Wall Street speculates on General Motors bankruptcy

SupplierBusiness.COM ^ | 04-18-2005 | SupplierBusiness

[spetznaz]

alot of it is also perception and the way quality issues are covered in the media. the new Honda Accords where recalled last year for defective automatic transmissions, did you hear much about it in the media? no. A latch on a GM pickup truck fails, and its all over the news.

I have to politely disagree with you. One cannot place the blame on the media for the number of defects announced. While it is true that Honda did have defective transmissions, none of the foreign makers have anywhere near the same number of recalls as GM has. It is not even close.

This monday alone GM had 6 seperate recalls! six! And infact i can say the media 'helped' them out by only concentrating on one of those recalls (the seatbelt issue). But there were 5 others.

Tell me any foreign automobile company that has ever had 6 recalls, each of them different in nature, in one freaking day! You cannot. No one can, simply because GM quality is just insane!

Here are the recalls made on Monday (note the range and scope of the vehicles involved, plus the varied nature of the problems): GM recalled 1.5 million full-size pickup trucks and sport utility vehicles from the 2003 to 2005 model years with second-row seat belts that may be difficult to properly position across passengers’ hips. GM also announced five other recalls on Monday. They include a recall of 332,202 of the 1500 Series Chevrolet Suburban and Yukon XL SUVs from the 2000 and 2001 model years for possible overheating of fuel pump wires that could lead to engine stalling, failure to start, a possible fuel leak and inaccurate fuel-level readings. Also recalled were 142,585 1500 Series Silverado and Sierra pickups from the 1999-2002 model years and 2500 and 3500 Series pickups from the 2001-2004 model years with manual transmissions. The parking brakes could wear out, allowing the vehicles to move unexpectedly. GM also recalled 69,037 of its 2005 model year Buick Lacrosse and Buick Allure sedans, which went on sale last year, for a potential problem with a brake part that could lead to brake loss. GM said it was aware of a low-speed crash, which did not result in any injuries, as a consequence of the potentially faulty brakes. Also recalled were 39,078 2004-model year Buick Rendezvous and Pontiac Aztek SUVs, which could stall or fail to start due to a faulty ignition relay. GM said the problem resulted in one minor crash, but no injuries. Lastly, GM recalled 22,115 Saturn L Series wagons from the 2002 to 2004 model years because they were built with center and passenger-side rear seat belt anchors that fail to comply with U.S. and Canadian safety standards.

Tell me the last time Toyota, Honda, Hyundai, Volkswagen, BMW etc ever had anything similar to that. The problems at GM run deeper than a 'latch on a GM pickup.'

And that is not even touching on issues like the fact that the vast majority of their vehicles (with the notable exception of the Cadillac line since the new CTS/STS sedans are selling like hotcakes, and obviosuly the Corvette) are as boring as heck. And customer surveys basically put GM cars at the bottom of the 'desirability meter.' Is that the media's fault as well? What about asinine management decisions like buying niche brands like Saab, and then adding product lines (like the new Saab SUV) where the SUV is basically a Chevy Trailblazer! That decision just shows how ludicrous the management is ....no Saab conoisseur is going to purchase what is essentially a Trailblazer with a different fascia and badge, and sales will obviously be low. But not as low as (actually nothing can be lower than) the Aztek! Poor product design, hopeless marketing startegy (basically their focus group arrangement LIED to them that the Aztek would be a hit, and the reason for that is probably how it was arranged ....and maybe because management wanted to hear what they wanted to hear).

And then there are the statements by GM V.Chairman Bob Lutz where he lamented that GM was 'selling deals and not vehicles,' and needs to get back to selling cars instead of merely offering deals. Is it the media's fault that GM has to offer insane financing deals to lure customers? And is it the media's fault that Toyota premium-prices their vehicles, and still get customers up the wazoo?

And finally there is the fact that GM sells a third of its cars to employees, suppliers, their families and friends, and car rental fleets. A third! You can be certain tha Toyota and Honda are not in such a predicament. Is that the media's fault as well?

The long and short of it is this. General motors has no one but themselves to blame for the predicament they are currently embroiled in. They had decades when they virtually had no real competition (and had 50% of the market in their pocket). They made vehicles that to this day are classics (I would probably trade the BMW 3 series for a nicely redone 1967 GTO). But almost all their current vehciles are duds (have you seen the CURRENT GTO .....it has the horsepower, 350 i believe, but it is nothing more than a souped up version of the Australian Holden Monaro. It is NOTHING like the '67 GTO in looks, spirit or heart, and in my opinion the current GTO is ugly and over-priced. And apparently that is the view of others as well since it is simply not selling, and for its price one can uy a BMW M-3).

GM needs to do what Chrysler did .....rusttle itself and freshen up. That (in my opinion) is even more important than getting rid of the albatross that is the UAW, the reason being that even if they got rid of the UAW (and their mind-boggling union contracts) they would still need to make cars that would induce people to buy them instead of relying on employee and fleet sales to make up a third of the overall sales. GM needs to ensure their vehicles have the best quality, the best value, and the best look. Again Chrysler has done a good job, and it has paid off for them. GM has even been successful at this, since their Caddy division has sparked back to life due to the CTS as well as the Escalades ....vehicles that actually look good to buy and are more than sufficient (especially the CTS-V and the new STS) to compete with BMW without an ounce of shame. GM needs to work the same magic on its other brands.

If it doesn't it will still be blaming the 'media,' and it will still be flaming down (and i doubt that their cash reserves can last 7 more years).

And no, the media is not responsible for anything afflicting GM .....including the negative customer perceptions.