I read an article today ( http://www.detroitnews.com/article/20111004/OPINION03/110040330/Big-3-car-sales-defy-bad-economy ) by Daniel Howes in The Detroit News. I thought I’d share it and I’m sure it won’t be controversial, just good refreshing news.
I’ve slowly been replacing my family fleet of all (GM and Chrysler) Big-3 vehicles with only GM vehicles over the past several years and I’m extremely really happy with them all, but I wasn’t quite ready for another Chrysler because of the Fiat connection, but who knows in the future ?
Tsunamis and earthquakes causing import car and parts shortages were factors in the Big 3 surge, but it goes well beyond that. Truck and SUV sales went way up, too.
I think when word gets out about how good these Big 3 vehicles have become and more recommendations from CU (Consumer Reports) and the big push now to buy American, sales will really soar even more. The great warranty that comes with a GM car is a bonus and I hope it continues.
Some were turned off on GM cars years ago, but folks, I have to tell you that my Big 3 cars are second to none and best of all are an excellent value, unbelievable actually. This suge in buyers doesn’t really surprise me.
What do yo think ? Isn’t this great news for the good old “can do” U.S. and our economy ?
That is good news! It is for our country anyway (not that I like other places to suffer misfortune). And I prefer American vehicles, especially G.M. (Chevy); however, Ford is the only “Big-3” company that didn’t take a government bail-out, so I’d most likely check them out first if I was in the market for a new set of wheels. Glad to know that G.M. is doing well, though.
There is a Fiat connection to all of the “Big Three” and has been for many years. A division of Fiat has supplied them with most of their aluminum cylinder heads and blocks for many years. Fiat was the first to figure out how to cast aluminum cylinder heads without cracks and many of the other defects that plagued early aluminum heads.
I think this is clear indication that they never needed a bailout in the first place !
Ford figured it out that they only needed to wait out the ebb tide.
Are they paying back our money ?
CSA, your unabashed enthusiasm for GM vehicles is commendable, but I’d have been much more impressed with the article if it had put the GM numbers into context with the marketplace overall. To determine if a 20 percent increase over dimal last-year numbers is truely an indication of change, it has to be compared to figures for GM’s competitors. The writer of the article IMHO “took the easy way out” and did no real analysis on the “bite” of data that he had. He wrote the article around very, very little.
I would love to see GM return to its glory days. In the 60s it and its counterparts in the “big three” made the best working class cars io the world, and came out with timeless styles. Cadillac and Lincoln were the premier cars, and designs like Camaro, Mustang, Charger, and the like were desired worldwide. But it’s way too early to tell whether they will or not. Bob Lutz just published a book about his tome at GM, and it’s very “telling”. It tells the story of a corporation so bloated with beaurocracy, and so tied to its “design cues”, that it was stifled. I myself see more “design vanilla” coming out, more risk aversion, and continued beaurocracy. Why, I have to ask, did Toyota long ago establish itself as the leader in hybrids rather than GM? Why has Tesla developed truely usable EV technology and vehicles while GM has not? Why are Indian and Chinese companies slowly developing penetration in the small vehicle segemnt while GM has not?
I wish GM only the best. Whether they’ve truely shed their anchors is yet to be seen.
Back in the late 1950s and early 1960s, GM had almost 50% of the U.S. market. There was talk back then of breaking GM up under the anti-trust laws much like what had been done to Standard Oil years before that.
I rather wish GM had been broken up. There would have been real competition and perhaps some real engineering advances had GM been split up. When I think of the automotive advances from the independent manufacturers–the fresh air heating system by Nash, the step down design by Hudson and the “first by far with a postwar car” design by Studebaker, the competition by the result of splitting GM would have been healthy.
I remember that 'talk" about splitting GM up. Doing so might have prevented the complacency that became a GM trademark. I have to believe, however, that in the long run the marketplace is better served by allowing unfettered growth and letting the market sort out the best from the worst. Unfortunatly, artificial meddling like the GM bailout interferes with the marketplace working properly to do this.
I often hear it said that “business isn’t doing its part to stimulate the ecomonomy”. But business’ job is not to stimulate the economy. It’s job is to make money. It is the government’s job to stimulate the economy. And the best way they can do that is to enact laws that while protecting the innocent from the predators also allows and encourages business to make money and grow. It is through that process that jobs are created, income rises, and the economy prospers.
If a corporation becomes too big, too wrapped up in itself, and it no longer serves the needs of the marketplace, it’ll fall. And it should be allowed to. Until then, it should be unhindered in its growth.
I know the Standard Oil story. But the story also includes a great deal of prosperity as well as the illegal shenanigans.
As for fiat connections, there’s more to it than Keith lets on.
Ford and Fiat have some joint ventures already - the Fiat 500? Nearly identical to a Ford Ka.
And Fiat and GM? Well, Fiat may not be in business today without GM - they were on the verge of bankruptcy in 2005, but had a put option which would force GM to buy them out. GM paid them $2 billion to go away rather than buy them out, since their company was in such lousy shape. Fiat used that money to restructure and regain profitability. Without it, they might have gone under.
Possibly just an indication of a big ticket purchase cycle and the general public is finally coming around to wanting vehicles again.
Saturate the market with long lasting product and there will surely be a lag of purchasing during the life of the products already purchased.
– granted that with millions of units being sold it’s a little hard to completely saturate a cycle. but just look at the evidence of the degree it has happed with vehicles and houses.
I know that I don’t need another vehicle for at least six more years, maybe longer. ( I have an 06, 08, & 79 )
Who makes any money off of me during that time ?
A lot of “American” name companies are doing well…when they lower their overhead only and lay off a substantial part of their domestic work force, negotiate for fewer benefits and lower wages and move more production to China. You think parts and entire cars aren’t made by the Chinese and others and shipped here with GM logos ? (Toyota doesn’t too with some of it’s Scion line). Before we start waving the red, white and blue while GM does well, consider their incentive is to wave the big “green”. Nothing wrong with that, just keep things in perspective.
I’m most happy when we produce and manufacture more here with American workers to help preserve our security and way of life then I care about the logo on the plant itself . As long as GM opens more not fewer plants here, they get my kudos.
he done an interview about the book, too
A lot of “American” name companies are doing well…when they lower their overhead only and lay off a substantial part of their domestic work force, negotiate for fewer benefits and lower wages and move more production to China
China is intentionally devaluing their currency so China is cheaper. One must look at the big picture, if people are not working due to outsourcing in the long term you are reducing your market potential. If we outsource the jobs we have unemployment as a direct result. Unemployment leads to less purchasing power. The trickle down effect expected to boost the economy is only in my estimation going to increase the condo sales in Tuscany!
There’s also an article in the Baltimore Sun today focusing on compact cars. The Toyota Corolla is still #1 in sales this year, the Chevrolet Cruze is now #2, while the Honda Civic slipped to #3. Hyundai and Ford have also made substantial gains. The drop in sales for the Big 2 is partly due to the Japanese earthquake, but those cars are increasingly showing up in rental car fleets. It appears that at least 2 of the Detroit 3 have finally figured out how to compete in the compact car market.
“Are they paying back our money ?”
Yes; most is repaid. The US Government still holds 500 million shares of GM common stock. Share price was $32 in July and is around $22 now. Technically the government hasn’t lost a thing until they sell those shares, and then they would have to sell them at a loss.
Now would this bring Pontiac back? Also I really liked the newer Saturn Vue but had to pass. Didn’t want to put $15K in a 2 year old car that was already obsolete.
Fleet car sales don 't indicate personal preference as you know. They may indicate best buys for the rental fleet. Total sales minus fleet sales gives a better indiction of what the public wants.
Jt, I think it’s inaccurate to say that we might get the money back. In truth, the deficit being what it is, that money was obtained by selling bonds on which we’ll have to pay interest. Even if we get back the loan amout dollar-for-dollar we’ll still have lost the interest. I would argue that the money should have gone toward deficit reduction.
Although I don’t support such bailouts, I truely hope GM succeeds. But they need to do so on the merits of their products.
Galant, I doubt if we’ll ever see Pontiac back. They’ve always made slightly upscaled duplicates of Chevy cars, and that form of duplication isn’t good business economics.
dagosa, the articles said that the Corolla and Civic are increasingly showing up in the rental fleet. They made no such comments about Hyundai, Kia or the Cruze.
same mountainbike, it is not inaccurate. The stock has not been sold yet, and to say we might get our money back would be optimistic. To say we will not get the money back is pessimistic. But neither is inaccurate, because we can’t see the future.
In a way the money did go towards deficit reduction. The deficit is not larger because people remain employed. If GM and Chrysler had gone under, who would they have taken with them? Surely several parts suppliers. Then consider how that would have affected the other auto manufacturers in the US.
If we apply too much of our resources to deficit reduction at this time without concern for other important economic issues, we will repeat the same disaster that occurred during the 1930s. We were in a depression and it was made significantly worse when the government tried to reign in spending without regard to how it would affect the job market. That threw us into the worst part of the depression, and it only ended when we fought WWII. I’m not minimizing the need to cut government spending - that is important. But it isn’t the only thing we need to work on.