Monday, June 1, 2009

Who Killed GM?

We played a nice little parlor game around the producer workstation this afternoon bemoaning the roots of General Motors' bankruptcy. As with many things, you can point the finger of blame in several directions. But we could all agree GM grew too big and bloated and beholden, like one of its much-hated Hummers.

One argument is that GM kept churning out gas guzzlers when people wanted fuel efficiency. I disagree, and so does legendary Tucson car dealer Jim Click, who says the automakers build what people are buying. We wouldn't see all those SUV's on the road if people didn't demand them. Families need the space for their kids and stuff. People wanted to feel safe in a car that could stand up to that side-impact crash.

"What about the stationwagon?" you may ask.

Fair question. The car companies made them, and people bought them... until Chrysler rolled out the minivan. People liberated themselves from verve-killing gunboat vehicles that took up too much space in the garage and advertised to the neighborhood you were the prototypical happy family. Today's statiowagon loses the wood-panel sides and banana-shaped tail lights, but the stigma's still there.

So we can't fault GM for following the basic supply and demand principle. But we can, a colleague argues, fault them for dropping the ball on greener cars when gas prices shot up. She has a point there: GM forced its own EV-1, as documented in the film Who Killed The Electric Car?, off the road. Yet even the film concludes a perfect storm of consumer apathy, oil company lobbying, and government flip-flopping combined with GM's lame marketing to wreck the EV-1. GM still makes hybrids, but it's gonna cost ya.

So we move down the lineup to the next suspect: the unions. I remember when I lived in Fenton, Missouri, home to a gigantic minivan plant and also to a neighbor who worked for the local auto auction. He would walk around the cul-de-sac with his dog's leash in one hand and a beer in the other, picking up gossip like cigarette butts. Ask him what he thought about a UAW strike and you'd hear him grumble about how the Japanese would sing tribute songs to their company while the larded union guys would occupy mass for an insane amount of money.

Indeed, GM has paid through the grille for workers' generous health care and pensions -- $103 billion over the past 15 years -- adding thousands of dollars to the sticker price on that soon-to-be-defunct Pontiac. People went to the Mazda dealer down the street. If the union didn't like what it was getting, it went on strike. GM went into the hole, realizing it couldn't fight back. The UAW concessions now come about a decade too late.

So GM built the wrong kind of cars for too much for too long, thinking it was too big to fail or the next hit minivan was right around the corner. It threw people a leaf on fuel-effiency. It failed to inject its unions with a dose of hard reality about the cost of living versus the cost of operating. Too many options came standard, and now we're stuck with this lemon that won't get fixed with a tune-up.

I own a Kia Rio, which has served me well ever since I bought it in 2001, trading in a 1987 Chevy Celebrity. The old car had a tank of an engine but a disintegrating interior. I drove off in a new car for the price of a used -- and with a ten-year warranty. The odometer is up to 125,000 miles and counting, the upholstery is holding together, and it's paid for. I'm driving it until the wheels come off. When that happens, I'll see what GM or any automaker can sell me. Be prepared for some haggling.

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