Jen Butson

This made me giggle, out loud, a bit this morning, and of course I felt the immense need to share it with everyone. So enjoy…a parody of GM’s re:invent commercial.

Lesson #1: A recession is a natural occurence, more or less, that cannot be fixed easily. Therefore, do not get in a panic and start throwing around money to try and make it better. It most likely will not work.

Lesson #2: If a company is headed in the direction of bankruptcy, let it go. Billions of bailout dollars will not save it. (Exhibit A: German retailer; Exhibit B: GM and Chrysler)

Lesson #3: If you are a company that is not headed in the direction of bankruptcy (i.e. Ford), you will be put at a disadvantage. This is the point I will go further in depth with.

General Motors and Chrysler, though bailed out and bankrupt, have two significant competitive advantages over companies such as Ford – the only one of the big 3 to not receive bailout funds, nor go bankrupt. What are these two advantages?

1. Wiping out their debt – Ford accrued a lot of debt because of the recession as well, but had been planning for a recession and therefore was not in a position of need necessarily. Ford still has this debt to deal with. GM and Chrysler do not. Because of their bankruptcy, they get to start with a clean slate, but under the same name, brand, etc. So after taking billions of government dollars, they get to start over anyway.

2. Union concessions – under the threat of losing their jobs, the CAW union members agreed to concessions in their agreements – namely a decrease in benefits. However, because Ford was not under this same pressure, the union has not agreed to any concessions. Good thing Ford wasn’t dumb enough to offer them as much as GM in the beginning.

The good thing for Ford, is that they still have the public’s trust and their dignity intact. According to the Economist, 70% of taxpayers disagreed with the bailouts. I couldn’t be more proud of Ford…I have been a Ford girl for as long as I can remember and this just makes me love them even more. And also gives me so much more material to smack-talk GM fans with.

I’m passing along this amazing article from the Economist that I just read about the decline of GM in Detroit. It touches on the political level of how the government constantly protecting and bailing out the auto industry is what made it fail. Very good read, especially if you’re interested in this stuff.

Read it here.

General Motors has released their new “Re:invent” commercial, assuring stakeholders that they’re not done here. I’m glad that they have now committed to new technologies, and have acknowledged their immense brand dilution. The only thing I cannot get out of my head is “why did it take bankruptcy for you to make these revelations?!” Brock Yates wrote a book in 1983 that foresaw what is happening right now. I’m dying to read it, and have been searching all over the net for it. Book review is to come.

I mean, someone had to see this coming. When your market demands smaller, more fuel efficient vehicles, design them. When your demographic demands hybrid vehicles like the import brands are making, design them. General Motors failed to listen to consumers. They stuck to the same designs and technologies that they had been using since inception. Apparently they weren’t big on innovation.

They’ve finally done it: filed for Chapter 11 (in the States anyway). It’s been a long time, it’s been dragged out, but it’s finally happened.

Here’s what I think about this event: band-aid solution. Governments threw piles and piles of money at General Motors, hoping to save it (bad idea) without really looking at it. GM would come up with a “plan” to restructure, ask for a few billion, and do the same thing a week later. They have been fighting this bankruptcy for a long time. Now that it’s finally here, it’s doing mainly one thing: eliminating the debt that the old GM holds. GM expects to now rise from the ashes, but I’m stuck wondering how this will work when there has been no major overhaul of the organization. Sure, they’ve trimmed some fat off their workforce (ahem, unions), but it can’t end there. That is where the problems just begin. I can personally see GM falling right back into their old habits without a second thought (these habits being paying their union too much, not researching the market enough, etc.). I found this great graphical representation of the fall of GM from wallstats.com:

I have to note one major thing from the illustration: GM, annually, pays $67 billion ($7 billion in pensions, $60 billion for retired workers) for workers that don’t work. The retirees. This is astronomical. Of course these men and women are entitled to their pensions and benefits, but GM has to take this into account as a serious lesson in business. What’s going to happen when all their current over-paid workers retire? And if they fall back into their own ways with the union, this trend will just continue forever. My suggestion: either get the union to answer to GM, and not vice versa, or bust it out. Honda is so successful because they refuse to deal with unions.

Also, the obvious points: you pay your management too much for being a failing company, and your products don’t meet market demand. You need to fix these to survive.

And that is my rant for the day. All I can say is that if GM does rise from the ashes and succeed, I hope they name their first new vehicle the Phoenix.

General Motors is like a dying felon, who is begging doctors (government, bondholders, general public) for a life-saving cure…of course no one WANTS him to die…but he’s too far gone to be saved. Circling the drain.

So I’m sure most of you know of The Onion, America’s “Finest” (but false) News Source. A video I came across last week really spoke to me. It’s likely because it pokes fun at the current auto industry debacle. Primarily the fact that the big 3 have 1 big problem: over-production of cheap-ass cars that nobody wants to buy. The only issue I have with the video is the fact that they use Ford…when really, who are we kidding, Ford is the only one not teetering on bankruptcy. But who doesn’t love a good ol’ reality show. Enjoy.

Click here.

If you know me, you probably know that I am not a fan of the way most labour unions operate these days. Hell, you may have even seen my presentation on how I don’t like them. Since I did that presentation, the recession has gotten worse. The auto industry, in particular, has gotten worse. The auto industry is pretty much the cancer of the economy…American and Canadian. Because of this, it bothers me immensely when I see more and more CAW union members striking in public. I passed a group today of CAW strikers on my way to apply for jobs. Though I couldn’t restrain my laughter, I did restrain saying what I was thinking: “Be thankful you have a job right now, especially in the auto industry.”

Be thankful that you weren’t one of the thousands of workers laid off to date in the auto industry. Be thankful that, while you had to take a decrease in your benefits, you’re still earning well above average. Be thankful that you are one of the shrinking number of Canadians that is still employed.

As I said in an earlier post…GM is like the Titanic. So you know what…be thankful you got on a lifeboat.

After seeing this video, I felt compelled to poke fun at it. You should know how much I love to hate GM. *Ahem*…So let me get this straight – GM has total confidence in its customers? Well that’s fantastic…sweet, really…but why should its customers have confidence in them?! Is this their way of trying to regain public confidence after everything that’s happened? I mean, GM is one of the most poorly operated corporations in the world (that at least hasn’t done anything illegal, really) and has had to fire thousands upon thousands of employees because they

a) don’t know how to run a business;
b) give into the union quicker than they can even strike; and
c) make shitty vehicles that no one wants to buy anymore.

Hate me all you want for hating on GM, call me naive for thinking they deserve to go under, but all I can say is: no one could save the Titanic, and sometimes you just can’t save a sinking ship. Especially when it carries thousands of people and there aren’t enough lifeboats for them all.

I kid you not. In Peterborough, my hometown, there is a dealership (GM, of course) that is offering a deal where if you purchase a van or truck, you get a free car!

ARE YOU KIDDING ME?! It has actually reached a new low now…BOGO used to be a shoe or clothing or thrift store deal. The auto industry is now doing so horribly (well, GM and Chrysler at least) that they are being forced to offer this.

My only question is: Anyone need a van or a truck? I could really use a free car…