Author Topic: Why Did GMC Fail...? (Read 805 times)

TM7 · « **on:** June 23, 2009, 02:49:18 PM »

I was going over some General Motors records the other day... market share, vehicles sold, stock price, etc.
Data does not support their rapid demise...in fact quite the opposite.

from wikiinvest

Globally, GM sold 9.4 million cars and trucks in 2007, an increase of 3 percent over 2006. The GM 2007 tally was the second best global sales total in the company's 100-year histor. And would be the third consecutive year the company had sold more than 9 million units. Not too bad for a company on the brink of calamity. GM had been through worse, the Great Depression and the Second World War for example, but survived and thrived. When Wagoner took over stock was at an alltime high then quickly dropped, yet he kept his job right up until the TARP and bankruptcy and all of this happened thru robust sales. There is more going on that can't simply be blamed on unions.

..TM7
.

Swampman · « **Reply #1 on:** June 23, 2009, 02:51:29 PM »

Their cars & trucks were junk. The CEO admitted that publicly.

Cement Man · « **Reply #2 on:** June 23, 2009, 03:20:32 PM »

Quote from: Swampman on June 23, 2009, 02:51:29 PM

Their cars & trucks were junk. The CEO admitted that publicly.

I have an '07 Trailblazer and an '08 Silverado. Pretty good junk so far. They replaced an older Trailblazer and an older Silverado. (Both of those are still going strong yet too.) Guess I'll never learn.

Swampman · « **Reply #3 on:** June 23, 2009, 03:29:35 PM »

I guess not. I wouldn't have one if it was free.

Brett · « **Reply #4 on:** June 23, 2009, 03:30:22 PM »

Swampy, If they were such junk how come they had the largest market share on those pie charts?

I believe that the union had a lot to do with their demise. Labor costs per unit sold were too high to make a reasonable profit. Poor management and not enough investment in automation are the other areas that hurt them.

jjas · « **Reply #5 on:** June 23, 2009, 03:47:44 PM »

I think Brett is on the right track. Throw in too much product overlap, too high retiree costs, a non-performing finance division and executive salaries that were way too high for the level of performance and I believe it all adds up to the mess they are in right now.

Jim

Cement Man · « **Reply #6 on:** June 23, 2009, 04:28:35 PM »

Quote from: Swampman on June 23, 2009, 03:29:35 PM

I guess not. I wouldn't have one if it was free.

You got nothing to worry about. They aren't free.

Dixie Dude · « **Reply #7 on:** June 23, 2009, 04:33:14 PM »

They may have lost a lot on the GMAC Mortgage business. I had a GMAC mortgage one time with the housing bust.

Cheesehead · « **Reply #8 on:** June 23, 2009, 05:38:20 PM »

Remember the Vega.

Cheese

Rustyinfla · « **Reply #9 on:** June 23, 2009, 05:45:13 PM »

I think I read somewhere that GM paid something like 14 million in one year just for Viagra for retirees. If that was true they deserve to fail.

Sourdough · « **Reply #10 on:** June 23, 2009, 06:05:10 PM »

I know several people here in North Pole that had Yukons. Every 3 months they were having to replace the transfer cases. Something was going wrong with them. One woman that works with my wife traded hers in after the sixth transfer case went out. She got a Honda.

Cement Man · « **Reply #11 on:** June 23, 2009, 07:26:01 PM »

I have owned and driven cars for 47 years. I traveled a lot in my job and often turned over vehicles in 18 months. I 've had Ford, GM, and Chrysler products and just have not had any real lemons. One '94 Caravan dumped the transaxle at around 60K, but it cost not a cent to replace and did fine for several years afterwards. Last I heard my old '86 Ford pickup straight six cyl. was still going with about 350K on that untouched engine. The only car I had real problems with was an '81 Nissan I bought new. It an electrical problem with the interior lighting and the brake lights which eventually got me a new car at no charge.
For the most part I've had very good results with many makes.

blind ear · « **Reply #12 on:** June 24, 2009, 03:24:24 AM »

Health care benefits was one large item because Corporate loopholes allowed GM to use the funds allocated to that rather than set it up in a untouchable trust saying the health care could be covered out of "profits" when due, much like the social security fund. When time to pay came the funds were not available along with other defered savings that lost the benefit of compound interest.
Corporate loop holes.

SHOOTALL · « **Reply #13 on:** June 24, 2009, 03:31:59 AM »

They DID NOT FAIL !
They did reserch on their competition and realized that both Germany and Japan were rebuilt by the US to be more competitive

so they are just following suit !

Cement Man · « **Reply #14 on:** June 24, 2009, 03:42:29 AM »

I think their problems were too high legacy costs, gas prices going through the roof and not having an adequate product line of higher mileage vehicles, and the credit crash.

blind ear · « **Reply #15 on:** June 24, 2009, 03:50:17 AM »

SHOOTALL i agree, In wwII we fought aggainst Nippon, Siemins, Daimler and others, Now they are so comingled with US corporations they are hard to recognize. The rebuild post WWII made them good investments because of thier improved efficency.

SHOOTALL · « **Reply #16 on:** June 24, 2009, 04:48:31 AM »

Cement man , their /the problem was lack of competition ! The unions saw to that . Now they are forced to compete and it hurts .

Cement Man · « **Reply #17 on:** June 24, 2009, 07:40:02 AM »

Shootall, I think we are talking about the same thing? Legacy costs being the amount of pension money obligations that had to be "built into" the cost of each vehicle making it hard to compete value-wise. Seems that is what I read.

SHOOTALL · « **Reply #18 on:** June 24, 2009, 08:02:01 AM »

That's right . When there was no competition the unions demanded and got what they wanted . Hey either you bought one of what used to be the big three or you walked . Now there is all the pork in the union contracts but the people paying for the hog feed found a new place to get a ride . The big three should have been left alone to either get fit or fade away .

Dixie Dude · « **Reply #19 on:** June 24, 2009, 09:27:07 AM »

the problem with Cerberus is they own Remington, Marlin, H&R, Bushmaster, and DPMS weapons manufacturers. They have merged a lot of the production, maybe to be more efficient. Don't know. I heard that either Feinberg or Merkin hunted and wanted to own their own gun companies. They may have been trying to take over GM and maybe that backfired.

Dixie Dude · « **Reply #20 on:** June 24, 2009, 10:20:34 AM »

There are only two independent gun corporations in which you can buy stock, that is Ruger and Smith & Wesson. Don't know who owns Mossburg. There are probably several privately owned gun companies like Henry, Kimber, or such. Winchester and Browning are owned by FN. Don't know about Colt. I think the anti-trust act could break up the large oil companies also. Look what happened to Texaco, Amoco, Pure, Sinclair, Gulf (in the south), ect. Same with the tire companies. Uniroyal and Goodrich are owned by Michilen now. Firestone got bought out by a Japanese company. There are natural monopolies like AT&T which were regulated. Most of the oil companies and other companies said they needed to merge to become a bigger player in the international arena, but it doesn't promote competition and lower prices that should be with capitalism. We are just not using the anti-trust laws to keep more companies going. They were looking at breaking up GM back in the early 70's. They had 70% market share in America with ford at about 20% and Chrysler 10% with AMC a sliver. They were talking about splitting off Cheverolet which was half of the GM market. Might have made for more competition, better, and lower priced cars.