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So, GM wasn't making what the public wanted?

I have a shocker for all of you that say this... from President Obama all of the way down to A|R members... and right through the media.

GM is the second largest maker of vehicles in the world.

Sure, they are behind Toyota. In 2007, the last year I could find numbers for, Toyota built 9,497,754 vehicles. That includes the production of Daihatsu and Hino, which Toyota owns. In contrast, GM built 9,349,818 vehicles.

So, what about Honda... Mazda... Nissan? If you add them up, they sold 8,629,942 vehicles.

The heck you say! Honda builds what people want!

They build what SOME people want. So does Hummer. In fact, just a few years ago, Honda was having a terrible problem... they needed SUVs and trucks. The market had moved and caught them unable to compete... So, they had to go to Isuzu to help them out. They sourced the Honda Passport and Acura MDX from them. It's ok, there are rumors that the Japanese government gave them some allowance to tide them over...

But that's not all... Toyota is smacking GM down pretty well if you just count cars, but when you add in light commercial (LCV, that would be pick-ups and SUVs) GM pulls back into the lead... a very narrow lead. What pushes Toyota back ofer the top is Heavy Commercial Vehicles (HCV) and Heavy Busses... many of which are Hino sourced. And even if you only look at cars, GM outsold Honda 3-2. Not even including LCV. And that is what Honda just can't manage... even when they try. They sold 43,268 LCVs, while GM sold 3,055,575... not even a contest.

There certainly have been some problems at GM...

Without a doubt. But, building vehicles that people wanted to buy hasn't been nearly the issue that some have tried to make it. Just the other day, the President talked about them failing because they haven't built cars that people wanted for years... Obviously that isn't even close to accurate.

So, what IS the problem? Obviously it is profitability. And there are a lot of things that go into that mix. The fact the the hourly cost for workers for GM is almost double that of Toyota or Honda certainly plays a part. The reason they were so dependent on SUV sales was because of the very high margins on them... in effect, Escalades and Suburbans were paying for the UAW. As soon as those sales were impacted, GM started to take on water.

Final thoughts...

I ran across an interesting study in a print magazine a few months ago. It was about the Pontiac Vibe compared to the Toyota Matrix. It was revealing and also raised a few other questions. There were a couple of things that stuck out to me...

The owners of the Toyota experienced the same number of recalls, but seldom remembered that there had been recalls.
The owners of the Pontiacs generally thought there had been more recalls than there actually were.
The owners of the Toyotas brought their vehicles to the dealer more for routine service.
The Pontiac owners didn't seem to be as regular with their maintenance.
When priced the same on a dealer lot, the toyota was seen as a better bargain, better built and more solid car.

Here is the rub... both of those cars were built on the same line using the same parts. Both had the same number of recalls for the same issues.

And the same thing happened with the 1985-1988 Chevy Nova and Toyota Corolla.

And let's not forget that the Japanese government has also given bailout money to Toyota, Honda, Mazda and Nissan. In fact, one of the few companies NOT on the dole is Ford. And don't forget that in the first quarter of this year, Toyota lost about a billion dollars MORE than GM lost. And that would be from operations. Toyota is scrambling to restructure. But they don't have to keep plants open to satisfy a union. They don't have to pay people to not work. And their hourly costs are only about 60% of those of GM.

Perception doesn't always equal reality...

One other thing. I owned a Saturn, but have never been a big fan of GM cars. The Saturn was left to me. I am a Jeep fan and a Ford fan... And I have owned cars built in several countries... I don't buy or eliminate a car based on the country of manufacture.

I'd love to hear from you...

Posted by Lane Bailey - REALTOR & Car Guy on 06/01/2009 11:19 PM

Comments (44)

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44 Comments on So, GM wasn't making what the public wanted?

JUN

Lane,

Very interesting. You, obviously, know that stuff, and I enjoy reading it as you give the perspective that is different from all those 'kitchen" discussions.

Isn't it that GM is suffering from being close to Obama's vision for the rest of us? GM in a sense became like a big government with social (union) component that is choking them and bringing them down. They were successfully brought out of competition

Lane- I'm a Toyota girl. I drive a 06 Hybrid Highlander. Built in Japan. One recall... for a floor mat clip. I have previously owned a Toyota Sienna... loved it no problems. Tacoma- loved it no problems, Toyota Corolla, Ford Windstar- biggest crap car on planet. And the service was bad too. And before that I had a Honda Civic- I killed it, but I put 390,000 miles on it before it died. Served me well.

Lane

My wife and I currently drive Fords as work and every day drivers. But hidden behind doors in the recesses of my barn are my 66 GTO and 68 SS Chevelle. Two great GM cars.

Does all this mean they are going the way of the Studebaker?

I had no idea that GM ranked so well as far as the number of cars it sold.

JUN

Wow- great information-- why do I NOT learn this from our NIGHTLY NEWS? It is a matter of perspective and WHO is deciding what our perspective?

VERY interesting!! That challenges several of the things I "knew" - but apparently "knew" wrong. Yet it also confirms one real problem - the unsustainable burden the UAW puts on the industry. (I don't believe it's the UAW workers so much as the UAW "bosses" who are mucking things up... kind of like what's now going on in DC - it's not so much Democrats as the Democrat plutocracy that's now directing the Executive and Legislative branches of our government.)

What people want continues to change. Had GM been making only small electric cars a few years back, Toyota and its Tundra would have reaped the benefit.

Lane, i wish you could read all the local newsfeeds up here. Wow, and the blogs.

Overall people are NOT happy with the new Gov't Motors.

Another example of perception being reality to the general public.

Lane - I drive a Ford Ranger, my wife drives a Hyundai (ok, when I show homes I drive the Hyundai). Don't forget, the government would not let (and still doesn't let) GM, Ford, et al import their foreign models that are extremely popular as well as extremely economical. Protectionism at it's finest.

I think they did need to make a better car at a better price that people liked to look at and they would still be in business. Hmmm supply and demand, what country did I hear that about from?

I don't know about supply and demand in the car business- we drive Chevy's and have liked them for a long time. I personally drive a Tahoe and thik its the best car I've ever had.

People have had the perception that the foreign made cars were constructed so much better than American made, but when they realize that their Toyotas and Honda's are for the mist part made here in the states with at least 60% American made parts, the only difference is the cost of manufacturing. Toyota and Honda do not have to support 3 people for each 1 working on the line. It's not hard to see where the problem might be.

Lane I have always had GM cars but I think one problem is they keep changing models. Toyota has stuck with Corollas since 1968 and people will pay 3000 for a corolla with 175,000 miles because they have a history of lasting well past 200,000 same for the camry, Honda has the accord. GM doesn't stay with a car long enough to have history and quite honestly I have never had a GM car brak 200,000 my best chance is my current 1999 Geo Prism with 154,000 but that is really a Corolla except I didn,t have to drive a car that said Toyota.

Perception is reality we expect to have more problems with American made and thats what we hear they have had recalls. I hope they get the infasructure squared away so they can be competitive with the other car companies.

I've owned: 1977 Pontiac Sunbird (Good car), 1987 Chevy Camaro Iroc Z-28 (junk), 1988 Ford Tempo GLS (great car), 1990 Chevy Corsica (good car, great v-6), 1991 Chevy Lumina (ok car, great v-6), 1980 Mercury Zephyr (good car), 1987 Toyota Celica (good car, high repairs), 1990 Mercury Cougar (great car), 2002 Ford Explorer/new (excellent SUV), 2-Isuzu Rodeos, 2000 & 2003 (both excellent), 2003 Nissan Pathfinder (excellent), 1996 Toyota Camry (exc. car, 246K miles), 1989 Toyota P/U (exc. truck), 1998 Chevy WT P/U (good truck, lots of repairs), 1998 F-150 (exc. truck), and current vehicles are 2008 Honda Civic/New (outstanding car), 2004 F-150 (best truck I've ever owned) & 2001 Mercury Grand Marquis (I love this car).

We buy imports more for whats under the hood rather than how our ego thinks it looks and how fast it should go and thus we service our imports like clockwork and in return receive excellent resale. GM has built nothing but junk for the past 10-15 years or so and have horrible resale. My Ford trucks have been the best trucks I have ever owned save for the little Toyota and that was a putting around town truck but was fun to drive and had gobs of miles. Right now Toyota Tundras are just about the best truck on the planet and rival my F-150 so I would own either I think.

What kills me about domestic dealers is the fact a car or truck that stickers at 34K will sell for $26K and be worth 14K the next year. My new Civic cost $17,399 and right now is still worth $16K easy and it is 1 year old. Ford is going to enjoy being the best US auto maker for at leas the next several years and people are drawn to them as the last true 100% American car company that has not taken a government handout. Chrysler needs to just go away or do a 180 and change everything. GM will come out of BK better than ever but will people buy cars from them? probably but only time will tell how long it takes them to get back to where they were and that really may never happen.

Toyota & Honda are doing very well because they build a solid vehicle that is great on gas, priced reasonably with good service and excellent resale. To be honest, Ford & GM need to step up and offer warranties comparable to KIA & Hyundai but they need to build them to last as well. Ford will dominate 2010 when it comes out with the European models here in the US and I will be looking forward to strong growth in my shares of Ford I purchased when it was down around a buck. I hope you all did the same.

Call me, the Oklahoma Car Guy!

Thanks for your input but it didn't sell me again. I bought & drove my last GM car back in 1990, paid $25,000 for it & prayed all the way to the Honda dealer ( it was only 3 yrs. old and had engine & electrical issues), that it would keep running till I got there. I traded it in for an Accord and I have never looked back. I have owned several Hondas & several Lexus'. The american auto makers got lazy, took it all for granted, put out a mediocre product and now it caught up to them.

Lane,

And what's the first thing GM looks to cut - its minivans, pickups, suv's. People aren't buying its cars because they just plain are overpriced for current market conditions and you're upsidedown in a new car for most of the term. :)

Steve

Lane,

Thank you for sharing. There is much Americans do not understand about this country's most important industry. In the past 25 years, states such as Tennessee, South Carolina, Alabama and others have given huge tax breaks to lure Asian production to the US. The Asian automakers have taken advantage of these large tax advantages and have benefited by hiring young non-union labor and from having no retirement burden in order to reap exhorbitant profits and invest more into their American plants and product. Meanwhile, the domestics fought for survival in rust belt states who continually raised their taxes, unions who continually demanded more, and a rapidly escalating retirement burden as market share declines forced downsizing.

Some will have you believe the downfall of the domestic auto industry was poor American management. Some will blame management for caving into the UAW's demands. Many do not realize the UAW is protected by legislation which prevent the domestics from replacing them. The UAW is the only union in the US where striking employees cannot be replaced. The reality is the downfall of the domestic auto industry was poor government policy which tilted the playing field to transplants.

The economic repurcussions will be felt for decades. We've handed the best paying technical jobs (historically) to the transplants. Each US-based automotive engineering job supported 3 other high paying technical jobs. Many of these jobs have now migrated to Asia and have taken other technical jobs with them.

I've owned all types of cars, but if you had to ask me I would say I am a Ford man. My wife told me we were boycotting Ford for a few years there. It is a good thing I did not need to buy a Car. Right now Ford is the only American Car Marker I will buy from. No Government Motors for me.

My two favorite cars: 67 Ford Mustand Notch Back with a 289. My first wife made me sell it. I should have known and gotten rid of her instead. The car had fewer miles on it.

Right now I drive a 2002 Ford 150 with a Crew Cab. I am thinking of getting a small around car town, not to save gas, but to keep the miles low on the Ford. I'd like to have it around for another 10 years or so.

My wife has the Toyota Seina, which is very good van. One of the few that still seats 8. With 5 kids that all the set room we can get is important. I know we could get the whole family in a 7 passenger van, but she wants another.

American cars were great until the 70s and 80s. That is when they made junk like the VEGA, MAVERICK, PINTO, DAYTONA SPECIAL and screwed up everything they gained in previous years. That is when Japan started into the US market....and their cars were cheap....but they were no super car saviour. They rusted out so fast that many were rusting on the way over here on the boat from Japan.

I guess when you allow the accountants to decide what and how a car is built instead of a good engineer , that is what you get....planned obsolescense at it's finest.

In the past few years, American cars are every bit as good as anything from Asia....just have a long road back from the sour taste in our mouths from the above listed junkers.

GM and Ford along with Chrysler made a lot of SUVs and trucks because that is what people wanted.....and here in the NORTH...SNOW BELT.... you need one for 5 months out of the year. Why do you think it is called the "rust belt"? Snow up to your door handles sometimes and a good dose of salt so you can at least find some pavement at times....

Auto workers have taken huge wage cuts over the last 5 years...American Axle took about a 50% paycut to keep going and not close their doors....and the Exec who bartered it got a wonderful $8 Million dollar bonus for structuring the wage cut. They took it to keep jobs here in the US which were going to go to Mexico unless they took a cut. Also a huge cut in Medical benefits....They kept giving, and management kept taking....and drawing the big bonus'. THEY STILL MOVED A LOT OF JOBS EVEN AFTER THE CONSESSIONS...

Now I don't know if I should try to "BUY AMERICAN " or not. Do I buy a Ford made in Mexico or a BMW made in the USA? If I buy the BMW, the AMERICAN line workers get paid and a small check goes to Germany. But then, if I buy a Ford, the Mexican auto workers get paid ( the US auto workers don't) and a check goes to an Exec in Detroit. I vote for the way the Auto workers here make the money....

As for Chrysler, If you have ever gone to an auto auction where classic cars are being sold...you don't see any Japanese cars being sold for big dollars, but try to get a Cuda or Challanger, or Charger with less than $100,000 for the bid price. Auburn, Indiana auto auction over Laborday weekend...WOW I can't see me ever drooling over a CLASSIC CAMREY.

Larry Mennetti....Michigan rust belter and Realtor with Five Star Real Estate in Grand Rapids

I really think the unions killed this company. The product and management didn't help, but it was the union.

JUN

Jon - Interesting observation. And probably too close to true.

Tammy - You missed the point... GM obviously wasn't having a problem selling cars and trucks...

Trey - When you get bored with those old cars, you can call me... I'll come get them out of your way.

Christine - And shockingly, the politicians don't seem to mention it...

MT - That is why I wrote it... now you can cuss at the TV, too.

David - The UAW has a lot of help from the government... but I wonder how many of the employees would like to know that they have the choice of running the company out of business or taking some cuts...

Richard - Getting the mix right can be tough in a changing market...

Missy - I'm not happy about Gov't Motors myself...

Mike - It is safety standards that don't allow the A cars... Some make the Smart look big..

George - Did you read the post?

Lisa - There are a lot of good vehicles...

Ed - There are some serious cost issues for the American companies...

Hugh - The Cressida is gone... And the Supra. And now there are Scions.

Terry - I hope they can as well.

Russell - No need for the all bold... And I'd put American engines up against powerplants from around the world... on a HP/mileage basis. There have been some dogs, though... Everybody has them. I was behind a Lexus today that made me choke with all of the blue smoke.

Celeste - And that has to do with the number of cars manufactured how?

Steve - It sucks that the highest profit vehicles are the ones that are getting cut...

Anon - Thank you for your comment... I would guess you are a keen observer of the industry.

Gene - I like so many different cars it isn't funny. I have had a lot of Fords, though.

Larry - The Japanese cars of the early 70s sucked at least as much as the American cars... But, on to the UAW... they took cuts, but it was too little and too late. The labor cost for the big three was around $125/hr. That compares to the transplants at around $75/hr for US plants... And the actual hourly wages are similar. It was crap like the paid furlough programs that pushed that up, as well as legacy costs. It makes it very difficult to compete when you are paying almost twice as much for labor.

Mike - I don't think product makes the top three... Government on the other hand...

I bought a brand new Honda civic hatchback in 1995 for $11300 . 9 years & 340,000 KM later sold it for $3300. Bought a 04 Chev Impala in 2005 with 19000KM for $16500. Have spent over $2000 in repairs (not regular maintenance ) already. Its got about 126,000 KM on it right now. Market value is about $3300.

Did I mention I had no problem with my civic. And I was young and a bit rough driver when I owned the civic..

Lane, thanks for the educational post. I hope that GM and all our companies rebound and will once again be profitable and employ lots of workers.

Another blame the unions post. Why am I not surprised? You wouldn't want to blame making gas guzzlers all the while Asia was making hybrids? Irresponsible capitalism lead to this mess. When the auto companies decided they were going to make the cars that made huge profits for them and the petroleum giants and decided against what was best for the long term viability of the company (i.e hybrids), that's when they doomed themselves- and the rest of us.

I think Unions represent only part of the problem. The other issue is American's are hell bent on throwing thier money away on US cars & trucks. Buy a quality used vehicle and maintain it like you're going to drive it for the rest of your life. Every single car I have owned has been well maintained and I never had to trade a car or truck in as it was always sold by me to typically the first person that looked at it. Used car buyers are smart enough to know when something has been well maintained, kind of like a home.

And what I don't understand is that most people will bitch about paying us a 6 or 7% fee yet they will lose more than that on a new car/truck purchase in the first year of ownership. These are investments and what they are worth when you go to sell is 100% up to the owner.

I'm so glad Oklahoma does not rely on GM like we did years ago and when the plant shut down, we survived and did quite well. I had hoped Toyota or Honda would take over the GM plant but that didn't happen.

Very interesting post, you've obviously done some extensive research. And while the debate over whether or not Unions are to blame will undoutedly last for years, truly there were many, many reasons for the problems at GM...some of which we will probably never know about. Just like the rest of the current financial crisis...there's plenty of blame to go around.

As for the "SUV bashing" that has become so popular recently. I live in a very rural area without many paved roads...I also breed horses and goats and have a large family. I drive a large GM-made SUV, with a towing package. Recently I was getting gas in a city about two hours from where I live. A very rude young person in a very small hybrid vehicle took it upon himself to "demand" I get rid of my gas guzzler and "get real." I asked him a simple question. "What is the towing capacity of your vehicle?" He did not know what to say.

I've driven some of the hybrid SUV's and they just do not have either the power or towing capacity to be of much use to me...the research I did showed that these vehicles would actually get WORSE gas mileage under the towing and road conditions I would be driving on than my gas engine SUV. My point? There will always be a market for large vehicles with high towing capacities...no matter who is making them.

This is more looting of America by the Hope and Change crowd sponsored by Goldman Sachs. Attention Michigan: You voted for Hope and Change. I hope you have some change left in your pocket after Geithner and the O man are done with you.

GM has never built what the American people wanted. In fact they probably have no data on file to support such a claim. Such as survey information or letters from consumers stating they wanted a big gas guzzeling SUV. They have made what they thought was profitable, not what was econonically and environmentally friendly. Now they are being burned for not asking what the consumer wants/ed.

Don't get me wrong, I'm not a "Green Weenie", my wife has a 1997 Geo Tracker that get 30 miles per gallon and I have had an 86, 94, and 2002 Tauras' since 1989. I now have a Chrysler Sebring. In my younger days I had an MGB/GT, Volkswagen Beatle (see my age), Volkswagon 411 (BEST CAR EVER), Datsun 510.

My point is, I buy vehicles as a tool for getting me from point A to point B, not as a status symbol or statement of who I am or want to be!!! I look for efficiency (MPG), effectiveness (quality), and economy (price). If GM will make me a car that gets 40 plus MPG, that requires servicing no more than twice yearly, at a price under $21,000 then Deal Me In!!! I could give a rats a.. if is is gas, hydrogen, propane, or electric.

THOMAS JOHNSON,

Just to inform you of a few facts that you obviously haven't a clue about:

We were under a Republican Governor, here in Michigan, for 12 years prior to our present governor. And since 1963 it has been Republican controlled. When Granholm took over 6 years ago we were already broke due to Republican mismanagement. This is why the state kicked the Republicans to the curb.

I guess you are a Republican, based upon your O man comments. I guess you must have missed the 8 years of Bush and Republican control of the House and Senate since 1994 except for the last 2 years. Guess you didn't notice all of these problems were generated under Republican "free for all" trade. It didn't start in the last two years....but it will be changing since we kicked the irresponsible Republicans to the curb across the country. Why do you think only 26 percent of the population call themselves Republican now?

Get your news from someone besides Rush....the high school educated opinion spewing talking head. He has less education and expertise than nearly everyone else you could be listening to....he is just the most mean spirited one on the air....which is why voters are leaving the GOP in droves.

I am an independant ....voted mostly Republican all my life....They finally drove me away too....

Looking at the financial statements of a company this large is extremely difficult. But a glance at their balance sheet and cash flow will tell you a lot. Pensions and Post 65 Benefits (healthcare to legacy employees) are a huge chunk of GM's liabilities... Revenue has dropped 20% 2008 over 2007, but pension and benefits are fixed costs and have no tie to revenues. That being said...

If you break down their market share by type of vehicle it shows the following:

Cars (small, mid sized, sport and luxury) 18% of the market.

Trucks 25% of the market. That is great. And if you isolate the pickup truck, GM has 37% of the market. That is OUTSTANDING.

Now lets look as to where Obama wants to take GM. Small cars, well unfortunately my friends GM small car market share is a paltry 12.6%

If you were running GM what market segment would you use and leverage to get the company back on track? This is where there is a complete disconnect between rational business decisions and political agendas. This is why nationalization of any industry or business will not yield savings or benefits or economies of scale, but will yield poor decisions, inefficiencies and losses.

Very interesting stats. I had no idea that GM ranked so high in sales. I have owned 6 cars in my life a Mazada B2000 that I paid $2500 for- it was great until it got caught in a bad hit and run in the parking lot (I was not in it); a buick that my dad got and gave me (he paid $250 for it and trust me that was not a great deal- it was not capable of going over 35 mph)- it was an in-between car; a Ford Taurus- that I hated with a passion, a toyota Rav-4- was ok but burned through breaks, a toyota corolla (biggest lemon car ever), and now a Pontiac Vibe- it is exactly the same as the Toyota Matrix and it runs like a dream- all in all the best car I have ever had- I have had it for 5 years and have had zero problems

I'm a big GM fan...It will be interesting to see what "Government Motors" does now :)

Anon - And that had to do with the QUANTITY of cars made and sold how?

Gabe - I hope so too... but I fear not.

Another Anon - Well... since the UAW is the primary difference in labor costs, and labor costs are one of the biggest problems... If the shoe fits. And I would urge you to research a little more. You might start with the post I wrote that you obviously didn't read!

Russell - Since JD Power has put several US brands ABOVE Japanese brands, I think you might want to rethink that... However, you are correct that taking care of a car is the way to make it last.

Kellie - I have offered to hook a 10,000# trailer to a person's Accord to show how it would save fuel... they declined. And I do pull a 10,000# trailer on occasion.

Thomas - While Obama didn't start this game, he sure did amp it up.

John - Did you read the post? I guess not. GM outsold Honda by at least two to one... WORLDWIDE! Next, Toyota has a hybrid, as does GM and Ford. Honda was later to the game. Nissan hasn't played yet... or Mazda, Hyundai, Kia... So, what are you talking about?

Larry - Perhaps getting your news from an unbiased source might work for you as well... Since Democrats took control of MI, the economy has nosedived. Even when the rest of the country was doing ok, MI was not. Raising taxes didn't help... That was pure Democrat policy right there.

Michael - You looked WAY deeper than I did. But you are right, governmental priorities and profit aren't always going to line up.

C & J - Cars are like people... All different. Thank you for stopping by.

Dan - I'm actually not a big GM guy... but they need some love right now. They are getting kicked by people that are ignorant of the facts for things that aren't true. So, I'm always willing to join the ugly side of a fight.

JUN

Lane. Interesting and detailed analysis. It is a perception thing. FORD=Fix Or Repair Daily. American cars have not kept up in design features as much as the foreign cars have. Now they are suffering for it. I hope that change happens soon.

Thanks, Lane. You're 100% right. An unsustainable business model had a much greater impact than not being able to sell cars.

My father worked for Chrysler and my grandfather worked for GM, but you simply CANNOT pay people who no longer work for you. It's an archaic, uptopian business model that does not reflect real life in a free market economy. It's unsustainable--this was going to happen at some point.

We can debate who makes better cars all day. It's largley irrelevent. If GM had controlled costs, they would have been (more) profitable. We're all business owners--if anyone should understand cost control, it's us.

Lane - Looking deep into a situation is what I like to do. I think it is important for everyone to look a little deeper than they would like to when it comes to a lot of things. Questions like: What happens to the interest rate when it starts to adjust?; What will be my payment after the 5 year interest only period is up?; I really don't understand how I can pay at 1% interest when it is really 6% interest? What does 'recast' mean? Would have saved a lot of people and this country a lot of heartache.

All too often we are sold the benefits (hopes and dreams) of a plan without being aware of the risks involved.

Mark - For 40 years or 2 generations we've been led to believe that Detroit produced inferior cars. That imports were better. I don't believe that is completely the case anymore but imports still hold their value better. It will take time for perceptions to change. To be honest me and my wife drive imports (BMW). But when we travel and rent a car it is always a late model American with only a handful of miles on it. I realize that people tend to drive rentals harder than their own cars but I've always felt that the cars I drove had little substance and very little appeal. It might be just my perception, but I think it will be hard for people who are used to the better imports to purchase an American model. I feel as well that those who are used to driving SUV's will not take easily to a small "smart" car.

Michael - You're correct. It is an unsustainable business model to think you can pay 3 people for the work of 1. Sure there are economies in using unpaid robots to do the work that used to be done by humans but the way it currently works doesn't work. Pensions do work when the payout is based on the value and performance of a fund, and not a guaranteed payment that is at or very close to the salary earned while employed. Municipal workers, (police, fire, sanitation and teachers, et.al) have the same situation and we are seeing the strain on budgets in certain states and cities. The revenue (taxes) can not cover the long term liabilities negotiated by the unions under the duress of a strike. (contracts made under duress are usually ruled void by the courts... an intersting thought) When Social Security was devised the average American lived to 70-72. The SS fund was flush with money and no politican could keep his hands off of it. (This didn't happen under Bush.. it happened the day after Social Security was put in place.) Now we live to 90, the number of people in the workforce are declining due to corporate tax rates forcing jobs overseas combined with a Chinese currency that is not allowed to fluctuate from the US Dollar making labor seem cheap there. Talk about unsustainble models... If the Chinese allowed (or were forced to allow) their currency to fluctuate away from the Dollar we would see how strong Yuan was, their imports would become expensive and manufacturing would come back to America, strengthing every aspect of our economy. Sorry... that will be my last political-economic rant of the day.

Lane, good post. I often wonder why OBama is slamming GM saying no one wants those cars when the sales numbers prove otherwise. I think that there is an underlying agenda where they want to somehow FORCE U.S. automakers into making more fuel efficient cars so we look like Paris! Hey, those cars are absolutely cute and I love how they look BUT, I would prefer to be alive after a crash in a slightly larger vehicle. It's sounding like Germany and the VW, everyone drives a bug. It'll be a Citrone, Peugot or that other silly car that the Pink Panther drives.

P.S. I drive an american car - a Chrysler. Before that it was a Lincoln and before that it was another Lincoln. NO problems out of the ordinary!

I don't agree with Mark one bit!

Not sure my 'bucket' will fit in their bucket seats.... nor will my 6'4" son fit in the back.

hmmm

Fantastic post and comment thread. I'm going to make a confession - I love cool cars with some power. I live in Denver, and driving at the speed limit up the twisting rocky Mountain passes is a thrill I hope I never have to give up. I've bought Hondas and Toyotas for years, because I considered them well-built and economical. They served me well, but I could no longer resist when Chrysler came out with the Sebring convertible. Man, I have so much fun in that car! Upgraded the stereo when I blew out the speakers, but have had no other work done besides maintenance. (I seem to need brakes quite often!) My fear, frankly, is that the Government Motors mentality will stick us with nothing but boooooring cars to choose from. Great gas mileage, or maybe don't need gas at all - that's great, it's what we need. But I'll always dream of the days when cars were fun! I know, I know, my attitude is irresponsible. But I recycle, carry cloth bags to the grocery store, have and use a compost pile, and don't drink water out of plastic bottles. Now, I'm going for a drive with the top down and the music loud!

Mark - First On Race Day. For Off Road Driving. This Over-rated Yucky Oriental Truck's Aweful.

Michael - If they had controlled costs, they would have fewer problems right now...

Michael - Being able to strike without fear of job loss does make negotiations a bit strained.

Lyn - Political agendas aren't the best business plans...

Joetta - My wife rented a Sebring Conv. for a drive up the Pacific Coast Highway. She hated it. But, that doesn't mean it was a bad car... just not the one for her. So many people seem to think that if THEY don't like a car, it must be the car's fault and it must be ugly junk.

JUN

Lane,

Good post but even better discussion. Go to the head of the class - now featured on "Celebrating Free Enterprise." Congratulations. :)

Steve

Now I have to tell the 'rest of the story'. I don't know what year your wife did that, but the first Sebring I bought was the first model year, and I bought it used. It was a lemon. The THIRD time I had it towed to the mechanic, it was gone. But then ... I still wanted to own a convertible and it was the only one with front wheel drive (important for snowy days), a full-sized back seat (important for moms), and the original American-designed convertible top mechanism that's been in use for 50 years. So I took a chance and bought a new one. It's got 80,000 miles and has been wonderful. Your wife's probably accustomed to a nicer car, but for me it's a thrill. BTW - I could drive anything along the Pacific Coast Highway and be happy, happy, happy!

JUN

Steve - Thanks.

Joetta - I think it was a first gen car... but that wasn't the point. She HATES my F-350, almost refuses to drive it, but I love that truck. And there is room for both of us in the world. Many people that respond about American cars seem to think that because THEY don't like them, that must mean they suck... are poorly designed, have inferior components and are ugly. But, in the case of GM, they are outselling Honda by a couple to one... so, according to the numbers, they can't make ugly cars...

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