It’s easy to sit here in the UK and observe the travails of what was once the world’s largest car manufacturer with a sense of comfortable detachment.
Yes, there are several thousands of UK jobs at risk, and we hope that the Magna deal will allow Ellesmere and Luton to continue producing vehicles. But the corporate disaster belongs on the other side of the Atlantic, and just as it’s easy to feel empathy for the victims of a natural disaster wherever in the world it may occur, you only realise the full terror when it happens in your manor. Accordingly, GM is America’s tragedy, but it will have global ramifications.
A post mortem of what, in a few hours, will be known as the ‘old’ General Motors is now pretty pointless. Once you’ve berated decades of management for sanctioning mediocre products, railed against the unions and gasped at the ludicrous healthcare burden, you’re left with a picture of a company that wasn’t making very good cars, was already perilously large, unprofitable and financially immobile, and which had the bad fortune to wade into a recession. In reality, the post-Lehman landscape only hastened the inevitable: despite all the posturing from Lutz and Wagoner, GM has been doomed for years.
We’re now entering unquestionably the most damaging phase in the modern history of the automotive business. The financial press is overflowing with talk of acquisitions, mergers and partnerships –it’s good see positivity and people trying to forge a future for the industry, but the real problem never seems to be addressed. Namely: that there is too much capacity, too little credit and too many people terrified of buying a new car. And this isn’t a temporary blip; it will take years, maybe decades, for new-car demand to recover. It was hard enough to justify the existence of the likes of Chrysler, Saab and a Brit-specific version of Opel before the world went wrong, now it seems ludicrous to suggest that they are commercially viable operations. If every European car brand is to survive the coming five years, governments will have no choice but to support a kind of automotive twist on the Common Agricultural Policy: simply pay people to make cars that are summarily dumped, unsold, on an ‘EU car mountain’.
I digress: back to GM in the States. It was inevitable that GM needed to restructure and, given liabilities of $172bn, understandable that it needed protection from those to whom it owed money in order to get the job done as efficiently as possible.
What surprises me most about the known template for the shrinkage of General Motors is how much of it looks like common sense. Normally in these situations a group of very clever industrialists and economists retire to the boardroom only to announce a few weeks later a baffling set of measures that don’t sync with the reality of the car market. But this time we’ve had talk of ditching Hummer, Pontiac and Saturn, flogging the European arm and getting rid of thousands of US dealerships. It looks very harsh, and if you or your family are directly connected to such events, it must be horrific, but it’s what needs to happen if GM stands any chance.
Sadly, that’s where I suspect the good news peters-out. It’s a long time since I’ve seen something as foreboding as the ownership structure of the beast that the media is already calling the ‘leaner, meaner GM’. The US government will have a 72.5% stake. That is an utter disaster.
The words ‘government’ and ‘car’ are not comfortable together -the history book confirms why. When the British government involved itself in the machinations of its own car industry, it laid the foundations for the Morris Ital and the Austin Allegro. The Soviet Union didn’t have much choice than to offer state-sanctioned machinery, and given the low aspirations, there are those who thought the Lada wasn’t too bad. If they hadn’t copied a Fiat it would have been even worse. You can play this game with just about any nationalised car manufacturing exercise: you either end up with some comical shitter designed within the organisation or a dreadful licensing exercise that subsequently tanked in the marketplace because it was too old and rubbish. There is but one exception: Renault, when it was La Regie, was state-owned and made some wonderful cars.
Politicians are perhaps the worst group of people on planet earth to involve in the process of making and selling cars, and of course the timing of this intervention –just as environmental issues and alternative fuels are, seemingly the only agenda- couldn’t be worse. Here is the perfect opportunity for a new administration to impose what it feels should be the template for America’s (and by association, the world’s) personal transportation.
Give the space shuttle controls to a chimp, and you’ll expect a shunt.
Okay, the jury’s still out on this because we haven’t even seen what Nu-GM will attempt over the next few years. Now I’m sure Obama and his aides have several sources of advice, but I wouldn’t want to be singled-out as the only non-pious media source who refrained from offering a few pearls.
It concerns me and possibly anyone else who loves their motoring that Obama and his chaps have a poor grasp of the emotional nature of car ownership. It’s possible that over a generation, as most politicians would dearly like, the role of personal transportation could be de-emotionalised, but thankfully the world isn’t ready for it yet. People still want to express themselves through their cars; a car is still the second largest purchase most people make. If Nu-GM and its politician bosses think they can impose their new ideology on the masses, it could be a shambles.
By all means change the way we do things, but package it in a way that makes it appealing, and offer people what they want; now what you think they should drive. Go to Apple, DC shoes and Sony: understand the nature of desiribility.
I’m minded of a conversation I had with Quattro Gmbh boss Stefan Reil last year. Asked what he thought the future was for Audi’s RS products, he said: “The last car Audi makes will probably be an RS.”
If Nu-GM doesn’t make cars people want, the politicians can be sure that someone else will. Or, of course, they could just hire a load of Frenchmen.
from drivers-republic
