That Graphic Sums it up perfectly..

BUT.. Change CAN happen.. it will be painful as hell..

To the external factors I might add increasing concern about the environment on the part of the public (especially younger people), which deters them from buying gas-guzzling SUV's, which are both inefficient and unnecessary for the average person's daily use.

I've been lucky that the 2 GM's I have had, have both been good cars but even so I'm starting to feel the lure of the imports as I start to look towards a new vehicle. The Volt is still a possibility for me assuming GM keeps its plans to get it to market.

Yup. Failure illustrated.

Idea: repurpose some plants to be able to convert existing vehicles that aren't being sold to alternative fuels, (electric/hydrogen/biofuel) with the efficiency of an assembly line.

Now they can sell vehicles people want without having to create entirely new cars and trucks.

I'm pretty sure the know-how to do these conversions already exists, that is if GM can figure out how to do a YouTube search without spending a billion dollars.

GM will file Chapter 11 bankruptcy in 2009. They are toast as currently aligned. Any stupid company--and I don't care what the union wants--that allows a job bank (i.e, the rubber room) to pay out $750M in salary and benefits to people to sit in a room and not work deserves to fail.

GM's chickens have finally come home to roost. "Gadfly types" have been warning the company (and the buying public) for years that poor quality,ham handed customer service and overly generous pay and benefits for workers AND management would wreck this company and well... That day is here. Oddly enough, for most of it's life,GM built a pretty good car (at least by American standards), but when the accountants and finance types took an iron grip on the executive suite,the decline began and hasn't stopped.

I personally am so pissed off that the way that they have handled this bailout scenario (run it into the ground so far that only the taxpayers can afford to save it) ,that I will personally NEVER buy a GM made car again. Fuck you, General, I gave at the office.

BTW- Before you zombies start your "Do you know that American cars are just as good as Japanese blah,blah,blah" , I must politely tell you that you should look at a blue book pricing guide. Japanese cars hold their value better because they have paid their dues in this market with dependable,economical cars. they don't build the Corolla or Civic as an afterthought- the build them to win customers for life. hell,Toyota took one of GM's own plants and taught them how to build a car the right way and the arrogant bastards still couldn't get it right.Let them fail.

The government could nationalize healthcare, relieving the company, and many others, of enormous health care liabilities.

Even though I agree with many of the "fail" points, and about how a lot of it needs fixed - but I do worry about what would happen to the thousands of retired workers if GM does fail (or if the UAW sells them out and gets rids of the pensions & health care that they worked loyalty for years at GM for), and of course retired workers have no current vote at the UAW so it might be easy to sell these people out - people who worked for years at GM to get the pension & health care to provide for them in the later years.... and now with the posibility that if GM fails, not only will you have the thousands of current workers out of work (along with the thousands of non-GM workers who supplied parts to GM out of work), you will all of a sudden have the thousands of retired workers now unable to maintain their lives.

So when people say you can't let GM fail... I agree with that. And I do hope that management, the suppliers, and the current UAW will do everything possible to make it work.

@IrvCrapper: Hell, it would probably cost less for the government to buy GM and steadily sell of its assets over a period of time. The taxpayer may even profit from this, or at the least zero out.

@coan_net: Maybe they could sell the UAW golf course that consistently loses money to help compensate the retirees?

[theunionnews.blogspot.com]

This couldn't be more true... and it applies to not only GM, but Ford and Chrysler as well. It sickens me to drive past an American auto dealership and see nothing but trucks and SUV's lined up that nobody wants to buy. They need to make drastic and I mean DRASTIC cuts to stay competitive. Take Ford for example...

According to their website, there are currently 19 vehicles that bear the Ford name, over half of which are SUV's or Trucks. I would cease production of about half of their lineup to just the basics:

Small Car - Fiesta (Should be an EV within the next 5-10 years)
Sedan - Focus
Crossover - Edge
SUV - Escape (Hybrid Only)
Pickup - F-150
Cargo Van - E Series

Same thing goes for Lincoln. If it isn't selling, drop it.

Once you have eliminated the unprofitable cars, the factory should only make cars that they think are going to sell. If dealers aren't selling F-150's, stop making them and devote those resources towards more profitable cars like the Focus (which is a great car by the way, I just got one myself)

I see all kinds of fail in that graphic. Lots of outdated information and rife with media sensationalism. Sure there is truth to a few of the items on there, but this guy is trying to sell posters.

To all you armchair auto executives wanting to dance on GM's grave, we've heard you over and over, GM got the message - no sense spewing your shit anymore. Your precious Toyota and Honda are suffering the same fate and it will get progressively worse as the tier 2, then tier 1 suppliers start falling off - but you won't hear about their pain and suffering because that's reported in Japanese, not English and you can bet your ass the Japanese government is helping them out.

@Xanaxian: Thats an excellent point. I get angry when I see a Soccer Mom driving a Hummer or one of those Ford Excursions.

Hell even my mother drives a 5 passenger Jeep and the only one who is ever...and i mean ever in said Jeep is my mother. There is no reason for it.

There is still a market for cars and trucks. The loss of GM will only mean someone else will pick up the slakc, maybe Toyota. Those workers at a GM plant might only have to switch the labels on their uniforms, and ofcourse take a pay cut.

@se7a7n7: Well even if they fix everything thats wrong with them and they greatly improve the quality of their vehicles they still have to worry about their brand perception which could take years to change.

Alot of people have given on on American cars because of quality concerns and even if the cars got better by tomorrow they go under before the bad perceptions can be changed.

I want to know the guy's sources...from what I have read, many of his facts don't seem to be accurate. For instance, isn't worker pay only something like $21 an hour now due to negotiations?

@kwsventures: The UAW should take a $3/hour pay cut if the person is making $28 or more an hour and they need to drop the job bank which is an utter waste of money.

I know I know pay cut evil rawr! Lets be honest here, $25 an hour or 48k a year is a pretty good salary for one person in the middle class with 2 kids. Chances are this person's wife or husband also work so add their income too and its plenty.

Im a single father, I dont make $48k a year, my ex doesnt give me child support but I have enough money for our apartment and a nice car plus enough amenities to be comfortable.

Sacrifices need to be made by both the UAW and the companies. If they dont make these changes at least for the time being then they may find they have no jobs at all.

@TheSpatulaOfLove: While Toyota and Honda are wrapped up in the global downturn, their execs haven't been shitting the bed for years, so they will survive. It's not like car manufacturing is going anywhere, but the companies in the best position will last, GM is not in that category.

Media sensationalism? lol.

@Snarkysnake: The hourly wage of their employees isnt what I would call overly generous. Its fine really, I would say maybe $3 too much an hour at most...well so long as they are actually spending all that time working and not dicking around.

GM's biggest issue is and has been quality of their vehicles. Slowly over time their brand perception was eroded and people started seeing them at bad cars to buy which killed sales. The current economic situation didnt help so now they have gone from few auto sales to no auto sales.

they could easily support their work forces wage rate if they ran their company a little better. Perhaps before you blame the UAW you might consider how much those CEO's are making...the same CEO's who never do any hard labor and at the same time run the company into the ground with bad decisions.

@morganlh85:

That's the average, entry level may be lower.

[www.associatedcontent.com]

@coan_net: $3 an hour paycut to anyone in the UAW making $28 an hour or more and getting rid of the JobBank would save them more money than they are getting from the bailout.

More than fair.

@Xanaxian: Environmental concerns are addressed - somewhat - in the "Internal Factors" portion. He blames it on the management - "Too focused on Trucks and SUV's."

Which I can kind of see. The move away from gas-guzzlers has been in the works for a bit; it's shifted from being an external factor (consumers are a'hankering for something different...) to an internal factor (...which the Big Three haven't committed to offering).

Snarkysnake: Consumer Reports has recently admitted (a big step for them, as they've all but had sex with Japanese automakers in recent years) that Ford is on par with the best Japanese automakers in quality. Mercury consistently is one of the top three brands in all of autos in long term reliability (JD Power). It takes time for resale value to adjust to changes, since Americans are dumb and cling to stereotypes for longer than they're true. Resale value, at least with Fords, will compare to Toyotas and Hondas in a few years' time. Ford is going to survive this crisis. Probably not Chrysler and maybe not GM though.

@Kevin Weber: Chryslers losses can be absorbed. It's part of a much larger conglomerate. Not so, Ford and GM.

He might have benefited from a little spell checking before sending that one out to press...I find that to be consistently helpful :)

Working families that don't live in the Deep South making a few dollars more an hour than someone living down there don't go far enough.
Workers not living in a no-union, "right to work" state should have to labor for free, and their wommin used as hourly chattel and their children ground into food products.

I mean, so long as we're blaming skilled but non-graduate degree-holding for the uppityness of having health care, a decent (not upper, or even upper-middle) wage and a fairly reliable (gulp) pension.

Much simpler to cut to the chase: feudalism, here we come!

@Kevin Weber:
I agree with you that Ford probably will survive and their quality has improved somewhat (but don't say that to anyone who ever owned an Aerostar or Windstar,they won't listen),but the article above referenced GM specifically, and that is what my remarks are directed toward. The arrogant,incompetent management of GM is still in place. The workers on the line are going to pay with their jobs and their futures because of the mismanagement of this outfit. I hope Ford makes it-they didn't try to suck tax money out of us taxpayers. But the world will be a better place if GM has to face the problem that they created.

We will never buy American again. We've owned one Buick and so many STUPID things went wrong with it... Within 50,000 miles of purchase (2 years), the following things happened: dash board controls "burned out" and needed replaced at a cost of $600; huge sections of paint starting peeling off within months of the sale; a window stopped working; a seat belt stopped "clicking" into place; the stupid rear view mirror fell off the windshield; the cheap plastic cup holder broke... I could go on and on. If they got these SIMPLE things wrong, what's going to happen with all of the important things like the engine??

My parents have owned 4 Camrys in the last 25 years, put over 250,000 miles on each of them, and NEVER had the stupid problems we've had with this Buick.

So you tell me -- why should we buy a Buick ever again when Toyota has always delivered a quality, well-made vehicle in our experience??

Hmm. A couple of those internal Fail trailers aged out at least a decade ago, and a couple of the externals aged out last month.

How long should they remain relevant in this illustration? Perhaps the designer should animate this critter and make it interactive on a subscription basis.

@DrJimmy: It takes time to build failure. You can't look at a companies stock price at noon, and determine it's health. All of the factors listed have contributed to the fall of GM. It's a process that has taken decades, and is so listed.

@qwijybo: You're willing to pay $40K, plus sales tax and/or fees, less $7,500 federal tax credit (source), for one?

@kwsventures:

GM is not going to fail. Congress will continue to give them bailouts until there is no more money left to give.

@coan_net: IIRC, in the last contract negotiations, the UAW agreed to assume responsibility for the pensions and healthcare of retirees, after getting a lump sum from each of the Detroit 3 to fund those benefits. Since I don't foresee the UAW managing those benefits any better than the companies did, it looks like the UAW did sell out the retirees, kind of.

As for the UAW being willing to do "everything possible to make it work," remember, they refused the demand by Senate Republicans to drop wages to the level of those offered by foreign automakers in the U.S.

@mibi: It's been said that if even one of the Detroit 3 goes out of business, it will lead to some parts suppliers going out of business, and the U.S. factories of foreign automakers will be unable to get all the parts they need. Could be FUD, though.

Labor costs only account for ten percent of a vehicle's production cost. So why is the UAW such a large part of this diagram?

I want a well built small car that's economical, fun to drive, gets decent gas mileage and keeps its resale value.

Oh, and it has to be practical, like a small wagon or hatchback.

Wait, GM doesn't build anything like that.

Plus, every American car I've ever owned had just stupid things go wrong with it every sixth months. Every Japanese car I've ever owned needed oil changes and regular service on wear items.

@mibi: Cerberus, the entity that owns 80% of Chrysler, is an investment fund, not a conglomerate. Cerberus also owns 51% of GMAC (oddly enough). I wouldn't put much faith in Cerberus's prospects right now.

And the guy who make this graphic thinks GM is in the most dire position? Judging from each of the Detroit 3's current models, I'd say Chrysler takes that (dis)honor.

@Snarkysnake: No doubt Ford would've liked to get some government loans; they didn't ask at this time because of the strings that would've been attached, not because of any feelings of honor.

@coan_net: They need to phase out retirement benefits, instead of leaving people high and dry. It will take time for this to benefit the company, but it took decades to get GM in the state it is, not to mention the US economy. Throwing money at the company won't make us allwake up tomorrow to a happy successful GM.

@☠Grяrяrяrяrяrяrя now gets up to 29 MPG highway (kindasortam...: What about the Pontiac Vibe, which is, in essence, a Toyota Corolla and built alongside the Toyota Matrix by a partnership of GM and Toyota? True, its resale value probably will be lower than the Matrix's, but its purchase price would probably be lower, too.

I stopped reading when I got to the thing about the EV1, it wasn't the future, it was a very limited vehicle that is probably one of the most over hyped by the media ever.

No bod

Resisting Change
Seat belts, airbags and catalytic converters were all fought before implemented late in the game

Fumbled Electric Vehicles
The EV1 was the future and GM pulled the plug prematurely

Wow, I mean WOW, where to begin. I could pick a lot of this apart and serious attack the author as an auto industry insider.

According to your EV1 point, guess who else had an electric vehicle out at the same time as the EV1? Toyota. It met with the same fate. Know who sides with all of GM's contentions about not being able to sell the EV1? Toyota. Yep, everybody's favorite GREEN company.

Why is it only TODAY Toyota announced another kick at the wildly popular OnStar can?

Slow on hybrids? OK, how well did hybrids sell vs economic cars last year? THEY BOMBED:

"Hybrid car sales dropped 51.2 percent in December from a year ago and were down 12.7 percent for all of 2008, according to Autodata Corp. Sales of the Dodge Ram pickup alone (245,840) nearly matched demand for all hybrid cars combined (247,488) last year.
Even the iconic Toyota Prius saw sales slide 12.3 percent to 158,884 vehicles last year. The fuel-efficient Chevy Cobalt (188,045) and Ford Focus (195,823) outsold the Prius."

Are you BLAMING GM for selling SUV's to an SUV happy public? Was it GM's fault the public were lapping them up?

Check your quality numbers, which company recalled more cars in the US than they sold in 2006? Toyota. Which car did CONSUMER REPORTS (certainly NO FRIEND to the US Automakers) call the BEST car in America? The Chevy Malibu, which has won over 30 industry awards since it's release in 2008.

Which company builds the highest Kelly Blue Book value car? GM (The Cadillac CTS)

Know why GM has so many legacy costs? HEALTH CARE. Is the current health care situation in America now GM's fault too. For DECADES they helped BUILD the middle class by offering GOOD WAGES and insure MORE AMERICANS than anyone but the US Government. Were you complaining THEN?

Complaining about a government bridge loan? The Japanese government backed the Prius research. They are offering Toyota money NOW in fact. Anytime Toyota has ever needed money, the Japanese government has been there for them. Governments in progressive nations such as Sweden and France and Germany and Japan have all ponied up billions to support THEIR auto industries. What do they know GM haters here don't?

I could go on and on but I'd say part of the reason for the perception problem is half-cocked, half-assed researched cutsie pie articles like this one...

@CaptainConsumer:

Finally, someone else here who has a clue.

Basically, these companies were poorly ran and they deserve to fail. That being said, government needs to stay out of the way and not interfere. The UAW also needs to recognize that the glory days of sapping the auto makers for billions of dollars in pay in benefits are coming to an end. The auto makers have been the source of a lot of prosperity yet, the UAW can't take some cuts. It's wrong to expect to continue getting paid when you're not working. When you retire, it's not the company's responsibility to sustain you for the rest of your life.

One more thing... It really is irrelevant what the execs make per year. These are private companies. They can pay what ever they want. If the employees don't like it, they can go someplace else to work -- the same goes for the execs.

@TheSpatulaOfLove: Actually, major American news outlets recently reported that Toyota would lose money this year for the first time. So did Consumerist. [consumerist.com]

@kwsventures: The Jobs Bank should be thrown on the Management side. It was their idea, not that of the UAW.

@magic8ball:

This must be from the desk of the "No Shit" department.