GM is in very serious financial trouble, and thinks that the solution is to force every new Buick and GMC owner into a $1500 three year OnStar subscription.
Buick and GMC fans are furious. General Motors is in bad fiscal trouble again after the stock collapsed over the past six months and analysts are warning about “earnings misses” and “recessions” this morning related to GM and large investors are dumping the stock.
GM learned nothing the last time it went bankrupt and re-emerged. Some structural problems were fixed, such as having too many brands that were basically all the same car, and some were not.
The biggest problems “New GM” faced were that the Obama Administration managed the bankruptcy and they had to agree to carry over many of their legacy problems into the new company, which continued to drain their coffers.
While nobody should want retirees/pensioners and current workers to “take a bath” on their pay and benefits, at the same time, none of GM’s main rivals in the auto industry have to deal with anything like it.
Then came the government mandates to build compliance and electric cars that nobody (at the time) wanted, because gas was cheap, so GM killed them off as soon as Obama was gone. Then gas got very expensive again, and it forced them to stop what they were doing and run a crash program to get efficient and electric vehicles to market.
Obama allowed the GM bankruptcy to go through while allowing all of the people who ran them into bankruptcy to remain at their posts without punishment.
They claim that Cadillac will be all electric by 2025, and Buick will go that way too. The problem here seems to be that they’re getting exceptionally greedy for cash. These are already luxury brands that people will pay premium amounts of money for, but even people with the money to buy them new respond negatively to outright cash grabs that are large enough to affect the sticker price by over $1,500 when it’s for things that they’re not even going to use.
BMW recently made the news for plans to charge people $500 once or $12 a month for heated seats, and Toyota is charging for the heated seat and remote start as “services”. Which means that the hardware is already there, but then they went and wrote software that doesn’t allow them to work and which shuts them off if you haven’t paid that month.
Now, people who have a BMW or something will just go ahead and pay it, but folks will raise hell over $1,500 for stupid OnStar, and in many cases, they’re threatening to leave and buy a Ford truck already when they’re hearing about this.
I don’t blame them. Ford is already having far less serious trouble building a truck to their specifications, they have the number one owner satisfaction ratings in trucks. And there’s a reason. They charge what they charge, and owners feel like they’re getting their money’s worth. People respond well to that.
They will not respond well to GM and others turning their truck into “Windows Anytime Upgrade” over OnStar and heated seats.
GM is also facing headwinds because they haven’t made a single damned mile per gallon improvement in gas mileage in 20 years, and now their new trucks are doing worse because in 2022 they need a “Fuel Management Module” that they say they can’t get because of the “supply chain” and not having it costs you even more gas. Over $5,000 over the 200,000 miles you might own the truck.
Ford took the initiative, and many of their trucks are plenty powerful and get twice the gas mileage, and they don’t have any of this “Windows Anytime Upgrade” nonsense going on, at least as far as I can tell.
During the last recession, Ford asked Congress to bail out GM because they use some of the same suppliers, but Ford didn’t take bailout money.
This time around, I think Ford won’t need bailout money and they stand to sell more trucks than ever due to what’s going on over at GM.
When I got the Buick, it needed some work. It turns out that there’s nobody left at the Buick or Chevy dealers that knows much about a 2008.
In fact, ACDelco parts are drying up and you increasingly have to turn to the aftermarket.
It would be great if you could still get GM cars that worked right. I’ve never had any serious engine problems out of a 3800 V6, but they quit offering anything with it after 2009. It’s what’s in my Buick right now.
Short of a dead battery, I never had my 2003 Impala with an earlier version of that engine fail to start up. Even when it had 300,000 miles on the odometer. I recently gave it back to my mom.
It was just a really great engine, and they replaced it with one that was much less reliable, gets the same gas mileage (allegedly, mom says hers does a lot worse), and is just “utter trash” from what I’ve talked to actual mechanics about. They say that the 3.6l and 3.9 liter V6s are “seriously unreliable”. That the owners have “nothing but problems” out of them and the transmissions GM attached to them, and that “they don’t even get good gas mileage”.
My mother has a 2011 Impala. It’s 3 years newer than my Buick. She drives the 2003 around saying “The 2011 is a gas guzzler. It only gets 13 mpg in the city. I can’t afford to take it in anywhere because they always charge me $600 and then leave it sitting there for two weeks and tell me they couldn’t find anything wrong with it, or they replace something and it’s still doing the same thing.”.
GM did not improve after the bankruptcy. She’s had two Impalas and a Malibu post-bankruptcy. She bought the Malibu from her state representative in Indiana and it seemed to be an okay car, but an uninsured driver backed into her and then lied about who she was to the police, and then convinced the police to let her go and blame my mom for the accident.
(Substantially the same thing happened to me in Illinois last year and the police let two felons with no ID and no insurance go and left me to fight the ticket in court, after the felons caused the accident. They never bothered to claim anything on my insurance though, and so there’s no payout in CLUE, and I fought the ticket and they didn’t show up in court, so no change to my insurance rate. Cops showed up to to the hearing, but my attorney objected under the hearsay rule and got the police thrown out, and then the court dismissed the ticket and went on extracting money from everyone else there.)
The Impalas were junk, though. She lost one in bankruptcy and said “It was such a piece of crap I didn’t care.” and it was only three years old (a 2014 model in 2017), and then she got the 2011 from a buy here pay here, and everything has gone wrong with it, plus it’s rusting worse than the ’03.
With the car market being what it is now, it’s like “You find an old car and you have a mechanic keep fixing it.” because the cost to repair a car has gone up a bit, but nothing like the sticker price on a new one.
But mom keeps getting hunkered down with a GM that doesn’t do much except break down and cost money. Not because it got old. Not because something stupid that was a wear item anyway wore out. But because literally everything they’ve made since 2010 has been trash. At least in the Chevrolet division. I hear Buick is still decent.
I noted that most of the Chevys that they did have were made substantially in Mexico, not Canada and the United States, like they were when they more or less worked right. When they were made in America and Canada, they often made it 250,000 miles or more without too many problems.
Today, people try to get out from under a GM car before the odometer has hit 100,000 miles, and they’re usually on their third transmission and trying to unload it before the warranty ends and it eats another one.
One of the problems is that GM has only been doing CVT transmissions for about 10 years and they don’t build them right. They go out a lot even if you aren’t abusing them, and the dealerships obviously aren’t going to admit that. I came across a page from a Chevy dealer bragging about how smoothly the CVTs shift and that they save gas.
I’d rather lose half a mile per gallon and feel the car shifting gears and just have a transmission that worked right as long as I changed the fluid and filter every 60,000 miles or so, like what GM used to make.
Rebuilding a CVT properly is almost never going to happen unless the mechanic knows exactly what they’re doing with that model, and even if they ever can get it to work right again, expect to pay so much that you might as well have bought a new one.
The whole point of the CVTs and new engine designs appears to be to cut down the longevity so there’s no used cars on the market that work right. Call me a conspiracy theorist if you want, but that’s what’s happening.
The problem isn’t even that you can’t make an engine out of aluminum, with variable valve timing, and a rubber timing belt, and attach it to a CVT, and not get decent reliability. Toyotas and Hondas usually work fine for a very long time, even if the owner didn’t change the timing belt when they should have. And since most of the foreign cars use non-interference engines, a timing belt snapping means a tow and a new belt instead of the car being scrap metal.
The American cars that use timing belts instead of chains tend to be interference engines. In an interference engine, the timing belt or chain failing usually, almost always, means catastrophic engine damage, so you want a chain, and to keep up on your oil changes and make sure the level is always correct, so the chain doesn’t snap.
(One of mom’s former co-workers that recently got fired bought a 2011 Ford Mustang, fifth owner, from a buy here pay here lot, and they said “Oh, it just needs a timing chain!”, and the engine broke down twice and they even offered her a different car and she’s all like “No! You’re going to put a NEW engine in that one!)
I was down at Chevy and at Buick, and the Chevy division is suffering a lot worse than the “luxury” divisions, Buick and Cadillac.
It appears that GM is lowering production in the Chevy division to free up parts for Buick, Cadillac, and GMC, which is where their profitable buyers go anyway.
The Chevy dealer’s lot is 10-15% full and what they do have are these gigantic gas guzzling trucks and SUVs, and those are $65,000 and up, plus taxes and bullshit fees. Then you look at the window sticker and they removed the Fuel Module and the seat warmer (humorously, the buttons are still there).
So you get out of the dealer, having paid $70,000 for a truck, and then you have to freeze your butt off and get bad gas mileage because they sold you an incomplete truck, for $70,000.
But soon it’ll be $72,000 because of OnStar, which you didn’t even want. Most people are saying it’ll be their last GM vehicle, that this is the last straw. They seem to think Buick, GMC, and Cadillac buyers are stupid and that divisions that have profit are just going to tell their buyers to eat shit and smile about it and become a profit piñata because we all know that you can’t balk and buy a Lexus from Toyota instead. 🙂
“I already have smartphones with hotspot data. Why the hell do I need OnStar. What year is this?”
Good question. Excellent question! You should call GM’s customer satisfaction hotline for your vehicle brand if you have purchased a GM vehicle in the past several years and tell them what you think of this, and what you’ll buy next time. Raise hell. Lay into them. Tell them you won’t be back.
I would be absolutely furious about this. I have the hardware for OnStar in the Buick and I had it in the Impala.
They don’t like to tell you this, but if you’re in an accident and you hit the red emergency button, they have to send out the paramedics, even if you’re not an OnStar customer. It’s the law. They can also be sued if they don’t.
For everything else, enjoy your $500 a year WiFi hotspot in the car.
I’ve gotta say that I’ve been a Chevy owner, a Buick owner, and a Ford owner, and I had way less problems out of my Fords than I did out of my GMs.
I liked my 1995 Corsica, as far as how fast it was (itty bitty car with the 3100 V6!) and it got great gas mileage. Unfortunately, I started getting the “ignition switch turns off randomly on the highway” problem that was killing people, which GM tried to cover up. I ended up paying to have the ignition switch replaced. A while later, the engine failed after the connecting rods started making noise.
At least back then there was always another $2,000 clunker where the last one came from.
I feel that, at 38 years old, I shouldn’t already have to say “The younger people will never know freedom or economic prosperity.”, but I think what’s going on in the American car industry is a reflection of where America is as a country. It’s turned into a nation of “Patrick Bateman” clones. The Patick Batemans thought they were all going to get rich on Bitcoins.
Richard Stallman’s political notes said yet again, and he’s very, very wrong btw, that “interest rates should remain low”. He’s following some splogs that pose as news sites, where Paul Krugman passes as an economist.
Stallman repeatedly and incorrectly asserts that hyperinflation will help the poor. Wrong. Cheap money flows to the rich and creates moral hazards. It does things like propping up asset bubbles, even as the economy sheds jobs.
Right now, we’re watching a massive (and I must say hilarious) correction in the “cryptocurrency” market, just months after Matt Damon’s Super Bowl ads. My Savings Account is paying out 2.5 times as much interest as it as two months ago. We need to get inflation under control and reward people for prudently managing their finances.
I don’t see the jobs market being affected very much by rising interest rates. What I do see being taken away, stolen, from workers, is their ability to use their paychecks to buy food and housing. And that has to stop!
One of the outcomes of wasteful government spending and years of low interest rates is that when I wanted a nicer used car, I had to pay $8,000, for one that needed work.
Stallman ignores actual problems like this and argues that the Fed should just throw more cheap money everywhere.
Back to GM…
The last time they were about ready to fail and started talking about taxpayers having to bail them out, I opened my big mouth at work and said “They should be allowed to fail. The market will correct for it, people will just buy cars from someone else.”.
I was 21 years old (in 2005) and knew that GM wasn’t the only company that made cars. (Some people didn’t want to hear it though.)
I nearly got written up by my boss at Walmart for saying that.
He came up to me and said, “You made a lot of people upset by saying that. A lot of people here have family members that work at GM.”.
At the next meeting, I had to apologize. I clarified, “I don’t mean that I have any bad feelings for the people who work at GM. I have a lot of respect for anyone who gets up and goes to work and earns a paycheck and provides for their family. Both of my grandfathers worked there. I’m angry that bad management led GM to this situation. I made an insensitive comment, regarding macroeconomic policy, and I’m sorry that I didn’t give a better example, such as ‘I hope that the employees are okay and can go across the street to Ford.’ I apologize if any feelings were hurt..”
You can’t say much of anything without someone else choosing to take it the wrong way. GM very much deserved to fail then, but I don’t have any animosity towards the people who work there.
I hope they can get a job at Ford.
Now, most people have no idea, even now, that some of the “foreign” cars actually have the most US labor involved in making them. That’s where we are with the global economy today.
In 1985, when my Aunt bought a Honda Prelude, which still worked in 2013, when she passed away, because she was tired of getting ripped off at the gas pump by the damned Saudis, my grandparents were less than amused. They acted like she was Benedict Arnold because GM had already started dropping the ball even back then.
GM is failing because it has failed to adjust to consumer demands. It has spent decades fighting against fuel economy standards that wouldn’t even add much to the price of a car.
Some of the “safety features” that don’t really do much to keep you safe add more to the price of a car than gas saving technologies, and GM didn’t fight against those, oddly enough.
To add to the evidence that GM still doesn’t “get it”, they want to make an “electric Hummer” with a battery pack that weighs as much as my Buick Lacrosse and produces more emissions.
I truly and honestly believe that we should not have to “save” GM with tax money again. And if we do, then it should be turned over to the UAW to run as a co-op.
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