Saturday, May 2, 2009

U.S. Automakers Taking Different Roads

Why don't I follow my own advice? If you track back to an earlier post (February 21, 2009), you can read about my feelings on that date regarding the troubles being experienced by the United States automakers. At that time, I discussed the big three and concluded that Ford Motor Company was the best bet into the future.

I'm not a financial wizard; but I told readers that if I had to lay my money down, I would put it on Ford. Here we are a couple of months later and the share price has gone from $1.85 when I wrote the article, to a close yesterday at $5.69 per share. In the meantime, GM and Chrysler continue towards some form of bankruptcy, even with the help of the government.

Yesterday, we learn that Ford has outsold Toyota for the month of April because of the growing interest in its Ford Fusion hybrid automobile. While sales were way down from last year, Ford captured 16% of the existing market for the month.

GM continues to wallow in stupidity. GM cars fell more sharply than its trucks; and as reported in the Associated Press story, GM "goes against the Federal goal of selling smaller, cleaner cars." The definition of disaster is General Motors. Evidently, a forced change at the top has made no difference in steering the company into a road to the future.

I think it is a huge mistake for the Obama administration to offer GM, one more penny. While there is validity in trying to protect our prior investment, I just don't think that the team at GM knows how to make wise decisions. Casting aside their Pontiac division is going to be a devastating blow to the company. Pontiac was their 3rd best selling brand. What's more important is that they had many models, like the Pontiac G6 that was affordable, gasoline efficient, and stylish. Pontiac had its own followers throughout the country as Pontiac car clubs are found throughout the United States. I don't think there is a Buick car club to be found (I have not researched this). I happened to stay at a hotel one day in the Midwest that was hosting a Pontiac Grand Prix convention. The parking lot was quite a site. I actually traveled their in my own Grand Prix having no knowledge of the convention. Needless to say, I fit right in.

I have owned a number of Pontiac Grand Prixs and the mileage on these models was a respectable 26 MPG. The Pontiac G6 was rated at 30 MPG. My Pontiac Vibe (4 wheel drive model) is rated at 31 MPG and I had a Pontiac Bonneville that gave me 24 MPG.

In a recent article on GM, it was reported that their Pontiac brand was the best selling GM product among young people. If GM is going to market towards the middle-aged and elderly population, they will be out of business in a very short time. I think they should have been forced into a structured bankruptcy and the company split into 4 separate companies. Maybe then they could have found one executive that knows how to run a car company.

I guess I've bought my last Pontiac!!



  1. Also, you see Grand Ams everywherre! In addition, Iheard they are also getting rid of their popular Saturn division. I don't agree with the harsh tone though about helping out American car companies that are and have been a big part of American tradition especially when the gov't is giving banks and Wall St companies huge amounts of money with seemingly few enforcable restrictions. I don't think it is fair that these companies get huge huge raises for execs still cuz it is "mandated" or "contracted" with taxpayer bailout money instead of being willing to loan out money again to people and small businesses. Also, I don't think it is fair that auto workers had to make still more huge concessions although they too had "contracts" and mandated agreements. I will really miss the choice of Pontiac and Saturn autos in the future.

  2. Hey Tom,
    M.H. here. What a great quote " The definition of disaster is General Motors"! It seems you have purchased your last Pontiac. You can bet the Execs. don't care as long as their children and their children will live better than your children and their children!
    The only thing that comes to mind is "blood is thicker than water". Or "dog eat dog".
    In these times, if "I'm" rich ,and you are not, then "it sucks to be you"!
    Going to see Mom tonight!
    Say hi to Sandy!