Big news from GM today: In an effort to restructure, the company will kill off a number of its slow selling passenger cars by the end of 2019 and also shutter the plants that produce them.
This news shouldn’t be too surprising given what Ford did in late April, but some of the cancelled models had long production runs and will be missed. The CT6 is not one of those cars. Although it debuted to decent reviews, the sedan didn’t make enough of an impact to justify its continued existence. It will likely finish out the year with just under 10,000 units sold. Here’s hoping the 4.2 liter twin turbo V8 finds a home in something else.
The XTS, Cadillac’s last front wheel drive sedan, will also meet its end next year. The car will likely sell a total of about 15,000 units this year, which would give it the honor of being Cadillac’s best selling sedan for 2018.
Pretty much all variants of the Epsilon II platform will be cancelled, including the Impala. Arguably the most tragic vehicle on the list, Chevy’s full size sedan debuted to extremely positive reviews and notably scored very high in tests performed by Consumer Reports. It will probably find just under 60,000 homes by the end of December, a far cry from the 140,000 units it moved back in 2014.
The Regal will live to see another model year, but the LaCrosse will not. It seems the Buick is just as popular as the sport it is named after, at least in America. The LaCrosse will probably find another 3,000 buyers before the year is out, which would put its yearly total at around 18,000.
The Chevrolet Cruze will also be gone at the end of next year. Although it revived GM’s reputation in the small car segment, that wasn’t enough to keep production going, especially since consumers have clearly favored the Japanese models for some time now. About 150,000 examples of the Cruze will be sold for calendar year 2018, down from a high of 273,000 in 2014.
Finally, the Chevrolet Volt will also be cancelled, as well as the previous generation GM full size pickups that were likely still being produced to feed the fleet beast. Both the first and second generation Volt plug-ins were significant for General Motors, but with the introduction of the Bolt, it did seem a bit unnecessary in the lineup, especially since its base price almost mirrors that of its fully electric counterpart. The current model has also been plagued with reliability issues, so perhaps its cancellation is a good thing. Total Volt sales will probably come in at around 18,000 units for 2018.
As the auto industry continues to adapt to shifting consumer tastes, today’s news won’t be the last time we hear about the cancellation of long running nameplates. It’s highly doubtful that the Malibu and Sonic will live to see another generation, but for now they solider on.
Related Reading:
Cherolet Impala RIP? Look Like The End Of The Road For An American Classic – by Paul Niedermeyer
Future Curbside Classic: 2014 Chevrolet Impala – A Major Upgrade – by Paul Nidermeyer
Just wow. It is a shame the Chevy Volt was not reliable enough and I did not expect it to be cancelled. I also hear the Cruze has reliablity issues which is a bummer since the Impala does so well. I am not sure what else to say, I am just reasonably surprised.
BTW, in the article it says, “Finally, the Chevrolet Bolt will be cancelled.” instead of the Volt.
Fixed. Thank you.
Welcome. When I first read the article I panicked a bit and thought “Why would they cancel the Bolt, I hear that is a good vehicle.”
By personal ownership experience, having owned a 2012 Chevy Volt since January 2012 (almost 7 years) replacing a 20 year ownership troublefree Lexus LS400. Our Volt has been remarkably trouble free, virtually trouble free like our 1992 Lexus, requiring only routine oil changes at the specified two year intervals, a routine 5 year 12 volt engine starting battery replacement. Because I live in the salt belt Great Lakes, and because of the minimal usage of the brakes due to the Volt’s strong regenerative braking, due to salt corrosion of the rear rotors, both the rear rotors and pads were replaced in December 2017. Not bad, relatively minimal 7 year service costs.
We have not experienced any other issues with our Volt over almost seven years of long term ownership/ usage. I mostly drive electric, on battery, since I usually drive less than 40 miles per day. The flexibility of being able to drive the Volt with the gasoline engine spinning the generator for electric power has allowed me to drive effortlessly through the mountains of West Virginia for yearly straight through 540 mile trips from Cleveland, Ohio to Charlotte, N.C. and then back home with round trips of 1100 to 1200 miles tanking up along the way, just like a regular car. Effortless long distance driving.
My lifetime mileage has averaged 121 mpg. Not Shabby.
Some say on CC that the Chevy Volt is unreliable, my answer is that in almost 7 years of daily usage the Volt quality has been virtually Lexus-like. I haven’t experienced any unexpected issues.
Some say the GM lost money on all Volts produced, well that wasn’t my concern, it has delivered great value for the money paid by me while giving me wonderful electric driving experiences.
Likely Toyota also lost money on ever 1st generation LS400, but it was an over engineered well built car, that I enjoyed for twenty years. It never mattered to me whether or not Toyota made money from my Lexus purchase.
Regarding the Volt, in my hands, it’s been a solid, well engineered car likely to outlive GM, unfortunately for GM.
So I haven’t experienced any quality or manufacturing issues with my Volt. Unreliable, well, not in my experience!
Both my wife and I love our Volt.
Cheers from Leura, NSW.
It’s the second generation thats had quality issues, not the first.
My best friend has a 2017 Volt LT with the leather and heated seats package. Not long after he got it, one of the headlamps completely failed while he was on a trip to Denver, and earlier this year, something happened with the potentiometers in the accelerator assembly that necessitated a full replacement of that part.
Other than that, it’s been reliable and he loves it. It now shares the garage with a 2015 BMW i3.
Perhaps I will put a first generation Chevrolet Volt on my maybe list when it comes to used cars.
I read this earlier today. Already it is being politicized with the Democratic senator from Ohio accusing GM of being greedy because they are cutting these cars. Sadly Mr. Brown has a reputation for being divorced from reality and cannot comprehend that GM is cutting cars that nobody wants. Why make cars that nobody wants? He should be blaming John and Jane American who are not buying these cars instead of GM for cutting them.
Same with the UAW which is up in arms about this and yet cannot comprehend that UAW employees made shoddy cars in the 1970’s and 1980’s turned a lot of Americans away from domestic Big Three cars for ever.
Those cars were designed and approved by men (yes,mostly men) who knew they were sending out poorly made products. The UAW wasn’t responsible for GM’s multitude of debacles in the era. Management made all the decisions. When management speeds up the line and the workers are over-stressed, quality will suffer.
The other senator from Ohio, Rob Portman, a Republican, also slammed GM today; it’s not just the Democrats, at least in the states where the plants are.
I do not appreciate you blaming the Union Auto Workers. A union Auto worker myself I do see a few bad people.We all know it only takes a couple bad apples to ruin it for everyone else. we do not have the control over engineering of how it goes together or the quality of parts used.
It’s important to distinguish between cars ‘that nobody wants’ and cars their manufacturers can’t figure out how to build profitably.
The GM models being axed next year sold over 300k units combined in 2017, more than half of them Cruzes. The Fords being cancelled sold nearly 500k in the same year, about half of them Fusions.
Both companies are pinning their hopes on customers buying their crossovers for 10-25% more than the cancelled products instead of competitors’ products which cost the same. The risk is that their customers will do exactly the latter, become Honda/Toyota/Nissan/Hyundai buyers instead, and never set foot in a GM showroom again. Especially since both are cancelling products that are likely to be the buyer’s first and most influential new car purchase (Cruze, Fiesta, Focus).
There are multiple and complex drivers for GM and Fords decision making, from Draconian UAW rules, to a highly volatile and unpredictable regulatory environment (and I’m not talking about the EPA), to simple poor product planning. But the ending to this story is the same: domestic brands ceding even more market share to their global competitors.
There has been huge over capacity in the auto sector for decades now. Car plants all over the world were being kept open with corporate welfare. It’s about time it stopped.
All the major car companies are preparing to transition to electric vehicles. That means engine and transmission plants will be largely redundant. There will no longer be a need for a series of engines and transmissions for various models. EV’s are going to be cheaper in the long run because they have so few parts compared to an ICE.
Blaming workers is a funny trope. I wonder why we blame people making $25 a hour when its people making $5000 a hour who make all the decisions.
Who is blaming the workers today?
See above.
Gotcha.
I’m afraid this is the end of the line for Cadillac. If the only thing they can sell in decent numbers is just another ugly SUV, the future looks bleak for the former Standard of the World.
The long, long infatuation with longer, lower, wider sedans is finally fading. As much as enthusiasts dislike the tall, two box form it was the “default” setting for cars before the post-WWII boom help create the demand for big sedans. Does the inherent higher CoG of CUVs/SUVs optimize nimble handling at speed or on curves? Nope – but it does maximize space efficiency and sight lines (current slapdash subcompact CUVs excepted), which seems to matter more to NA consumers than absolute performance. We may even be moving back to most true high performance vehicles being truly expensive – again, similar to pre-WWII. Selling cars that loose money (or make very small profits) is not a path to sustainable success. Now, if you want to argue that Ford and GM should be able to produce something other than CUVs/SUVs and trucks that people want to buy I’m hip – for all the resources both companies have consumed trying to be competitive worldwide building cars you’d think we’d have better results than shuttered factories and subpar cars.
But given current sales trends, NOT discontinuing money loosing products would be irresponsible.
I think then the long infatuation with longer, lower and wider might fading more slowly then we thought. Honda and Toyota pick up the slack and the Civic, Corolla, Accord and Camry had became longer, lower and wider as well.
And they still sell more and more CUVs/SUVs every year. I like sedans – there’s one in my garage (though it didn’t come from Ford, GM or FCA) and I like CUVs – there’s one of those in my garage too (again from elsewhere than above). The market is shifting, GM has to adapt or fail.
Overcrowded freeway environments and draconian enforcement have sucked most of the fun-potential out of motoring. Few care anymore about the incremental handling improvement and sportiness of a sedan/hatch over a tippy-toed crossover/SUV.
Some of the former models produced at the Oshawa plant, which has been in operation for over 100 years:
Buick Regal (1988–2004, 2011-2017)
Chevrolet Equinox (2010–2017)
Chevrolet Impala Limited (2014–2016)
Chevrolet Impala (1965–1985, 2000–Present)
Chevrolet Camaro (2010–2015)
Buick LaCrosse/Allure (2005–2009)
Pontiac Grand Prix (2004–2008)
Chevrolet Monte Carlo (1995–2007)
Buick Century (1982–2005)
Chevrolet Lumina (1990–2001)
Chevrolet Celebrity (1982–1990)
Chevrolet Caprice Classic (1971–1990)
Pontiac 6000 (1982–1988)
Pontiac Parisienne (1958–1986)
Chevrolet Bel Air (1976–1981)
Pontiac Laurentian (1958–1981)
Chevrolet Biscayne (1958–1975)
Chevrolet Brookwood/Kingswood/Kingswood Estate/Townsman (1969–1972)
Pontiac Strato Chief (1958–1969)
McLaughlin Chevrolets from 1916
McLaughlin Buicks (1907–1918)
Chevrolet Chevelle Malibu SS Convertible (1964 – 1965)
Acadian Beaumont (1964/65)
Beaumont (1966-69)
And it’s also a very well-regarded plant that’s been recognised for its production quality.
Then there’s Hamtramck, famously built as a high-tech new plant in the 1980s. They displaced an entire neighbourhood to build it (there’s a cemetery on the grounds) and now GM wants to shutter it. It’s a stone’s throw from the Renaissance Center too.
GM needs to make brutal cuts, I get that. But there’s a lot of sadness in today’s news, particularly in terms of the impact on people.
Speaking of Hamtramck, I spotted that article from the Detroit Free Press about Poletown.
https://www.freep.com/story/money/business/john-gallagher/2018/11/26/gm-detroit-hamtramck-plant-closing/2114067002/
My 69 Chevelle SS I had in high school was made in Oshawa.
As a CBC listener, as I travelled today, I heard all about the Oshawa plant, with little focus on the rest of the GM story. Seeing the rest of the story makes more sense. It’s too bad about Oshawa, but I can’t say I didn’t see the writing on the wall some time ago. I was hoping they’d at least keep truck production there, but I guess with the new Silverado it’s moving out of that plant too. It’s too bad because Oshawa had a great reputation for quality built cars. Our family probably owned more GM vehicles than anything else, and the best ones were all built in Oshawa.
I remember when I was in grade school, I did an essay on GM Canada’s history, all about Sam McLaughlin to the then modem GM of Canada. They sent me all kinds of great information, and history. At least, I still own a piece of history from that Oshawa.
I grew up with Oshawa made Pontiacs and Chevrolets. The build quality on the older cars was superb and it made me proud as a Canadian that our workers took such care in their jobs.
I will be weird to see that era end.
However, Toyota’s Cambridge-Woodstock plant is the only Lexus plant outside Japan. This is a largest Toyota operation in North America, with over 8000 workers. It has won numerous awards. Toyota built something like 570,000 cars in Canada in 2017.
Honda is producing upwards of 250,000 cars a year in Canada.
I would like to see the Korean makers open a plant here, as well. It’s not all doom and gloom.
Not surprisingly, this has been top of the news here in Motown.
The thing that strikes me is the way GM is trying to shrink it’s way to profitability. They abandoned large swaths of the global market last year, and now are closing more plants in North America.
If people want SUVs and trucks, instead of sedans, why not use those plants to build more SUVs and trucks? FCA’s Sterling Heights plant used to build the Chrysler 200. It now builds Ram pickups and is running 7 days/wk (I made the mistake of driving down VanDyke, past that plant, on a Sunday afternoon last month and ran smack into the end of shift traffic jam) FCA replaced the Dart/Compass/Patriot at Belvidere with the Cherokee and Cherokee sales are up 48%ytd, while the Compass decamped to Mexico, and it’s sales are up 125%ytd. While Fiat is being shrunk in Europe, an article on the wire today says idle capacity at Italian Fiat plants will be used to produce more Jeep Compasses and a new “baby Jeep”.
Marchionne talked, at length, about the need for scale to amortize the costs of the technological change in the industry, yet GM seems to be going in the opposite direction.
GM still having its slow death dance.
The only product they make that sells in enough quantity to make a profit is the pick up truck. Building more of them isn’t going to sell them any faster.
By adjusting the production footprint to better fit a realistic (meaning, not driven by hefty incentives) market share, and axing models that aren’t selling well, perhaps GM is finally addressing some core issues.
Good point, Geeber. Particularly when you consider there were factories manufacturing a selection of models of which sales were wayyyyy off from just a few years ago. No sense keeping those lines running if the product isn’t selling. As devastating as this news is for workers, GM can’t be in the “Oh, what product can we throw to this factory” mindset. They need to get lean and mean.
If people want SUVs and trucks, instead of sedans, why not use those plants to build more SUVs and trucks?
Because they’re only selling their current SUVs and trucks with over $5k of incentives on the hood?
Do you not realize that GM has an overcapacity of one million units per year?
Steve, there’s this thing called the free market, and supply and demand are the foundations of it.
FCA had different issues. Apples and oranges. The Ram and Jeep brand has been growing steadily. GM’s trucks and SUVS not. Building more of them would be the equivalent of suicide.
I guess Sergio might have the last laugh.
The big news of GM cuts overshadowed the firing of Carlos Ghosn from Nissan.
The ideal quantity to produce is one less than there is demand for. That goes for anything but especially expensive items. GM has plenty of trucks and SUV’s, none are capacity constrained. The only reason RAM is so busy is that they moved some production from Mexico and are running two different lines for two different generations of pickups, one version of which will be phased out in the next year, then both lines will run the same trucks. As with GM, there is no problem getting a five figure discount on their pickups and the last thing any of them really needs is yet another conventionally engined SUV to just take share aware from the other products already in the showroom, there is plenty of choice already.
GM probably could and probably needs to go even further. I’m guessing that when it comes time to renegotiate the contract next year, GM will be sitting there and ready to call the UAW’s bluff to strike. I believe GM has more money and ability to wait out a strike than the workers do this time around and may well pick and choose a few more plants to not reopen if there is in fact any strike. There will also likely be a bloodletting of more white collar positions than already announced if there are less and less product lines to support.
GM has had plenty of time to see the writing on the wall and adapt either the Volt or the Bolt powertrain to a format that might actually sell, a CUV, I can’t understand why they have not done so. Then again, the fact it’s a GM may preclude it from selling no matter how good it is.
Interesting thoughts, and probably truer than we hope.
It is amazing that the best hope for GM is in downsizing and cutting capacity, but it is the surest way to become a long-term profitable business. We have seen what GM did in Europe and Australia, and what it tried in Korea, and we are now seeing it happen in North America. They could not find a way to build cars and trucks cheaper, so they are cutting production of the ones that don’t sell as well as hoped and focusing on what they do well. While it pains the enthusiasts, it makes good business sense. Do what you do well, and focus on those things, and you end up doing well. Apple has played this game, refusing to branch out on a lot of products (TVs were always something that they were supposed to come in and disrupt) until they have it down pat, and instead focused on producing the best iPhone, iPad, iPod, and Mac computer they could build, and charge high prices for them.
Maybe GM will focus on making the best cars, trucks, and SUVs they can, and sell them profitably, but their own history says otherwise. I wish them luck, they will need it.
I don’t know if anyone thought the CT6 would survive beyond the first generation. It was an upsized version of the ATS’s athletic formula that pleased car magazines but no one else, sold during a period when former stalwarts like the Lexus LS were losing ground, introduced as a “almost flagship, not quite” alongside the “not a flagship, wait for the CT6” XTS that outsold it anyway.
Didn’t seem like a focused effort to me, which is odd because the development costs would be a big chunk of money regardless. Why not go all the way and do it right? Or not at all and save the costs.
Now, I’d personally rather have the CT6 over whatever CUV blob will replace it, as the handling chops would appeal to me and I prefer actual sedans and full BOF vehicles to the CUV middle ground. But I’m unfortunately not in a position to spend $60K to prove it.
There were originally plans to spin a crossover off of Omega but the platform’s death warrant was signed when those plans were nixed. I can’t believe Omega has been a one car-only platform for a few years now. The CT6 has probably been a drain of money.
Still, I appreciated that Cadillac was adjusting strategy (again) and that this 7-Series-sized sedan would battle the 5-Series.
I’m hoping for a reprieve but I know that’s probably unrealistic. It’s just astounding Cadillac’s freshly redesigned flagship sedan would be a China-only model.
So the large Cadillac crossover will stay on C1 platform as XT6 sharing wheelbase with Acadia, instead of being like the direct competitor Lincoln Aviator.
And I drove both of them, Aviator is quite better. And chime is from Detroit Symphony Orchestra
What I find interesting is this. From the mid 1920s until well into the 70s GM led the industry. Where GM turned its attention everyone else mostly followed.
While New GM has largely done a better job of building cars and trucks than Old GM did, it seems to have mostly abdicated any kind of industry leadership role. Chrysler led the way in axing passenger cars, and then Ford. Only after the rest of the American industry has put down its cards does GM make its play. This is the way Lynn Townsend ran Chrysler.
It will be interesting to watch where vehicle volumes shake out going forward. Will GM remain number 1 in US total market share? All three companies are clustered a lot closer together in total output than in decades past.
On the other hand, the “old” GM would have resisted doing anything until the last minute, believing that its size and past glories would insulate it from the real world. So I do give GM management some credit here for not waiting until the wolf is at the door to make these changes.
One thing to remember – next year GM negotiates a contract with the UAW. With this announcement, the focus of the UAW will be on saving those plants, if possible, as opposed to making big gains in pay and benefits.
Those plants are officially “on hold,” meaning that they could receive new product. I would not be surprised if a result of the contract negotiations is that one or maybe two of these plants are “saved” with a new vehicle that, one hopes, can be profitability produced there.
Geeber’s right. The old GM would have been reactive and clung to low-profit, low-volume, old-school, mainstream cars until it was virtually too late. The current, Mary Barra GM is simply being proactive and trying to get ahead of the game.
On the other other hand, old GM could do that before the product started to become half assed and unreliable, a 50 year hot streak in an industry that is only about 120 years old isn’t insignificant. The real world of those years was created by GM, and probably could have continued if they didn’t get lost in it in a combination of hubris, greed, knuckle dragging and internal politics forming a thick fog by the 70s.
The old ways may have doomed them, but they also made them the giant they were. The new ways may still doom them but there’s not much positive to show for it besides a protracted death rather than a rapid one. Nobody’s going to look back at Mary Barra GM products as fondly as Lynn Townsend Chrysler products either, they may have been reactive but they had genuine identity, – it’s not lost on me that a Townsend era clone of a GM product, the current Challenger, is killing the current Camaro in sales. – Modern GMs seem to be a mix of rebadged foreign subsidiary models and competent but unexceptional clones of the segment leaders.
Those plants are officially “on hold,” meaning that they could receive new product.
What new vehicle would that possibly be? I’m struggling to come up with anything.
Keep in mind that as Mary Barra said: “we’re one day closer to the next major downturn” (recession). Nobody wants to expand their product line in the face of that inevitability. She’s battening the hatches for the next inevitable storm, while keeping cash flow high to support GM’s big bets on mobility and autonomy.
Ford has talked about “white space” vehicles, and has several new crossovers coming to the market to complement the upcoming brand-new versions of its existing ones (Escape, Explorer). I would hope that Ms. Barra’s team is watching that closely.
It’s good that GM is cutting the deadwood, but to ultimately grow in this business, it’s important to innovate in an intelligent way. Game-changers such as the 1938 Cadillac 60 Special and 1958 Ford Thunderbird were introduced in the teeth of serious economic downturns, and still succeeded. After it sheds the deadwood, GM cannot rely on continued cuts to prosper.
In 1938 and 1958 GM (and the other car makers) weren’t reading numerous reports that the private car market is predicted to shrink 25-50% in the coming 5-15 years. That’s different than the economic prospects of 1938 and 1958. back then, recessions were inevitable, as were recoveries. There’s no recovery from these predictions that mobility services and autonomy will destroy a big chunk of the legacy automaker’s markets.
All the CEOs are running scared. That includes Toyota.
And then add in an inevitable economic downturn to that mix. Yes, that will of course be temporary, but downturns also have a nasty habit of changing buyer’s habits for beyond just the the downturn. It may well hasten the adoption of mobility services.
As I said in a comment further down, there’s no doubt that GM very specifically didn’t want to be the first because of its bailout. The government at the time was very big on promoting green tech and small cars, and the bailout was contingent on GM bringing the Volt to market, even if its prospects and profitability were very much in doubt (the gen1 Volt was a notorious money loser).
Although there was nothing in the bailout that required them to keep building the Volt and other passenger cars, there was a lot of perception about GM doing just that.
The bailout is becoming a distant memory, but I think GM did not want to be out in front on this issue. It staked a lot on its ability to build small cars in the US thanks to the much cheaper Tier II employees, never mind the ditching of its crushing pension and retiree health care obligations, which are what really killed the company in the first place.
It’s smart of them to be the last of the Big 3 in this regard. The other two took the lead (and the flak), and now folks are used to it. Mary Barra is no dummy.
I woke up this morning to this news and I’ve been poring through it. My initial understanding was that the factories were only being idled and that negotiations were ongoing with the UAW. Reading further, that doesn’t appear to be the case.
As for product cancellations, these were mostly expected.
The Impala’s been on the bubble for years. The XTS was always going to be gone by the end of the decade. The Volt will probably make way for an EV crossover.
The only two that come as a surprise are:
-The Cruze. Of course, it’s entirely possible they could just source this from Mexico anyway like they do with the hatchback. But if they do kill it in North America, I’m astounded they’d do that when the Sonic has been on the bubble for years and the Spark has somehow defied all odds and continued to be sold.
-The CT6. There has to be some kind of mistake here. I know the Omega platform can’t be profitable considering nothing else has ever been spun off of it but to announce a huge facelift and an exclusive new V8 and then kill the car a few months later, effectively meaning a tiny number of 2019s will be built? And to then only keep the product in China? That sounds like a crazy hatchet job.
Again, the CT6 is a car they could import. I know people get uneasy about a Chinese-built Cadillac but the defunct Plug-In CT6 was imported. And there have continued to be rumours about an Escala, I don’t know how the hell that all plays into this.
Cutting the CT6, even if it doesn’t sell as well as the Germans, seems phenomenally short-sighted for a brand trying to attack the Germans head-on. Also because it’s not a 7-Series rival, ostensibly, but a 5-Series rival that’s a bit bigger (and the CT4 and CT5 will match up with the 2-Series/A-Class and 3-Series/C-Class).
How have sales of sales of the BMW 5- and 7-Series, and Mercedes E- and S-Class, been trending? I see far more BMW and Mercedes crossovers than I do sedans these days. If it’s a BMW sedan, it’s invariable a 3-Series.
Cadillac has been attacking the Germans head-on for over a decade now, and it’s not working. Passenger car sales have been declining across the board for virtually every manufacturer. Cadillac would be better served with an expansion of the Escalade sub-brand as a line-up of competitive crossovers.
Cutting the CT6, even if it doesn’t sell as well as the Germans, seems phenomenally short-sighted for a brand trying to attack the Germans head-on.
They picked the wrong thing to attack. Cadillac’s market share in bell-weather California is 0.5%; Tesla’s is 4.6%. Cadillac in the US is screwed, and has been since about 1985.
They only thing keeping Cadillac alive is the Escalade. I have not seen one of the so-called CT6s ever in the flesh out here on the West Coast, and seeing any of their other sedans is a truly rare occasion.
Lots of money being shoveled down the hatch…
I have never seen a CT6 here in Vancouver. I see loads of Tesla cars, however.
GM is simply doomed. It was doomed in 2009.
Cadillac does need to work on its electric vehicle strategy. For example, they literally have no hybrid now. The CT6 Plug-In was never going to be part of the redesigned line-up.
So not only does the brand have no hybrids whatsoever, they have no BEVs. GM should have been on top of this, especially considering selling a luxury BEV can insulate buyers from sticker shock (after all, they’re buying a luxury car, not a cheap commuter car). They should have had a Model S rival years ago. Instead, they had the horribly flawed ELR, probably the most disastrous product launch for Cadillac since the 1980s.
Cadillac does need to work on its electric vehicle strategy.
You think? Actually, that might have been possibly somewhat helpful advice ten years ago (I don’t think it would have been), but it’s absolutely pissing in the wind now. Do you not yet realize that there’s a huge difference between building EVs and selling them to the folks who actually are buying them? How many Focus EVs has Ford sold? You think Tesla buyers are going to give a Cadillac EV even a glance? If so, I have a bridge to sell you.
It’s ALL ABOUT BRANDING (Sorry for the caps). And Cadillac destroyed its brand decades ago, in a colossal bonfire. It’s brand is…utter crap, for the kinds of folks who buy Teslas. And will be buying EVs.
Sorry Will, but your perpetual optimism about Cadillac and Lincoln has me utterly confused, and seems totally out of place from someone in your demographic. I keep trying to understand it, but no luck so far…
There really is a reason why GM and Ford stock has been languishing for years now. The market is not stupid; it’s a bet on their future.
My assumption is that Will has a foreigner’s romantic attachment to Cadillac, as I do. I had no idea how shamelessly cheapo the 80s/90s ones were until I saw them up close relatively recently. I want there to be American Cars. The CT6 is the most convincing American Car since the first LX Chrysler 300. It will be a shame if Cadillac dies, or becomes simply a way of telling your neighbors you paid far too much for your Suburban.
Will’s comment on the CT6 interior disappoints me (I’ve never sat in one) because outside of a Morgan it’s the new car I most desire. It strikes me that too many of the sort of Americans Cadillac needs to attract are driving foreign cars only because they *assume* they are better, or more likely some variation on Miata Man’s comment on “non-aspirational people”. The problem with “people who want you to think they’re aspirational people” is not always the quality and suitability of the product, but how to convince them of the detectability of your Kool Aid, and the desirability of your badge in this case.
It’s probably too late to convince anyone “It’s not your unpleasant step uncle’s Cadillac”, and that makes me a little sad.
Agreed that Cadillac is dead in the U.S. It’s an aspirational brand that mostly appeals to non-aspirational people.
Lincoln’s almost certainly a goner as well, although that brand seems simply underfunded versus Cadillac’s malignant mediocrity.
Maybe the same reason I, one of those damned Millennials, keep pulling for Cadillac – I remember when they didn’t suck (or at least suck as bad). Damnit, they used to be the Standard of the World! It was a wonderful feeling to look at your car keys and see the Wreathe & Crest – you knew it was a luxury ride.
Paul is spot on about the branding – even I the buyer of every Brougham on Craigslist knows that you have to adapt or die.
For whatever reason, Cadillac isn’t aspirational in the same way a BMW or a Mercedes is – and GM already has in house Buick for near luxury…and GMC Denali trim lines for luxury trucks. Makes Caddy kinda redundant.
Tom, the last really cool Cadillac was the 1963 Pininfarina model. They really were standard of the world in those days. Even a 1977 could be optioned into coolness.
By 1980 it was all over, but they didn’t realise it yet. The 1985 failed to attract the new generation of buyer they needed. By 2000, the core buyers were dead and there were no replacements.
They tried, and they failed.
Remember the ELR? If you don’t, don’t be ashamed. Few ever heard of it, and it was an abject failure, denoted as a rebadged Volt for a much higher price. The bad part of this is that GM should have brought out the Volt as the ELR first, using the Cadillac brand to justify the high price. Instead, they chose to bring the Volt out as a Chevy, and people demanded that it be cheap.
The CT6 plug in was a stopgap that really had no purpose. If someone wants a luxury sedan EV, they buy a Tesla. They don’t want a hybrid. If they wanted to lead in EV, they could have gone for an electrified Escalade, or at least the CUV (SRX or CT5 or whatever they call it now).
As much as I wish they had not, GM has ruined any goodwill the public had for Cadillac. They are just as ruined as Buick is in America. What a shame…
“GM should have brought out the Volt as the ELR first, using the Cadillac brand to justify the high price.”
I am no defender of GM, but I have to give them a pass on this one. They were under incredible political pressure to bring this car out as part of the government bailout. What the K car was to Chrysler in 1980 the Volt was to GM in 2008. Bringing the Volt out as an exclusive, pricey Cadillac would have been a great idea in normal circumstances, but was never going to sell to the political types who were running things at the time.
They’re pretty rare on the street here in New York, too. Even as “black cars” – most of those are Escalades or Suburbans/Yukons these days, or Toyota Camrys. I used to drive by Goldman Sachs’ HQ every night on my way home from work and their car services are 100% hybrid Camrys these days.
Not surprised to see Lordstown on the factory list, regardless of how the Cruze is selling. That plant has been a challenge for GM ever since they put it up to make the Vega. When my neighbor moved in to manage the Pittsburgh Fisher Body plant in ’83, his predecessor was sent to Lordstown to clean up J-car production.
The worst part of all though is that some 15,000 employees will lose their jobs as a result, all while GM has still made an operating profit so far this year and had enough to spend $100 million on stock buybacks to its wealthiest shareholders and given its CEO a nice $22 million compensation package.
Especially when certain people are so concerned about not letting cars, even American cars, built outside the U.S. pass across our borders into the U.S. it amazes me that GM is being allowed to do this, especially considering they’ve recently received some $600 million in federal contracts.
Yeah, its a damn shame a whole bunch of North American workers are losing or potentially losing their jobs. Really surprising that they’re not replacing the cancelled products with other vehicles.
Watch next year’s negotiations with the UAW.
I’m not as sanguine as you are that this is just a negotiating ploy. Let’s face it, Lordstown is a money pit with only one shift. And the Cruze is going nowhere.
The CT6 and CTX are both zombies. As is the Impala. And Volt; which is neither fish nor fowl. EV buyers want pure EVs, and not lugging a gas engine around, now that there are long-range EVs readily available. It’s a dead concept.
Just what do you think GM is going to replace them with? Even if they can squeeze the UAW some, the product still has to sell, and at a profit. A few bucks an hour in lower labor is not going to do the trick.
Keep in mind that a heft chunk of GM’s line workers were Tier 2 already anyway, although I suppose some of them have moved into Tier 1 by now.
I don’t see a future for these products or factories.
I could very well be wrong. But this at least partly smells of a classic negotiating ploy.
Today GM announces the potential closing of several plants, and next year, during the negotiations, it look as though it is “giving up” something when the UAW and GM find a way to keep one of them open.
The product for the plant doesn’t have to be a current one. It could be a new, more salable product.
It’s not so much about finding a way to keep the Cruze/Impala/Lacrosse/CT6 limping along, as finding a new product that can be built at a profit in one plant.
I have no doubt that all of these vehicles will all go away, and that most of these plants will close. But I wouldn’t be surprised if one plant remains open, but with a new product.
As for what GM wants from the UAW – it’s not so much getting concessions (although that could very well occur with revised work rules at a plant that wins a reprieve), as changing the focus of the negotiations. The focus is going to be less on negotiating a more lucrative contract than on what can be done about these plant closings and potential layoffs.
But, I’ve been wrong before, so who knows?
You might be right about possibly one plant. Possibly. 🙂
Barra is very concerned about the inevitable next recession, and maintaining cash flow for GM’s big bets on mobility and autonomy.
Predictions as to the shrinkage of the private passenger car market as a result of mobility/autonomy keep coming out, and they all very negative. Predictions, yes. But when all of them paint a gloomy picture, it’s best to play it safe.
The next recession is, in my opinion, just a year or so away. There has been a long, sustained period of growth since the 2008 crash. The fact the US government is financing most of its operations via borrowing is going to drive up the cost of money. The inputs of the auto industry are now 10-20% more expensive due to your country’s ludicrous tariffs.
It’s a perfect storm brewing.
How about turning Lordstown into a Vega museum? I’m sure that could become a popular tourist attraction like the Corvette museum in Bowling Green. Well, maybe not.
A Vega museum is a great idea for Lordstown.
They could put a huge, gaping hole in the middle of it, just like the Corvette Museum in Bowling Green, and throw the automotive excrement known as Vegas into it. Nose-down, as they were shipped to the unsuspecting public in “Vert-A-Pac” railroad cars.
I, for one, would pay to see that.
A Vega museum is a great idea, although I suspect Lordstown is waaaayyy to big for that, something along the lines of the Ypsilanti Corvair museum we visited would be perfect. With a crater to throw some Vegas in.
Maybe you could use the plant if the crater in the middle was really, really huge. But then what would you throw into it? We’ve been running that Vega challenge for years and only a couple of candidates, pretty hard to fill up a massive crater.
And yes it’s very unfortunate that thousands of people will lose their good paying jobs. I feel for the people, not GM. I’ve never bought a new GM vehicle, and as I’ve said before I loathe (old) GM from how they treated my employer in the early 2000’s. It would take a lot for me to buy from them…
“A Vega museum is a great idea, although I suspect Lordstown is waaaayyy to big for that”
Because you need pristine original cars for a museum, I think a Vega museum could be housed in a typical suburban garage. OK, maybe a small pole barn. Unless you are going to display each of the many failure modes . . .
it amazes me that GM is being allowed to do this, especially considering they’ve recently received some $600 million in federal contracts.
Who’s to stop them? This is still (mostly) a free economy, right?
I’m pretty sure that the reason GM is the last of the Big 3 to cut sedans is precisely because they were bailed out by the government, and that bailout included a commitment to bring the Volt to production, because that was a part of the government’s rationale; to encourage new green technology. And an implicit commitment ti build small cars. But there’s nothing to hold them to that now, or actually ever has been, once they exited bankruptcy. Their obligation is 100% to their shareholders.
The bailout is becoming distant history, and GM clearly sees that the need to maintain its financial health (profits) is more important than any remnants of vague promises made almost ten years ago. The market has changed drastically since then.
,,,spend $100 million on stock buybacks to its wealthiest shareholders and givong its CEO a nice $22 million compensation package
True. Stock buybacks add nothing to the value of a company, it is entirely profit for executives and shareholders. Stock buybacks used to be illegal in the US.
spend $100 million on stock buybacks to its wealthiest shareholders
A stock buyback is just what it says it is: a stated intention (often not carried out) to buy a certain dollar value of stock on the open market. That affects its wealthiest and poorest shareholders equally, to the extent it affects them at all. Any shareholder, large or small, can chose whether to sell some of their shares or not.
If it is successful in increasing the price of its stock (no guarantee it will) it affects all stockholders equally, in proportion to their stock holdings. There’s nothing discriminatory about a stock buyback.
It’s no different if I stated that I was going to buy $100 million of GM shares on the open market. Big deal. And no one is going to hold my hand to the fire if I don’t.
it is entirely profit for executives and shareholders.
How do you come up with that? Stock buybacks is an alternative to dividends, and has some pros and cons to that. It’s more tax efficient.
There’s no intrinsic “profit” in a stock buyback. Those shareholders that agree to sell (no one is under obligation to sell) make whatever profit they would make if they had sold anyway.
Executives benefit if their compensation is tied to “pegs”, whereby the company stock meets certain goals. So yes, if a buyback has the effect of increasing the price of the stock enough to meet a peg, executives with tat in their compensation package stand to benefit to one degree or another.
Stock buybacks used to be illegal in the US.
I’ll take your word on it, but lots of things used to be illegal. Stock buybacks are very common now, and have been for decades, and are done in Europe too. Corporate finance (and all finance) is more complex than it once was.
A stock buyback essentially implies that the corporation thinks it cannot make a decent return in investing its excess cash. Which is certainly the case with GM at this time, given that they are in effect shrinking. What should they invest in that gives them the prospect of a good ROI?
Yup, the cash has to go somewhere that benefits the balance sheet. To most of us everyday people $122 million sounds like a great deal of money. Compared to development costs of a new car – not really very much.
Or, say that GM’s cost per employee is roughly $85k/year (I’d guess it’s much higher) you could keep roughly 1500 excess workers on the payroll doing…something…for 12 more months. Again, not going to make GM a better GM in the long run.
Holding the bottom line means a healthier GM (we hope) which means a(n eventually) growing GM which means more money for stockholders and more cars for us to talk about.
Still a sad day for the folks at the plants on the chopping block.
All financed by a trillion dollar tax cut that added $1 trillion to your deficit, future generations will have to finance.
As Jimmy Carter has rightly said, your country is an oligarchy.
Daniel, exactly. The 0.001% runs the USA, and the rest seem okay with it.
You’re getting into politics now, which is a different issue and one we’ve all agreed to not get into here.
Regardless of the impact of the tax cut (idiotic, for sure), I’m not aware of any significant new stock buyback agreements from GM since the tax cut of 2017, but I may have missed it. In any case, it’s hyperbolic to say it was “100% financed by the tax cut”.
I’m not defending GM’s or any company’s stock buybacks per se; it depends on the circumstances. But if a company has cash that they can’t invest profitably, they might as well give it back in the form of dividends or stock buybacks.
The point is that stock buybacks have been a common thing since the 80s, and trying to peg any one company’s buyback to a specific political act is not a productive exercise. It’s bigger than that.
Please don’t play games Paul. Trying to backtrack.
Your stock buybacks for GM are being financed by the middle class, including those GM workers being let go.
And their children and grandchildren will pay for those tax cuts and buybacks.
I won’t be bullied.
Daniel, you know nothing of my politics, as I don’t indulge in them on this forum. The issues that have affected the middle class, and other economic issues are a lot more complicated than being distilled into a few talking points. I saw them coming in real time over a number of decades.
My point is that to inject them into this discussion is not appropriate. If you want to discuss politics, its going to have to be elsewhere. To separate industry issues from politics requires a certain discipline, but that’s what it’s going to take here.
If we resort to political sound bites (which your comments are), it just invites more with the opposing point of view. And nobody is going to change their mind one iota.
I’m willing to discuss the facts around the circumstances of industry events and developments, but I’m not going to indulge in hearing the political judgments/solutions. What are you expecting to accomplish with your comments? Nothing, I hope. Hence they are not welcome here. Sorry.
We can all hope to live in a more equitable society, and work for that. But to throw sweeping political generalizations at a decision by a company to close some plants or buy back stock is not going to shed light on the specific circumstances that company or industry finds itself at this time. That is what I’m interested in discussing, not the ills of our society or politics.
Your stock buybacks for GM are being financed by the middle class, including those GM workers being let go.
That’s the kind of simplistic, sweeping statement I’m talking about. Life (and business and politics) is a lot more complicated than that. I wish it were that simple.
Any more political comments by you on this subject are going to be moderated.
Paul, I read your reply carefully, and stand by my comments. Though I do apologize for injecting larger politics, even if this topic is directly impacted by them.
Suggesting that buybacks are a ‘common thing since the 80s’. Sorry, I can’t normalize it. The jury most definitely out on their ethics. They were illegal at one time, and there is much politics behind them now in light of the trillion dollar tax break.
There is a culture difference between our countries. Many Canadians, including me, generally find the intense deregulation in US business and banking alarming, and high risk. Seeming most protective of executives and investors. Why I don’t feel comfortable with the optics of some of GM’s actions here.
I’m going to respond one more time:
Stock buybacks are roughly comparable to dividends. Historically, corporations paid dividends out of profits to shareholders; it was the only way to distribute their profits.
Yes, once upon a time stock buybacks were illegal, as they were seen as a form of market manipulation. A whole lot of things were once illegal or regulated heavily in the financial world, including many things wrongly so, as they were unnecessarily restrictive. You know that savings account interest was once regulated by the government? And women and blacks couldn’t get loans? and…
I don’t see very much difference between a company distributing excess cash via dividends or buybacks. Yes, there is some debate on the subject, but none of the arguments are very compelling, hence the popularity of it. As I said, there are tax advantages to it, and everyone is certainly free to maximize tax advantages legitimately. You trying to color buybacks with some moral taint simply doesn’t work for me.
GM announced last year that they were going to not retain more than a $18 billion cash reserve. Period. And that anything above that would be distributed to shareholders, via dividends and buybacks. And that’s exactly what they’ve been doing; a combination of the two.
Has the tax law impacted GM? Yes, but perversely, the opposite of what you might think. Since GM was (is) still sitting on a huge pile of tax-deferred assets that it accumulated as the result of vast losses from their pre-bankruptcy days and the bankruptcy itself. New GM emerged from that with many years of tax credits. But because the new tax cut makes those credits less valuable, GM actually had to take a write-down of $7 billion. Now that’s not a cash loss, but it had to be reflected in their accounting.
Since GM hasn’t been paying any taxes, they got essentially no or little benefit from the tax cut.
My point is, and has been all along, that these buybacks have been going on for decades, and they are a legitimate way of distributing excess cash to shareholders, and that in the case of GM, the tax law had little or zero impact on their on-going buyback program.
So for you to jump in with sweeping moralization and condemnation of GM and our political system is really off base when talking about GM’s decision to cut plants. Or buy back stock.
If you want to rag on about macro socio-political-economic issues, this is not the place. If you want to comment on specific issues affecting the story at hand, first, have your facts straight. You don’t. Sorry.
The massive tax cut and buy backs transferred public tax money into private pockets.
We agree to disagree. I’m done for tonight.
Not all that surprising since Ford had already come to the same conclusion. It’s simply business; there’s not enough profit in the smaller cars, and the larger ones no longer sell. Add in the expense of constant updates in technology and regulatory requirements, well, the money just isn’t there, anymore. The only ones that have a firm grip on the situation are the Asians. Domestic volume sales are all in old-tech light trucks, SUVs, and crossovers.
Still sad to see mainstream GM cars go the way of the dodo.
So are we going to see Bob Lutz on CNBC today predicting the imminent demise of Tesla? Or giving an eulogy for his beloved Volt?
Not likely, is it? It is amazing how anyone would listen to this old has-been. He’s probably on TV advocating for tail-fins and wrap around windshields.
I think he’ll go on air to call for a revival of broughams, because that’s obviously what Americans want.
Lutz claimed that making Pontiac into “all RWD” and “American BMW” would have brought in crowds of car enthusiasts to their dealers.
His halo cars, like Solstice and SSR did nothing to keep GM from a bail out.
Enthusiasts will say “I’ll buy one” at the Auto Shows, then end up with used BMW’s or truck/SUV, then cry when “car guy cars” don’t sell.
The irony being that BMW doesn’t even want to be the German BMW anymore, at least not in the sense Lutz was thinking, i.e. enthusiast-oriented driver’s cars.
It’s bad PR to cancel the Volt name. Should just put the name on an electrified UV, and say “all new Volt SUV”.
But also, GM is going on about “We are going to lead in Autonomous …blah blah, When? 2020? How many will sell? Cost? Lease or buy?
Some claim “You’ll just order one to come to pick you up!” Who will own fleets of them, the Gov’t? With what $$$?
If private, how much will it cost to keep them clean? Drunk riders will trash them.
And think of all the times these will have to stop for “automatic software updates”.
How often do current cars have to shut down for automatic software updates?
As a Cadillac lover i was just warming up to the CT6 (name sucks though). Sad to see the volt and Impala go. This car industry really sucks these days. no longer interesting at all
This car industry really sucks these days.
Comment of the day! Or of the year! Decade, even.
Yeah, that’s what every CEO is saying too. I’ve been saying it for years. At least we agree, for once. 🙂
I have to disagree that it’s not interesting at all. Not since the early ’80s with mass downsizing and the adoption of FWD have we seen as many rapid and interesting changes in the car industry.
I was only responding to that part of his comment. I wanted to agree with eddie once. 🙂
I didn’t say it’s not interesting. Quite the opposite! It’s utterly fascinating. The first thing I read each morning is AutomotiveNews.
The Citation is an interesting car with an interesting story. I wouldn’t touch one with a 10- foot pole, however. LIkewise I definitely find EV, autonomy and car sharing interesting topics, but I couldn’t possibly be more depressed by most of it.
I can’t possibly fathom a situation where I wouldn’t also be excited by something I find interesting. To me, it’s impossible to find something interesting but be depressed by it.
Wars are one of the most depressing and devastating aspects of humanity I want no part of, but I find the subject of the world wars quite interesting. I cant fathom a single interesting thing that doesn’t make me uncomfortable, even as a hardcore ICE car enthusiast I’m depressed by the environmental repercussions of them en masse.
While there have been many technological strides and some really facinating things done with cars in the way of engines and HP as well as the handling aspects of even the least expensive vehicles, i find it hard to get excited over vehicles that all but a handfull look alike. It’s like being assimilated to a world of sameness where no one or anything stands out on it’s own. The suv or cuv craze brings my point home, that everyone feels that to be “with the crowd” you have to have a vehicle that looks like everyone else’s, i find boring. That manufacturers are getting rid of sedans also serves to make my point. As a child born in the early 60’s where i was genuenly excited to see the new front or rear ends of the latest Caddy or Chevy etc. Those days are long gone. While technologically and engineering wise, amazing strides have been made to an otherwise really lackluster(visually) industry. Nowadays it seems that a mindless fresh out of college kid can say “lets change the logo of Cadillac and based on “surveys” gets it done and no results whatsoever and gets a raise and applauded for a stupid suggestion. As a man i am a visual being(almost all men are)and visually this industry has little to move me in that dept.
Now you’re touching on something else: though the wrapper changed every year in “the good old days,” the car underneath remained more or less the same.
Still is largely the case with the exception of the handful cars on the cutting edge of technology, how much has a mainstream sedan changed under the skin since the 90s? Most cars you look underneath you’ll see the same configuration of unibody chassis, MacPherson struts, transverse overhead cam four or V6 engine and multilink rear suspension as you’d see generations ago on a given model, and generally nothing meaningful changes under the skin for a given styling cycle/generation either, which is an eternity by the so called “good old days” standards.
Hear hear, Eddie! People still look back fondly at objectivity bad by modern standards cars because they had visual spice constantly sprinkled on them to keep attention. I firmly believe the loss of annual styling changes and instead chasing the European model of long production/substance over style aesthetics is what made American cars irrelevant in the market, domestically and abroad.
It’s great to finally agree on something Paul as i find your writes among the most interesting here and enjoy what you bring to this site!!!
Catching up to reality, I’d say. I recently had a rental Chevrolet Malibu, and I was thoroughly unimpressed. I can’t see why anyone would want one. And “new” GM has cranked out that sort of car-based mediocrity in small, medium and large versions, with “value” and “luxury” (cough) variants. All sedans are suffering mightily in today’s market–but the best ones, like Toyota (with Lexus variants), set the pace for those still seeking competent sedans. Even if the segments are shrinking, the leaders rise to the top. Modern GM was never a leader in sedans, and is wise to simply shut them down now (ironically following FCA and Ford).
The bigger question for me is what exactly does GM do next? Ford still dominates with pick-ups. Jeep seems to have the domestic SUV angle covered. Tesla absolutely owns EVs. The Germans still have a solid grasp on upscale rides, while the Asians continue to dominate the reliable/high value segments. So what does GM excel at? Gigantic old-school Tahoe/Suburbans (and “upmarket” variants from GMC and Cadillac)? Niche segment Corvette? There really aren’t many “greats” to choose from in their line-up, certainly not enough to support such a large enterprise….
I was trying yesterday to list segments that GM owns. Suburban and Corvette were all I could come up with, and they owned both segments for so long partly because there were so few competing products over the years. To give GM some credit, these are the two vehicles they have consistently improved upon. They once did this in mid and large size sedans, but that was a long time ago.
There’s another significant factor that may be driving this. GM’s new pickups, which historically generate a significant part of their profits, have not been well received, specifically because of their lack-luster interiors. It’s already known that GM will be rushing in improved interiors next year to remedy this. But the damage in the launch of their most important product will have been done, and might linger.
The new Ram pickups are considered to have a much more appealing and successful interior design. And it’s experiencing greater relative success. Ram pickups may give GM a serious run for the #2 spot in the next couple of years.
The potential/likely loss of profits from this undoubtedly also played into this decision. It’s essential that Mary Barra keep GM’s profits high, to maintain its ability to keep investing in its hopeful future in mobility and autonomy, as well as keep the stock price from falling.
If GM screwed the launch of this new generation of pickups it will be a massive mistake. Increasingly, interiors and its features are what sell cars and trucks, as they’re otherwise functionally so much the same. It’s hard to imagine GM not having gotten this.
I was getting my Jeep serviced at my local FCA dealer, and while waiting to pick it up, I wandered the showroom to check out the new vehicles. The new Ram interior is stunning. Far nicer than competing trucks in my opinion. In the Limited trim level I saw, the interior could legitimately be called “luxury” with a straight face. Were I in the market for a pick-up, there’s no question which one I’d get.
From my exposure to current GM products (mostly rentals), they still haven’t figured out the importance of quality plastics and cohesive interior design.
They did, around the early 2000s. Then, they seem to have forgotten again or at least fallen behind rivals. Reviews of almost all the latest GM products have criticized the interior quality. It seems their return to interior quality greatness (or at least goodness) was short-lived, although they’re not as bad as they were during the 1990s and early 2000s, relatively speaking.
I remember being disappointed with the CT6 interior relative to the CTS. I noticed a couple of pieces that just weren’t as nice. And that was on their luxury brand flagship. I’d love to compare the new Malibu to the old one, which had a pretty nice, solid interior.
Agreed about the new Chrysler interiors. I rented a Durango earlier this year, and the interior quality and design were both very impressive. The powertrain needed refinement, but they nailed the inside.
Yes, their new trucks have quite bad interiors.
And I only found out Blazer’s interior is worse, and model year 2020 as planned last year wasn’t better neither.
I have read some of the reviews of the new GM pickups. C/D was particularly positive, but they made negative comments about the interior. This word about interior seems to be spreading like wildfire, and it no doubt has hurt this truck launch. Regardless of how good the rest of the truck is, and it actually does sound pretty decent other than the interior, this bad interior will turn off a lot of potential buyers.
GM Trucks are hugely important and they have continued to make no progress in market share for some time. It this new truck doesn’t do well, and I suspect it is already doomed by the interior and quirky styling, this may be big trouble for GM. Chevrolet still has little brand power with cars, but it does with trucks and performance cars. Let’s hope it doesn’t lose what it has.
On the other hand, Ram has done an amazing job of branding its brand up while Chevrolet has whittled its away. Ram is nipping at its heals, and has already surpassed Chevrolet and GMC in sales Canada (individually). I am sure it will only be a matter of time in the US, before Ram outsells Chevrolet trucks.
IMO, the last cutting edge GM truck was the GMT-400. Every since the success of that truck, GM has pretty much rested on its laurels, and taken the conservative approach. Each truck was gentle evolution of the previous generation, but often had cost cutting and other changes that dimished its reputation. As a result, it has lost market share.
“IMO, the last cutting edge GM truck was the GMT-400.” Bingo!
We had one ’87 GMC (previous generation, but with EFI). It looked good but lacked refinement on the road. Three GMT-400’s in the family over the years and they all impressed with tight build and good handling (for a truck), especially compared to the ’94 and ’97 F-150’s we also had.
I do find the 2nd row bench seat on the 2014-2018 Silverado Extended Cab to be quite uncomfortable and hopefully that issue has been resolved.
Well, this sure has been an interesting comments section to read! There’s a lot of good points being made all over the place. It is sometimes hard to keep politics out of here, but if it is let in it will quickly toxify the site. There are plenty of other things to talk about here while keeping within the borders.
Good points you have made and I agree with you.
Given the climate damage and environmental pollution our addiction to these cars and trucks we love so much m has caused, we should just say farewell and good riddance. I know it’s not a popular position.
Spend time talking about what we should do in reaction to the grave danger we all are in if we don’t do something about climate change as detailed in the reports released last Friday.
Otherwise all of us, all 3.5 Billion inhabitants of this earth, be in a worse position than the 14,000 folks affected by this news today.
What do I do with my 1951 Studebaker, my ’63 Valiant and my Avanti? I don’t know. But it’s time for us to face reality, alas.
Please keep your classics, and take them out for short drives on nice days. Just don’t use them as daily drivers, and their carbon impact will be nil.
I’m optimistic that EVs will continue coming down the price curve, solar and wind will keep growing because they’re cheaper, and grid storage will come on line to cover the baseload.
I seriously doubt the veracity of those reports and do not believe we are in any such “grave danger.” However I know I’m not supposed to get into any more rants on that issue, so will only say my response to the reports is to make absolutely no changes in my life. I would advise you to continue to keep and enjoy your ’51 Studebaker, ’63 Valiant, and your Avanti and don’t concern yourself with what the founder of modern climate science referred to as “a bunch of hooey.”
What evidence do you base that position on?
Send them to me, i’ll take care of em 😉
Except it’s the opposite. We’re not talking about GM cutting their trucks and SUVs to build small, efficient cars and electric vehicles. Instead we’re talking about GM cutting their cars to build and sell more hulking SUVs, trucks, and CUVs.
My guess is this is only temporary. Next time gas shoots over $5/gallon, that’s going to be the end of the domestic auto industry.
“Next time gas shoots over $5/gallon, that’s going to be the end of the domestic auto industry”
I agree, people are always going to be looking for an affordable gas sipper. Toyota, Honda, Hyundai, KIA and Nissan all offer sub $19,000 compacts rated around 40 mpg highway. I think GM needs to hedge it’s bets and keep at least one or two sedans for the next gas crisis.
No people aren’t always looking for an affordable gas sipper, the few that do that expect to buy it for less than it costs to make.
When gas hit $4 the number 1 selling vehicle in the US was still the F-series and #2 was the Silverado. Dealers that stocked up on their mfg’s sub-compacts got stuck with a lot of them rotting on the lot.
Sedans aren’t the only way to get good mileage these days. I’ll be the last defender of the long/low/wide 3-box sedan but for reasons completely independent of the mileage argument, in fact the sedans I mourn were guzzlers. The mileage criticism is dated in this day and age, many current crossovers and midsize sedans get as good or better better mileage than Focus’ and Cobalts did 10 years ago. Small cars just will never shake the stigma of being cheap, every time gas prices go back down after a spike, people drop them like a bad habit.
To EdR, your number of the current world’s population is inaccurate and outdated, unfortunately for all us and the planet.
The current world population as of September 2018 to the UN Densa report is 7.7 billion.
The frightening numbers are those of projected world population future growth. By 2030 a population of 8.5 billion, and then by 2050 a world population of 9.7 billion. This growth is projected to occur mainly in the developing world with more than half of that growth occurring in Africa.
The projected environmental costs of population growth with the included associated energy utilization will outstrip any environmental and carbon savings occurring in the developed world. Population growth, according to UN studies is the deadly time bomb that the majority of the planet is ignoring at our own peril, regardless of politics.
^^^^^ THIS ^^^^^
Amen. Ever since I first learned about logistic growth curves for bacterial plates in college microbiology class, I’ve been worried about us all – the comparison to our own macro world and its similarly finite resources and space was made very clear to us. Looking at the global human population growth curve, which has only been getting steeper over time, it’s not unthinkable that we may hit carrying capacity within a current lifetime. That will be a huge crisis in itself. On top of that, though, if we take the bacterial plate analogy seriously, is that at high density the organisms often produce waste products that reduce carrying capacity, and that drop can be as steep as the original rise. For us, those waste products are not only CO2 but everything else our industrial civilization puts out. We’re fortunate, though, that unlike a plate of culture medium, we are living in an open system, with constant energy input from the sun, and we’re finally learning to use it on a large(ish) scale. Whether we as a human civilization can figure out (soon) how to use that energy to effectively mitigate the damage we’ve done and put ourselves in a position to comfortably plateau somewhere remains to be seen. Until then, I worry. (And sorry if this was a weird digression, but rarely do my interests in cars and biology manage to collide – it’s basically this and the physiological effects of crashes!)
I never thought I’d say this, but sometimes I long for the halcyon days of the late ’90s! The world has changed a lot since 9/11 and technology is advancing at a ferocious pace. Scares me a bit what the next decade will bring.
It’s too bad the Volt hasn’t sold better, it has a lot going for it. It’s the only plug-in hybrid I can think of with 50-mile or better EV range. The same car is good for the electric daily commute, but capable of long trips on the freeway or the back roads. Until 15-minute charging is both possible and common, which is about 10 years off in my book, a little gasoline can be a good thing. Plus the Volt’s a hatchback, which is so useful.
If the plug-in Prius has 50 mile range (not today’s ridiculous 20 miles) I’ll consider it when it’s time to replace the 2010 Prius.
One thing about the Volt and the Bolt that puts me off, though I hate to admit it. It’s a Chevy. Sorry, I’m just not a Chevy guy, the brand just says ‘cheap’ to me. Somehow Ford and Toyota have escaped that. Maybe it’s just because my dad was a Ford guy.
It is a deeper problem though, that GM has no brand with anything besides a mass-market dumb-car image. Too bad they failed to develop Pontiac or Olds into an edgy tech brand, long long ago. Or Saturn if they’d stayed committed to it. I know they tried a little but they fell far short.
Remember the GM EV1? That wasn’t a common Chevy, a golfer’s Buick or a gold-chain Cadillac, it was just GM. I guess I respect GM more than any of its brands. If they came out with a genuine Tesla alternative (maybe like the Bolt but without all that plastic and badging) and branded it “GM” I’d consider it. Funny thing about branding and identity.
The Volt somehow managed with its 2nd generation to look: Smaller, Lower, Cheaper, Less distinctive than the first generation. The Cruze somehow managed the same exact trick. None of these are what the market was/is looking for. And yes, I completely agree with you that the brand is a turn-off. As well as the brassy goldish badge. Any millennial worth their salt knows it has to be Rose Gold or nothing. (Just kidding on that last part there 🙂 ).
Jim, I agree with you on the Cruze. I always rooted for GM, and I wanted them to be the best, but with the exceptions of the original Cruze and ’08 Malibu their cars often manage to look both tacky and generic at the same time. Rose gold emblems would actually be a step in the right direction.
Writing from the EU I must confess I was also surprised by Opel’s equivalent’s lack of success when compared with the Prius. Was it the Opel stigma (kinda like Chevrolet in the US…). No idea but it bombed.
Opel has the perfect logo for an EV.
Rotating that logo 135 degrees clockwise, would make the Opel the official car of speedsters everywhere…
The demise of the sedan is a natural progression in the market.
Think about it , when was the last time you saw a station wagon (put out of business by minivans) or a two door coupe (death to the personal luxury car market sooooo popular in the ’70’s). Today, its SUV’s from extra small (Ford EchoSport) to extra large (Chevy Suburban) with very expensive pickup trucks thrown in the mix.
Even the rental car companies are picking up on the shift in preference. My last 5 rentals have been SUV’s for only a dollar or two extra per day over a rock gut Hyundai Accent or Kia Rio.
My last three rentals were not sedans, and were the cheapest available vehicles using Costco at the time, yes, cheaper per day than even a Fiesta or Rio. Jeep Compass, Kia Soul and Hyundai Santa Fe. Rental companies must be getting smarter about resale value, not just purchase price.
My first and only Costco rental (so far) was a “luxury” car for a week, pick-up and drop-off at LAX, that cost little more to rent than a basic smaller car, perhaps because it was mid-January. The pictured “or similar” car was a large front-drive Cadillac sedan. At the airport, to my surprise, we were offered a choice of two vehicles, both with tailgates.
(We chose the Audi Q5, final year of the previous design with 19″ wheels and other options, which proved an excellent choice for a family vacation. The other choice was the Range Rover Evoque, but we prefer outward visibility.)
I know the West Coast (US) is different but I see late model station wagons and 2 door coupes far more often than I see any recent GM passenger car except Cruz, Volt and Bolt; make that domestic passenger car with the addition of Focus and Fusion. Those wagons and coupes bear the nameplates VW, Volvo (wagons); and BMW, Mercedes, Audi (coupes and wagons).
Schadenfreude.
There is no longer an economic case to be made for producing vehicles in USA or Canada.
Boeings yes. Medical supplies/equipment/technology yes. Pharmaceuticals yes. Legal and financial services yes. Entertainment yes. Fossil fuels yes. Agricultural products yes. Caterpillars probably still. Technical education possibly. Passenger vehicles no.
Comparative advantage in world trade.
Elon Musk would disagree with you.
Paul wrote: “Their obligation is 100% to their shareholders.” This is correct for any corporation. It may not be what some want but it is what it is under free market capitalism. This needs to be understood and accepted.
Also, I wish to comment about the similarity or difference between dividends and stock buybacks.
Dividends are direct payments to owners of some or all of the profits of a corporation. These are taxed to owners in the year distributed at the current income tax rate on dividends. This may be different for dividends paid to individuals, corporations, mutual funds, retirement accounts or sub-chapter S corporations. However they are generally taxable, at some rate, in the year paid.
Buybacks, in theory, benefit the owners by reducing the outstanding number of shares and, all other economic parameters being equal, therefore raising the current share price of all shares – those owned by individuals in small amounts or by investment moguls in massive numbers. But in all instances, the identical per share theoretic gain is not realized until the shares are sold – if ever. So, instead of realizing an immediate taxable gain on dividends paid, the long term owner of shares can defer any tax obligation on any potential gain on shares still held after a buyback until a sale years down the road or until never – if shares pass in an estate at the “step up” value. It is complicated and it is US tax law but generally a buyback is more beneficial to a very rich owner than it is to a small owner who cold make better use of an increased dividend paid and taxable at the smaller owner’s much lower tax rate. Again, complicated US tax law.
Paul wrote: “Their obligation is 100% to their shareholders.” This is correct for any corporation. It may not be what some want but it is what it is under free market capitalism. This needs to be understood and accepted.
This is true in the States and other corporate law systems following the shareholder model such as the UK. In many other countries however the corporation is under a legal obligation to take other affected stakeholders into account. Not that that would have prevented shuttering these excess capacity plants now, mind.
As another post upthread noted, not word on the Spark and Sonic, both of which sell in lower volumes than the Cruze.
It could be because the press release is mostly about closing plants. The Sonic shares Orion Township with the Bolt, and Wall St likes to hear about electric cars, so Orion stays open.
The Spark is built in Korea. The press release said two plants outside of North America will also be closed, but did not name them.
There has been a great deal of controversy over GM’s recent announcement that they will spin off the engineering part of GMK into a separate company. Many observers figure this is a preliminary move to keep the small car engineering capability, while shutting down the production facilities. Having closed one GMK assembly plant last spring, there remain two assembly plants and an engine plant in Korea.
I expect to see more commonality between the next Sonic, Trax and Encore.
Nothing lasts forever, even cold November rain…
I would love to know what Akio Toyoda is thinking right now . . . I suspect the next generation Tacoma and Tundra will be much more competitive in areas other than reliability. . .
Ford is sort of getting away with moving upmarket as the F150 / Expedition / Mustang company, FCA is doing the same with Jeep and Ram. I can’t imagine a scenario where GM gets half as far as either, which may not save them in the long run anyway. Like Paul said – branding is crucial. The GM brand is a dumpster fire.
It seems inconceivable, but some sort of major economic disruption could really snuff them out. What happens when most of the baby boomers are retired and not spending any money?
Just GM and Ford trying to force everyone into building the only vehicles they could ever be successful at: big cruisers. Yesterday’s Electra 225 is today’s Silverado. They could never figure out how to do smaller cars right. How is it that Hyundai/KIA can offer such a wide range of vehicles with a small home market yet GM can’t? They better hope gas stays cheap for a very long time, or they’ll be caught short with a very limited product offering.
I foresee bad times for the American auto makers. If Chevy stops making the Impala and the Cruze the only cars left would be the Sonic, spark and the Malibu. Who is really cross shopping those against Honda or Toyota? If all they can produce is trucks and full-size SUVs imagine what the average sticker price for a Chevy would be? Could they afford to give as many incentives as they do now?
Sorry the reason I personally have never bought an expensive American
vehicle is because I never felt they could ever be trusted to build a simple inexpensive one
Back in the early 1980’s I was a participant at the GM Fremont Ca. assembly plant supervisors training program. Early in the program our instructor asked us to identify the “business” that General Motors was engaged in. Most of us answered that GM was in the car manufacturing business, or the industrial manufacturing business. That wasn’t the answer that they were looking for, so they told us the proper response. General Motors was engaged in the business of making money. Which should of course, be the bottom line. This is at it should be.
I, as well as my immediate and extended family, have been employed by General Motors as production line workers. Most of us have moved on to other types of employment, either through choice or circumstance. At one time what was good for GM was good for a lot of America. Many families and individuals have benefited from this relationship.
However if the company is going to survive and maybe even thrive again, it’s going to have to successfully adapt to the changing realities of the market. A lot of enthusiasts will lament the passing of the General’s various automotive divisions and their signature models, but it doesn’t make any sense to build what you cannot sell.
An industrial company that sees its primary focus as making money rather than making good products, is not going to make good products.
“Their obligation is 100% to their shareholders” is not a law of physics, it’s a political choice, a relatively recent one in American history and not the case in many other countries. It’s an ideology that was propagated in the 70s by monied interests asserting corporations as unquestionable powers free of any wider obligations, and has led to many shortsighted and long-term-destructive business decisions.
Again, not that simple. It’s a balance.
I worked for an industrial company where the chief engineer’s goal was to make THE best die changing equipment for the North American auto stamping market. The company owner supported him in his mission, and project managers like myself had no influence on that.
He designed THE best equipment alright, but it was expensive to build and time consuming to design. We were always late, and we always lost money. The equipment was awesome though, and our customers loved it. But he was one of the main factors that drove that company out of business.
A company has to be in the business of making money, but it also has to never lose sight of what makes money: an efficient organization, good products, and a happy customer.
+1,000
Not a surprise given the other American car manufacturers culled their domestic market cars earlier this year. GM has finally acknowledged it is no longer the biggest company in the world and has to shed excess capacity left over from the glory days now long gone. I however cannot escape the impression that the steel tariffs influenced the timing as well as the models to be axed.
Rather wondering what GM will do with the market outside of the US. In Mexico I already had the impression the new Cavalier is functionally hardly inferior to the Cruze, so unless GM chooses to continue Cruze production elsewhere, both will be replaced by one model. Idem for other axed cars.
At the risk of sounding like a broken record, I do still seriously wonder how Ferd can claim not to earn enough on two models continuously in the top 10 best-selling cars in Europe on that market. If so, the problem lies with Ferd (or GM), not the market itself.
If so, the problem lies with Ferd (or GM), not the market itself.
That is what I have been suggesting in several forums discussing GM’s latest retreat. The problem is not that consumer tastes are shifting. The problem is GM isn’t creating sufficiently appealing products, and losing market share.
FCA *is* creating appealing products, so it doesn’t need to close plants in North America. Idle Fiat capacity in Italy is being turned to building yet more Jeeps. While FCA’s plans to build Ram pickups in both Sterling Heights and Warren is on track, their previously announced plan to take pickup production out of Saltillo is being reconsidered as their pickup line is so successful, they may need all three plants building them.
I remember when GM held over 50% of the US market share. Now, GM is down to a 17% share, only 5 percentage points above FCA. Last spring, Marchionne was saying it’s possible that FCA will be more profitable than Ford, this year. This is a decades long failure of management, but GM blames customers.
If the problem lies with Ferd, then they should get rid of him and hire someone who won’t be a problem.
For the record, I was referring to the manufacturer of the Ferd F-Teenthousand 🙂
Who still managed not to earn enough on the then nine-year-old Fiesta in Europe, while it was and is consistently one of the top selling models on the continent.
It’s very noble of you to stick up for Ferd, but since he’s been such a problem I still think it’s best if he goes.
I forgot to mention another significant factor: China. GM’s sales there have been on a protracted downturn for some time, with sales down 15% for the quarter ending Sept. 30. The Chinese market has slowed some overall, but GM’s losses exceed the market, and it’s losing market share primarily to Japanese brands in the lower-mid section of the market.
This is a very significant event, and portends possibly more difficulties ahead. GM does not appear to be able to compete with the Japanese brands in any part of the world.
Not to overdo the GM bashing, but honestly, driving current GM products versus Asian competitors (including the Korean brands) as rentals in the U.S. really highlights the gaps and GM comes up the loser.
No matter which market you are talking about, cars are relatively expensive and people are seeking as much value and refinement as possible for their money, whether in Beijing or Boston. It’s not rocket science, but continuous improvement and a focus on delivering satisfaction in everyday use (versus hitting a target on paper) has served Toyota, Honda, Hyundai, Kia et al well. GM seemingly doesn’t “sweat the details” and therefore simply can’t earn the positive word-of-mouth needed to drive meaningful volumes with good margins in key global passenger car markets.
The wretched Malibu rental I drove for a week recently was a case in point. For example, it had “sophisticated” start/stop technology, but stuttered and shook every time I came to a stop or went to accelerate. Absolutely horrid. And though the technology promises to “save gas” the thing drank fuel like a ’72 Buick Estate Wagon. No manufacturer can get away with this anymore, especially when there are no other desirable brand attributes to fall back on (like Jeep for example) which might prompt buyers to endure some rough edges for the sake of a sought-after image. Or where competitors like Toyota serve up remarkable consistency, product freshness and hold a strong reputation, even if they aren’t particularly cutting edge (just like GM used to do for decades before the 1980s).
The apparent satisfaction with “marginally decent” or “just barely satisfactory” being the internal GM benchmark for “excellence” does not bode well for the company’s long-term future, despite Mary Barra’s moves to placate Wall Street. The news this morning was filled with coverage on how GM’s future will be EVs and autonomy, but I fail to see how GM’s current “mindset of mediocrity” will translate into a leadership position in either of these areas.
Brutally apparent with this latest news is the peril so many workers face in the modern age, at GM and elsewhere, as these enormous market gyrations continue. The notion that all these newly unemployed people will be successfully retrained as AI programmers or artisanal cheese makers seems naive at best. As much as the markets “despise” old-line businesses, the harsh reality is that “new” technology businesses are beloved by investors because they seek to eliminate the “high cost” of people. As “old” firms shed workers to reinvent themselves for the tech age (and in the case of the auto industry, with corresponding massive tsunamis through dealerships, repair shops, insurance companies, municipal and state tax revenues, etc., etc. etc.), the societal impacts will become ever larger and more apparent. The age old question “what’s the price of progress?” is arguably more relevant than ever.
I’ve rented both the Impala and the current Cruze, and found them to be quite competent, especially so the Impala. The Cruze had stop-start, which worked quite unobtrusively for me. It’s turbo engine had a rather satisfying power delivery.
I have not rented a current generation Malibu, but did rent a previous one, which struck me as adequate except for some subjective features.
I find your comment “the thing drank fuel like a ’72 Buick Estate Wagon” a bit hard to square away, as both the EPA numbers and real world testing doesn’t seem to suggest that it has out of the ordinary fuel consumption. Maybe a leaky gas tank? 🙂
The problem in my opinion is simply that domestic cars have been falling out of favor for decades, and there’s really not much the Big 3 could have done about it. It’s a secular decline. Folks just don’t think of these brands if they want a basic car. To build something materially better than the japanese competition is essentially impossible without increasing the cost. The rep the Japanese brands have accumulated over the decades is a mammoth hurdle which cannot be overcome. They’re simply screwed.
It’s happened to other companies: Kodak, Xerox, IBM, etc…
I have driven the current Impala and previous Cruze, both of which were better than the current Malibu in my opinion. Neither were class leaders though, and the Malibu definitely isn’t. My rental pattern of late has me doing a lot of consistent driving in suburban Dallas. Same roads, traffic conditions, different rental cars. The Toyota products are my choice if I can get one—does what is asked, reasonable economy and refinement. The Koreans are typically pretty good. Don’t love the Nissans, but would happily take one over the Malibu. I’ve driven 2 different Malibus over the past few months, and they both were unrefined and used a surprising amount of gas on the same roads with the same driver (me) and similar traffic conditions. Typically with all the Asian brands, I use about 1/4 tank for the rental period. Both of the Hertz Malibus used 1/2 tank under roughly the same usage. The Malibu was no roomier or quicker than a Camry, but had notably worse gas mileage. And both had the very disconcerting “cough, stumble, shudder, turn off, shake, shudder, restart and lurch” drivetrain which I found to be so embarrassingly bad. So maybe outliers, but still not good.
Though I note the adjectives you used “quite competent” and “adequate” aren’t exactly glowing. The problem is there are so many cars out there that inspire more praise than that!
Question for you Paul; I’ve been wondering for years – why do GM and Ford and the former Chrysler not make cars with the quality and fit and finish (and interiors) of most German, Japanese and maybe Korean cars? The former Big Three have designed many potentially great cars – that is until the beancounters got involved. I know a company exists to make a profit but the Germans and Japanese seem to want to build the best cars possible for the price. Is it a cultural thing? It doesn’t seem to exist in any other American industries.
To answer that would take a book!
Even your question needs qualifying. Some of the current interiors of American cars are quite good and competitive. And the quality has come up, if still not as good as the best.
I’m going to take a stab with a quick answer that will obviously fall short of a comprehensive answer.
The Big 3 got complacent, due to having the market essentially by themselves since about 1930 or so. This really became an issue in the 50s, especially when they fell into a trap of trying to build longer, wider, chromier, finnier cars instead of better ones. Style over substance. It sold cars, although some got injured badly, like Chrysler in ’57, due to bad quality.
Meanwhile here comes VW in the 50s and keeps selling the same Beetle and just improves it every year. This was the ultimate opposite of the Detroit approach.
And the Japanese followed up with that by building a wide variety of cars but always improving their quality. the Toyota way.
During the exceptional period (1946-1971) Americans were optimistic that their economic circumstances were always going to keep getting better, and many things were very cheap: education, health care, food, energy, housing, etc.. So they were willing to spend a bit more of their income on big flashy cars. Mostly they were pretty reliable, for the times.
Americans traditionally were always more open to change, looking for the next big thing and a way to improve their economic circumstances. That’s why immigrants came here in the first place. Which means the tradition of craftsmanship and quality is not as deeply ingrained into the culture as it is in parts of Europe and Japan.
Yes, America could build good products, but they were vulnerable to more ambitious, more focused manufacturers in Germany and Japan to do better.
Car building, and a lot of manufacturing, became a less desirable industry to be part of for an increasing number of Americans. The brightest kids were increasingly drawn to New York and California for careers in media, finance, entertainment and high tech.
And these are the types of industries that have fueled the American economy in the past 50 years or so.
America has been experiencing a shift away from manufacturing era into other economic areas. Obviously, that’s easier said than done, and has massive effects and negative consequences. yet our economy keeps growing. GM lays off a few thousand people; 200,000 new jobs get created each month. Yes, they’re not all as good, but that’s just how the American economy works.
It appears that the management of American car companies simply haven’t been able to navigate the many massive changes that have profoundly impacted them: energy fluctuations, environmental, economic, societal, etc..
And there’s simply the massive one of social prestige. Imports became “in” with the young educated boomers in the 60s, and these are the influencers in society. Well educated younger people always set the trends in society, and they increasingly saw American cars as passe, frumpy, and connoting values that they didn’t espouse.
The problem is that when your industry/company is in a state of secular decline, it’s extremely difficult to stop. Look what happened to Sears, Kmart, Kodak, IBM, and so many others that are either gone or had to change completely (IBM).
American car companies are in a state of secular decline, and if it weren’t for American’s love of trucks, they’d all be dead already, or again.
There’s no easy answer. I don’t pretend to tell them what to do. I see nothing but more pain in their future, the exception being FCA, as Jeep is the only truly healthy brand left in this country, and one that is viable globally.
I probably didn’t answer your question directly, but ti just turned out this way. Life is like that. Some things go up; other go down.
At the moment, the only exception is of course Tesla. We shall see how that plays out.
This is a very significant event, and portends possibly more difficulties ahead. GM does not appear to be able to compete with the Japanese brands in any part of the world.
GM couldn’t compete in Europe either, so tucked tail and ran. The point I have tried to get at is that GM is blaming customers for not buying their products, when GM’s competitors do not seem to have that problem. GM closes plants and abandons markets, while it’s competitors retool plants to build models customers do want.
Bubblevision is trying to make Barra look good today, by touting her as a game changer that has embraced “small is beautiful” rather than observing that GM has been losing market share for 50 years.
https://www.cnbc.com/2018/11/27/gm-breaks-from-tradition-with-new-untested-path-under-ceo-mary-barra.html
GM is blaming customers for not buying their products
Show me that. As in a direct quote.
No CEO is ever going to do that; it’s the kiss of death.
They’re not blaming anyone; they’re responding to the realities of the market and their position in it. You’re free to draw your own conclusions. But it’s all rather self evident.
My point is that this is a secular decline that started almost 50 years ago. And that GM and Ford are obviously unable to stop it, even with what are generally considered competitive products.
You do realize that folks by brands, not features? And there’s no way to duplicate a wildly successful brand like Jeep, right? GM tried that with Hummer, but that didn’t work out so well.
Consumers have been shunning Big Three brands except for trucks and large utilities in ever increasing numbers for decades. Nobody wants to buy a new Chevy sedan, when it’s going to be the only one in the whole neighborhood, right? Even if it’s highly competitive.
Who in their right mind bought a Studebaker in 1964? Or an Ambassador in 1973?
It’s all about branding, which is essentially a function of humans being social creatures. We don’t want to stand out and look stupid for our purchases, especially such an expensive one and one that everyone sees.
Low resale value is one reason for low sales, and just never seemed to get better.
Back in the 60’s the Impala had high resale and was #1 car. Value was lost along the way.
I read an old article on DAF in Automobile Quarterly and when asked why the Variomatic hadn’t really caught on, Wim van Doorne CEO of DAF began his answer with:
“People are stupid”
So we can see where blaming the customer got DAF. 🙂
I recall reading an analysis a long time ago that successful car companies either make hits that capitalize on fashion or they master the basic blocking and tackling of making a good, basic car that is largely problem free.
The Japanese (and increasingly Koreans) are the second kind. The Germans have had a really long run of the first kind and this is where Ford and FCA have excelled.
GM does not seem to have done consistently well in either category (although it was King of the second group from the 20s through the 70s).
And just how do you “blame customers” when you don’t have them? You mean “non-customers”?
Excellent article in MarketWatch on the “reason” for the closing of the GM plants in question:
https://www.marketwatch.com/story/the-dramatic-chart-behind-gms-job-slashing-2018-11-27
The story contains a graph on the steep decline of passenger car sales over the last several years. Well worth reading.
Going along with the recent Olds Bravada post, if somehow GM kept Olds and Pontiac, they’d simply be offering badge jobs of Chevy SUV’s, with dealers trying to claim they are the “better brand”.
There’d be Bravada, “Olds Encore” and such Utes. No way would there be new versions of Cutlass Supreme personal lux coupes or 98 Regency land cruisers.
It’s not 1958, 1978, nor even 2008.
No surprises here except the news about the Impala.
Sales numbers don’t lie, however, amd many knew this day would come. Still sad that so many prefer trucks, SUVs and crossovers, but I suppose in today’s realities, it seems right.
I was hoping for a final new Impala, but I’ll keep my 2012 as long as I can, as it has been a superb car.
In some ways, I don’t feel right commenting on this article because I never buy new vehicles. But one thing seems obvious to me — you cannot succeed in a market in which you choose not to compete. What GM (and the others) have done is surrendered an entire market segment. Yeah, I get that the market segment in question is shrinking, and yes, I get that they are losing money (or are their profits just smaller?) in that segment.
But something about saying, “Right now things are tough so we’re just gonna quit,” just doesn’t seem to be the right answer to me.
I claim no expertise in business — though I’ve grown my own business through good times and bad for 23 years — but I’ve never known any business which succeeded by quitting when the competition got tough. I’ve known some which quit a segment to free up capacity for rapid growth in another segment — I’ve sorta done that myself — but quitting just because the going is tough? I just can’t see how that is ever a winning strategy.
It’s not about winning anymore, this is coping with losing. When you listen to the proponents of these segment withdrawals, particularly with this latest one, the direction is simple: controlled and planned phasing out of the car business. Cars are commoditized, autonomous ride shareing is the future and it’s going to be less painful for everyone involved to slowly cede the market to the successful appliance, err, automakers for physical product and have some assets to sell off at the end to retrench in other avenues of business than cars.
Apparently, Toyota doesn’t see it that way.
GM, in its heyday, was more than a car company. They sold appliances for real, Fridgidaire. So did Ford Philco and AMC Kelvinator, but GM was a major player. GM was also a diversified industrial company, with Allison, Electromotive and other divisions. All of that was spun off to focus on what?
Honda Motor Corporation may not have commercial trucks, but does have a variety of non-automotive products, including jet aircraft.
Though I grew up in a Ford household, as a kid in the 50’s and 60’s I respected so much of what GM was producing – the quality, styling, and engineering. That respect ended at least a couple of decades ago. Packard ads used to say, “Ask a man who owns one.” Colleagues and friends who bought Oldsmobiles, Cadillacs, et al from the 80’s onward could not provide a positive answer to that question.
A close friend purchased a 2018 Cadillac ATS on special order this year. I recently visited him and we took road trips in it and in his 2008 BMW 328IX that he purchased new and now has 80K miles. I can say firsthand that the ten-year old BMW is so superior to the new Cadillac that it is illustrative of why Cadillac is no longer a respected prestige brand. My friend ordered the Cadillac because he wanted the last of the six-speed manual models. I tried to dissuade him from this decision, pointing to the dismal reliability records for the ATS as well as its outdated design and less than appealing interior. But the dealer sweetened the deal by taking many, many thousands of dollars off the price – and there were not many manual transmission choices left in this price range. The basic problem is that despite the upgraded leather and wood interior, etc. the car feels more like an upscale Chevrolet than a “Cadillac” of the prestige days of the brand. The turbo four is rowdy and not particularly efficient, with just OK acceleration and MPG. The overuse of plastic in the dash is unappealing and already producing some unpleasant noise. The quality of the other interior appointments is just OK.
OTOH, the ten-year old e90 BMW continues to be tight, quiet, and extremely solid on the road. Other than the crappy cupholders, the paint and leather and wood interior are gorgeous, the inline six and six-speed auto are smooth as silk, and the car reeks of quality and prestige.
As Paul notes, here in SoCal the Cadillac brand lost its meaning a long time ago (same with Lincoln). Mercedes, BMW, Audi, and Lexus took over. Unlike William, I do not see how Cadillac could stage a comeback at this point as the brand is so tarnished after decades of disappointing automobiles.
I’m reading the new book on Harley Earl and GM by William Knoedelseder. It’s not a great work (a lot of little errors: where did he get the idea that 50’s VW Beetles had a mighty 57 horsepower?) and lacks depth, but I do recommend it as a window into a time when GM was hugely successful in the post WWII period, the Sloan “ladder” was working, and the cars were aspirational on so many levels. While there is little chance GM will ever be GM again, best wishes to the leadership in their attempt to reorganize and create a viable company for the future.