The Tragedy of General Motors -- Fortune article
The Tragedy of General Motors -- Fortune article
(OP)
Sales of dinosaur gas-guzzlers are down, potential buyers are worried about long-term warranty coverage, the so-called leagacy cost of $1500 per vehicle produced in N. America, guarantees to Delphi pensions, difficulty of GMAC in obtaining funds.
Fortune magazine story:
htt p://money. cnn.com/ma gazines/fo rtune/fort une_archiv e/2006/02/ 20/8369111 /index.htm
Delphi problems & timeline, 18-Feb 2006 Detroit Free Press.
http://www .freep.com /apps/pbcs .dll/artic le?AID=200 6602180315
Does anyone believe GM in survive?
Could Chapter 11 allow enough cutting of salaries & pension benefits to allow profitable N. American operations?
Should the govt. help, as it once did with Chrysler loan guarantees (loans which Ioccoca repaid early)?
GWB has said no bailout for either GM or Ford.
Do GM employees, who received relatively high salary & benefits w.r.t. other mfg. jobs, deserve govt. help when many people get no pension or benefits other than Social Security & MediCare?
Fortune magazine story:
htt
Delphi problems & timeline, 18-Feb 2006 Detroit Free Press.
http://www
Does anyone believe GM in survive?
Could Chapter 11 allow enough cutting of salaries & pension benefits to allow profitable N. American operations?
Should the govt. help, as it once did with Chrysler loan guarantees (loans which Ioccoca repaid early)?
GWB has said no bailout for either GM or Ford.
Do GM employees, who received relatively high salary & benefits w.r.t. other mfg. jobs, deserve govt. help when many people get no pension or benefits other than Social Security & MediCare?





RE: The Tragedy of General Motors -- Fortune article
...and very scary.
Cheers
Greg Locock
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RE: The Tragedy of General Motors -- Fortune article
RE: The Tragedy of General Motors -- Fortune article
Personally, I hope the Gvt. stays away from any bailouts until they show they have a leader on the caliber of Iacocca.
Perhaps they could lure Dieter away from Daimler.....
RE: The Tragedy of General Motors -- Fortune article
RE: The Tragedy of General Motors -- Fortune article
The Detroit Free Press had an article Saturday (sorry, can't find a link on their Internet site) from a bankruptcy expert. He stated that bankruptcy is not a pancea, and that Ford and GM had little to gain from it, while the shareholders would have significant erosion of their value.
I don't see bankruptcy for GM, but I do see further contraction. I don't understand why they don't see their product problems - Cobalt, Lucerne, etc. are supposed to be world-class?
Regards,
Cory
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RE: The Tragedy of General Motors -- Fortune article
Contraction/plant closure only raises the legacy load on the remaining fewer employees. People are still buying huge numbers of vehicles. The real problem for GM is that nobody buys a Cobalt, Lucerne or gas guzzler Suburban when they can get a Avalon, Camry, Prius or Tundra.
Any way to swap management with Toyota?
RE: The Tragedy of General Motors -- Fortune article
They just aren't doing it very smoothly, especially from the point of view of the workforce.
Mike Halloran
Pembroke Pines, FL, USA
RE: The Tragedy of General Motors -- Fortune article
Cheers
Greg Locock
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RE: The Tragedy of General Motors -- Fortune article
Where I see the real issue with American manufacturers is the poor management of company resources, from idiotic pay and perks for company men, to lacking the will to hold down the very legacy costs which cripple them now. The sad thing is, this goes far beyond just GM and Ford, it is endemic in every organization from United Air Lines to our very own Federal Government. Retirement benefits which are not fully vested are the next threat this country faces, and to be honest, it scares the bejesus out of me, for the level of price increases for private concerns or the level of Taxation required to support this system is onerous.
I will say, in 1995, my company took our pension away, and subsituted a 401K. They made no bones about whose responsibility it was for a secure retirement. At that point, I was hopping mad, and just about quit. Now, some 11 years later, I realize it was the best thing they could have done, for I control my destiny.
I guess my point is, painfull or not, until we address the issue of legacy costs nationwide, we will have our shorts handed to us by those who face lesser ones.
RE: The Tragedy of General Motors -- Fortune article
RE: The Tragedy of General Motors -- Fortune article
RE: The Tragedy of General Motors -- Fortune article
RE: The Tragedy of General Motors -- Fortune article
payroll etc. Now most all big business keeps adding thousands of "non producers" that usually make more than the
worker in the factory. So there is a lot of non producing
over paid employees.
And GM's biggest problem is, they can't seem to be able to
design a nice looking vehicle any more. So it is either part of a master plan to go outa business and let China have
the car manufacturing or ??? Learn by this Ford and GM.
Ford has a nice looking car on the market now. The big
problem is. It is priced so high that no one can afford it.
Well unless you are an over paid "nonproducer".
The GT-40 look a like. And you GM had the Firebird and Camaro. All you have to do is bring the price down to the
$12,000. area, and you will have massive waiting lists.
Every teenage kid in the country would be buying one, and
same goes for us 50ish generation also.
So the problem is wake up and design something that is appealing. And bring back the good little Geo Metro. Just
use the same old tooling. It looks just fine like it is.
RE: The Tragedy of General Motors -- Fortune article
Someone makes bad parts at a Japanese car company, they can lose their job, because they care about quality. A line worker at a Ford plant cracks 500 truck frames and he goes home laughing and shows up the next day, while the trucks are scrapped.
RE: The Tragedy of General Motors -- Fortune article
The UAW would selectively strike workers at one company & draw on the non-striking workers at the others to support the strikers. The struck company eventually gave in, and then the other companies gave matching labor contracts (AMC & Chrysler occasionally got reprieves); but management didn't care as long as they didn't pay any more than at their competitors. Worked OK for the first 30 post-World War II years, but then a dose of reality in the form of global competition hit.
Labor contracts and US & state labor laws protect incompetent workers. If fired, they collect unemployment benefits unless the company can prove to a labor board judge that intentional damage was done.
Japanese Brands Sweep Top 10 Auto List
It's the first time that U.S. firms are absent from Consumer Reports' annual survey.
By John O'Dell, [Los Angeles] Times Staff Writer
March 2, 2006
"Detroit's automakers were shut out Wednesday as Consumer Reports awarded all top 10 new-car picks to Japanese brands in its annual auto issue.
It marked the first time since the magazine began its "top picks" nine years ago that no American vehicle made the list.
...
The magazine has found that Toyota and Honda vehicles consistently have fewer problems as they age than those of other manufacturers, Champion said. An 8-year-old Toyota "is about as reliable as a 3-year-old Ford," he said.
Among American brands, Ford "consistently" has lower problem rates for older vehicles than do General Motors Corp. and DaimlerChrysler's Chrysler Group, Champion said.
Of the 36 major brands surveyed, German automaker Porsche was the least reliable, with Hummer, Land Rover, Volkswagen and Mercedes-Benz filling out the bottom five.
..."
The top-rated vehicles in each category:
"Small sedan: Honda Civic
Family sedan: Honda Accord
Upscale sedan: Acura TL
Luxury sedan: Infiniti M35
Small SUV: Subaru Forester
Mid-size SUV: Toyota Highlander Hybrid
Minivan: Honda Odyssey
Green car: Toyota Prius
Fun to drive: Subaru Impreza WRX STi
Pickup: Honda Ridgeline"
-- Consumers Union
http://www.consumerreports.org/cro/home.htm
[subscription required for the full report]
RE: The Tragedy of General Motors -- Fortune article
You wouldn't have expected that 5 years ago, would you?
Cheers
Greg Locock
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RE: The Tragedy of General Motors -- Fortune article
Ultimately, it is the American people that pays, either way. More specifically, it is the younger generation Americans, and those yet to come, who will be paying.
RE: The Tragedy of General Motors -- Fortune article
Journalists are not engineers
Politicians are not engineers
Consumer population isn’t educated enough to pick the best engineered car, but would rather rely on what their liberal arts educated friend told them, or how popular the car is within their network of friends. Most people don’t buy cars any more because they are practical, but how that car conveys them to their piers. Since the early 80’s, the overall growing consensus has been; you must be smart if you drive a foreign car. When was is cool, or smart, to drive a Ford or Buick? I say GM and Ford need to wise up on how they spend their marketing $$$.
RE: The Tragedy of General Motors -- Fortune article
Weak to say the least. GM, make the jump to DOHC that you should have made twenty years ago, and eliminate the 2,000-year-old rear suspension technology and THEN I will be interested in the best that you have to offer. If you can't do better than that on your top-of-the-line sports car then I don't know how you can expect to be considered a serious contender in that market.
RE: The Tragedy of General Motors -- Fortune article
RE: The Tragedy of General Motors -- Fortune article
If you look at what people want from a Corvette the pushrods are not the problem. I agree the disgusting rear suspension could be retired, I suspect there are a few egos on the line on that one. I don't know if the leaf spring puts customers off.
Every new Corvette that is brought out is greeted by a ra-ra chorus from the usual suspects - "now we have a sportscar the equivalent of any Euro (or Japanese) supercar".
Well, that sort of blinkered approach is precisely the problem. Any goddamn fool can walk up to a Ferrari or a Porsche or an NSX or even a Lotus and see attention to detail in the interior that blows the Corvette away. Build quality on most Corvettes is also pretty daggy.
Also bear in mind that GM has been on the verge of closing Corvette down for the last 20 years (off and on), and you'll start to understand the problem. The only one of their products we can be bothered to talk about is the one they want to kill.
Cheers
Greg Locock
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RE: The Tragedy of General Motors -- Fortune article
I agree, for a car like this, pushrods is the way to go; and if the suspension can still be a class leader, leave it be. The majority of the people that buy this car won't notice anyway.
I do like the what GM is doing with the V series Caddies.
Hey is it true the LaCross might get a Northstar. I was hurt when the killed olds and we lost the auroa.
RE: The Tragedy of General Motors -- Fortune article
While pushrods may be what Corvette customers want (if they care), at some point I think you've definitely got to try again with a technology that is, simply put, superior. It would be a shame for engineers to lower or water down their performance standards in the name of "tradition" (see the Ford Mustang and SRA).
I agree about build quality and fit-and-finish. GM hasn't proven that they're interested in providing top-notch stuff, IMO. Take a peek into any new Saturn or Pontiac and then go take a look at a comperable Toyota or Honda -- the difference is astounding.
Yeah, if Chevy wants to put the Corvette into the true supercar realm, it's gotta get away from crappy suspension and pedestrian interior design. These parts of the car certainly do work as it is, but there's nothing "super" about it.
RE: The Tragedy of General Motors -- Fortune article
The actual demographic that buys new Corvettes is 'interesting', if I can find an on-line reference I'll post it. Sure isn't your average Porsche driver. Social class B/C 50 years olds.
Cheers
Greg Locock
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RE: The Tragedy of General Motors -- Fortune article
Also, Viper performance for the price tag? It's in the same price bracket as the cars you listed above... and then you say it's as bang-for-your-buck as the Corvette.
RE: The Tragedy of General Motors -- Fortune article
The Corvette satisfies a NITCH market.
To deviate from a nitch to take on a bigger market is fraught with danger.
I expect that in the USA a Corvette is somewhat cheaper that most serious European sports cars, and will certainly beat them re some aspects of performance, and reliability and maintenance cost.
I am not familiar with the exact layout of the Corvette think there is a lot more to suspension design than just the style of spring, as the spring on nearly any half reasonable modern sports car suspension only effects vertical movement, all other movement like toe, camber and caster change, and lateral and longitudinal movement is controlled by arms, not springs.
I think that the spin off market image from nitch products can be quite valuable to the overall company market performance.
Re overall performance bang for bucks, the Japanese turbo sports cars like the Toyota Supra and Nissan Skyline are hard to beat, but I don't think that Corvettes appeal to Skyline buyers.
Just as an aside, The car that is currently (still I think) made in Australia, and sold in the USA as a Pontiac GTO, regularly wins a strictly production car race at our Mount Panorama circuit. This is a tough road race circuit that goes over a mountain. The 7 litre version of the Holden Monaro/Pontiac GTO regularly beats Ferrari, Porsche and Nissan's best on this track under these rules. The finish is a bit rough, it has a carbon fibre panel where the rear seat should be, it has no radio nor A/C. It does have real big Brembro brakes though. Oh yes, it also cost A$250,000 when the standard 6 litre version cost A$50,000 with CD stacker and A/C and back seat.
The point, every car has for and against, and every car has its nitch or spot.
In my opinion, the secret to staying in business is to identify notches you can fill while keeping customers happy enough to pay enough for you to make a profit. This is a complex mix of image, performance re all sorts of parameters, cost to buy and cost to own.
You can get away with (or even appear to expand on) low cost to buy, but high cost to own for a while, but you will eventually test the loyalty of your customers beyond their endurance.
Regards
eng-tips, by professional engineers for professional engineers
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RE: The Tragedy of General Motors -- Fortune article
RE: The Tragedy of General Motors -- Fortune article
They should have done what Ford did with the new Mustang, but one better. More style than substance, the Mustang still has a solid rear axle for example. If they could have spent a little more effort with the styling, I think that the GTO would have been a huge hit.
As for the Corvette, there is just something visceral about driving such a monster that is very difficult to describe, but which keeps it such an icon here in the US.
RE: The Tragedy of General Motors -- Fortune article
"Do not worry about your problems with mathematics, I assure you mine are far greater."
Albert Einstein
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RE: The Tragedy of General Motors -- Fortune article
Basically, I think GM & Ford are starting to get that point, but I do think they tend to focus their marketing in a particular year to certain demographics...which unfortunately is usually older. It's great for your books in the short term, but doesn't help to build that brand loyalty that many of the Japanese have developed over time. But that's management. And with American auto manufacturers' decisions partially influenced by quarterly stock prices, I don't see that long-term vision or planning coming in the near future.
RE: The Tragedy of General Motors -- Fortune article
RE: The Tragedy of General Motors -- Fortune article
And trust me, $15K for the sportbike includes a LOT of high-end accessories. Dealer price on a Triumph Daytona 675 is around $9500, and about $10ish for a new YZF-R6. The liters run about $11-12K. Used is a steal. 4-5 year old bikes go for $4-$6K, many with less than 10,000 miles on the odometer. And you can actually still work on them without too much difficulty.
Sorry for the thread-jack...game on.
RE: The Tragedy of General Motors -- Fortune article
I am surprised by the comment that bikes are faster in curves than cars.
Maybe a superbike vs an everyday car, but apples for apples I doubt it.
My memories from a miss spent youth are that it was only my fastest ever car that would regularly beat the super bikes for acceleration, with the car having less advantage for the first 100 yards, but gaining more advantage as the speeds increased, but when it came to curves, virtually any of my hot rodded street cars could catch the bikes in the curves. Concern for the riders safety often prevented overtaking in the curve.
Are their any race tracks where cars and bikes race on the exact same track, and if so, what are the relative lap times.
What has this got to do with survival of GM.
Brand loyalty evolves from the stage of life where we might be miss spending our youth.
Durable design, simplicity of design and legacy of main mechanical parts all help the kids on a budget. This then influences the opinion of them and even their more conservative friends for years to come. It was the case with the VW Beetle, the "T" model Ford, the Small Block Chev and the current Nissan Skylines, and I expect it had an influence on the popularity of these brands for the next decade or two.
Styling is also a major issue, but that is very short term and is independent of "brand loyalty".
Sorry for the rave. Just my version of "the world according to Pat".
Regards
eng-tips, by professional engineers for professional engineers
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RE: The Tragedy of General Motors -- Fortune article
ht
Lap record for a bike is 1m 30.33, car is 1m24.22
As you say, bikes are slower round corners, for good, physics related, reasons.
Cheers
Greg Locock
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RE: The Tragedy of General Motors -- Fortune article
RE: The Tragedy of General Motors -- Fortune article
"GM to Sell Majority Stake in GMAC for $14 Billion
By Jesus Sanchez, [Los Angeles] Times Staff Writer
3:54 PM PDT, April 3, 2006
General Motors today announced the sale of a majority stake in its profitable financing unit, GMAC, to an investment group for $14 billion in a deal that will give the ailing automaker a badly needed cash infusion to help turn around its money losing North American operations.
The sale of 51% of GMAC to a consortium led by the investment firm Cerberus Capital Management is part of a sweeping overhaul by Detroit-based GM to slash operating costs and boost sales in the face of intense competition from foreign rivals. Last month, GM offered to buy out more than 100,000 of its unionized workers as part of the recovery program.
..."
http://
"Auto Sales Expected to Mirror Recent Trend
From Reuters
April, 3 2006
U.S. sales of vehicles are expected to have followed a familiar path last month, with General Motors Corp. and Ford Motor Co. losing market share to nimble foreign rivals led by Toyota Motor Corp., analysts said.
Toyota and other Asian automakers have been relentlessly stealing U.S. sales from Ford and GM, which have been struggling with excess inventory and a shift in buyers' tastes from larger sport utility vehicles.
...
http://ww
"Buick Sales Epitomize GM's Woes
The company ignored warnings 20 years ago that changes were needed. Is it too late?
By John O'Dell, [Los Angeles] Times Staff Writer
April 2, 2006
Buick was the seed from which General Motors Corp. sprouted. And for generations, the luxury car line was one of GM's most bountiful divisions.
The Buick brand filled a crucial niche for the auto giant, attracting well-heeled consumers who wanted more than an Oldsmobile but weren't comfortable with the flash of a Cadillac.
Now as GM faces the threat of bankruptcy, Buick has emerged as an emblem of the auto giant's broader woes. GM sold nearly a million Buicks in the U.S. in 1984. By last year, sales had sputtered to 282,288, a 70% decline over two decades, the biggest of any major auto brand.
Buick has broken down in U.S. showrooms for the same reasons that Americans deserted GM brands such as Chevrolet, Pontiac and Olds in favor of Toyota, Honda and Nissan.
Buick offered bland designs and ignored consumer demand for pickups, minivans and SUVs. Buyers' shift toward snappier styling, snazzier features and — most of all — higher-quality cars left Buick vulnerable in the late 1980s when Lexus, Infiniti and other foreign luxury models invaded its home turf.
...
In the mid-1980s, a Burbank market research firm hired by the automaker warned that European and Japanese rivals were revving up to leave GM in the slow lane.
"The sounds of heavy armor can be heard in the suburbs, in what may be the final assault on General Motors' long-time stronghold, the luxury car market," the report from Vista Group said. If GM didn't satisfy car buyers' tastes for smoother handling, sleeker designs and fewer but more luxurious options, Buick would start losing customers to the new competitors. The Vista report proved prescient.
...
"They had this arrogant belief that when baby boomers turn 50, 'they belong to us,' and that just didn't happen,"
..."
http:
[note: LA Times on-line articles are only free for 1 week]
--- So, will GM fritter the $14B away on downsizing & employee buyouts, or actually do something to improve sales, like improve engineering, fit & finish, MPG, styling...?