Monday, March 30, 2009

"The End is Nigh"

... No, this isn't going to be an reference to the movie "The Watchmen," which featured a character carrying a sign bearing the words "The End is Nigh."

Its a reference to GM and Chrysler.

Today the Obama administration has effectively ousted the CEO of GM, Rick Wagoner, citing that the company's restructuring plans, presented by Wagoner, were not sufficient to make the company viable in the future. There are stories in all the usual places, but I read the Wall Street Journal here and found the story really... shocking. Perhaps I've been avoiding thinking about the broader realities of the economic downturn because like many, I've been affected by cutbacks. But after reading all the stories today (the WSJ, NYT , BBC, and CNN) I have to say... the end IS Nigh.

I feel terrible that these two companies have reached such a state, and am fully aware (or at least think I am) of some of what might follow if the companies are allowed to fail. But they have failed.

Don't forget, if you're reading this, its likely that you, too, have lived through the 70's gas shortage. And the introduction and proliferation of Toyota and other import cars- Subaru, Kia, and Hyundai. Maybe you've forgotten, but I haven't forgotten the days when a Toyota was a piece of plastic junk that my grandmother scoffed at as she drove her huge Pontiac to church, just down the street. I have personally witnessed the changes in in cars since the 1970's- the drive to smaller, more efficient, more economical cars fostered mainly by companies like Toyota.

I mean, Toyota changed their cars to better suit the American market, while still producing better, more economical cars. Thier cars got bigger, and more robust, while still being smaller and more efficient than thier US-made counterparts.

What has GM been doing in the last 40 years? I've watched as GM made token efforts to appeal to people who wanted more efficient, smaller cars, and churned out MORE and BIGGER cars each year; the Chevy Suburban, the Hummer, the Escalade? Who goes off-road in an Escalade. I know- people BOUGHT them, so GM kept making them. Some part of the blame rests on conumers like me, and not just GM and Chrysler. (As an aside, some of my friends might like to throw these statements back in my face, but I still prefer American cars, I still intend to buy American. We'll see.)

GM's answer to the Toyota Prius- a brilliant and great (50mpg) car that even I, the corpulent (to put it nicely) Vox Populi, can fit into- was the Chevy Tahoe, "Hybrid taken to its logical extreme" at 22mpg?! The bigger is always better attitude is still at GM 40 years later. To say nothing of the whole misuse of the phrase "logical extreme."

The last thing I want is for these companies to fold. But I'm afraid it might be better for all of us, in the long run, if they did. They didn't work. They failed as buisnesses, and they failed us as citizens by not changing with the times. If Dell today were, for example, still trying to sell 80386 machines with 64MB of RAM... well how well would they be doing right now? They wouldn't.

And no, I haven't forgotten that they can't exactly change the factories and tooling overnight. But its been 40 years. WE ALL SAW THIS COMING, and if they (as companies) didn't, well then they deserve to be closed. The comapny executives failed to change the direction of the company, the stockholders demanded too much profit, and not enough was reinvested in the company, the union workers failed to notice that if the company failed, they'd all be out of work... the whole thing failed.

I'm still sugar-coating my writing here, because I really feel for these companies, their workers, and all of us who will be affected by the results of all those people out of work...

But I think it's going to have to happen.

I grew up in GM cars. I've slept in the back seat of more Buicks and Pontiacs than... well, than I've slept in hotel rooms. I bought my current car (a Buick!) not because it was most efficient (go ahead and mock me) or was the best fit for my large size (though it was), but because after test driving 7 cars from all over the world, the Buick changed gears when I expected it to: it "felt right."

That has been enough for many of us to keep buying US cars. But no more. I'm just as likely to buy the wrong car for the wrong reasons as anyone, and so I'm just an ordinary consumer just like everyone else. But right now, the writing on the wall seems to suggest the time is up for GM and Chrysler, and as I read the words, my heart answers...

"Yeah, I think it is."

1 comment:

Scoopernicus said...

I have been constantly irritated over the last 10 years on how US automakers have refused to admit that we needed more hybrids and less SUV's.

Granted SUV's have a higher profit margin, and employee health insurance eats up a significant amount of production costs, but then these are the same class of guys who fought tooth and nail Universal Health Care and higher milage standards. The writing was on the wall for a long time, and they wouldn't read it.

That's sad because we ought to be a nation of manufacturers not bankers. The auto industry's financial woes are just a fraction of what the financial sector is asking for, and the financial sector is getting a lot less strings attached for their bailouts.

I say good riddance to the CEO's who drove their industries into a ditch, but lets get things back on track with American Made hybrids and electric vehicles, and hell yes, building more mass transit vehicles too.