Why GM is in a World of Hurt

I think the '64 Pontiac Catalina was our first GM car. We moved to New Jersey that year and it was one of those pretty aquamarine blue cars that were popular in that era. I remember the color because my mom and I used to argue about it. She said it was green and I said it was blue. Aquamarine is one of those colors you have a hard time pinning down.

The '54 Ford dad had that year was a little easier to peg as far as color was concerned. Robin's egg blue. I remember that car because when our house was being built, we lived in a rental property about a mile away. On one occasion mom was supposed to drive us over the hill to the house in that car. Dad was going to meet us there, so he left. I was packing the trunk full of stuff, and one item I dropped in the trunk wasn't supposed to be there... the car keys.

After a while, when we didn't show up, Dad eventually returned. He was not very pleased.

Out next family car was a Pontiac, also. Our neighbor next door had an Oldsmobile. Eventually mom and dad graduated to Buick's. My dad's youngest sister and her husband eventually graduated to Cadillacs. These were they kinds of decisions that made General Motors king of the hill in the auto industry. The gave the moniker Heartbeat of America to their Chev line, but the reality is, General Motors was the heartbeat of the auto industry, and the auto industry was the heartbeat of America.

But the world has been changing. American cars just ain't what they used to be. For a wide range of reasons. The quality of the merchandise is one of them. The old joke about hoping that when you purchased a car, it was "a Wednesday car" may have had a small basis in reality. While shooting a couple photos for an ad years ago, the perfection of the Toyota's windshield made the Corvette's window seam look amateurish.

On our last family trip to New York a few years ago I was astonished to see, as we entered the Lincoln Tunnel from Manhattan, that not a single car around us in any direction carried a U.S. nameplate. And so, Ford's strength has diminished, and GM is on the ropes. It's hard to imagine losing 74 billion dollars since 2004, and easy to see why they went to Washington for a handout. Now, this week's double whammy.

First, they announced they will be missing a debt re-payment. Evidently they don't have the money and don't have any more credit rating to get a short term package from the banks.

On top of these they are being forced to recall 1.5 million vehicles to fix a potential oil leak problem. This can't be a cheap fix and has to be a huge headache to execute. According to the announcement, "The recall affects various Buick, Chevrolet, Oldsmobile, and Pontiac models equipped with normally aspirated versions of GM's much-utilized 3800 3.8-liter V6."

Specific vehicle make, model and years include the following:
Buick Regal 1997-2003
Chevrolet Impala 2000-2003
Chevrolet Lumina 1998-1999
Chevrolet Monte Carlo 1998-2003
Oldsmobile Intrigue 1998-1999
Pontiac Grand Prix 1997-2003

These things no longer affect U.S. workers alone. While at a SEMA Show in Vegas a few years back I had breakfast with a fellow from China whose Beijing company employed 65,000 workers making parts for GM cars. Years ago I recall purchasing a tail light cover to replace a broken one on our '79 Pontiac and was told I would have to wait six weeks for the part to be shipped here from Korea.

For very visual summation of the forces, internal and external, which have crushed General Motors, check this out. My gut tells me this story isn't over yet.

Source for recall story: imakenews.com