Collectors item for sure!
GM cutting 30,000 jobs and closing auto plants – Americas – International Herald Tribune — I blame the mediocre quality and gosh-awful designs for this problem. Remember the Pontiac Aztek?
General Motors, battling to stem its losses and stave off a charge by its global competitors, said Monday that it would cut 30,000 jobs in North America and close all or part of a dozen facilities over the next three years.
The restructuring is meant to cut $7 billion a year from the No.1 automaker’s costs by the end of 2006, $1 billion more than its previous target. That translates to about one-sixth of GM’s annual corporate spending of about $42 billion.
Related link:
What’s Good for General Motors
That same year, 1955, General Motors was hauled before the U.S. Senate to explain how it had become the largest corporation in both the United States and the world and how its investors were able to enjoy twice the average manufacturing return on investment. The Senate wanted to know: “Wouldn’t America be better off if General Motors reduced the price of a Chevrolet substantially to make it more affordable for the workingman?” G.M.’s executives responded that, if they reduced the price of a Chevy as much as they could, they would run their competitors out of business. This clearly indicated that G.M. had amassed enough power over the automotive market that it would have been appropriate for the federal government to order the breakup of General Motors into three corporations, require it to dispose of its acquired part suppliers, and force it to allow normal retailing of its products alongside those of its competitors. Had this occurred, there is little doubt in my mind that more than 90 percent of the cars we drive today would be American-made.
Half a century ago, the American people were told that they could not do without the economies of scale at General Motors. How was it, then, that Toyota and Honda—companies a fraction of the size of General Motors at the time—were able to cross the Pacific and secure a sizeable market share by selling better cars at lower prices? Remember “planned obsolescence,” three-year styling cycles, and five years to rusted-out hulks? Superior disk brakes that were not adopted by G.M. until decades after they were commonplace in Europe? Or Detroit’s refusal to make quality compacts until foreign cars had secured 20 percent of U.S. market share? At those Senate hearings in 1955, Charlie Wilson, the chairman of General Motors, summed up G.M.’s philosophy: “What’s good for General Motors is good for the rest of America.”
It is a real shame that so many are going to lose their jobs, but I have noticed the bad design thing myself. I think the worst trend of late is putting the speedometer in the center of the dash – in between the driver and the passenger. It is in some of the new Scions and it was a real deal-breaker for me over the Saturn Ion Redline – although I did buy a GM (used ’05 Vibe).
I do hate to see so many people lose their jobs (especially when eveyrone knows the CEOs won’t take one cent of a paycut and will likely continue to get bonuses for running the company into the ground), but I have to say that GM had this coming.
Their designs are awful and every GM car I’ve ever owned has had some recurring problem I’ve had to fix over and over again simply because of bad design (and the mechanics admitted this.) My girlfriend’s 2000 Grand Am has had to have the wheel beirings replaced twice times in 135,000K (about 75,000 miles, one set shoudl last 150,000K at LEAST) because their design exposes the ABS sensor wires to the elements and when enough dirt and road salt get in there, it shorts the sensor and causes the ABS to go haywire. There’s never been a fix for this. There’s also three spots on the car that rust on queue every single year and there’s nothing you can do about it except to keep fixing it (I had this problem on my last GM car too.)
Last year I leased a Mazda 6 and couldn’t be happier with it. Not one single solitary problem and it gets better gas mileage that my GM and has 45 more horsepower.
GM, Ford and Chrysler have to learn to start designing quality cars if they want back in the game. If they don’t, this won’t be the end of the red ink for them, cuts or no cuts.
Actually Lenny, not that I’m out to defend GM (I think their cars are crap), but the speedometer in the middle of the dash was developed by Toyota for the Echo, which is pretty much a Scion with some detailing differences. GM really didn’t have anything to do with it. It allows the factories to switch over between left and right driving cars in the same line with minimal effort. Other manufacturers have to have separate assembly lines to do this.
I have an Echo myself, and it took me a while to get used to the placement of the speedometer. However, I now believe it’s a far superior design, because I no longer have to crank my head down to see the dash because the steering wheel is in the way, nor do I have to move my hands if the’re blocking the view. Now, I can just make a quick look to the right and see everything clearly.
It’s those ****** SUVs. They are selling 6000 pound behemoths that get 14MPG. Toyota is selling a nimble Prius that comfortably seats five and gets 60MPG in the city. GM is tanking; Toyota isn’t even adding people to the waiting list because it’s a year long.
GM ignored reality too long, ignoring concepts like research and instead tried to milk the SUV gravy train. It milked it until it ran dry, now it’s got no intellectual property and 300 billion in debt.
Uh, Toyota is transferring jobs to here. They’re still taking the profits home to Japan. They’ll do that from the new plants they’re readying in China, too. But Toyota and their affiliated plants in the USA employ 190,000.
They’re getting a commercial ready to advertise that fact — now that GM is getting ready for layoffs.
Doesn’t matter how much room the Aztec has, it’s ugly as hell. Room inside doesn’t sell cars. Design does. As for the HHR, upon it’s release the auto press refererred to it as the “Me Too Cruiser” due to it’s blatant rip-off of the PT Cruisers design. Ouch.
Chrysler easily has the best stylist in industry. GM has been trying to do the whole “retro” thing since Chrysler mastered it with the Viper,Prowler, PT Cruiser and 300C. Not once have they succeeded.
They put the asses behind the big SUVs because they offer the greatest profit margins. They deserve to choke.
It’s really sad abott this all.
MY DAD WORKS FOR GM 🙁
When GM bought EDS from Ross Perot (before he entered politics), Ross ended up with a seat on the GM Board. He started talking to dealers and questioning executive compensation and the GM brass very quickly bought him out. Maybe GM’s fate would have been different if Ross has been more successful.
Lets get real allen unions are not the reason why gM is real trouble.The execs were not doing there job in getting new and better products in the showroom floor. Foreign makers are offering new and better products at a faster rate and are able to change directions faster then the big 3 automakers here.They respond quicker to market forces then other 3 makers.
It’s the result of terrible management. It’s really just the slow version of the WorldCom BS. Short sighted and status quo decision making based upon greed that slowly eroded a decent company. Likely due to the expectations of continued bailouts and favorable legislation by the gov’t.
… and one reason Toyota, Honda, etc, etc can build cars successfully, and at a profit in the USA is that they treat their workers well, and pay them well. So, when the UAW comes trawling around for more suckers, er, workers, the workers at the plant tell them to get lost.
The realities of the “global marketplace” (or whatever you want to call it) are that companies can build identical products with identical quality in Mexico for $5/hour vs $20/h in the US. Lesse, I can build my product cheaper, without the UAW breathing down my neck, and my workers will be THRILLED with a job that pays a fraction of what I’m paying my US workforce? Hmmmm…. where am I going to build my next plant, if my competitors don’t beat me to it? (or if I don’t go bankrupt first.)
Parallax, you’re right about reoccurring problems. My wife’s 1995 S10 had problems with the seat belts, i.e., they had to be replaced. The same problem is occurring with my 2004 S10. I’ve had both rear seat belts replaced.
Which is SHOCKING considering the safety factors involved. That’s exactly the type of thing that gets a vehicle recalled. And it’s a reoccurring problem over several years!
My favorite thing about this is the totally absurd item in the labor contract (which I’m sure the UAW had no part in) that nobody could be laid off until September 2007. The company could be completely bankrupt by then, but who cares as long as those union jobs are protected.
Everybody is to blame here. The management seems to have no clue about future markets and consumer demand and the unions are more than happy to extort (through threats of walk-out) these unaffordable pay and benefits packages.
Inept, lazy management and Unions who loot the company’s future for present gain. Slap on a layer of poorly designed and engineered cars and you get GM.
Just to break it gently to Lenny E., the Vibe was designed by Toyota; it’s basically an American built Matrix.
Yeah it’s terrible that workers are protected from mismanagement by multi-million dollar executives. Really is a travesty.
I was watching the news video of a GM plant & there were nothing but robots working on the engines.
I toured the nearby Toyoto engine/transmission plant last year & there were very few humans, about.
All robots.
Unloading parts from trucks, moving the parts to the assembly line where other robots assembled the parts.
At the end of the line a robot picked up the assembled engine & moved it to the loading dock where it was loaded on another truck for shipment.
It had been raining & their was a human there mopping up the water that dripped off the truck.
Appears the days of assembly line jobs for humans are waining.
Re#1: Model A Ford had speedo in center of dash. It also had daytime running lights, energy absorbing bumpers, and got 20MPG – And anyone could fix it.
RE#2 have a 1991 GM K-5 Blazer with 220K no failure miles on the odo- yes it is boxy ugly – but it doesn’t break and it works for a living. Perhaps that was the last year they made a durable SUV. Quality took a nose dive in the mid 90’s.
R: Aztek, GM has the Aztek, Honda has the Scion, and VW had the Thing. Some people just like ugly.
Being an old-time rodder, I always thought that GM should go retro in a big way – based on parts and plans they already own.
Imagine how many sales they could get if they pulled the body molds for a 1963 Vette coupe and built it up on a modern chassis with good brakes and steering. It could get 40 MPG and there would be a waiting list for years.
**Scions** are built by Toyota
Sorry, I was trying to do Toyota a favor and blame the Scion on Honda.
Look up Chery, the Chinese car company. When the Chinese manufacturers get to the USA, they may crowd out GM & many Ford products. They’ll be the low cost producer by far.
To Allan Clark, the CEO is the main reason. The buck stops there. Toyota makes quality cars in the USA with American workers AND pays well. The CEO also doesn’t make anywhere near what GM CEO Wagoner makes. As Lee Iacocca said, “Quality is a management decision.”
Head don’t roll in today’s environment. If no one was fired over 9-11, do we really expect anyone but those at the lowest levels to be fired from a company that makes cars? GM could’ve pushed for a national health plan in the 90s, but the corporate chieftains were too busy managing the stock price. And unions are always blamed. That’s just a scam to cut their pay while the CEO’s pay & the other bozos who make the decisions, their pay remains the same.
To comment #12:
But we buy the most goods. There’s a limit to how many people can be replaced before there’s not enough customers. Workers buy things, the unemployed don’t. If we pass equilibrium, the economy will slowly disintegrate & after that what’s the solution?
The New 2006 GTO is an example of GM problems.
A new six liter, all-aluminum 400 hp LS2 powerplant makes for a good start. Base $32,995. Red tag price $30,773.73.
The original idea was a low cost, high performance American sport coupe. If GM could produce a low cost, high performance sport coupe today it would sell well. The formula is known.
V8 cast iron block and heads
4 speed simple transmission.
No AC-no radio. I have a guy who will hook you up with blasting tunes.
Rear wheel drive.
Basically stripped, with low 0-60 an .25 mile performance.
Beefy springs and sway bars.
Instead what you get today is a thirty grand luxury sports car intended for a market that would rather buy a 60’s muscle car for 10 grand.
I’d rather have 3 60’s muscle cars for 10 grand than an 06 Goat. The 60’s cars are going to increase in value.
The new goat is nice, but there’s nothing like an old goat. Pontiac should look at producing a stripped down screamer for 10-15 grand tops. 15 grand should get you a ragtop. Call it theGTO Formula. Do it in all black with a good old cast iron 300-350 horse V8 and a 4 speed. Maybe dress it up with a little chrome and fat tires. They could just sell it online and lower the cost by bypassing the dealer network, which you couldn’t do in 1964. Skip the car salesman bit and the dealer overhead. Make it easy to repair with a PC link to troubleshoot any problems, so you can skip the dealer ($70/hour) service routine. The thing would possibly sell better than the original goat. Or go out of business offering these red tag employee, bloated luxury yuppy coupes. The yuppies are buying Bimmers guys.
For all the Union bashers.
There is no sense blaming the unions.
If you stop and think about it, management designs the product. They draw the prints and decide the specifications. They purchase the raw materials after deciding where and whom to purchase them from. They provide the machines that will assemble the product. They monitor the assembly process and then audit the product for conformance to specification (Quality Control). They create and or direct the marketing campaign. They then put their product out into the market place and wait for the buyers to come.
The union people show up for work and do the jobs assigned them.
So why blame the unions because people don’t buy the cars? Why blame the unions because the quality is poor. Why blame the unions because buyers are flocking to Toyota, Honda, Mazda, Subaru, and other foreign owned auto manufacturers?
Back in the late 1950s, the United Auto Workers and United Steel workers forced the large manufacturers; GM, Ford, Chrysler, US Steel, Bethlehem Steel, Boeing, McDonald Douglas, to recognize and bargain with the unions. Since that time until the late 1970s, the US had the highest standard of living in the world. The economy recirculated money as the workers could afford to purchase other products which in turn created new jobs and wealth. This endless cycle of growth was thrown a monkey wrench in the late 1970s when these workers started contributing to pension plans and buying stock. This new wealth ended up on Wall Street where the new creed became “short term gain” instead of long term planning.
We are now seeing the results of that short term greed. R&R is not being promoted and CEOs make exorbitant amounts of money.
1990
With Iraq’s invason of Kuwait, the U.S. economy and vehicle market decline.
What else is new?
1991
In the face of financial loses, GM Chairman Robert Stempel announces plans to idle 21 U.S. and Canadian assembly and manufacturing facilities over the next four years, and to reduce the number of hourly and salaried employees by 74,000 as part of a program to restore profitability.
1992
Let’s move this operation to Switzerland! Throw it in frickin neutral!
A major reorganization is launched with the establishment of North American Operations (NAO), based in Warren, Michigan, and General Motors International Operations (GMIO), based in Zurich, Switzerland.
1993
NBC breaks out the IED’s
The NBC television network issues a “live” on-the-air apology and retraction for having aired video footage in its “Dateline” program purporting to show that fuel tanks in GM pickup trucks built from 1973-1987 were prone to catch fire in side impact collisions. The “Dateline” producers had actually used remote-controlled incendiary devices to try to ensure that a fire would erupt, seemingly due to the collision.
1994 M-I-C-K-E-Y the future is all here.
General Motors and the Walt Disney Company sign a new contract that ensures GM’s presence at the Walt Disney World Resort in Florida until the 21st century. The contract extends the partnership at Epcot until 2007 and provides for a complete redesign of the existing GM World of Motion pavilion.
1995
GM announces plans to sell U.S.-made right-hand-drive Saturn cars in Japan through its own network of dealers starting in 1997.
1999
General Motors’ new joint venture assembly plant in Shanghai, China, begins production of Buick Regals for the Chinese market.
General Motors establishes a strategic relationship with Honda Motor Company. Honda is to provide engines for a future GM vehicle built in North America and GM’s partner Isuzu is to provide Honda with diesel engines for the European market.
I don’t think it’s working, but it must of seemed like a good idea in a board room meeting. GM is looking like swiss cheese.
The whole thing is a part of a larger corporate plan.
The big guys on the top push people around, the unions complain and plants close. So what! It’s just business. GM is like US Steel was in the 1980’s. It’s not like they can be forced to keep open plants that account for losses. In 5 years they could be posting record profits. Automation will increase and the need for the factory workers will decrease. Do something else. What happens to car dealers when people begin buying cars over the Internet? So car salesman are out of work because the consumer can save a few grand on commissions and skip dealer overhead. It’s coming next. Not everybody will want to buy this way, but it will create new incentives.
For now you get employee pricing. In two years you will get direct pricing. The dealer will be an option, for those who want to spend more. Inventory is too expensive. Maybe Dell can build cars next.
Maybe Ford or GM will do what Dell is doing or partner with Dell. Buy an SUV and get a new laptop in on the deal or something. More value, less overhead. The car business is in for change.
with most of the ford n gm cars being built in mexico n canada woulden,t it make sence that americans building toyotas nissans ect in the usa buy these cars n trucks wake up ford n gm!!!!pay these mexicans a half decent wage n they would buy your autos..