So many people I talked with last month online and in person couldn’t believe how strongly I was defending General Motors. Here were the talking points I heard day after day:
- Serves them right for making cars no one wants to buy (well, they sold ~12 million cars last year)
- Serves them right for fighting MPG increases (my 2 ton Saab wagon gets 30mpg fully loaded on trips and GM has more hybrid models available than any other manufacturer, as well as the first mass-produced plug-in hybrid ready to go out the door this year)
- Serves them right for making crappy cars (quality has steadily increased over the years to rival the Japanese automakers)
- Why should we give them money if they’re just going to go under in the spring? You’re just prolonging the inevitable (you didn’t read the December plan, did you…)
- What they need is a government-backed, customized bankruptcy proceeding (would you buy a car from a company that was going bankrupt?)
Well, nothing is ever entirely certain, but after none other than George W. Bush came to the company’s rescue, GM today surprised everyone by announcing that even though it now has the money in hand that it was looking for, and even if its worst-case scenario of only selling 10 million cars in 2009 comes true, the company won’t need any further injections of capital from the government. What? You mean they actually got the money and they are still saying that they won’t need more? Why, I thought that as soon as they had that money, they’d be right back with hat in hand?
“I was really expecting them to go for a second round, so this comes as a surprise,” Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan, said in a Bloomberg Television interview. “If GM could stabilize their financing, we were projecting a sales rate of about 11.5 million vehicles in 2009. It’s not the catastrophic drop that ourselves and others were projecting if we had major bankruptcies.”
Chrysler on the other hand is facing more pressing issues. The latest Consumer Reports had a rundown of the positive and negative aspects of each of the Big Three automakers. Bottom line is that Ford and GM are making vehicles that have excellent fit and finish, good reliability, and features that people want. Chrysler (Dodge, Chrysler, Jeep) has the distinction of having NO models featuring a “recommended” tag by the magazine. The reason? Poor reliability, poor fit and finish, poor ergonomics and use of interior space. I would not be surprised to see a GM/Chrysler merger which effectively does nothing more than fold the Jeep name into the GM family.
Perhaps if that happens there will once again be a Jeep worth buying.