Comments on: The Slow Death of General Motors

By: Paul Fox

Paul Fox — Mon, 06 Apr 2009 20:57:36 +0000

Martin Hutchinson’s fawning support for the now departed GM C.E.O., G. Richard Wagoner Jr., seems to missunderstand the function of managment which is to anticipate the markets and to make products that the markets want/need. One of the reasons that Ford hs not as yet required government money is that they already negotiated a better (for them) contract with the U.A.W. To bame the “bicoastal media” is ridiculous since the bicoastal areas represent the largest car market in the U.S. Obviously, GM has not been making enough new cars that the American public wants to buy. Proof enough for this fact lies in Mr. Hutchinson’s admission that he drives an “ancient” Buick.

By: JIM

JIM — Mon, 06 Apr 2009 16:09:58 +0000

Most of the comments here have good points but as a white collar GM employee I can tell you the main reasons for failure are not mentioned.

By: DG

DG — Mon, 06 Apr 2009 07:13:39 +0000

When I read this story about poor build quality; subpar materials and a lazy unionized labour force it kind of makes me smile.

This is all a deja vu; just look up the history of Alfa Romeo and the Alfa Sud. The Italian state (majority share holder in Alfa; because of the 70’s crisis; sounds familiar?) wanted to address unemployement in the South. So they build this plant and offered a job to all these communist day labourers that were used to a 3 daywork-week in the fields.

Ofcourse the government (they know best!) also mandated exactly what kind of steel should be used for to build the chassis (they ahd negotiated a barter deal with the Soviets).

The factory was the scene of quasi permanent strikes and outright worker’s sabotage. It took years before the state decided to confront the situation and wanted stop hemoragging taxpayers money.

What happened? The Alfa Sud was sort of a commercial success (it was cheap, sporty and appealled to the young) but it destroyed Alfa’s reputation for building cars that were ahead of the competion in terms of engineering advancements. It lost that reputation forever.

Eventually that state closed the Alfa Sud plant and sold the shared to Fiat. Fiat almost bled dry and went bankrupt in trying to rebuild the Alfa brand.

Now ofcourse the US govt’is hoping the Fiat can also save Chrysler. But Chrysler isn’t Alfa. Alfa was never a multi-billion dollar industrial conglomerate. Before the Alfa Sud it was a minor player that build cars for profit to partecipate in races. Chrysler is way to big for Fiat to succesfully digest it. GM and Fiat tried to partner before; and didn’t work out either.

By: Jon

Jon — Mon, 06 Apr 2009 05:34:35 +0000

“The success or failure of any enterprise is the direct responsibility of its management”.The UAW made not the first decision concerning GM or any other automobile company.It amazes that any with a driver`s license thinks they know how to run a car company.I guarantee Timid Tim and his erstwhile employer haven`t a clue.The so-called labor costs are often less than advertising costs for some models.If the U.S. companies labor costs are so unworkable how did Ford set the profitability record (since surpassed by Toyota) a short ten years ago?One huge problem that is never acknowledged is the at least four different subsidies that foreign competitors enjoy vis-a-vis the domestic industry.Government policy ranging from CAFE to taxation has driven half of the industry offshore with the other half hanging on for dear life.Academia in the future will recognize this as no less than protracted industrial suicide in its case studies.Almost all of the previous comments are clearly made by people who know little of which they write.That never seems to stop rhem.

By: Luther Rankin

Luther Rankin — Sun, 05 Apr 2009 23:36:44 +0000

GM and most large companies are not being run for the benefit of the owners of the company, the shareholders.
They are being run for the benifit of management. The owners have lost control of what they own.

A large portion of FORD on the other hand is still owned or controlled by the ford family who still looks out for their own interest.

This point I believe is the reason why Ford today is in better shape that GM.

By: George Holloway

George Holloway — Sat, 04 Apr 2009 00:20:58 +0000

Lots of interesting comments! I’m surprised that no one has brought up the obscene salaries, bonuses and golden parachutes of the geniuses who “manage” GM. Moreover, a company that cannot sell enough vehicles to generate enough profit to pay the INTEREST on their debt is doomed.

By: Gary Wardell

Gary Wardell — Fri, 03 Apr 2009 02:32:30 +0000

I work in Minnepolis Minnesota. I live 30 mile from work. My trip home is NOT all expressway. The road I live on is gravel.

I will pay to get my old trucks fixed until some manufacture comes out with what I call a Big Green Truck. If I purchase a small “green” car, I might not get home in Minnesota snow storms.

Who is going to purchase a car that might not get them home? Who is going to purchase a gas hog?

By: John King

John King — Thu, 02 Apr 2009 20:53:42 +0000

I drive a 1997 Mercury Grand Marquis with 234,000 miles on the odometer. I drive it by choice, not because I can’t afford nearly any car I would want to buy. This car has only ever had four parts installed other than the normal maintenance items like tires and brakes. They are; a power seat swicth, the dash dimming switchtwo, a water pump and a belt idler.
The car still runs like new, looks practically new and the leather interior is still in excellet condition. By the way, it will get 32 to 33 MPG on the highway unless I run gasoline that contains ethanol. Then it drops to about 28.
Foreign car owners, beat that record.

By: MARVIN WILSON

MARVIN WILSON — Thu, 02 Apr 2009 15:33:33 +0000

I have to agree that dealerships are the biggest problem with the American auto companies. The greed and underhanded tactics used by dealerships to get every penny possible from customers is deplorable. Customers almost never get to talk to anyone from the auto companies, they only talk to the dealerships. Wether it’s a bad deal on a new car, a rotten trade in deal, after sale service, or excesivly high service charges at dealerships, the customer only talks to the dealerships. When a complaint get to the auto makers their response almost always favors the dealerships. I beleave the reason for that is customers inexperiance againsrt dealerships experiance. A salesman sells up to tewo or three vehicles a day. He knows all the tricks of the trade The service dept also services many vehicles a day. They know all the tricks to uo the total on the bill. on the other hand the average customer buys 1 new vehicle once every 3 or 4 years if not less(inexperiance). How often does he take his vehicle in for service (also inexperiance). Dealerships take advantage of that inexperiance and exploit it to the max. Thua you usually end up with a dissatisfied customer. He will usually not return to that dealership, and eventually will not return to that product. Thus the auto maker looses a customer. How long can this senario go on before an auto maker looses to many customers. But big management continues in their infinate greed, continues to let the sales staff. the service dept and all others in the customer relation positions keep backing the dealerships and ignoring the customer

By: Poonie

Poonie — Wed, 01 Apr 2009 16:00:58 +0000

Everyone talks about market share, but does GM in fact sell fewer cars today than it did 30 years ago? I can’t even find this information on GM’s website. Granted, 2008 was a really bad year, but I’ll bet my Nissan that GM sold more cars in 2007 than it did in 1977. “Market share” is a convenient excuse for explaining why GM is losing so much money. If in fact they are selling more cars but losing billions then GM’s management looks even worse.