Monday, November 21, 2005
My Thoughts on General Motors
I've been hearing on the news all day that GM is going to close 12 plants and lay off 30 000 workers. I feel for those workers, their families, and their communities. If only their unions hadn't pushed for the kind of health coverage they now get - but I digress. GM has been losing market share every year for a long time now. Why? Because they build cars people don't want. I know that where I live in west Texas it doesn't seem that way since every second person has a Chevy truck. But here's my experience. A month ago my wife (Holly) was rear-ended as she was entering our driveway. While her Nissan Murano SUV was being repaired we rented a fairly new GMC Envoy. At first glance it seemed to be a nice vehicle - until we had to drive it for 2 weeks! When we got the Nissan back after 2 weeks it was such a step up - the Murano is smoother, has a more solid feel, better steering, better handling, more rear leg room, more cargo room, the engine is far more advanced, not to mention the CVT transmission, the interior materials and ergonomics are clearly superior to the GMC, and it gets better gas mileage. And, the Nissan is $6000 cheaper than the GMC. Brand loyalty and emotional appeals to "buy American" cannot overcome the vast differences in quality and function that now exist between American vehicles and their Japanese and German rivals. That's why GM is losing market share. It's still sad, but that's "where the rubber meets the road."