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I see your point, but weren't GMs outsized pension and healthcare obligations the #1 culprit as to why their R&D budget has been pretty miniscule for three-plus decades?
IIRC, they also went upwards of a decade without any upgrading of the Cavalier, although their track record of compacts going back to the Citation in the early eighties has been pretty underwhelming compared to the Civic, Corolla, Protege and other very successful compacts.
The lame excuse of blaming the workers on the assembly line gets under my skin. If management had pulled their heads out of their rears, listened to customers and their assembly line workers, they would never have gotten into the mess they did. Now I have a question for anyone who thinks the workers on the line were over paid and too much retiremnet; Explain the justification of millions of dollars a year for people at the top of the company making horrible business plans decisions. Consider that the top vice president makes more than an entire plant full of assembly workers in a year. So quit the blaming of workers pensions that doesn't even touch the amounts of pay and pension plus stock options of the higher ups ruining the business. In fact, gm along with many companies ran into a problem with pension funds only because they did not pay in as they were supposed to for decades.
The lame excuse of blaming the workers on the assembly line gets under my skin. If management had pulled their heads out of their rears, listened to customers and their assembly line workers, they would never have gotten into the mess they did. Now I have a question for anyone who thinks the workers on the line were over paid and too much retiremnet; Explain the justification of millions of dollars a year for people at the top of the company making horrible business plans decisions. Consider that the top vice president makes more than an entire plant full of assembly workers in a year. So quit the blaming of workers pensions that doesn't even touch the amounts of pay and pension plus stock options of the higher ups ruining the business. In fact, gm along with many companies ran into a problem with pension funds only because they did not pay in as they were supposed to for decades.
I think there is plenty of blame to go around when it comes to GM's failures, from the executives to the unions. There was a quote from a book I read about the history of GM and it was a former top executive. He was asked when he felt GM made a turn for the worse and his response was the late 60's.
When asked why he said that was the time board and executive meetings ceased to be about cars and were solely about stock price. The focus on the dividend and share value led to shortsighted decisions. A business that runs on long product cycle is not a good match for Wall Street that demands instantaneous results. As such the product suffered from shortened R&D and cost cutting and concessions were made to the unions to avoid strikes at all costs.
All in all, an interesting thought and one I happen to think is pretty correct.
On the union end, GM made concessions to the unions to keep them working with little thought about the impact it would have on the future. By the 2000's, approximately $2k of the price of every car GM made was going to fund pension and health benefits for retired employees. GM was paying about $7.3 billion per year for retirees and had paid $103 billion over the past 15 years. The un/underfunded obligations you mentioned was the new VEBA system that went into effect in 2007 under the UAW contracts between GM, Ford and Chrysler. GM owed about $9.5 billion, Ford owed $13.6 billion and Chrysler between $6 and $9 billion. GM had already paid in $13.5 billion. This was for healthcare alone. There were still pension obligations that GM had underfunded throughout the 2000's that they still carry even after the bankruptcy. As it was there are 650,000 GM retirees and their spouses on GM retiree healthcare, many more people than GM currently employees in the U.S.
So, yes, the union was greedy and yes, GM made a lot of stupid decision including playing ball with the union for unreasonable demands.
Before the restructuring a GM UAW employee had a couple benefits that his counterpart at Toyota or Honda in North America didn't. The first was that the GM UAW employee would be paid full wage while laid off or furloughed while trying to find other employment. The GM UAW employee would receive a full pension upon reitrement. The GM UAW employee and their spouse would receive free healthcare for life. In all other areas they were equal, including pay.
Since so many people these days are railing against teachers and government employees for having similar packages, why are we so quick to think it's OK for the union employees? I think the union did it's job and got what it could, but it wasn't sustainable and even the union realized that. Now with the changes in place, GM, Ford and Chrysler have less than a $250 handicap versus other non-union brands.
So, no the union isn't solely to blame as GM agreed to the terms, but the terms were unreasonable and had to change for GM to be successful.
GM's structural costs did hurt it in terms of R&D.
However, there was (and still is to some extent) an arrogance inside the Rennaissance Center. GM management always felt it was too big to fail. As such, they could do what they wanted with products, collective bargaining, etc, and it would all just sort of work itself out.
The management was atrocious.
We see how that worked now.
The union is part of this too. No doubt. They are not the sole reason, but both parties could see the direction they were heading for a long time... right for the abyss... and instead of steering they stepped on the gas.
"On the union end, GM made concessions to the unions to keep them working with little thought about the impact it would have on the future. By the 2000's, approximately $2k of the price of every car GM made was going to fund pension and health benefits for retired employees. GM was paying about $7.3 billion per year for retirees and had paid $103 billion over the past 15 years. The un/underfunded obligations you mentioned was the new VEBA system that went into effect in 2007 under the UAW contracts between GM, Ford and Chrysler. GM owed about $9.5 billion, Ford owed $13.6 billion and Chrysler between $6 and $9 billion. GM had already paid in $13.5 billion. This was for healthcare alone. There were still pension obligations that GM had underfunded throughout the 2000's that they still carry even after the bankruptcy. As it was there are 650,000 GM retirees and their spouses on GM retiree healthcare, many more people than GM currently employees in the U.S."
The retiremnet funding I was referring to was well back into the 90's. VEBA was a failure from the get go and this failure was in my opinion intentional by gm brass.
Another part of NJGOAT's post;
"I think there is plenty of blame to go around when it comes to GM's failures, from the executives to the unions. There was a quote from a book I read about the history of GM and it was a former top executive. He was asked when he felt GM made a turn for the worse and his response was the late 60's.
When asked why he said that was the time board and executive meetings ceased to be about cars and were solely about stock price. The focus on the dividend and share value led to shortsighted decisions. A business that runs on long product cycle is not a good match for Wall Street that demands instantaneous results. As such the product suffered from shortened R&D and cost cutting and concessions were made to the unions to avoid strikes at all costs."
This late 60's change in board meetings was a start of the downfall. By the early 70's, gm board thought swaping engines from one division to another would be ok with buyers. Clearly they were nothing more than penny pinching overpowered idiots, without understanding of the reasons gm had so many specific brand loyalist. And when the brands became deluted, first under the hood with the putting the junk sbc 305 in everything by the late 70's, then trim levels that mirriored each other brand/division, finally to the only difference in design was simply which grille insert, is it any wonder why bean counters should NEVER be allowed to run a company? Lets face it, until the bean counters/keep them happy on wall street idiots took over, gm was so big that the government nearly split them up to avoid a monopoly on the auto market in the US!!! Then the money men took over , and sales has went down ever since.
I don't understand why everyone was so upset when they started to standardize the engines in the late 70s. Each division having powertrain engineers seems redundant to me. Was it because Olds buyers getting Chevy engines viewed Chevy as a lesser product?
"all of those seperate makes" were very successful for GM for decades.
And then the economics of the automotive industry, particularly the U.S. market, changed drastically; after which it became unfeasible to carry so many marques within the same market. GM was way too slow to realize this. In fact since then they tried adding two new marques to the market, both of which are now gone.
I don't understand why everyone was so upset when they started to standardize the engines in the late 70s. Each division having powertrain engineers seems redundant to me. Was it because Olds buyers getting Chevy engines viewed Chevy as a lesser product?
I think a lot of it had to do with brand loyalty and identity. Until the 70's GM really did treat each brand as it's own entire car company. In a time when the U.S. market only really consisted of the "Big Three" and GM was far and away the largest of those, it made sense. Oldsmobiles were Oldsmobiles designed, built and sold by Oldsmobile. Same for Chevy, Buick, Pontiac and Cadillac. There were tangible differences between the brands that made each unique. GM ended that when they started using common powertrains and people were upset. I don't think GM was wrong for making the decision they made, obviously it is a much more efficient way of doing it. However, they continued on that path in the chase of ever better profits and eventually bled all the uniqueness out of each brand which is when they really lost the loyalty of their customers.
It wasn't necessarily "the chase of ever better profits" that motivated them so much as the chase to stay in business. When you no longer own 50% of the U.S. market you can't keep acting like you do. You have to start economizing. They tried to do it while keeping all the old marques and adding new ones. That was a mistake.
You still don't explain how discontinuing a successful marque in GMC resolves Buick's brand image problems. That makes no sense.
Actually what doesn't make sense is how you misread what I wrote. Where do I ever say that discontinuing GMC would resolve Buick's image problem? I never said that. What I did say is both GMC and Buick have image problems that could be turning off potential customers. GMC has a "redneck" image while Buick is known as the brand for old geezers. So that means someone who's potentially interested in the Jimmy or the Lacrosse might decide against buying one all because of the nameplate. Sure, GMC is doing great. But does anyone really think GMC would lose customers if they dissolved the brand and rolled the GMC models into GM? Same with Buick. Having a separate brand makes sense if you're gaining customers that you might not have otherwise. Scion is a perfect example of that. The people who buy those cars probably wouldn't buy them if they were just Toyota models because Toyota isn't really known as the brand for young single people. But how does Buick or GMC gain customers they may not otherwise have gotten had those cars just been GM cars? imagine if Buick rolled all of its cars under the GM umbrella. Would previous Buick buyers abandon GM? I doubt it.
Quote:
Originally Posted by 12GO
The lame excuse of blaming the workers on the assembly line gets under my skin. If management had pulled their heads out of their rears, listened to customers and their assembly line workers, they would never have gotten into the mess they did. Now I have a question for anyone who thinks the workers on the line were over paid and too much retiremnet; Explain the justification of millions of dollars a year for people at the top of the company making horrible business plans decisions. Consider that the top vice president makes more than an entire plant full of assembly workers in a year. So quit the blaming of workers pensions that doesn't even touch the amounts of pay and pension plus stock options of the higher ups ruining the business. In fact, gm along with many companies ran into a problem with pension funds only because they did not pay in as they were supposed to for decades.
I agree. I get so tired of people say it was all the unions' fault that the domestic automakers ended up where they are. That's such a cop-out. The root of the problem has always been management. You can blame unions for making unreasonable demands, but who agreed to those demands? Management. Management green-lighted hideous designs like the Aztec and Skylark. Management decided to abandon plans for developing more fuel-efficient engines and instead decided to pump out more gas-guzzling SUVs just as gas prices shot up. Management agreed to make all these redundant models that ended up competing against each other. For a country that loves to talk about taking personal responsibility, we're sure good at pointing the finger at someone else.
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