US Motors
GM Ceo Wagoner resigns at Obama’s behest. Politico. Well, as $9.4 billion stakeholders thanks to a Bush admin bailout, with GM hopping to Obama’s tune in hopes of 16.6 billion more, I guess it’s our failing auto company now. I wouldn’t mind seeing a planeload of financial whizkids from Bangalore to light an outsourcing fire under the overpaid, under-performing whiners of Wall Street, but 40-odd years of competition from Japan didn’t do it for GM management or its unions. I hope USM CEO Obama or Geithner, whichever one is running that show, has a better idea, but Obama’s demand for a more “lean, mean and competitive” auto industry notwithstanding, I don’t see either of those guys coming up with a new Camry or getting the loyal workforce out for jumping jacks in the morning.
Riehl suggests the new boss isn’t likely to put the same kind of pressure on auto unions he just put on management. Megan McArdle suggests the rot at GM is too advanced to fix it with a new fish head. Gateway’s getting a Venezuela feel off it. Ouch. Kaus: Wagoner as Obama’s Diem. Ouch, stop that! Surber with what Obama told Wagoner: “Yugo.” Low blow! That’s like a Truth Hertz Donut.
Meanwhile, Steyn’s talk of GM’s evolution into what our Canadian cousins call a “Crown corporation” sounds suspiciously like what we used to call taxation without representation. Maybe more like acquisition without consultation … anyway, Steyn gets an Old Europe stink off it.
More background at WSJ and the AP, which notes Obama is not confident GM can do it. Hot Air notes the public isn’t confident Obama can.
Related, not so different, Powerline is mulling toxic assets.
Welcome Instapundit, Surberistas, etal. Always good to see you. Don’t be shy, come on in. We’re mulling some age-old questions. Whither Pakistan, with our money. Whither China … with our money and our technology. Oh yeah, and whither Miss Universe.
Posted by Jules Crittenden at 7:53 am on Monday, March 30, 2009
10 Responses to “US Motors”
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March 30th, 2009 at 8:32 am
[...] “I guess it’s our failing auto company now.” Plus a roundup of other [...]
March 30th, 2009 at 8:51 am
GM did come up with a new Camry - better, in fact. It is called the Malibu by Chevy, with the platform used for almost every other GM brand (i.e., Aura for Saturn). I have owned both, an ‘03 loaded Camry XLE 4-cyl. and an ‘04 Malibu LS V6 . Unquestionably, the Malibu was superior. The Malibu had much greater power (V6 vs. I4) but got much better mpg - by 3-4 mpg on the interstate, for example, and 2-3 mpg around town.
I kept the Malibu until this happened, then drove the Camry until last December, when I was finally able to swap it for a decent car, an ‘05 Volvo S60 turbo. I tried to find an later-model Malibu - but they were all more money than the Volvo, in many cases much more.
(My wife drove the Camry before I did; after my Malibu was destroyed she got a Volvo wagon and I drove the Camry.)
March 30th, 2009 at 8:55 am
I meant to include that GM’s main problem has not been the quality of its cars. I spent more money repairing the Camry (not maintaining, repairing) than the Malibu, yet the Malibu had 20K more miles on it when I lost it than when I dumped the Camry. GM’s marketing of its best models has been awful.
March 30th, 2009 at 9:25 am
Banana republic, here we come.
From the Politico article:
Industry sources had said the White House planned very tough medicine in Monday’s announcement, which turned out to be an understatement. And it went to the very top. The measures to be imposed by the government will have a dramatic effect on workers, unions, suppliers, bondholders, shareholders, retirees and the communities where plants are located, the sources said.
I’m curious about how they’re going to implement these tough measures. It seems to me that in order to do that, the government will be giving orders that would be illegal if they came from the company’s management. Do the “liberals” in this country have nothing to say about that?
Anyway, this is a great time to fire up a little Iowahawk:
http://www.youtube.com/watch?v=rAqPMJFaEdY
March 30th, 2009 at 9:46 am
I bought my first Japanese car last year, after years of Fords and Chryslers. 2007 Nissan Maxima, made in Tennessee. Nissan exec’s corp leaseback with 12g miles, it was a steal. Every second car on my block is a Camry, and the HP/luxury/$$$ ratio in the Nissan is better, and they look better, too. 265 HP 3.5L V6 is like a V8 lite, and the thing is big, so I know I’m doing my part for the environment … burning up as much gas as is economically possible.
March 30th, 2009 at 11:16 am
Blithe assertions of how great Japanese and German auto OEMs are without mentioning the coordinated industrial policy of Japan and Germany as a dominant reason for their success is a glaring omission among these hardcore, born-again free marketeers.
For 30+ years, Japan has manipulated the FX markets to keep the Yen weak, and their imports cheap. The Japanese government “coordinates” the entire auto value network, i.e., the prices that OEMs pay for everything from tier 1 components to raw materials. An efficient way to keep costs low, no? In the US, you go to jail for this, it’s called “collusion”…see Standard Oil and about 75 years of antitrust law. In Japan, it’s how business is done.
As usual, Crichton was exactly correct: The Japanese do see business as war, and the coordinated actions of their government and OEMs were quite effective.
Good luck with the conservative conventional wisdom of a prepackaged BK…I’m sure it will only be $50 billion+ or so more expensive vs. bridge loans.
March 30th, 2009 at 12:08 pm
Indeed - I have always thought that Nissan products are superior to Toyota. I drive a ‘96 Maxima GLE for several years before passing it to my eldest, who is still driving it, going strong at 160K miles. I replaced it with a ‘98 Infiniti I-30T (a rebadged Maxima) which I passed to my second son who still drives it with only 85K miles.
I’ve had one Accord and it was really good, too - I’d take a Nissan or Honda over a Toyota any day.
I will say, however, that being now a two-Volvo family that it will be pretty tough to persuade me to buy a different brand. Safety is one reason, though GM, Ford and the Japanese makes are, overall, not far behind if not in some models tied. The main reason is the amazing comfort and driving ergonomics of the Volvos and the low costs of operations. Fuel economy on my turbo is 30+ on the interstate and mid-20s in town. (See my fuelly.com ledger.)
They’re the only car on the road with actual orthopedically-designed seats and brother, you can really appreciate it after a 500-mile day.
March 30th, 2009 at 9:15 pm
If you are really interested in the situation you should be reading Robert Farago’s blog “The Truth About Cars“.
He is up to number 238 on the GM Death Watch, which began April 3, 2005, four years ago next Friday:
“General Motors was born as a conglomeration of independent car companies. In the beginning, all of GM’s acquisitions maintained their own distinct mechanical, design and marketing identity. Despite the imposition of centralized control in many strategic areas (e.g. choice of suppliers), each sub-brand remained true to its niche. Exactly when, how and why the structure fell apart, or became one big amorphous mass of poorly made product, is not as important as the fact that it has.
* * *
“The divisions might have better luck competing with non-GM brands if they weren’t so busy competing against each other. As a result, whenever one of the eleven non-identical twins tries to make a case for itself, it unintentionally demeans a fraternal partner. GMC’s claim to be “professional grade” makes Chevrolet seem amateur. …
* * *
“… Thanks to decades of bureaucratic bungling, craven UAW appeasement and intra-departmental intrigue, GM has neither the will nor the skill to kill the omnivorous cancer devouring it. There’s only one thing for it: sell off all of the brands.”
* * *
March 30th, 2009 at 10:18 pm
GM is dead. If nothing else, India’s Tata Nano (and its inevitably more luxurious descendants) are going to capture the world market. Aside from that, the relevant story here is Obama’s defacto governmental nationalization of a capitalist cornerstone, and its subsequent demise.
March 31st, 2009 at 7:57 am
Yeah, MOJ, it’s amazing how all those furrin car companies can build cars in the US better and cheaper than Detroit can. Wouldn’t have anything to do with the fact that they don’t have unions to overcome?