The "real" reason GM went bankrupt (my theory)

I took this from another thread, so as not to send it off the original topic.

Maybe it's that, or it may have had a bit to do with replacing and renaming their entire model lines and destroying any model identity/loyalty they once had.

It may have been that they continued bulding their cars bigger and bigger when more consumers were buying smaller, more efficient cars (present company excepted )

It may have been the GM CEO's order that all company executives drive their respective company's brand of car, instead of driving Cadillacs. The executives simply started ordering Chevys with power windows, seats, the works. Those special option codes then appeared on dealer order forms, and dealers began ordering fully-loaded cars, blurring the distinction between brands and creating internal competition.



I have a different theory, though...

Back in the early-mid 80's, GM dealers employed Dave Campo to do ads for local dealerships.
His enthusiasm was contagious - I still have Viking Chevrolet's phone number memorized thanks to him.

Take a look at this sampling of his work right HEEEEEEERE!!!:

http://www.youtube.com/watch?v=M48HTxtjFdk
http://www.youtube.com/watch?v=uv9ghqB6Zi0
http://www.youtube.com/watch?v=onMXzujXiDQ

Sometime in the mid 80's, Ronald Reagan started the "War on Drugs".
Once that was in full swing and the cocaine supply dried up, Dave's *ahem* enthusiasm waned, and he was eventually replaced with someone much less memorable.

GM's sales suffered as a result, since customers no longer mimicked the ads or called "that hotline" to talk to Dave.

Even though it's been about 25 years, GM has yet to recover.
They probably never will, since Dave died last year.

So, it's fair to say that President and Mrs. Reagan killed GM.

 

Our opinions differ lol


Chrysler is now owned by Fiat so who knows that the Itialians want to do with the old Mopar buildings. Ford I think is in Dearborn, Michigan and is still there. When Obama bought GM he went to work, closing lots of dealers here. Even ones that were riding the financial storm out. Fitzpatrick Chevrolet Hummer here , closed down, they were on the dump list. So was Lehmers Oldsmobile Pontiac, but they complained to GM top brass two years before the great collapse the city helped them throw over 3 million bucks into making their dealer a state of the art shop and showroom. The loan wasnt even paid off when the ink hit the paper that Government Motors had them on the list to ace. Since Obama gave Pontiac the axe and Olds came a few years before, they now sell new GMC trucks and Cadillacs and Buicks. Diablo Chrysler Dodge Jeep didnt fare so well. The Chrysler Pentastar flag was lowered for the last time there when the news came down the pike they were getting shut down. They bulldozed the place days after it closed. Fitzpactrick morphed into a saturn dealer and maybe 2 months after they opened, GM killed off Saturn, so today its a abandoned building and shop. Thousands of people from the sales people, to the desk jockies to the techs lost their jobs. Jesus every time I drove by the Chrysler dealer, there was always people in there. They were busy as hell. Then they closed down. Anyways the closest Chevy dealer to me now is a 45 minute drive away. Not like id ever go, id never buy a new GM car or truck since the government owns them. Same with any Mopar product.
Ford all the way baby ! They refused MY tax money. The NUMI plant here closed down after Obama took over the auto companies. It was a joint plant GM had with Toyota. Toyota made Tacoma trucks, Corollas and Camrys there. On the GM side they built Chevy trucks, Buick Park Avenues and Cadillac STS's. Another 5400 people, got canned and not by their doing. Tesla Motors bought the place and now build 1000,000 dollar cars there now. The NUMI plant in Fremont was the last car plant on the west coast. Ellis Brooks Chevrolet fell too. At the cornor of Geary and Van Ness Avenue in San Fran. Theyve been there forever. They opened i think in 1923 selling new Chevy cars and trucks. the brick building they were in was decalred a landmark even. Selling Chevys long before Dhana Shore was doing jingles for them and Chevrolet " See the USA in your Chevrolet aviable at Ellis Brooks Chevrolet cornor of Van Ness Avenue and Geary Boulavard in beautiful San Francisco " I go on you tube and watch thoes from time to time.

Yeah...I know about Government Motors. Supposedly Chryslers mess came when Daimler (a german company) ran it and then bailed out without much notice. That was the start of that mess for them from what we saw up here and heard from workers in the main offices like management people. That started it. They were already in some type of HOLY CRAP mode before Daimler bailed out...and there were tons of new factories being built and started up to make way for getting rid of the old, delapitated, falling down, eye sore, and not economically viable any longer facilities. They spent a small fortune on the new buildings and new contracts for workers.
The bigger scheme of things for all the top big three was 1)no one is buying American anymore...we got scrap metal like Kia, where the hell did they come from? And Fiat, and Scion, and BMW, and Toyota was gettin bigger than ever...Then there is Hummer...a totally stupid piece of oversized machinery that only are driven by men with small you know whats who think they are super special and they are as small as their .... well you know ! Then Saturn...a great company, a great car before GM took over them....nice cars...Buick, Oldsmobile which got put out to pasture 5 years ago...then PONTIAC got smashed down for the top of the line alternative to Chevrolets. just like Lincoln Mercury was the status symbol over Ford for top of the line models. Then you got the smart cars, and people screaming about the price of American cars versus Japanese , Korean, German, Italian, and what really happened was the total market was completely oversaturated with too many models, too many kinds, and the foreign companies offered better warranties at half the price on the tag. Not that the quality of the vehicle is there in the little junk...but...these people that drive that crap that is throw away now, will be the ones going to drive the cadillac's in the future.
Chrysler just can't compete in that areana...Chevy was struggling with model remakes that failed, were not fiesable, and were not being bought....Pontiac started failing with they had 12 models on the market that were luxury cars that just don't work for families.
Vans are a thing of the past up here...and everyone and their brother got those beast things like hummmers, 4 door trucks, SUV's that are bigger than the Chevy Suburban ever thought of being, and less stable or crash worthy...
It was nothing to see an SUV on its top, on the side of the road, blocking three lanes of traffic at rush hour, and 8 ambulances needed to take everyone to the hospitals from the accidents. Jeep was fareing not so well with some of their structural things as well, and they were not considered fashionable and NOT BIG ENOUGH...the bigger the better was the motto here, and the flashier the better is the key to this place...and then there was the millions of ragged out more than 15 year old cars on the road that were pollution city involvement. So came along cash for klunkers. Amazeing how no one has criticized that program that cost the taxpayers billions of dollars, but got the cars on the back lots moved out and selling again. That was economically sound judgement...that was pollution control..that was safety issues...and that was beautification of the roads as well. They made the cars that were worth nothing into something to trade up with, and eveyrone took on these completely outrageous car loans and cars were selling again. Then all of a sudden...the banks in New York one by one started to fall like dominoes....and we had to bail them out....so in the frame of bailing them out...we all of a sudden saw loans to the manufacturing industries being called due. With lagging sales for almost 5 years...models that were not acceptable or profitable...and an overestimation that glam was to be necessary and everyone would buy them after they sat on the blocks in the back lots of the factories...almost a full model year...started the fourth round of layoffs
when no one else even knew there were three rounds of layoffs already in the works.
Houseing took a dive...the banks took a dive...the inside traders were and are still scamming and getting their money regularly...and then the layoffs. People lost houses, lives, families, cars, possessions, and we watched it happen here evey day to people we know.


We had whole city blocks with BANK OWNED and FORECLOSURE signs in the front yards.


I think Obama only helped the car companies by giving them tax money to prop them up was to make the UAW happy. The company I got laid off from didnt get a bail out. At any rate, thats what we have bankruptsy laws for. A company can file for bankruptsy and still function as its bankruptsy pans out. K Mart did it, most of the airlines have done it , lots of times even. United, Delta, .... lots of them. GM and Chrysler got bailouts to satisfy the union thugs. Thats it.

 

In early 2009 I saw the writing on the wall at the Dodge dealership where I worked as a tech and had a business venture I had been wanting to try, so I did. We were one on the books to be shut down by Chrysler. 4 of my friends stayed because we were told they were not shutting us down by management but I knew better. 9 months later they go into work and around noon are told to make arrangements to move thier toolbox, today is our last day.
Fast forward to June 2011 franchise was awarded back to them and are operating after a 2 year court battle. I am currently employed thier once again but work is as slow as I have ever seen and we have a tech with 50 years of Chrysler experience who said he also has never seen it this bad.

 

Not completely. Fiat owns about 60% of the company. The United Auto Workers owns the rest.

I enjoyed your post.

 

You know who lost on the whole auto bailout thing ... the shareholders, thats who ! The people that believed in the car companies most took a HUGE bath on what they thought was a sound investment.

And if you own more then 50% of a company, you essentually own the company. Just saying ....

I knew the recession was going to be a major one when Lehman Brothers went bankrupt and folded up. That was at the start of the great collapse in late 2007. I was like .... oh crap !

Never in my wildest dreams did I think Mopar would be owned by the Itialians and GM would be a government run enitity.


Im sorry about the first post , that was way too lengthy, but it frustrates me how reckless our President is with tax dollars our country dosent have..

 

The reason G.M. failed is simple. They were building too many cars that not enough people wanted, and too much badge engineering. And that has been going on for WAY too long. Where is the reasonably priced car that an active family of four can actually fit in? There isn't one from any manufacturer.

 

GM and Mopar were not making bad cars. They were actually making great ones. Its their reputation that haunted them. From the mid 1970s until the middle 1990s GM and Chrysler cars were built terrible right out of the factory. Body parts that never really lined up like they should have, electrical and fuel issues, disaster motors, cars and trucks that were pleagued with numerous problems. Even paint jobs from the factory that inside of a year the clear coat would flake off in the wind. The US automakers laughed at the asian tiny compact cars as they built huge gas guzzling land yahots. Thoes tiny asian cars had virtually NO issues, no recalls and had amazing reliability. By the early 1980s the Japanese car companies had a reputation for great built cars at a reasonable price to buy. Hence why in alot of my posts I stress to stay away from any 80s US made cars. They are junk. It pains me to say that but its true. So lots of people bought the asian cars so they would spend more time driving then in the repair shop. Plus the gas milage of these cars was great.

The US car companies didnt take notice until the middle 1990s that they were turning out crap. They did actually do a 180 and started building quality cars again but people were gun shy about GM, Ford and Mopar because of the past years.

The Big 3's reputation was way beyond repair. Two of then collapsed because of it.

 

Not that complicated really. Unsustainable contract agreements which the government buyout really did nothing to remedy. They stay afloat now buy selling primarily to the government (about 3/4 of sales this year IIRC).

mike

 

Simple answer without a lot of words... GM stopped moving gear heads from the production floor to management, and started hiring MBA's from the Ivy League schools that didn't know squat about automobiles.

 

You control the company, yes, of course. But the UAW, being both owners AND employees, could cause trouble for Mr. Marchionne and company if they're not happy with where he wants to take the company.

 

What?

How about:

Chevy Impala
Toyota Camry
Nissan Altima
Ford Fusion
Dodge Charger
Hyundai Elantra
Honda Accord

to name just a few.


The local Nissan dealer is selling new 2012 Altimas for under $18,000 right now. The local Chevy dealer is doing the same with Impalas. That's a pretty darn reasonable price, and any of these cars carries four quite comfortably.

Until recently I owned an '09 Altima, and it was a great car. Very comfortable, easily seats five, let alone four, and plenty of trunk room, unless you want to carry surfboards or something like that. I've driven Chevy Impalas as rentals, and I've liked them as well.

I don't see the basis at all for your comment.

 

i think fiat owning chrysler is gonna be great. Marchionne has said "our goal is 400 hp and 40mpg from the same engine". he also implied that the jeep brand is an american tradition and should remain as such.
i like this guy.

Dan Ackerson is a grade A *******. he is in a prepetual lip lock with Obamas rear end. He has said that he is not a car guy. he has also said that it is a problem when "car guys" are in positions of power. because they dont want to build cars like the volt, they want to build camaro's and corvettes. (ya know...cars people want).

Allan Mullalay,
Im building a shrine to this man in my back yard. (i kid i kid)
he is not a car guy but he is a genius and puts the car guys where they need to be. (in the design room and board room) next to carroll shelby, he is the best thing that happened to ford. he brought ford back without gov help and thanks to him the words "i want a ford taurus" have come out of my mouth. my wifes milan is great and my focus is top notch for the money.

 

GM should re-introduce retros as identicle to these, to start earning profits again:

 

GM simply got too big, and were making too many vehicles that competed directly with other vehicles they made. (Does the market really need a Chevy Suburban AND a GMC Yukon XL?)

Compare GM's past line up (you know the makes) with Toyota - Toyota vehicles, and Lexus vehicles - they've even dropped the Scion brand, now back to the two makes. Heck, Mazda even saw the writing on the wall way back in the 90's. They were going to bring out a new 'luxury' brand after Toyota and Nissan did it, but cancelled the plan, deciding the extra sales just weren't the expense. A lot of that additional expense would have been borne by the dealers, who would have had to open new showrooms, hire new staff, etc.

After shedding Oldsmobile, and then Pontiac , Gm needs to give each division more autonomy - just give them the goals and let them develop their own vehicles. Maybe the 'corporation' can build the platforms, and the makes can design the vehicles to go on them. Less parts sharing might make the vehicles a bit more expensive, but I think not having a Chevy Cobalt AND a Pontiac Sunfire on the market is a good thing. I see a bit more individualism among the makes right now. The Chevy Traverse, Buick Enclave and GMC Acadia for one example, each seem to at least have their own look, not sharing any outer body parts.

 

Volkswagen did it in an interesting way, by sharing components between Skoda, Seat, VW, Audi, Porsche, Lamborghini, Bentley and Bugatti (in ascending order) and it seems to function. Each has an individual charachter, despite sharing. GM of the 60's and early 70's had divisions of differing charachter. But, component sharing was conceptually different. It worked, also.