• Dec 8, 2008
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]


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  • 48 Comments
      • 6 Years Ago
      GM is an obsolete dinosaur that engineered its own destruction. It needs to go away and let someone else allocate the capital that its been reallocating to overpaid union workers and clueless execs. Funny how so many autoblog readers rail against government regulation, but throw capitalist tenets out the window in their rush to save a company that obviously is not worth saving. How do I know it's not worth saving? The market told me when it destroyed GM's market share and its market cap. What a waste. I already wrote to my elected representatives and told them GM shouldn't get a single dime of taxpayer money. Capitalism means freedom to both succeed...or fail.
      • 6 Years Ago
      Why are all the people blaming GM for making big SUVs and pickup trucks? That's not fair. Are these SUVs/pickup what american people needed in the past ten or twenty years? GM did exactly the right thing for providing what the customers wanted on the marketplace. Can NYT name a company not driven by profit? In my perspective what GM did wrong was failing to predic the oil spike and finacial crisis afterwards, and shody quality and legacy cost are the long term reasons.
        • 6 Years Ago
        Good point carlbolt since now Toyota have now its own "gas-guzzlers" with the current 4Runner, the Tundra, the Sequoia, Lexus LX470 and Nissan the Armada and Titan, there a good text about it at http://consumerguideauto.howstuffworks.com/the-american-gas-guzzler-myth.htm
        • 6 Years Ago
        Question: Why does Ford has over $10 bln more cash right now than GM, when both would presumably have the same per-employee costs?

        The fact of this question alone is enough reason to be critical of GM. GM is being singled-out because it is the poster child of bad management. Their next-door neighbor, Ford, in the same environment, with the same unions, and the same marketplace, is not in the same financial situation.

        Let's look at the facts:

        That GM had lukewarm (at best) commitment to Saturn and the EV-1 is not a matter of debate. Their own EV-1 sales reps were told to excuse the car for its faults. That's the opposite of good marketing.

        That GM had a lukewarm commitment to vehicle quality is another no-brainer. GM cars rarely topped ratings for safety, performance, and so forth. You rarely saw a GM marque advertisement include the term "JD Power". Consumers may not decide at the dealer based on this, but they are primed to buy highest possible quality, and do passively make such judgments.

        That GM was not focused on the consumer buyer is a known fact. Until recently, the majority of their sales were fleet sales, where turnover is higher than in the consumer market, and quality can be sacrificed.

        In essence, GM put all their eggs in the fleet sales basket, all their eggs in the high-margin (SUV/pickup) basket. And they rose and fell with the tide.

        Meanwhile, over the past 15 years, Ford went diverse. The F150 and Explorer were bringing in major cash, but that didn't stop Ford from pushing the Ford Focus through 90s and early 2000s. The commitment to quality engineering is evident: the fact that Jaguars are more reliable now than when Ford purchased them is evidence of an understanding of each niche market as demanding different levels of value. At the same time, they used mainly Volvo engineers to modernize their platforms and cut overhead. They knew they fell behind on hybrids, and licensed Toyota technology to catch up in the meantime.

        From my average consumer perspective, GM is getting a deserved drubbing because of serial mismanagement on the highest strategic level.
      • 6 Years Ago
      i do believe the hybrid was a marketing decision rather than a business decision. if it wasnt for the media bias and toyota using celebs to campaign hybrids through the deceitful MPG claims, i dont think it would have been an issue at all. at the end of the day, it doesnt help many people financially to own one. not to mention resale value of those things, or even the ability to sell a used hybrid (that doesnt have one of those california carpool stickers).

      i dont blame the big3 for not going the way of hybrids, but i do find them at fault for giving up on small/midsize efficient cars. they did have a few hits in other segments which they receive no credit for...
        KLR
        • 6 Years Ago
        "first generation bio-fuels depend heavily on oil"

        You think oil production doesn't depend heavily on oil, too, shipping it all over the world? Not to mention the military support and the multitude of dollars sent out of the country...

        Bio-fuels can be home-grown and keep the money here while benefiting domestic businesses large and small.

      • 6 Years Ago
      The issue is more about the system of US corporate environment. Because most CEO jobs are no longer "long-term", CEOs are short-sighted and want to boost stock prices asap (their bonus and stock options depend on it). As a result, strategies are for short-term purposes. No CEO's would plan a strategy that is pain in the short-term but pays out big 10 years later, since he/she would get fired right after stock holders see the short-term pain. One CEO from an off record interview: as long as the profit looks good when I'm in charge, who cares about the future.
      • 6 Years Ago
      EV1 was ugly as sin. Half the battle for sales is design, and in that respect, GM failed miserably with EV1. Only fanboys were interested in driving-as-geek in the dork-mobile.

      Same reason why the first Insight didn't garner a whole lot of buyers.
      • 6 Years Ago
      Yeah, NYT should talk... I guess that's why they are borrowing against their own building to stay in business.
        • 6 Years Ago
        You beat me to punch. Hypocrisy much?
      • 6 Years Ago
      All non-automotive media needs to just shut up about this.
        • 6 Years Ago
        +1

        Still, for once the NYT wasn't completely retarded.

        Maybe that's because it wasn't Thomas Friedman writing!
      Phil
      • 6 Years Ago
      The New York Times commenting on anyone else's downfall is quite ironic. Since the Tines itself is following the same type of arrogant know it all type of management style. Pinch is sinking the ship and the Old Grey Lady is going down fast.
      • 6 Years Ago
      some of the people on here are just way to funny. I don't see how NYT debt problems is anyway related to their article about GM. One thing has nothing to do with the other, just want to look for a scape goat for the topic at hand, which is that GM, through their ignorance, did not see ,what is happening to them now, it coming.

      reality is liberal.

      but GM's situation has nothing to do with being liberal or conservative, its about the business decisions they chose to make, which as you can see ended up being bad decisions.

      Ford make me proud of the American Auto industry, please, because GM simply just does not get it. Look at Lutz, he offered up his job to save Wagoner, WHAT A JOKE. THEY BOTH SHOULD LEAVE!

      Lutz "i dont believe in global warming" - how strange, i didnt know global warming was a religion, its either real or it isn't. and whats bad is that he doesnt see that its real.
      • 6 Years Ago
      It seems like there are a load of ostriches on this site. Surely the fall off in sales, which is admittedly across the board, is most prevalent amongst the gas guzzlers.
      GM is particular has got its product strategy wrong time and again and the '14th Floor's' misunderstanding of its brands world wide would be unbelievable if it were not for the evidence.
      The strength of unions is the failure of management. Not in curtailing their demands but in allowing the situation to persist that brought about such high demands in the first place.
      The evidence is there to place the company's predicament firmly at the feet of those that have persistently chosen to make a multitude of critical errors that many believe have not only led to its current position but also stymied the technological advancement both in terms of safety, efficiency and reliability within the industry as a whole, since its inception.
      • 6 Years Ago
      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.
        • 6 Years Ago
        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.
        • 6 Years Ago
        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.
        • 6 Years Ago
        "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.
        • 6 Years Ago
        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.
        • 6 Years Ago
        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.
        • 6 Years Ago
        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.
        • 6 Years Ago
        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....
        • 6 Years Ago
        Maybe because the so called "cheap Japanese cars" go head to head with the same Opels and Vauxhalls in the EU market.
        • 6 Years Ago
        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.
      • 6 Years Ago
      "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.'"

      This thinking that an investment in hybrids is a marketing decision as opposed to a business decision is exactly why they failed.
        KLR
        • 6 Years Ago
        Hybrids are a marketing decision. They aren't cost efficient for the consumer and they don't steer away from the use of oil (unlike flex fuels).
        • 6 Years Ago
        "Hybrids are a marketing decision. They aren't cost efficient for the consumer and they don't steer away from the use of oil (unlike flex fuels)."

        first generation bio-fuels depend heavily on oil, so that statement is false. its something like, it takes 2 gallons of oil to make a gallon of E85.

        and then dc11 continues on by saying hybrids dont hold their value. Um, in what country is that?

        using celebs to campaign the prius, now thats a marketings strategy. the car itself not so much. The car is innovation, advancement in technology.

        W/E, whenever a new car architecture is developed it is always very costly at first. however, with the introduction of new cars using the same architecture costs can be distributed among them, reducing individual costs.

        Why do you think GM is now delaying developing new architectures for their SUVs? because they dont believe they will have the models to spread the costs around and recuperate their investment.

        I am all for buying an American car. I am upset at how GM, Chrysler, and Ford have run their company. Ford seems to be making the right moves now though.

        Rick Wagoner, PLEASE LEAVE!
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