What Is Wrong With GM?

Great Debates
41

You’ve read too much into what I said. I’m against putting performance engines in SUV’s. A Chevy Avalanche 5.3L V8 makes 310 hp and 340 lbs of torque. Compare that to a Cummings Turbo Diesel that produces 350 hp and 650 lbs of torque. One is designed as a sport engine and the other is designed to tow.

What is needed is a smaller diesel to replace the gasoline engine and still produces the hp and torque needed for a larger vehicle. Look at the VW 4 cyl 2.0L turbo diesel. it produces 140 hp and 236 lbs of torque. bump that up to a 2.5L and now you have something that will produce more torque than a V8 with significantly better fuel economy. I don’t know if you’ve ever driven a turbocharged engine but the power band is much wider than a naturally aspirated engine.

42

Hokay. Perhaps that was a knee jerk reaction on my part. There are a lot of people that seem to think the big bad evil SUVs are overpowered. I agree with you about the diesel.

Maybe it’s the ‘built on a Monday thing’.

I can’t imagine how that is true, but take my Wife’s Jeep for instance. It seems that many people just love love love their Jeep. My Wife’s has had serious maintenance problems. Stuff that was documented to be a problem for years (hence the class action lawsuit) and stuff that should not be a problem at all.

I looked into the lemon law for it. I talked to Chrysler/Jeep and the dealership. I got nowhere

Before I get too off track again, I wonder if American badged cars don’t have as much quality control in the plant? Is the ‘made on a Monday’ theory true? It only takes one bad experience to sour a customer. We’ll never buy another Jeep.

I know we are talking GM here, perhaps the same thing has happening to them.

43

How different would things be if GM had lobbied in favor of Clinton’s universal healthcare plan back in the early 90s? Wouldn’t shifting those healthcare costs over to the government saved them a ton of money?

44

First off, you need a workforce that understands that they ARE replaceable. If only 10% of the workforce is made up of habitual slackers that are protected by union rules, the entire assembly suffers. Here’s how GM could fix itself:

  • Abandon unions, and pay reasonable wages for reasonable jobs. Paying someone $50/hr just because he’s been there 20 years is unacceptable - pay should be job-based. Pay a high school dropout $8.50/hr to put lug nuts on the wheels in final assembly. And get him to understand that there is PRIDE to be had in a job well-done, but that he’s replaceable if he’s a total fuck-wit about it. Offer incentive-based promotions, where possible, so even those who ARE high-school drop-outs have the ability to move vertically, if they prove responsible.
  • Abandon ALL healthcare “benefits” and go to a standard healthcare package like any other major company - one where the employee shares the burden of the expense as part of their paycheck deductions.
  • The only pension should be a 401(k) plan.
  • Automate every part of the assembly possible, with final fit and finish the responsibility of highly-motivated, well-trained individuals who have some form of vested interest in the car they produce. Perhaps even a DIS-incentive program if a car THEY produced, as tracked by serial number, comes back to the dealer with fit-and-finish issues. (Note that this may eliminate the high-school-lug-nut position mentioned earlier.)
  • Go to a 7-day work week for production, with differing schedules of Mon-Fri for one crew, and Wed-Sun for another crew. This helps reduce “built on Monday” issues.
45

I know I’m only one datapoint, but repeated thousands upon thousands of times, I become significant.

http://www.pistonslap.com/ A website devoted to the problems of GM truck owners earlier this decade. I lucked out due to buying a truck with the 7.4L engine (rather than the 6.0 or 8.1L). But I watched friends fight GM over this problem. It wasn’t pretty. I don’t care how reliable they claim their vehicles are now, I have seen what they do when they need to back their product.

My last two car purchases have been Toyotas. When I replace my truck (in a few years) it will be a Toyota.
GM can go to hell. The faster, the better.

46

The auto industry in America has established a chain of incompetence. When you go in to buy a car you have to be armed to the teeth with info to fight salesmen who lie and cheat. The games they play with customers has been a blemish on the industry for years.
Then after you buy one the dealership begins a process of ignoring the owner. Much has been written about the dealers letting a car sit on the lot for 3 days then calling the owner and saying it is fixed. Multiple trips and constant fighting with the dealerships has been the pattern. Then of course they have short hours . Getting a car done at a dealer is a huge inconvenience and very expensive.
Then of course they cover up design flaws . SUVs with terrible center of gravity problems are pushed as the safest vehicles on the road. Gas tanks that explode and tires that can not handle the forces are more examples. None of this has to be.

47

I think part of the problem is that they are based in Detroit. The midwest’s idea of what cars should be is so different from California - America’s center for the car culture. You end up with cars designed with no concern for parallel parking or gas mileage. The engineers see American cars on the road in Detroit, while on the west coast you see imports everywhere. Plus, who coming out of college is going to work for GM in Detroit vs Intel, Apple, or Google in Silicon Valley or an aerospace firm in southern California.

48

There is no argument that certain cars and engines are worse than others. My Honda Accord had oil ring sealing problems. I assumed it was valve stem seals and while I was removing the cam I managed to break it. When I went to the foreign parts store the guy looked at me and smiled. “So why were you taking the cam out”, “I was going to change the valve stem seals”, “yah kjnow, that engine had oil ring problems”.

Sigh. It did. But hey, it was fun learning how not to remove a camshaft. I replaced all kinds of crap on that car such as plastic radiators, and master cylinders. It seemed to eat more water pumps than usual. I did like how they engineered some of the suspension parts. They were easy to disassemble.

Not to ramble but Honda is not perfect by any standard.

49

Not much is based in Detroit. The design and build went to India and then China. The factories are moving everyday. They will all be gone soon. Every day in the Michigan papers we read of another factory closing, another supplier moving to China.
I play racketball with a guy who acts as liaison between an American and Chinese company. They had intended to completely walk from American designers and engineers. But, experience is important. There are problems we are able to solve because we have already encountered it before. They rely on us to help them through the rudiimentary stages. Eventually we will be out.

50

Is the US producing the kinds of mechanical and manufacturing engineers that are needed in the auto industry, or are kids all going into computer and bio-engineering fields? I worry that we will lose our manufacturing base permanently some day

51

It is just a matter of time. There are a lot of mechanical and electrical graduates with much reduced job opportunities. The jobs are gone because they work for 10 to 20 percent of our wages in India and China . They are willing to accept a slight degrading of engineering to save the money. They will eventually catch up.
What bothers me is they did not invent a better product. they did not compete and win. Our corporations willingly moved everything possible to make more money. Corporations have the gall to say buy American but they could care less.
You can get an operation much cheaper in foreign lands. Your xrays are being read in India. Your teeth are being made in India and China. There is nothing sacred. If it can be made cheaper abroad it will be. The move has only begun.
We were forced to train and show foreign workers how to do our jobs. But they did not get our experience. It is the high priced jobs that are going. It is the college jobs and special tech jobs going. The middle class is going away rapidly.

52

I can’t wait til they outsource upper management. It’s be hysterical to see the look on the CEOs face when the board tells him “We can hire 1,000 MBAs in India for what we pay you.”

53

I have no statistics, but the former General Motors Institute (now named “Kettering University”) still exists & still produces those mechanical & manufacturing engineers, albeit no longer strictly affiliated with automotive manufacturing.

54

Actually, the U.S. is still the world’s largest manufacturing economy. It’s output is also inceasing, while it’s share of the workfiorce in decreasing. In fact, I recall that total manufacturing jobs in the 3rd World are increasing in absolute terms but also decreasing relative to the population.

55

Not for long.

56

True, but the Chinese are desperately rushing to get it, whereas we’re hardly even interested in it unless we can automate it. And they will find it sucks.

57

Cheaply made switches and brake rotors (cast so thin that they warp). It is the guys in the purchasing department who are to blame-for chiseling parts suppliers to the point where they cheapen the parts. THat (I think) is the root of the problem: cheap parts =crappy cars. Chrysler learned this in the 1970’s-they kept using the same stamping dies (for the body panels), long after the dies were worn out. this meant that the body stampings gradually drifted out of tolerance-and the poor guys on the line had to fit them as best they could.
The parts guys never understood that saving $0.14 on a part made little sense, if the recall 9to fix the bad part) cost $500!

58

Slight tangent but interesting: I read an article about their auto-plants (and mfg in general) and how robots are just too expensive, they can throw labor at it far more cheaply so that’s what they are doing.

59

The Chinese are starting with nice brand new fancy up to date plants. That is a huge advantage. They have the money to put in the best and newest machinery. It will appear that they have figured out how to get accuracy and quality. But it is all the new stuff that gives that impression. We would have trouble competing if thats what we are doing.
But we are not competing. They did not provide a better product . We moved our factories there for cheap labor. The big 3 will be hugely there in the near future. But who will buy the cars if the manufacturing is in China. Their wages are providing a relative new class. It is not comparable to the middle class in the US. Will they be able to afford to buy the cars. ?
Then have we forgotten that China is a Communist country. One of the reasons we did not fear them was that they were mostly agrarian and did not have the ability to match us in arms . But we gave it to them. I hope that they use it properly. If not it could be ugly down the line,.

60

I’m going to resurrect this zombie as it is still topical, given that this week GM made the news twice:

Cash reserves down to $16 billion. Compare this with Huerta’s letter saying GM had $21 billion in cash. Bankruptcy is possible by end of year. I don’t envy Richard Wagoner his job.

Deutsche Bank says that GM shares were given a price target of $0.00 per.

I pretty much agree with everybody in this thread, especially those comments that referenced “accountants becoming President” because if you want to point to the one man who made the downfall of GM inevitable, you need look no further than Roger Smith, of Roger and Me fame. This guy was so bad at his job that he warrants nomination in the category of Worst Corporate Executive of All Time. Where do we begin?

… When he began his reign in 1981, GM had 46% of the US market. At the end (1990) it had dropped to 35%… this after creating a separate car company (Saturn) at a cost of $20 billion.

… He became obsessed with the concept of automation and robotics and spent no less than $25 billion on them, with financially disasterous results. One automated “plant of the future”, at Hamtramck, cost a minimum of $500 million to retool, with robots being front and center to the “answer” to Japanese competition - one of Roger Smith’s favorite sayings was “we’ve gotta automate away from these assholes” (workers). It didn’t work: the robots were very unreliable, even to the point of breaking windshields, and a car that came out of the Hamtramck factory had anywhere from $500 - $1,500 in extra costs sunk into it.

… In 1984 he paid $2.5 billion for Electronic Data Systems (EDS) and saddled GM with a crantankerous H. Ross Perot, who Smith then paid an additional $700+ million of GM’s money to get rid of him. GM spun off EDS 11 years later to a profit of $18 billion… not that it helped them in the long run.

… He was obsessed with the Org chart, believing that GM’s organizational structure was part of the problem. It was, but his solution (based on car size) was worse, one that effectively shut down the company for over a year.

… With all this money, over $45 billion, GM could have bought both Toyota and Nissan.

Roger Smith was a horrible executive, who could be counted on to make the wrong decision at the wrong time. GM didn’t have to fail in the 2000s if Roger Smith could’ve been forward-thinking enough to truly address the retirement benefit issue.

Perhaps the $20 billion spent on Saturn could’ve gone to strengthening the balance sheet. Who knows what would’ve happened then, had GM sunk $20 billion into shoring up its retirement fund by buying into the start of the biggest equity boom of our lifetimes?