There is reason to believe that General Motors is failing again, after having been bailed out by America’s taxpayers. It stopped reporting monthly sales back in April of 2018, despite the fact that all of its domestic and foreign competitors had been reporting them on a regular basis. This was a drastic decision by GM’s management, which had reported such figures during the last auto sales crisis—described as the Crash of 2008.[2]
GM was on the ropes then. Chrysler and Ford were too, but company founder Henry Ford’s great-grandson Bill Ford and Boeing’s Alan Mulally[3]—who had become Ford’s president—put together a winning plan to save Ford without going into bankruptcy. They hunkered down and sold off Aston Martin, Land Rover, Volvo, Jaguar, Ford’s dominant interest in Mazda, and consigned the Mercury brand to the dustbin of automotive history. In the process, their strategy succeeded impressively. Today, Fords are the largest selling vehicles in the United States; and the Ford F-Series trucks outsell all other vehicles.
Both GM and Chrysler went into bankruptcy; and with his Fiat conglomerate hanging by a thread in Europe, its gutsy chief Sergio Marchionne bought Chrysler, and the rest is business history. Marchionne saved both of his companies.[4] Today GM manufactures vehicles in 37 countries, and sells its core American automobile brands—Chevrolet, Buick, GMC, and Cadillac—through its U.S. dealers, some of which were put out of business following the last crash because they were deemed not to be buying enough cars from GM.[5]
It has been reported that the company plans to halt production at several of its American plants, and reduce its salaried workforce by 15 percent—or more than 14,000 employees—in a massive restructuring that will cost up to $3.8 billion. The Detroit automaker said “plants in Ohio, Michigan, Maryland, and Ontario will be ‘unallocated’ in 2019 and it will cease operations at two additional plants outside of North America by the end of next year.”[6]
This time, there must be no bailout for the company. It must be allowed to fail and go out of business—which is exactly what GM did to many of its best dealers and their employees. In the process, long-time and loyal GM customers were hurt too, having been the source of monies to bail out the company. No mercy was shown to any of them by GM’s management; and none should be shown to GM this time around. This is true as well with respect to electric vehicles, and their taxpayer subsidies.[7]
© 2018, Timothy D. Naegele
[1] Timothy D. Naegele was counsel to the United States Senate’s Committee on Banking, Housing, and Urban Affairs, and chief of staff to Presidential Medal of Freedom and Congressional Gold Medal recipient and former U.S. Senator Edward W. Brooke (R-Mass). He and his firm, Timothy D. Naegele & Associates, specialize in Banking and Financial Institutions Law, Internet Law, Litigation and other matters (see www.naegele.com and Timothy D. Naegele Resume). He has an undergraduate degree in economics from the University of California, Los Angeles (UCLA), as well as two law degrees from the School of Law (Boalt Hall), University of California, Berkeley, and from Georgetown University. He served as a Captain in the U.S. Army, assigned to the Defense Intelligence Agency at the Pentagon, where he received the Joint Service Commendation Medal (see, e.g., https://en.wikipedia.org/wiki/Commendation_Medal#Joint_Service). Mr. Naegele is an Independent politically; and he is listed in Who’s Who in America, Who’s Who in American Law, and Who’s Who in Finance and Business. He has written extensively over the years (see, e.g., www.naegele.com/whats_new.html#articles), and can be contacted directly at tdnaegele.associates@gmail.com
[2] See http://www.wsj.com/mdc/public/page/2_3022-autosales.html#autosalesE (“Auto Sales“); see also https://naegeleblog.wordpress.com/2015/11/30/a-34-trillion-swindle-the-shame-of-global-warming/#comment-14697 (“Is General Motors Failing Again?”) and https://naegeleblog.wordpress.com/2015/11/30/a-34-trillion-swindle-the-shame-of-global-warming/#comment-14324 (“The Passing Of An Auto Giant”)
[3] See https://en.wikipedia.org/wiki/William_Clay_Ford_Jr. (“William Clay Ford Jr.”) and https://en.wikipedia.org/wiki/Alan_Mulally (“Alan Mulally”)
[4] See https://naegeleblog.wordpress.com/2015/11/30/a-34-trillion-swindle-the-shame-of-global-warming/#comment-14324 (“The Passing Of An Auto Giant”)
[5] See, e.g., https://en.wikipedia.org/wiki/General_Motors (“General Motors”)
[6] See https://www.cnbc.com/2018/11/26/gm-unallocating-several-plants-in-2019-to-take-3-billion-to-3point8-billion-charge-in-future-quarters.html (“GM to halt production at several plants, cut more than 14,000 jobs”); see also https://www.freep.com/story/money/cars/general-motors/2018/11/26/ontario-plant-closure/2112539002/ (“GM closing Hamtramck, Lordstown, Oshawa plants, cutting jobs”)
[7] See, e.g., https://naegeleblog.wordpress.com/2015/11/30/a-34-trillion-swindle-the-shame-of-global-warming/#comment-10525 (“The Swindle And Shame Of Global Warming: Electric Cars”)
It is clear that the boycott movement is growing.
I agree with what you’ve said. I’ve written that the mechanics are misdirection and obfuscation designed to sneak under business scrutiny to hide the corrosion going on inside. Thanks for a great writeup. Good to hear from you. Coincidentally, checking the Board of Directors of GM pops out a list of folks who also would love the optics of showing up president trump and his “manufacturing in America” mantra. The presence of some of these people begs the question, “what is their experience in business and/or auto manufacturing and sales?”
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Thanks so much, Ron. I agree with you.
A belated Happy Thanksgiving. 🙂
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SWISS CHEESE
I have a 1997 Chevrolet Lumina. While still mechanically sound, the paint is starting to peel-off. The plumber’s 2006 Chevy Van is also suffering the same fate. Chevrolet never was able to fix its paint defects since the 1980’s, but with zero percent interest, the FED was able to engineer profits for a otherwise “Zombie” Corporation.
How widespread is this phenomenon in American Industry today? I just read United Technologies is splitting itself into three separate corporations. This suggests that some of them will go to Mexico or just disappear in some manner. No MAGA. Just ongoing DECLINE.
Who will save the day?. Just read that 30% of all American consumers are still trying to pay-off the balance on their credit card from LAST Christmas ! We are simultaneously being told how well-off consumers are or how strong the economy is. I have my reservations on both accords.
Here is what I see: America is not growing, but China is. So, by 2030, we can expect 50 Million Chinese Affluent Chinese to hit the North American continent and go on a shopping spree buying whatever they want. So this time, we will import wealthy Chinese who will dominate the domestic consumer market, or specific segments of it most likely. The tastes of the American consumer will obviously be “outvoted”. Its a fete accompli. Not even China would buy GM today. How about Russia (Hugo)?
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Thank you, Craig, for your comments.
I am not as pessimistic as you are about America’s future.
First, there was the Japanese “wave.” Then, the Chinese wave. America has withstood, and will withstand all of them.
Russia is a pygmy state. China has serious problems too.
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APPLES VS ORANGES
Japan is tiny compared to China. How many Billion Japanese are there? We saw the highly publicized trophy real estate the Japanese bought in the 1980’s. They leveraged a relatively small population using their currency and debt to appear larger than life, making a “big splash” in the process. The Media focused and amplified this real estate buying spree. When their bubble burst and they had to sell these properties at a loss, the media was silent.
The Chinese are different and smarter in the way they invest abroad. For one thing, its long term and its sustainable. Secondly, Chinese Tourists will be very specific and choosy in what they buy and where they go while visiting the U.S. The Media won’t pay attention unless you have former GM factory workers shinning shoes at The Ritz Carlton or pulling a rickshaw for wealthy Chinese in downtown L.A. or New York.
Come to think of it, one could stage such a scene and put it on Youtube and become a cult newscaster. Even if its not true, anything (story) is possible in today’s news media.
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Thank you, Craig.
I have dealt with both the Japanese and Chinese over the years, and find them very similar . . . and largely sophisticated. But no more so than Americans.
I bought the largest minority bank in the U.S. for Chinese investors who were based in Hong Kong, which was quite an experience.
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Emotional GM Workers Wipe Away Tears After Thousands Laid Off Ahead Of The Holidays [UPDATED]
Valerie Edwards has written for the UK’s Daily Mail:
See https://www.dailymail.co.uk/news/article-6435109/Emotional-GM-workers-wipe-tears-away-thousands-laid-ahead-holidays.html (“Heart-wrenching photos show General Motors workers wiping away tears after company laid off more than 14,000 people without warning, just before the holidays“) (emphasis added; videos omitted); see also
https://www.dailymail.co.uk/news/article-6445193/Hundreds-GM-workers-gather-solemn-prayer-Ohio.html (“Hundreds of GM workers gather in solemn prayer in Ohio“) and https://www.thetruthaboutcars.com/2018/12/union-set-to-waste-general-motors-in-canada/ (“Union Set to ‘Waste General Motors’ in Canada”) and https://naegeleblog.wordpress.com/2015/11/30/a-34-trillion-swindle-the-shame-of-global-warming/#comment-14697 (“Is General Motors Failing Again?“) and https://www.thetruthaboutcars.com/2019/06/did-gms-seat-belt-recall-fix-the-problem-feds-intend-to-find-out/ (“Did GM’s Seat Belt Recall Fix the Problem? Feds Intend to Find Out“) and http://www.businesskorea.co.kr/news/articleView.html (“GM Korea Desperate to Generate a Profit“)
Like the NFL that has been boycotted effectively, with much more to come, so too General Motors must be boycotted and forced to surrender or disappear.
GM and its auto brands are collapsing, while BMW contemplates an expansion of its operations in the United States.
See, https://www.reuters.com/article/us-bmw-manufacturing/bmw-chief-says-considering-second-u-s-manufacturing-plant-idUSKCN1NX00R (“BMW chief says considering second U.S. manufacturing plant“); see also https://www.wvgazettemail.com/opinion/readers_vent/readers-vent-nov/article_9d0e1d7b-daee-50f9-ad1a-2f5aab506f02.html (“General Motors is failing again. This is no one’s fault except those running the company. They make too many poor quality vehicles no one wants. . . . No one wants electric cars except Obama and his troglodytes. I’d never buy anything made by GM“) and https://naegeleblog.wordpress.com/2009/12/17/is-redemption-possible-for-tiger-woods/#comment-14749 (“Nothing Ever Changes With Tiger Woods, Or Colin Kaepernick“) and https://naegeleblog.wordpress.com/2009/12/05/is-barack-obama-a-racist/#comment-14614 (“The NFL Must Be Boycotted Forever“)
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GM May Shut Down Cadillac [UPDATED]
For those who say this is impossible, just remember that Oldsmobile and Pontiac are long gone.
The Drive has noted:
See http://www.thedrive.com/news/26086/gm-president-says-cadillac-has-one-chance-at-an-american-comeback (“GM President Says Cadillac Has ‘One Chance’ at an American Comeback“); see also
https://www.thetruthaboutcars.com/2019/01/this-is-pretty-much-it-new-gm-president-acknowledges-cadillacs-last-chance-for-glory/ (“‘This Is Pretty Much It’: New GM President Acknowledges Cadillac’s Last Chance For Glory”) and https://www.change.org/p/demand-gm-to-put-an-end-to-racial-intimidation-in-their-workplaces/sign (“Tell GM to end racial intimidation in the workplace, create anti-harassment policies“)
If Cadillac is hitching its star to electric vehicles, it is truly doomed.
See https://naegeleblog.wordpress.com/2015/11/30/a-34-trillion-swindle-the-shame-of-global-warming/#comment-10525 (“The Swindle And Shame Of Global Warming: Electric Cars“); see also https://www.asburyauto.com/compare/2018-lincoln-continental-vs-2018-cadillac-cts/151378 (“J.D. Power and Associates rated the [Lincoln] Continental first among midsize premium cars in owner reported satisfaction. This includes how well the vehicle performs and satisfies its owner’s expectations. The [Cadillac] CTS isn’t in the top three”)
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GM = CRONY CAPITALISM
The history of GM post 1974 has shown them to be extremely resistant to change, innovation, or internal management reform. Not surprisingly, they have already lost more than half their market share since their heydays in the 1960’s. They failed to adapt and the UAW was adversarial towards management, as well. Eventually, they were forced to modernize but it cost many jobs in the end.
Today’s GM reflects a legacy history of missed opportunities but huge executive bonuses thanks to President Obama’s massive bailout with taxpayer funds. It was a real windfall for GM Executives and UAW workers alike. Not so good for shareholders, dealers, or even the public. GM closed down many dealerships, some of which were long term businesses who were profitable. They just did not care because the criteria was “political” not financial. GM became an example of crony capitalism to this day.
GM has failed to build cars the public wants and refine them into a quality car. They kept Sloan’s marketing emphasis bringing out new model after new model. Most did not sell well and were discontinued to this day. Paint jobs are of inferior quality. My 21 year old Chev. has paint peeling-off and exposing gray primer underneath. The plumbers two Chevy Vans are having similar paint issues, one is a 2003 van the other a 2006 van. Quality is slipping and so are sales.
The financial picture and economics of residual value and new car prices, along with rising monthly payments have been the deciding factor. You can sell junk to a indifferent consumer as long as they can buy one and refinance another one at about the same monthly payments, as has been the case for the last six years. Not any more.
Turns-out low lease rates or interest rates and high residual values helped subsidize today’s sales by pulling forward from the future. Now, the incentives have reversed and auto financing companies are losing money with huge drops in residual values on cars coming off lease. Many just go straight to auction today. Today’s new cars are pushing $40,000+. Not very many individuals will be buying any of them at those prices.
Another matter is the jump in sub-prime borrowers for new cars. When a prospective buyer wants to finance a car, the info. is forwarded to a number of banks ( Capital One, Alley Financial, Santander Bank). This business is very competitive. So, Santander bank comes back with their bid of lower monthly payments for a buyer with bad credit. In fact, Santander bank only does due diligence with 8% of its loan applications. The best terms are selected to close the sale.
Santander Banks auto loan dept. has 80% of their book stuffed with subprime car buyers. In fact, Second Look, L.L.C. a private credit analysis firm has estimated the default rate for this “traunch” of new car auto loans originating in 2015 will be about 15% by this year. I have noticed the lot at nearby Aames Associates gradually filling-up with repossessed cars in the past two years, while it was virtually empty until a few years ago. Their business is picking-up. The cycle has turned and we now have way too much global capacity, so GM is closing down several North American factories ( Ontario, Canada and in the U.S.). The entire domestic auto industry is in trouble and now, once again, must restructure. Obama bought them this many more years of life. Its over.
To compete, Ford must do like it has with its very successful and profitable F-Series Pickup Trucks. These pickups are workhorses and highly profitable, so instead of discontinuing them for a new model, they are refined each year getting better and better. Toyota and Honda have done this for years with their flagship passenger cars: Camry and Accord. GM will have to do likewise or become irrelevant in the future. SUV’s, Pickups, Corvettes and little else. How many factories do you need to produce 4 models? Not near as many. More robotics and you can see the future. No future.
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Thank you, Craig, for your comments. I agree completely.
I bought a Chevrolet from a dealership that was excellent in terms of service. My son did the same; and after the GM bankruptcy, it shuttered the dealership because it was not warehousing enough cars, and was keeping its inventory lean.
I vowed there and then never to buy another GM product again. What they did to the loyal employees of this dealership was cruel, heartless and irresponsible. The dealership had an excellent reputation in the community.
I was involved legally (as an expert witness) with another dealership in the Midwest, which sold Ford products. I was very impressed with how Ford handled the matters. It was fair at each and every juncture, based on my limited observations.
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Another major consideration with the slow-down in U.S. Auto production:
The automotive industry and its ancillary service businesses ( including retail auto parts stores) comprises about 5% of total GDP. Its makes up, all together, about 3% of all U.S. Workers, as well. Aerospace comes in a distant second. The U.S. economy won’t tank just because of reduced revenue and auto sales. However, its part of the whole trend.
So, the more industries or service companies that see revenue declines (such as retail , the more the chances of a recession in the next few years or a multi-year period of scant economic growth from the current 2.8% annual GDP. This won’t cut it with a $ 950 annual Federal spending deficit for 2019 and $22 Trillion in National Debt with interest to be repaid. Neither party is serious about cutting overall govt. spending as far as I can see. As interest rates rise in future years, so will the interest to be paid each year out of the Federal Budget, rising exponentially in future years.
President Trump wants a wall but even more important strategically is a well equipped modern Navy. To fulfill this policy goal, President Trump promised adding 10 new Navy Ships to our aging fleet to patrol international sea lanes. China is building-up its Blue Water Navy diligently and quietly. If we can not get it done with the small window of opportunity under President Trump, then I foresee China directly challenging us in their regional waters and possibly in the South Pacific at large, as well.
We will probably be forced at some point to back-down if our Navy can not be kept state-of-the-art for the next 20 years. We must invest now. Where will the money come from? Do we have it?
Remember the moment of truth between President Dwight Eisenhower and Great Britain over the Suez Canal Crisis? President Eisenhower forced the British to withdrawal their troops from the Suez Canal area under threat we would sell-off their sovereign bonds. Not one American soldier was needed or sent to the Suez Canal. This is precisely how Great Powers die. No shots, just retreat, quietly. Nobody notices.
We are slowly dying. We are running out of time and we are a divided nation. We are not exceptional in view of history if we allow ourselves to be distracted by trivial and petty politics. The Communist Chinese are surely smiling. The last century was our century, but will this century remain the American (second) century or the Chinese Century? I am not so sure.
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Thank you for these comments too, Craig. I understand, and agree with most of your points.
We have a limited window in which to close the gap with China, and sprint miles/years ahead. If it is not done during the Trump presidency, we may have lost the race . . . albeit China is years/decades behind us in many ways.
For example, it bought a dilapidated Soviet-era aircraft carrier, the Liaoning, which had been nothing more than a rusting hulk. Today, it is questionable whether the carrier is combat-ready.
See, e.g., https://en.wikipedia.org/wiki/Chinese_aircraft_carrier_Liaoning (“Chinese aircraft carrier Liaoning“)
I have described what I believe are the greatest risks to us and our allies in a recent series of comments.
See https://naegeleblog.wordpress.com/2010/01/19/emp-attack-only-30-million-americans-survive/#comment-15839 (“Will The United States And Israel Cease To Exist?”)
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Another Sign That GM Is Failing, Again: Ford Steps Up, GM Looks For Way Out [UPDATED]
There are plenty of telltale signs that GM is failing again, as mentioned in the article and comments above. The demise of Cadillac may be the capper, but there are other signs as well.
Marc Stern has reported for TorqueNews:
See https://www.torquenews.com/3769/ford-has-stepped-takata-recall-gm-looks-way-out (“As Ford Has Stepped Up In Takata Recall, GM Looks For Way Out“) (emphasis in original)
Also, WIRED has reported:
See https://www.wired.com/story/boeings-737-max-cars-software/ (“WHAT BOEING’S 737 MAX HAS TO DO WITH CARS: SOFTWARE“)
This time, GM must be allowed to die, and not be propped up again by America’s taxpayers. After it was bailed out the last time, it turned around and screwed loyal dealers and their employees, as well as GM customers.
The chant this time must be: NEVER AGAIN.
Fool me once, shame on you; fool me twice, shame on me.
The boycott against GM and its products must continue, unabated!
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THE REASON WHY GM ALREADY FAILED
The reason GM has failed is primarily related to product quality and Service.
First, product quality. I own a 1997 Chev. Lumina Sedan. After 20 years, the paint just started to peel off, exposing the gray primer underneath. The value of this car ( Kelly Blue Book) is only about $700-$800 Wholesale. Private Party value in good condition: $1,400.
So, its not worth anything now, even though it runs fine and always passes the biannual smog certification, as well. The State of California ( DMV) pays a flat $1,500 to salvage a vehicle ( remove it from use ). In this case, the highest bidder is the State of California. Unfortunately, after 25 years, GM still can not properly apply a quality paint job at the factor. In comparison, Toyota or Lexus have no such problem.
Secondly, quality of service at GM dealerships. Quality and competence at many GM dealerships has proved since the seventies to be shoddy and spotty. Consequently, many dealerships have since gone out of business ( in my area) since 1980. All the Federal government did with their GM bailout is keep a sick and uncompetitive domestic automaker in business for longer than warranted. GM has become the proverbial “Zombie” Corporation. They should be allowed to fail and go out of business.
The one problem if GM fails and closes down is some communities are entirely dependent on domestic truck and auto sales. Small towns like Cedar City, Utah have only three auto dealerships- all Domestic: Ford, Chevrolet, and Cadillac. For practical purposes, there are no import dealerships outside of large cities such as Salt Lake City ( 3 hours away).
This could become a bigger problem for rural America. Foreign manufacturers only care about market size and revenue. Small rural communities are unattractive for most foreign car dealerships. They are unprofitable. We need a national policy to help-out with this market efficiency. However, another auto bailout for GM is not advisable. Perhaps a merger with another auto company with the stipulation they subsidize rural dealerships would be a possible solution, given the other economic realities. Think outside the box !
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Thank you for your comments, Craig.
First, Toyota and Lexus products must be boycotted too. What Toyota did on a worldwide scale to bury the truth of its unsafe vehicles is criminal and truly mind-boggling. Its executives should be in prison now; and its co-conspirators in the United States (e.g., regulators, members of Congress who were effectively “bought off”) and other countries should have joined them.
See https://naegeleblog.wordpress.com/2010/01/04/toyota-and-lexus-vehicles-are-unsafe/ (“Toyota And Lexus Vehicles Are Unsafe”) (see also ALL of the extensive comments beneath the article)
Second, I agree completely that GM “should be allowed to fail and go out of business.” As I stated in response to your comments above, on January 26, 2019:
Third, because Cadillac’s survival is in doubt, this may leave Chevrolet, GMC and Buick as GM’s remaining brands, serving small rural communities—along with Ford, which buckled down and survived after GM and Chrysler were bailed out. Now Ford is the largest selling brand in the U.S.; and Ford F-Series trucks are the largest selling vehicles in America, by far. Why GM kept the Buick brand is also mind-boggling, when it might have kept Pontiac that appealed to the youth market.
Fourth, cars and trucks can be bought online, and checked out online. A family member is shopping today for a used car for a teenager. Online shopping, with CARFAX reports on the quality and safety of the vehicle, make shopping easier than in the past.
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Soon General Motors May Kill Off Cadillac
Neal E. Boudette has written for The New York Times:
See https://www.nytimes.com/2019/08/27/business/cadillac-brand.html (“Cadillac’s Last Stand? Storied Brand Aims (Again) for Revival“) (emphasis added); see also https://naegeleblog.wordpress.com/2018/11/28/boycott-general-motors/#comment-17817 (“Another Sign That GM Is Failing, Again: Ford Steps Up, GM Looks For Way Out“) and https://naegeleblog.wordpress.com/2018/11/28/boycott-general-motors/#comment-15860 (“GM May Shut Down Cadillac“)
As indicated in my comments above these, the demise of Cadillac has been predicted for sometime now, and it may be simply a matter of time. Its death is approaching, rapidly.
GM shed Pontiac and Oldsmobile, and Cadillac may be next.
With respect to Tesla, it is destined for the dustbin of automotive history too, which cannot happen fast enough.
See, e.g., https://naegeleblog.wordpress.com/2015/11/30/a-34-trillion-swindle-the-shame-of-global-warming/#comment-19056 (“Teslas Must Be Banned From American Roads“)
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GM will be around as long as there are stupid customers or car buyers who still don’t know the difference or what real quality is. As long as seniors want some nostalgia and therefore a Cadillac, they GM make them and sell them. However, buyers may find they become money pits after about 50,000 miles.
GM still has political pull so they can get government fleet business and rental car fleet business to keep going. GM has moved to the China market for future growth. If China does not work out for them then GM may be in trouble. The individual retail customer is obviously not a high priority with GM.
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I respectfully disagree.
I believe Cadillac will disappear; and any future bailouts for GM may not occur. Both Ford and Fiat Chrysler have shown how to survive, thanks to Bill Ford and Alan Mulally at Ford, and Sergio Marchionne at Fiat Chrysler.
See, e.g., https://naegeleblog.wordpress.com/2015/11/30/a-34-trillion-swindle-the-shame-of-global-warming/#comment-14324 (“The Passing Of An Auto Giant”)
No one has distinguished himself or herself at GM. It is like a rudderless ship lost at sea.
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GM Under Fire From All Sides
Sylvan Lane has written in The Hill:
See https://thehill.com/business-a-lobbying/461859-gm-under-fire-from-all-sides (emphasis added)
As cited in my article above and the comments beneath it, the unraveling of GM began to become apparent when it stopped reporting monthly sales figures to the Wall Street Journal. Next, there have been rumors that GM would jettison its Cadillac brand. And now this.
What’s next for the troubled company?
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MOVING TO CHINA
GM and the UAW are finally getting what they deserve. GM quality started declining steadily since about 2000, according to one mechanic. Apparently, some changes must have occurred in the EXO office. Now, Its on a path to failure.
All GM workers should find another employer or make a new career or if too old to learn new tricks, retire. Their old jobs are going away as GM closes down its U.S. facilities. A contracting economy is going to support fewer car makers than in past recoveries.
Sure looks like another financial crisis maybe in the wings. FED had to directly provide (print) money in the inter-bank “Repo” market for a second day and at higher than official interest rates too. Not enough money in our financial system to run the overnight facility.
If liquidity dries-up somewhere else, then a crisis can erupt. Only a matter of time anyway because all the existing debt in the system has destabilized it. We are headed back to more trouble. We did not learn anything in 2008.
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Thank you, Craig, for your comments.
My views of the U.S. economy is nowhere near as dire as yours. With respect to GM, first it may jettison Cadillac, and then other major changes may be forthcoming. It seems to have “worn out its welcome” in Washington, and elsewhere in the country.
As I said previously, when it put excellent dealers and their fine employees out of business after the federal bailout, lots of us vowed that we would never buy, lease or rent GM vehicles again.
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Another Solution For General Motors: Nationalize It?
Chris Kutalik—former editor and director of Labor Notes in Detroit and a union organizer, and now “deeply involved in Texans for Bernie and Labor for Bernie”—has written at the Jacobin:
See https://www.jacobinmag.com/2019/10/general-motors-nationalization-uaw-strike (“Make GM Government Motors Again”)
With Cadillac on the ropes, and GM seemingly failing, extreme measures such as those being advocated by unionist and Bernie Sanders’ supporter, Chris Kutalik, are bound to gain traction in some quarters—just as Leftist plans to ban airplanes and gasoline-powered vehicles are high on their lists.
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Has General Motors Become The Functional Equivalent Of Disgraced Toyota?
Jesse Pagan has written for ABC6, WSYX, an Ohio-based station and ABC Television affiliate:
See https://abc6onyourside.com/on-your-side/westerville-family-in-limbo-as-gm-leaves-them-in-dark-over-shift-to-park-issue (“Westerville family in limbo as GM leaves them in dark over ‘shift to park issue'”) (emphasis added); see also https://naegeleblog.wordpress.com/2010/01/04/toyota-and-lexus-vehicles-are-unsafe/ (“Toyota And Lexus Vehicles Are Unsafe“) and https://naegeleblog.wordpress.com/2010/01/04/toyota-and-lexus-vehicles-are-unsafe/#comment-21894 (“Wish I had known about this . . .“)
Both GM and Toyota must be boycotted.
The most likely reason for the deadly problems at Toyota and Lexus is faulty software that has never been fixed.
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