Howard_T

Preview from Europe: Too Big to Fail? Not GM

The death of the "greatest generation" is not only a problem for GM, but also for Ford and Chrysler. Don't forget they built a lot of the rolling stock (and aircraft) that won WW2. I can't blame engineering for the ills of the industry. Marketing calls the shots in Detroit, and the marketeers have long been under the impression that the customers who make the car-buying decisions were not interested in economy or performance, but rather preferred comfort and amenities.

When the first wave of European imports hit the US market in the 50s, the cars were, for the most part, economical but generally uncomfortable, not well finished, and poorly equipped. The second wave of imports was from Japan, and they learned from the Europeans. Their cars were better, but still not quite up to Detroit's products, especially when it came to fit and finish. By the 70s Japan had learned how to improve the quality of manufacture as well as build in the amenities and performance without sacrificing economy. The European manufacturers, pared down to the Germans and Scandinavians, studied the lessons from Japan, and it was only a matter of time before the demise of the US industry began. Many blame the unions for the problem. While they certainly haven't helped, I cannot fault them for seeking the maximum reward for their labor. I hold management to be the most responsible entity for the industry's problems. The insistence on short-term bottom line results in order to make the stock look good produced suicidal contracts with the unions, inefficient factories, too many truly bad designs mixed in with the many good ones, and product lines that ceased to appeal to consumers who shopped with their pocket books rather than their emotions and loyalties.

Now we own GM. The unions have agreed to concessions, but for how long? When will their contract expire, and what will they seek in wages and benefits when it does? I am truly afraid that the public's representatives on the board (loyal Obama appointees, I'm sure) will be too willing to give in to those who helped elect them in the first place. If management and the unions begin the spiral again, it will likely mean the death of GM, since the public might not be willing to continue throwing their tax money down the drain.