The Incredible Shrinking General Motors

[shovelhead]

It appears to be a style demand as much as gas prices that may not change back. I don't understand the desire for small & medium crossovers [[other than women apparently like to sit up high to see the road better) but they have definitely taken a large permanent share of the market.

Not being confrontational but one size does not fit all. The small and medium crossovers have a definite market, not all need a Tahoe/Yukon platform. It made more sense for us wanting a 4wd vehicle for winter mobility but without seating for seven passengers that we would vary rarely use to go to a midsize platform instead. We had to go outside of GM vehicles to do so as they no longer produced anything we wished to buy since 2009 and an AWD configuration did not appeal to us, we wanted a true 4wd vehicle.

I agree, if not for OPEC wanting to sink our alternate sources of petroleum and the subsequent market drop of the per barrel price of oil we would probably be at five bucks a gallon at present. And truthfully if I have to pay five bucks a gallon for gasoline I would rather pay it to a U.S. or Canadian producer than OPEC. Sorry, I lived through the gas lines of 73-74 and the 79 and the uncertainty of having a auto dealership job during the subsequent recessions while OPEC nations got rich. NO sympathy for greed.

[401don]

[QUOTE=shovelhead;529807]Not being confrontational but one size does not fit all. The small and medium crossovers have a definite market, not all need a Tahoe/Yukon platform. It made more sense for us wanting a 4wd vehicle for winter mobility but without seating for seven passengers that we would vary rarely use to go to a midsize platform instead. We had to go outside of GM vehicles to do so as they no longer produced anything we wished to buy since 2009 and an AWD configuration did not appeal to us, we wanted a true 4wd vehicle.

I agree, if not for OPEC wanting to sink our alternate sources of petroleum and the subsequent market drop of the per barrel price of oil we would probably be at five bucks a gallon at present. And truthfully if I have to pay five bucks a gallon for gasoline I would rather pay it to a U.S. or Canadian producer than OPEC. Sorry, I lived through the gas lines of 73-74 and the 79 and the uncertainty of having a auto dealership job during the subsequent recessions while OPEC nations got rich. NO sympathy for greed.[/QUOTE

Clearly there are people like yourself who need a small/med. 4wd. but I was really talking about the vast majority of these purchases, which are front drive crossovers used to drive around the suburbs for errands when a chevy cruze would do just fine.

[313WX]

Good points, Olds made some great cars, with the Cutlass Supreme one of the most popular in GM history. Also, still don't understand why they kept Buick over Pontiac, the so called performance division. I loved Pontiac's, and owned a few over the years, and now they are talking about dropping the Impala. Go figure.

I can sort of understand the move with Pontiac. It was a duplication of Chevrolet in many ways and wasn't particularly profitable at a time when people frankly weren't buying pony cars. Plus, there was the China factor too [[they love Buick).

That said, I don't understand the logic of completely abandoning market segments like Barra seems to be doing. They may not be profitable *today*, but trends do change and you don't want to be left empty handed when they do.

If the plants were properly utilized as mentioned earlier, they wouldn't have to discontinue so many of these brands and segments as it wouldn't be nearly as expensive to build them [[see Volkswagen, Toyota and Nissan as perfect examples of this).

[shovelhead]

313WX, my point exactly. But in all fairness the abandoning market segments started under the Roger Smith era. I felt that the reasoning behind his divesting of divisions was to increase profits to pay larger dividends to stockholders to make it more attractive for GM to expand and issue more stock. Before that GM was a solid dividend payer albeit not great dividends and the stock price stayed pretty stable also from what I remember as we personally we held some GM stock until about 1980.

Pontiac had some good product at the end. The G6 convertible was the only four passenger one built by GM. While they shared the Solstice platform with the Saturn Sky, well Saturn went buh-bye anyhow. And now we come to the G8. What a nice car, four door performance sedan. Holden platform from Australia. With some upgrades, a lot better handling and performance too. So much better than that poor attempt to resurrect the GTO nameplate with that bulbous two door rebadged Holden coupe.

Chevrolet already had enough product and let's face it, not everybody wants to drive a Chevrolet or a Cadillac. So the answer was to head them to a Buick AARP Edition? Can you say boring? IIRC the last revolutionary "wow" feature was the CRT touch screen in the 86 and later Rivieras. Still remember the TSB from Buick warning us in dealerships to clear the notes from the screen as autoworkers were leaving NSFW messages for others on the production line........ Last Buick that piqued my attention was the GN and those have been gone since 1987. And before anybody says anything about me making disparaging remarks about Buick, AARP, et al, I am squarely aged in the demographics for Buick ownership as the dealership mailings I get highlight that division. Only Buick I owned was from 95-98 as it was such a steal I could not say no to the price.

What gets me is the costs involved to liquidate a car line, the payoffs like they did with Oldsmobile, the litigation with the last go-around of closures and the amount of settlements to aggrieved parties [[dealers) then at a later date the 14th Floor [[old Board of Directors floor at the REAL GM Building) decides "let's re-open so and so division, should not cost over a few BILLION" to get marketing staff, service staff, dealer support, etc. Now with the new Medium Duty division that should be a no brainer, International will probably warehouse parts like American Isuzu did and handle warranties the same way, thru Isuzu. Previously GM and Isuzu jointly handled service, sales and parts marketing so maybe history will repeat itself.

Like I said, really does not matter to me. I made the decision about a year ago that it was time to fly, closing in on a half century of dealership employment was enough.

[shovelhead]

401don, another interesting point you brought up. The Cruze. Marketing.

I felt that the Cruze and Malibu were too close to each other in size. Why both? If it was a price point, create a de-contented Malibu, price leader as called. Again, two car lines, close in size, multiple FMVSS certifications, EPA Emission regs to follow. Diesel Malibu anybody? The Cruze Diesel was rated at the same mileage as the gas engine, so what was the advantage? GM able to say "we are on the cutting edge"?

Don't know, it seems that the new GM is intent on committing itself to the same fate as before, dwindling market share. I just hope that history does not repeat itself with another bankruptcy. Some of my co-workers joke about that happening but I don't know how many businesses associated with GM could take another hit like the last time around.

[shovelhead]

GM was supposed [[from what I was told) to introduce a medium sized SUV to replace the Trailblazer/Envoy package for the 2014 M/Y. Saw and spoke to an engineer one evening while he was in a parking lot in late 2012,tagged as a Trailblazer according to the door nameplate. Similar in size to the new Canyon/Colorado truck. He knew about the truck, intended for sale in Thailand.

Why not here too? I would have been interested at the time, not today.

[JBMcB]

It wasn't just an issue with too many marques. Dealership agreements also came into play. You would have GMC/Pontiac/Oldsmobile dealerships down the road from a Chevrolet/Buick dealership, down the street from a Saturn dealership, and they'd all be competing with each other. Franchise laws prevented GM from cutting back on dealerships, so you end up with a saturated market driving prices down. Good for the consumer. Bad if you are competing with Toyota, who has, maybe, two or three dealerships in every major metropolitan area.

[Cincinnati_Kid]

The Impala is a shell of its former self. How can it and many of the other rather pedestrian models go on? Too many other cars out there, better styled, better performance. Sad really.

That may be true to a certain degree, but the Impala looks better than a lot of cars it competes with, namely the Taurus and Camry IMO. Fleet sales are what ultimately did it in, it cheapens the marque.

[shovelhead]

GM used to have a mileage clause for areas, a "can't put that store within five miles from another of the same franchise" thing. I worked at a metro Chevy dealership once, they allowed one just over five miles, maybe two tenths of a mile further out. Hey letter of the law so to speak.

1970, when I started, GM terminated the franchise of the first store I worked at. Dual GM lines, they cited market share and the discontinuation of two in house competition.

Of course 15 years later I worked in the rural southwest at a five line GM store.......... that was different I suppose......

[313WX]

What a disaster July was for GM. They need to get it together and fast.

http://www.gm.com/investors/sales/us...roduction.html

[313WX]

Don't know, it seems that the new GM is intent on committing itself to the same fate as before, dwindling market share. I just hope that history does not repeat itself with another bankruptcy. Some of my co-workers joke about that happening but I don't know how many businesses associated with GM could take another hit like the last time around.

There won't be a next time [[as far as bailing them out), especially not with the Republicans firmly in control of the government.

[ndavies]

While sales are down, It's not a disaster. They are selling many Pickup trucks and SUVs. The product mix of vehicles being sold is tilted towards their most profitable vehicles. They will make big profits off of it.

The industry is still on track to sell the 3rd most cars ever this year. Ford, GM and FCA will all be very profitable. The workers will still get the Huge bonuses next year. The stock holders will get their dividends.

Selling the most cars is not the goal. Making the most money is.

[313WX]

While sales are down, It's not a disaster..

I'm focused on the long term.

Sure, having severely underutilized or overutilizied plants, sacrificing market share and 100+ day inventories when auto sales are declining may be a good strategy to ensure $30K bonuses and appease Wall Street today, but it's simply not a sustainable way to do business. It doesn't appear GM's trying to address these problems in any significant way either.

[313WX]

While Ford and Chrysler have actively taken steps to run their plants efficiently, the utilization at all of GM's plants [[except Spring Hill, TN) is a basket case...

But hey, as long as Wall Street's happy now and we're getting $30K bonuses, who caress about the negative long-term consequences of operating this way, right?

After all, I'm sure it'll be the Wall Street shareholders that bail us out like be...oh wait...?

9 Plants running severely under capacity, with an average of 45%
1 Plant running in a healthy range at 89% [[Spring Hill)
8 Plants running severely over capacity, with an average of 154%

Arlington - 157%
Bowling Green - 38%
Fairfax - 62%
Flint 1 - 143%
Fort Wayne - 144%
Hamtramck - 56%
Ingersoll - 134%
Lansing Delta - 136%
Lansing Grand River - 44%
Lordstown - 41%
Orion - 44%
Oshawa 1 - 38%
Oshawa 2 - 44%
Ramos Arizpe - 40%
San Luis Potosi - 174%
Silao - 185%
Spring Hill - 89%
Wentzville - 156%

And on that note:

GM’s Conundrum: Too Many Factories Making Slow-Selling Cars

https://www.wsj.com/articles/gms-con...ars-1507571555

[313WX]

Also:

General Motors plans to temporarily shut down Detroit factory over slow demand, says report

https://www.cnbc.com/2017/10/12/gm-p...port-says.html

[Zacha341]

Too many fleet cars/ rentals cookie-cutter models - lackluster design and people holding on to their older cars longer are factors along with other reasons. Though I like Buick......

[401don]

When Cadillac introduced CTS about 15 yrs. ago the new architecture looked like they might finally be reviving the brand. Now 15 yrs. later they have fallen off the map against the import competition and have all of their car models still living off this outdated design.

[Lowell]

And now for the rest of the story...

General Motors: Booming China Sales Should Set Up a Profitable Third Quarter

The good news: The automaker's sales in China are up. The better news: GM's most profitable products are driving the growth.

Oct 11, 2017 at 4:33PM

General Motors [[NYSE:GM) just reported that its sales in China rose 6.6% in September, on strong SUV-driven gains for its Buick, Cadillac, Chevrolet, and China-only Baojun brands.

GM has now overcome the year-over-year declines in China sales that it posted earlier in 2017; year to date, its sales there are up 1.1% in 2017 versus the same period in 2016.

Buick has sold 159,000 cars in the US for all of 2017.

How does that^ compare with last month in China?

GM in China: The raw numbers

Brand	September 2017	Change [[YOY)
Buick	114,500	5.7%
Chevrolet	57,757	11.2%
Cadillac	17,248	37.6%
Wuling	82,082	[[24.2%)
Baojun	94,718	51%
Total GM China	366,305	6.6%

https://www.fool.com/investing/2017/10/11/general-motors-has-set-up-a-profitable-third-quart.aspx

[Lowell]

Same story over at Cadillac. GM's global sales are giving it stability.

Market	September 2017 / September 2016	September 2017	September 2016	YTD 2016 / YTD 2015	YTD 2017	YTD 2016
Total	+16.5%	35,020	30,065	+20.9%	256,613	212,277
United States	+1.1%	15,530	15,368	-4.6%	113,846	119,286
China	+37.6%	17,248	12,539	+61.8%	124,625	77,028
Canada	+1%	1,277	1,264	+16.4%	10,182	8,751
ROW	+7.9%	965	894	+10.4%	7,960	7,212

[canuck]

A friend just bought a new Bolt Electric car 2 days ago. Very powerful hands on the steering feel. I was in Paris a litlle while back and found that tje worst thing was the air and noise pollution. Electric cars would nix that.

[Hermod]

2WD car-based SUVs replace the station wagons that suburban moms loved and which the car makers don't make any more.

[Bham1982]

A friend just bought a new Bolt Electric car 2 days ago. Very powerful hands on the steering feel. I was in Paris a litlle while back and found that tje worst thing was the air and noise pollution. Electric cars would nix that.

Air pollution in Paris is from diesels, not a factor here. Noise pollution [[I assume you mean on the streets) is from motorbikes, also not a factor here.

[SammyS]

With all the recent natural disasters we've been seeing, I'd bet there'll be an uptick in sales in the near future.

[canuck]

Air pollution in Paris is from diesels, not a factor here. Noise pollution [[I assume you mean on the streets) is from motorbikes, also not a factor here.

Yes, I know. I meant Paris. Did I mention Detroit? That was the worst thing about Paris; the air and noise pollution. If all the scooters and motorcycles were electric, the noise would definitely be less of an issue.
If the cars were electric, the noise would also be a lot lower obviously.

[DetroitNightLights]

They're going to need to find alternative funding sources to keep the freeway and road system going. Gas taxes, vehicle registration taxes, traffic fines, mass transit fares, toll fares, and parking fines will all be affected. Early on, this technology will be cost prohibitive for a shrinking middle class. There will be some private drivers, but ride sharing and public transit is probably going to provide the initial demand. Eventually, economies of scale, less fuel costs, reduced need for parking lots, and an end to auto insurance requirements as we know them will lower costs and raise unemployment.


With Self-Driving Cars, Auto Insurance’s Time Is Limited

"Insurance prediction: Insurers will start to go out of business as customers reduce their personal auto policies or drop insurance altogether."


Drivers spend an average of 17 hours a year searching for parking spots

"Motorists spend an average of 17 hours a year searching for spots on streets, in lots, or in garages, according to a report issued Wednesday.
The hunt adds up to an estimated $345 per driver in wasted time, fuel, and emissions..."

..."Overpaying — caused by drivers' inability to estimate how long they need to park or forking over extra at a garage to avoid the risk of getting a parking ticket — costs Americans more than $20 billion a year or $97 per driver, the report estimated."


Drop in gas tax revenues leads to shrinking budgets

Economists believe gas tax revenues are likely to continue to decline or at best remain stagnant no matter when the economy recovers because of the geopolitical changes in oil-rich Middle Eastern countries and trends favoring fuel-efficient and hybrid cars...


“...Ultimately, using motor fuel consumption as a way to finance streets and roads is a losing proposition.”


For the state and local governments, this means finding a long-term solution for what many consider a lasting problem that has gutted their highway programs and forced them to buy price-inflated materials on a shrinking budget.


Cities will lose money thanks to obedient self-driving vehicles

"A decline in revenue from tickets could be more painfully felt in places that rely more on fines. A 2015 investigation by 9News and PBS I-News found five Colorado towns relied on traffic fines for at least 30% of their budgets. These fines comprised almost the entire budget of one town. The Nevada Supreme Court complained in 2015 that a decline in traffic tickets was crimping the court’s budget."