Hi and welcome to my very first blog about 'cars'. Now I know that that title says either a lot or very little. It depends on how you perceive either. I'm passionate about cars, I can't stop learning about them, researching them, reading up on them, etc. Don't get me wrong, I'm not a 'car-nut'. I don't grunt and watch TSN's every race they broadcast nor do I have a room plastered with STP and Pennzoil posters. I just like cars. Without intending to, they have become a studious passion that has been with me since I was 16, but I never paid much attention to it before. But now, it's time to make something of that passion.
So in the age where there's talk of a global recession, what the hell could be of interest in this blog in relation to cars. Good question and I can't really say that I have anything to add that you probably haven't already thought of yourself. Layoffs; inflated gas prices; hybrids; government bail-outs.
Well, woa, let's back-up one.
As a fan of the automotive industry, I find myself having a contradictory response to the American auto industry's request for a government bail-out. Let me explain that: I don't want to see 'The General' or Chrysler disappear to the annals of history. (I couldn't care less about the one that starts with 'F' and ends with 'ord', but we'll get to that another day).
But I have to ask: how can they be so arrogant to expect the government to bail them out?! Thousands of companies disappear every year and with them, someone's dreams have disappeared too. We don't see them requesting bailouts. If it were possible, don't you think there'd be thousands of such requests flooding the US congress every day?!
I can only say, they got themselves into such a mess. Let me explain: Using GM as the best example, they allowed the unions to dictate to them what and how they would take care of their employees. Now, this in itself is not totally a bad thing but as GM made more and more in profits by putting out not-exactly high-quality products at low-prices (let's face it, most people shop with their wallets before anything else), GM saw that there was no downside in giving in to the unions' demands for their line workers' health care. And at first, there was nothing wrong with it. But then, it almost became a joke. Within the industry, GM was being called a 'Healthcare Provider', not a car-builder. Now anyone in any business knows that's not how you do business. GM was dumping more money into the health care of its employees rather than in the development of higher-grade quality materials, or alternative fuel sources, etc.
Add to this ever-increasing output of their products and soon, GM was beginning to become less-and-less sustainable. I mean, look at it this way: when in one year you produce 50-thousand units of a particular model but thanks to advances in metallurgy or robotics, you can increase that output by another 20%, the following year you're putting out 120-thousand units. Again, on the surface of it, that seems fantastic. But here's the problem: ten years ago, you made a product that lasted 4 years. Then you made one that lasted 6 years. And so on. Uh-oh. Suddenly, the public wants more of these extended-life vehicles but the more of those you make, the longer you'll end up waiting for that customer to come back. But you can't go back to making a vehicle that lasts only 4 years when your competitors are making cars that last 6 year or more. Plus, you've now conditioned the public to expect these products. So now, you've created a demand for a product in which you will eventually surpass the demand. In other words, the better the cars became and the longer they lasted, the less likely were you to see that customer until their vehicle starts to go on them years later.
And look at Chrysler. A company that has made taking chances a success for them. But that success is sadly petering out. Let me make some examples: the K-car, (for those who don't know or are under 30, ask your parents what a 'Reliant' or 'Dynasty' was... and I don't mean the TV show... I know, I know, ask your folks about that one too). The PT Cruiser; the 300C with its neo-1970's styling; the resurrection of the Charger name; and more recently, the return of the Challenger. These were all risks and they worked. But others didn't: the Crossfire; the Prowler; the Avenger (worst-named car, in this author's opinion for what you get), and to a slight degree, the Pacifica. And then there were the products that Chrysler knew how to make and make well and price well: the Minivan. (Although Volkswagen is probably the true creator of the 'mini-van', Chrysler made it iconic and versatile and affordable for the masses). Despite the incredible success of the 300C and the PT Cruiser, the door is closing on Chrysler. It's already been sold and they've cut dozens of models from their lineup.
GM is selling off its foreign interests: controlling-interest in Suzuki; Opel in Europe and other interests. Their attempts at getting on the retro 'bandwagon' met with poor results: The HHR, a sad and mediocre homage to the suburban van of the 1940s; the SSR, a performance-oriented homage to sports-trucks of the 1960s but a dismal failure in its performance attributes. It had the right ingredients though: fantastic styling; a de-tuned Corvette engine; the capacity to become an open-top tourer, (hardtop convertible) and the versatility of having a cargo bed. BUT... the engine was a slug; the cargo bed's rigid tonneau cover couldn't open large enough to carry any real cargo of significant size (think: IKEA); and an $80,000 price tag for a vehicle that looked faster than it was. They even delayed releasing the retro-Camaro while they gauged Chrysler's success (or lack thereof), with the Challenger. And now, the Camaro is coming out. But is it too late? Why is the 'General' content with coming in second? With the success of the 2nd-generation CTS (a Burglarizing title-holder now) and the hopes resting on the new Corvette ZR-1. (But who's going to pay over $100, 000 for a Corvette?!!)
But let's get back to the topic that I started with: the arrogance of a company as large as GM to ask for a handout. They're not even yet operating in the red. They're panicking because the profits are going down. PROFITS. Not foreclosure or factory-closings, etc. This is no different then when the oil companies blame the taxes involved in selling you gas as the reason why it was nearly $1.55/ltr this past summer.
If GM, and the others were to look back to when they were small companies, just starting out, maybe they could learn from the accounting of the day to see where they went wrong and how they can fix it, instead of asking the government, and ultimately you, the consumer, to pay for the 'indentation' the current market is making in their profit margin!
All I can say to end this is: the arrogance!!!!
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