Et tu General Motors?

Chevy Volt chevrolet.com 

     I have been critical of the Ford Motor Company in two recent blogs: Another Turnaround?and Ford Drives Sedans Out of their Showrooms. Now it’s GM’s turn.
     First and foremost, they just pulled the plug on their breakthrough electric vehicle. They will cease production of the Chevrolet Volt in March of 2019. I know two people who own the Volt and love them; one is my son-in-law, Michael, and the other is our close family friend, Bob. Bob, who lives in Detroit, is on his second Volt and will be sad that he cannot get a third one. Michael enjoys the gas mileage of his cobalt blue Volt on the congested freeways of Los Angeles but wishes it had a bit more sport car performance.
     Consider what Dan Neil wrote about the Volt in the Wall Street Journalback in 2010 when the breakthrough car was launched:

… Chevrolet Volt, GM's futuristic extended-range electric vehicle and the company's most technologically significant car since the 1912 Cadillac.

A bunch of Midwestern engineers in bad haircuts and cheap wristwatches just out-engineered every other car company on the planet. And they did it in 29 months while the company they worked for was falling apart around them. That was downright heroic. Somebody ought to make a movie.

     Clearly, GM did not know how to market nor how to improve the vehicle so that it would remain the icon that it started out as. It’s demise like that of the Ford Taurus is the epitome of ineptitude that has plagued Ford and GM for decdes.
     The Volt was not the only car that GM was going to cease production of in the next year. Five other vehicles, all sedans, are part of their exodus from passenger cars: Chevrolet Cruze, Chevrolet Impala, Cadillac CT6, Cadillac XTS, and Buick LaCrosse. Like Ford, GM is saying that this is the result of declining car sales as the public has been favoring crossovers, SUVs, and pickup trucks. In the case of GM, this might result in the shuttering of up to five plants and the elimination of up to 14,000 jobs.
     When we were looking for a new car for my wife in 2011, we looked at a LaCrosse. It seemed expensive for what it was. Instead we bought a used Mercedes C300 with about 20K miles on it. The revised Buick line was supposed to appeal to us. Perhaps, if we bought it, we may have liked it, but GM is fighting a huge perception problem. People don’t think their cars are as good as the Japanese and German cars in the same class. We valued a two-year-old Mercedes with mileage over a new LaCrosse. There is something wrong with that and, as the consumer, it is not my problem. It is one of many problems GM has not been able to solve.
     Cadillac? It was once the epitome of luxury cars in this country. You knew you had made it when you bought a Cadillac. Growing up, I always heard people praising an impressive but unrelated product by calling it the Cadillac of this and that. “This is the Cadillac of baby strollers.” Or, “That is the Cadillac kitchen tables.” But, no longer. They

The Old GM HQ in Detroit

still make a good car but when looking at the market shares of luxury cars in 2017, Mercedes, Lexus, BMW, and Audi are all ahead of Cadillac. Here is what Car and Driversaid about the XTS that is being discontinued: “The XTS may not be the best of its high-luxury bunch, but it is one of the cheapest… The XTS is a competent and relatively affordable retirement cruiser, but it can’t truly compete with the best in this class.” The XTS sells for 52% of what the Mercedes S Class sells for and 73% of the BMW 7-Series, but sales are so low that the car is being dropped.
     In 2014, GM made a lot of hoopla of moving the offices of the Cadillac Division to New York City. No US automaker has ever done anything like that. I remember when I moved to Connecticut and worked in Manhattan, I thought that every auto executive should come out here and drive their cars around the hills and winding roads of Connecticut and then into Manhattan. My thought they would understand why the Germans were beating the pants off the US luxury brands. With the Cadillac move, I thought just maybe GM was doing something right and would become competitive in a market they owned for decades. It did not work. On September 28, 2018, GM announced it was moving their 110-person Cadillac team back to Detroit. It was a failed experiment that I have to assume was poorly managed and underfunded.
     This is the story of GM. In the 1950s and 60s, their market share of the US auto market was in the high 70%’s. Today it is a 17.6%. The descent was steady and consistent over the years. By any standard, this is an epic decline that can only be attributed to poor management. During this epic decline, the culture of GM was underscored with an unbelievable arrogance fueled by the illusion that they collectively believed it was still 1955.