NYT argues GM engineered its own downfall
Ten years before Chrysler introduced the world to minivans, General Motors had already developed its own version. Toyota sold the Prius at a loss for years before it became popular while GM leased a fleet of electric EV1s for three years before deciding it would never turn a profit. Honda and Toyota both sold small, efficient vehicles for decades even though their sales were relatively small and profits less than stellar. Meanwhile, GM spent billions to establish Saturn to compete with small import cars, only to let the brand go five years with no new products.At least that's the way this New York Times story looks at GM's recent history. Through several interviews, the newspaper paints a picture of a company driven more by short term profits than ingenuity. GM board member George Fisher is quoted in the story saying, "We were late on hybrids. Why were we late? We made a business decision as opposed to a marketing decision. That's probably a mistake, in retrospect."
For GM's sake, hopefully the company's leaders have learned from history and will renew the automaker's innovative spirit with or without its pending government loan.
[Source: The New York Times]
Reader Comments (Page 1 of 4)
happy_penguin 6:40PM (12/08/2008)
It isn't entirely off base but but the whole picture is a much broader panorama and many things came into play which have lead to this problem. The union deserves some of the criticism as well as many bad decisions and poor designs of the past by management. But there also is the issue of WHY the Japanese have been building better small cars all these years. To begin, that's what they sell in their home market and they have always built small cars. In fact, the Japanese had to make bigger cars to finally compete in the US. Nobody in the US wanted those little boxes until fuel prices forced people to buy them. The reasons are many. But the stage was set for good things out of Detroit until the financial industry failed after creating their own mess, *everyone's* big mess.
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rypt 7:42PM (12/08/2008)
Little boxes like what?
The Civic? The Corolla? They aren't little boxes, they are plenty big enough for 99.9% of people.
zamafir 7:49PM (12/08/2008)
rypt has a point, there's a big difference between 'nobody' wanting a car, and the f150 having the highest sales. I'm not sure when the last time was the civic wasn't selling well or was underperforming. It wouldn't have hurt GM to have a small competitive car in their portfolio, or a completive Malibu generations before the current finally got on the ball. A good deal of the criticism offered in the article is apt, expect more people to continue a natural curiosity of why GM is doing so horribly now and what could have helped avoid such an immediate and drastic downfall, it's natural.
happy_penguin 8:02PM (12/08/2008)
"The Civic? The Corolla? They aren't little boxes, they are plenty big enough for 99.9% of people."
I don't think you read what I said. Yes, they were little boxes and they got bigger. The Civic is about the size of an Accord 20 years ago and the Accord is a size that Honda didn't even produce 20 years ago. Same thing with Toyota. There's a reason for that. Americans didn't want those tiny cars. Now Honda comes forth with a Fit, Toyota brings the Yaris, etc.
Sea Urchin 9:23PM (12/08/2008)
Dude you are way off. This article is DEAD ON. Look GM spent BILLIONS on making Pontiac a performance brand, but a few years Pontiac started selling minivans (Montana) and Pontiac Torrent (SUV). Same is the case now, billions on Solstice and G8 just to kill all that progress with G3.
Another example i s Saturn, Saturn has one of the newest lineups in the industry..................GM spend billions on it................but now they will kill it. All that money was wasted.
Also, GM developed a mild hybrid, which never was a big seller, never turned a profit, GM developed a two mode hybrid, spending billions on it, just to make it obsolete with Volt.
Kitko 9:51PM (12/08/2008)
RE: Saturn
1. If you market Saturn as cheap alternative to cheap Japanese cars for years, why on Earth would you make it selling rebadged Opels that are way better than cars your "traditional brands" offer. You end up with "cheap" Saturn selling Opels that compete, in house, with rebadged Daevoos sold as Chevys and Pontiacs......
2. If you market Saturn as a US alternative to imports, why on Earth you make sell it imports from Europe? And why on Earth you market Astra as "designed in Europe"... Because Cadillac Catera, aka Opel Omega was such a big seller?
rypt 10:08PM (12/08/2008)
Maybe because the so called "cheap Japanese cars" go head to head with the same Opels and Vauxhalls in the EU market.
Kitko 11:42PM (12/08/2008)
rypt,
European offerings from Honda, Toyota and Nissan are much different from their US line-ups. Compare US and EU Civics, Accords, Corollas. Nissan Primera was sold as Infiniti in the US, EU Accord is sold as Accura in the US.
http://www.honda.co.uk/cars/civic5door/
http://www.honda.co.uk/cars/accordsaloon/
Latest US Corolla is a cheaposaurs compared to Toyta Auris (EU Corolla's replacement). It looks cheap compared to my friends 2006 Euro Corolla. Ever heard of Toyota Avensis?
So, no, Opels face much better competition in EU than they face in the US.
Garibaldi 1:26AM (12/09/2008)
Not to direct my comments directly at you, the argument that the UAW got Ford, GM, and Chrysler to bend over for 70 year flies in the face of reality: the UAW didn't show up at negotiations with surface-to-surface missiles; GM et al and the UAW each signed the contracts. To say that the UAW hosed the automakers belies the facts: if they got hosed, it was self-inflicted. Screw me once, shame on you....
rypt 8:37AM (12/09/2008)
The USDM Civic is actually very similar to the JDM Civic, while the EU civic is different. Having been in both JDm and EU Civics I cannot say that there is that much quality difference between them.
Rocketboy 8:54AM (12/09/2008)
Again, the success of the MINI in the states totally disproves your theory. People did/DO want a small car (and the MINI came out when gas was cheap), when it's well built, well designed, and is built/designed/treated as a premium small car. What we don't want in good times are econoboxes. We only want them in bad times.
happy_penguin 3:24PM (12/09/2008)
As a niche brand, Rocketboy. The Mini is not a car for the masses. Chrysler sold 107,349 units as of September. General Motors sold 284,300 vehicles as of September 2008. Ford sold 102,685 vehicles... Do I need to go on? Mini sold just 3,732 vehicles as of September 2008. Even more telling is the fact that in 2007, for the entire year, Mini only sold 4,031 units. In other words, apparently "nobody" wants a Mini.
http://www.autoblog.com/2008/10/01/by-the-numbers-september-2008-nobody-wins-edition/
You've shown nothing to refute what I said. Americans want big cars. The Japanese know this. That's why they had to build big cars.
conor 7:45PM (12/09/2008)
which is why they lost over a billion on the ev1
Rocketboy 1:17PM (12/11/2008)
The smallest decrease?
The fact that the decreases almost always have to do with supply of MINIs, and not demand?
Ya, that has nothing to do with anything.
http://www.motoringfile.com/section/sales/
" MINI USA reported November sales of 4,545 automobiles, up 43.1 percent from the 3,177 cars sold in November 2007. Year-to-date, the division reported sales of 50,511 automobiles, an increase of 31.3 percent, compared to the 38,483 cars reported in the first eleven months of 2007."
and...
"...the MINI brand also delivered 20.8% fewer vehicles in the month under review than the previous year (15,103 / prev.yr.: 19,078). This is mainly due to the model change in the MINI Convertible, which ceased production in August"
or...
"...Due to this temporary interruption in the MINI model programme, deliveries of the brand were 3.4% lower in October than for the same month last year. ..."
It's a terrible problem to have that your sales drop mainly because the amount of units you have to sell has been reduced.
Clay 6:45PM (12/08/2008)
Yeah, NYT should talk... I guess that's why they are borrowing against their own building to stay in business.
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StickShift 6:55PM (12/08/2008)
You beat me to punch. Hypocrisy much?
2004m3driver 2:17AM (12/09/2008)
Well as long as they don't ask for a handout.
The fact is their arguments are still sound. Whether you attack the NYT or not thats not the point. No ad hominem.
tricky dicky 6:50PM (12/08/2008)
wow pot and kettle.. Either way easy to tee off after the fact.. How are hybrid sales these days?
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dc11 6:56PM (12/08/2008)
oh.. in about 5-10 years time, do you know what headlines will say (assuming GM/Ford/Chrysler is still around)???
GM blames poor sales due to poor product decision. Big3 CEOs admit changing the whole fleet into hybrids was reason for downfall.
Yes, hybrids are good for the environment, but it an intermediate solution to the problem. As per usual, the american companies will overreact to today's media claims that people want hybrids, so thats why they will sell nothing by alternative fuel vehicles, and in turn cant really create profits, and also R&D costs eat up whatever they can get from the little sales.
They will see little conquest sales, and will lose all legacy sales.
not to mention the design of the cars will still be even more mundane than the next few generations of toyota products.
and all during this period of time, UAW factory workers will still be making roughly $50-$70/hr for installing windshields and kicking the tires to test quality of build. All while striking only 4 times due to labor contracts.
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FThorn 7:17PM (12/08/2008)
I know no uaw worker that makes $50 per hour.