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Why GM Failed - From A Broad Consumer's Perspective



May 29, 2009 – Comments (4) | RELATED TICKERS: GM

Hi, my second blog post and I'm going to break it down without the stock numbers, without all the business jargon, and without all the terms only experts would understand for the reasons why GM failed.  I won't even go into exact years or exact points in time but just do this off the head.  And... if I can type this out off the head, then how much bad business do you think GM really has done - from a consumer's perspective?

1. GM's lineup of cars don't meet consumer demand BY A LONG SHOT!  What is demand?  Well if you ask the super ballers of Hollywood, you get 1 opinion.  If you ask the average 9-5 Joe Smo that makes around 40-50K a year, you get a totally different one.  Which group has more people?  Umm...

2. Forget Japanese (cough Toyota) or any other company that seems superior to GM.  That argument is played out like a Jheri curl as Notorious B.I.G. once said.  Let's look at GM and GM alone. 

-Chevrolet: we got the awesome mid-life crisis car, the Corvette.  Awesome HP for the price and all, looks nice and all.  But go back to that average Joe, his 1 yr salary ain't paying for this car after taxes!  Then we got gas guzzler Tahoe, another 50K+ SUV that will take at least another 50K out of your wallet from gas LOL.  Same with Suburban.  Avalance just looks like a horrible nightmare of a design.  Their other hybrids and cargo vans are decent but not really hitting that 'average Joe market'.  Camaro is the only bright spot starting at 23K but too little too late guys!  Cobalt looks like a wannabe foreign car also.

-Cadillac: decent cars, if you got the money.  I mean when I saw them in Matrix Reloaded, who didn't like that sick CTS?  But overall, the entire line from Escalades to the family cars to the crossovers are just ridiculous in prices when looked at the overall market.  And come on guys, XLR-V at 106K, get serious.

-Buick: won't say much for them.  Overall the line looks like B-design cars.  Don't even look like the old Buick's in anyway, shape, or form.

-Saturn: ahh, how did they ruin such a solid car in the 1990s?  Of these, the Sky looks nice.  But I can do better elsewhere.  Plus it is overpriced a little by about 5K.

-SAAB: great cars like Cadillac but there are too many similar cars and with that variety, they lack any variety in price.  Plan to spend at least 30K for these.

-Pontiac: while I said I won't compare GM to foreign companies, the G6 is just like the... let me hold that thought before continuing LOL.  Love the Solstice, but it is another example of too little too late for GM.

-Hummer: do I really need to comment on the flaw with this one?  Hint: it kind of relates to gasoline LOL.

-GMC: finally the great GMC from GM.  I think GMC could be its own car company.  I mean they are producing 21 (or should I say "were") different vehicles in 2009 model year for the GMC group alone.  And what insane person does this for a group that is composed of almost all SUV's, trucks, and vans?  Maybe the CEO of GM?  Yes 21 means 21 like those alcohol ID check commercials LOL!

3. This bullet isn't really needed.  When you got 21 vehicles in just 1 group of your entire vehicle lineup as a company, there really has to be something wrong with the planning or thinking in a company like GM.  Of the lineup of probably close to 100 different cars, only like 4-5 of them would I even consider buying.  That is saying something.



4 Comments – Post Your Own

#1) On May 29, 2009 at 3:27 PM, dbjella (< 20) wrote:

I will take a different approach.

GM was the #1  auto maker in terms of vehicle sales until recently.  I am not sure how long they held that crown, but I think it was a quite long period.   Think about that for a moment.  Now think again.

The question was during their time was does GM have a revenue problem or an expense problem?

Why GM is all in the math.


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#2) On May 29, 2009 at 3:46 PM, PSU69 (92.31) wrote:

GM, a classic case of bean counters killing a company.  I worked with BMW, Toyota, Honda, GM, Ford, Volvo, and Chrysler.  Each has their unique strategy for working with vendors on product development.  GM was the worst of the bunch.  It was price focus, not VALUE TO CONSUMER.  They relied too heavily on their addiction to BIG FAT THIRSTY vehicles for cash flow.  Dumb leadersip = FAILURE.

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#3) On May 29, 2009 at 6:12 PM, StockSpreadsheet (67.73) wrote:

I think a big problem also is that GM didn't downsize the company while thier sales were downsizing.  Instead, they just added more of the same thing across all their makes so that they had even more makes and models to try to sell to a shrinking group of customers.

When I bought my car several years ago, I worked for a GM subsidiary, so planned on buying a GM car.  I did my research and narrowed it down to one or two cars of each make across the GM family.  I quickly realized that I was looking at the same car, (the Chevy Lumina), that they had just added different paint jobs and a different make tag on each.  Supporting 6 different versions of the same car is stupid and just adds unnecessarily to overhead, (each dealership needing to stock parts for each car).  What they should have done is combine dealerships along the way so that each dealership carried more makes and GM had fewer overall models.  If they take out the clone cars, they probably only have something like 20 models across the whole family.  All of them could be on one dealership lot if they got rid of the overlap between the different GM makes.

It is also true that they let their costs get WAY out of control, paying their workers twice what other autoworkers were making here in the U.S., so that only their biggest and most expensive cars and trucks were profitable.  Saturn was a good idea at the time and could have been a brand to pull them out of the toilet if they would have done cost containment on it when they set it up, but they treated it as a hated stepchild and Saturn went down the toilet with the rest of GM.

All that said, GM could make a decent car occasionally, even if by accident.  My Lumina has performed very well over the years, gets decent gas mileage, needs very little maintenence and doesn't give me problems.  I also think it looks pretty good.  To me, it is a very good car and something that if GM had made more cars of similar quality and comfort and could have made money on them then they would not be going into bankruptcy as they are headed today.

Just my two cents.



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#4) On May 28, 2010 at 9:51 PM, BrandonPaulChevy (< 20) wrote:

GM failed because of the economic meltdown and that's it. We can't blame them. However, some of their auto parts doesn't really function well..

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