How would you save GM?

[88Comrade2000]

It amazing to see the General Motors still remain so incomptent. It so large- that it still would adversely effect the economy if it went under.

To a company that had 50% of the market 25 years ago; to now barely hanging on to 25% of the market.

GM came close to bellyup once but not to the extent Ford and Chrysler has. That near death forced Chrysler and Ford to change. Though Ford did slack off again to be where they are now. Chrsyler has been at deaths door so many times that they now are owed by Mercedes.

Personally, I think Toyota will eventually become the world's #1 Automaker. They are in tune with the market and can forsee new trends.

Part of GM's problems is their high overhead- healthcare/pensions, labor costs, etc.. They plan to eliminate 25,000 jobs over 3 years.

Another part of the problem- which GM doesn't seem to realize is the fact they are too big and they make vehicles they noone really wants.

Considering that General Motors is company that we really can't afford to go away for good; what would you do to turn around the company?

Do note- Any changes in the contract with the union really can't be done until 2007- when it's time for a new contract.

[Westbrook36]

Save the flagship vehicle, the Corvette, there isn't anything in their lineup I'd consider owning.

They are old and tired in their styling and performance. A part of GM died when they got rid of both the Camaro and the Firebird so they could, what, make more Luminas.

That being said, the LS2 is an amazing engine, even though they are watering it down by plopping it in more vehicles than just the Vette.

[dreamingwolf]

first you have to ask yourself one question, do I purchase things to benefit my community or do I purchase things to benefit myself. If you are later then cry to the skies **** GM.

Second, ask yourself would you pay the same to upkeep an american car as you would a japanesse car. Ive known many mechanics, and one thing that they all say is that japan car owners never ***** about fixing their car. People who gravitate to the foreign cars tend to be the more wealthy, it aint nothing but a thing to pay to keep their precious running.

Thirdly, we must examine the unions. Since we as a population are willing to support the unions and the added cost they add to the product, we should own up and pay the bill. But we dont. Its far easier to complain and cast a vote. Then suprisingly you all freak out that jobs are going overseas. Wake up idiots.

You have two options. Raise tarrifs to make overseas companies equate with our union dues, or disband unions. Both will result in you having to pay more at your local retailer, and thus will never happen. So you union states shut the **** up, your killing yourself by out pricing your skills.

[Ignatius J.]

????

why do you always type with asterisks?

people buy foreign cars because they are better cars. They run when you turn the key. They look better too.

Until GM finds a way to build cars that work, they're never going to have the market share.

[Thiebear]

Focus for Gods Sake:

2 door:

Cavalier

Cobolt

Monte Carlo

Alero

Sunfire

Grand Am

GTO

Ion Quad Coupe

century

lacrosse

lesabre

lucerne

cadillac cts/sts/deville/xlr

impala

vibe

g6

grand prix

9-2x

saab saab saab

saturn ion

malibu

park avenue

bonneville

ssr

corvette

solstice

30 suv's

8 pickup trucks

13 cargo van types..

Half the regular people don't even know what a "GM" car is...

I would stop making commercials that show every occupant as a complete moron that leaves their kids in the car, or in an accident.

[zoony]

Originally posted by dreamingwolf

You have two options. Raise tarrifs to make overseas companies equate with our union dues, or disband unions. Both will result in you having to pay more at your local retailer, and thus will never happen. So you union states shut the **** up, your killing yourself by out pricing your skills.

DING DING DING DING :notworthy

The Japanese and Germans are building plants in this country far away from Detroit in places like Alabama and Tennessee. There is no UAW to deal with. There are no $75/hour custodial jobs.

Did you hear that THE AVERAGE WAGE for the 25,000 jobs being cut at GM was $54.00 per hour?

$54.00 PER HOUR!!! For assembly line work! :doh:

I'm amazed GM has been able to be competitive AT ALL.

Quick story... I met a guy a few years ago who was a member of UAW and worked on the assembly line producing Jeeps. I forget what he said he did... but it was something akin to driving screws. So anyways, we were talking about the increased cost of living in his part of the country and gas prices / etc. He actually said... get this... "Thank God this isn't 15 years ago when I was only making $50,000. No way I could live off that kind of wage now." This guy was probably making six figures... :doh:

Speechless then... speechless now. UAW. I hope they're proud of themselves, 'cause its time to pay up.

[@DCGoldPants]

really bust their asses to produce fuel cell vehicles and other eco-friendly ones.

Appeal to the folks who want to be trendy while saving the planet, etc, etc, etc.

[zoony]

From a marketing standpoint, however, the solution is simple. The question is if GM is nimble enough to pull it off. The solution is 2 parts.

1. Find out what the customer wants

2. Then build it.

... it's not rocket science.

[Golgo-13]

They need to look at the brands they have actually had success with (Caddy, Corvette and GMC truck) and try to carry that success over into other aspects of their company. Ford is having wild success with the new Mustang with the retro styling, Chevy should reintroduce the Camero in the same way. They would sell like hotcakes.

[Mufumonk]

I love karma.

[dfitzo53]

Originally posted by Mufumonk

I love karma.

:laugh:

[gbear]

I guess Im one of those guys who doesn't buy american.

My first car: Buick Century...broken all the time. got rid of it at 102,000 miles because it wasn't hip (nickname old fogie mobile) and it was always broken. I got tired of breaking down in the middle of no where.

Second Car: Honda Civic hatchback. I drove it for 125,000 miles and got around 40mpg. It had few problems, and basically I traded it in because I could finally afford a new car and there was some standard maintenance it was going to need soon (breaks, clutch, ect.), and it stil lhad some decent trade in value.

Third Car: Toyota Carola. So far, I'm at 183,000 miles and counting while still getting 38 mpg. I've had one non stadard maintenance thing happen to the car (bad bearing). I intend to drive this car till it stops going.

When American cars have the reliability and the resale value at high milage that my foreign cars have had, then I'll reconsider. Might even be enough to make me deal with a little lower mpg. If they fix that too, heck, at that point I'll definitely buy because in general American cars are more comfotable.

[Prosperity]

I would make the company smaller and cut costs because it is obvious that there are better cars out there and there is no more need for such a big supply, then I would copy everything that Honda does and try to make small improvements for the American market.

[Kilmer]

My first car was a Chevy Nova, then bought a Mustang. Briefly owned a Chevy Van. Then owned a Chevy Malibu for a couple years. Then a 76 Buick Century. And finally a Chevy Cavalier. (my wifes first car and the one she owned when we married). The Cavalier is the last American car I have owned.

We bought a 94 Honda Accord new and still drive it because it doesn't break down. Because we loved the 94 so much we ended up buying a 99 Accord when the Cavalier died at 90k (the mechanic literally told me my engine was just too tired to go on...LOL - one of those crappy american aluminum block 4 cyl). Now I don't have to replace a muffler every year and heater core every other year. (The Cavalier truly sucked)

American car companies would do well to not only make their entry level cars not only affordable, but not complete piles of **** too. When we looked at replacing my Buick after we married, my wife insisted on a Toyota or Honda because of her experience with the Cavalier. I got her to test drive a Camaro, Mustang, TBird and different versions of the Dodge Intrepid - can't really remember what they were all called. Plus many other American Cars ( I really wanted to stay American) but I could not get her to bite on any of them so I relented and went with the Honda Accord. I don't regret it.

I have owned a ton of American cars, but I can't say I have like there dependability. The Buick was the only one I owned that I sold while is still ran well. The thing had 250k and the Air Conditioner still worked! When we replace the 94, it will either be with another Honda or maybe a Buick. Probably a Honda, although I think Honda's quality went down a bit with our 2nd car, mechanically it is very solid.

I don't anticipate needing a new car very soon since the 94 has 130k and still runs fantastic. I am one of those people who hate car payments more than I care about what car I drive. Cars usually have to rust out from under me before I take on a new payment.

[codeorama]

I pretty much buy american, I've had really good luck with Ford's (knock on wood) and my work vehicle is a new Trailblazer and I'm very impressed with it.

[Hitman56]

Hire Foose to design a line of vehicles.

[zoony]

Originally posted by Hitman56

Hire Foose to design a line of vehicles.

Helluvan idea.

Also, I think American auto companies are missing the boat with some of the extinct American brands.

How cool would it be to see Ford or GM resurrect Dusenberg to compete with the likes of Lexus, Infiniti, & Mercedes? Who wouldn't want a Dusenberg? After all... it's a doosey!!!

What about Packard... or maybe even Hudson. I wonder if these brand names are for sale. As big an idea as retro styling is these days... what about retro brands?

[Leonard Washington]

they need to make their cars better. usually they have nice exteriors then crappy interiors or nice interiors and crappy exteriors. i think their reliablity is much better than the 80's, but they need to develop new engines rather than putting EFI on a 20yo design.

[iheartskins]

As dreamingwolf has noted, it's all on the Unions. They are crippling that company and many others. That's the principle issue at GM. Second is better design and fuel economy.

[chomerics]

Originally posted by iheartskins

As dreamingwolf has noted, it's all on the Unions. They are crippling that company and many others. That's the principle issue at GM. Second is better design and fuel economy.

That's absolute BS, it isn't the unions, it's the schmoes runnung the joint.

I USED to be an anti-union guy, but I have since changed my tune, and I have come to see that they are a necessity for the American worker. They are a needed entity especially now considering the governments proponent for siding with business every single time, and completely taking a crap on the American worker.

Zooney, the $54 number is complete BS. The average assembly line worker for GM gets paid crap, I know a few guys who work at GM, and their top engineers don't make that salary. The figure rolls everything into the cost of a worker, and until they stop cooking the books this way, the will constantly be priced out of the market. Everything is figured into the cost per employee. For example, the electricity and everything else required to run the manufacturing facility.

This is where the American business model does not work, and it is in a bunch of big old-school corporations. They factor in costs of everything into their employee's numbers. They then divide the total cost by employee's to get an "average cost". The higher the number, the better for the company, because you are using less employees per product. It is a simplified explination, but it is the way Parker Hannifin (another giant GM type company) do their books. The problem with this methodology is that you tie everything into employee cost, and your baseline price. . . you don't seperate out business expenses and product cost, which drive up the overall cost of product.

Now, as for GM, they need to do a number of things.

1. Revamp their line.

It's old and stale. Bring back the Camaro and go retro with some of their lines.

2. Hybred technology investment. They should place a bunch of R&D into fuel efficiency and start to market their cars as a modern 21st century marvel instead of a 20th century relic.

3. Eliminate the top fat. GM is a top heavy company with probably over 500 employees making 200K+, these are the jobs you should eliminate. They have not brought the company to where it needs to be so you need to get someone who will.

4. Streamline manufacturing and tolerancing.

This is where the Japanese auto manufactures were ahead of the US auto makers 20 years ago. We have caught up by using Japanese manufacturing techniques, but the supply chain and DOEs need to be streamlined.

There is probably a list of about 100 things GM did wrong, and not working for the company, it's hard to asess what to do, but there are a few things I could think of.

[iheartskins]

Chomerics, I appreciate the fact that you've got buddies that work on the assembly line, and I'm sure there are exceptions, but I too have a connection at GM and he too is close to the situation as a corporate executive at GM. While he's never said anything to specifically blame the Unions, he has indicated that salary levels there are relatively commensurate with the levels that zoony indicated in his post.

As has been hashed, and rehashed, there was a time for Unions when employers were abusive in their tactics toward employees--but that time has swayed in the other direction where labor forces command, in certain circumstances, too much power. The costs of GM's unionized labor force is felt not only in the direct pay scheme but also in the enormous pension load that UAW has managed to get GM's BOD to approve, as well as similar benefits costs such as health care:

On January 20th, the company announced its 2003 profits. Excluding the recently sold Hughes Electronics business and some other items, profits fell by 18.6% on the previous year. Profits from car sales in North America tumbled by nearly two-thirds, to barely $1 billion, dragged down by a charge of $2.6 billion for GM's huge pension scheme. A fall in car profits overall, from $2.5 billion to $1.1 billion, was not offset by a $923m rise in profits from the group's financial businesses.

See this article in full at The Economist.com.

See also:

Union-bash or bust?

Jun 8th 2005

From The Economist Global Agenda

General Motors has announced that it will lay off 25,000 workers in its home market, in an effort to arrest its decline. This will help, but GM may need to pick a more serious fight with its unionised workers if it is to survive as a world-class carmaker

THERE is a sickness at the heart of General Motors—the car giant’s generous health-care plan for blue-collar workers. This issue sets the battleground between GM and the United Auto Workers (UAW) union. And GM might decide that it is time for a showdown.

Richard Wagoner, the company’s chairman and chief executive, outlined a four-point plan at its annual meeting on Tuesday June 7th to reverse GM’s ill fortunes: declining sales and market share coupled with rising costs. The success of two prongs of the approach—improving its products and marketing—are firmly within the hands of GM’s managers. But the other two—tackling gargantuan health-care costs and reducing overcapacity through lay-offs and plant closures—will require a degree of co-operation from the mighty UAW that may prove elusive.

GM has had a bad year so far. While overall car sales in North America remain buoyant, the company has seen its market share slip to 25.9% in May, over a percentage point less than a year earlier and a huge slide from the firm’s position in the late 1970s, when it commanded some 50% of the market. A series of mishaps has exacerbated GM’s troubles. The firm was forced to pay $2 billion to free itself from a put option agreed in more prosperous times that would have forced it to buy Fiat Auto, an ailing Italian carmaker. Then, in April, GM announced that it had made a loss of $1.3 billion for the first quarter. The next month, two leading credit-rating agencies cut its mountain of debt to junk status.

There is no doubt that improving GM’s products and sharpening its marketing will help. The firm has lost ground to Asian rivals that are more in tune with what American car buyers want. As demand for sport-utility vehicles, one of GM’s mainstays, has faltered, the firm has been left looking flat-footed while Toyota, Nissan and Honda plugged the gap with their smaller cars. The Japanese are also beginning to challenge GM in exclusively American territory, the pick-up truck.

But much of the advantage enjoyed by the competition is simply down to costs. The Japanese carmakers’ workforces in America are non-unionised, on lower wages, and are offered fewer benefits. Since these firms are relative newcomers to the market, they have a vastly smaller pool of retired workers to pay for and do not suffer from the sort of crippling overcapacity that dogs GM (and Ford). By announcing plans to lay off 25,000 blue-collar workers by 2008 and close some plants, GM is merely advancing capacity cuts that have been in train since the firm’s heyday of the late 1970s, when it employed some 600,000 workers in America alone.

Although the cuts appear steep, amounting to some 22% of GM’s blue-collar workforce in America, the reality is less clear. To push through plant closures before the UAW’s general labour-relations contract with GM expires in 2007 will require renegotiation of that deal. This is not likely. Any job cuts that don’t come about through early retirement or voluntary redundancies will probably face stiff union resistance. Richard Shoemaker, leader of GM’s UAW-affiliated workers, ominously noted that the union is “not convinced that GM can simply shrink its way out of its current problems”.

An even bigger battle looms over health-care benefits. In his speech at the annual meeting, Mr Wagoner repeated the oft-stated fact that $1,500 of the price of every GM vehicle goes towards providing health benefits for current and retired workers and their families—“a significant disadvantage versus our foreign-based competitors,” he noted dryly. But forcing concessions from the unions is sure to prove difficult.

For GM to recover, it must break free from the legacy of strong-arm unions, crippling cost structures and onerous commitments to its ex-workers

GM recently wrung concessions from its white-collar staff on their contribution to the company’s health plan, which costs it nearly $6 billion annually. These employees contribute some 27% of their health-care costs, close to the national average of 32% according to GM, with the company paying the rest. Meanwhile, blue-collar workers pay a mere 7%. A whopping 450,000 retired workers and their spouses are currently covered by GM’s health plan.

In a management shake-up announced in April, the president of GM’s North American division, Gary Cowger, a company veteran who enjoys a good relationship with the unions, was handed specific responsibility for dealing with GM’s “legacy costs”—ie, trying to persuade the UAW that factory-floor workers need to cough up more. Mr Cowger has a fiendishly difficult hand to play. He may be able to persuade the union that what is good for GM is good for its members too, but that is just about his only lever. Mr Shoemaker maintains that the firm’s salvation lies primarily in making better cars.

Perhaps GM should consider confrontation rather than conciliation. Some argue that forcing a showdown with the unions would provoke widespread retaliatory industrial action that would deal a fearful blow to GM at a time of weakness. But the company has plenty of cash on hand to see it through a protracted strike and could have more if it sells a slice of GMAC, its profitable finance arm. And it has considerable stocks of cars to plug any gap in production—one potential upside of that overcapacity. The benefits of breaking the stranglehold of a union that has turned wages into something approaching a fixed cost are innumerable for a firm that is now fighting the competition with one hand tied behind its back. Added pressure for change may come from Kirk Kerkorian. The wily investor announced on Wednesday that he had raised his stake in GM to over 7%.

The union-bashing option should not be taken lightly. But America’s carmakers—like its airlines and steelmakers—find themselves in an industry weighed down by history. For much of the last century they were coddled by protectionism, or over-regulation, or both, during which time they acquired powerful unions and high cost structures, and took on enormous long-term commitments to cover their workers’ retirements. More recently, deregulation has freed up their markets but has also constrained their ability to pass costs on to consumers. For GM to recover, it must break free from the legacy of strong-arm unions, crippling cost structures and onerous commitments to its ex-workers. And it must do so quickly, with or without the UAW.

Source: Economist.com

[zoony]

IHEART... thanks for the post. I was getting ready to reply, but looks like you did the work for me.

The only thing I'll do is mention two things.

1. The $54.00 / hour AVERAGE wage was taken directly from the USA Today. That is not BS... it might not agree with Chomeric's stance, but it is not BS.

2. Chomerics... quick, call Toyota, Mercedes, BMW, Honda, and Nissan. Tell them that their model for doing business in the U.S. is wrong. They need to cease operations in the Southeast / midwest, layoff their workforce, and hire union workers at 10x the compensation! That will help them to compete! You've cracked the code! We need Unions!

p.s. I hope you caught the sarcasm... I was laying it on pretty thick.

[Westbrook36]

Originally posted by zoony

Helluvan idea.

Also, I think American auto companies are missing the boat with some of the extinct American brands.

How cool would it be to see Ford or GM resurrect Dusenberg to compete with the likes of Lexus, Infiniti, & Mercedes? Who wouldn't want a Dusenberg? After all... it's a doosey!!!

What about Packard... or maybe even Hudson. I wonder if these brand names are for sale. As big an idea as retro styling is these days... what about retro brands?

They are doing this and ruined the proud names of many classic vehicles. Come on, the Thunderbird is a joke. GM itself should shoot itself for the "GTO". Sure, it's powerful but it looks like a damned Lumina. :puke:

I can't believe this thing has the proud GTO name bestowed on it.

[portisizzle]

I have a very low regard for unions and the union workers who think they are worth more than they really are.

[Ghost of]

Originally posted by zoony

Helluvan idea.

Also, I think American auto companies are missing the boat with some of the extinct American brands.

How cool would it be to see Ford or GM resurrect Dusenberg to compete with the likes of Lexus, Infiniti, & Mercedes? Who wouldn't want a Dusenberg? After all... it's a doosey!!!

What about Packard... or maybe even Hudson. I wonder if these brand names are for sale. As big an idea as retro styling is these days... what about retro brands?

I been sayin this for years. Don't 'remodel' an old Packard from 1930---build new internal parts and make it the same.

I'm a weirdo that prefers the old Packards to almost any modern car.

Car design, in GENERAL, sucks these days and there's so much plastic and polymer junk.

Meanwhile, I had an ex that basically creamed over the idea of the Acura Integra's successor(can't remember the name." It was OK, but I didn't see why it was so exciting. It looked like a million other lame-ass 90s-00s designs.

I think, too, that it's worthy of note that American companies OWN large percentages of the foreign car companies(or are owned by them like DaimlerChrysler.) Many of the 'foreign cars' are made here. Americans can make fine products. In fact, the very top-end high-tech manufactured goods are still made here(I'm talking premium stuff, not MP3 player parts)

Just avoid the unions and the 'getting by' mentality with doing business. If you need to fire some designers and execs or workers, do it. If you need to retool for a couple years to make yourself secure in the long-term, do it.

If you look at the Rust Belt and the old manufacturing towns of the East and Midwest you basically see the destruction wrought by the union mentality. There was a place for them but they pushed their agenda too far.

Leave it to chom to tell us that what everyone knows isn't real, but is actually the opposite.