...seems to be making a huge impact on the buying decision of everyone around me.

My dad who has always bought American so long as they had an offering somewhere in the realm of the foreign competition was just mentioning that to me last night when I told him I really liked the new LaCrosse and was pointing out the stellar deal that could be had on a 2009 Malibu at the moment.

He really likes the new Malibu and is interested in the LaCrosse like I am, but he's pretty concerned about the future of GM. So are my friends and coworkers. It seems right when GM is making the right products that people like, they no longer have the image of stability that they need to back the product.

Here are the questions I pose:
-What do you think the odds are that GM will go completely under within the next 10 years?

-What do you think is the difference between what consumers fear will happen and what most likely will happen if GM does go under?

-What can GM do to alleviate those fears? It's like the elephant in the room that nobody's talking about... including GM. "What if"?


Bonus thought:
If GM does go under, I expect it to wake up a stronger sense of national pride among a lot of people in the US who will try harder to buy US-made products. I also expect many of GM's customers to go to Ford (far more than will go to Toyota, for example).

If GM does go under it could provide a substantial boost for Ford... let's hope if that does play out that Ford rides that wave into success and dominance and doesn't let it make them get lazy and complacent, much as I feel GM did to get themselves into their position today.

 

GM needs to start a SERIOUS ad campaign with the theme of, "It's up to you" comparing their current offerings to the competition on a brutal, point-by-point, value-for-value basis. Maybe even in 2-minute infomercial format.

They need to communicate that the quality gap is closed, or even tilted in their favor. And when it's readily apparent that there's really no difference between Camcord and Malibu, (or whatever and whatever) except on the most insanely nit-picky or opinion-based levels, they need to lay it out: One is a vote for the future and for your country, the other is a vote for immediate selfish gratification, based on no sound foundation.

And put it right there: "It's up to you."

 

-What do you think the odds are that GM will go completely under within the next 10 years?
i think it is very possible, but I personally feel they are going to tough through it and we will all be able to buy our 2025 vette or camaro. *have faith ppl

-What do you think is the difference between what consumers fear will happen and what most likely will happen if GM does go under?
as much as it saddens me to say it. the way our country/govnt is leaning if they DID happen to go out in the next adm., the feds would prob take over the warranties on the vehicles.

-What can GM do to alleviate those fears? It's like the elephant in the room that nobody's talking about... including GM. "What if"?
isnt this the million... o, i mean trillian is the new million to the feds.. dollar question?

 

Zero.

I think the typical consumer things that GM and all of its dealerships will magically disappear, and they haven't put any further thought into it.

What would actually happen is economic catastrophe. Fully one quarter of United States workforce will lose their jobs. Our GDP will fall by 10% or more. The value of the dollar will go in the tank (farther). The results would get worse and worse in a chain reaction that would not end for a long, long time. The total cost of this failure would likely exceed one trillion dollars.

GM should come right out and say, publicly, that they screwed for many years. Their board and their executives focused too much on short term profits on Wall Street, and not enough on the product. They should apologize, and then they should say that it has finally come back to bite them.

They should then describe the catastrophic chain reaction I described above, to the best of their ability, without going into too much financial detail (because that will make the average consumer confused and they'll stop listening). They should give an estimate of the total cost of that failure, and point out that said failure would fall on taxpayers. Then they should say that the only viable way out of this is with government assistance, and plead with the general public to continue funding them while they turn around.

As a token of good faith, GM should point out all of the great cars they've made recently, and they should announce major changes in the lineup that eliminate or replace all of the not-so-great cars within a specified timeline (I think five years would be reasonable, given sufficient funding). They should be public and honest about the cars that weren't so great.

They should point to the Malibu, CTS, G8, Camaro (once it's out), Corvette, the Lambdas and the GMT900s, the new Lacrosse, etc., and say, "look, this is what we're capable of." And then they should point to cars like the Pontiac G3 and say, "but this is what happens when we're short on cash and need to make a quick, easy buck just to keep the doors open."

Having pointed that out, they should come up with an honest estimate of how much money they need to turn things around. Here's a hint: it's at least $125 billion (that may be reduced somewhat by the money they've received recently). They should say, "we know that's a lot of money, but it's a tiny fraction of what would cost you to let us fail, and we believe in this country and want it to prosper. This option is the lesser of two evils, and believe us, we wish we didn't have to ask. With your support, we will turn GM around and reclaim our long-lost status as the world's best automaker."

They should commit publicly to a reasonable executive salary cap, and to as many other transparent (i.e. obvious to the public) reductions in their expenses as they can find.

They've already done some of these things, but I don't think they've gone far enough yet.

Fail. If GM goes under, the suppliers go under too. And if the suppliers go under, Ford goes under. As JasonD is fond of saying, there is no safe distance.

 

I think the odds of them going totally under, as in Chapter 7, are low no more than 25% and I think even if they did the feds would step in one way or another. Some sort of radical reorganization is still possible though.

Most of the people I know aren't thinking about what would happen if they bought a new car because it's not really on their radar, I'm sure it's a consideration for people in higher income brackets though. What I think would happen is that the brands, dealers and everythign else would get sold piecemeal, which could be really bad for warranty holders. The government becoming responsible for all those warranties though, would be a Kafkaesque nightmare.

I don't think there is much they can do change it, other than stop the bleeding, which will be difficult.

And to that last point, the people who honestly believe a collapse of a major automaker would be good for this country will continue believing it, for at least 6 months or so, until thousands of midwesteners start migrating to the coasts and the sunbelts and saturating the job market as well as every public service.

 

Impossible.


I think your lack of distance from the situation has you blowing it out of proportion. There is no way that GM's going under would cause one quarter of the US to lose their jobs.


They already have. In two different ad campaigns in the last 5 years. If you're unfamiliar with those campaigns then maybe they need to do another one that's more far-reaching.

It's amazing how much thought and effort you've put into this considering you've already stated they have zero chance of failing. Especially since the question I posed was not how should they keep from failing, it was what can GM do to alleviate the public's fear of their potential failure (and the corresponding potential lack of warranty/parts support that would come as a result).

Some suppliers would go under, not all, and others that could hang on would reap the benefits... it's like survival of the fittest... when the economy turns south the weaker competitions dies out and makes a better market for the stronger guys that weathered the storm.
And whatever repercussions Ford suffered as a result would similarly impact any foreign car manufacturers using those same suppliers.


I seriously think your lack of distance from GM is keeping you from perceiving this realistically... you've bought into the uber doom and gloom scenario. Not saying it's not possible but you seem to be so sure of this, and yet so sure that GM will not fail, either.

 

Even Toyota said that it would take an affect on their supplier network. GM may die, but Chevrolet , Cadillac, GMC and Buick(China only maybe) will be around.

 

I don't think it would be good for the country but I do believe the results wouldn't be ALL bad.

 

I think you've misinterpreted my post.

I also think that if you feel I've overstated the consequences of failure, that you don't know enough about the industry, and the industries that support it.

Without government aid, the odds of failure are 100%. I just don't see any way it could be allowed to fail, because that scenario is obviously unmanageable.

I am not familiar with those. Were they TV ads?

Regardless, they need to reiterate it as part of the rest of the stuff I am suggesting.

Industry lead times are simply too long for this to work.

 

If GM goes under it will start an avalanche that will topple the entire industry. Is it possible? Yes. However if it does happen many more will follow. If you honestly believe the GM is doomed, you'd have a better chance buying a car from a chinese manufacturer if you want the best odds of the company still being around in 10 years.

 

I think that nothing will help until at least the March 31st deadline because everything up to that point is speculation. With the stimulus fight that just happened no one knows whether the President will have the same type of pull with the automakers coming back to town if the reports aren't so good.

 

Threxx, you point out the issues people are having with a company that had to go to the government or else they would go under. Now imagine how people would react if the company actually went into bankruptcy. That would be "Game Over".

"Buy American" isn't the problem, isn't the answer, and is simply whistling into the wind. The public will always spend their money on the best product possible for the price.

It's up to our industry to compete, not simply to send jobs offshore or pull resources out of a well balenced product line simply to focus on a high profit (and venerable) segment. Or to cut cost at the expense of the same level of quality or better than what other top competitors have.

I don't want to beat up on just GM. Chrysler built their whole business model on trucks with cars as an afterthought (save the LX cars). Early this decade, Ford seemed to be cutting quality and customer service at every turn. GM's problems have been gone over many times.

But the answer is making a company competitive. If that involves changing management or mindsets, then that should be done. The day any of them can't compete, or has to hide behind a "Buy American" campaign instead of a g"Give us a look" campaign (ie: Lee Iacocca's "If you can find a better car, buy it!" Chrysler campaign) tyhat gets people to look and compare, then it's time for them to cash out and hand things over to someone else.

The Chinese seem eager to compete here.

 

Only a tiny fraction of the public buys like that.

Most people buy the cheapest thing that will get the job done.

 

One of the Chevy Dealerships down the road here just closed a few days ago here in Greenville SC.

 

Y'know oddly enough a few years ago one of the reasons I bought my GT was because I thought Ford might not be around today. Given the exsistance of the aftermarket, number of Mustangs sold, and the prevalence of mod motors across Ford's various vehicle lines it didn't really bother me that they might not be here.