Excellent piece here on the factors behind the long-term collapse of General Motors, which filed for bankruptcy reorganization protection today.
Lots of variables to consider. Personally, I have historically preferred Honda and Toyota for their durability – my one adventure into a Chevy Blazer was a near-bankrupting blizzard of repair bills and esoteric issues that challenged mechanics far and wide.
But if it’s true that GM is making higher quality vehicles now than a decade ago, it seems like a company with a future – if it begins making higher quality management decisions than a decade ago.
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Good points Bill. I would add that GM (and largely the other 2 Detroit outfits) largely abdicated a large segment of the market. The last time I bought a new car (8 years ago) GM didn’t have anything to offer me. I was looking for small, fuel-efficient, and fast with good handling. Ford at least made the long list (Fiesta as I recall) but did not make the short list. They were all “Japanese” (actually built here) – Honda Civic, Nissan Sentra, Toyota Corolla, Mazda Protege. The Detroit Three focused so much on trucks and SUVs that they largely ignored an entire segment.
Similar when looking for the family hauler. The Ford Freestar is lousy; Chryslers Town/Country has transmission issues – however it is the best offering of the Detroit Three. Our Mazda MPV (25 mpg) is vastly superior to anything the Detroit companies offer.
So – whose fault is it when I don’t buy a Detroit vehicle? Mine for having standards I demand be met. Or theirs for failing to meet them?
I agree, Ben. I think that the wounds suffered by the American auto industry are self-inflicted.
The Blazer I owned, while good looking, was absolute junk and a gas hog to boot, right at the time while speculators were making their oil fortunes at yours and my expense.
Today – a Honda Accord, 34 mpg.
Ane remember – the Detroit Three are NOT the only American automakers. Marysville, OH, is in the USA. Americans built my Civic. It may have imported parts but so do Fords etc. And I DID look at the Detroit offerins – however they fell short.
Another thing I observed during that car hunt. The local Ford dealers only wanted to show me trucks – not cars. One even adverised itself as “The Truck Store”. That doesn’t help when I am in the market for a car.
Antiquated business model is what brought GM down. UAW also had a large part into it as well, as Unions are an antiquated organization units that does much more harm than good to its members.
Just as Unions are antiquated and large redundant models/brands, but you also have the miserable customer service orientated, high-pressure sales tactics of the traditional auto dealer.
Dealers were just as bad as the company who were almost as bad as the UAW. A perfect storm to bring down an American business icon, formally known as General Motors.
Other antiquated business models? Newspapers, maybe? The news doesn’t look good for them.
Main stream forms of revenue were car dealers, now will be far less dealers will bring much less. Classified ads? Move to the free craigslist.
I don’t know. Somebody needs to figure it out. Bill, if you figured it out, you will be a millionaire many times over. Because I know there is going to be a Google/Microsoft of newspaper publishing somehow.
Newspapers, as they stand today, will never cease to exist because television and radio can’t ever provide quality story depth.
Now, the form they take is another question.
bill – the thing that might change newspapers is the internet. What might be the next step could be a reasonably priced paid website without all the pop-ups. That is my current problem with kansas.com – it has so many scripts that it will occassionally lock up my computer. Perhaps you could ask ‘the powers’ there why I have so much more trouble here than I do at cnn.com or msnbc.com
Yeah, Ben, I think that’s where it’s headed. The current thought is that there are some business synergies between a more emphasized Internet product and the print edition.
I’ll pass the scripts issue on to our technical folks.
Bill – I want to toss an auto issue on the table for you: Are we moving away from the personal vehicle as a sex symbol? If so; what are the implications of that? Couple that with the fact that cars are, in fact, made better than they used to be and consider this:
Suppose the US vehicle fleet is 100 million cars. If a car has a 5-year life then 20 million would be replaced annually. If the life is 10 years that cuts to 10 million – 15 years and it is 6.7 million units. My Civic is almost 8 years old and I have no plans to retire it. It ain’t fancy but it will handle 60+ mph on Kellogg with ease. (Unfortunately it sometimes prefers 70+)
I think we have about 8 US automakers right now – how will they slice up such a shrinking overall market?
You raise an interesting point, and a crucial marketing point, I think, to the future of the auto industry.
If you’ve read auto history, you know that Iacocca’s dream was to make the disposable 100,000-mile car to force Americans back into the purchase market sooner.
You wonder now if that strategy didn’t ultimately doom the American auto makers, although it appears Ford got the message quicker than GM. Meanwhile, I have a friend who owns a 1995 Toyota Tacoma that’s about to roll past the 500,000 mile mark, with nothing more expensive in repair than ordinary maintenance.
As for the car as sex symbol, I think a lot of that answer depends on fuel prices. If gas drops back to around a buck-fifty, then you’re going to see market demand for fuel-swilling sports cars, pickups and SUVs.
Clearly, history shows us that most Americans aren’t really energy-conscious; instead, they’re wallet-conscious
A side note: GM did Iacocca one dream better by producing the first 50,000-mile disposable car, the Chevrolet Vega.
Sadly, that was my first car. Block built out of empty beer cans.
A newspaper model you you: Focus a LOCAL paper on LOCAL issues and co-market with something like USAToday, Wash Post or something. Or, online with links.
I’d love to see better delving into County and city governments.
I don’t think planned obsolescence is going to fly. That is why Toyota and Honda have been kicking so much butt, because they made them last so much longer (although I think their bodies rust up way to fast).
We need to be highly conscience on the fuel use and material use to build automobiles. There is not a whole lot of oil left in the world. I was listening to NPR the other day and some commentator was saying that we may need to go back to one car per household like it was back in the day, instead of a car per every person who holds a drivers license.
But you talk about a car. I have an 85 Pontiac Fiero.
and it’s in great shape.
But going back on your take on story depth? I beg to differ. I believe the radio and tv has newspapers whipped in story depth, investigative reporting and diversity of interest. NPR for example will blow away any newspaper in story depth.
I think that is the big problem with newspapers. They have no depth. But that is just my opinion. Lets just say that whatever “new” news the Wichita Eagle posts each day, well… it can all be read within 15 minutes. I don’t think the Eagle has an article over 300 words and whatever news you guys post, it’s known and regurgitated on TV and Radio news sources. Because any “new” news couldn’t fill up single broadsheet page.
Does the Wichita Eagle serve a purpose? Sure it does, but it can probably be done with a quite a bit smaller staff and exclusively online. I would say a team of 6 to maybe 8 people could do everything the Wichita Eagle is doing.
But, whom am I to say. Music Publishers are still trying to pump out CD’s. Well, at least they gave up on the audio cassette and the 8-track.
What I would really like to see, is an editorial/investigative monthly published magazine style news source for the Wichita/Kansas area, such as the Atlantic Monthly is. I would pay for a subscription for that.
I think it is in San Diego – an online investigative publication that won awards for digging into local corruption. That is what I would like to see the eagle ‘morph’ into – a local investigative publication. There is a LOT of dirt in city, county, state governments and also in our court system.
Supplement that with links to McClatchy for national and world news.
Looking at TV for a moment – do I need Channel 2 (for example) to regurgitate national/world on the 5 or 6 PM newscasts when the network will cover that at 5:30? Spend the time digging locally.
I couldn’t agree with you more Ben. It just seems that local papers tend to compete with the exact content of local tv and radio.
I remember a segment on NPR talking about local newspapers saying why do they still print stocks, national sports scores and etc, when the majority of the people that like that information find it online.
Sure, there are people that are still not plugged in to the Introwebs, but that number is ever so decreasing and trying to be all things to all people and trying to squeeze out a audience of the 20% in the 80/20 rule isn’t going to lead to success and profitability.
I think the local newspapers can really do without all the fluff of national syndication and fillers and really focus on local interest with highly in-depth publication.
For example. No offense to the you guys in the Business Reporting at the Wichita Eagle, but the Wichita Business Journal has you guys beat big time, even after you did the big “Thursday” (trying to beat the WBJ) Business News Section. I notice that after the 1st week, the content shrank back to the daily news cycle content.
WBJ only publishes weekly and commands a steep subscription, but it’s good for information on the local areas. Plus they keep their website fresh with information everyday.
I want the Wichita Eagle to thrive and I would love to see Bill Wilson win a great award, because I know you deeply care about our community and you’re a great asset to reporting on news.
Talk about news. My favorite series on HBO called “The Wire”, last season focus on the Baltimore Sun.
That would probably be an interesting series to watch for newspaper reporters. (Although as for “The Wire”, you would have to start on season 1. 
You’ll be hooked for sure. It’s President Obama’s favorite show as well.
ictBest … I can’t say that I agree with you regarding our business section. What national syndication fluff do we run? What do you mean the content shrank back after the first week? We don’t keep our Web site fresh? I’d love to talk about it with you and get a little more of your opinion. Give me a ring sometime at 269-6706. Dan Loving, Business Editor.
I’m gald I have NOTH the WBJ and the Eagle Business section. The WBJ seems to me to have become just e bit too much of a cheer-leader and doesn’t seem to want to dig into things and open cans of worms.
Question for the eagle guys here: I wonder if it might make sense for McClatchey to publish a “stand-alone” national/world paper and then have the eagle do only state/local. Then fold them together and deliver to my door.
Looking at this morning’s paper – we had Tiller cover almost the entire front page and Obama’s speech relegated to a corner. In my scenario the national/world stody (the speech) would have covered the front page of the McCaltchey part while Tiller, as the LOCAL story, covers the Eagle.
bth … Not sure how something like that would work. Not saying it’s not possible, but there are logistics involved that might make it difficult.
BOTH not NOTH – can’t type
You all have spent a lot of time comparing the auto industry with printed news. But in my opinion it would be more appropriate to compare it with the airlines in terms of simple market overcapacity. Honda and Toyota, and even Hundai and KIA have learned to compete in that market, while the (former) Big Three have yet to learn that consumers are not going to suck up all the volume of whatever they are making. Just like Pan Am and Eastern folded, and a network of regional airlines grew up, I feel the auto industry as a whole is going to contract and restructure to fit the current market. It will be interesting to see what Penske’s new business model for Saturn turns into.
Similar thing for their labor costs — US auto companies built a costly labor structure when there was some competition for the labor. Unions could not demand more than the market of the day would allow. But as the linked article pointed out, what was once employee benefits provided by enlightened companies has turned into a locked in fixed cost added to the price of the vehicles. That doesn’t fit today’s market either.
And don’t get me started on dealers that disrespect their customers. At least they identify themselves by shouting at me in their ads so I can figured out who to avoid….
Dan, it’s not that the Eagle doesn’t keep their website fresh, on the contrary, I love the Business Updates you guys have during the day.
I was just commenting that the WBJ, being a weekly, puts up fresh content daily on their website (other than weekends).
I was referring to when the Eagle released the Thursday Business section, which was suppose to be in depth reporting and exposes on local businesses. The first week it came out, I was impressed and I thought you guys were on to something, but it just seemed like just after that first Thursday of the “expanded” business section, it reverted back to what it is like on a daily basis, which is just two stories.
I’m ok with that for most days, because I understand that there isn’t a whole lot really going on, but I would like to see that Thursday expanded business edition again.