GM: Serving the Greater Good?

GM Employee Discount“GM Suffers Massive Losses,” the headlines screamed this week. Wow, do you mean that we don’t want to buy ever bigger SUVs? I read the headlines from Forbes and API, and it sounds like a shocker. Big scoop… front page news: “GM Posts Another Huge Quarterly Loss.” Can even ’employee discounts’ save the day?

For 30 years, and probably longer, the US auto industry has been in a state of denial. It’s not just the American car-makers, mind you; it’s the entire industry. But as I look at the current state of affairs, it comes to no surprise that GM could soon face bankruptcy.

In 1973 the gas crisis really began. As prices soared under OPEC constraints we got our first taste of scarcity, and how it affects the global economy. Today we read about peak oil… a concept that the world’s oil reserves, and the amount we’re taking out, have hit their max. They can only produce so much. Add to the equation China’s massive growth and consumption and we get rising prices plus diminishing supply.

With Gulf War I and now Iraq, we see American, British and coalition men and women serving and dying essentially to safeguard our supply and access to oil. Whichever political camp you sit in, oil is a contributing factor. Safeguarding and planting democracy in the Middle East is certainly a noble endeavor, but if the net product of the region was soybeans I doubt we’d be so hawkish to intervene.

Don’t get me wrong, I am proud of our sweeping success in Iraq. American ingenuity and determination have proven themselves. I truly believe that the lives of millions of people there, have been vastly improved.

But in the auto industry, that entrepreneurial spirit, that pioneering know-how and true grit that we see in the defense industry, that American spirit, simply died out years ago.

What’s the point? We go to war in Iraq, and at home GM is pitching Esplanades, Hummers and Suburbans. Men and women get shot at, and our reaction back home is bigger trucks to commute to and from the office?

I love to watch the history channel. More and more I realize that in World War II, much of the strategy behind so many encounters and territory grabs were over natural resources. Rommel was in North Africa, not to teach Bedouins how to speak German, but rather to secure oil supply to the Middle East and control access to the Suez. Japan struck at Pearl Harbor not to wake up a sleeping tiger, but rather to secure oil in the Philippines and Southeast Asia. History repeats itself.

During WWII, people sacrificed. At home, in the states, in London’s blitz, people rationed. They gave up necessities, they bought war bonds, they did whatever they had to. Even an event like 911 didn’t wake us up to realities. Does it feel like we’re in a state of war?

During those days of the greatest generation, GM stood tall and worked together for a goal. They earned the leadership position that put them where they are. Have they squandered that social capital?

GM Employee DiscountI’ve been searching for a new car that will help me save gas. As I engage in my search, I care about three things. Fuel economy, reliability and price. And you know what? Despite my desire to purchase as American product, if there is such a thing anymore, GM does not even come close to my short list.

Fuel economy
GM’s site proudly displays “10 unique GM models … with at least 30mpg. No one offers more choices”.
In 1975 VWs Rabbit topped 50 miles per gallon. In 2005, thirty years later, they still haven’t managed to even come close. Where is the American Pioneer at GM?

Maybe its perception, maybe its personal experience, but for me, two brands have proven themselves reliable time after time. GM is not one of them.

So it takes an employee discount program to bring car prices in line with reality? I sure would feel stupid if I bought one a week before they started that deal. Years of brand consolidation, mega-dealers and regional “cooperation” between dealers and groups, have worked to keep prices high.

Bolstered by massive profit taking on SUVs, GM built more and more supply in gas guzzlers. To be in their current state, in time of oil shortfalls and rising prices is no surprise to me… and I’m on the outside. If your broker sold you auto stocks, it might be time to shift that portfolio.

I guess what really takes the wind out of my sails, what really brings me down is that I’ve been set up for a fall. Where’s my brave new world? It’s exciting to see news coming from GM, about Hydrogen technology, about new ideas, a revolution in transportation. Can we continue to ignore the price of petroleum, both the financial and environmental?

It’s easy to define a corporation as one whose responsibility is to its shareholders. Until they realize how interconnected our economy is together. Until they can look further than 3 months down the road and start to plan for a new tomorrow, until our leaders find a vision, we’re in for tough times.

It seems to me that GM lost itself. If you wonder just what it will take to get it back, I can easily answer that for you. They need vision. Vision to take us to a new generation of energy independence. As Honda and Toyota surge forward with hybrid technologies, as Volkswagen pushes leading generation clean diesel, Detroit needs to do some soul searching.

I was brought up with faith in my country: With a belief that American spirit can overcome any obstacle. I believe that we can meet every challenge head on, and work for the common good. For too long technologies and dreams have been buried for the sake of the status quo.

Rather than wait a decade to produce new technology, we need to do it today. I wonder how many ‘todays’, US automakers can hold out for.