What Really Caused GM's Downfall?

Clear, concise and undoubtedly correct. Sorry, but you'll never make it as an economist.

The oil price was very low to go for EV project then. Now they should go for it. Also smaller cars.

Certainly Anonymous Hero you have demonstrated over the past couple of years that I've been around, a great grasp of certain aspects of the car industry.

It was a victory for me that you even entertained some of my proffered concepts concerning an Electric Road.

However, even though you are a logical expert, that is not necessarily perfect, since people are funny.

Of personal vehicles below 12,000 pounds there probably ought not be more than 4 models for instance.

Maybe 6, but basically what makes sense is small cars, medium sized cars, trucks, and vans.

Now it is known that in the US, we have pretty much gotten all the oil we are going to get out of Texas.

Canada is still giving us some at good prices, but even they are up for melting gooey sand.

Frankly if you crunch the numbers a Prius hardly seems to make any sense at all to me, but where I live you'd think it must be the most sensible car in the world to buy, since there are an awful lot of them.

Now in fact the EV1 is now an old and obsolete vehicle.

In a way considering the basis for GMs success, it was stupid for them to have abandoned the project since much of their success had nothing to do at all with being sensible, and a lot to do with "fashions".

Further I consider GMs failures unique to that particular company, and its culture.

Then I go further when thinking of what the roads in the US are really for.

I start thinking of real trucks of over 18 thousand pounds Gross Vehicle Weight.

That's why I want an electric road really.

Sometimes things are more complicated than we would prefer, but what a successful company does is actually get the money that is on the table.

Apparently Toyota figures that getting a little here, and a little there, adds up enough to keep them in business.

P.S. Forgive me, I'm out of steam for this post, that is a letter, and to get everything really put together from past, present, and into the future, requires a book.

"The administration's next move will be to punish the market for not buying what the administration has decreed they should buy. To do this the government will increase taxes on gasoline, add import duties to foreign cars, and subsidies for domestic cars. In short, the consumer will be made to pay for not buying in on Obama's dream through a number of revenue channels"

Just look at the motor cycle market today to see where that will lead. When Harley was going under because the Japaneese iron was more affordable, more user friendly, better built etc. Dear old US slapped a huge tax on imported bikes to make Harleys competitive and now there is a complete lack of variety in the bikes available today. You either buy a Harley clone from a Japaneese manufacturer, or a real Harley, or a "sport" bike. Where are the wonderfull commuter bikes we had in the late 60s and 70s? Where is the Honda 750?

I wouldn't say that. I see everything from 1800 cc cruisers, which are far quieter and more comfortable than a Harley, to small street-legal dirt bikes and "crotch rockets". BMW still sells 750 and 850 cc bikes. In the 60s, Harley was about the biggest bike you get. The 750 Japanese bikes were considered powerful, although not as much as a "Hog". Today the 750 cc bikes are not seen because the makers have switched to 1500 and 1800 cc bikes that make Harley look anemic, and are excellent commuter bikes.

Dear Anonymous Hero,

Possibly I live in a weird place for I see an awful lot of brand new Prius, or Toyota Hybrids showing up on the roads around here.

Some of the Hybrids, like the Camry aren't all that small either.

As well, partly because this is a University town, those stupid little scooters are doing well.

-(sure they're cute, but well, just too slow for me.)

The issues of Unions and Labor, and International competition I have grappled with in other threads.

I end up back in Holland looking at how they do things now for lessons.

Best Regards.

<...people have to buy what you make...>

Codswallop.

<...you have to sell what people want...>

That's better.

<... Foreign automakers will happily build what we refuse to build....>

In a free market economy that rates as a wonderful opportunity.

<...people have to buy what you make...>

Codswallop.

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Yeah, that statement seemed strange to me as well.

I just assumed that Anonymous Hero probably meant to say:

"People have to want to buy what you make."

But I will let him clarify/correct, if he wants to.

AH what say you?

Sorry for the confusion, but I meant that to be successful, people have to buy what you make.

Sorry for the mystery.

Yeah, that's what I thought. Well said. I'd give you another good answer, but I already gave you one for that post and that would be cheating. Should I GA the clarification?

So it is Unions,oil prices, bad management and no market research responsible for the downfall of the great Auto Giants?

" Detroit management is not blameless. Middle and upper management has aggreed with union demands. "

Why does'nt anyone ever bring up the benefit package and wages of the salaried work force? Also up for consideration should be the absolutely ugly design of many of our american made cars. Most look like they came out of the same cookie cutter. It is not the union that designs cars that won't sell. Nor is it the union that hires twice the number of management employees that our foriegn competitors do.

Stomach this : GM cars suck.

"2. Union labor has created a huge financial burden on the industry. Compared to the rest of the world our workers are over paid and over compensated. This creates a very unlevel playing field compared to other auto companies operating in the US and abroad. Unless this problem gets a radical overhaul we only need to look at the US steel industry to get a good look of the future for Detroit."

What should "our workers" be paid and to what level should they be compensated?

Should we use the lowest scale as a model?

Well spoken and very true.

The market has been changing for many years and we have been sticking are heads in the sand, fighting to keep it the way it is. When, instead we should have been restructuring the system to stay competitive. Well, now the chickens of reality have come home to roost and we are calling foul. Unfortuneately, upper management and the gubermint are still pandering to the unions and thier interests.

You got to be kidding. What make you think that the ones benefiting from scams are going to change their ways?

It looks like Nissan thinks it can sell evs.

http://finance.yahoo.com/news/Nissan-to-mass-produce-apf-2708893709.html?x=0&sec=topStories&pos=6&asset=&ccode=

In a nutshell, the reasons GM failed is, the union, oil prices, poor management and in the case of the EV1, cost effectiveness. The latter has been the reason for most good ideas to end up in the waste bin. We are now at a point in time where cost effectiveness can no longer be used as an option to deep 6 an idea. Fossil fuels will become more costly. Solar and battery technology will still be costly, but we don't have much of a choice left. It means "bite the bullet" whether we like it or not. If you can afford that gas guzzler, well it's your money, but for most of us, the switch over to more costly green technology may become a fact of life.

Here is a list of best selling cars in the USA for April 2009:

Top 10 Best-Selling Cars

• Honda Accord: 29,212
• Ford F-Series: 28,757
• Chevy Silverado: 26,437
• Honda Civic: 26,252
• Toyota Camry: 25,324
• Toyota Corolla: 18,534
• Ford Fusion: 18,321
• Dodge Ram: 17,903
• Chevy Impala: 17,532
• Chevy Malibu: 14,665

So it appears that what America wants is either a fair-sized car with good gas mileage (say 25 mpg), or a pickup truck (many really NEED these to make a living).

So, GM has missed the mark on pickup trucks, letting Ford dominate that market (Chrysler 2nd). For the medium-sized car market, they have spent too much time trying to "tune" their offerings. They have dropped several reliable models (e.g Corsica) in favor of more expensive Malibu, Regal in favor of another new model that nobody is buying.

Notice that there are no SUV's or Crossovers on that list ! But GM still says something like "every one in the USA wants to buy the big cars".

They made crappy, unreliable cars.

My '89 Honda Prelude lasted 15 yrs, and with 275k miles on it I sold it, still running fine albeit a bit rusty at the wheel wells, for $400. A friend of mine still drives a '86 Toyota Tercel daily in Manhattan.

I see 20, 25, even 30 year old BMWs and Mercedes on the road all the time. Not so much with GM cars.

I wish them well with their Volt and new car battery plant though, good move GM!

I wonder if thats where GE got the name for this time frame fits?

Was used on a lot of Electric Lift Trucks.

According to the DVD "Who killed the electric car" GM never sold the EV1. They were all leased.

When oil friendly politicians got in power in California and undid the Zero Emission law, GM let all the leases come due and pulled all of them back.

Ed Beagly Jr., Mel Gibson and other "rich" folks were not allowed to buy them when the lease was up.

They were crushed and none are in scarp yards today. The crushed remains of all EV1's are on trailers, on GM property.

Why would GM go so far to keep "un-profitable" cars out of our hands? Do electric cars spoil tune ups, spark plug, oil filter and oil sales? Or is it a motor that does not wear out as fast as an internal combustion engine does.

A family may need one traveling car to go farther than 150 miles but all the rest of the family cars could easily be electric for all the farther most of us go to work, shopping, and back in a day.

Has anybody else noticed that Chrysler stated they were making an electric car this year and then whet bankrupt. Then Saturn was to have an all electric car and poof it is to be sold.

Are any fully electric cars on dealer lots yet? No, just hybrids.

I know most people are not impressed with the idea of a fully electric car but do 99.99% of us feel that way? I know I would buy a fully electric commuter, especially if electricity is like sixty cents per gallon.

Steve N., Mechanical Engineer

Crushing experimental products is pretty much standard operating procedure in the industry.

I worked at Whirlpool and engineers and select customers got a chance to test drive new concept products (typically for a year) and were required to file reports about the product as they used them for that year. At the end of the year if the customer or engineer wanted to buy it, and if the product had gone into production, you had the option to buy a new one off the line at a discount.

If the product was not a production item it had to be returned.

Afterword, these prototypes were all destroyed (I watched the process) due to liabilities.

In the EV1's case it was not only about the liability, it was about stocking parts. Have you any idea what it would cost GM to build and stock replacement parts for a fleet of only 1100 vehicles?

Everyone wants to believe in conspiracy theories, buy the long and short of it was that the electric car was not going to earn GM or anyone else a profit. Just because there were a tiny few hard core fans (less than .1% of the market) does not make it a profitable venture.

Yeah, GM might have sold 1,000 EV1s , but hell, they normally sell about a million vehicles a year. GM sells 1,000 vehicles every 1/3 of a working day.

The battery technology is just not good enough yet. If you look at the real cost of an EV, even with the gas savings, it just doesn't measure up in the eyes of a consumer.

If saving money is your biggest concern, consider a cheap electric car at $35,000. That is the Chevy Volt. I am not counting electric golf carts as cars.

I can buy a cheap Hyundai for $12,000 and have $23,000 to spend on gas. If I travel 12,000 miles a year at 30 mpg and $5 per gallon, that's $2,000 a year in fuel. I could drive the Hyundai for 11.5 years on the savings alone. That's assuming you get electricity for free for your EV.

10 years from now you need to buy a new battery pack for $10,000 (actually, probably in 5 years). With that money I could go another 5 years paying for gas for a total of 16 years service. "Hello brain!"

For the foreseeable future, the only reason to buy an electric car is because it is cool and you have a lot of money to burn.

"I know most people are not impressed with the idea of a fully electric car but do 99.99% of us feel that way?"

That's 1 in 10,000. Probably about right.

good and ogjective analysis, the way it should be

probably the same things that brought down Studebaker, Nash, Packard, Cord, Hudson et al - low sales or bad management or both.

Keeping the battery alive.

The latest issues of Car & Driver has a section on EVs. A side bar about battery life states that the Toyota Prius uses a "charge-sustaining" cycle. It never charges the batteries above 80% and never discharges much below 50%. You cell phone is more like 100% and 5(?)%.