The American Spectator

John| 11.18.08 @ 7:55AM

Thirty years of bad management, worse labor and UAW bought and paid for politicans and what do you get? Detroit, both the City and the Industry, demanding that the rest of us pay their bills. Detroit is an inbred, lazy, and incompetent industry whose leaders can not even recognize the obvious small changes you rightly point out. There is no hope for Detroit. It could not correct its mess even if it tried.

Engineer with proud| 11.18.08 @ 8:13AM

I used to work for GM and remember how purchasing did not work with engineers. Actually, sometimes both sides viewed each other as a hinderance. Instead of working together, we had purchasing trying to force engineers to use the "platform component" even though it made no economic sense at all. And later on, too many engineers would not support purchasing (feeling manhandled by them) when changes to the original design was made, which allowed the supplyer to put a huge cost increase into the product. So WWP got a low initial price for a component that didn't fit into the car, which, after changes, ended up costing more than the component that fitted well and would have solved both financial and technical problems.

Carl| 11.18.08 @ 8:52AM

You left out the Union Scale work rules

GM pays $2,500 per car for benefits that Toyota does not pay. $2,500 x 10 million cars = $25 Billion, not a viable long term solution. Let the Government pay the retirement benefits for the retired workers and let the Companies go Bankrupt. The disaster would be only for the Democrats who get UAW money and

Ryan| 11.18.08 @ 9:04AM

From a marketing standpoint this is a start. To fix the bigger problem bankruptcy will probably need to occur. What can Congress do? Create incentives for these companies to rebound. Eliminate the cafe standards that force these automakers to make low margin cars with high fixed costs that nobody wants to buy. Drill for oil that we already own to determine our own future and keep gas prices low to encourage driving and leave money in consumers pockets, heck get rid of the gas tax as well. Keep taxes low, especially capital gains taxes. Force the unions to renegotiate into a win-win situation for everyone by making all these states right to work states. Allow the automakers to reduce the number of dealerships they have to more accuratley meet demand. All of these ideas are free. Sure Congress will have to make do with less, but that will be a good excercise to eliminate wasteful spending. Throwing billions of dollars to prolong to another day the death of these companies is a waste and is inexcusable.

Mike| 11.18.08 @ 10:10AM

Actually, Toyota and Honda rebadge some of their vehicles as Lexus or Acura, they just do a better job of dressing them up. GM doesn't even seem to remember what it was trying to accomplish with this stratgegy in the first place. My GMC was the same price as the Chevy, different grill, same vehicle. The small trucks Colorado/Canyon should have been Saturns anyway. Escape from the unions first, then fine tune.

Ed| 11.18.08 @ 10:11AM

How about #4 or really #1, QUALITY? If quality could be brought in line with Toyota, Honda and Nissan, the other problems would fade to the background. The author's points are well taken but without a devotion to quality, no manufacturer can compete, US or otherwise.

Dan| 11.18.08 @ 10:53AM

I drive a GM and love it and will gladly buy another, even though I've driven Toyotas for years (and a Sienna is currently our second car). The author is correct, the cost structure is bloated and needs to be realigned.
1 - too many brands. Now with the Chevy Traverse you have the same vehicle in FOUR different brands (Saturn Outlook, GMC Acadia, Buick Enclave).
2 - corollary of (1) too many dealerships. Many of these are protected from closure by state laws.
3 - ridiculous UAW contracts, for retiree benefits, work rules, pay & benefits to current employees, benefits to workers "displace" (the infamous "jobs bank").
4 - CAFE standards don't allow small foreign cars to be imported, as the author notes. The tree-huggers have yet to realize these exist not due to environmental concerns, instead they're really a scam to benefit the UAW.

A prepackaged bankruptcy allows GM to address all these. Dealership contracts can be broken, UAW contracts can be broken, retiree benefits can be tossed onto the PBGC. Of course those benefits will then fall into line with what the rest of us in the real world usually see.

And one more thing, current management will be sent packing.

GM can, and does, build good cars.
Good cars can be built profitably in the US - witness all the transplants.
Until they get their cost structure in line, their viability is not sustainable. Any bailout now would be followed by a bigger one in a few years.

Howard| 11.18.08 @ 11:48AM

Good points. Three divisions make sense:
1. Chevy- Equal to Toyota or Honda.
2. Caddy- Equal to Lexus, Acura.
3. Saturn- Innovative stuff, move the Volt to Saturn, other concept stuff.

megapotamus| 11.18.08 @ 12:13PM

In any event, with a combined market value of about $7bil for the Big Three (or Big 2.2) just what they will do with the proposed $25bil is mysterious especially as they seem to have metabolized that amount last year with nearly no benefit to them or us. The author is an auto expert? Goody. I suppose we must all be come one now as we are to forcibly become responsible for this tottering megalith. No to bailouts, friends. Just no. The Big One, Paulson's Purse... everyone said we would be eating lawn clippings if that did not pass then all market news, regardless of direction, became proof of its necessity. Sadly Bush set the precedent with the Bush Stimulus that economists have found, predictably, had almost no net benefit. It was simply a shift of dough from one pocket to the other so how could it? No more bailouts. Rescind the ones we've booked and let the chips fall. Could they fall any harder than they have to date? If these are principles as we always claim, why are they not applied in times of dire upheaval? Are they not even MORE necessary? I am ill. Of all punditry only Cavuto (bless that chunky monkey) is talking any sense. NO MORE, friends. It will not work. It cannot. And we all know it.

Marc Jeric| 11.18.08 @ 2:57PM

"Strong" unions led by either commies or mafia (same thing) destroyed already many industries - e.g., steel, textile, electronics, education, government services, and now car industry, among others. Bankruptsy then engage non-union labor and save the companies!

Dave| 11.18.08 @ 3:24PM

GM and Ford now make products that are as good as or better than Toyota and Honda - get over the notion of crappy American products!!! That's the first thing that needs to happen - the American car consumer needs to give these guys a chance again and buy their products. However, there are too many divisions; too many dealers; and too much in legacy costs. GM needs to go to Chevy and Caddy. That' s it. Going bankrupt seems to be the only way to restructure both the business and the costs. If a loan is given, give it to the suppliers while the automakers get their act together.

dmjones| 11.18.08 @ 4:59PM

I do agree that GM has too many brands to balance. They are trying desperately to get rid of Hummer, but without much luck. Too bad, as it's a great product for a certain demographic--just not profitable enough for today's marketplace. In reality, they've almost reduced themselves to 3 nameplates already: Chevy is the "bargain" car and Cadillac is the "luxury" car. In the middle is the strange part: although Pontiac, Buick, and GMC are technically 3 different brands, they are almost always sold in the same dealerships. Saturn is the odd man out; at this point, the only thing GM can figure to do with them is sell European-designed cars (Opels) through them. My own personal opinion: roll Buick and Pontiac into one division (probably Pontiac), dump GMC and move those trim lines to Chevy trucks, and extinguish Saturn as a "nice try." If they can't find a buyer for Hummer, incorporate that as a trim line into the Chevy trucks as well.

Tony C.| 11.18.08 @ 11:14PM

You had me all the way up to... "When average workers don't perform, they get fired." as opposed to CEO's whom are compensated regardless of performance. There is no accountability on the bottom or the top of the GM food chain.

David Govett| 11.19.08 @ 1:36AM

GM, Ford, and Crysler should give out 100 shares of their stock for every car bought. When the general public owns the company, they'll be more likely to purchase from them in the future.

HILEW| 11.19.08 @ 5:37AM

Chapter 11 will heal all wounds

Pete M.| 11.19.08 @ 6:05AM

I went pickup shopping, wanted to replace my 20 year old S-10 with a Colorado.. Bad news. The mileage on the new 2008 4 cylinder model is much worse than what I got from the 20 year old version when new, and a little worse than what I'm getting now with a worn out engine. The Colorado feels slow and weak too, just plain overweight. So I'll keep a 20 year old truck that is totally worn out in every possible way because its actually a better vehicle than the new one I really want. Sigh. Make something that is worth buying is what I'd say to GM.

tofly| 11.19.08 @ 10:53AM

This is supposed to be the United Sates of America!e
Michigan has been on hard times for many years because of the outsourcing of our manufacuturing jobs overseas and to other parts of the country. a collaspe of the automotive industry would completely devestate the economy of Michigan and other automoble producing states. What do we replace this industry with? Making widgets? All the conservative free market at any and all costs senators had better hope to god that their states do not have some unforseen calamity that requires the good will of the unaffected parts of this country. We will remember that it is every man for himself.

Tim Pruse| 11.19.08 @ 3:04PM

Mr. Peters is correct about the need for GM to cut down the brands and cars that are basically double of one another. However, the idea that the country should stand idly by while the Big 3 go under is insane! The executive pay argument is a white elephant. In any government loan scheme GM management, labor, and stockholders should all be forced to make some strong concessions. Yet why does this not hold true for the companies bailed out on Wall St.? Why should we give $700 billion to Wall St. execs to shuffle around money in a giant game of usury and allow our manufacturers to die? Correct me if I'm wrong, but supposedly over $100 billion has been dispersed to Wall St. and yet credit markets have not loosened at all. We were promised this money was needed to loosen up the credit market. It sure seems like the bankers are hoarding the money away and not providing any credit. The country WILL enter another Great Depression without a doubt if GM goes under. It will also signal the end of American hegemony as we lose our manufacturing capability.

William R. Barker| 11.19.08 @ 4:45PM

You know what GM (or ANY car company for that matter) could do to earn my loyalty? They could address the "lifetime loyalty" issue in a concrete fashion.

What do I mean by that? Well here's a suggestion:

DON'T RIP ME OFF FOR non-warranty parts and service!

Why in God's name should I as a consumer pay an additional mark-up from what an independent mechanic does when I go to the XYZ dealer's parts department to pick up a part for my XYZ vehicle?

Understand. I'm not asking for a discount. I'm simply asking to be charged the same reasonable profit generating price for a "genuine XYZ part" for my XYZ vehicle sold at the XYZ dealership as that given to any local independent service station mechanic who buys the part so that he can install it in his customer's vehicle.

Next. Don't rip me off on diagnostic services!!! Don't tell me that there's a flat rate charge of an hour's labor (or more!) to scan for a code or do a perfunctory physical inspection of my vehicle and perhaps a test drive.

Back when I was a kid the service stations used to note a "Lift Charge" of maybe $10 to "check" your car. They rarely charged it, but it was there in theory to discourage abusive "price shopping."

I say the dealerships should use pricing to encourage rather than discourage out of warranty owners to bring their XYZ vehicles to an XYZ dealership service department for service. The way to do this is to charge a REASONABLE fee for "checking your vehicle out." I'm thinking a general "lift charge" of a quarter hour of labor at most, with extra diagnosis time billed at the actual incremental hourly rate.

Anyway... just two concrete suggestions.

BILL

Glenn Niblock| 11.20.08 @ 4:45PM

GM hasn't learned a very basic lesson. It is a bad idea to compete with ones self - it's like trying to make more soup by peeing in the pot.

Stop Badge Engineering| 11.29.08 @ 12:36AM

Most people recognize Chevy as an economy brand, Caddy for luxury, but the rest are a little confusing to most.

Chevy should make a full line of cars and trucks. Everyone agrees on that. I believe the Corvette should be spun off to it's own brand, comprised of three cars, coupe, convertible and Z06. (No flames, please, I drive a Corvette everyday!) It should be the GM halo car, not just the Chevy halo car.

Come to think of it, the Corvette only has a small bowtie on the emblem and the computer display says Chevrolet when I start it. Otherwise, GM has deleted "Chevrolet" from the car entirely. Go ahead and complete the process. My '71 manual said "Corvette Stingray"...even though there was one "model". Good idea. They should have taken it a step further.

Speaking of Chevy sports cars, what sense does it make to bring back the Camaro? Chevy already has the Corvette.

This car is doomed to fail anyway, as it uses almost the same business model as the GTO, except now with a overpriced V6 instead and over-the-top boy racer styling. The revived GTO died because of it's high priced first and foremost, bland styling was just icing on the cake.

If you're going to keep Pontiac around, then it needs to offer only a few cars and they all should be performance or sporty models. Keep the G8, Solstice and add a sporty 4 cylinder. For example, the Cobalt SS could be moved to Pontiac and sold as a Pontiac model only, while Chevy gets the economy model.

Buick needs to go. It's a "medium" luxury brand like Mercury. None of them have a place in today's world.

GM should slowly phase out Hummer. The brand image is just too polarizing. That new SUT they have looks decent, but it should be a Chevy. Just stop making them entirely. If you can sell the name, then great. If not, then let it die.

Saturn seems to compete with Chevy for value customers. Then again, they have the Sky, which makes no sense. It simply doesn't fit. Sell the Sky or the Solstice, but don't sell them both.

Mary| 1.19.09 @ 4:09PM

Would be nice when they have a recall they would fix it and not give u a 7 week runaround saying sorry I just am having a rough time finding the part t fix your GMC Envoy but let me fall behind on the payments and the bank would be after me in a heart beat, so its ok to leave me trying to find rides working 40 plus hours a week. Having a brother who is also a mechanic dont help either seeing as no one can seem to locate the part or A part to fix mine !! If this is how GMC handles their recalls and such then they shouldnt be producing anymore vehicles anyway!

Tiffany Cuff Links| 4.9.10 @ 3:59AM

dfsdsfsd