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GM may end up having the last laugh at critics
Warren Brown / Washington Post
Cornwall, N.Y.
Dear readers:
After 33 years at the Washington Post, I am taking the company's latest, and possibly its last buyout offer. That means I'll be signing off from duty as a full-time Washington Post staff writer, which will result in the probable end of the "Car Culture" column. But the "On Wheels" product review column will continue under my byline under a special contract.
Under the current schedule, the effective date of my retirement is July 1. That gives me one more month to raise hell in this space. I'll begin by arguing against the often inane analyses of the challenges facing the domestic automobile industry, sometimes served up on the editorial and opposite-editorial pages of this otherwise fine journal.
A perfect example of that nonsense is the piece published by my brother scribe, Eugene Robinson, on June 2 ("Our Car Company: We All Own GM. Just Don't Bet on a Happy Ending").
My only agreement with that column is the assertion "we all own GM."
We owned General Motors in World War II and in the Korean conflict when we needed it to build tanks and other weapons of limited destruction.
We owned it when we needed it to help build what once was the free world's strongest middle class.
We owned it in 1955 when, alarmed by GM's rapid growth -- the company had a 50.76 percent share of the U.S. automobile market back then, peaking at a 55 percent share in 1956 -- we urged our lawmakers and our Justice Department to do something to break up the "monopoly."
And we owned it after the devastating 9/11 attack on our nation, when it was GM that pulled us from the economic brink and got consumers buying again through a savvy marketing campaign.
We certainly own it now that our government has used taxpayers' dollars to buy a 60 percent share of GM in a bid to help the company restructure its operations under the protection of federal bankruptcy laws.
What boggles my mind is why so many people in GM's halcyon days supported the government's interference -- the federal bid to section the company into smaller pieces -- while now, much of the public is outraged over the government's success in accomplishing the very same result via federally subsidized loans and bankruptcy protection.
My friend Robinson, like so many editorial writers who have made a similarly flawed argument, says that the current federal intervention in GM's affairs will lead to the company's failure. He offers a tired litany of reasons for GM's supposedly inevitable final collapse.
GM has poor product quality. GM has lousy management. GM has too many divisions. Forget that it already has shed all or part of Opel, Vauxhall and Saab in Europe and Hummer, Pontiac and Saturn in the United States in a bid to make it through a grievously tough economic period.
Robinson, like most critics who have paid scant attention to the company before our present headline-grabbing financial crisis, now wants GM to get rid of Buick.
To all of that, I say "baloney!"
By any objective measure, GM has world-class product quality, including long-term reliability. That much has been ascertained by independent market research firms, including AutoPacific, J.D. Power & Associates and even Consumer Reports, long a harsh critic of all things GM and a strong backer of almost anything Honda or Toyota .
I will stipulate, for the record, that Consumer Reports often has been right in taking GM and other domestic automobile manufacturers to task. For too long -- the late 1960s through the early 1990s -- they were fat and arrogant, turning out motorized rubbish, "moving the metal" and, as one top GM executive once told me, "putting out as much dog meat as quickly as possible in hopes that the dogs (consumers) would snap it up."
I liken that sorry period in the history of the domestic automobile industry to an equally distressing era in American journalism when news organizations were producing sensationalized rubbish -- "yellow journalism" -- the kind that did little to shine light on the truth, or to explore the profound divisions that continue to separate the national body into warring parts.
We journalists, especially those of us in the liberal media, revel in the belief that we've gotten past all of that. We routinely applaud what we see as our progress and superior common sense -- although many of the institutions that employ us are struggling as hard as GM to stay in business in a rapidly changing and frequently befuddling market.
Indeed, the widening landscape of unemployment in the news industry in many ways is beginning to resemble the scene in the domestic automobile business.
Yet, while we peer over journalism's economic precipice, all many of our editorial writers can see is "a history of bad management" among domestic automobile companies. Is there no "bad management" in the news business that they would care to write or talk about?
Here's the deal, point-by-point:
• GM was darned smart to hold on to Buick, because Buick is a globally strong brand, the leading automotive brand in China , which happens to be the world's fastest-growing automobile market.
• China 's vehicle-manufacturing industry can absorb the Hummer brand -- which, GM says, a Chinese heavy-equipment maker has already agreed to do -- and then export Hummer products back to these shores, where, despite the opinions of editorial writers who have never driven or understood that model, there exists a loyal market for mightier-than-thou sport-utility vehicles.
• Chevrolet and Cadillac are globally strong brands -- with each fully capable of tit-for-tat combat in international markets in their respective midstream family and luxury vehicle segments.
• It is arguable that GM should have kept its GMC truck group. In terms of technology and platform engineering, Chevrolet carries the same trucks as GMC. But, through the magic of computer-assisted design, vehicles sharing the same basic underpinnings can be made to appeal to completely different buyers. That is the case with Chevrolet and GMC, just as it is with Toyota and its Lexus group, Honda and its Acura group, Nissan and its Infiniti group, Hyundai and its Kia group, and Volkswagen and its Audi group.
In commenting on the new GM's future, Robinson writes: "In truth, I don't see much more than a temporary reprieve (from ultimate failure) for General Motors and a somewhat easier landing for GM workers. Obama said he plans to leave management of the company to the professionals. At this point, I have to wonder why." I don't.
Leaving management of a car company to car people is the smartest thing President Obama could have done. Bad management of the automobile business did not put GM in its current position any more than bad management has brought Toyota the biggest losses in that company's history. The "bad management" that trapped GM and Toyota in their current unhappy states occurred at the federal level, where politicians repeatedly failed to come up with a sensible national energy policy, balanced to require participation, however painful, from automobile manufacturers, politicians and consumers.
The bad management that slowed sales of new domestic and foreign vehicles to a barely sustainable trickle occurred among federal regulators who were supposed to regulate the banking industry, but who apparently failed to regulate anything of any kind.
As for placing bets on future longevity: Here's betting that GM will be around a lot longer than many of the traditional news outlets -- print and broadcast -- covering GM today.
Warren Brown / Washington Post
Cornwall, N.Y.
Dear readers:
After 33 years at the Washington Post, I am taking the company's latest, and possibly its last buyout offer. That means I'll be signing off from duty as a full-time Washington Post staff writer, which will result in the probable end of the "Car Culture" column. But the "On Wheels" product review column will continue under my byline under a special contract.
Under the current schedule, the effective date of my retirement is July 1. That gives me one more month to raise hell in this space. I'll begin by arguing against the often inane analyses of the challenges facing the domestic automobile industry, sometimes served up on the editorial and opposite-editorial pages of this otherwise fine journal.
A perfect example of that nonsense is the piece published by my brother scribe, Eugene Robinson, on June 2 ("Our Car Company: We All Own GM. Just Don't Bet on a Happy Ending").
My only agreement with that column is the assertion "we all own GM."
We owned General Motors in World War II and in the Korean conflict when we needed it to build tanks and other weapons of limited destruction.
We owned it when we needed it to help build what once was the free world's strongest middle class.
We owned it in 1955 when, alarmed by GM's rapid growth -- the company had a 50.76 percent share of the U.S. automobile market back then, peaking at a 55 percent share in 1956 -- we urged our lawmakers and our Justice Department to do something to break up the "monopoly."
And we owned it after the devastating 9/11 attack on our nation, when it was GM that pulled us from the economic brink and got consumers buying again through a savvy marketing campaign.
We certainly own it now that our government has used taxpayers' dollars to buy a 60 percent share of GM in a bid to help the company restructure its operations under the protection of federal bankruptcy laws.
What boggles my mind is why so many people in GM's halcyon days supported the government's interference -- the federal bid to section the company into smaller pieces -- while now, much of the public is outraged over the government's success in accomplishing the very same result via federally subsidized loans and bankruptcy protection.
My friend Robinson, like so many editorial writers who have made a similarly flawed argument, says that the current federal intervention in GM's affairs will lead to the company's failure. He offers a tired litany of reasons for GM's supposedly inevitable final collapse.
GM has poor product quality. GM has lousy management. GM has too many divisions. Forget that it already has shed all or part of Opel, Vauxhall and Saab in Europe and Hummer, Pontiac and Saturn in the United States in a bid to make it through a grievously tough economic period.
Robinson, like most critics who have paid scant attention to the company before our present headline-grabbing financial crisis, now wants GM to get rid of Buick.
To all of that, I say "baloney!"
By any objective measure, GM has world-class product quality, including long-term reliability. That much has been ascertained by independent market research firms, including AutoPacific, J.D. Power & Associates and even Consumer Reports, long a harsh critic of all things GM and a strong backer of almost anything Honda or Toyota .
I will stipulate, for the record, that Consumer Reports often has been right in taking GM and other domestic automobile manufacturers to task. For too long -- the late 1960s through the early 1990s -- they were fat and arrogant, turning out motorized rubbish, "moving the metal" and, as one top GM executive once told me, "putting out as much dog meat as quickly as possible in hopes that the dogs (consumers) would snap it up."
I liken that sorry period in the history of the domestic automobile industry to an equally distressing era in American journalism when news organizations were producing sensationalized rubbish -- "yellow journalism" -- the kind that did little to shine light on the truth, or to explore the profound divisions that continue to separate the national body into warring parts.
We journalists, especially those of us in the liberal media, revel in the belief that we've gotten past all of that. We routinely applaud what we see as our progress and superior common sense -- although many of the institutions that employ us are struggling as hard as GM to stay in business in a rapidly changing and frequently befuddling market.
Indeed, the widening landscape of unemployment in the news industry in many ways is beginning to resemble the scene in the domestic automobile business.
Yet, while we peer over journalism's economic precipice, all many of our editorial writers can see is "a history of bad management" among domestic automobile companies. Is there no "bad management" in the news business that they would care to write or talk about?
Here's the deal, point-by-point:
• GM was darned smart to hold on to Buick, because Buick is a globally strong brand, the leading automotive brand in China , which happens to be the world's fastest-growing automobile market.
• China 's vehicle-manufacturing industry can absorb the Hummer brand -- which, GM says, a Chinese heavy-equipment maker has already agreed to do -- and then export Hummer products back to these shores, where, despite the opinions of editorial writers who have never driven or understood that model, there exists a loyal market for mightier-than-thou sport-utility vehicles.
• Chevrolet and Cadillac are globally strong brands -- with each fully capable of tit-for-tat combat in international markets in their respective midstream family and luxury vehicle segments.
• It is arguable that GM should have kept its GMC truck group. In terms of technology and platform engineering, Chevrolet carries the same trucks as GMC. But, through the magic of computer-assisted design, vehicles sharing the same basic underpinnings can be made to appeal to completely different buyers. That is the case with Chevrolet and GMC, just as it is with Toyota and its Lexus group, Honda and its Acura group, Nissan and its Infiniti group, Hyundai and its Kia group, and Volkswagen and its Audi group.
In commenting on the new GM's future, Robinson writes: "In truth, I don't see much more than a temporary reprieve (from ultimate failure) for General Motors and a somewhat easier landing for GM workers. Obama said he plans to leave management of the company to the professionals. At this point, I have to wonder why." I don't.
Leaving management of a car company to car people is the smartest thing President Obama could have done. Bad management of the automobile business did not put GM in its current position any more than bad management has brought Toyota the biggest losses in that company's history. The "bad management" that trapped GM and Toyota in their current unhappy states occurred at the federal level, where politicians repeatedly failed to come up with a sensible national energy policy, balanced to require participation, however painful, from automobile manufacturers, politicians and consumers.
The bad management that slowed sales of new domestic and foreign vehicles to a barely sustainable trickle occurred among federal regulators who were supposed to regulate the banking industry, but who apparently failed to regulate anything of any kind.
As for placing bets on future longevity: Here's betting that GM will be around a lot longer than many of the traditional news outlets -- print and broadcast -- covering GM today.