How Many GM Executives Does It Take...

When I read the paper, I mentally collect stories of how Ford and GM are going down the toilet. My reaction is, well, not happiness, but a sense that they well and truly deserve their fate. There have been loads of stories on how GM is straining under their pension and health care obligations, how their products are not selling despite incentive offers, and how SUVs (i.e., the profit base for the Big Three) are declining in popularity, thank god. The story I saw today was "G.M. to Sell Bulk of Stake in Japan's Suzuki".

Basically, GM is selling about $2 billion of shares in Suzuki Motor of Japan, which drops their stake in Suzuki from 17% to 3%. They are doing this, obviously, to increase their cash supply during their current difficulties: To get cash to rebuild in North America, GM has been selling off assets, including equity alliances made with Asian carmakers during better days back in the 1990's. In October, GM sold its entire one-fifth stake in another Japanese automaker, Fuji Heavy Industries, maker of Subaru autos.

One quote stood out to me: Troy Clarke, president of GM's Asia-Pacific operations, said the sale would reap GM a pre-tax profit of $550 million to $750 million. Considering we have been hearing about how GM has lost money at astounding rates (equivalent to hundreds of dollars a second, if you average it out over the quarter), this seems to be a promising way for GM to make money: invest in other car companies. Ouch.

Okay, a cheap shot, but I have historical reasons to dislike Ford and GM. Exhibit one, below: the original BatMobile: a sky-blue, 1979 four-cylinder piece-of-crap commuter model Mustang. Well, with four cylinders, it was honestly more a gelding than a mustang.



Note: the cattle horns were not a permanent fixture; they were a temporary loan from Beef

This was my car for high school and college; it ate up transmissions on a semi-regular basis. One memorable failure was when the headlight switch on the drive from New York to Boston went intermittent. I spent the entire drive hunched over, pressing on the switch to keep the headlights on. The car also left me stranded on two separate occasions: once in Connecticut (slept in the car overnight; broken timing belt), and on Soldier's Field Road at 3 AM on the way back from IHOP (gave up on the car after that).

My family owned another Ford: a 1976 Granada (V-8, power steering, boat). It had a pretty similar reliability record; as a kid, I remember the route we took to the dealership repair shop all too well. The only reason my family didn't think that we were getting ripped off is that we had a goddamn French car before that.

So… my parents bought themselves a Toyota Camry in 1986, and it's still in good shape (twenty years later). I know that the Big Three automakers have vastly improved their quality. But I still feel justified in holding a grudge.

Most of my experience with GM has been via rental cars, and I have frankly been underwhelmed. I don't know how many of my readers are old enough to remember how GMs used to have two different keys: one for the door and trunk, and the other for the ignition. I always thought this was idiotic: you'll need to give a valet both keys; it doesn't really help security. I found out the reason why: GM used to make all of their steering columns at a central plant, complete with the ignition assembly. They could not manage the logistics to key the ignition the same as the body locks—thus, two keys. Oy. Also, I think they were the last automaker left using single-cut keys (notches on only one side, instead of up-down symmetric). Just another example of their flair for competence. But don't worry—they managed to catch up after a few decades or so.

In a related vein, one of my friends got his master's degree in mechanical engineering at the University of Michigan. He told me that there were typically a group of engineers whose sole ambition was to go work for the Big Three. And they were typically the ones at the bottom of the class, who he wouldn't trust to design plastic cutlery molds.

The Big Three automakers always seemed to be the paragon of corporate arrogance and blindness. For instance, Toyota and Honda threw their energies into developing hybrid cars, while GM dismissed them and concentrated on cranking out profitable SUVs. Well, it's looking a bit like a dinosaurs-and-mammals situation at this point: if you don't evolve... (mmm... tasty dinosaur eggs...)

As a final point, my childhood was in the 1970's and 80's, which was probably the height of the anti-Japanese sentiment in automaking cities and the UAW. The degree of racism and threatened violence in the prevalent attitudes had a lasting impression on me, as captured on picket signs, slogans chanted by striking workers, Japanese-car-demolition events, etc. I don't suppose many non-Asians are familiar with the Vincent Chin case: Chinese-American beaten to death with a baseball bat by two unemployed autoworkers who thought he was Japanese. They each received three years probation. Given the degree of hate displayed by some the workers of the auto industry, I don't have many qualms about avoiding their product.

As a postscript, I don't know how "randoms" read my blog; it's quite possible that there's a reader who is from an autoworker family or something. If it makes you feel better to write a pissed-off screed, well, feel free. But it's not going to change my mind, or the mind of the majority of my friends: I flipped through my address book, and could associate only a small handful of US-made cars (mostly Saturns). That pattern is unlikely to change.