Is General Motors Really Trying ?

Last month, the General Motors Corporation (GM) went to Congress and begged for a multi-billion dollar bailout to keep their company from going under. Even though most Americans believed GM had created their own problems by the bad decisions they made, the bailout was granted.

For years, GM had built ever larger gas-hogs as oil prices rose and their foreign competitors opted for smaller more fuel-efficient cars. Then last year, Toyota overtook GM, and for the first time ever, become the biggest seller of cars worldwide. As oil prices spiked, GM was left holding the bag with their gas-hogs, and the company was in deep trouble. They assured Congress and the American people that they had learned their lesson and would change their ways, in return for the bailout.

The American people didn't like it, but they went along with the bailout to save millions of American jobs. After all, GM had learned their lesson hadn't they? Or had they?

This week, because the gas prices had gone down, GM announced they were once again increasing production of their expensive gas-guzzling Sport Utility Vehicles (SUV). They are increasing production of these SUVs, while laying off workers at the same time in other plants -- cutting 1200 jobs in Michigan and 800 jobs in Ohio. Do they really think Americans are going to flock to buy these expensive gas-guzzlers just because gas prices gave fallen?

Someone needs to tell these dummies that the only reason gas prices have fallen is because no one can afford to buy it. This country is losing around 200,000 jobs a month, and that may go on for a while. If GM wants to once again become the car of the masses, and not just the rich, they're not going to do it with SUVs. I have to wonder if they've learned anything at all.

At the same time that GM is increasing production of SUVs, Toyota announced they are considering bringing their smallest car to America. The Toyota iQ (pictured above) is 10 feet long, holds 3 adults and a child, gets over 50 miles to the gallon of gas and costs a hell of a lot less than an SUV. Which company do you think sees the reality of a world slipping into depression?

I'm very disappointed in GM. With their current viewpoint, it's only a matter of time before they're asking for another bailout. Unless things change, they won't deserve it.

What Is An "American" Car ?

On Monday, nearly 2700 workers walked out of the General Motors plant in Arlington. They were joining thousands of their union brethren in a strike against General Motors.

For years, these workers have watched as GM shipped American jobs to other countries, where they could abuse lower paid non-union workers. Today, GM has less than 25% of the number of American workers that it employed in 1970. That is an apalling figure, especially considering that many more cars are being made.

So this strike is less about wages, and more about job security. It's a bad sign that the contract expired on September 14th without a new agreement. Does it mean that GM wants to ship even more American jobs overseas?

This dilemma got me to wondering just what is an "American" car? Is it a Chevrolet made by Mexican workers for a company headquartered in the United States? Or is it a Toyota made by American workers for a company headquartered in Japan?

The Mexican-made Chevrolet makes GM's owners richer, but the American-made Toyota probably contributes more to the American economy, because the money made by the workers turns over several times and benefits many more people in this country. To me, a car made by American workers is a lot more American than one made by foreign workers, regardless of where the rich owners live.

American-headquartered car companies like GM and Ford should be careful about asking people to "Buy American". They might just do it.

What Happened To General Motors ?

Last week it was revealed that General Motors is no longer the leading car producer in the world. In the first quarter of this year, Toyota sold 2.348 million cars, passing GM for the first time. During the same period, GM sold 2.26 million cars. And it doesn't look like this trend will be reversed anytime soon.

What happened? How could GM have lost the lead it had for so many years? MSN.com has a pretty good article on how this happened.

The article says that the two main reasons are "yester-think" and "bloated union contracts". I disagree about the union contracts. They have re-negotiated many of the contracts, and closed down many plants in this country to shift production to Mexico and other places. It has not helped, because that was not the problem.

But the engagement in "yester-think" was definitely one of the major reasons. GM was fat and happy and continued to build the same product, while Toyota (and other foreign companies) were constantly redeveloping and improving their product. By the time they figured this out, it was too late. Even most Americans now consider Toyota and Honda to be more advanced and more dependable than cars made by GM and Ford.

I think another reason for their downfall was the close ties between American car companies and the big oil companies. For many years, each looked out for the other. Big oil keep their prices fairly low, and the car makers refused to seriously consider building truly energy-efficient cars. When they did build a small car, it was more of an afterthought, and did not meet the quality of its foreign competition.

They were convinced that the world preferred to drive big gas-guzzlers. But then the big oil companies decided to go for enormous windfall profits, and by doing so put a knife in Detroit's back. Toyota, Honda and others never had a close relationship with big oil, and were able to build ever more efficient and dependable cars. When big oil went crazy, they were already in the market with appropriate products. GM and Ford are still trying to play catch-up.

Maybe they have finally learned, you just can't trust the big oil companies.