Flint Artifacts: 1986 G.M. Poster

Flint Photos: G.M. Left

Forget the think tanks, policy discussions, and arguments...a license plate is all it takes to sum it all up. Thanks to Dennis Brownfield for the photo.

Trying to Buy G.M.'s Friendship

The New York Times has a story today illustrating one of life's lessons that Flint learned long ago...just because a city is nice to a corporation like G.M. doesn't mean G.M. is going to return the favor.

Louise Story reports:

In the end, the money that towns across America gave General Motors did not matter.

When the automaker released a list of factories it was closing during bankruptcy three years ago, communities that had considered themselves G.M.’s business partners were among the targets.

For years, mayors and governors anxious about local jobs had agreed to G.M.’s demands for cash rewards, free buildings, worker training and lucrative tax breaks. As late as 2007, the company was telling local officials that these sorts of incentives would “further G.M.’s strong relationship” with them and be a “win/win situation,” according to town council notes from one Michigan community.

Yet at least 50 properties on the 2009 liquidation list were in towns and states that had awarded incentives, adding up to billions in taxpayer dollars, according to data compiled by The New York Times.

Revenge Motive: The 1998 U.A.W. Strike and the Future of Flint

Last week, I had an interesting discussion with a Flint Expatriate who still works in the automotive industry. We talked about the reasons G.M. abandoned Flint, covering the list of the usual rationales, including cheaper labor elsewhere, etc. But he also mentioned a motive I've never really heard before — revenge. Specifically, revenge for the 1998 strike that started at the Metal Fab Center and spread to Delphi East. Before it was over, the strike lasted 54 days, cost G.M. $3 billion in lost profits and $12 billion in sales. It closed 27 of G.M.'s 29 assembly plants and over 100 parts plants in the U.S., Mexico and Canada. While both sides made concessions to reach a settlement, he said, G.M. never forgave Flint, and the corporation abandoned any hope of maintaining a large presence in the city where it was created.

Has anyone else ever heard this theory before? I'm just wondering how prevalent this idea is in the Flint area. Is this something people believe or talk about? I was not really writing or reporting about Flint in 1998, but I was surprised that I'd never heard it before. Wondering if it's just one person's conjecture.

Bob Lutz Walks Away from G.M.

The iconic and colorful Bob Lutz is retiring from G.M.

Lawrence Ulrich of The New York Times reports:

In an auto industry characterized by public apologies, hairshirt humility and bland company men, Mr. Lutz was more in the vein of the late Henry Ford II, whose lasting epigram was, “Never complain, never explain.”

Famously blunt, occasionally stubborn and blessed with a knack to lead, inspire and provoke, Mr. Lutz, a onetime Marine aviator, will wrap up a 47-year career when he retires on May 1.

1967 Buick Electra: The Art of Advertising

The Past Meets the Future

There has to be some deeper meaning in this shot. An MTA bus idles outside the Durant-Dort Carriage Company — the birthplace of General Motors.

A justifiably wary bus driver unused to tourists.

Bankruptcy Looms for G.M.

Bankruptcy could come as early as Monday for G.M. Michael J. de la Merced and Micheline Maynard of The New York Times report:

Early Thursday, G.M. proposed a deal in which bondholders would receive up to a 25 percent stake — a bigger share than G.M. offered the autoworkers union — if they do not oppose its bankruptcy reorganization, and then said that a group representing many of the largest bondholders had accepted the offer.

The proposal came as administration officials and G.M. began to discuss how the carmaker would look once it emerged from a court reorganization. The company is expected to seek bankruptcy protection by Monday, the deadline set by the Obama administration to restructure outside bankruptcy.

Saab Story

Saab, a subsidiary of G.M., declares bankruptcy. (Photo Courtesy of saabhistory.com)

Bush Approves Loans to Automakers

David M. Herszenhorn and David E. Sanger of The New York Times report:

"President Bush on Friday announced $13.4 billion in emergency loans to prevent the collapse of General Motors and Chrysler, and another $4 billion available for the hobbled automakers in February with the entire bailout conditioned on the companies undertaking sweeping reorganization plans to show that they can return to profitability.

"Mr. Bush made his announcement a week after Senate Republicans blocked legislation to aid the automakers that had been negotiated by the White House and Congressional Democrats, and the loan package announced by the president includes roughly the identical requirements in that bill, which had been approved by the House."

Unrequited Love

G.M. apparently courted Ford without luck before turning to Chrysler.

Loyal customer

With a few more customers like Joseph Macko, G.M. would be doing just fine.

There are loyal customers, and then there's Joseph Macko. The 84-year-old Flint man has bought or leased a new Cadillac every year since 1955, the year Disneyland opened in Anaheim, Calif. "You only live one time. Money is to spend," he told The Flint Journal. "I spend it once I get it."

Macko, a retired General Motors Corp. worker, used to buy a new car every year, but he's been leasing the last few years. Last week, he drove home this year's fresh set of wheels — a black 2009 Cadillac DTS — from the Al Serra Auto Plaza in Grand Blanc.

"He looks forward every year to buying a new car," said Gordon Taylor, who has been Macko's salesman for 22 years. "He wants that same vehicle."

Marcella Macko said her husband isn't the spendthrift he might seem — he saves up all year to pay for a new car.

But, she said, she just doesn't get excited anymore about the annual ritual.

"He does, but I don't," she said.

Motorama comes to Pebble Beach

Suddenly, today's SUV's don't seem so big.

As this Futurliner from 1953 shows, G.M. designers got a little nuts when production feasibility was not an issue and they were creating futuristic masterpieces for the traveling showcase known as Motorama.

The G.M. flights of fancy will be featured at this years prestigious Pebble Beach Concours d’Élégance car show.

"In its heyday during the 1950s, Motorama delivered the automaker’s message of postwar optimism to millions of curious spectators," reports Don Sherman for The New York Times. "On display will be the 1938 Buick Y-Job that begat the dream-car era; 17 Motorama showpieces from the 1950s; a 1959 Corvette racecar that forecast the ’63 Sting Ray; and one of the custom-crafted trucks that hauled Motorama exhibits around the country."

The Firebird III from 1958. The final "dream car" built by Harley Earl.

A question of quality

Imagine this 1976 V6 Buick Century Special in canary yellow. Now imagine putting 198,000 miles on it over 15 years. My brother lived the dream.

Let's talk about quality.

An earlier post on a pristine Chevy Malibu Classic prompted slick to reflect on G.M.'s seventies-era quality control:

"I will agree in the heyday and that toward the mid to late '70s cars such as the Malibu pictured were produced when the mentality was f*** it, ship it, if they don't like it tough s***...I can remember when a car got close to the 50k mark my dad would get nervous and get rid of that car. Today, GM cars go 200k with relatively few problems, for the most part. Every once in a while a customer will say, 'They sure don't build cars like they used to.' And one of our guy's favorite response is 'They sure don't, thank god."

So we can probably all agree that G.M. cars in the '70s were not exactly finely-tuned machines. The attitude was that you drove the car a few years then got another one. But I have a real world example that's the exception to the rule — my brother's Buick.

The deal in our family was that if you made it through college, my grandparents bought you a new G.M. car as a reward. So when Matt graduated from Aquinas College in 1976, he became the proud owner of a yellow Buick Century.
So here's the scenario. You've got a young Flintoid known to frequent bars like the King's Armor who has friends with names like Bobo and Hooker with a poorly made G.M. coupe. This car's doomed, right?

Not so fast. The Century racked up 198,000 miles before it finally died in 1991. It was a little rusty, but it still had the original transmission and it never needed any major repairs. He sold it to the kid next door as a project car for $1. "It was very reliable even though that was probably the low point of Buick," Matt remembers. "It was fine. It worked."

And that, my friends, is about as enthusiastic an endorsement of a mid-'70s Buick that you're ever going to get. Especially out of my brother.

But what about today's American made cars? Jalopnic.com asked the same question earlier this summer, and home-grown autos got a lot of support from readers who agreed with slick's evaluation. For example:

"I have to put my two cents in on this one, I manage a large GM dealership Service Department, and the shift in quality I have seen in the last 5 years is nothing short of amazing. In a time where 75% of our business was warranty related repairs, now it is less that 25% and trending downward. The biggest struggle dealers now have, believe it or not, is the increased quality has reduced the amount of repair dollars, and with the reduced or extended maintenance the newer vehicles provide, there isn't a lot for us to do. We have been forced to jump on the "fluid transfer" bandwagon just to survive. It is the strangest progression I have seen in the car business in 25 years."

And vehiclevoice.com has a post declaring that crummy American cars simply don't exist anymore. And this was after the writer rented a Chevy Aveo:

"Aside from the looks and bargain basement image, this was easily a car that I could live with day in and day out. Which brings me to a point I had long comprehended in theory but only now really understand. There are no bad cars anymore. Virtually all cars – even the most basic ones out there – are competent and well built. There is no modern equivalent of the Pinto or Vega today; even the most humble car out there will get the job done, and in relative comfort. 

"As such, the product itself is becoming much less of a differentiator these days. Now, design and marketing have much bigger roles in getting people to notice the product. Today, choosing a new vehicle is much more about how it looks and how it speaks to a consumer’s wants and sensibilities than it has been in the past. Automobiles have always been emotional purchases to a degree; today this is even more so the case due to the fact that there are truly no bad cars out there – making emotional attributes all that more important."

With all this good news, maybe my brother will consider G.M. when he buys a new car. But that might be a while. He's still got the Acura Integra he bought in 1991 when the Buick Century went to the great impound lot in the sky. It's running fine, and he says it corners a lot better than the old Buick.

A future without G.M.?

Bill Vlasic of The New York Times asks the obvious question: Will Ford and G.M. survive?

"Neither company appears in immediate danger of failure. But analysts say Detroit is in a race against time.

“Things are pretty bad, and the river is getting deeper, faster and wider,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. “The question is, can they get to other side before the cash runs out?”

American automakers have decided — critics would say, belatedly — to shift production from trucks and sport utility vehicles to smaller, more gas-efficient cars, including hybrids. But it takes time to switch equipment for production. And it is unclear whether the automakers have sufficient cash to remain solvent until their new vehicle lines are ready for customers."

White-collar cuts at G.M.

Nick Bunkley and Bill Vlasic of The New York Times report:

"General Motors said Tuesday that it would reduce labor costs for salaried workers by 20 percent, eliminate its quarterly dividend and further reduce truck production to ensure that it has enough cash to finance its turnaround for at least two more years.

"The moves are expected to raise about $15 billion by the end of 2009, the chief executive Rick Wagoner said in an address to employees.

"Mr. Wagoner said the automaker would also stop providing health care coverage to salaried retirees at age 65, offer buyout and early retirement packages to reduce its salaried work force and freeze base pay for salaried employees through 2009."

Financing sales

Flint Expatriates reader slick told us last week that G.M.'s financing offer of 72 months at 0% interest was attracting buyers to Flint auto showrooms, and he was right.

Matt Franklin of ABC12 reports:

The week of the sale, dealers were very busy. A salesperson from Hank Graff Chevrolet in Davison says more than 100 cars were sold during the initial three-day period of the 72-hour sale.

At Saturn of Flint, since last week when the sale started, they sold more than 100 vehicles. It was a similar story at Applegate Chevrolet in Flint.

Many of the smaller cars were the vehicles of choice for customers, but just as many decided to choose pickup trucks and SUVs, despite the high gas prices.

This left me wondering just how high gas prices will have to go before people stop buying SUVs.

Don't bother bringing a gift

Talk about a depressing birthday party!

And please don't mention stock options at the celebration.

June swoon

Nick Bunkley of The New York Times reports on the dismal June auto sales figures:

"Sales fell 28 percent at the Ford Motor Company, 21.4 percent at the Toyota Motor Company and 18.2 percent at General Motors in June, the worst month yet in a miserable year for the automobile industry."

Auto industry primer

Some readers who are in the thick of it may find this too simplistic, but Edward Silverstein offers a fairly succinct overview of the current U.S. auto industry and the role of organized labor:

"To understand the labor issues facing the U.S. auto industry is to understand the U.S. auto industry itself. Between 2006 and early 2008, the Big Three automakers (GM, Ford and Chrysler) cut about 80,000 jobs through buyouts and early retirements, and more are on the way. The goal is to have a smaller, lower-paid workforce. The former workers will head into new careers in different industries. Layoffs could be down the road, too.

"A major problem facing the Detroit-based auto industry is that contracts negotiated by the auto unions were so generous, compared at least to the salary and benefits offered by non-unionized auto manufacturers elsewhere in the world, that the Big Three can’t remain competitive with companies from overseas.

"They are not selling enough vehicles – due in part to wages and benefits spelled out in contracts. Some workers blame management for not offering and concentrating on the right product line. Others say that a government-sponsored national health plan would alleviate much of the pressure that the auto companies find themselves facing. Americans spend more on health-care per capita than other nations that are known for manufacturing cars – Japan, Germany, China, South Korea and France. Some workers would like tariffs imposed on imported cars. Then there’s the issue of the U.S. economy, which may keep some consumers from being able to afford a new car.

"The union has been generally supportive of the buyouts. In fact, the employee buyout plans were developed with the United Automobile Workers (UAW) union ."

Can Voluntary Employees Beneficiary Associations Control Health Care Costs?

"The UAW has also been working with the auto industry to find a way to keep up with retiree health care costs, which are estimated to total between $100 and $116 billion as of early 2008. GM may be responsible for about half of that amount, and has four retirees for every current employee, according to industry estimates. The plan being developed as of 2008 calls for setting up a health care trust administered by the UAW, called a Voluntary Employees Beneficiary Association (VEBA).

"Critics argue that VEBAs in other industries tend to be under-funded by the companies, so that shortfalls need to be made up by the individual retirees themselves paying higher deductibles and co pays. GM expects to save billions once the trust is created."

Industry Looks at Two-Tier Salary System

"The auto industry is continuing to look for ways to pay workers less. One option gaining in popularity is the two-tier salary system where non-core workers in manufacturing plants earn much lower wages than those with core responsibilities. Many workers resist such a system.

"The automakers say these are the kind of steps needed to make the U.S. auto industry competitive with companies such as Toyota. The hope from unions and management is that as American-made cars continue to improve, consumers over time will opt to buy a Ford, GM or Chrysler rather than an import.

"Whatever the outcome, it’s clear that the Rust Belt – in states like in Illinois, Indiana, Michigan, and Ohio, as well as Pennsylvania – has suffered from the slump in the auto industry. From 2000 to 2006, Michigan lost more than 330,000 jobs, most of them in manufacturing. The UAW has seen a decline in membership since the 1970s, when membership was over 1.5 million. Membership was less than 540,000 at of the end of 2006.

"The UAW has held strikes in recent years but for the most part the union appears to be cooperating with management to bring improved health to the nation’s struggling auto industry. The question is whether the workers will back concessions and make the industry more economical and more competitive."