. I was just thinking today....everyone likes to hark back to the days when GM owned 50% of the market. Now they are somewhere in the mid 20's..and the situation keeps looking bleak.

Everyone assumes this is due to GM making crappy cars (the general public at least). But when you look at the number of brands and models offered today, versus the number of brands offered in the 60's it becomes obvious the main reason is really that the market is flooded with choices. Normally choice is a good thing, however it is really not the case here.

Reason being, you are now forcing GM, a company with huge legacy and infrastructure costs to compete with companies that use much cheaper labor, not unions to deal with, and very low legacy and fixed costs. What is worse, GM's size is so huge that if it the company were to go under, so many people receive checks from GM, that the economy would take a rather large hit.

So the basic jist of my rant is...with all the choices, and all the disadvantages built into GM because of it's past, is there really a way it can fix itself? The only way I can see things fixed would be through a "correction" on the part of the government.

I really don't think the government would want GM's pension dumped on the PBGC/...so at what point, and how do they help?

So here is my basic idea-

Create a government monitored private corporation that would hold, and fund the pensions and healthcare of every retired or active autoworker in the United States. The Automakers would all have some controlling interest based upon how many employees they have. The corporation would handle benefits and healthcare, compensation for current workers would still be paid by the individual companies. Current benefit and pension levels would be maintained for everyone entered into the fund at the time of the inception. Any new workers added later on would be given benefits set based upon whatever negotiations between the corporation and the UAW or worker groups yield.

The fund would then be funded based upon a fee imposed on the price of every car sold in the United States based on cents on the dollar. So say the fee was $.03 for dollar...you would pay more of the fee the more expensive the car was. Import manufactures would see this as unfair...however I really feel that any company that sells cars in the United States should help and give back to the people who built cars before them. The fee would raise or lower based upon the monetary status of the corporation.

This would bring the US manufacturers back on a level playing field while maintaining current benefits for everyone who has them.

I know it is probably an idea with holes in it....but I really think the only way to get GM from this hole is to make everyone who sells cars in the US share in supporting the workforce that was there before them

 

Yes, GM is painfully aware of the fact that it's impossible for ANY company to compete via economies of scale on a global basis. But rather economies of scope: finding a way to differentiate a company from its competition and to react to the market place as quickly as possible (or even predicting the tides of the market and changing before they occur). That sort of stuff just is not possible anymore at 50%.

Know what else happens when a bunch of foreign brands start taking US sales away? GM has the opportunity to start selling in other countries. It's just another effect of the global economy. Decreased local marketshare with the potential for greatly increased global marketshare.

 

1. bad GM dealer image
2. bad GM car image
.a. bad gas mileage
.b. unreliable
3. confusing incentive programs
4. conditioning the customer to wait for the next incentive

Since most of it has to do with image, GM has to work overtime to prove that they aren't what the consumer thinks they were/are.

I also think price is a major issue. (Why V-8's cost $10k more than a i-4 is something I haven't been able to understand.)

 

Other countries are much more nationalistic about their car brands than the US. You would be hard pressed to fine any american cars in Japan because the Japanese see it as disloyal to buy them. How many Germans say screw Audi, I am buying a Cadillac.

GM sells well in China because American cars are a status thing there, and there is no well developed dominate maker...but China is also inacting laws that will make it less financially attractive to buy cars with V6 engines, which are most american cars. China is very protectionalistic...to the point than every foriegn company that sells a product can not do so on it's own...it must set up a joint venture with a local company before it can sell. That is why GM has a joint venture set up over there.


Lastly, North America is the most lucritive, and profitable market in the world, which is why everyone wants a piece of the pie. Any company would rather be selling mostly $30K sedans in the US rather than all $10K ****boxes in Brazil. So it is not that easy to just setup shop somewhere and make up lost US sales.

A free market is good...but when your own companies can not compete, things need to be rethought.

 

Sad part is, GM can revive all of their brands, and make some really nice cars, and they still may not stop Toyota from becoming #1. I hope they maintain that status. But the overall goal is obviously to return to profitability, and if that means not being #1, so be it. Better off being profitable, and making the cars I love, than being dead.

 

So basically, you're creating more Gov't Bureaucracy (which has to be paid for) and adding a 3% tax on every car sold in America to fund the Big 3's Pension and Healthcare cost?

 

GM already owns a part of Toyota and have several agreements together. See how GM is related to the rest of the carmakers in this link http://www.carlist.com/autonews/2005/autonews_132.html

 

That's the way I read things. Given the government's financials, I'm not sure that dragging it into this problem is going to fix the problem.

And given the numbers that are frequently thrown around, I'm not sure that a 3% fee would take care of the problem.

 

GM does not own a part of Toyota. And that listing is out of date.

 

GM's ownership was mentioned by a professor/researcher of one of the world's top B-schools (INSEAD). GM HAS Joint ventures with Toyota (check the internet). True the listing is dated 2005 but how does that make it's contents invalid today?

 

I read government and then I stopped reading. We need a better US health system period. If we got that, it would take a lot of weight of US companies with legacy cost.

 

NUMMI is a joint venture with Toyota, that does not mean that they own part of Toyota. in all honesty i feel that NUMMI was a mistake and in retrospect GM really got the tail end of the deal.

about the listing. some of the things have changed, namely GM no longer owns their stake in subaru. they sold it and toyota bought up a lot (if not all, i cant remember) of it.


honestly what its really going to take is to shake toyota of their uber good fuel economy image and tell people how good GM's fuel economy is.

GM: HURRY on getting the hybrids out and get them out on as many models as possible! do something to differentiate their looks from the rest of the models. (maybe different grille and green pinstriping or something) Why? because look at the most successful prius: the hybrid. It looks unique and when u see it u know it is a hybrid. these things are image symbols first and foremost. its trendy to be fuel effecient right now.........
......or at least to look like you really care about saving the environment (not to mention gas prices).


when the GMT900 hybrids come out make sure they get better gas mileage than the toyota SUV's and advertise the HELL out of that fact.

beat toyota at their own game.

 

How does it make it invalid? Easily.

For starters GM's partnership with Subaru was disolved when they sold off their entire stake in that company.

Then GM sold off most of its stake in Suzuki. They retained 3% of the 17.4% stake they had.

Then GM sold off all of its stake in Isuzu, however, GM maintains they will still have some kind of working realtionship.

So....things change you see.

 

Throw in Fiat, and you have a pattern.

 

Hah yea that was the worst one of all. But let's not talk about that, it will probably make BM giggle or entice him back to post.