Originally posted by: Fritzo
Originally posted by: Corporate Thug
I guess that's what happens when you make crappy cars.
Nothing to do with their build quality, it was their poor decisions in the early 2000's. It's actually a good lesson in greed and poor leadership.
Around 2000, Toyota and Honda were switching to eco friendly cars because they had foreseen high gas prices (they have The Force or something). GM decided to run the SUV train to death...until it was too late to stop the train from going off the cliff.
$3 gas hit, and GM execs acted like they were shocked that people didn't want 12MPG SUV's anymore. So, instead of costly retooling and redesigns, they decided to offer rebates. Huge, amazing rebates---to the point where they were losing money on each vehicle sold.
The rebates made new GM vehicles cheaper to finance than used vehicles. Therefore, used GM vehicle prices took a nosedive. When this happens, lease buyouts (GM's big cash cow) took a huge hit.
Which leads us to early last year, where GM is stuck with products nobody wants, and has to accept lease returns for used vehicles they can't give away. They tried to increase sales with...you guessed it...MORE rebates. It didn't work, and they finally realized they were going to have to make efficient smaller cars. They decided to do expensive redesigns and retooling at a time when they had negative cash flow, hence the layoffs we're seeing now.
Today, they're having to retool more plants and pay workers overtime because they can't get enough Cobalts and Aveos on the market to keep up with demand. They have a product people actually want, and they can't make enough of the damn things.
Someone's going to write a book on this some day with the title "How to Screw Up a 100 Year Old Business".
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