In the 1950s, the saying went "As goes General Motors, so goes the nation." We've inevitably heard this phrase over and over again during the last month or so first with the news of Chrysler's bankruptcy and now with the fall of GM.
Last week when the deadline for GM passed, I made the comment that I would never purchase another General Motors product again. As someone who has been a Chevy guy his whole life this saddened me, but it is probably the truth. Sure, GM could magically turn itself around and become a profitable, lean, mean automotive machine but history tells us otherwise as was the case with Amtrak and the USPS. Truthfully, by the time I am ready to purchase a vehicle, it won't be new, and I'm not even sure GM will exist.
Another popular phrase oft mis-quoted is "The definition of insanity is doing the same things over and over again and expecting different results." This epitomizes what has been happening in the automotive industry for years now, and even with what appeared to be a revolving door policy when it comes to management, the top brass seemed to find a way to achieve the status quo. Why bother studying to get an A, when you can coast your way through school and get a solid C. Of course, the "me too" mentality of the workers strived for a C, but demanded to be compensated as if they were not only getting an A, but had perhaps wrote the textbook!
Even in bankruptcy, which is intended to shed baggage to help restructure, the auto companies can't do it right. Instead of starting fresh and doing business the right way, we're rewarding those who are responsible for putting us in this mess and changing the law so that they are like self-centered celebrities, cutting in front of all the "common people" to get in to the newest hot spot. Besides the inept management, there are two groups to blame here: Unions and the Government, both of whom are easy to blame, sometimes fairly, other times not.
Lets start with the unions. As is the norm with nearly every article discussing unions, it will be prefaced with "Unions were a vital part of America at one point in history. However..." Lets face it, that however portion didn't just magically appear in 2009, its been sitting there in a corner, bound and gagged under threat of cement shoes for decades. Many of the people I work with belong to a union. Most of them are under the notion that they've got these wonderful benefits that nobody else has, and that the union officials fought long and hard to get every last inch of negotiating room. After having a conversation with them, the health benefits really aren't that special, nor are having to pay union dues. As my coworker discovered, they don't particularly like it when, after asking why you don't belong to a union, the response is "Can't afford the pay cut." The hardball negotiations have earned a few perks, but have been abused to the point where they've negotiated themselves out of a job. Tell me how much sense it makes to have someone come in to perform work, only to be told that they weren't allowed to do work, because they were incapable of doing so - not being in the union, and therefore unqualified - but that they would still get paid for said work, while watching the union member perform said work, if time allowed during the course of breaks, lunch and other mandated times where work was unallowed, and that the "watching" turned in to "showing" them how to do something because they didn't have the specialized training to complete the task in a reasonable amount of time. Most unions are a cancer on an organization and do not fight for the rights of workers, but simply give perks to those select few union officials.
The government isn't far behind either, in fact there's a good chance they've done more damage to the industry than unions could if they tried. The main issue of the government, as is the case in nearly anything the government gets its hands on is too much interference. Think of that job where every three minutes your supervisor comes and looks over your shoulder or calls you to see how things are going. That's the government in a nutshell - micromanaging us all to death. What the government did that was so unforgivable, is to tell the American people - "You don't know what is good for you as much as we do" and then decided to mandate numerous restrictions to the automotive companies to help them "compete" with the foreign ones. Remember, as bad as big trucks and SUVs are, Americans prefer those vehicles to small compact cars. With the exception of last summer with gas going for over $4 per gallon, there hasn't been a trend in that direction, and the sale of hybrid cars is even more lacking, especially when you look at the resale value of the same hybrids being pushed on us. We don't want hybrids and fuel efficient cars is one argument made. Another is that the select group of individuals who wanted a hybrid to "save the planet" have already purchased one, and the people looking to save money realize that the few thousand dollar premium for hybrids far outweighs the savings in fuel over the lifetime of the vehicle, from a purely economic standpoint. The government pushed FlexFuel E85 - a massive disaster which used up our food supply and was lacking in any savings, both environmentally and economically. Now we're on some pseudo electric-hybrid type kick since hydrogen cars have been ruled out by the new Administration. What all of this means from a common sense perspective is that the companies are being forced to retool as the regulations and incentives from government change, but are reluctant to do so because as soon as change is implemented, they may be forced to do so again on the government's whim, making there no winning situation for companies.
With General Motors now owned and run by the government, why would anyone purchase a vehicle from them? The government has been able to succeed in certain things, but has never been efficient when doing so. If mediocrity is what you're after, then by all means, purchase a new General Motors car. Consider my refusal to purchase one a boycott, a protest or whatever you want. When we first offered bailout money to the automotive companies, I, along with many others, was steadfast against the bailout. Living in Detroit, not giving the auto companies free money gets you many odd stares, but every once in a while, you need to stand up for principle. Giving the auto companies was a waste of money then, and the way this bankruptcy was orchestrated is a waste of money now. It wouldn't have been worse had no money been given, because it doesn't get worse than bankruptcy. We just would have been here a bit sooner instead of delaying the inevitable and been a few billion dollars less in debt.
And a final story to end it on: General Motors was founded by William Durant. Before founding General Motors, he ran the Durant-Dort Carriage Company, which as the name implied, was a manufacturer of horse-drawn carriages. The Durant-Dort Carriage Company was a failure, but only after the onset of the automobile. Durant didn't ask for a bailout 100 years ago from the government. He saw the changing times and adjusted accordingly. History, as they say, is bound to repeat itself. In 1931, after Durant had built a mansion in northern Michigan, it mysteriously burned to the ground, which some say was the work of the newly formed United Auto Workers. Ironic, thinking that nearly eighty years later, the same United Auto Workers would be responsible for burning the entire General Motors company to the ground as well.
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