GM "Lost the Bet" on Lower Fuel Prices

[2012Aveo]

This is an article about GM's Janesville plant, not Toyota's San Antonio Tundra plant. Toyota never claimed to be perfect. Yes their Tundra plant was bad timing, but they have many car models that sell very well to make up for that mistake. Besides Toyota's mistake wont help GM i\or any of you in any way. And if you search the internet there are articles about the Tundra plant's bad timing. Some of you here really believe that by posting negative statements about Toyota you are helping the US auto industry. Evidently not. I am always curious which one of you post on the Toyotanation forums. There are usually 2 to 3 posters on Toyotanation that try their best to point out Toyota's faults. Really pathetic when they could invest their and their employer's time better by doing what they actually get paid to do.

[jbartley]

the article seems to forget that GM held the line. the market may be declining but GM is holding on to it's large percentage of it. if this was toyota, it'd be a success story.

[kenman923]

Pretty soon, GM itself will become a division of Tata Motors.

[crazywop112]

Its wierd to see trucks go exstinct but it will happen if gas prices continue to rise. Only the well off will be able to afford trucks if gas prices continue to climb the way they are. Some analysts are even predicting gas prices hitting $7 a gallon. But you cant blame GM for this, no one could have predicted gas prices would go up this high. Even according to the laws of supply and demand gas prices should be up but inflation should not be occuring at this accelerated rate. Greed from gas companies is driving prices up.

[K-1]

Originally Posted by 2012Aveo

This is an article about GM's Janesville plant, not Toyota's San Antonio Tundra plant. Toyota never claimed to be perfect. Yes their Tundra plant was bad timing, but they have many car models that sell very well to make up for that mistake. Besides Toyota's mistake wont help GM i\or any of you in any way. And if you search the internet there are articles about the Tundra plant's bad timing. Some of you here really believe that by posting negative statements about Toyota you are helping the US auto industry. Evidently not. I am always curious which one of you post on the Toyotanation forums. There are usually 2 to 3 posters on Toyotanation that try their best to point out Toyota's faults. Really pathetic when they could invest their and their employer's time better by doing what they actually get paid to do.

Well isn't that the realization of the century. Thank you for that thoughtful insight.

My point is that when a domestic automaker takes a bad step, EVERYONE jumps on it. When Japan Inc. takes a bad step, it's brushed aside because they're supposedly clairvoyant and omnipotent from a few good-selling models. Way to root for the home team jackasses.

[K-1]

Originally Posted by crazywop112

Greed from gas companies is driving prices up.

Wrong. It's greed from investors and speculators. You'll notice the people talking up the price of oil are the ones with vested interests. First it was $100 oil, then it was $150 oil, now it's $250 oil.

[TJ95GAGT]

Originally Posted by K-1

Wrong. It's greed from investors and speculators. You'll notice the people talking up the price of oil are the ones with vested interests. First it was $100 oil, then it was $150 oil, now it's $250 oil.

Absolutly correct. Those predictions came from brokerage houses/companies who no doubt have oil in alot of their funds and stand to make out like a bandit when the time is right. Sounds similar to the tech stock situation and more recently housing.

[2002 Caddy]

Originally Posted by crazywop112

But you cant blame GM for this, no one could have predicted gas prices would go up this high.

Everyone has been predicting this since about 2000. Our corporate economist warned about "peak oil" in early 2001. Google "peak oil" lots of charts like this:




Look at the date on the chart 2003...
Look what is says... By 2010 Demand will be up and supply will be down...

GM management should have known for AT LEAST 5 years.
If they didn't know they need to fire every economist that works there...

[drew770]

Originally Posted by K-1

That's not what the article was about. GM retooled an existing plant for SUV production, which is now dwindling. Toyota built a BRAND NEW (and over-budget) plant for Tundra production, expecting hit 200,000 sales per year. Why aren't we reading about Toyota's screw up?

Because this is not a pattern for Toyota. This plant is just one plant and GM has multiples to close because of an over reliance on SUV and trucks.

And if Toyota had to close the new San Antonio plant (which it won't) Toyota has the money to shift resources.
GM can not say the same.

[drew770]

Originally Posted by tkrelston

Recently? Too busy dealing with Kerkorian and appeasing Wall Street, THAT’S how!

How was GM appeasing Wall Street? GM's shares have been in the tank for years which goes against Wall Street and most auto analysts/Wall Street folks say that GM needs to close a couple of brands which GM has refused to do.
So with all that How is GM appeasing Wall Street?

GM just did not see a profitable future in small cars and thats why they never focused on them.
It wasn't Kerkorian or Wall Street that told GM to ignore the small car segment.

[Tone]

In "On A Clear Day You Can See General Motors" former executive John Delorean was critical that GM head office spent too much time muddling in the operation of its divisions and not enough time doing big picture, strategic planning to ensure the entire company was headed in the right direction.

Foreseeing the potential of a rise in gas prices ... and it's impact on GM's business ... is exactly the kind of thing Delorean said GM was terrible at in the 60s/70s. And evidently still is today.

The problem isn't that GM introduced the new generation of trucks. The problem is and was that the profitablility of the company rested too much on a line of vehicles that would obviously be impacted by a significant rise in gas prices. A rise that many in the industry predicted would happen supplies got tight due to rising demand and flattening reserves.

So what was GM's Plan B?

Their new generation of big crossovers are very nice. But, they still weigh in at close to 5000lbs and only seem to get marginally better fuel economy than the BOF trucks they are designed to replace. Their biggest advantage seems to be in the area of ride, handling and passenger room -- laudable strenghts, but not really the full answer to $4 a gallon (and rising) gas.

I fear that, given all the fires GM has to put out from a strategic perspective (labour costs, too many brands, product, etc.) that management probably did a decent job ... they just can't deal with all the problems, all at once.

If only GM had taken Delorean's advice 30 years ago, we might be looking at a very different company.

[2002 Caddy]

Originally Posted by Tone

If only GM had taken Delorean's advice 30 years ago, we might be looking at a very different company.

VERY true... Look at the trucks, they are the nicest in the world. Beautiful vehicle. Look at the interior of the Malibu... World class.

GM has demonstrated that they can build world class competitive vehicles.

30 YEARS! If they had taken this advice only 10 years ago we wouldn't be in this mess.

[KingElvis]

Originally Posted by TheWraith

exactly. GM heavily invested in the GMT900's, at the expense of a lot of other things, and now they have extremely weak offerings for many segments, and it's left them in a position where they need to play up future offerings that aren't for sale yet and hope that interest in them stays strong until they actually produce them.

Substitute whatever moribund platform of GM's for the last 20 years or so, and you could pretty much say GM's been "playing up future offerings that aren't for sale yet" since about 1987.

Going back to 1987 and the GM-10 introduction, GM was saying that once the old G body was cancelled, the GM10s (Lumina, et al) were going to conquer the US market like Ghengis Khan took central Asia.

Didn't happen.

I predict similar results for upcoming 'world beaters' like the Camaro ("We've been getting great feedback from fanboy blogs!") or the Volt ("Tom Friedman wants one!").

[Get_ A_Clue]

OK, I understand I'm on a GM fanboy site, but some of the comments here are delusional. Not sure if anyone's been paying attention but "delusional" is a word that best describes the management at GM over the last 40 years. If you haven't noticed, GM is in a DIRE state and could possibly be forced to either file for bankruptcy or require a government handout to continue operations.

What does Toyota's new truck plant have anything to do with this? Yes, Tundra sales are down but Toyota offers a full range of small cars and SUVs that sell very well. Not sure if anyone knows this, but the Camry has been a perennial best seller (Personally, I don't know why). Having conquered certain car segments, they expanded into the full-sized truck market. That new plant is also a state of the art, flexible plant and can be modified to make cars. Get a grip - Toyota can and do take risks because they're in the enviable position to do so.

And stop with the Corolla/Cobalt comparison. GM's "small" car offerings are pathetic - embarrassing even. Have any of you actually been in a Cobalt? It's a complete POS, designed specifically for the rental car market. The Cobalt gets 1 mpg better than the new Corolla? Wow that's awesome and I'm glad they've finally made fuel efficiency a priority, but c'mon: the Cobalt was stillborn. Corollas sell because of their perceived quality, their better resale, and because that nameplate has been around forever. That's how you run a business: slowly update and improve a brand/model so that it gets cachet. You don't, as GM does, create a half-assed product (Cobalt, Aveo, G3, G5, etc), become disappointed because no one wants it, then instead of improving it, let it die. Then on the next product cycle, offer something new with a completely new name, that's still half-assed and think something will change. Fortunately GM has finally learned this.

Sorry for the bash but people need to get a grip. GM has been run into the ground by self-serving, shortsighted idiots. If there isn't better decision-making (updating GM's SUVs shouldn't automatically mean that GM can't fast track small car development - why are these mutually exclusive to them?), the company will die. Period. Stop directing your ire at Toyota for having a diversified lineup and direct it towards GM management and their apologists.

[johnny smallblock]

No one is going to write an article about how Toyota screwed up as long as they're making $10b a year. If Toyo ever loses money, then the criticism will come.