My New GM Car

[Gaspar]

Dear Mr. President,

I recently purchased a new GM vehicle and was wondering when it would be delivered.  I'm not sure if the vehicle I bought is an SUV, sedan, or sports car.  I would really like a sports car but my wife will object, because we have two young children and it would simply be an impractical investment.

If my purchase doesn't ring a bell with you, I purchased the vehicle through a fantastic new government program where the federal government takes my money directly out of my paycheck and gives it directly to GM, skipping the whole retail process.  Very clever really. No sleazy salesmen, or difficult choices.

I really don't need another vehicle, but I wasn't given a choice in the matter, so I will accept whatever you send me.  After all, they say "you shouldn't look a gift horse in the mouth", though technically it's not a gift, since I will have to pay for it over the next 20 years or so.

A few weeks ago I noticed that you added some upgrades to my purchase.  Does this mean I will be getting leather seats or a NAV system?  My wife and kids are so excited.  My little girl is only 4, but she already understands that someday this vehicle will be hers (she's too young to understand that she will be paying for it).  Your clever financing program is sure to be a model for all types of businesses in the future.  Good work!

This morning, I understand you are announcing that there will be some additional cost.  If this is a requirement to buy the undercarriage anti-rust treatment in order to receive the premium package I'm not interested.  I also understand that you are not offering any warranty on this vehicle.  I must admit, I'm not happy about this.

When it was first announced that you would be taking away my money to buy a GM vehicle for my family, I thought WOW!  This is so much easier than dealing with a salesman on the lot.  Those shifty salespeople are always trying to nickel and dime customers for additional options.  They agree on one price, but continuously return with additional costs, then they claim that they have to go "talk to their sales managers" to see if they can adjust the invoice.  I hate that, and believe it is what killed GM over the years.  I was hopeful "bait and switch" sales tactics wouldn't be the case here, but I am apparently wrong. 

So, I guess I will play the game (don't really have a choice).  Please go talk to your sales manager, and tell Mr. Axelrod that I demand a warranty if I am going to purchase the premium package. 

Sincerely,
Scott Gaspar
Tulsa, Oklahoma

P.S. When will my vehicle be delivered?

[Neptune]

Yeah yeah yeah.

All cutesy-ness aside, I'm inclined to believe GM is dead in the water.  I don't know how many people GM employs, and I doubt the Administration wants them all on the unemployment line, but I have a feeling it's going to happen.

[cannon_fodder]

I like it!

But in all honesty, GM is a breath away from being dead in the water.  I was really hoping I was wrong in that assessment, but they just dug too deep of a hole and their business model never adjusted for it.  Sure, the last couple years they have made some moves in panic mode - too little too late:

GM Auditors: There is significant doubt that General Motors can continue to be classified as a going concern.

[Gaspar]

Wait a minute. . . does this mean I'm not getting a car?

[Neptune]

I kind of question whether or not "Nationalization" would be on the table in the case of GM.  It might be.

The auto industry is in serious trouble.  They were hit hard in 2002-2003, and just when it looked like they might come back, the floor drops out.

All of the big three are antiques.  They refused to really even make a half-baked attempt at retooling.  They were too busy trying to keep shareholders happy, and weren't willing to spend the money to insure future stability.  GM and Ford are still technically years behind Toyota.  Maybe a decade behind.  Ford is in a little better shape.

I don't like GM's apparent thought processes.  Sure, the hybrid Escalade gets near 50% better gas mileage than a non-hybrid Escalade.  But 50% better than crap, is still crap.  They don't seem to understand, or they don't seem to be technologically in the right place, to even be logically competitive with Toyota or Honda.  GM still seems to think it's future is in building the same vehicles it had five or ten years ago.

GM seems to be trying a little harder lately.  It's probably too late.

[Cats Cats Cats]

Wait a minute. . . does this mean I'm not getting a car?

Maybe not.  But if you send this post to 200 people Bill Gates will send you a voucher for a new car.

[Gaspar]

Maybe not.  But if you send this post to 200 people Bill Gates will send you a voucher for a new car.

Well, it was reported last week that Bill Gates told his wife she was not allowed to use her Apple or purchase a new iPhone, so as an Apple user, I am reluctant to rely on him.

[cannon_fodder]

I do need to point out that Ford is not in the same boat.  They are not doing great (says the man that bought in at $8, and figuring it must be a great buy reinvested at $5, and now sees it at $2), but they took some pain years ago in restructuring and retooling that the other two did not.  They have not taken Federal Money and are not in real danger of being insolvent.

If Ford lives and the other two fail, it pretty well proves that they COULD HAVE survived if they played their cards correctly well after they were on notice of the possibility of failure (clearly all could have survived if they had been prudent decades ago).

[Gaspar]

I wonder what makes it so hard for companies like our US automakers to keep up? 

We have other industries that continue to advance technologically, and update production systems to compete world wide.  Heck, Honda plants in the US retool every couple of years and pump out new models and technologies at an astounding rate. 

The automation systems in the Toyota and Subaru plants are amazing, and the quality control is second to none.  Why can't we install the tail pipes on a caddy straight or put the hood on a GMC Yukon level on both sides?  Why is the hood ornament on every Doge Strata crooked?  Why does the heater on all Doge Dakotas leak hot air through the center vents when the AC is on?  These problems I mention have existed for 10 years or more and everyone seems to just accept them.  When you drive up behind even a new $40,000 Cadillac you expect to see one tail pipe tip mounted crooked.  If you were to pull up behind a Mercedes or Honda Accord and see this, you would assume it had been in a wreck or something.   

The demand exists.  Toyota is selling Tundras like wildfire.  The Nissan pathfinder, Toyota Sequoya, and other SUVs built here by Japanese companies are rolling off the lots.  In the smaller car categories the Accords and Civics and even the new Scion division of Toyota moving well.

Why can't we do the same?  What EXACTLY is the obstacle, that holds back our ability to compete? 

We used to claim that these companies used cheap labor and we couldn't compete with that, but today they are all built right here in the US by Americans.  Perhaps it's the fact that they use components made cheaply in other countries, but we do that now, too, to an even larger extent than they do. 

What could it be?  I just don't know.

[sgrizzle]

I do need to point out that Ford is not in the same boat.  They are not doing great (says the man that bought in at $8, and figuring it must be a great buy reinvested at $5, and now sees it at $2), but they took some pain years ago in restructuring and retooling that the other two did not.  They have not taken Federal Money and are not in real danger of being insolvent.

If Ford lives and the other two fail, it pretty well proves that they COULD HAVE survived if they played their cards correctly well after they were on notice of the possibility of failure (clearly all could have survived if they had been prudent decades ago).

Chrysler already said they will be solvent this month.

[nathanm]

I haven't noticed those issues recently. Of course, I never noticed assembly issues on older US cars, either, only that they were much more likely to be seen broken down on the side of the road.

[Gaspar]

Mmmmm solvent.

[Gaspar]

I haven't noticed those issues recently. Of course, I never noticed assembly issues on older US cars, either, only that they were much more likely to be seen broken down on the side of the road.

Now every time you get behind a Caddy you are going to see it.  Sorry for that.

[Neptune]

I wonder what makes it so hard for companies like our US automakers to keep up?

You ever seen the movie "Who Killed The Electric Car"?

http://en.wikipedia.org/wiki/Who_Killed_the_Electric_Car%3F

It's about the EV1 (GM's all electric car), and some other car industry stuff.  

Something that really stuck with me out of that movie:  The Clinton Administration spent a lot of money on the auto industry to help develop Hybrid autos.  When Bush came in, Hybrids were dropped for Hydrogen, and the auto industry just "threw it's hands up" and walked away from Hybrids.

During the Clinton Administration, Japan's auto industry looked at the hybrid as a serious economic threat.  They were afraid that the American auto industry would get ahead.   So Japan went hardcore into research and development; and came out with all the necessary tech.  And, just as Japan was coming out with it's first mass produced Hybrid lines, America's Auto Industry just walked away and forgot about it.

It really set the stage for the tech and tooling gap.  America's auto companies are definitely behind, and it's pretty much all their fault.  They were just too interested in big gas guzzlers; they were making too much money on them to worry about tomorrow.

[Gaspar]

You ever seen the movie "Who Killed The Electric Car"?

http://en.wikipedia.org/wiki/Who_Killed_the_Electric_Car%3F

It's about the EV1 (GM's all electric car), and some other car industry stuff.  

Something that really stuck with me out of that movie:  The Clinton Administration spent a lot of money on the auto industry to help develop Hybrid autos.  When Bush came in, Hybrids were dropped for Hydrogen, and the auto industry just "threw it's hands up" and walked away from Hybrids.

During the Clinton Administration, Japan's auto industry looked at the hybrid as a serious economic threat.  They were afraid that the American auto industry would get ahead.   So Japan went hardcore into research and development; and came out with all the necessary tech.  And, just as Japan was coming out with it's first mass produced Hybrid lines, America's Auto Industry just walked away and forgot about it.

It really set the stage for the tech and tooling gap.  America's auto companies are definitely behind, and it's pretty much all their fault.  They were just too interested in big gas guzzlers; they were making too much money on them to worry about tomorrow.

But that doesn't really explain it.  Hybrids are a minimal sector of the market.  They are just now growing in popularity, and the investment costs are coming down to where someday the initial investment will be overcome by the fuel savings.  They got a huge bump when gas prices went up, but not so much now.

The big Toyotas and Nissans, and Hondas are still selling against their US counterparts.  But I think most people who own foreign cars will tell you that the important factors that influenced their decision were quality & reliability over fuel efficiency.

Quality & Reliability are huge problems for US automakers.  Even if they are only perceived problems they still influence buying decisions, and have a huge impact.  Honda turns out efficient, powerful 4 cylinder engines that run for decades with minimal maintenance, and the American public knows it.