How did GM(Basic Motors) get to be in the predicament that it is in today?

Query by Willy Wonka: How did GM(General Motors) get to be in the situation that it is in today?
Pending Chapter 11, why is GM on the verge of collapse? Never just say the compounded problems from the housing market and the decline of the economy.

Very best answer:

Answer by Vipassana
Poor item.

Poor response to customer requirements.

Overpriced goods…

The list goes on and on.

And seeing as most of what they create is made in Mexico or Canada, it’s not like all our spent American dollars are in fact going to Americans.

Lexus is much more of an American organization than GM is now.

All round, the business got so assured that Americans would get their merchandise simply because they’re an “american” organization…that they stopped really generating an item worth buying.

And when we caught on, and our money started going elsewhere…instead of enhancing the product, they just hyped up the “Created in the USA” campaign.

Which is pathetic.

Add your own answer in the comments!

4 Responses to How did GM(Basic Motors) get to be in the predicament that it is in today?

  1. alfredb1979 says:

    Bad management.

    Even in the 1990s when the economy was booming, GM was losing money.

    GM loses money just by turning on its lights every day. Ouch.

    Besides, would you buy from a company that makes engines for your vehicles in China when they could be made in the USA? Don’t buy a Chevy Equinox then.

  2. fire4511 says:

    Years ago GM management agreed to Union contracts that pushed the true costs into the future, rather than standing up to the unions and their excessive demands. They now have contracts where they are paying for retiree health care costs that are extremely high, and are actually paying some current workers to do nothing but show up and sit in a “labor pool”.

    It is hard to make a profit when you are paying over $ 1000 per car produced (average) in benefits to people who are not working for you. That is what it is costing in retiree health benefits (not including a generous pension)

    The unions still are bleeding the auto manufacturers dry. If GM files Chapter 11 and rids itself of the union contracts, it can once again be a great company. If, like what the government did with Chrysler, they end up with the union contracts intact, they will not survive.

  3. kevin says:

    The two answers you already have, plus high labor rates brought on by greedy unions/workers, a bad reputation from the 80s and early 90s for building inferior cars (which however founded at the time is not true now), a sudden change in product sales (the majority of which were SUVs before last summer) brought on by the spike in gas prices at the same time as economic stress (this is a big one, as some 70+%of their sales were large vehicles), probably some complications from marketing so many similar cars under all the different brands, and a few others I’m not aware of I’m sure.

  4. Rapid Fire says:

    Over 30 years ago an American Production and Proficiency expert went knocking on the doors od the American Big Three (gm-ford-chrysler) with a detailed plan on how to successfully compete with the Japanese Exports that were pouring into North America. He was prepared to share his ideas for a small percentage of the profits that they would surely reap from his expertise.

    They laughed him out of their offices and he went to Japan. The Japanese manufacturers welcomed him and his ideas with open arms, minds and cheque books.

    The Americans continued on with their antiquated ideas and shoddily planned obsolete cars for another 40 years until today. In the meantime their competition produced better cars at a better price and treated their customer well and provided warranties that actually were worth the paper they were printed on.

    In other words, nobody killed off the American Manufacturers. They committed corporate suicide. They have no one to blame but themselves.

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