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Here come the Samsung Saturns...
Mine: 1995 318ti Club Sport-2020 C43-1996 Speed Triple Challenge Cup Replica
Wife's: 2021 Sahara 4xe
Son's: 2018 330i xDrive
Penske screwed up Detroit Diesel years ago, I remember the stock going from 30 to 12.50 before he bailed out..Manufacturing is not his strong suit...Middleman is where you can skim the money..
He will be an importer of junk, the "Smart Car" is a good start..and probably go downhill from there..
When you strike, it's an attack on the customer, AFAIC. I LOVE when the Union Busters cross the picket lines. It shows how eager people are to work DESPITE an attack on one's very own livelihood.
What comes around, goes around! :P
Regards,
OW
1 - even with the shedding of costs and debt, they need much better products. That is going to take billions of dollars and at least a few years. A tough one.
Bogus remark
The Success Trap
The plight of the Big 3 in the US market is actually a decades-long story of the loss of domestic market dominance. However, many have been too quick to say that their recent troubles have resulted from “making cars that customers are no longer interested in buying”. While it is a historical fact that the Big 3 have gone from a combined share of 66% to well under 50% within this decade, it would be incorrect to say that this is a result of the consumer’s rejection of American brands. Today, Chrysler’s market share in the US is about what it was 20 years ago (roughly 10%). However, over the course of the last half of the 20th century, the Big 3 fell into a several traps that were largely a result of their prior success – especially for General Motors.
1. Product Innovation Trap: GM was a company known for product innovations such as the electric starter, V8 muscle cars and “tailfin” styling. Companies should never assume that what worked in the past will work again in the future. Relevant product innovation is critical in the car industry. While blessed with one of the strongest R&D capabilities in the business, it became increasingly evident that GM was having difficulty bringing these innovations to the market. A noteworthy example of this was GM’s $1B EV1 electric car program, which never became a commercial success.
2. Brand Trap: Alfred Sloan’s pioneering concept of “different cars for different buyers” was the centerpiece of GM’s early 20th century expansion – and this was perfect for an industry in its infancy. However, the cost of engineering unique products for as many brands as GM had in its portfolio became too great. GM’s reluctance to give up brands because of their historic value became a major financial burden. After GM’s sale of Hummer, Saab, Opel, Vauxhall and the wind-down of Pontiac, only 4 brands will remain: Chevrolet, Buick, Cadillac and GMC Truck.
3. Business Model Trap: It can be argued that the mass production business model was Henry Ford’s innovation – but it was Alfred Sloan’s GM that realized its true potential. The introduction of the principles of business management at Sloan’s GM ultimately became the textbook for running a successful business. The failure to adapt these principles to an increasingly competitive and globally distributed world has contributed to GM’s decline.
4. Legacy Cost Trap: In a new and growing industry, size is an advantage. Bigger companies have the ability to leverage scale and thereby lower costs for purchased goods, and can recover investment costs over a larger number of units sold. However, size brings fixed cost resulting from worker salaries, health care and other benefits, retiree pensions, and other general and administrative costs. Inflexible labor contracts make it difficult to adjust to new marketplace realities. On top of this, it is very difficult to match the costs of global competitors where such costs are subsidized by social benefits available in their country. Companies in a global industry will have difficulty competing against rival companies with workers willing to accept lower salaries for comparable work.
Businesses hoping to grow and thrive in the 21st century global business environment would be wise to learn the lessons from GM’s ultimate failure to avoid the “Success Trap”.
The trap has finally tripped..... :lemon:
Regards,
OW
Bogus remark
You are entitled to your opinion. Just why has GM's market share dropped by over 50% over the past 30 years? Because they are wowing the market?
I agree !
In 1979 I was making about half of that, including overtime. Built this 2460 sq foot brick ranch on 6 acres in '79, raised 3 kids, had horses, bought new cars and kept them 2-3 years, a van to pull the camper trailer, a real farm tractor bought new, always some kind of motorcycle, and still managed to put some into savings.
House and land cost $72K. New Loaded Olds Cutlass V8 cost $7K+. New Dodge Colt cost $4K+. Wife contributed by keeping kids and such, which pretty much bought groceries. Folks that made in the $30K+ bracket were well off indeed. I don't think the UAW was even making $32K at that time.
Recon some places just cost a lot more to live in. And a lot of folks just don't know how to manage money.
Kip
There are many more effective auto companies competing in the market.
I recall hearing of Mercedes in the 70s but dealers were few. VW dealers were around but not close.
Now how many different companies are there?
So it's easier to understand, compare to the number of TV stations in the 70s. We had 4. Now there are over 70 with the low line cable access and hundreds if you want satellite or higher-priced Time Warner. I wonder why the local stations 2, 7, and 22 don't have the share of watchers that they used to have.
That example parallels the auto market decrease.
2014 Malibu 2LT, 2015 Cruze 2LT,
I have to give 40% blame to the UAW, 40% blame to management and 20% to the Feds and especially CA legislature, with all their wild mandates. The other states also played a role in tighter regulations that pushed manufacturing off shore.
I have to wonder if the UAW and GM ever worked together to make a better car and company. It does not appear so.
Duh....Ever heard of population growth for one.
What is the quantity of cars sold or dollar value of cars sold graphs look like since 1979?
Wouldn't be suprised if the dollar value was up, and the quantity of vehicles in all but car categories was up.
Horrible business plan and only 2 or 3 top level cars does not cut it.
You are dead on regarding the UAW/Management Ponzi scheme. A massive house of cards in a Category 5 hurricane called competition and the reality energy market finally ended the pain. :sick:
Regards,
OW
To blame the bankruptcy on the products needing to be much better is bogus.
Plenty of companies make terrible quality products and are successful. Hundai is one.
Plenty of companies make terrible quality products and are successful. Hundai is one.
I have no problem if you do not like Hyundai. The FACTS are that GM sold less cars over the last 5 years and Hyundai sold more. One lost market share and one gained. One is thriving and one is destroyed and being kept live with the People's money.
If the products were great, don't you think people would buy them?
Here is an article that underscores the argument that GM cars are second class at best in ALL CATEGORIES. The article concentrates on small cars but it is evident in ALL car classes. The competition will continue to win.
The title just goes to show the GM is ALWAYS behind the times.
GM to Build Small Car in U.S.
Now, will the cars be great cars....I highly doubt it as long as the UAW survives.
FACT. The article might as well have included a top class luxury car, a winning performance luxury car, a mid size top selling car, etc, etc. etc.
Pick-em-up's, aside, of course! Cars have been forgotten at GM for years now. Where've you been???
Regards,
OW
It doesn't matter what Dave, Rocky, Imidazol, 62vette, or anybody on this board feels about GM's quality. It matters what the overall market believes. And too much of the overall market believes GM's products are not desirable relative to the competition. Hence the need to improve products. Simple!
It is what it is. The market keeps sending the message.
Regards,
OW
Rockylee is no longer part of this board. He got tired of the one-sidedness.
2014 Malibu 2LT, 2015 Cruze 2LT,
Is it that or did he give up his internet provider?
Who in their right mind would ever buy GM? GM will stay alive as long as we continue to pour billions of dollars into this failed business model. The pressure will be on the Obama Administration to keep the money flowing for at least 3 1/2 years to the next presidential election.
We're conservatively looking at $200 billion in tax dollars needed to keep GM alive through 2012. Bend over and get ready for Gettel-finger.
The overall market fluctuated some: 10 million in 1982, 16 million in 1986, 12 million in 1991, 17 million in 2000.
Problem was, by 2003, GM sales were something like 70% trucks and SUVs, and the bloom promptly fell off that rose and sales began a steady inexorable slide, a few hundred thousand at first, then 500k, then a million a year lost, to where GM only managed 2.95 million in 2008, and looks to be under 2 million for 2009.
To make matters worse, Toyota posted regular sales increases almost every year since 1982 (under 700k) through 2007 (2.6 million).
2008 3,258,413
2007 4,057,287
2006 4,393,816
2005 4,565,603
2004 4,991,989
2003 5,301,683
2002 5,507,902
2001 5,001,628
2000 5,631,771
1999 5,747,336
1998 4,979,860
1997 5,457,425
1996 4,956,004
1995 5,356,597
1994 5,329,958
1993 5,018,940
1992 4,617,467
1991 4,509,869
1990 4,977,728
1989 5,574,846
1988 5,858,528
1987 5,533,879
1986 6,392,245
1985 7,215,382
1984 6,529,281
1983 5,943,306
1982 4,515,651
1981 5,131,703
1980 5,031,615
1979 7,057,668
Production is built at GM owned plants and excludes production at Joint Ventures (CAMI/NUMMI)
2008-1989: includes US, Canada and Mexico
1988-1986: Excludes truck production in Mexico
1985-1979: Excludes Mexico production
However, I dunno if they're model year sales or calendar year sales. I think it might be calendar year sales. IIRC, GM moved about 3.5 million cars in model year 1983...no way they sold 2.4 million trucks!
I'd imagine 1977-78 sales were close to 1979 sales, if not better. May have topped 1985, even.
Do ya think that might have been the problem?
2014 Malibu 2LT, 2015 Cruze 2LT,
Don't make a recession into a reason GM needs to make cars twice as good. A few months ago, nobody would buy a great house at half price.
Some market share was lost, but $4 gas, recession, credit crunch, and the overspent consumer more than any lack of quality.
Besides, people in various topics rail against lawyers, and I'm still here... :P
I do hope his job works out with debt consolidation, and now that his divorce is finalized, he can move on with his life...
we ARE his family...
How many of those were fleet. On the car side probably 40-50%. My wife gets a new company car every two years. Many have been GM vehicles and all have contributed to my poor opinion of GM vehicles. The few I was dumb enough to buy with my own money sealed it.
A few months ago, nobody would buy a great house at half price.
I'd pass over most of the GM product line even if free.
The real problem has been a corporate structure that has kept GM from being profitable. Ineffective management, to much debt, restrictive work rules over the years, to many unappealing models, and so on all add up to a bankrupt company.
No doubt, that put the nails in the coffin. But GM has been struggling to make money on cars for decades. Much of the profits from the late 90's through mid '00 was from GMAC mortgages and other loans.
UAL has lost money for decades, goes banko, and comes back for another round. Meanwhile a lot of pilots, flight attendants, mechanics and middle managers make a salary and planes keep flying. And we taxpayers bail out the pensions when they file Chapter 11.
Just think, if the economy hadn't gone into the toilet, the UAW could have mortgaged Black Lake and really built the strike fund up nicely. :shades:
You would think that any management team worth the $$millions they were being paid could see the huge dependence upon a market segment that was going to be hit hardest at the first big increase in oil costs. It's not like it hadn't happened before in the 1970's. Epic failure - I would be fired from my job for that kind of performance. And the UAW should have seen where they were taking this company and begun to actually help GM be successful.
That is correct, however the big growth in the economy and SUV/Truck sales masked the structural problem and allowed GM to look like it had hope. Once the economy tanked (and it does that with some regularity), GM had lost it. And of all the big car companies selling around the world, only a few are going bankrupt. The weakest ones.
Well, give 'em time. We're 3 months out from the fiscal year end for most cities, counties and states, not to mention the feds. All the current government employees are working under budgets passed last year, and those tax revenues aren't going to be there come October. For a harbinger, just see California and imagine how much higher the unemployment rates will go. Throw in another oil shock just for grins. Yikes!
Porsche wanted to be big, and tried to buy VW. Now Porsche has no dough so is talking merger with VW (but their profits have plunged, as have BMWs). But Qatar is going to bail out Porsche so they can buy VW outright it appears. Nissan/Renault doesn't look all that cash flush, and are combining platforms trying to save 1.5 billion euro. Even mighty Toyota had their debt ratings cut from AAA to AA by one of the rating outfits, and that was several months ago. Marchionne at Fiat expects that only six global producers will survive the current recession.
The UAW VEBA may wind up with a seat on the New Ford before this year is over.
Back in the 1970's and 1980's, I don't think too many GM vehicles were getting dumped into fleets and such. That was mainly Ford and Mopar's job! It did start happening in the 1990's though, and definitely in this decade. Now I think GM did start cutting back on fleet-dumping in the past few years. One reason the Lucerne and LaCrosse don't sell as well as the Century/Regal and LeSabre did, for example, was because those models had sales increased by dumping. And to be fair, everybody does it. And just because a car ends up in a rental fleet, doesn't make it a bad car. After all, fleet buyers need cars, too. But when you jack up production to where you have to dump thousands of cars nobody wants to buy into fleets and such, there's a problem!
cars nobody wants to buy into fleets I agree with everything else you're saying, but this phrase gives me pause. First, the subordinate clause sounds like GM (et al) intentionally produced more cars which didn't sell over-the-counter, therefore they sold them to fleets. Rather, the fleets want to buy cheap, perhaps near or below cost, and GM sold to them because their contracts with UAW about numbers of employees per plant required them to pay those suckers whether they worked or not. Hence producing cars in those unnecessary plants helped pay the fixed costs of operation although likely without major profit if any profit. In other words, I see it as GM's being passive in that choice rather than active.Second, the phrase "nobody wants to buy" has been bantered around by the GM-haters so much that it sounds like noone wants any GM car; that's, I assume, relative to the writer's chosen preferred vehicle such as a honda or BMW. However GM produces and has produced many vehicles and people do want to buy them. The phrase "nobody-wants-to-buy" has been over-used like "hope and change."
2014 Malibu 2LT, 2015 Cruze 2LT,
If anything, this was probably the root of the problem...keeping those plants running, so they didn't have to pay those auto workers 95% of their salary not to work.
That's one thing that's always bugged me, too, is how they focus on that. Wouldn't it still have been more feasible to shut those plants down and make the employees go on furlough or whatever? I mean, 95% of salary is still cheaper than 100%. Plus, a lot of those workers were getting OT...probably 1.5x for anything over 8 hours in a day, and 2x for Sundays and holidays. I'd imagine that shutting the plants down temporarily would wipe out the OT, as well. Plus, the cost of running the factories. Electricity and other power sources, wear and tear on the equipment, and so forth.
Plus, as they were over-producing, rental fleets were starting to sell off their cars more quickly, flooding the market, depressing used car prices, and just perpetuating a vicious cycle.
Now it's great, if you're in the market for a used car. I know I've mentioned numerous times about my Dad's '03 Regal, that he got in September of '03, with 19,500 miles on it, for $10,995. Original MSRP was probably around $26K! Seemed a bit of a ripoff at that price, although I'm sure it went out the door at more like $21-22K. And for that price it seemed an okay car for the money. But definitely a steal slightly used at $10,995!
And to be fair, it's not just GM that's overflowed the rental fleets. Mopar and Ford have done it too. The Taurus had been a fleet favorite for years. So have the Crown Vic and Grand Marquis. I remember in late 2001, going to the dealer with a friend who had a '95 Grand Marquis at the time. He wanted to look at the new ones. Well, every single GS (base) model on their lot had already been pre-sold to rental companies. Other than that, I think they had one or two LS models, one of them being a fully-loaded model with leather bucket seats and some sporty-looking package. Not a Marauder, but I think it was called LS Ultimate or something like that?
Didn't we see an article that claims Black Lake operates in the red at about $27 million per year? The UAW needs to buy up some of the abandoned high rise buildings in Detroit and set up homeless shelters for out of work UAW families. After all it is much their doing that has destroyed the auto industry. They could give back some of what they have taken from the workers for decades.
I think you are underestimating the total cost of an employee being paid for not working. It was a horrible concept from its roots. I think the blame for the jobs bank falls directly on GM. They also have to pay health care and retirement on that worker that is NOT producing anything. If not for work rules they could have sub contracted those workers to dig a ditch somewhere or paint a house. That is about $100,000 per man year with NO return on investment.
The Taurus had been a fleet favorite for years.
Through much of the 1980s and 90s I rented from Hertz. As much as 26 weeks a year. I liked renting the Thunderbird. It was comfortable and got decent mileage. Then Hertz dropped the Tbird and only offered the Taurus. What a POC that was. The ones they bought were pathetic. I switched to Budget and Alamo renting a variety of cars and mostly Explorer or Trail Blazer until the cost made more sense to own.
I think you hit on the problem. Joe Public would go in and buy car X for $26k. Hertz would buy the same car for $21k. Hertz keeps the car for a year and dumps it for $11k. Joe Public goes to trade in his car in 3 years and finds he owes more than the trade-in value. Starts looking around at his buddies that bought CamCords that are still worth more than they owe and switches to the import.
Who do you blame? Management is responsible for flooding the market in an attempt to maintain market share instead of profitability. UAW could care less. They are getting paid to just show up at work or jobs bank.
The ironic thing in this bankruptcy is the Ultimate blame lies with the stockholders that elected the board that appointed the CEO. And the stock is now worthless. Too bad so sad. I sold my few shares of GM back when it was $27.
Must be where you live. The two I shop in are clean and the people friendly. I can take back a Chinese CFL light bulb that burns out and they will refund my money. I think it has more to do with the East Coast mentality. Don't knock McDonald's. I bought MCD at $14 several years ago. It pays a dividend and has not been affected in this recession. I have not had a burger from them in at least 20 years so not sure what they taste like. I could care less, millions are eating them. I do get a craving for their fries now and then when out on the road.
I have asked this before. If WalMart is so terrible. How do they manage to keep 18 stores making money in Detroit? The hot bed of UAW communism. My guess is the UAW buy American crowd are a bunch of "do as I say, not as I do" liberals.
Other boats have also been damaged in that gust, some are taking water, but because their captains were sober, their crew was fit and the structure is better, they have a chance of wethering it out.
2018 430i Gran Coupe
Oh, I don't knock Micky D's. They make great fries if you get them fresh and hot. Burger King makes a better burger. Both hardly make the best hamburger.
How do they manage to keep 18 stores making money in Detroit? Easy! Lots of po' folks in Detroit these days! Anybody who had a choice would avoid Wal~Mart like a rabid pit bull with ebola.