Why GM's Latest Moves Aren't Enough

Reader Comments
Back to article

I support Gm and i think that everone should buy from them

of 9:31AM January 06, 2009

(Sidenote: While GM is on hard times they are taking out full page ads in the Boston Globe pleading their case)
'The 15% Solution"
One possible approach to dealing with the auto crisis -- The federal government could give any one who buys a fuel efficient car from the Big 3 a 15% instant rebate back on the selling price. This program could have an 18 month time limit.
The total of the rebate dollars might then constitute a loan the auto makers would have to pay back.
If effective, this solution would immediately jump start US auto makers by giving them a huge advantage over the competition while they work on the remaining legacy issues. Auto makers would stay employed and no money would go directly to the car makers.
The feds might also think about underwriting an extended car warranty program for this period. Again, the total dollars to do so, could constitute a loan to the auto makers.
If the dollars don't proof out, the concept still might we worth exploring.
Joseph Hare
Hingham, MA.
More.....
A quick direct "15%" instant government rebate (say averaging around $3,000) from the Dept of Treasury paid to consumer with purchase of a US auto maker lower mileage car might make these cars especially attractive,
The problem with the fed using IRS tax return deductions is you only get indirect value (a lower tax payment) and but once a year (April 15).... and higher wage earners get more real dollar benefit.
I thinkt this rebate program would get consumer attention/visibility. Hey, If you could buy a Camry priced today at $20,000 for $20,000 versus a Malibu priced today for $20,000 for $17,000 (plus get a10 year warranty), which would you buy?
Such a program, if it worked, would give auto makers an instant dramatic jump start while they work on getting
more cars that would sell (without rebate program) developed and while they deal with worker legacy issues.
Giving a bailout just keeps them from going bankrupt while they try to get a higher % of americans to buy their cars. They have not suceeded in doing that over the last 20 years. Assuming Americans were motivated to buy fuel efficient Gm-Ford-Chrysler cars, the biggest stumbling blocks might be that the auto makers could not retool fast enough to produce enough low mpg cars to get profitable, that they could not get rid of their gas guzzlers, and that the union entitlement are still choking them..

Joseph Hare of MA 11:03PM November 17, 2008

I,m trying to buy a 2008 gmc 3500 duelly . The dealer is ho
lding out for the last dollar. You would think they would want to sell it fast????????

neal of MA 10:17PM July 16, 2008

To me, GM's problem is obvious--the make cars that break down and fall apart much more often than Toyotas and Hondas. Just look at Consumer Report's repair statistics for documentation. There are other issues such as medical costs, but I don't see GM turning around until every car they make is a quality car.

Dan of AZ 9:19PM July 16, 2008

I currently live in Japan and have for the past 4 years. Ultimately, what is bringing the slow death to GM is a lack of vision and complicity with the oil giants. From 1996-1999 GM built the EV1 and commercially viable plug-in electric vehicle that was available only in Southern California and Arizon.While it wasn't perfect it could have had the potential to revolutionize the auto industry.Under pressure from the oil giants they killed it off. All the leases were terminated and every one produced, except for a few in museums were hauled out to the desert and destroyed. These cars also did not require fuel filters air filters etc. So AC delco and all those other businesses would no longer be needed either. But here is what did happen the EV1 scared the crap out of the Japanese and in 1998 Toyota came out with the first prius. In the U.S. with oil trading at $20-$25 a barrell we looked at it and laughed and continued to drive our Ford Explorers. Fast forward ten years and now look who is laughing, all the way to the bank and world automotive domination.

octopushead 8:11PM July 16, 2008

For the last 50 years (at least) the auto unions have been gouging the consumer by wresting unsubstantiated levels of compensation and benefits from the "Big Three" US automakers. The automakers, rather than living up to their mandate to manage, repeatedly caved in to those demands and passed the cost through to the consumer, thereby preserving their equally undeserved bonuses. I have no sympathy for the US auto industry. Its payback time. I hope all three implode and remove a huge dead weight from the back of our economy.

Lion Man of NY 12:21PM July 16, 2008

In mostly city driving around Providence,RI and Barrington ,RI 181 miles in total. My Saturn View AWD 6 2004 model I recieved the respectable result of slightly over 25MPG.
I have no absolutely NO complaints on my Saturn. Before I have driven Pontiac Bonneville, Audi 5000, Mercedes 240D, Mercedes 220D.
I will continue to drive and purchase Saturn!!!

Bernhard Weiss of RI 9:31PM July 15, 2008

G.M. needs new management! cuts should have been at the top.
how long can this charade of poor leadership go on?
G.M. needs product and profit to prosper. not clever accounting!

m.r. 7:40PM July 15, 2008

so you dont think the pontiac grand prix or grand am or the g6 are good sellers,,you'd have them dump them

alex nicol of MI 4:29PM July 15, 2008

The $40,000 Volt is going to help turn GM around? In what universe will this miracle occur, because it won't be in this one. A car that isn't priced in the low $20,000's range can't make much of an impact except in press releases.
However, the real problem isn't the Volt. Current GM management are the same bunch of idiots who ignored GM's growing problems in the first place. I can remember reading articles about GM needing to shed losing divisions in the early to mid 1990's.
Lets not forget this is the same management team that killed their first electric car and let Toyota take the the in hybrids with the Prius. Yes, the Prius and its elk were and still are niche products, but you think someone at GM might have been awake long enough to ask themselves if they had a contingency plan for a sudden rise in the price of oil.
Even now the GM bureaucracy is moving at the slowest pace possible to deal with their current dilemmas. What happens if the slowing economy becomes a full blown 1981 level recession? What happens if something truly disastrous happens to the oil markets, such as Israel attacking Iran? I don't know the answers to these questions and I hope I never find out, but clearly GM's management isn't thinking or acting as if anything worse could happen to spoil their latest plans. Wishful thinking is no substitute for for hard headed planning with a clear eye to a potential pitfalls.
(I do not own or plan to purchase any shares of GM or any derivative products based on these shares.)

Kurt in Saint George of UT 4:14PM July 15, 2008