par with Honda and Toyota, I would be thrilled to purchase one. Sadly that is not the case.

Secondly, I am completely in the dark as to why foreign manufacturers should enjoy a $1500 benefit in the manufacture of a car when we don't have tariffs on foreign made products. Almost every other nation in the western world does, why don't we? Perhaps foreign lobbyist have made their "case" to our duly elected officials (cash, cash, cash?)? Afterall, $1500 represents 6% on a $25k car. Doesn't seem like such a horrible tariff to level the playing field, but again, the Big 3 have to start making cars on par with the competition.

As to the idea of GM investing in China, they will do what big tobacco has done, they will abandon domestic sales for greater sales abroad. There are a lot of Chinese people who would love to drive an "American" car. Look at how popular Marlboro cigarettes are in offshore locals.

alan

Bob, excellent analysis. If GM built cars that are on par with Honda and Toyota, I would be thrilled to purchase one. Sadly that is not the case.

I know this is the popular opinion, but I am starting to take more and more exception to comments like this. I had a 93 Civic DX and I can't tell you how many problems I had between valve seats, timing belts and shoddy parts on it in general (broken interior pieces, etc etc.) I had the car up until 105k miles. I followed that up with a Tacoma and had similar bad experiences and it was a real let down.

In 04' when the Colorado came out, brand new model and the one I bought was the first I had even seen in San Diego i decided to snatch one up because I liked the looks so much. I worried a little about its quality and reliability (not to mention the stigma with buying a vehicle in its first production year) but I figured since it seems like I've had so many problems with every car I buy it didn't really matter.

Well I'm sure you can see it coming but I now have 110k miles on the clock. The only issue I have ever had was a noisy fan in the dash and that was replaced free under warranty at 25k miles and haven't had a single issue since.

I am on a lot of different car forums and I see a lot of other people that share my experience but for some reason the Japanese quality and reliability claim just seems so natural to people they don't even consider that it may be highly outdated.

My 2 cents.

GM has the same opportunities to sell cars outside the United States so it is possible to take advantage like the foreign car companies have.

I know this is the popular opinion, but I am starting to take more and more exception to comments like this. I had a 93 Civic DX and I can't tell you how many problems I had between valve seats, timing belts and shoddy parts on it in general (broken interior pieces, etc etc.) I had the car up until 105k miles. I followed that up with a Tacoma and had similar bad experiences and it was a real let down.

In 04' when the Colorado came out, brand new model and the one I bought was the first I had even seen in San Diego i decided to snatch one up because I liked the looks so much. I worried a little about its quality and reliability (not to mention the stigma with buying a vehicle in its first production year) but I figured since it seems like I've had so many problems with every car I buy it didn't really matter.

Well I'm sure you can see it coming but I now have 110k miles on the clock. The only issue I have ever had was a noisy fan in the dash and that was replaced free under warranty at 25k miles and haven't had a single issue since.

I am on a lot of different car forums and I see a lot of other people that share my experience but for some reason the Japanese quality and reliability claim just seems so natural to people they don't even consider that it may be highly outdated.

My 2 cents.



You bring up a great point. The new GM,Ford,Chrysler products are not fighting a TRUE quality gap with the Asians,but they are fighting a PERCEIVED quality issue.

In fact, FORD recently had a better JD Power initial product quality rating than Toyota. Sometimes the truth gets ignored due to the old realities. I recently drove a new Chevy Malibu rental car while on vacation,and was very impressed to say the least. Great ride, great look,comfy,and great mileage to boot. I would not hesitate to buy one if I were'nt saving for a new Camaro :) But really, you are right about quality.

The Asian cars have problems as well, some MAJOR. Oh the stories I could tell! If they did not break, the dealerships would not need service bays or parts departments.

Also the Asian cars do have tariffs if they are imported from outside of the US. The way they circumvent these charges (which help to keep the US cars more competitive), is to build cars in Kentucky, Texas, Tennessee,etc. In this way, since the cars are built in the US, they forgo the import tariffs. Pretty slick, huh? The upside is thousands of jobs for US workers.


Ok, and now for my little rant... sorta related to US vs foreign interests....:beers:

Personally, I'd like to see the US drill here, drill now, and pay less for gas, then sell our US oil all over the world for under $100 per barrel. Its called "dumping" (selling a product for less than its worth) The Asians have done it to us for years. A little payback is in order. Would'nt it be great to put more Americans to work on newly built oil rigs, and sell a US made product that the whole world would run to us for? We'd export oil, keep the workers of this country employed,help the trade deficit,and stick it to the Saudis and other OPEC thugs that currently hold us hostage over energy! I'm running for office! :D

I am on a lot of different car forums and I see a lot of other people that share my experience but for some reason the Japanese quality and reliability claim just seems so natural to people they don't even consider that it may be highly outdated.

You bring up a great point. The new GM,Ford,Chrysler products are not fighting a TRUE quality gap with the Asians,but they are fighting a PERCEIVED quality issue.

In fact, FORD recently had a better JD Power initial product quality rating than Toyota. Sometimes the truth gets ignored due to the old realities.

Bob is 100% on the money with "perceived" quality. I was a CS pro for many years, and I taught classes on customer service as well. One example I used in my speeches was; Delta Air Lines was #1 out of all domestic airlines for most of the 70's & 80's. But by the 90's, the DOT rating (via complaints, denied boarding, lost bags, on-time %, etc..) had them well under the old #1 spot, and even past #5 & #6 spots at times. However, when people were polled...Delta rated #1 for nearly a decade after their notable decline had begun. Why? Perception hadn't caught up to reality.

The point is this: With any name brand product, they can perform poorly for only so long and still get away with it. But once the "switch" is flipped in customers minds, it usually takes twice as long to get the customer back....if at all. It works both ways (good and bad). And with automobiles that most people only purchase every few years, a down cycle in perception can be deadly.

.......... Personally, I'd like to see the US drill here, drill now, and pay less for gas, then sell our US oil all over the world for under $100 per barrel. Its called "dumping" (selling a product for less than its worth) The Asians have done it to us for years. A little payback is in order. Wouldn't it be great to put more Americans to work on newly built oil rigs, and sell a US made product that the whole world would run to us for? We'd export oil, keep the workers of this country employed,help the trade deficit,and stick it to the Saudis and other OPEC thugs that currently hold us hostage over energy! I'm running for office! :D

I am not so sure under $100 would be considered dumping. I think that today's inflated value of a barrel of oil may not be what it is really worth. I think we are on a bubble (just like the NASDAQ @5000). Traders have run the price up and the oil market needs a correction. Maybe $50 is too low but $150 is certainly too high. I realize something is worth what someone will pay, but most of us are stuck w/o fuel cells in our cars so there can only be pressure by lowering our use. Hence no leverage.

Hey man, you have my vote.:hurray:

My 2006 Colorado has been and is a great vehicle. I have improved my driving habits and get 19 MPG in town. It is very quiet ride. No major service called for until 100K miles.

GM will be back , I just can't see this giant going belly up.

I agree on the "perceived quality" problem that GM has. I rent a lot of cars. Anymore they are pretty much all good. The malibu is actually a pretty nice car, both in performance and looks. I suspect the new camaro will be as well. The CNBC show kept stating that GM needs to build cars that people actually want and not have anything that is halfway there. The volt ? that hybrid car looks nice. If they pull that one off to compete with the prius I think that would be a real win for GM. I drove an EV1 when they were out. Besides the ugly the car was very well engineered it even had "creep" designed in to feel less like a golf cart and more like a gas car at idle. I suspect that good hybrids are the future and if the US carmakers don't get some good products out they will be left behind.

There used to be a saying in the Market: So goes GM, goes the Market. Seems to have been true so far this year. Let's hope not longer term.

GM will be back , I just can't see this giant going belly up.
Jerry, I sure hope you are right on this one!

Interesting perspective of the "perceived" to that of the "actual" by the public, and it does take time to dismantle this outlook.

I think that the big three have closed the gap to some degree, but still have a ways to go. As in previous threads, it was pointed out where and when all this started, and how we have arrived at this point today.

I seems like the different companies tend to have had their heyday, and time in the sun, as Sony and Toyota have had. Even the Volva and Mercdes products have gone this route.

There are thousands of people out there on this side of the world relying on the continued auto production, and the cheap labour in the third world adds another twist to the dilemma.

capt

Isn't the JD Power rating a bought and paid for rating by the company? That is what I have always heard. The company that hands them the most money gets the best rating.

I'm sorry, but I kind of take exception to GM quality issues too. They have been fighting that quality issue for years since the mid 70's-early 80's. They deserved it then. Fit & finish on those vehicles was lousy. They haven't deserved it in the last 15-20 yrs. IMO. Check out any new GM vehicle paint/ fit & finish against any of the foreign stuff.

As far as building what people want- they have been building what the public was buying. Full size trucks & SUV's. At least around here. They always had a decent car for the money. Again, in IMO. Example:Pont. Bonneville/Buick Lasabre 3.8L's would get easy 29-30mpg on the hwy. Damn near as good as the tiny Corolla. No one was buying. Perception. GM cars gas hogs/Toyota thrifty. Today a new Cobalt was delivered to the dealership that was EPA rated I think around the low 40's mpg highway, mid 20'smpg city. Sticker around $16K. XM radio, decent room, nice paint. For a little commuter not a bad ride. Compare pricing and standard features against the imports. Again IMO.

I work in the parts dept. Till the 1st of this year it was at a GM truck/ toyota dealership. I can tell you that Toyota had it's fair share of recalls on their vehicles. But the toyota die hards there were always of the opinion that toyota recalls were to protect the consumer. When GM had recalls they laughed that they were POS. Got tired of that mentality and moved to an all GM store.

I'm sorry this got to be a long winded rant. A few "chillys" tonight has gotten me to say more than maybe I should. I've owned them all. GM, Jeep, Ford, even bought a beater toyota car for the boy when he was in college. All good vehicles! None perfect. All, even the toyota needed replacement parts at some point. GM has a job ahead of them getting people past that bad rap they got 35 yrs. ago. Hope it's not too late. As far as one vehicle better than the other, one veteran mechanic gave me the best advise. He said "if it has ti*s or tires, sooner or later it's going to give you trouble"

Isn't the JD Power rating a bought and paid for rating by the company? That is what I have always heard. The company that hands them the most money gets the best rating.

No, actually thats not the case. They are like the Consumer Reports of the auto industry. They interview customers, and base the company and or product ratings on customer praises and problems. On the product side, the big rating is the " problems per 100 cars" ranking. The lower the number, the better.

Typically,the Asian cars have dominated in terms of quality, but as of late, the US made cars are in the hunt, and Ford edged out Toyota,which I guess throws out the concept that the company with the most money wins :D

well i woudlnt be suprised to see our crate motors made in china lol. Since our economy here is kinda slow, would it be out of the box to just semi copy a idea? They copied alot of our ideas.

I am in the market for a sporty car to drive daily to work. Gas mileage is an obvious priority but not the last word. I have just started looking and have driven only one. I have always liked Honda and had dropped a friend off at a dealership so I test drove a Civic si. Nice little car and I really like the looks same with the Accord. The Cobalt looks more generic to me even the SS I'm sure its a nice car but a car has to have a good first impression or it doen't stand much of a chance in my book and that impression is all visual. GM needs to cut some of the fat at the top and hire the worlds best designers at whatever the cost. This is the only way out.