Duly chastened, Ford, General Motors, and Chrysler were back on Capitol Hill today asking for a bailout. The good news is that they no longer need $25 billion. The bad news is that they now need $34 billion. Sigh. General Motors, which asked for $12 billion the first time around, now says it needs $18 billion. What's more, it needs an immediate cash infusion of $4 billion, which will be used for the remainder of this year (as in for the next three weeks).
I'm firmly in the camp that says we're throwing good money after bad. I'm also of the position that $34 billion isn't going to do the job. If lawmakers decide to give the Big 3 the cash they're looking for, you can bet (and I will take all comers) that the automakers will be back again -- at some point -- looking for a lot more. Mark Zandi, chief economist over at Moody's Economy.com has it right. He testified before congress today, saying that, while he agrees that the carmakers need to be bailed out, they'll need between $75 billion and $125 billion. That conjures up an image of 3 guys with buckets trying to bail out the Titanic as it was going down.
From the New York Times:“Not perfect by any means,” Senator Christopher J. Dodd, Democrat of Connecticut and chairman of the committee, said of the Big Three’s detailed plans to turn their companies around. Nevertheless, Mr. Dodd said, the companies had demonstrated “a commitment to that kind of necessary reform” needed to keep American carmakers viable in the 21st century.
But the committee’s top Republican, Senator Richard C. Shelby of Alabama, said Detroit had failed to show that it could reverse a decades-long slide. “I intend to oppose bailing out the Big Three,” Mr. Shelby said at the outset.
Not only had the auto executives failed to make a better case than they did at their first appearance on Capitol Hill two weeks ago, but new questions have arisen, Mr. Shelby said. In particular, he said, the companies had raised their request for federal aid to $34 billion from $25 billion.
“How are you going to pay it back?” Mr. Shelby asked.
Bingo. How are they going to pay it back? Any ideas? Anyone?
If you have some ideas, drop me a comment (below).
You can read the rest of the New York Times story here (link).
Thursday, December 4, 2008
Big 3 Automakers Back on Capitol Hill Today Asking For A Bailout
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157 comments:
What? You don't know? In a few years they will be back on Capitol Hill asking for a bailout so they can repay a loan made to them by some nasty creditors who wont buy their cars because the Big 3 owes them money...
That is what they failed to account for in their plans. Sure, if it is a gift they will be fine. But a loan? They seemed to forget that we don't want to give them the money, we want it back at some point. Preferably soon.
I have to say though, is anyone surprised they are screwing with the dollar amount? Come on. They are car salesman, it is what they do.
At this point, I think we have to bail them out or they aren't going to let our Congress do its job. They are just going to keep showing up. But not GM. If they need $4Billion just to get through the next 3 weeks. No. They are also the reason the dollar amount went up. I say, if they get anything, GM gets $9Billion just like Ford and Chrysler can have $7billion.
Hell, look at the picture I used. We should caption it.
How can I squeeze more out of these stupid lawmakers? That would work as a caption.
Anyone else?
By the way, Lion, GM's Wagoner testified that GMAC can only finance 6% of its vehicles now -- down from 50% last year. If you don't have a 700 FICO you can't even get a loan through GMAC now.
GMAC financed 2% of its vehicles in November, down from about 10% the month before. Source: Ward's Auto (subscription based).
Cheers CM,
The GMAC figure is staggering. I wonder how that compares to Honda and Toyota? I believe the 14-20% differential in sales drop from GM to Ford is directly related to the inability of GM to finance purchases. This is not going to change no matter how much they give GM. GM is doomed.
A lot of what they discussed today talks of electric cars. Did anyone notice the huge drop overseas in electric car purchases? They are still not feasable and are not the answer long term.
Green, I am for a managed restructuring (BK).
I don't see how GM survives in its current form -- no matter how much we throw at the problem.
Gas is less than $2 a gallon now. Electric cars? What are those?
CM, Gulf Oil's CEO just stated he sees gas at $1 a gallon in the spring.
Watching Dodd, it's clear he has no real clue. People do not want GM cars or Chrysler cars. Everyone is saying they won't buy them in bankruptcy, they AREN'T buying them now. Everyone knows even if they get this bailout they are still in danger and aren't going to magically rush back to showrooms.
They are talking about not being able to lease. BS, you can lease no problem from Toyota, Honda, Nissan, Audi, BMW, and others. You can't lease a GM, Ford or Chrysler not because of the "financial crisis". It has nothing to do with it. They can't lease them because they got clobbered on resale at auction because the vehicles have a terrible resale value because of terrible long term reliability. They were losing 2-3k per vehicle traded back in at lease end. It had nothing to do with the financial crisis. What a scam.
Nothing they are talking about is going to change the Consumer Reports reliability ratings or real reliability. GM won't be able to lease vehicles because they can't unload them at auction to wholesalers because they had no value.
I think the Big 3 should crash and burn. They are screwing us, their employees, and now the US government.
I know all about the ripple effect if the Big 3 fail.
I wish no harm to the "little guy/gal", as I am one of them.
But, we as taxpayers can't bailout the entire US economy!
Something has got to give.
Hey, I hear Buick sells well in China!
Unless some (or all) of these companies enter into bankruptcy, I don't see anything changing except a new request for additional tax payer money.
So GM and others get a bailout. Why not Toyota and the other 'responsible' auto makers? - Isn't providing money to some and not all, playing favorites?
Anyone hear the Violins being played on the Titanic? I do.
CM - It's like Chrysler in 1979 all over again. Only then they only wanted $1.5 billion.
And Chrysler paid the loan back -- early.
Hanadarko, I hear the violins. I am sure that the Big 3 do as well.
Has a real slush-fund feel to it. Peter, paying Paul, to pay Mary.
Green, bingo.
You can lease, question is what are these things worth on the backend? Zilch. As a result, their residuals likely reflect that fact.
Hell, BMW recently slashed its residuals. Leases are down. Consumers aren't willing to rent BMWs when it makes more sense to just finance and own. It used to be smart to lease BMWs when the residual was 65% for a 36-month lease. Or 74% for a 24-month lease. Those days are gone.
So it makes sense that no one wants to lease a GM. But they can lease, as you said.
Cosmos, the ripple effect would be huge. Not sure how this economy, right now, would handle that ripple. I bet that's what everyone is afraid of finding out.
Since when have we started caring about being paid back? AIG? Citi?
$18 billion is 1.8 months of Iraq war.
$18 billion is 5.4% of the total we've thrown at Citi
There are 3 million jobs that hang off of GM. $18 billion is cheap to save them.
Drew 18 billion won't save them, 18 billion will get them through spring. It's more like 120+ billion and unlike Citi they have a product nobody wants. Their sales are down 40-50% a month while the others including Ford are 20-30%.
GM and Chyrsler will suffer more than the others because they cannot lease. All the money in the world won't help GMAC improve the residual value of their lease vehicles.
Right now a customer with a credit score off 720 (auto fico) can go get a Honda Civic for 189 a month or an Accord for $209. You can do the same thing for Toyota, Nissan and others. Your payment is slightly higher if your score is lower (680) and substantially higher down to about 640 but leases are still available and advertised. GM and Chrysler will never lease vehicles again, and the fact that they are down 45% while others are 30% is the premium they are suffering for not having that option.
Ford can survive because they still own FMCC. GM can't even offer a loan to most people. How many of you want to go to a GM dealer to buy a $24k car and have 5 inquiries per report as they shop your loan around to a half dozen places? The way things are now a day later half your credit card accounts will be closed for too many inquiries. Meanwhile you can walk into Toyota and get a single credit pull and walk out with your car.
Mitt Romney made a reasonable argument for some type of managed bankruptcy in an op-ed column a few weeks ago.
"Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check."
http://www.nytimes.com/2008/11/19/opinion/19romney.html?em
Nearly every auto manufacturer was down those amounts.
Suzuki down 46%
Nissan down 44.4%
GM down 41%
Hyundai down 39.7%
Daimler down 38.2%
Toyota down 33%
Honda down 30%
And for having vehicles that you claim no one wants, GM still sold 154,877 vehicles compared to Toyota's 130,307.
Please don't spread misinformation. Your statements about credit are true though. I'm curious where you got the $120 billion figure. That works out to $196 a share, so I'm thinking you're stretching something somewhere.
Drew, I think Green was referring to the comment that Mark Zandi made today. He said that the Big 3 would likely need between $75 billion and $125 billion. This $34 billion is just a bandaid if Zandi is correct.
Exactly CM. Remember Fannie Mae originally only needed how much, same for AIG and Citi.
Drew, so GM and Toyota sold nearly the same number of cars, Toyota will make 5 billion this year, how much is GM going to make?
You left out Ford who's sales were 10-15% better than the other Big 3. They can still lease. Suzuki doesn't lease, neither does Hyundai or Daimler (at an affordable rate because of residual values typically being too low).
Toyota, Honda and Ford were all around 30%, they all still lease, it's not a coincidence. That's an avenue GM does not have open and worse GM has no capability to finance in house.
I'd like to see the 2-3 million jobs lost explained. Is there a list of suppliers who are sure to close? If we're still buying 11 million cars wouldn't those parts just end up being sold to Toyota, Ford, Honda and others? Why not then bail out the suppliers instead?
Drew, you know where those jobs will go? Right over to a new Honda plant.
If GM, Ford and Chrysler fail, Honda and Toyota will pick up the pieces just fine. Sure it might take a bit, but we will recover.
Boooooo....
Let 'em fail. GM and Ford both make excellent cars...but they refuse to sell them here! The Ford Mondeo is a great car that would take a serious chunk out of the Toyota and Honda sales.
GM's Opel/Vauxhaul also is coming out with some excellent cars. Take a look at this:
http://www.vauxhall.com/vaux/static/pdf/brochures/cars/insignia/2009/insigniaEd1.pdf
THAT's what GM sells overseas...but not here. I've actually written GM to request that they ship a few over but they're not interested.
I drive an Infiniti M45 (and occasionally the company's Bentley or Benzs) and that Opel/Vauxhaul is the first GM car that's ever caught my interest. That says something. Not even their Caddies have appeal to me, but that little $20k car does. The technology's certainly more advanced than any of the luxury cars currently out there. Add in 37mpg city / 59mpg highway without any hybrid bullmanure and I'm sold. I'd actually order one right now sight-unseen if I could but alas, they won't sell them here.
Right now the big 3 have plenty of problems, especially pensions and union contracts, *BUT* none of that matters right now.
The big 3 are making products very few people want. I absolutely dread renting a car as it's usually low-end Korean cars (KIA/Hyundai) or Ford/GM POS. Rather sad when a brand new Ford Tarus rental right off the car carrier gets worse mileage than my luxo-barge.
All of the planning in the world won't mean a hill of beans if you don't make a product people actually want.
There is so much misinformation out there about the domestics, most people can't make a truly informed decision about their position on the Auto Bailouts.
There is the constant drum beat that the domestics only make gas guzzling SUVs and their cars are all crap. It's just not true.
Drew: How many of those GM vehicles were fleet vehicles? I don't give the American public much credit in the intelligence department (hence the current credit crunch) but I thought they'd at least want a decent car to drive.
I disagree, Drew. I am informed and my decision is HELL to the NO.
Domestics make better cars, true, they just don't sell them here. And the ones they do can NOT compare to what Honda and Toyota get in mileage. They just can't. Again, the ones that do, don't get sold here.
Let them fail! Let them fail! Let them fail!
1. Ford sold the Mondeo here before and it went over like a lead balloon. The Fusion and Milan are frequently rated very highly.
2. The Insignia is being sold here in long wheel base form as the new Buick LaCrosse. If Saturn survives, the short wheelbase version that you saw will be the new Aura.
3. If you drive an M45, you should take a serious look at the new CTS.
To put it in perspective:
Toyota will make 5 billion this year.
GM lost 4.2 billion last quarter and so far has lost 21 billion this year, after losing 37 billion last year.
So they sell near the same number of cars, Toyota is making 5 billion this year, GM is going to lose 20 billion on the back of 37 billion last year.
Toyota has roughly 1/3 the number of dealers of GM.
Honda stands to make 5 billion this year.
Nissan will make 750 million this year.
Suzuki will be profitable this year.
If GM is selling the same number of cars but losing in a quarter what Toyota turns as a profit in a year how is that going to change with a bridge loan?
As one of the politicians said today the UAW will need to make a larger concession then deferring a payment. GM will not survive paying 78 workers to build a car when others are doing it with 35 workers at half the price.
As Sean points out, it's not as though these automakers can't build sweet products.
You know that Chrysler had a hand in the early MINI Cooper engines (2002-2007, I believe). MINI has since moved away from that engine (now using Peugeot), but lots of people were quite happy with that 1.6L engine that Chrysler had a hand in.
These companies can build products. Would be nice if some of them were available here in the U.S.
CM, when they do try to sell them here they don't give them enough time to catch on. We need more than a few months. Especially if the car is hideously designed.
The point is, these folks just aren't cutting it. They can't manage their costs and they can't sell their products. When that happens, sad as it is, it is time to say goodbye.
Sorry Lion, you're wrong.
Standard Malibu gets better highway mileage than the Accord.
Ford Fusion hybrid gets better than Camry Hybrid.
Ford Escape Hybrid has the best mileage of any SUV
Cobalt gets up to 37mpg
Focus has been a mileage and emissions leader for years.
GMs SUVs and trucks are the most efficient in their classes and substantially better than Toyota.
Honda's V6 Ridgeline gets the same mileage as a 315hp V8 Avalanche.
Ford is drop shipping the Fiesta here from Germany.
Chrysler is the only basket case here, I can't defend them.
And I had to go and mention Chrysler. LOL.
You just need to bring yourselves up to date.
Chevy Malibu, Saturn Astra, Saturn Aura, Ford Fusion, Mercury Milan, Taurus/Sable - two of the biggest and safest while being very fuel efficient.
Cadillac CTS, Saturn Vue.... the list just goes on and on....
Lets be clear here, Drew, you can't compare a hybrid to a regular SUV. That is like comparing an apple to a Hummer.
And I drove a Cobalt (as does my aunt, my cousin and three friends) none of us got anywhere near that 37mpg. I maxes out around 32. Highway only driving.
BTW, are you using EPA estimates? Because I think we both know how inaccurate those can be.
And lets not just talk about mileage. Lets discuss how they hold value. And how reliable they are. And warranty. And price. And value for your dollar.
Drew, you're doing a great job of getting the message out.
How come the big automakers haven't been so good at getting the message out? Or have they?
I haven't been paying attention -- so please consider this a serious question.
I am up to date, Drew, and their products still suck.
I wish it wasn't true, but it is. If they didn't suck, and they COULD manage their business, they wouldn't be asking for a bailout.
You don't see Honda in there. Or Toyota, do you?
Honda, Hyundai, and Toyota have been getting their own bailout for years via the socialized medicine of their home country. GM still has to pay for every single UAW member's Viagra pills.
You're simply not up to date if you think the Malibu is not at least competitive with the Accord and Camry. The Saturn Astra is exactly what you were wishing for in your previous posts. It is lifted straight from Opel.
Lion, I think the government should provide DIP financing. This will allow GM, Ford and Chyrsler to re-organize and for once put them in a position of power in dealing with costs.
Toyota pays $48 per worker, GM $73.
Toyota pays $210 per vehicle to health benefits GM $1525.
Toyota has 1600 retirees, GM 460k.
http://www.npr.org/news/specials/gmvstoyota/
Consumer Reports provides hundreds of thousands of actual user reliability data each year. The domestics on average are far below the Japanese and have been for 10-15 years. So many people were burned over the years they're gone as customers until and only if the Japanese slip up which they won't.
Let's not forget GM lost 30+ billion last year before the credit crisis got really bad. They lost money prior to that too.
Toyota sells the same number of cars and turns a 5 billion dollar profit in the worst credit crisis and major recession. GM lost money before the recession and is still bleeding money and market share.
One more thing to consider, leases make up 25-30% of new car purchases, GM no longer leases.
Chrylser no longer leases.
25-30% of the new car buyers are now excluded from buying directly from those two.
I don't have consumer reports in front of me, how has it rated per Consumer Reports reliability?
Well, first on the mileage issue. The EPA rating traditionally favored the imports. If you drive like a typical American (i.e. nothing like the EPA test) the imports would fall below the domestics in fuel economy. That said, the EPA test was updated for 2008 is more fair and accurate now. Many of the imports had their ratings revised down.
Reliability: The domestics and imports are all over the place. Some are great and some are crap on both sides. Don't generalize. The Toyota Tundra was a HUGE disaster that wasn't covered in the MSM. In 2006, Toyota recalled more vehicles than they produced. My 2004 Cadillac CTS was flawless.
Resale: It's comments like yours that generalize, stigmatize, and falsify, that help push reliability down. 10,000 Corolla drivers on the net chanting how the Cobalt sucks is going to have an effect.
GM has 100,000 mile power train warranty, just like Hyundai.
Value for dollar: Feature for feature, you are almost ALWAYS paying less for a domestic.
That is a great way to not answer my questions, Drew. Just because the car gets similar mpg, does not mean it is an equal car. Does it hold its value the same? Is it the same price? Does it have the same features? Is it as safe?
And why can't they do that with all their cars?
And, lets be real here, the Big 3's trouble isn't just with health benefits. The biggest trouble is with their pensions. Honda etc pay US workers too. And they provide health benefits too. So don't give me that crap. It is BS and you know it.
I am with Green on this one. A loan of $25billion isn't fixing shit. A loan of $250billion (or even a gift) isn't fixing it. Only a complete restructuring will. Which needs to include dropping the union. Cutting costs (including relieving themselves of some employees) and re-evaluating how they make cars.
So don't give me that crap, Drew. I know jobs are important. Trust me, I know. But so is stopping this madness before my great grandchildren end up footing the damn bill.
I will be back later to rant a little further. Good post, CM!
I wouldn't mind a DIP. Perhaps it would allow the Big 3 to get healthy and get their financial houses in order. Their cost structure has to be dealt with.
These guys are losing on every car they make. From top to bottom, the model has to be reworked.
Here's an update...
Dec. 4 (Bloomberg) -- General Motors Corp. and Chrysler LLC executives are considering accepting a pre-arranged bankruptcy as the last-resort price of getting a multibillion-dollar government bailout, said a person familiar with their internal discussions.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a36fjEnQqEgc
So....they will take the money and then still file BK? Is that what that means?
Scott, I would be just fine with that. A prearranged BK satisfies me. I don't want these guys going out of biz, so a nice reorg works. And as long as you have a healthy DIP (debtor in possession financing) package in place, everyone gets paid while the big 3 work out their problems.
Lion, it means that as a condition to taking bailout money, GM and Chrysler would accept a BK filing to get their house in order.
The prearranged deal would have the blessings of the union, creditors and lenders. It would allow the companies to remain in biz -- rather than liquidating.
Lion, that's one of a few scenarios being discussed.
Maybe we should refer to it as the "bridge loan to bankruptcy" option?
And to be clear, the automakers have been fighting this option all along. A prearranged BK would not work, say the automakers.
But it's an option.
From the Bloomberg story:
Lynn LoPucki, who teaches bankruptcy law at Harvard University and the University of California at Los Angeles, said Democrats’ goal of preserving a U.S. auto industry is not doable without a bankruptcy.
“A workout requires everybody’s agreement,” LoPucki said. “If I own bonds, GM can’t force me to take less than 100 cents on the dollar outside of bankruptcy court. Bankruptcy is the only thing that can work because GM and the government need the ability to force people to go along with the plan. Paying everyone in full is prohibitively expensive.”
CM, agreed. Some kind of managed bankruptcy seems to be the best way at this point.
I don't think it will be backed by the UAW though.
Lion, don't get me wrong. I think the Wagoneer needs to be fired and I think they need a major reorg. That said...
"And why can't they do that with all their cars?"
I'll turn this back to you... Why can't the imports? The import's "classics" like the Civic and Accord are great vehicles, but some of their new stuff sucks. Tundra and Tacoma have tons of problems. Corolla, Camry, and RAV4 all had engine sludge problems that Toyota blamed on the owners. Honda's Ridgeline is a joke.
The Ford and GM mid-sizers are very much equal to the Asian big 3.
CM: I do try to get the word out. I am one of the webmasters on a GM board. While we're mostly GM fans, even the most diehard among us thinks that GM's PR team is worst ever.
And Lion, people obviously don't want Citi's products. Mortgages are down how much again?
This is a rich quote from the Bloomberg story:
“These Wall Street geniuses and law firms are coming up with all these solutions that make them a lot of money,” GM’s lead independent director, Fisher said. “The truth of the matter is that this is so complex, the what-ifs game has so many legs on it, I could spend the next 24 hours talking on the what-ifs.”
Seems lawmakers could turn that argument right back on the automakers.
Drew, I know you get the word out. I'm curious as to why I have to hear about the great attributes here -- at my blog, from you. Shouldn't GM and these other carmakers be getting the story out?
You just answered the question, though. GM's PR team is terrible.
Drew: Let's put things in perspective. Ford/GM/Chrysler are making substantially better cars than they did in the 1980's. Actually, they're even better than the "classic" American cars, despite not being as well loved. I'd blame the styling for a lot of that.
1)I'm talking about the CURRENT Mondeo, not the fish-eyed crap with softened suspension they brought over years ago.
2) Maybe I'm blind, but the 2009 Lucerne looks NOTHING like the Opel/Vauxhaul Insignia.
3) Cadillac's CTS is fugly, both inside and out, only has a V6, and gets poor mileage. That's Detroit Engineering for you. No thanks. Have you even been in an M45, let alone behind the wheel of one? No comparison.
Like I said, if they'd bring over the Opel Insignia, exactly as-is, without all of the "identity branding" a.k.a. cheezy plastic cladding that GM are famous for, without dumbing it down or softening the suspension, I'd gladly buy one right now, literally would write the check today without even seeing or test driving it. I've driven GM's and Ford's Euro products before and they *are* different animals.
Aesthetic design is only part of the problem. Mechanical design is another. I just got a call from a friend with a ~2004 Dodge. Needs a battery and water pump.
Let's look at how you get to the battery:
The battery is located behind the driver's side front tire.
Step 1: Jack up the car and remove the front driver's side tire.
Step 2: Remove the front of the wheel well cover.
Step 3: Remove the battery.
Step 4: Replace the battery.
Step 5: Replace the wheel well cover.
Step 6: Replace the tire, remove jack.
Say what?!? Whatever happened to opening the bonnet, removing the battery, and replacing the battery? Even on the newer Benzs, where the battery's underneath the back seat, it's just a matter of sliding two levers and the seat lifts right up exposing the battery.
As for the water pump, you practically have to tear down the engine to get to the damn thing. We're talking ~3-5 hrs to do what would take about 1 leisurely hr on a Mercedes.
To quote Jeremy Clarkson, "I'm looking at a Buick LaSabre. It was rubbish when it was new, it was built by idiots, and it's rubbish now."
I really hate to go down this rabbit hole, but there has been a trend in the media for years that has been unfairly disparaging the domestics. Consumer Reports is one of the first and worst that comes to mind. Consumer Report's data collection methods are unscientific and they recently were forced to admit that they put bias in their automotive reviews. They printed a meya culpa about favoring the by giving the V6 version a favorable rating despite wide spread problems with the transmission.
My own anecdote is this. My 2004 Cadillac CTS received a poor rating from CR due to the 3.2 litre engine. The problem with this was that the 3.2 had been replaced with a brand new 3.6 very early in the model run and the 3.2 had very few sales. The GM 3.6 V6, though new at the time, has gotten accolades since introduction. To my knowledge, CR has never corrected or noted this.
The review magazines find tiny things to pick on with the domestics while ignoring similar things or worse in the imports. In one comparison test that included both the CTS and the BMW 3-series, they remarked that the CTS's steering wheel was too large and that made it not as pleasurable to drive. The 3-series, in the same road test, had 2 major problems one of which was an ABS system failure that caused the car to spin out. The second was when the car failed to even start.
The BMW took 1st place in the test.
The CTS took 4th.
Stuff like this happens regularly.
Drew, I will say this and only this: It doesn't matter what the imports are doing wrong because it matters what they are doing right: making money. They are not asking for a bailout so I don't care.
CM, if they did a BK, would they still have to pay back the loan?
Wow, Sean and Drew can really get down in the weeds when it comes to specific car models.
I'm loving it. It's nice to see these guys get down. They're attacking issues instead of each other, too, which is especially nice.
Have I said that I have the best readers lately?
And can't forget about Lion. She's feisty as all get out. The emotion is always right there on the sleeve.
Lion, not sure how all of this is being structured, but I would imagine that it would be a loan that must be repaid. Otherwise, it's just a handout.
But none of this is concrete yet, so we're just guessing.
Drew: My comments come from hands-on experience. Due to my line of work, I find myself behind the wheel of numerous cars. I could care less what the media says. I know what I like and I get to see which cars hold up under some extreme driving conditions.
The Lion said...
Drew, I will say this and only this: It doesn't matter what the imports are doing wrong because it matters what they are doing right: making money.
EXACTLY. Maintaining the status quo for the Big 3 obviously isn't working. Yet they continue to do it over & over again. I don't think stupidity should be rewarded.
This is also where the unions need to get off their high-horse and realize that their product (labour) isn't worth what they're charging and they're pricing themselves out of jobs. They can blame Henry Ford for taking the need for craftsmen out of mass-produced cars. Having been to the Bentley factor in Chester and talking with the workers there -- THOSE are true craftsmen. The boys slapping 3 welds where 5 are spec'd in Detroit are not.
Drew, consumers have spoken on the reliability of GM/Chrysler and Ford. They walked in droves to the imports and continue to do so. Consumer sentiment didn't drive down resale values, poorly made cars drove down resale values. A Consumer Reports review, and reliability reports are two different things. Having owned both well rated imports and poorly rated domestics in the last 5-7 years I found their reliability reports to be spot on. Apparently a lot of consumers have as well or GM wouldn't have lost so much market share.
It's interesting you keep mentioning the CTS. One of the larger Caddy dealers was quoted as saying 90% of his business was leasing. How is a bailout going to solve the problem that you can't lease a GM or Chrysler? You eliminate 25-30% of potential customers right there when you're already facing many obstacles.
Toyota and GM aren't selling substantially different amounts in terms of numbers. In a horrible situation Toyota will make 5 billion, GM is en route to losing 70 billion in the last 8-10 quarters. A few billion in cash doesn't change that.
Consumer Reports has correctly stated Ford is making much better vechiles. 13 of the 44 least reliable vehicles were GM, 6 from Chrysler but only 1 from Ford and 41 of 44 Ford vehicles are rated as reliable or better than average reliability. It's not a coincidence that people are still buying Ford's at a pace consistent with other reliable manufacturers.
With a lease if the car isn't reliable who cares, you usually walk away before the warranty is up. With GM no longer leasing that's not the case and it's even more of a problem that they are seen as often unreliable.
I am going to concede a touch and say that,yes, Ford (and FORD ONLY) has improved. They have stepped up to the plate and are starting to make better cars in recent years. They also are selling some jets (which I approve of) and they seem to really want to make this work.
They laid out a plan that showed them borrowing the money and they laid out a plan that had them not borrow funds. Both were well thought out. Their CEO stepped up and was the first to announce a pay cut to $1 with NO bonuses. Ford is cutting executive pay across the board and managerial pay. They are withholding all 2009 bonuses. Ford is FINALLY getting their shit together.
The other two? Nothing but words words words. IF (and that is a big if) we bail out anyone in the Big 3, make it Ford. GM and Chrysler still can't hack it. Look at their numbers, they will NEVER be able to pay back the loans.
And I try not to be feisty, CM, I just can't help it. :)
UAW finally offers some concessions. Too little, too late but here it is...
DETROIT (AP) - Worried about their jobs and warned that the cost of failure could be a depression, hundreds of leaders of the United Auto Workers voted overwhelmingly Wednesday to make concessions to the struggling Detroit Three, including all but ending a much-derided program that let laid-off workers collect up to 95 percent of their salaries.
http://apnews.myway.com/article/20081204/D94RI75G0.html
The bailout is reportedly all but done. Democrats have taken ownership of it and will either benefit from it at the polls in 2/4 years or face the consequences.
Without major cost changes GM can't survive. Deferring payments doesn't help them. The ill will from hundreds of thousands of former GM salesman, dealers and employees can't be discounted either.
Without major concessions they'll be back in a few months, a few months after that and probably again in 2010 all the while losing market share.
Look at that sentence. Need we say more? Laid off workers collect up to 95% of their salaries. Nice work if you can get it. Even if you're not working it's nice work if you can get it.
I forgot to mention re ill will with average american.
61% are against the bailout, 70% feel it's unfair to taxpayers. GM keeps talking about customers not buying if they are in bankruptcy, I doubt many of those 61% will be rushing to their local Big 3 dealer after all of this anyway.
Holy crap. Can I have one of those jobs? Because I am currently laid off and let me tell you my 0% of my salary just ain't cutting it.
UAW can shove it. Too little. Too late. Should have never happened to begin with.
Jeremy Clarkson is a big idiot.
If you want to cite retarded design by domestics, I can match you 1 for 1 with an import.
Take my partner's 2001 CRV for example. Changing the oil filter should be easy, right? Wrong. Jack up the car. Turn the wheels hard to the right. Have your 4 year old crawl in behind the front right tire and try and reach in to grab the oil filter through a hole in the inner fender.
Oil filter on my CTS? Top center of the engine. Pop the hood, wrench off the filter cover, replace filter cartridge, replace cover, close hood.
The Jobs bank was a terrible idea and the person who thought it up should have been chained to the back of Wagoneer's Malibu Hybrid and dragged to DC.
Consumer sentiment IS MEASURED BY resale value.
Lion, you are confusing the Lucerne and the LaCrosse. It's the LaCrosse that the Insignia is based on. It's the Insignia in Buick trim.
Green: "Having owned both well rated imports and poorly rated domestics in the last 5-7 years I found their reliability reports to be spot on." - Really? Now why would you do that? Why don't you try some of the well rated domestics instead.... or to be fair in your comparison, buy a poorly rated import.
Lion - "I am going to concede a touch and say that,yes, Ford (and FORD ONLY) has improved. They have stepped up to the plate and are starting to make better cars in recent years. They also are selling some jets (which I approve of) and they seem to really want to make this work."
Malibu, Astra, CTS, Aura, Outlook, Acadia, Traverse, HHR, next LaCrosse, Lucerne, G8, Enclave, Vue.... all of them new products that have gotten great reviews, you really need to check them out. GM is selling their jets also... but Ford selling their jets is a double edged sword. Did you know that Ford donated their unused jet time to people who need emergency organ transplants... either to ship the organs or the patient?
I can't, and won't defend Chrysler, so throwing Dodge darts (hahah) at me won't work.
I said nothing of an Insignia so I have no idea what you are talking about there.
Don't care what reviews say, I care that even with good reviews they still can't sell a car to save their life. Even if they COULD sell a car that car wont make a profit.
I also think that Ford donating anything right now is a dumb dumb move. Yes, it sounds lovely on paper but on the books it just means more loss.
Drew, because when I bought the vehicle I listened to the people that told me the Big 3 had improved their vehicles and the vehicles were "too new to rate" per CR.
How is GM going to be competitive when 1300 dollars of every car goes to health benefits? How can they be competitive when it takes 75 workers to build a car Toyota builds with 35? How can they be competitive with pensions totaling near 440k employees versus 2k for Toyota? How can they gain back consumer trust which has run stampede style away from them? Does anyone think a bailout is going to help consumer sentiment or quell concerns of quality? Companies cut corners when desperate or at least that's the public perception. Packaged bankruptcy or not, I think the ship sailed for GM with news they were in this bad of shape.
Toyota does not provide pensions like GM does, Green. They contribute to individual retirement accounts.
Green: What you're pointing out is the "bailout" the imports have been receiving for years from their home countries by way of socialize medicine. Sure the imports have a few factories here in the US, but most are in factories that are covered by socialized medicine.
The pensions are going to VEBA in the summer.
Consumer confidence will return when people stop giving the imports a free pass and realize that NO manufacturer can build a perfect car. Again, Toyota recalled more vehicles during 2006 than it actually produced. The Tundra has been a flop by any interpretation of the word. Nissan's Titan is selling so poorly, they're giving up on their own design and rebadging the new Dodge Ram. The Camry and Avalon BOTH had severe transmission problems when first released. Toyota let the engine sludge issue drag on for so long without a recall that class action lawsuits have been filed. Toyota does secret recalls. They issue a technical service bulletin and then send out coupons for a free oil change. While it's probably good business from a PR standpoint to give out free oil changes, they aren't properly informing the public when necessary repairs are required. Bet you hadn't heard ANY of that.... It simply isn't published in the mainstream media. Hell, Car and Driver has a BMW suffer catastrophic ABS failure during a test and nearly crash, yet they still rated it number one! If it had been a GM that broke down during the test, do you think there would have been any way it would have gotten number one?
Again, stuff like this happens all the time.
Drew: consumer confidence will return when they stop throwing cash out the windows and when they can figure out how to build a car that makes a profit. Something they have failed to do for years.
Again, every change they make now, unless it is a radical reorganization, is too little too late. This should have happened 10 years ago, not today.
Drew I'm not arguing BMW is a good car, and I think CR was too harsh on Nissan in terms of reliability but overall they're a better indicator than the silly pay for inclusion "initial reliability" studies.
The problem Drew is GM has peeved so many people over so long they're DOA. They're pushing on a string at this point.
Year GM Market Share
1991 35.0%
1992 34.1
1993 33.5
1994 33.2
1995 32.8
1996 31.5
1997 31.3
1998 29.4
1999 29.4
2000 28.2
2001 28.3
2002 28.6
2003 28.3
2004 27.5
2005 26.2
2006 24.7
2007 ~22%
2008 ???
The same guy that told Congress today he has a plan said this a few months ago...
"Even in a tough market, we think we can grow share,'' Wagoner said today in an interview on Bloomberg Television. ``We do have a good chance, primarily on the strength of some important car products: Chevy Malibu, Cadillac CTS.''
I wish I could edit. Those comments were from 1/2008:
U.S. Market Share by Manufacturer May 2007/May 2008
GM 23.8% 19.3%
Toyota 17.2 18.4
Ford 16.5 15.4
Chrysler 12.8 10.7
Honda 9.3 12.0
Nissan 6.0 7.2
Hyundai 4.6 5.6
BMW (includes Mini) 2.0 2.3
Volkswagen (includes Audi) 2.0 2.2
Mercedes (includes Smart) 1.4 1.8
The Big 3 all lost share domestically, all the others gained share. Consumers have spoken with their wallets.
We've come along way from the angry mobs who attacked Japanese cars with bats in the 70's and early 80's.
I was a kid back then but I remember the watching those images on TV.
Things are so different in the post-NAFTA, global world we live in now.
Drew, I don't want you to think I'm anti-Big 3. We need the jobs and the competition to keep the other manufacturers honest.
But, I just don't see how a few deferred payments and layoffs are going to solve their problem. The world has changed and GM/Ford and Chrysler are bleeding share. They are likely underestimating their continued loss of share and overall loss of sales.
They're are in terrible shape and it seems everyone but the union realizes how bad it is. Whether it's 3 months or 13 months it's going to come down to Congress approving continued bailouts. You can't have a company losing 30 billion a year and one making 5 billion a year selling the same number of cars without a massive change. I don't think they'll make the real changes needed.
As CM has said every car they sell right now puts them further in the hole. How can they pay off their debt if they keep digging the hole deeper.
They're still going to be left with dealerships that cannot lease vehicles and you can bet the other manufacturers will hammer price point leases against any vehicle GM brings out that is desirable. In a few weeks we'll end up doing a massive bailout of GMAC because they'll come back and tell us they can't execute their plans without it.
You can count on GMAC coming back to the table. They need a bailout because they need to lend. Without a bailout, they can't lend. If they can lend, that will help GM. GM would be able to sell more cars. Those are the kinds of arguments you'll hear.
This is all too predictable.
I say you take all of these guys into BK. Let them restructure. Provide a nice DIP facility. Go from there.
Does anyone know if GMAC has been granted bank-holding status? I know they applied a couple of weeks ago.
Company: GMAC Financial Services
Participation: GMAC applied to become a bank holding company and participate in TARP, conditional upon becoming a bank holding company.
Date of disclosure: Nov. 20
Notes: Separately, GMAC commenced private exchange and cash tender offers.
Got that from a Dow Jones release.
Doesn't look like they have been approved yet.
I just feel that many of you are misinformed or out of date about the domestics' product quality. Especially in the last four years GM has improved it's trouble areas dramatically yet receives little recognition for it.
The Malibu consistently gets rated right up there with the Accord and Camry. Next time your car shopping, you must give each of the big 3 a fair chance. All of our livelyhoods depend on the Big 3 recovering.
Anyone who is interested in more GM information without the PR crap, I invite to visit www.CheersAndGears.com That is the website I help run. We have similarly lively debate over there as well. If you do visit, I go by the name of Oldsmoboi. Be sure to say "Hi".
I give all companies a fair chance. But the fact is, even if they did make products in line with the foreign makers, they still can't make a car that turns a profit.
People seem to be forgetting that.
But I will quit now before we hit 100 comments.
Lion, my comments can handle 1000s of messages. No worries.
Well...in that case!
Forgot to add that I don't care if you build a car that runs on hopes and dreams of small children. If you can't get someone to buy it for a price that creates a profit....you deserve to go bankrupt.
Welcome to the world of business. It's a bitch.
....its not my fault, CM, I'm ill today :(
I remember when Amazon.com used to ship a $20 bill with each book. That's just another way of saying that they were losing money on every thing they shipped.
Amazon.com eventually found a way to make money. Glad they survived.
They do make products that match or beat the imports. No, not all of them, but between the big 3, there is at least one car that would wet your whistle.
I hope you support socialised medicine because that is the ONLY way that the domestics will be able to match profitability with the imports without marking the price up or shipping all manufacturing off shore.
Pensions are going to VEBA and all new hires get 401ks.
Check out this article.
Mob of Pundits.
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/21/AR2008112101348.html?nav=rss_opinion/columns
From the article:
"It is the rankest hypocrisy for well-paid journalists to decry the "high" pay of UAW-represented employees. I doubt that there is one UAW critic in the media, or on Capitol Hill, who would be willing to settle for a UAW paycheck. I'm almost certain there isn't one who would be willing to trade his or her relatively cushy employment for a year on an auto plant assembly line."
Glad I ain't a pundit. Plus, I was never well paid anyhow. Haha.
Drew, thanks for the article. Not something you read everyday in the media.
Drew! Honda and Toyota both provide health insurance for their American employees so that is just a DUMB statement.
But yes, I do support socialized medicine. :)
Drew Toyota has made a profit how many years in a row? Same goes for Honda.
It's way too simplistic to say the reason they make money is health insurance. The reason they make money is it doesn't take 80 people to build a car, it takes 34.
GM has been losing share for most of the last 27 years. That's not going to change with a bailout. If they don't get huge concessions from the UAW the 60-70% against this bailout could possibly steer clear of their cars even moreso than if they went into bankruptcy and emerged with government support.
The 10000 pound elephant in the room is the union agreements but the Democrats won't touch that with a ten foot pole.
Let's not forget that one of the reasons GM is here now is that the last agreement(s) prevented them from being able to close factories and outsource.
Is the author serious? People wouldn't take a job with those benefits at 71k a year? For real? That's 20k more than the HOUSEHOLD income in the entire nation and somewhere near 40k above the per capita income.
Sadly, the author is serious. Crazy. But serious.
"Drew! Honda and Toyota both provide health insurance for their American employees so that is just a DUMB statement. "
Now getting personal?
45% of Toyota's vehicles are imported. Workers for those vehicles have their health insurance covered.
Take away 45% of GM's healthcare obligations and watch how much more money they can make.
"The reason they make money is it doesn't take 80 people to build a car, it takes 34."
Where are you getting this statistic?
The Sigma plant in Lansing, not a single human hand touches the car till it's ready to roll off the line.
Just for the record, I'm not a fan of the UAW or management in this case.
This article may help in clarifying some of the details being discussed here...
"You might expect it from right-leaning commentators like Will Wilkinson. You wouldn't expect it from someone like Mark Perry, who lives in Flint, Michigan. And you certainly wouldn't expect to see it in the New York Times, from the likes of Andrew Ross Sorkin. But all of them are perpetuating the meme that the average GM worker costs more than $70 an hour, once you include health and pension costs.
It's not true.
The average GM assembly-line worker makes about $28 per hour in wages, and I can assure you that GM is not paying $42 an hour in health insurance and pension plan contributions. Rather, the $70 per hour figure (or $73 an hour, or whatever) is a ridiculous number obtained by adding up GM's total labor, health, and pension costs, and then dividing by the total number of hours worked. In other words, it includes all the healthcare and retirement costs of retired workers."
http://www.portfolio.com/views/blogs/market-movers/2008/11/18/the-return-of-the-70-per-hour-meme
Drew that came right from the UAW President in his press conference two weeks ago. It was one of his selling points believe it or not, that it for every car the Big 3 make 76 people are involved when the domestically manufactured imports are at 34. I notice he left that out today, wonder why. It was during the Q&A session.
What's the mantra at CreditMattersBlog.com? Attack issues! LOL.
Seriously, just trying to keep us friendly.
Please resume.
Okay, got the exact quote :)
For every 2500 cars sold the Big 3 employ 78 people, for every 2500 cars Toyota/Honda sell they employ 33.
Me thinks that might be part of the problem.
I should add it's in the 1st Q&A Video:
http://www.uaw.com/auto/11_20_08auto1.cfm
Watching the Q&A videos it's clear there isn't an understanding of how bad it is. Who cares what Ohio is doing for Honda. Honda is making money and paying payroll taxes and employing people GM is laying off. All the money given to all the imports would equal about 30 days cash burn at GM right now...
An interesting article from someone that covered GM for 30+ years who also thinks bankruptcy is the right choice. You'll note a theme that they never seem to grasp how bad things are going. The story on the Aztek reminds me of the car Homer Simpson designed for Danny Devito 20 years ago :)
http://money.cnn.com/2008/11/21/magazines/fortune/taylor_generalmotors.fortune/index.htm
There was a great Wall Street Journal about that Honda plant in Ohio during the past 30 days. Let me see if I can find it.
I actually highlighted this story back in October:
http://online.wsj.com/article/SB122488710556068177.html?mod=googlenews_wsj
The relevant part of the article starts when Mr. Brad Alty is first introduced. Personally, I think the entire article is worth a read, but the Honda part starts with Mr. Alty.
I didn't know of some of the concessions the UAW made in '07. I still think it's too late, however, for much good to come of it given the enormity of the situation...
"In 2007, the Big Three signed a breakthrough contract with the United Auto Workers (UAW) designed, once and for all, to eliminate the compensation gap between domestic and foreign automakers in the U.S.
The agreement sought to do so, first, by creating a private trust for financing future retiree benefits--effectively removing that burden from the companies' books. The auto companies agreed to deposit start-up money in the fund; after that, however, it would be up to the unions to manage the money. And it was widely understood that, given the realities of investment returns and health care economics, over time retiree health benefits would likely become less generous.
In addition, management and labor agreed to change health benefits for all workers, active or retired, so that the coverage looked more like the policies most people have today, complete with co-payments and deductibles. The new UAW agreement also changed the salary structure, by creating a two-tiered wage system. Under this new arrangement, the salary scale for newly hired workers would be lower than the salary scale for existing workers."
Sounds like an accounting gimmick to me. But, in all fairness, the union did at least offer more concessions than I was aware of when I posted a comment earlier.
Oops..Here's the link from my last comment.
http://www.tnr.com/politics/story.html?id=1026e955-541c-4aa6-bcf2-56dfc3323682
CM, Re: The WSJ article
Haha...I remember, as a kid, watching the Brady Bunch, wearing bell-bottoms and "knowing" that Pinto's blew up if they were hit from the back.
Scott, I was a kid during the '70s also. Indeed, was a kid for most of the '80s as well. But I do remember the Pinto -- and its penchant for blowing up when it got hit in the right spot.
CM, good article.
I remember Jay Leno doing a skit on the Ford Exploder.
I remember another comedian commenting how every late 90's early 00's SUV/Truck you'd see from GM would have at least 1 day running light out at all times.
I think the danger for GM and for those about to vote on this bailout is that consumers who can't pay their own bills aren't going to look kindly on this bailout when worst case the average worker makes 15% more than the average HOUSEHOLD income.
I live in a major metropolitan area that's also pricey. Not long ago there was much excitement about a national company opening an office to employ a few hundred people. Starting wages for those with a college degree was $17 per hour and the jobs were quickly snapped up. That was before the economy went bad.
I'd like to someday be able to buy an American vehicle again. The only path to that happening is a reorganization either in or out of bankruptcy. Based on everything said I find it hard to believe they can cut costs enough outside of bankruptcy. Delaying payments isn't going to solve the real and PR problems.
GM has an opportunity, as does the UAW to come out of this much better than most imagined. I cannot see customers supporting the Big 3 minus what is perceived as major concessions. Maybe it's just me but everything I've seen so far seems like it will fall far short of what is needed.
It just occurred to me that I have never owned a domestic automobile. I have always owned German and Japanese vehicles.
What's interesting is that I have nothing against the domestics. I've just never found anything that I really liked. If an American automaker builds something that catches my fancy, I'm there.
I'm on my second Mitsubishi Gallant. It's an '07 and I couldn't be happier with it.
VW Jetta was the worst car I've ever had!
The big 3 should go BK. They deserve it. How is it that they held a practical monopoly after WWII, and so mismanaged that advantage that a ruined country like Japan took market share away from them to the point where they've been driven practically out of the business? Who is responsible? Just the workers? Really? Do they design the crappy cars? Did they invent that utter contempt for the consumer summed up as "planned obsolescence"? Folks, it was management all the way. Arrogant. Out of touch.
Here's some neat links. The compensation for the big 3 runs anywhere from 15 to 24 million. How much does the CEO of Toyota make? How about you read it here, along with all kinds of other stats:
http://www.manifest.co.uk/news/2004/20040510Forbes.htm
Note something? Right, the Japanese get paid the least - by far, by a HUGE margin. And they actually run profitable and successful companies, unlike the big 3 losers.
Here's the next interesting thing in view of the above stats... so the Japanese managers make a fraction of U.S. managers? Times are tough - guess what, they're cutting 5000 manager's bonuses by 10% on top of already infinitely lower pay compared to U.S. managers:
http://www.nytimes.com/2008/12/02/business/worldbusiness/02toyota.html
The big 3 have been making inferior products for decades. You think it's all in the head of consumers as to why they deprecate used cars from domestics compared to imports? Sorry, but they are right on the money (pun intended). You don't take millions of consumers and tell them they're imagining things. I'm just one example. I rent cars regularly. Every time I get a domestic is groan time. Horrendously designed from an ergonomic point of view. In the past two weeks I just had a chance to compare a Sebring and an Elantra. Now, Hyundai is hardly a paragon of value and reliability - and yet, I tell you right now, I'd rather own an Elantra than a Sebring as far as user experience goes - by a 1000%. And this is regularly true of the domestics vs imports I rent. I doubt the market is wrong, when millions of consumers independently experience this - and then make the resale value of domestics vs imports be where they are. The market has spoken, case closed. More in next post.
My first car was a VW Scirocco. Fun little car. Have never owned a Jetta but have driven in them before. Nothing to write home about. And, frankly, even though my Scirocco was fun to drive it was a bucket.
Then someone says it's the socialized medicine that's the unfair advantage of the Japanese. I can only laugh. What's next? If their workers are better educated, are we going to say "what an unfair advantage - they have free education", Toyota managers are vastly superior - oh, what an unfair advantage! Cry me a river. Hmm, maybe then we should quit trying to imitate 3rd world hell holes and join the civilized world with free medical care and education?
In any case, that argument is BS. Toyota has the same healthcare for their workers here - so no cost issue. They import a lot of vehicles? Err... so do the big 3! I doubt the big 3 pay healthcare for cars/parts they manufacture in Mexico or even Canada or any other place where they've shipped out the jobs. So this is a nonsense argument.
The big 3 never planned ahead. When they made mega billions in profits, did they set anything aside for a rainy day, or design fuel efficient cars of the future? Where is their Prius, in Prius numbers, not some drawing and a bunch of promises (lies) while they fought every fuel efficiency standard tooth and nail.
Most importantly, they seem unable to survive as a business model (with the possible exception of Ford). They deserve to die. That's how capitalism works.
There is a new VW Scirocco??
http://www.youtube.com/watch?v=LFfnRG9VeHc
And the argument that people are biased against domestics?!? Are you kidding? Try the opposite. I personally know of several people (one is my uncle) who cry "buy american" even if it's a worse product (which my uncle said as much - he'd rather buy a worse american product. That attitude is widespread, especially in flyover country. The imports have come in at a huge disadvantage with giant prejudice and hate against them - who can forget the screams of "riceburners", the baseball bats, the attacks and murder of random Asians because of "imports". That toxic attitude is still prevalent - especially in the South. That's a huge in-built advantage of for the domestics who have NOTHING else going for them from a technology, value for money, design or reliability point of view. Despite all that, the imports have prevailed WITH THE PUBLIC. It wasn't due to reading "biased" journalists. Oh, and I'd take Consumer Reports over self-reports from the big 3 and their fans any day. You want to sell me on the notion that the folks from Consumer Reports - regular Americans - have for decades been secret agents of the Japanese? Doesn't pass the smell test. They may be wrong once in a blue moon - against the big 3 (OR FOR THEM), as everybody can make a mistake, but consistent bias - I call BS on that.
But what is key is that the CONSUMER, the actual buyer of the product has spoken - by the millions upon the millions. They can't be all wrong. It's insulting and patronizing to tell them they all imagined things. When it comes to people parting with hard earned money - bias has a way of falling away - people go for what they truly experience. And they have spoken abundantly for years now - as the steadily diminishing market share of the big 3 has evidenced.
I don't want the big 3 to fail - consumer choice is always a good thing. But bail them out? Sorry. Not with this management in place. Fire ALL managers. Immediately. Then we'll talk.
CM, I love the new VW lines. They are bringing back some of the oldies like the Rabbit. I have always been a fan of the Rabbit! :D
I haven't been paying attention to VW. I'll have to look around and see what they've been up to.
I said there was a general media bias against domestics. I'm sure a few of you have heard of or remember the Cadillac 8-6-4 engine of 1980. It is one of GM's most famous disasters. It was only on the market for about 18 months before it got pulled. Yet still today I read about the Cadillac 8-6-4 in reviews for the 2009 CTS. Why, when reading a review about a 2009 Corolla do I not hear about the 1980 Corolla that would rust away faster than you could say "Salt Truck". Fair is fair, right?
I'd never advocate someone buying a worse American product (that's why I cannot currently recommend any Chryslers), I simply maintain that there is an equal or greater domestic per for each mainstream import.
I'm not against imports either. What I am against is the constant, rabid, and unjust slander against the domestics.
Drew said...
I just feel that many of you are misinformed or out of date about the domestics' product quality. Especially in the last four years GM has improved it's trouble areas dramatically yet receives little recognition for it.
How "misinformed" can driving a car for a week at a time be? After 500 miles you notice quite a bit and have a good idea of what you would & would not buy. 0 chance of me buying a current Chrysler/GM product. Ford has some adequate stuff, but for my money I want better than adequate.
It's not going to be enough to for the US auto industry to make equivalent products to the imports -- they need to be substantially better to overcome the crap they made in the 1980's/1990's. They also have to overcome all of these:
http://www.nydailynews.com/money/galleries/detroits_biggest_duds_/detroits_biggest_duds_.html
Yes, much of that is in the past but still resides in the memories of many Americans. Not too dissimilar from the way that the killing of Jews overshadows many of the technological breakthroughs that happened under Nazi Germany. We have Hitler to thank(?) for today's highway system.
As others have noted, Ford's trying and seems to be on the right path, but it's going to take a few years for them to get it right. Or...they could just bring over the Mondeo and start with that and the 2011 Fiesta and rebuild your fleet from there.
How come the only Ford products I'd remotely consider (Taurus/fleet-sales Lincoln Town Car Executive L) are made in CANADA and not the USA? Go bark up the Canadian money tree, not ours.
Also, where's the high-mileage cars? No diesel passenger cars from Detroit for the 'States. Tons of them in Europe. Interestingly, practically no hybrids in use in Europe. Probably because they don't need them due to better engineering and diesel engines. 45mpg-75mpg without the extra weight of batteries & such? I'm sold. Unfortunately only the Germans are offering diesels in the US.
As multiple people have pointed out. The tribe has spoken. The Big 3 need to start turning out products people want. Period. Yes they have internal problems, but without buyers they have bigger problems.
Drew said:
I'd never advocate someone buying a worse American product (that's why I cannot currently recommend any Chryslers), I simply maintain that there is an equal or greater domestic per for each mainstream import.
Challenge: Find a true US equivalent to:
Infinti M45
Mercedes SLK / Infiniti G35
Mercedes S53
Mercedes E320 (Diesel)
BMW 3-series or 5-series
VW Jetta TDI/Passat TDI (Ford Tarus could possibly work if they had better engines)
At the same time, I've yet to find a good import substitute for the Lincoln Town Car Executive L (fleet model). In most ways it's a dated dinosaur, but that's also what makes me like it. At the end of a long day, settling into the back seat of this car always feels familiar and comfortable and serene, regardless of which driver/car I have that day.
I did say mainstream, did I not?
M45 - Cadillac CTS, CTS-V or STS depending on your requirements. Lincoln MKS
SLK - sold 6,000 in 2007, not mainstream
G35 - Cadillac CTS
S53 - S-class sold 24k in 2007, S53 is a small subset of that, definitely not mainstream
E320d - CTS, STS, 300c compete with the E-class in general, but you're right, I wish we had more diesel options from all manufacturers.
3-series - Again depends on your needs. Pontiac G8, Cadillac CTS
5-series - The CTS matches up with the 5-series the best and does it for thousands less feature for feature.
VW TDIs - Are you asking about engines here or what? I completely agree about wanting more diesel engines here. I had a conversation with Bob Lutz prior to the current CTS release begging him to bring the 2.9 litre diesel version here. As far as the cars themselves, not just the TDI part, the Jetta, Rabbit, and Passat are met by the Astra, Aura, Fusion, Milan, and Malibu. Taurus is a bit big to compete directly with Passat, it has more room than a Crown Vic.
Don't start with me on VW reliability. My ex had a Passat with a reliability record that would make a Kia blush.
There are a few types of vehicles that each side does best to the point of there being no contest.
"Also, where's the high-mileage cars? No diesel passenger cars from Detroit for the 'States. Tons of them in Europe. Interestingly, practically no hybrids in use in Europe. Probably because they don't need them due to better engineering and diesel engines. 45mpg-75mpg without the extra weight of batteries & such? I'm sold. Unfortunately only the Germans are offering diesels in the US."
Take that up with the EPA, or if you're in California, CARB. The Germans can justify the development costs because they have an outlet in Europe. Can you blame the domestics for not wanting to develop diesels when every few years CARB ups the emissions requirements and effectively bans the sale of diesel cars in California?
Drew the problem with all those cars, none can be leased now which is particularly important with higher end vehicles. I'd also argue their reliability is not the same as the Nissan built Infinitis over the long term.
Barney Frank is on CNBC now. He probably has a good handle on the Big 3 situation just like he did Fannie and Freddie.
Barney Frank in January 2008 "I am glad to have your prediction that we will soon be engaged in a "federal bailout of Fannie Mae and Freddie Mac," because I disagree and this will give us some measure of the accuracy of our respective predictions in this regard."
http://paper-money.blogspot.com/2008/03/almost-daily-2-capitol-appeal-slight_13.html
He's giving our nations leaders advice today when he didn't know Fannie Mae was bankrupt just weeks before he made that statement.
A person close to me had the Ford Explorer of the late 90s that had serious engine problems and got stuck for thousands in warranty work at just over 40k miles. He had always owned domestics but now owns Acuras. A close relative had the early 00s Ford minivan that had plastic headers up against a metal block. He had thousands in work done at 40k miles and it was explained to him this was a known defect as the two different materials heated/cooled at different rates causing the defects. They now drive Hyundais and Infinitis. In the late 90s I owned a domestic product, at 37k miles the head gasket let go circa 1970. I brought it to three dealers and got quotes well over 1k. I brought it to an independent service center who explained there was one of Drew's "soft" recalls and I could call a number and get a huge discount. Sure enough they were right I only paid $160, but why didn't the manufacturers dealer know about this? I now drive only Nissan and Hondas.
The Big 3 will never get any of us back unless we get burnt on another car and that won't happen.
Tom, you hit it on the head. In Japan and many Asian countries there are CEOs that kill themselves rather than be dishonored. It happened in the melanime situation most recently. They take a fraction of the pay and honor their jobs and company above all.
"The Big 3 will never get any of us back unless we get burnt on another car and that won't happen."
Then you do yourself and this country a disservice. If you think you can't be burnt by an import.
http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla%3Aen-US%3Aofficial&hs=Yrw&q=Toyota+engine+sludge&btnG=Search
http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla%3Aen-US%3Aofficial&hs=1rw&q=Nissan+altima+fires&btnG=Search
http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla%3Aen-US%3Aofficial&hs=sXH&q=Tundra+tailgate+failure&btnG=Search
http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla%3Aen-US%3Aofficial&hs=UYH&q=Honda+transmission+failure&btnG=Search
Think again.
Drew please, I do the country a disservice by employing people in Alabama versus Detroit? I'd think the people of AL, TN, OH, IN are happy that many of us choose to buy cars assembled by Americans. I know all the salespeople, service people and managers at the dealerships are gainfully employed Americans.
Americans rejected your thinking a decade ago. No consumer owes anything to the seller of a good or service. What's changed is Americans now have a choice, and they've chosen to buy something other than a car from the Big 3.
Yes.
The profits from that purchase go where? The car was designed where? The parts come from where?
But I like how you ignored the rest of my post.
Hey, we lost another 533k jobs last month. What's another 3m - 5 m more when the Big three go into Chapter 7?
A country that doesn’t make anything doesn’t need anything financed.
"Americans rejected your thinking a decade ago."
And look where that's gotten us. Stagnant wages, crumbling industrial base, massive trade deficit, crushing national debt.
The current state of things is the culmination of 30+ years of wrong thinking.
This was an idea that came up at the hearing yesterday:
"Force the bailed-out banks to finance the industry loans"
thoughts?
Drew, I didn't ignore it. But you're trying to equate a few bad imports with all the bad domestics. Consumers spoke, they ran away from the Big 3. Look at the earlier numbers, every Big 3 lost share while all others gained share. Customers are still running from Detroit. Sure there are some lemons in the import mix but on the whole there were way more horror stories in the domestics. Yet they/you want to use very recent improvements as some sort of prod to get the cattle buying domestics again. Consumers don't owe Detroit anything.
By the way, aren't a lot of the "domestic" autos now made in Canada and Mexico?
You haven't commented on the UAWs comment that for 2500 cars sold there are 78 workers on the domestics versus 33.
I won't disagree that it was a mistake to allow the domestic apparel industry which made equal quality goods to be decimated. I won't argue that point for any of the other industries that were decimated simply because somewhere overseas someone was willing to work for pennies on the dollar. These were industries that produced goods of equal or in many cases superior quality that were wiped out by unfair practices. That's not the case with the Big 3. They were mismanaged, the unions demanded too much and now they are bloated, dying businesses.
Answer this, do you think all of this is going to increase or decrease sales even with a bailout? I think customers will continue to run away out of sheer frustration. GM isn't bankrupt because Honda came in and sold cars at 30% lower rates. They're bankrupt because they produced cars at 30% higher costs than everyone else.
Industrial production is not nearly the major component of our economy it once was. Right wrong or indifferent times have changed and desk jobs at financial services companies far outweigh the number of jobs at a factory.
ALL DOMESTICS ARE NOT BAD!
Drew, agreed, but you can't ignore the fact that just because TODAY GM is building a few better cars and that Ford has been building better cars for the last 3-4 years that customers will come back.
They haven't, they won't. Too many people have been burned for too long. We're talking about two different things here. I'm not arguing that they've gotten better, they have, the problem is it's too late. Can you cite any historical references for a company regaining market share after being on such a downward slide? There are few/none that I am aware of because the underlying causes of such a slide are customer angst.
By the way, the Cadillac CTS did well in CR testing but reader reliability scores..well.
"But you're trying to equate a few bad imports with all the bad domestics."
Do you really want me to list EVERY problem I know of with imports? It's a boring day here at work, I'll do it.
You are MAKING EXCUSES for the imports while CRUCIFYING domestics for the SAME PROBLEMS.
Toyota produced god knows how many engines with oil sludging problems that cause catastrophic engine failure.
Honda produced transmissions that couldn't last more then 40k miles.
Nissan's Altima would CATCH ON FIRE!
Toyota had ball joints falling off 4runners. Cam shafts exploding in Tundras, tailgates bending under body weight.
The 6-speed automatic in the Camry would drop 2nd and 6th gears. Consumer reports changed their rating for the V6 Camry because of this issue. The Avalon would drop 2nd and 5th.
VW is KNOWN for electrical gremlins.
STOP GIVING IMPORTS A FREE PASS ON THEIR PROBLEMS.
"Right wrong or indifferent times have changed and desk jobs at financial services companies far outweigh the number of jobs at a factory."
No more factories, nothing more to finance.
"By the way, the Cadillac CTS did well in CR testing but reader reliability scores..well."
The only thing Consumer Reports is good for is getting my fireplace started.
Drew, and hasn't CR crucified Toyota in their reliability reports? AND the Altima?
I'm not making any excuses. I've asked you if you think part of Detroit's 3 problem is that it takes 78 workers to sell 2500 cars versus 33 for everyone else. I've asked you how many of the Big 3's "domestic" cars are made out of the USA? F150 etc. You've only made my point on CR, the reader scores are pretty accurate and pick up on many of the problems. For 15-20 years they've consistently rated domestics as mostly terrible against imports. That's changing now but it appears to be too late for GM and Chrysler.
Not to mention they have no ability to finance cars and customers have long grown accustomed to manufacturer financing offers. They can't lease, they can't lend, and they're fighting 30 years of poor reliability entering a horrific recession.
The last statement? Manufacturing jobs have plummeted as the financial service sector blossomed. There's plenty of wealth to manage.
"Can you cite any historical references for a company regaining market share after being on such a downward slide?"
Nissan/Infiniti
VW/Audi
Chrysler has done it before
Ford did it with the first Taurus
And by the way, unless I misheard aren't the Big 3 already admitting they are closing a huge number of factories and laying off tens of thousands of workers?
When GM is done they'll not have many more actual workers than Circuit City. That's staggering.
Notice I'm not speaking of the Euro imports. VW used to get massacred on the CR reliability reviews. I stopped caring about their cars when I had to climb out windows because the door locks never worked.
I no longer pay attention to CR because of their unscientific methods.
It's not just manufacturing location, but the rest of the company matters as well. The Chevy Avalanche is assembled in Mexico from parts made in the U.S. It was designed in the US.
The Impala is made in Canada from parts all over North America. It was designed in the US.
F-150 is built in Dearborn Michigan.
For all of the above THE PROFITS REMAIN IN THE US.
"And by the way, unless I misheard aren't the Big 3 already admitting they are closing a huge number of factories and laying off tens of thousands of workers?"
They need to. They have far too much capacity for the economy we're in right now. A big reason they have so many workers is that the UAW won't let them fire anyone. They all just end up in the Jobs Bank anyway. Thankfully THAT abomination will be going away.
Profits Remain in the US? They're losing billions and they'll use those losses through deferals for years to come.
I'd rather have the recurring manufacturing jobs in Alabama and the design done in Tokyo than a design in Detroit and manufacturing in Mexico or Canada.
I thought F150s were at one point made in Canada?
What is going to make customers go back to GM?
1 million+ reader surveys may not be scientific but in 25 years of reading it I think many of us find our own personal experiences are borne out by their results.
F150s have been made in multiple factories at the same time. There was a Norfolk, VA factory at one point as well.
American's won't go back to GM until hating domestics goes out of fashion.
GM has a top vehicle in each of the major segments right now. There is no reason to not try them other than intentional ignorance.
The list?
Compact - Astra
Compact wagon - HHR
Midsize - Malibu, Aura
Large - G8, Impala, Lucerne
Mid-Lux - CTS
Midside Crossover - Vue
Large Crossover - Traverse, Outlook
Luxury Crossover - SRX, Enclave
Plus the trucks and SUVs.
Each one of those vehicles is completely competitive with imports and deserve a look.
"1 million+ reader surveys may not be scientific but in 25 years of reading it I think many of us find our own personal experiences are borne out by their results."
http://www.allpar.com/cr.html
http://www.truedelta.com/pieces/shortcomings.php
Drew, so the Tundra must be reliable then based on that same logic.
So what's the reason GM is in the tank, Consumer Reports? Not the Aztek, not the reliability problems, it's all a fiction created by CR to conspire against the Big 3?
On one hand you agree that Ford is more reliable which is what CR shows. On the other hand you say the Tundra and Altima, along with the V6 Camry are problems which CR shows, the only time you see to disagree is when they rate GM's down.
How is GM going to come back when they can't lease, sell or do much of anything else?
Thanks for keeping it friendly, guys. I know this is an emotional topic.
Much appreciated.
I'll let you guys get back to the debate.
You have it the wrong way around. I'm not agreeing with Consumer Reports based on anything they've said. That they sometimes get something right is pure chance on their part. NONE of my information about the problems imports have came from CR.
Please read both of these:
http://www.allpar.com/cr.html
http://www.truedelta.com/pieces/shortcomings.php
CM, thanks.
Drew the only point I'm making is the fall of GM was going on long before CR. You can't access their information without a fee. The perception of reliability problems with domestics is real, comes from consumers personal experiences over decades and can't be blamed on a magazine with a few million readers.
Maybe Congress should spend $100 million doing a scientific study on car reliability the last 10 years and tie that to bailout money. I bet that would be fought tooth and nail by our automakers.
The most "scientific" data we have and need is market share. It's all that matters.
Actually, the most scientific would be the percent of each model that are still on the road for a given model year run.
I'm trying to locate the article, but the domestics are surprisingly ahead on this one.
Drew we're arguing over two different things.
Forgetting reliability and everything else, what really matters is that GM is on a rapid spiral to the bottom. They're outpacing everyone now in actual losses and sales declines. They no longer have a viable manufacturing finance arm. They can no longer lease vehicles.
They are strangled by decades of mismanagement and untenable agreements. They sell the same number of cars as Toyota and lose 30 billion doing it while Toyota makes 5. That is a massive gap that a few deferred payments won't help.
They are going to continue to lose market share crimping revenue further. How are they going to make up 40 billion so they can ever make money?
At what point as a country do we look at 5 trillion in bailouts and realize we may be better cutting a 16k check per person instead of piling money into the unknown?
We're not arguing over those middle two paragraphs because we agree on them.
GM does need massive downsizing. Wagoneer needs to be fired. UAW needs to be shown the door. I stated that a while ago.
Yet you continue to assert that GM is still making crap top to bottom.
It's not just CR that has bad bias. ALL of the magazines and media display it. It's not a conspiracy, it's just fashionable.
Drew I've said over and over GM is making better cars but it's a relative term. You can't judge long term reliability on a 2006 car. Yes they've improved but at a slower rate than Ford which is ironically not even sure it will need a bailout. It's not a coincidence. Ford was mauled as bad as anyone else until very recently and if you do read CR you'll note that they started producing the crop of better cars at the height of their worst CR ratings - so the two do not go hand in hand. Ford also made the Explorers that rolled over and yet their reliability is way up. That's why I don't buy the conspiracy theorists. The loss of market share is the result of poor reliability, the genesis wasn't reports of poor reliability leading to lost market share.
Without a bankruptcy GM will still be dominated and harnessed by the UAW. The democrats don't have the stomach to take on the group that hands them every election in key states which is why the only way it can be resolved is via insolvency.
Chrysler has now engaged counsel in case it is forced to file bankruptcy:
http://online.wsj.com/article/SB122849949643583239.html?mod=googlenews_wsj
Frank Sees ‘Disaster’ if Auto Industry Fails
http://www.nytimes.com/2008/12/06/business/06auto.html?_r=1&hp=&adxnnl=1&adxnnlx=1228503969-JIdSFS47ZmamnDortwdP0w
Drew wants to argue that millions upon millions of consumers are wrong about the domestics quality & reliability. That they are deceived - all of them - by the media. For decades.
Every one of those assertions is nonsense. First, the vast majority of consumers are not guided by CR or auto mags. That's crazy. They are guided by personal experience - as I am. I rent cars about 20 times a year on average, and have been doing so for the past 12 years (due to my work) - mostly sedans. I take the car on the lot that's available. All cars - domestics and imports have flaws. But as a rule, these are my experiences: by and large imports are vastly better designed from an ergonomic point of view. They are also more reliable. And they provide a better driving experience. From my personal, my family and my friends car ownership experience, I have formed a very negative - and IMHO - INFORMED opinion of the domestics. They are garbage.
Millions upon millions of consumers over decades are not wrong. The domestics have been losing market share for decades.
There is no conspiracy or "fashion" for the media or public to demonize the domestics. If anything the opposite has been true ("buy american", "death to the rice burners" etc.). It is insane to assert that journalists from all walks of life and all backgrounds have succumbed to some fashion or are in cahoots to bad-mouth domestics.
Even if there were, consumers make up their minds based not on a stray magazine or CR article or whatever the media is pounding, but on personal experiences, their own and their friends and family. And these have been horrific when it comes to domestics.
Maybe the domestics have improved in the past few years. First, we'll have to wait for the LONG TERM reliability to be seen. Second, you cannot simply "come close", or even "be equal" to the imports. That's not how the imports won the battle for decades now. If you want the consumers to come back - you need to be BETTER, VASTLY BETTER than the competition. Only then do they have a chance at winning the consumer back.
Simple question: is there a snowball's chance in hell that the domestics will en masse be VASTLY BETTER than the imports anytime within the next 10 years? Exactly. Zero. Therefore: they are doomed to die. Good riddance.
Drew: You just proved my point. You said the Cadillac CTS for practically every car I listed. However every car I listed was different and not equivalent to each other. That also ignores the issue of styling, which is sorely lacking on many US cars. Can't say I've seen too many people aspire to own a Chevy Malibu.
I asked it earlier, but have you driven (at length) any of the cars I've mentioned? The CTS is one of Caddy's best offerings ever, but it falls well short when you look at the competition. I'm talking about the actual driving experience, NOT just the specs on paper. Just curious, is there any GM car you don't like? You seem very passionate about them.
Re: diesels, VW and Mercedes have diesels for sale in all 50 states. What's GM/Ford/Chrysler's excuse?
There's no conspiracy to hate American cars. Many people have had rather bad experiences with American cars over the past 3 decades.
All makes have laid eggs over the years. Americans have been doing it more often, longer than the others. Numerous reliability surveys and long-term owners comments confirm this. It takes years to erase the damage caused by just a single bad product. What also matters is how problems are addressed when they do come up. At 105k miles, well out of warranty, Mercedes replaced all of the electronics. At 160k miles the computers died again. Mercedes stepped up to the plate and replaced the car at their cost. They replaced it with a brand new Mercedes.
I have to agree with Tom on his latest post. Evolution is still the rule of the land. Evolve or die. I fault GM entirely on this. Yes, the UAW makes life difficult, but the airlines have found ways to work with their labour unions to contain costs. Bankruptcy wouldn't be a bad thing for GM. Ditch the archaic contracts they're stuck in and regroup.
Tom, they are making some better cars now particularly Ford. But you are right on everything else, there is no grand conspiracy. Given the choice I think most of us would rather buy USA through and through, the problem is even for a higher price we can't get the quality. I can't afford an extra 1-2k in maintenance costs every other year or two for the privelege of buying american.
Sean you are absolutely correct on the foreign brands understanding customer relations. Like I said earlier I had three dealers try to scre* me a few years back on a repair they knew was being comp'd by the manufacturer out of warranty. Strike 3 against that member of Big 3. Others close to me had major issues close to the warranty and got not even a sorry. Meanwhile a little Corolla I bought around the time of the "new" model? 99 I think had a component go at 44k miles. The car didn't die but it was something that had to be fixed in the motor and it wasn't cheap. No questions asked it was paid for by Toyota.
I want GM to survive after a merger with Chrysler. The only way I see them being competitive - really competitive and a threat to the other manufacturers is through bankruptcy/breaking of the union deals.
The distrust and greed on both the management and union sides destroyed GM.
At G.M., Innovation Sacrificed to Profits
http://www.nytimes.com/2008/12/06/business/06motors.html?_r=1&hp
My 2000 GM Pontiac Grand Am. Bought NEW.
If I am under warranty - great. If not....
Currently has 73,000 miles.
1. Brake Calipers squeal like a wooden door.
Known issue. TSB issued on it, affects almost every GA owner.
No recalls. GM refuses to admit responsibility. $90 each.
Bad design.
2. Heater/fan control. Fan only works on high.
Known issue. Need new resistor control module. Located in
almost impossible to reach area above passenger feet.
Affects almost every GA owner. No recalls.
GM refuses to admit responsibility. $40 each.
Bad design. New unit has been dipped in rubber for protection.
3. Window clips that secure power window module.
Crack and break. Affects almost all GA and Alero owners.
Until recently, these could not be purchased alone. Entire
new windows mechanism was required. No recalls.
GM refuses to admit responsibility. $200 each.
Since perhaps 2006, now you can buy just the clips. $40 each.
2 required per window. Bad design. Replacements are same.
4. LIM (Lower intake manifold leak). Affects almost all GA
owners. NO recall. Repair $1200. 6hrs of labor. If your lucky,
coolant leaks. If your unlucky, it leaks into oil and can cook
the motor very fast. GM refuses to admit responsibility. Class Action
lawsuit was placed. It was won, but I was out of statute for restitution.
I have not had this done. I deal with the leaks. Bad design.
2yrs after my car was made, GM quietly changed design. No more issues.
No help to older customers.
5. Odometer goes on/off at random. Known issue. Fix? Replace dash module for $700. GM refuses to admit responsibility. I live with it.
6. All freon leaked out this summer. Blown o-ring. I have to have it repaired. Can I blame GM, I suppose not directly.
7. Transmission hunts now and shifts erratic. Known issue. Need new shifting module within transmission. GM refuses to admit responsibility. $400 job.
I have not had that done yet.
..Now, my 2001 Toyota highlander....65,000 miles on it.
never been to the dealer for anything. Toyota sent a bulletin indicating a possible fuel tank issue. They discovered some fuel line clips that as installed MIGHT puncture the tank in a specific accident. Nothing was ever reported as happening. Recall was to twist the clips 90 degrees. I did that on my own. But wow..how nice was that?
The Highlander has had nothing done to it and all still original, except for oil changes of course.
My 1991 Toyota MR2? 120,000 miles on it.
Still getting 37mpg on it. Doesnt burn or leak a drop of oil. Brakes are perfect. Couldnt be more pleased.
This is why I am so against a bailout. GM has never learned how to treat a customer...and if the dealer doesnt help (most are idiots) what can the buyer do?
People are worried how someone would buy a car from a company that went bankrupt. Well they are not buying now, so what changes?
Airlines went bankrupt and people still flew them.
My latest expensive purchase?
A 2008 Suzuki DL1000 motorcycle.
Yea, I live in Harley land, but they have no class to them, Nothing unique or eye candy appeal (Hmm...think GM).
And they are WAY over priced.
I am sure something will come out to help the automakers and they do need some assistance, but will it stop with 1 request??
Yep, the domestics earned their reputation, one customer at a time. It's not your imagination. It's not what you read in a magazine. It's not "fashion". It's people's experiences. One at a time. All cars, foreign and domestic have flaws. But the *aggregate* numbers are what matters. And the customers have spoken. The domestics have been losing market share for decades.
Funny thing about motorcycles. I'm a rider (well, was, until about 2 years ago). I looked into Harleys, like anybody, I suppose. That was back in the early 80's. I wanted one, until I took a closer look. They were junk. Totally unreliable. I bought a Honda, never looked back. I owned Yamahas and Hondas, never a domestic. Maybe they bettered their product, I don't know. But reliability is so important to me, in all products.
As to the bailout - it will happen; there's a lot of political power the big 3 have. Watch the taxpayer get ripped off - for the trillionth time.
Tom, When my bike buddies show up on their HOGS, they are not allowed to park in my driveway. They know their place is in the street near the mailbox. Even at work, all of the MC stains are all from HD (USA made) bikes. Maybe thats the way Harley's mark their territory...like dogs do....?
Right, Hanadarko. And a funny thing about "fashion". Back in the late 70's, early 80's, you were in serious danger of getting beaten up by certain HD riders if you turned up on a Japanese bike. Just like with the cars, there were screams of "rice burner". So many times there were stupid competitions. The HD guys would always try to find something that's better about an HD - but they never really could. They'd lose races, so they'd tell me the HD has more "torque" - until I showed up with a Kawi and shut 'em up on that as well.
My point being, is that the prejudice was always *against* the imports, bikes or cars or trucks (remember the screaming about Japanese trucks when they first introduced them?). Now some folks want to spin it like it's the domestics that don't get a fair shake. Rubbish. To this day, a lot of people have a "buy american" philosophy - which btw. also is featured prominently in advertising... sometimes really shamefully, as they did after 9-11, the big 3 ran commercials saying basically "buy american cars as revenge against the terrorists"... such garbage. Never heard of any movement to "buy Japanese".
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