Stubborn GM Engineers Its Own Collapse - Baltimore Sun

[hatrack]

"AS GASOLINE prices surge to record highs, General Motors teeters on the verge of collapse with a credit rating one step above junk. This is hardly coincidence. GM has willfully ignored fundamental trends in technology and oil. To make matters worse, so has our government. U.S. security is threatened by rising dependence on oil and instability in the oil-rich Persian Gulf. Our automakers and government have a brief window to adopt an aggressive strategy to push fuel-efficient vehicles, especially hybrids, or we risk yielding our destiny to outside forces.

Oil prices have risen sharply, yet GM stubbornly keeps making the wrong vehicles, losing market share to fuel-efficient, foreign-made vehicles that have caught the public imagination - the identical predicament GM found itself in three decades ago. GM had been warned in the early 1970s that oil prices would rise, but it refused to match the gas-sipping, high-quality competition from Toyota, Honda and other imports. GM fought the future and lost. In the 1990s, when oil prices again were low, many predicted that prices would rise within a decade, threatening our security. OPEC nations simply had (and still have) much more oil production capacity and reserves than non-OPEC nations. Population growth, industrialization and urbanization were, predictably, driving oil demand steadily up, especially in China and India. Also, U.S. demand was again rising steadily as the political will for tighter fuel-efficiency standards had ended with the low oil prices.

Back then, the Energy Department partnered with GM, Ford and Chrysler to speed the introduction of hybrid gasoline-electric vehicles. Ironically, the main result was to motivate the Japanese car companies to develop and introduce their own hybrids. GM walked away from hybrids as soon as it could - when the Bush administration came in. The result: GM, which had a technological lead in electric drives, let its No. 1 competitor, Toyota, achieve a stunning seven-year head start in what will likely be this century's primary drive train. GM was publicly criticizing hybrids as late as January 2004, and only recently announced a half-hearted effort to match Toyota. This miscalculation will be regarded as one of the biggest blunders in auto industry history.

GM stubbornly pursues hydrogen cars as its vehicle of the future, but such cars require multiple scientific breakthroughs and massive government subsides. They would reduce the freedom of American drivers by keeping them tethered to a small number of fueling stations dispensing expensive hydrogen fuel. Most independent analysts believe these cars are decades away."

EDIT

http://www.evworld.com/view.cfm?section=communique&newsid=8382

[tk2kewl]

1. GM is probably following the bush* script

bankrupt the place so you can default on the pension burden and then restructure

kinda like raiding social security and then claiming it is inviable so must be phased out

(edited for spelling)

[opihimoimoi]

2. Long term Vision is not in their capacity...gambled on short term and lost

[Warpy]

6. I think you're absolutely right about that.

Meanwhile, once it sheds the burden of all those old guys who accepted lower wages so they'd have something to live on in their old age, it will be supported fully by the taxpayers. They still make a lot of junk that the military uses, and they won't be allowed to go under for that reason.

I think Shakespeare was wrong. Come the revolution, first against the wall will be the executive class and their MBA enablers. Then the DEA.

[Tux]

3. GM

Gm and UAW were damn good to my dad before he retired. My mom had 3 strokes and Parkinson's disease before he death. They helped provide medical insurance so she could get good treatment and die a dignified death that she ordered when she told the doctor to stop giving her blood so someone who needs it can live.

Now, they are just as bad as Bush. They ignored industry trends in other nations, knowing that hybrids would appear here yet still pushed SUV sales. Seems like an oil connection. Now they are having a hard time which means they could cut back on medical insurance, retirement benefits, etc even for retirees.

If GM wants to survive, they should get into automotive financing since they still make a lot of money off that.

[jojo54]

4. I'm proud AND resentful of GM

I'm proud because I own a Saturn (we've owned 3 all together) and am very, very satisfied with it. It's a sedan and gets great gas milage.

On the other hand, I'm sorry to say I'm associated with GM (in a sense) because I own one of their cars. They continue to produce and promote the Hummers like there's no tomorrow.

So, I'm a flip-flopper.

[AtTheEndOfTheDay]

5. GM has been talking this hydrogen malarkey

and the far east is going to do the real deal by going hybrid and electric. They've already instituted stricter environmental standards I read somewhere with stricter yet promised. This will drive the development of some really cool transportation I hope. I fear the U.S. won't be in the game.

[Robert Oak]

7. blame the engineers? NO, they do not make these decisions

Engineers are usually overriden in decisions by marketing people
and executives.

On top of it GM and Ford have trashed their engineers, offshored outsourced the work, domestically outsourced almost all of it,
so the internal engineers are more supply procurement managers.

Put the blame where it lies...where it always lies...with executive
management.

[carnie_sf]

8. I'd be interested

in knowing if anyone (ie big oil) is buying up the rights for the H2 fueling stations.

[democracyindanger]

9. "(O)ne of the biggest blunders in automotive history."

In a neck-and-neck race with GM sticking with gas-guzzlers in the late 70's while Japanese manufacturers were positioning themselves to eat the Big 3's lunch.