Let me start off by saying that I’ve driven a GM car since I got my learner’s permit. I started off in a Pontiac 6000 (thanks, mom.) I then switched to a Saturn SL2, which I had — and loved — for 10 years. By the time it got totaled, it still had the original clutch, still got 30mpg in the city and 35mpg highway, and had over 204,000 miles on the odometer. I was then financially able to afford the car I had been lusting after since I was 17, a Pontiac Grand Prix. And no sooner had I paid off the Grand Prix, the fine folks at Pontiac rolled out the drool-inducing G8 GXP… 415-horse 8-cylinder variable valve timing engine with a 0-60 time of a mere 4.6 seconds. And… available with 6-speed manual transmission.
When I wiped the slobber from my chin, I began reading reviews (which were glowing) and figuring out how long before I could justify buying a new car. Then came the death spiral.
Since Congress is doling out money and Detroit was bleeding it, they stormed to the head of the line for bailout dollars. Many people said then that they should be allowed to fail, and FiveBoxes had an article noting that these bailouts were nothing more than redistribution of wealth by another name. Congress started feeding the public the line that The Big Three could not be allowed to go into bankruptcy, that bankruptcy would be disastrous. So the auto executives flew to the first meetings in D.C. and were excoriated for taking private planes; their next trip they had to drive from Detroit to D.C. — a 9-hour trip each way if you don’t stop for food, gas, or bathroom breaks — to prevent the child-like browbeating by hypocritical members of Congress like Nancy Pelosi, who treat the U.S. Air Force like their private airline.
Ford bowed out of the negotiations, thumbed their noses at Congress, and basically said “Screw your bailouts, screw the strings attached, you don’t know the auto industry. We”ll sink or swim on our own.” Chrysler and GM persisted at their own peril toward the socialist nightmare that is government-run industry.
So the know-nothings in D.C. told Chrysler to buddy-up with Italian carmaker Fiat, and forced GM CEO Rick Waggoner to step down. Shortly thereafter, Fiat — a company operating in Italy, which is semi-socialist and jam packed with unions — comes back and says, “We won’t partner with you unless you cut your union expenses… they’re way too high.” It doesn’t get more ironic than this.
So Chrysler is dead and just won’t admit it. We can admire their efforts over the past 10 years to stay alive, with efforts such as the merger with Daimler-Benz, but in the end, the company that Lee Iaccoca rescued from the brink of defeat in 1979 was doomed as soon as the iconic CEO retired in 1992. We’ll remember the K-cars and the minivan than you gave us, and the Jeep Grand Cherokee that ushered in the SUV era, but despite your innovations, everyone else just made better cars.
As for GM… despite the taxpayer-funded bailout, despite being told that allowing the automakers to enter bankruptcy would be disastrous, the government is now telling GM to prepare for bankruptcy.
Excuse me? I thought we couldn’t let that happen?
And just when I thought it couldn’t get any worse, it’s announced that as part of the restructuring agreement with the government, GM is killing off the Pontiac brand. And it’s this reason that I’ll never be buying another GM car, and after about 5 years, neither will you.
It’s more than personal bias that has led me to this conclusion. No, this is more than a blow of personal proportions. My outrage is more than that of a guy who’s favorite car company and dream car are being axed. How did I come to this conclusion you ask? Simple: common sense.
If you ask any successful businessman or any accountant or heck, anyone with common sense, they wouldn’t have cut the Pontiac brand. Why? Well, because it makes no business sense (or common sense) to kill a successful and profitable product line. In 2008 sales, Pontiac was the #3 seller in the GM lineup, behind Chevy (1,801,131 cars) and GMC (376,996 trucks and vans.) Pontiac’s sales figures of 267,348 were more than Saturn (188,004), Cadillac (161,159), and almost double Buick (137,197.) The Saturn brand has already been signaled for cutting from GM. Cadillac is a very high profit-margin division, so that’s safe. So between Pontiac and Buick, with profit margins the same but Pontiac selling twice as many cars, the logical decision would be to cut Buick. But politicians don’t operate on logic.
There is one tiny nugget of information that explains why Congress forced GM to make this illogical decision: Buick is the best-selling American car in China. And since China owns most of our debt, we need to keep them happy.
Such political decisions, which run counter to logic and common sense, will only ever result in total failure of the enterprise which is controlled by the government. And GM will be no exception.
In the end, GM (which now really means “Government Motors”) will cut everything to the bone in hopes of trying to achieve three simultaneous yet conflicting goals, none of which are oriented towards the U.S. carbuyer:
- Keep the labor unions happy, since unions are a powerful lobbying & voting block
- Keep the Chinese happy, since they own so much of our debt
- Keep the environmentalists happy by forcing production of “green” cars, since environmentalists are also a powerful lobbying & voting block
In trying to appease everyone but the U.S. carbuyer, GM will succeed in doing nothing but churning out overpriced “green” cars that won’t sell in the U.S. because they don’t appeal to U.S. carbuyers, and luxury Buicks that are only for sale in China. And in the end, the only buyer of GM cars in the U.S. will be… the U.S. government.
And with that revelation, the only conclusion we can come to is that GM is dead, folks. Let us remember it fondly for all the great glory days it brought us… the 1965 Pontiac Tempest GTO, the original muscle car… the Hummer H1, the testosterone-pumping über-sport-utility vehicle… the Cadillac Seville, which set the standard for luxury cars… the Chevy Corvette, and over 50 years of sexy sports cars… and the Buick Reatta, which showed the world that American auto manufacturers were just as technologically savvy as their Japanese counterparts.
As for me, I haven’t driven a Ford lately, but if they are still around in 6 years or so when I’m in the market for a new car, I can promise you I will.