From South Korea With Love
A little story… In August of 1991 my Grandparents bought me a new car. It was pretty much the cheapest new car you could buy at the time, a Hyundai Excel. The sticker price was $5999 I think. That was with air conditioning and automatic transmission but no radio. This was a no frills vehicle, it got you from A to B and kept you cool in the summertime. Hyundai was relatively new to the US market and the quality was still very suspect. They had yet to make a name for themselves and were still learning.
In the 18 years since I bought that car Hyundai has come a LONG WAY! They are now the fifth largest automaker in the world. Today, they are a highly respected and recently released a line of cars to compete with the likes of Lexus and BMW; the Genesis Sedan & Genesis Coupe. I saw a coupe on the highway this morning and it’s a great looking car with performance that matches. Either Genesis is a great vehicle most anyone would be proud to own and come with a 10-year or 100,000-mile warranty which I think is an industry best.
And now the reason I bring this up, General Motors. How can a car company from South Korea start importing cars into the US in 1986 and 23 years later be making vehicles that put GM to shame? Because Hyundai “invested heavily in the quality, design, manufacturing, and long-term research of its vehicles”, something GM forgot how to do long ago. GM became a car finance company and less a car making company. We’ll make our money on the financing, just build some crap and people will buy it. Well, once people realized companies like Toyota, Honda, and Hyundai were making better cars at competing or better prices GM started its fast decline. And we all know how that ended, now you and me own a part of GM along with every other American citizen. Too big to fail is bullshit; GM got too big to succeed. It was so big and never adjusted its business model to the changing times.
We currently own a Chevy Tahoe Z71 that we purchased in 2005 and owned a Tahoe LT before that. Between the 2004 model we had (it was killed by Katrina) and the 2006 we have now, the quality is notably worse. The 2006 is a nicer model but missing key features we had in then 2004. We asked the dealership about the featuers and were told that they’ve been cutting out small stuff to keep the price the same for several years now. Simple parts are breaking and the local dealership we go to for service is horrid. Needless to say, we won’t be buying another GM vehicle.
So, it can be done, in South Korea no less. GM should have been allowed to die and maybe from it’s ashes something better created. Now, we have a company that learned nothing that still builds crap.
August 1st, 2009 at 11:20 am
Right on.
August 1st, 2009 at 11:27 am
Testing DISQUS.
August 1st, 2009 at 11:58 am
I think the US holds onto auto manufacturing as one of the last competitive measures between competing national economies. To your point, they aren't managing GM to be an auto manufacturer.. they've turned to finance which isn't sustainable. The unions seem to have gotten bigger as their insecurity has risen, and the inevitable needs to take place. Unions have beefed up their efforts for negotiating compensation to account for this insecurity but inevitably I believe bankruptcy is the only option. We're a service based economy and its about time they start realizing that.. We can't compete against foreign automakers who have governments that own the resources (and subsidize them) to manufacture the vehicles and cheap labor at their disposal. I guess my question is “Why are we trying to manufacture cars?” We've thrived on innovation… We should be developing the technologies and selling it to these manufacturers who are better positioned to manufacture.
August 1st, 2009 at 1:14 pm
An Ed sighting :) And dropping some knowledge on us no-less. The only issue is manufacturing jobs. What will all the untrained / uneducated people do if we quit manufacturing?
August 1st, 2009 at 9:07 pm
I don't disagree that that will be a problem. I believe that is the problem we need to be addressing, not trying to float auto manufacturers to avoid the problem . Some high end manufacturing jobs should be created as we develop alternative entergy sources. We also should manufacturing jobs related to national security within the US. Plenty of technological advances are out there and will have manufacturing jobs tied to them. Passing legislation that makes these initiatives more successful seems like the best option to me.
I also believe GM can compete.. they just don't need to be manufacturing as much within the US. There are plenty of offshoring opportunities in several emerging countries. That in combination with some of the common sense things Ford implemented in the “Ford and the American Dream” book would probably put them in much better shape.