Monday, July 13, 2009

Media Spreads Untruisms about GM

One of the dumbest things I've heard or read from reporters talking about GM over the past several months is that, at some point, the company just started making cars no one wanted to buy.

Ridiculous. Until last year, GM sold more cars worldwide each year than any other manufacturer. Then Toyota passed them by. Now exactly who on Earth was buying all those GM cars year after year, even during the 1980s and 90s when the company was supposedly completely ignoring consumers? How can any company sell more of something than every other company on Earth when “no one” wants their products?

Obviously, plenty of consumers did want what GM was selling. More, in fact, than for any other auto maker, including Toyota and all the supposedly more consumer-oriented companies.

What did GM in was not that no one wanted their cars, but rather that their cost structure and distribution network could not support merely being No. 1. They were based, rather, upon the shortsighted assumption that GM would continue to utterly dominate the auto market. UAW workers and retirees enjoyed pay and benefits that made them not merely middle class, but outright affluent.

My grandfather retired from GM after 30 years with a 90 percent pension and generous lifetime benefits I can only dream of. Now my high school dropout grandpa stays home every day and collects more than I do working full-time in a professional position, having graduated from one of the finest universities in the world. I'm glad he's comfortable. But even he complained for years about how the union was strangling the company, how lazy workers were untouchable, and were paid just as much as truly dedicated employees.

Well, the chickens have come home to roost.

I admit that I've been rather uninspired by most of GM's designs over the past couple decades. But then, Honda, Subaru and Mazda haven't done much to pique my interest either. Most auto makers, it seems, started churning out dull, lifeless, cars over the past 20 years intended to be acceptable to the widest possible market segment rather than actually turning anyone on. Of that, GM was as guilty as anyone. But it's absurd to say no one wanted their cars when more people were buying them than were buying any other make.

This reminds me of the the famous quote from media film critic Pauline Kael in 1972 about Nixon's election: “I don't know how Richard Nixon could have won. I don't know anybody who voted for him.”