Tag Archives for " bankruptcy "

RIP General Motors

GM is dead

GM is dead

To the casual observer, General Motors seems to have fallen spectacularly from lofty heights as America’s car manufacturing behemoth.

But it isn’t so.

GM has been dead for decades!

While I used to be a “Ford man” (now I’m a “give me a car that gets me from A to B reliably man”), and my disgust for anything GM (except the Corvette, which I’d say is the only thing they’ve ever done right) spills over into any analysis I do about the auto industry, I will say with unabashed and unbiased reasoning that

General Motors is dead. RIP.

I certainly hope that all the people reliant on the failed giant make out okay. GM’s failure to innovate and reduce expenses will bring down a whole host of people, from dealers to factory workers to parts suppliers to fools who bought their shoddy products in the first place. (Sorry.)

A lot of people will be hurt by their downfall.

One group of folks I do not feel sorry for is the shareholders (and if you’re an employee with significant stock holdings, you’re a sucker). You have been wiped out. Soon, any worth left in those stocks will vanish.

Another group I do not feel sorry for is the UAW. I am not anti-union, and I am pro-worker, but you guys sucked the life out of the American automobile industry. GM got so mired in healthcare costs that it quickly became uncompetitive with its Japanese counterparts. And the writing was on the wall when the Japanese car manufacturers decided to build cars on our turf.

At that point, there was no way GM could compete.

GM, Ford, and Chrysler have been stupid for at least 35 years. Back in the early ’70s, when the oil embargo occurred, Detroit kept making big-ass cars and trucks, while Japan refined their smaller econoboxes.

In the ’80s, Detroit, especially Ford, made inroads against Japan, but it was fleeting, for the American car-buying public decided – yet again – that bigger was better. I cannot tell you how annoyed I get when my friends tell me, “I like sitting way up high. I can see better.” Hey, dummy, everybody else is sitting up high, too.

Rather than provide some leadership and show some long-term strategy, Detroit built the cars that Americans wanted.

However, as soon as gasoline passed $2 a gallon, Americans – fickle as we are – decided enough was enough and we wanted more efficient cars!

Do you know how long it takes a new model car to make it from concept to finished, mass-produced product? YEARS.
Now, I don’t know why it takes so long; perhaps taking so long is part of the problem for Detroit. Perhaps Japan can do it in mere months. I don’t know. But, as an aside, why does it take so long? We have computers now. And robots!

Anyway, GM’s CEO, Rick Wagoner, is gone. They have a new Chairman, too. They’re going to restructure, which is a fancy-pants way of saying they’re bankrupt. (They may in fact avoid “bankruptcy” per se, but they have no money.)

Don’t forget the foreign entities that lose out, too. GM has plants and dealerships all over the world.

I hope they restructure and come out leaner, meaner, and smarter. But I doubt it. Unless they get some real business people involved. Right now, all they have are “lifers” and “car guys.”

They need visionaries. Business savvy individuals. Folks with a clue.

They also need to shed their financial obligations, like pensions and healthcare costs. You can bet that comes with the “restructuring.”