Inside GM's Fight For Survival

Reader Comments
Back to blog

"As for GMC, all of our GMC products are profitable. Pontiac has nowhere near the margins of GMC. That’s why we need to refocus Pontiac. Fritz has said that every vehicle in our lineup needs to pay its own way and that’s what we intend to do."
This comment illustrates that they still don't get it. Their business model continues to focus soley on margins at the expense of what the customer wants. You don't need to re-focus Pontiac to generate acceptable margins, you need to get rid of it because the customer doesn't want it! Until they get this idea through their heads, it's hopeless.

TAJ of LA 10:31AM May 31, 2009

Whose fault is it that peoples perceptions do not necessarily reflect the reality at GM (or Chrysler)? It doesn't take an MBA to figure out that as their market share declined they would need to consider some drastic changes i.e. cutting brands/models, closing dealerships, laying off workers, etc. When GM finally did start to move in this direction it was because they were dragged along. This all could have been accomplished over a period of years rather than forced into an artificially short time frame. Why wait to file Chapter 11? It is inevitable at this point.
Going forward I have no idea how GM or Chrysler will be able to ween from the government teet. I would like to see both companies succeed (turn a profit) but don't see how that will happen in the absence of government assitance.

Lou of OH 2:43PM May 20, 2009

GM is building the best cars and trucks they ever have, and they are every bit as good as any foreign competition! The quality and durability are very high (on par or better than Toyota). The value is outstanding. GM and FORD, for that matter, have seen the light. About 4-5 years ago, they saw the light and it takes about that long to fix the products. Now, the good products are hitting the street and they finally had a chance to re-build the trust that they so carelessly squandered from 1970-2005.
It's tough. I want them to succeed, and as a consumer, I'm now finally interested in some of their offerings (I own 2 Honda's and a Toyota - all made in the US, but we know where the profits go).
It's their own fault. Wagoner led them to get rid of rear drive platforms, he led them to "badge engineering", he led them to skimp on interior quality. Year after year they played the same strategy, cheapening their products, diluting their brands, and year after year they lost more and more market share. It's sad, but they deserve to be out of business. Wagoner should have been booted 20 years ago. Bob Luts should have been brought on board 20 years ago (he just retired).
GM (and Ford) gambled. They thought they could use marketing tricks and an army of dealers (about 2 to Toyota's 1 for GM) to cover up cheap, lackluster product, while they milked truck buyers. They made no plans for the inevitable - higher fuel prices and competition in their most profitable segments - TRUCKS. When you have a CEO with a short sighted (and flat out WRONG) vision... your company goes belly up.
Sad, hurtful, shameful. But this is capitalism. And it works. And this will make room for a new start up (making electric cars?) to flourish. From the ashes, we will rise again, because this is CAPITALISM. Someone will fill GM's void, and someone will recognize the opportunities that are possible. And we will be O.K., We just have to get through this painful part.
If we do bail them out (and for our sake, I hope we do), we can only hope the new company will not repeat the mistakes they have so painfully learned. Because there will likely not be anyone to save them next time.
I wish nothing but the best to the management and workers and their families.
TC

TC of NC 10:06AM April 28, 2009

I base my purchases on how much it costs to keep the wheels running. Consumer Reports has charts on repair records. For a VERY long time, American autos had much worse repair records than most of the imports. Even a small (nitche) company like Subaru seems to last foreever. I believe there is some kind of major flaw in the assembly line,and the allowance of too much variance in accepted in-accuracy of fit, tightness, of major motor parts. Much should be re-worked or just tossed out, never put into a car that should last for at least 10 years.

Ed Roberts of CA 1:03PM April 17, 2009

Even though the US Auto Industry was sloppy for a short period of time the competition from Japan and others later on were not a level playing field for the US Industry.As significant improvements were made on our shores the competition came to America for what is now a complete industrial complex but located in anti union locations so the cost advantage still exists. Our politicians attack the US Auto Industry with a vengence for selling large vehicles that have a larger margin for Detroit to compete and deviously avoid discussion about the disadvantage of unions and our non-competive status.Henry Ford said when asked about paying his employees $1.00 per hour(a significant higher wage at the time)"so my employees can afford the cars I build". We are fastly approaching the time when a majority of our citizens won't be able to buy our own products either. Dick Pugh
Woodburn Oregon

Dick Pugh of OR 8:07PM April 13, 2009

Like any company, down-sizing might be good. A CONTROLLED effert to restructure in order to get rid of the high-cost union contracts is the best thing that can happen to any company.
GMC needs to keep the core business, and then rid itself of SAAB, Hummer, and Saturn. Pontiac is mainly Australian anyway, so no need to mess with them A good clone that is still selling well in this country.
Buick, Pontiac, and GMC handle the middle market while Cadillac and Chevrolet cover the ends. And the later are your main export models.

Frank Gentsch of TX 4:12PM April 13, 2009

.. it looks to me again, listening to VP Ms. Docherty, she does not get it totally, for what is the paid for???
- still thinks of GM great cars, but loosing market share
- still wants to keep multiple brands, although all competitors streamlined,
- still thinks Wagenor was a great guy - only then she realized how serious it is - she should follow him quickly
and more..
everyone knows why GM is non-performing since years and knock-down, because of unqualified management like Ms. Docherty...
-

RENE of MI 3:53AM April 13, 2009

Watching the decline of industry in the US has been like watching a train wreck slowly unfold over forty years.
Many of us starting issuing warnings forty years ago. "Engineer, wake up. The bridge is washed out ahead. It is 1970 now. If you don't wake up and change course in the next forty years, you're going to crash into the ravine."
Needless to say, the engineer slept through the next forty years.
Many had a hand in poor policy: free trade ideologues; loony-tunes economists who thought manufacturing passe and the "information society" was the answer; rigid, inflexible, indifferent, greedy CEOs, unrealistic unions, fickle SUV drivers who left the auto companies high and dry when gas prices shot up, and so forth.

Luther of IL 2:48AM April 13, 2009

I am a retired GM employee. People say that I should not have made $28 per hour. What would they have preferred that I had worked for $14 per hour with no medical benefits. Well, I would not have worked on an assembly line for that. However, many of the same people feel sorry for Rick Wagoner because he lost his job. I say it's about time. You and I could have done every bit a good of job of running GM as Wagoner did and he was paid millions and million and millions of dollars. Now poor Rick will just have to take 23 million more dollars and go into retirement. While me and over one million other GM retirees and dependents lose our medical benefits and get thrown into the PBGC

Richard S Day of MI 12:44PM April 11, 2009

There is nothing wrong with General Motors vehicles the problem is with Uper Managment Arragense all of us that have worked in the assembly plants have seen it for years and wondered how this managment person has gotten so far or who they are related to . We have all herd the line about THE OPERATOR KNOWS THE JOB THE BEST but when it comes to job changes or design changes the operator is never asked. This ARRAGENCE seems to run more so the higher you go in the management chain and we on the shop floor know this to be the truth.General Motors is not in this state because of the Assembly Plants its in this position because of upper managment Arragence and Greed. JIM SHANKLAND OSHAWA ONTARIO ASSEMBLY WORKER

JIM SHANKLAND 9:18AM April 11, 2009