Just When Did The Big Three Begin Their Downward Spiral?
Senior Member
Joined: Sep 2007
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From: >wwOwww<
In this case however, OPEC didn't do that. They have continualy increased production since the Gulf War. This time the problem began with WalStreet traders encouraging everyone to invest in oil, artificialy raising the prices.
Leading us to the economic downturn we're in now.
The administrations have been proping our economy for a long time in creative ways. such as lowering the prime, extending loans to people without equity, and subsidising other ventures. When the oil prices went through the roof, people began to not to make ends meet.
It's almost like a conspiracy!!!!!
One day we'll know who was behind it. Meanwhile, it just sucks.
I haven't read any reports in the last few days, because I've been kinda busy.
But less than a month ago OPEC was trying to cut output, and Saudi Arabia did walk out.
Another story is about Venesuala aligning themselves with the Russians after our oil companies have made large investments there. Also by kicking us out they get our technology for free. Their oil is the USA's primary supply, because it is a low grade crude,{high sulfer content} and other Countries can't produce good gas out of it.
Really Old "Member"
Joined: May 1999
Posts: 1,362
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From: Kennesaw, Ga. USA
I think you folks have done a good job of hitting most of the high points.
If I may, I will try to throw a little extra color into the thread.
I spent my entire first career in the car business, 10 years at dealerships and 25 years with Volvo and SAAB in 4 count
I will relate some of what I learned in this post, and I will concentrate on GM as it is the company I know best. I worked for GM dealers, Volvo was almost purchased by GM and SAAB did get purchased by GM.
1. Legacy Costs.
I feel this is one of the paramount issues faced by GM and to a lesser extent by Ford and Chrysler. Depending on your source, it costs GM $1200 to $1500 per car just to carry the pension and insurance costs of present and retired employees. This, compared to $300 to $400 that the transplants carry.
2. The Social Contract.
These costs are a result of GM creating their own Social Contract with both Union and non Union workers starting in the 1950's. I have posted a link here that tells the story in a sort of biased way, but the facts are pretty accurate.
Essentially, the GM Management for over 30 years felt it was better to buy labor peace at almost any cost rather than facing debilitating strikes. During most of those years, they made enough cars to support the costs but they have not been able to do so for most of the last 15-20 years.
It is important to bear in mind that in the beginning, the Union wanted GM to go to the Federal Government for this protection and GM refused.
There are those that blame the Union for this situation and I don't think that is entirely fair. Any group of employees and their Unions that are given as much as this Social Contract offered would be inclined to ask/demand ever more and the UAW did this and GM gave in, time after time.
GM suffers under some of the most onerous, even ridiculous work rules of most any industry since the Brotherhood of Railroaders. The Job Bank has been roundly criticized by almost every Labor expert who ever bothered to write or talk about it.
Again, GM Management gave the Union workers these advantages in exchange, basically, for labor peace.
3. Management
It is easy to criticize the Managers of any enterprise, including our own Government.
GM, however, has in my mind been afflicted with a series of top Managers who were sadly out of touch with their own business or incapable of running it, an opinion shared by most business analysts.
Roger Smith 1981-1990
Roger was such a piece of work he rated a movie, "Roger & Me".
Bob Stempel 1990-1992
Bob was one of the nicest people you would ever want to meet, a real gentleman and a hard worker. Unfortunately, he came out of the Manufacturing side of the business and was supposed to fix the quality problems of the day. He was totally out of his element as Chairman and was fairly quickly booted out.
Jack Smith 1992-2000
"Smilin Jack" was a very slick operator who didn't seem to know the business too well and hired some underlings that caused nothing but problems during his tenure..
Rick Wagoner: 2000-Present
Rick came after I left the industry and I only know what I read about him.
Basically, again, a guy that is not a car guy but a very hard and loyal GM Lifer. I gather he does not like conflict and prefers natural evolution rather than radical solutions. Sadly for him, the last few years have forced him to go for radical solutions with which he is obviously not comfortable and maybe waits too long.
Ron Zarella Head of GM North America 1994-2001
It is generally believed in the automotive world that this guy did more damage to GM than any single Chairman or other manager.
He completely tore up their Marketing Departments and Divisions and hired I don't know how many Brand Managers from packaged food companies, packaged cosmetics companies and the like. A great deal of them were women who had done fantastic jobs in their former industries but were clueless when it came to automobiles.
One of his largest errors was to market the various GM products as models instead of brands. He also changed the logos of many of the brands to designs that were unrecognizable to the public that had known the old logos for decades. I will use just one example, the Aurora was marketed as an Aurora, not an Oldsmobile.
Bob Lutz Head of GM North America 2001-Present
Bob might have been the Knight of a White Charger. He is the ultimate car guy and it was thought he could save GM with his vast product knowledge.
Sadly, it seems even he could not overcome the inertia that runs GM and he may be a bit too rooted in the past. The HH and the new Camaro are neat halo vehicles but are not likely to capture the prospective purchasers of compact to mid size econo cars.
4. Results of the Above
Employment GM US
1979 618,000
2008 100,000 plus/minus
Market Share
1957 50%
2008 21%
If I may, I will try to throw a little extra color into the thread.
I spent my entire first career in the car business, 10 years at dealerships and 25 years with Volvo and SAAB in 4 count
I will relate some of what I learned in this post, and I will concentrate on GM as it is the company I know best. I worked for GM dealers, Volvo was almost purchased by GM and SAAB did get purchased by GM.
1. Legacy Costs.
I feel this is one of the paramount issues faced by GM and to a lesser extent by Ford and Chrysler. Depending on your source, it costs GM $1200 to $1500 per car just to carry the pension and insurance costs of present and retired employees. This, compared to $300 to $400 that the transplants carry.
2. The Social Contract.
These costs are a result of GM creating their own Social Contract with both Union and non Union workers starting in the 1950's. I have posted a link here that tells the story in a sort of biased way, but the facts are pretty accurate.
Essentially, the GM Management for over 30 years felt it was better to buy labor peace at almost any cost rather than facing debilitating strikes. During most of those years, they made enough cars to support the costs but they have not been able to do so for most of the last 15-20 years.
It is important to bear in mind that in the beginning, the Union wanted GM to go to the Federal Government for this protection and GM refused.
There are those that blame the Union for this situation and I don't think that is entirely fair. Any group of employees and their Unions that are given as much as this Social Contract offered would be inclined to ask/demand ever more and the UAW did this and GM gave in, time after time.
GM suffers under some of the most onerous, even ridiculous work rules of most any industry since the Brotherhood of Railroaders. The Job Bank has been roundly criticized by almost every Labor expert who ever bothered to write or talk about it.
Again, GM Management gave the Union workers these advantages in exchange, basically, for labor peace.
3. Management
It is easy to criticize the Managers of any enterprise, including our own Government.
GM, however, has in my mind been afflicted with a series of top Managers who were sadly out of touch with their own business or incapable of running it, an opinion shared by most business analysts.
Roger Smith 1981-1990
Roger was such a piece of work he rated a movie, "Roger & Me".
Bob Stempel 1990-1992
Bob was one of the nicest people you would ever want to meet, a real gentleman and a hard worker. Unfortunately, he came out of the Manufacturing side of the business and was supposed to fix the quality problems of the day. He was totally out of his element as Chairman and was fairly quickly booted out.
Jack Smith 1992-2000
"Smilin Jack" was a very slick operator who didn't seem to know the business too well and hired some underlings that caused nothing but problems during his tenure..
Rick Wagoner: 2000-Present
Rick came after I left the industry and I only know what I read about him.
Basically, again, a guy that is not a car guy but a very hard and loyal GM Lifer. I gather he does not like conflict and prefers natural evolution rather than radical solutions. Sadly for him, the last few years have forced him to go for radical solutions with which he is obviously not comfortable and maybe waits too long.
Ron Zarella Head of GM North America 1994-2001
It is generally believed in the automotive world that this guy did more damage to GM than any single Chairman or other manager.
He completely tore up their Marketing Departments and Divisions and hired I don't know how many Brand Managers from packaged food companies, packaged cosmetics companies and the like. A great deal of them were women who had done fantastic jobs in their former industries but were clueless when it came to automobiles.
One of his largest errors was to market the various GM products as models instead of brands. He also changed the logos of many of the brands to designs that were unrecognizable to the public that had known the old logos for decades. I will use just one example, the Aurora was marketed as an Aurora, not an Oldsmobile.
Bob Lutz Head of GM North America 2001-Present
Bob might have been the Knight of a White Charger. He is the ultimate car guy and it was thought he could save GM with his vast product knowledge.
Sadly, it seems even he could not overcome the inertia that runs GM and he may be a bit too rooted in the past. The HH and the new Camaro are neat halo vehicles but are not likely to capture the prospective purchasers of compact to mid size econo cars.
4. Results of the Above
Employment GM US
1979 618,000
2008 100,000 plus/minus
Market Share
1957 50%
2008 21%
Really Old "Member"
Joined: May 1999
Posts: 1,362
Likes: 0
From: Kennesaw, Ga. USA