So fast? GM nearly went bankrupt in the early 1990's. They and the other members of the "Big Three" have been losing market share in cars for decades. There is a simple reason for this, Rick: Your cars stink.
Despite public perception, the answer is not that foreign automakers are more productive or offer better-quality or more fuel-efficient vehicles.
GM and the rest have defined "quality" as elimination of defects. That's ridiculous. GM hasn't had a product competitive to the Camry or Accord for over twenty years -- and mid-sized cars were their bread-and-butter. The problem isn't in the factory or with the Union -- the problem is this, Rick: Your cars stink.
Simply put, we are committed to doing a better job of designing, building and selling high-quality, high-value cars and trucks that consumers can’t wait to buy. No excuses.
It's been over twenty years since the Camry was introduced. Oldsmobile was destroyed by Toyota and Honda because the Cutlass Supreme / Ciera was awful. Oh, but NOW you are going to make cars competitive with Toyota & Honda? What's taken so long? Does anyone really believe you have suddenly develpoed a design and engineering process that can make a mid-sized car people want to buy?
Foreign automakers have just a fraction of these costs, because they have few, if any, U.S. retirees
You didn't fund your retiree medical expenses while they were working, and that's not your fault? Toyota and Honda in Kentucky and Ohio should pay for YOUR bad contracts from decades ago?
American automakers and other traditional manufacturing companies created a social contract with government and labor that raised America’s standard of living and provided much of the economic growth in the 20th century.
"Social Contract"????? So now we have an alleged exponent of American Capitalism using Socialist formulations? Rick, the only reason your company paid those benefits is because you and the UAW agreed on contracts. The UAW earned a fortune for their members; that was perfectly OK when your cars were selling for large profits, but now your cars STINK and the value added isn't there. After DECADES of making fabulous profits and the highest wages in the country, now you have the crass nerve to whine about a "social contract"?????? Poor Baby!!
Another factor beyond our control is lawsuit abuse. Litigation now costs the U.S. economy more than $245 billion a year, or more than $845 per person. That’s more than 2 percent of our gross domestic product. No other country has costs anywhere near this level. And, the perverse thing is that, in many cases, the majority of courtroom settlements go to the lawyers and other litigation costs, not the injured parties.
A fair point, but your competitors face this problem too -- including Toyota and Honda.
Another major concern is unfair trading practices, especially Japan’s long-term initiatives to artificially weaken the yen. A leading Japanese automaker reports that for each movement of 1 yen against the dollar, it gains 20 billion yen in additional profitability, or nearly $170 million at today’s exchange rate. No wonder Japanese automakers have noted that their recent record profits were aided by exchange rates.
When all else fails, open the Iacocca playbook and blame the Yen exchange rate. Last time I checked, Rick, Toyota and Honda do not pay their North American suppliers and workers in Yen -- it's done in dollars. They also don't collect Yen for cars sold in the United States, either. Toyota is not a "Japanese" company any more -- just as GM is not an "American" company. They are both GLOBAL companies with hugh and series investments around the world. That's why, as you said, GM now sells more cars outside of the USA than inside. The Yen has NOTHING to do woth the FACT that Honda and Toyota's plants in the United States are selling cars and making large profits in US Dollars while your crummy plants lose money because your cars STINK.
It’s critical that government leaders, supported by business, unions, and all our citizens, forge policy solutions to the issues undercutting American manufacturing competitiveness.
Instead of looking to the Federal Government to fix your Social Contract, Rick, try driving down I-75 and visiting Honda in Ohio and Toyota in Kentucky. They can show you how companies headquartered in JAPAN do a far better job designing, assembling and selling cars IN AMERICA FOR AMERICANS than your fossilized company.
Running to the Federal Government when you got your butt kicked in the marketplace is really lame, Rick. You and your company have a great future together with the 'Rat Party -- going NOWHERE FAST. Buh-Bye!!
Seriously, you make a strong case that GM is largely responsible for its own miseries—and that the company's leaders still are not facing up to the cause of their problems: their cars stink.
This is nothing new. Back in the 1980s, I had a conversation with some lawyers and economists about the troubles of the U.S. auto industry. They prattled on for some time about exchange rates, tariffs, labor law, and so forth. Finally, I blurted out what was on my mind, that maybe the industry's problems might be solved by making better cars. They looked at me (just an engineer) with a mixture of pity and disdain, and resumed their discussion of macroeconomics and law. The idea that the answer to a manufacturer's problems might lie in making a better product seemed too mundane for them.
Aside from the vitriol....how old are those plants, a few years? a decade? How many retirees from 1960's and 70's and 80's does JAPAN have in the US (hint: none)? JAPAN does not have the 50 year overhead of retirees to pay overhead on.
The baby-boomers busted Social Security, and they busted Generous Motors.
This is ancient history, but do you remember the Pontiac Sunbird I bought (as a GM employee) and drove it directly to Annapolis with 18 miles on it? It struggled getting up the hills and when I took it back to the dealer--complained there also was a banging noise in the rear going around corners--it turned out the carburetor had to be re-worked (on a brand new car?) and the torsion bar was loose!
My next car was a Chevette. At 15,000 miles I had to have new brakes! After a complaint to GM Home office the charges were reimbursed. Moved and left GM.
Fast forward 25 years--older, wiser, many miles driven--we have had 4 Toyota Camrys (2 car family) since that Chevette--and will never buy anything else. Three reasons: Quality, style and performance! They build great cars in Kentucky!