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Date Posted: 00:12:23 11/15/08 Sat
Author: Fred
Author Host/IP: 98.173.140.150
Subject: As long as GM builds cars, people will buy them...
In reply to: Jim 's message, "Re: What's Wrong With General Motors" on 19:49:06 11/14/08 Fri

I think the current troubles of the U.S. auto industry is one of a steeply ingrained culture that didn't allow
them to see into the future or make timely responses to changing market conditions. In 1970, the Big 3 had
the lion's share of the domestic market and they were quite
steadfast in thinking it would always remain that way. They even
took comfort in the coming safety and emissions requirements
becoming a form of protectionism for them out of the notion that foreign auto makers would simply give up the U.S. market as their market share was simply too small to adapt
their product range to U.S. requirements. So they became
very complacent and to increase the bottom line they
sacrificed quality because they figured that the public would buy their products anyway even if the quality was
abysmal. That bought about the well known quality control
crisis of the mid 70's when the U.S. industry churned
absolutely awful cars. It took them years to notice cars
like the Honda Civic and Toyota Corolla were gaining popularity as small high-quality, well-appointed cars because their vision of a small car was a cheaply made tin box like a Pinto or Vega that often rusted out before it made it off the dealer's lot. Years later, GM CEO Roger Smith came up with the idea of building a Japanese car, so enter the Saturn. A lot of
people said, nice try, but it still isn't a Japanese car, and sales have never been strong. Then there was
the paint crisis of the 80's. Around 1986, the vendors that sold paint to the industry such as PPG and
DuPont had some up with what they thought was a better, cheaper paint formulation and the auto industry took the
bait. The problem was that the new paint refused to stick
the car. Paint was falling off in big chunks on cars that were only several months old. Fixing it was tedious and
expensive as the bodywork either had to be sanded down to
bare metal or chemically stripped to rid the car of the
non-sticking original paint. The response of the industry
was downright awful, they refused to admit there was a paint problem in the first place and refused most warranty
claims made on defective paint. The Big 3 only made
good on a handful of warranty claims made due to paint and
everybody else got disgusted and either got rid of the car
or ate the cost of repainting it themselves.
It's not to say that legacy costs aren't the proverbial
ball and chain dragging down the industry, but it's gaffes like poor quality and paint and their poor
response to them that has only heightened the liability of the industry to this type of thing.

....Fred

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Replies:

  • What's Wrong With General Motors is management's fault -- M.Denil, 11:02:41 11/15/08 Sat
  • Yer killin me mark -- Prairie Dawg, 16:22:04 11/15/08 Sat
  • Vendor parts... -- Fred, 19:02:32 11/15/08 Sat
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