Monday, 4 August 2008

Now For Something Completely Different


No, Not Monty Pithon, but my stab at being a business consultant for General Motors. General Motors lost over $15 billion (yes, billion with a 'b') in one quarter. They should not have been surprised. I could have told them why, if they'd asked me, and for only a small fraction of that fifteen billion.

I'm sure there is much more to it than this, but for a long time now, GM has no longer been the leader in the automotive world. They have become a poor follower, chasing after the leaders, giving the market away, then trying to catch up when it is too late. Back in the glory days of the 1950's, GM led the industry. GM came out with fins; everybody added fins. GM came out with a dog-leg windshield, everybody followed. In 1977 GM was the first to "downsize" their full-sized cars. I was managing a Chrysler dealership at the time, and Chrysler carried over their full size cars for one more year, hoping to capture some of the full-size market. They bombed. GM won, and the other North American manufacturers had to follow suit.

That was then, this is now. GM is behind the market in any number of ways. First, in performance. Only now are they coming out with sedans with horsepower. For the past few years, their Buick and Chev sedans had anemic horsepowere figures in the 190range, when their competitors like Accord, Acura, Camry, even Hyundai, boasted figures in the 260-270 range. Now it may not be politically correct to say it, but horsepower is still important. They may have been targeting old people with their underpowered cars, but a lot of old people still want to buy what young people are buying, and a lot of young people still buy performance.

Then there was the HHR (pictured above), the retro-station-wagon look minivan. They brought this model out just as Chrysler was ending the run of its successful PT Cruiser, again missing the market by several years. The next latecomer will be the new Camaro, scheduled, I believe, for the 2010 model year, again several years behind the new retro styled Mustang and now the Dodge Challenger, of which it almost seems a direct copy.

That's it for now, and thus endeth my career as consultant to the automotive industry. If anybody else has any input, we could get together and write a book about it.

Take Care

6 comments:

stauf46 said...

You did that whole post without mentioning CBA's of factory workers, well done.

You're right - it does come down to product, doesn't it? Writing a review for a new GM model a couple of years ago, a Car and Driver subtitle ran, "Buick hits one from the women's tee." They got letters, for a variety of reasons, for that one. The point was made: This new car was another safe, conservative, trailing edge product in styling and technology.

The import big-hitters make mistakes, too (Toyota Echo anyone?), but far less often.

Warren said...

John, you may be familiar with the site already, but I always greatly enjoy reading autoextremist.com, a site that isn't afraid to go after the automotive industry (a new edition is published every Wed):

http://www.autoextremist.com/

The list of criticisms that can be leveled at the domestic automotive industry is very long, but I think one of the big ones is how they frittered away their reputation for quality, and now can't get it back no matter what they do. Comments on automotive forums are quite telling in this regard. I don't think the dealerships were very helpful in this regard either. At the end of the day, however, I agree that it comes down to product. There are very few GM (or Chrysler or Ford) products that I would want to be seen in. I wish I would have kept my '69 Super Bee, though.

stauf46, what does CBA mean? None of my Google results make any sense in the context you are using.

John K said...

Pastor Terry,
LOL (I really did laugh out loud at the 'women's tee' thing). That and the 'trailing edge' show you are developing a gift for sarcasm that I didn't know was in you. Be careful about the Toyota Echo, though, I think one of your parishioners drives one. I also know someone who bought a Toyota Yaris (oddly enough, she traded in a 5-year-old Malibu) and has regretted it ever since. Says she can't hear herself think on the highway.

Warren,
I wish you'd kept the Super Bee too. Then if we ever met, you could let me drive it. ;) I wonder if they have classic muscle cars in heaven.

BTW I don't know what a CBA is either... must be some kind of theological term. ;)

stauf46 said...

I wanted to be obscure with my CBA reference - it's union talk (shsss!). Collective Bargaining Agreement - pensions and the like.

stauf46 said...

Hey, breaking news, John. Check out the new Buick at caranddriver.com - that beauty will fix things for sure.

Sure it will.

John K said...

Is that the 2010 LaCrosse? Here's what I found to be the telling sentence in the article,

"...similar in profile to various “four-door coupes” such as the Volkswagen Passat CC and the Mercedes-Benz CLS..."

Still following, no longer leading. Of course, by 2010. VW and Mercedes will have come out with something entirely new and GM will have to copy it for their 2013 models.