I was on the Guardian .uk web site reading about the GM tell all book – and noticed a contextual ad for a company tasked with selling off the 5.2 million sq foot factory and machinery from the residue of the “bad” GM – specifically the NUMMI plant in Fremont California which had been a Toyota/GM joint venture. The auction is the last week in September.
The story misrepresented one aspect – probably just out of ignorance or the youth of the reporter. The story mentioned GM wanted to get the hell out of Detroit and move its HQ to Warren, but the White House said “no”.
The problem is they characterized the Rennaisance Center as the legendary iconic headquarters of GM. The RenCen was originally conceived, funded and occupied by Ford in 1971 as an ill-conceived notion of charity to “save” downtown Detroit. The Legendary iconic GM building with the huge General Motors on the roof that was the GM headquaters for about 60 years was on Woodward Avenue about 2 miles to the North.
GM only became the owner of the RenCen when Ford decided to get the hell out of Detroit in 1996. GM has since plowed $500 million into renovations which were finished about 5 years ago. Business is not a charity. (I got the hell out of Michigan in 1997)
I was in the RenCen one time in the 15 years I lived in Michigan. It was a horribly conceived mess designed with the message that it was a fort that needed to be protected from the people on the sidewalk. The retail area was visually confusing with many dead ends that were isolated and gave an intense feeling of insecurity, especially with the context of Mayor Coleman Young’s “suburbanites” (white people) are the enemy rhetoric.
It’s virtually the only thing left in the city employing people (other than government agencies and related social services agencies and Tiger Stadium)
The inside story is that Penske wanted the newly retooled Saturn plant (state of the art) to manufacture as part of the deal. GM said, “No!” He searched around the world but could not fund or find a party capable of pulling that off. The real inside story is that Saturn was launched as a renegade business spinoff, independent of Detroit, to see if they could compete with foreign makers. It was a historic success. Saturn did so well, and the cars were of such world class top quality, that it made the GM Detroit operation look awful. This success help in opening the door for manufacturing outside of Detroit. But it only took a few year for GM Detroit to reabsorb Saturn back into the fold. With that, quality began to wane. What is inspiring that this short-lived renegade experiment in quality established the long term loyalty that sustained the brand till the end.
One of the big things that pushed GM over the edge was an accounting change. The government runs the pension guarantee corporation that was picking up the obligations of companies when they failed. Many of the companies had underfunded pension plans.
GM offered its employees retirement benefits far beyond what the pension guarantee fund would stand behind – very early full retirement, medical and dental care completely paid for. The change was GM had to not only estimate the costs of those future promises but set money aside to fund them. GM sold off EDS and their interest in Hughes Satellite to raise cash to set aside – but the numbers were staggering large. It wasn’t really “if” but “when” they were going under.
They encouraged early retirement, dropped the Oldsmobile brand, started tearing down the older pre-WW2 factories. As the number of cars produced declined, the overhead per car to fund those old promises kept going up, making their cars less and less price competitive. They tried to expand their global presence in China, Brazil and Europe to cope with their shrinking domestic market share.
On top of all that, you had Congress forcing them to make cars that got high gas mileage and ever smaller amount of emissions. People flocked instead to trucks which weren’t regulated the same. Shifts in demand because of changing rules see-sawed GM between having nothing to sell or having overflowing lots of vehicles people had no interest in buying.
I still drive one of the last Auras off the assembly line. I had two Saturns before that. I loved the cars and the services offered by the dealer … so, it stands to reason that GM would kill off Saturn and keep the monumentally plebeian Chevrolet line in full bloom. The Penske breakdown was sad news. In light of the fact that GM is now GovMotors, and in view of the relentless pillorying of Toyota (I smell politics and unions), a Lexus shall be my next automotive choice, unless, of course, GM and the henchmen of the press have killed that company to, ah, save union “jobs.” Nosce Inimicus.
GM has closed almost all the dealers in my area. The only dealer in a reasonable driving distance is one with a long-standing reputation of shady dealings. I went there recently for a worn out wheel bearing that made its presence made suddenly. I went there in part to see if all the rumors were true. Their repair was over $600 for a repair that would have cost $300 at a non-dealer (tire store) who also has a reputation for overcharging and doing bogus work. The part costs around $60 retail and maybe an hour to install. The local Chevrolet dealer who had been here since the 1930s was one of those closed dealerships (my car is an Oldsmobile that I bought a week before GM announced their plan to kill Oldsmobile)
There is no chance in hell I will ever buy a GM car again.