First, it’s success. When GM had 40% of the U.S. market they got fat and lazy. It was all marketing and their competition was U.S. auto makers. Along came the Japanese competition. They built better cars, cheaper cars, and were ahead on new technology, both in manufacturing and in the cars they built. GM was slow to respond. By the time they responded the Japanese had a foothold here. Two oil crises hurt. But, more than anything else it was the promises to the labor unions. Today GM owes $15 billion in pensions to retired workers. The average cost to produce a GM car is $5M more than a Japanese car produced here in the US due to these obligations.
When I was young I understood the GM concept. You started with a Chevrolet. As you moved up in the world you bought a Buick or Cadillac. With Cadillac ,you had arrived. The world changed but GM didn’t. They tried to hold on to the multiple brands. Even added some with GMC and Saturn. With Saturn, GM was going to prove they could do the Japanese thing as well as the Japanese. They proved they couldn’t.
Many efforts have been made to change the GM culture over the years. They tried different quality programs. They tried brand marketing. They must have had every consulting firm in America pass through, and tried everything they all had to offer. Nothing has worked.
Now the last crude price run up and the sagging economy has done them in. The government is going to save GM. How? Obama says we are going to help them retool to make more fuel efficient cars. They already make more fuel efficient cars in other parts of the world, they just can’t sell them here since we have different environmental standards. Small differences. Wouldn’t it make sense to let them sell them here while the were retooling? What will retooling do for the $15 billion in pension obligations? What will retooling do for the $5m per car cost disadvantage? Card check will unionize the Japanese plants here, and that should help. Or, maybe the Japanese will just close those plants.
Here’s my thoughts. It’s over for GM. Like Mickey Mantle said before he died, if I knew I was going to live this long I would have taken better care of myself. Like Old Mick, GM’s liver is shot. It’s time to let them die. Someone else will jump in and buy the plants and start making cars with a different culture.
We taxpayers, I’m about to become an ex-taxpayer so exclude me, can’t buy every business in the U.S. just to keep jobs here. At the same time, the government plans to tax business more. Can’t have it both ways. Have a hostile business climate and have successful businesses. Waxman wants to replace Dingell on the energy committee so he can step up carbon caps. Can’t make them spend billions for environmental requirements and expect them to compete. Manufacturing has been leaving the U.S. for years. Does government say why is this happening, are we somewhat to blame? No, they say we have throw money at the problem. When your entire GDP is government, who pays the bills?
I will promise you this. The government will not fix GM. GM has been breaking itself for 30 years and that’s too much fixing. Lot’s of taxpayer dollars will be spent trying, but when it’s all said and done, it will still be broken and eventually die. Why spend the money? Haul GM off to Oregon or Washington state where assisted suicide is now legal and give it the blue needle.
