My advise to the CEO & Board of General Motors: re: downsizing

[LynneSin]

http://www.detnews.com/2005/autosinsider/0504/26/A01-162446.htm

GM may close more factories

Despite a decade of cutbacks, analysts say sluggish sales point to more job losses.

By Ed Garsten / The Detroit News
Industry analysts predict GM will be forced to close several assembly and parts plants over the next few years because of sluggish vehicle sales. Do you think the plant you work at will be closed or will operate with fewer employees?

General Motors Corp., faced with shrinking North American market share and evaporating profits, may have no choice but to close more plants and lay off thousands more workers.

The automaker is trying to wring cost out of its money-losing North American business, which is saddled excess manufacturing capacity.

In the past 16 months, GM has been forced to shut down various North American assembly plants for 121 weeks because of slow sales and bloated inventories, according to an analysis by The Detroit News.

This week alone, GM temporarily laid off 7,000 workers, joining an estimated 8,500 workers already idled due previous plant closings or permanent production cuts. By contract, GM must pay the workers 95 percent of their pay.

Dear CEO and Board members of General Motors:

It was just reported that the sale of Hybrid Cars sales grew 81% in 2004. My local Toyota dealership, one of 2 major car manufacturers selling hybrids on the market, has a six month wait period for ordering a brand new Prius and are actually selling their used Prius (what few they have) at or above new car costs.

Maybe if you ditched the Hummer line, a vehicle that only a small portion of the population actually wants since gas for those things runs about $100/week and move into Hybrid Technology you could turn those profit statements around. Maybe, just maybe you can rescue your sagging profits, help save jobs and create less pollution for our skies.

Sincerely:

Someone who will probably never by a GM again as long as they aren't producing alternative fuel vehicles

[TreasonousBastard]

1. Alas...

Ford and GM actually MAKE money on Navigators and Hummers, so they are hardly about to drop the lines until they stop selling.

Profit on the big trucks is said to be around $10,000 each, but Toyota isn't making a dime on the Prius yet, and nobody makes much, if any, money on econoboxes.

Notice that Toyota and Honda are still happily selling all of the Lexus and Acura SUVs they can build.

[LynneSin]

2. See my other post - notice that Lexus now has a Hybrid in their lineup

And sure, you may make 10K profit off of the Hummer, but what if you're only selling a few thousands of them. The Hummer will not save GM especially since the public is starting to move towards better fuel economy to compete against the rising cost of gas.

This is the same exact reason that Toyota & Honda conquered the american market some 20+ years ago. When the Big-3 in america were buildling boats for cars, the Japanese came in with the smaller, more fuel efficient cars AND they made them a hell of alot more reliable to boot.

Now, not only the Japanese are making the hybrids and selling them as fast as they roll off the truck, but they've now put a hybrid engine into the top luxury car on the market - Lexus. I would suspect in 2-3 years you're going to see Hybrids in more of their models including the SUV. Once again Japan will be on top of their game while the Big-2 (Chrysler is now German) will be laying off their employees

[Tux]

3. Too true

Gm and Ford need to make a hybrid engine for thier trucks, SUVs and cars. Best yet, convince people that SUVs aren't all that great and dump the line. No reason for a suburban area to have trucks with double axils owned by accountants.

[TreasonousBastard]

5. Impressive that the new hybrid Lexus...

is expected to have a 31/27 mileage rating. I heard it announced over a year ago, but didn't expect it to have such high mileage.

The Ford/Mazda Escape hybrid has a 36/31 rating. GM has a hybrid truck, but it's not nearly as good as the others.

Anyway, I generally agree that hybrids are the best interim solution to both pollution and fuel usage, but it's not going to happen overnight. GM will probably use it's association with Toyota to make some more in the not distant future-- possibly when Toyota comes out with a hybrid Corolla. As with Ford, they don't have much of their own technology, and critical patents are held by the Japanese.

GM is, by the way, living proof that private enterprise is every bit as good as government in creating bureaucratic waste. Think if they ran the Post Office...

For most people, the cost savings in the fuel probably wouldn't be made up by the additional going-in cost. Quite frankly, people spending over 30-50 grand for a new car probably wouldn't be too upset about gas prices anyway. Saving the earth is more of an incentive for those so inclined.

My $7,000 used Saturn gives me an honest 35+ mpg on the highway (around 30mpg overall), and although I drive about 70,000 miles a year, buying a hybrid at current prices would cost me more money even with that kind of driving.

70,000/30=2,333 gallons
@$2 per gallon=$4,666 per year

70,000/50=1,400 gallons per year
@2 per gallon=$2,800 per year

So, I would save around $1,800 per year if I spent an extra $15-30,000 for a hybrid. And, that's assuming 50mpg, which might be optimistic. More if gas goes higher, and much less if I have to replace the batteries every other year. Not much real economic incentive to buy one. Even if the resale value holds, it's still probably a loser.

I save much, much less if I get another job that doesn't involve driving all over the East Coast.

[cheezus]

4. or they could make cars that don't suck

every GM vehicle i've ever driven has been a piece of crap comparted to it's honda/toyota counterpart