General Motors Isn’t Going Anywhere

by Kevin on June 2, 2009

Sure General Motors is filing for bankruptcy. Sure some journalists are lamenting the end of an era.

Oh, please. Give me a break.

If it’s the end of an era, it’s the end of a horrible era filled with cars designed to fail and a megacorporation that lost touch of its customers while ignoring economic conditions.

Sadly, This Isn’t The End of GM

If you listen to much of the garbage streaming across our TV and computer screens about General Motors’ bankruptcy, you’ll quickly find that we aren’t getting rid of GM.

We’re rebuilding it.

It’s an American icon after all.

The company is entering bankruptcy after getting $19.4 billion of American taxpayer dollars to fund operations. While during bankruptcy the company will receive another $30 billion.

But don’t worry — the government has this all under control. It is said that when GM exits bankruptcy it will be much stronger, and never need government assistance again:

He vowed the company will not need additional help from the government beyond what it will receive during the bankruptcy process and added that the part of GM that emerges from bankruptcy will not be at risk of failure in the future.

“We understand there are no second chances,” he said. “We won’t need one.”

Sign me up! I love guarantees about the future full of variables known and unknown. Especially when American taxpayers (a.k.a. the federal government) will own 60% of the new GM. (How exactly we plan to get rid of this “investment” hasn’t been revealed yet.)

This Is the End of…

  • Pontiac
  • Saab
  • Hummer
  • Saturn

…at least as General Motors products. The company is trying to sell off these product lines to someone, anyone that will take them. Not surprisingly they haven’t had many bites.

Don’t Expect Fire Sale Prices on GM Cars

Another article at CNN Money states that the prices on General Motors vehicles are just about as low as they can go. So don’t expect to walk into a dealership this week and find prices thousands less than last week.

Plus auto sales have been so dismal for so long that most dealers have slashed prices to the bone just to try and move inventory.

Personally speaking I am pretty sure I would never buy a GM product in the first place. Low prices wouldn’t convince me to do it either, unfortunately for GM.

The New General Motors

I do wonder what the new GM will look like. They will retain GMC, Chevy, Buick, and Cadillac.

But will they continue to produce cars that are designed to fail quickly? Will they continue to produce cars with low gas mileage?

Only time will tell. I hope the Chevy Volt (their electric prototype) makes it through all of this. That would be the one shining star in all of this mess.

Don’t forget the new GM will also inherit the underfunded pension plans of the old GM as well as $17 billion in debt (down from $54 billion currently).

Would you buy a GM product now or in the future?

{ 1 trackback }

GM is going bankrupt and I would rather ride a bike than buy a Corolla
June 2, 2009 at 7:49 am

{ 9 comments }

The Weakonomist June 2, 2009 at 6:43 am

NBC Nightly News showed a guy who first fe in live with Chevys I. The 1950s. Between his talk and the reporter’s cmments you’d think GM was very much dead. I’m not sure why they’re painting a picture like that.

I’m just glad it’s finally happened. Now we can find something else to talk about.

Oh and you needn’t worry about the Volt, there is no way the Obama administration will kill it.

Chris @ Dorm Room Biz June 2, 2009 at 10:24 am

GM is hoping to complete the sale of the Hummer brand by the third quarter. http://blogs.reuters.com/reuters-dealzone/2009/06/02/hush-hush-hummer-sale/

CS June 3, 2009 at 8:33 am

For the past 20 years we have bought 2 used Toyotas and only needed the 2nd one because we gave the 1st one to our daughter when she left home. We gave the autos general maintenance and never needed emergency services for recalls or defective parts. Many members of our families were angry at us for buying foreign cars but we are only waiting for American cars to become affordable AND reliable, with good track records. I don’t think that is too much to ask for but sadly, it is. Funny thing is, I grew up learning how to drive in a VW bug and everyone thought that was cool. Am I missing something here?

MS June 5, 2009 at 9:05 am

I think you are horribly mistaken about the quality og GM products right now. Have you driven a Malibu? It is hands down much better than a Camry. Silverado’s are the best trucks on the road currently. The new Cadillac CTS is at the same level as Mercedes and BMW. You really need to do your research. Yes, they made horrible business decisions in the past, but they finally have the products they need to compete, and I believe that once they shed the dead weight in bankruptcy court, they will be quite successful. Much more than Chrysler will, for sure.

Kevin June 5, 2009 at 9:23 am

@The Weakonomist: Let’s hope the Volt stays around. Think it is a good step forward.

@Chris: Indeed I saw that the day I wrote this. Sold at a significant discount to the Chinese…

@CS: Nope, we seem to be on the same page. That’s pretty much how I feel.

@MS: I’m sorry and hate to be rude, but your comment really made me laugh out loud.

Yes, I have driven a whole range of GM products: Malibu, Cobalt, Envoy, Yukon, Silverado, Hummer H3, Cadillacs…

They leave much to be desired. Now I haven’t driven the top line Cadillac, but I sure saw them in the shop a lot.

To say the Malibu is anywhere near equivalent to Camry or Accord is laughable. The materials are much cheaper. Have you driven one with 30,000 miles on it? 75,000 miles? They may be nice on day one, but what happens when the warranty runs out?

I think the GM commercial the compares all of their products to Honda is especially laughable. A Chevy Cobalt doesn’t belong in the same room as a Civic. There just isn’t a comparison. The Cobalts I used to rent could not hold an alignment longer than 2 weeks and we had a couple have severe front suspension issues while under warranty. These are brand new cars and they were falling apart. It was a joke. The same applied for the Silverado — couldn’t hold an alignment, shook constantly (I will grant you that most of the big trucks — F-150, Silverado, and Ram — all did this.)

So do I have experience? You betcha. Hands on, in multiple vehicles (not just one Chevy, several hundred).

How have you done your research?

Russell Fascenda June 13, 2009 at 8:22 am

I bought my Buick used about 5 years ago, it’s 10 years old now. It has 125,000 miles but I drive all my vehicles past 100,000 miles, until they quit or something major fails. Even my motorcycles (my Yamaha is over 140,000 miles).

My cars have been Dodge, Pontiac, Ford, Volvo, Oldsmobile, and Buick. So I’ve averaged 6 years per car, and all were bought well-used (except the Ford was only 1 year old).

I don’t do any exceptional maintenance just the fluids, brakes, and tires. Maybe I am just lucky?

CS June 16, 2009 at 1:54 pm

The vast amounts of recalls on Ford Motor parts within the past 5 years alone embarrassed me as an American and I never owned a Ford. Just as I am not a sports enthusiast but baseball and steroids is also a huge embarrassment. What’s up America? Madoff, Ginnie Mae, Freddie Mac, General Motors. How patient are we supposed to be?

Kevin June 22, 2009 at 8:54 pm

@Russell: Sounds like you got lucky! I’ve heard so many bad stories from others…

@CS: Interesting perspective. The age of looking the other way… perhaps it is leaving us now? Would love to see some steroid users get banned from the game or something like that. No other way to stop it.

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