I don't, repeat, don't want GM to be history, but articles like this makes them look sucidal.

MSNBC Story

Note: Since 1995, SUVs in America have gone up by about 250%. That sounds about right....

I'm biting my tongue on this "need" thing....

 

The new Car and Driver gives a 12 mpg average in their "observed" mpg for the new Tahoe. It weighs nearly three tons.

Stick a fork in them. They're done. I don't see how they survive. Their financials are just awful. I've been following this story for a long time. It just gets worse and worse. They lost money today when the DOW was way up. Look for GM to be booted from the DOW 30 very soon. They were down 52 cents per share today/2.68%. Horrible. Their capitalization is a mere 1/17 of what Toyota's is.

GM is probably the reason that the DOW finished in the red for 2005. After they are booted from the DOW look for this stock to really tank. I'd be surprised if they aren't in Chapter 11 within six months.

 

I've been watching GM for a while now, and my take is that they are intentionally bleeding and making "stupid" core decisions so that they can amputate their reasonably well paid and medically covered employees. It's the only way they can do it, nobody will take a pay cut and pay for their own medical if there's nothing wrong with the company. It's the WalMartization of America.

 

I just read that Car & Driver article about the Tahoe and their 12mpg figure in spite of the 16/22 EPA numbers. Here's how they explained it:

"One obvious culprit for our poor fuel economy is our staff's desire to emulate drag racer Don "The Snake" Prudhomme. A less obvious culprit is the optional remote start that allows the key-fob possessor to start the engine from a distance. It's a valuable feature against bitter weather - the car can be warmed up in the driveway while you're waiting for that Pop-Tart to cool off - but using it means you're burning fuel and not going anywhere. We used it, a lot."

 

So it sounds like they used it as would the average SUV driver. Sounds right to me.

 

Seriously, what a whacky world we live in. Trying to go out of business to save on blue collar health care and give six figure severance packages to the top execs, trying to market a failing and passing niche vehicle to the public that obviously wants something else?

I think GM (and perhaps the others as well) have outgrown themselves, and their fall may wake up others from their own stupidity and apathy.

Then again, I have a friend who's single, with an computer sciences degree, who drives an Expedition. There's absolutely no need for it, but he loves it. $80 bucks a week to fill it up. I'm practically forbidden to mention anything fuel related to him anymore. The funny thing is that after I got the FEH, I almost felt dirty riding in it.

 

They've been working on this design for around 2 years or so. What did you want GM to do? Throw away all the work (i.e. billions in cash) they've spent in engineering this vehicle? To do that would be an even worse business decision.

 

The Detroit Lions are one of eight NFL teams looking for a head coach. Actually, the general manager - Matt Millen is considered at least as much of their problem as the dismissed Steve Mariucci. He has failed to find a coach or players that can win games over the past four years, yet was just given a five-year extension! Local sportswriters could not resist comparing that to Ford or GM.

• The decision two years ago for GM to sink so much money into a new generation of jumbo SUV's was bad. They had to know that this market would not stay hot forever.
• Part of the criticism directed at GM is they move slower with more bureaucracy than other automakers
• Some of the effort in new engines should be transferable to their entire line of vehicles

No, I don't think you can put out a new line of vehicles in six months or even two years. What disturbs me is GM seems as addicted to the SUV as a crack addict to support a corporate/labor structure that is not competive in 2006. I don't like watching this train wreck.

 

But people keep buying them. There is still a sizeable market for full-size SUVs. Maybe a better way to change GM is to change their customers' perceptions of their needs.

 

I agree - a significant part of the public insists on jumbo SUVs. In past posts, blame has been assigned to Detroit, the oil companies, the government. I've maintained that the root problem is the people who have the compulsion to drive these vehicles. The other partners listed have a role.

Gas price spikes like during Hurricane Katrina will reduce some demand. The most effective way to stop this demand is to somehow make the jumbo SUVs that have been out since the mid 1990's uncool. That's a hard nut as there will always be people buying vehicles to impress people. My best guess is to somehow make some other vehicle cooler than the jumbo SUVs.

I can see a situation like Hurricane Katrina again - easily. A few people will reconsider if their Suburban's are worth it, but if prices go back down, they will forget it.