Can General Motors Recover?

News Type: Opinion — Seeded on Sun Jul 6, 2008 12:09 PM EDT

Article Source: TIME

Two months short of the company's 100th anniversary, General Motors Corp. executives remain defiantly upbeat in the face of a weak economy, terrible sales and Wall Street speculation that the giant automaker could ultimately wind up in bankruptcy court if the slump continues.

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3.5

{"commentId":2128220,"authorDomain":"mwestenfelder"}

Martin Westenfelder

Honestly, I guess that GM is pretty much doomed. It is in a very tight financial situation just at the moment when considerable spending and effort would be necessary to turn around.

The timid chevy colt project will not be enough to make a difference and GM will be damned to continue doing me-too products and always being one step behind the others.

The key is that with high oil prices, consumer demand is approaching the demand patterns in Europe and Japan. And European and Japanese carmakers are used to this for decades. GM has to learn this first from scratch - Opel, is far insufficient to make up for the lack of know-how.

The same is true for Ford.

Just wait until Peugeot, Citroen and Fiat enter the US market. This is going to break GM's beck.

{"commentId":2128220,"threadId":"307341","contentId":"1642733","authorDomain":"mwestenfelder"}

1 vote

#1 - Sun Jul 6, 2008 2:05 PM EDT

{"commentId":2129112,"authorDomain":"josh-of-arc"}

Josh of Arc

I have to grudgingly agree. GM and Ford are doing too little too late.

Sadly, the writing has been on the wall for quite some time. Had the American auto industry heeded it and started producing cars that reflected the reality of the market rather than plodding along the same path of tired, inefficient and poorly designed cars they might have stood a fighting chance. Instead, they put on their blinders and continued making SUVs and trucks their primary focus.

The time to act was 5-10 years ago.

{"commentId":2129112,"threadId":"307341","contentId":"1642733","authorDomain":"josh-of-arc"}

2 votes

#1.1 - Sun Jul 6, 2008 5:04 PM EDT

{"commentId":2129171,"authorDomain":"mwestenfelder"}

Martin Westenfelder

Josh - I wish no evil upon US Democrats but for many years I have been saying that Bill screwed this one.

Ever since the EU sped ahead with CO2 reduction and Japan followed suit, that was as early as 1990, the US should have smelt the danger arising. It doesn't really matter at what heights oil will be, European and Japanese cars will still be more cost-efficient. Those are now established players on home markets where the US cannot compete. And it was a matter of time until the US auto apple was ripe to fall from the tree.

Instead of pushing electronics and dotcom, Clinton should have made sure right in 1992 that the US doesn't loos more ground in car technology. He didn't and now its darn late for that.

{"commentId":2129171,"threadId":"307341","contentId":"1642733","authorDomain":"mwestenfelder"}

#1.2 - Sun Jul 6, 2008 5:15 PM EDT

{"commentId":2130129,"authorDomain":"josh-of-arc"}

Josh of Arc

Whazza?!?

The Big 3 were in trouble well before Clinton's administration. The American Automobile Industry is the primary reason the American Automobile Industry is in such a pickle. And CO₂only became a factor in the last 5 years. This is about poor management and obsolete product. With all due respect, you can't hang this one on any president, let alone Clinton.

It was the 70s oil embargo that should have woken up the US automobile industry. Instead of looking into ways of streamlining operations, creating a car that was more efficient, and making a better product, they just went bigger and bigger and bigger, appealing to a spirit of rampant consumerism. Their operating models remained pretty much unchanged from Henry Ford's despite the emergence of a global market. They obsoleted themselves.

Asia and Europe, meanwhile went smaller and leaner, recognizing that economy and efficiency both in operating model and in product offerings would ultimately pay off. Look at pretty much every vehicle offered in the 80s and 90s.

Flash forward to $145-per-barrel oil (now), and Detroit is 25 years behind the curve. It's their own damn fault.

{"commentId":2130129,"threadId":"307341","contentId":"1642733","authorDomain":"josh-of-arc"}

1 vote

#1.3 - Sun Jul 6, 2008 8:35 PM EDT

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JOSH OF ARC

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Can General Motors Recover?

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