CARBIZ

... and yet, strangely, the Canadian market was actually up 1.5% in October. I've been told that if Toronto was taken out of the picture, GM is actually doing very well this year in Canada.

Do you think that maybe Japan Inc (along with Stuttgart) egged Detroit into a horsepower war that would ultimately kill it? I was aghast when the new Sienna came out a few years back and advertised 240 hp and showed the van going sideways on the Bonneville salt flats. The horsepower wars that broke out (Viper/Corvette, CTS-V, etc) trickled down to the lowly SUV and econocar. I'm just throwing that out there, but GM/Ford do build great economy cars in South America and Europe, but maybe there was some sort of conspiracy, either externally, or by internal conceit, that sucked everyone up into this stupid horsepower race. Moltar, I am 100% with you on this one: I bitched to anyone who would listen 3 or 4 years ago (especially after my first trip to Brazil) that I wanted GM-Canada divorced from Detroit and 'married' to Europe. The Astra is selling like crazy here. So is the Vibe. GM can do it, but Detroit has behaved like its on a different plane, which truth be told, it was until about a decade ago. I just get the impression with Big Businesses that dissent or 'negativity' is not encouraged. If you snort and guffaw at the party line, you are shown the door. It's not limited to Detroit, either.

I think what we are seeing with world shipping is merely a reflection of the massive wobbling that we are seeing in markets of every type. Money is moving around the globe so quickly, mostly in panic, that I don't think any of the so-called experts have a handle on what is happening. Even if parts of the world are entering a recession, the huge drop in oil prices, the sheer paralysis in the world money markets and now the shipping crash tells me that panic is in the air. What kind of drop in world wide trade would a recession bring? 2-4%? If so, how could that result in a 93% drop in the day rate of capesize ship rentals? Something stinks from here to Denmark. Where has all the money suddenly gone? Gold hasn't gone through the roof. Nobody's investing in real estate, that's for sure.

First of all, the oil bubble was total bull$h! - I think we are seeing that now. World wide demand certainly has not dropped enough to anywhere near justify a 50% decrease in the price of oil in a few weeks. Clearly, the profiteers have moved on, having made their money. As I said on earlier posts, where was the justification for spending $$$ on a Cavalier replacement in, say, 2001 when GM was building every Blazer/Tahoe they could? Oh, that's right, Wagoner did buy into Fiat (who knows what happened with that debacle?) and Daewoo. He also had the foresight to dig Lutz up out of mothballs. Too little, too late? Perhaps, but he wasn't even in North America until '92, having been instrumental in building up GM's image in South America. He left a pretty good legacy there, wouldn't you say? Brazil is one of GM's crown jewels right now. We love playing armchair critic, but assuming we have all lived in North America over the past 2 or 3 decades (you did, didn't you?), I seriously cannot fault GM or Ford for decisions that were made in the '70s and '80s. They OWNED the market here. Detroit was cock of the walk. North America, rich and fat, was different than the Rest of the World. Any VP who would have professed building 35 mpg cars around here in the '90s would have been fired. Sorry, but that's the reality of Big Business, American style. How could these guys in Detroit anticipate the full frontal assault that Japan Inc, plus the Germans (not to mention the Koreans) made 20 years ago - and why would they take them seriously in the beginning? I know I laughed at the Tercels and Datsuns, and I wasn't even in the business. The fact that GM and Ford are doing elsewhere speaks as much about us as it does about Detroit. Hell, Asians buy Buicks in Asia, but Americans won't buy them - what does that say? Wagoner's background is all financial. I've never been overly impressed with beancounters or lawyers running anything, but at least Wagoner had the brains to get seek help when he needed it. Whether GM survives the next 18 months or not, who knows, but it is unfortunate that his buddies on the Board couldn't have warned him that all this Asset Backed Paper was worthless and the looming financial crisis that was coming - although I still don't know what Rick could have done differently 3 or 4 years ago that would have made a difference today. Cancel the GMT-900 developments? Speed up the Volt? Axe more divisions, along with Oldsmobile (that would have thrilled the Board, wouldn't it?) Not sell off GMAC? Without the profits of the trucks over the past decade, GM might not even have made it this far. Frankly, from what I can see, it would seem to make good economic sense to pull out of North America entirely. If annualized sales are dropping to 1983 levels, then there is no way there is room for 20 + makes in a market as small as that.

Vista at home is good enough for surfing the net, writing the odd email, haunting C&G and occasional porn. Reading the above posts I realize how much about computers that I DON'T know.

Chris, you think the average car buyer is any smarter than a teenager?

Why do you assume GM is worse off than Chrysler? The fact that Cerberus is so desperate to get rid of Chrysler would indicate they are worse off than the public knows. The advantage of Chrysler being taken 'private' two years ago is their true financial health isn't a known entity. As to Wagner, I don't know the man nor have I ever met him, but I will say that his legacy will be somewhat like whomever wins the election down there next week: they will preside over a mess that they did not make and will be burned by the consequences, regardless of whatever true talent (or lack thereof) they possess.

I read Delorenzo's blog every week and generally find his remarks bang on. At least for the 3 or 4 years I have been reading his rantings, he has been pretty critical of Detroit and Washington. Alas, I think it is going to take a worse meltdown than we have witnessed thus far to rattle middle-America (and Canada) enough to make them give a $h! about their neighbor's jobs.

NOTHING SCARES ME MORE THAN VOTER APATHY. I will take the loonie left or the fantatical right any day over the vast legions of people who don't give a $h! any more. How do you think politicians on both sides get away with what they say? Because half the population has simply tuned out. I work in a f'ing car dealership and not a single person here gives a $h! about what this city plans to do with tearing down expressways, putting up bicycle lanes on every street and pretty much making it impossible to drive a car in this city. If these people cannot be made to understand that what the socialist nazis in city hall plan to do over the next few years is going to not only erode everyone's way of life, but in particular our own, then what hope is there? There are times when I wish for a meteor strike so Mother Nature can start over again.

I am not blaming their ignorance; I am faulting their reaction. Clearly they weren't prepared to go ahead with their 'slant' on America and American cars with a world-class Caddy. You gave them a chance to change that perception and they rejected it. That is what I call bias.

Look, I am living with someone who was raised Jehovah's Witness - and I am an atheist, so I can overlook pretty much anything. I wouldn't hold what car they WERE driving before we met against them. Now, if he bought a Camry/Yaris/SmartCar/Fit/Versa/Ridgeline/Element or anything from Hyundai/Kia AFTER we met - well, that would be grounds for divorce.

That's always a risk in any business, but one thing that both GM and Chrysler have been good at is 'buying' customer loyalty with visa points, loyalty programs, etc. If Chrysler did merge with GM, I would wager that the bulk of their customers would stay with the domestics, even if that meant Ford benefited. One way or the other, we need to see some form of shake out in the industry. There are too many brands on the market and I don't think manufacturers can go on counting on huge sales increases every year forever. When it can cost a billion dollars to bring a new, decent model to market, it is going to get harder for the 'niche' brands to survive. The lawyers and legislators are seeing to it.

Just another example of the stupid media: when the facts do not conform to the theory, then the facts must be altered. Bias is not limited to these shores.

People who really know about cars aren't afraid of 4 cylinders, but many people remember the hoary 4s of the '80s - how gutless they were and unreliable, which makes them naturally wary of buying a new car, especially a luxury car, with a 4. I think it is unfortunate that over the past decade or so technology has gotten sidelined into a new displacement war because otherwise the R&D money could have been spent on 2.0 engines that get 40 mpg and 200+ horsepower with torque numbers that can move a 3,500 lb car with fun and reliability. This is the new reality and now car makers are going to have to play catch up to erase the last 10-15 years.

The trouble lies with the world trade regulations. This isn't 1980. I am not sure those type of proposals would be legal. I know the CAW has been pressing for a return to the Canadian Auto Pact, which expressly dictated that a manufacturer had to build one car here for every car they sold. That legislation single-handedly turned Ontario into the largest manfucturer of automobiles within a couple of decades of introduction. Overall, I'd say the old Auto Pact was a very good deal for Canada and for Detroit: some of the Big 3's best selling and best built vehicles have been built in Canada. There is a danger of becoming over-protectionist in these tough times, but I have no problems with some form of duty or tax being slapped on Asian car companies, due to the restrictions they put on foreign companies setting up there - even China, which insists on 'partnerships,' which is really just a long term plan to steal our technology. Europe's market is nearly as free as our own, so I don't think protectionist rules need to be set up against them; after all, GM and Ford are very successful there.

The moral of the story: better to be a big fish in a little pond than a small fish in a big pond. A friend of mine is a lawyer and his wife owns 2 or 3 retail locations in Timmins, Ontario - arguably the armpit of the Universe (although Shania Twain hails from there!) They have two seasons in Timmins: snow and mosquitos. However, my friends have a 16,000 sq ft home, complete with indoor pool, jacuzzi that seats 10, sauna, 40X20 theatre room, 2 story living room, etc. - all 5 minutes from Timmins airport. They make a ton of money, the cost of living is probably a 1/3 of living anywhere near Toronto and a 1 hr flight takes them to Toronto international airport - not much longer than it would take me to fight traffic from downtown to the airport. They work 6 or 7 days a week, then bugger off to the Bahamas or Mexico or wherever a few times a year for 1 or 2 week holidays. Really, not a bad life. They will even fly into Toronto for a weekend of shopping. I thought they were nuts when they moved there, but all in all it has been a great life for them. They've made a lot of friends and their home cost a fraction of what it would be to build in the Toronto area - they have 80 acres that backs onto a river. I wouldn't want to be poor in a small city, but being well off in a small city can be a very, very good life.

No, but it would be nice, given the opportunity, to wipe a competitor with 12-14 point market share off the map - and be able to 'control' their customer base with the same stroke of a pen. I realize the logistics of this seem to be overwhelming, but think of the pay off when the auto market returns to normal in 2-3 years! I don't know how GM can pull this off, but grabbing 12 point market share (while, more importantly, not letting your competitors get their hands on it) is a very tempting and bold move.

VW gets away with it because their cars LOOK like they are built well and come with manual trannies; therefore, they are the darlings of the auto mags. It seems that the quality of the HVAC control switches is more important than the seat catching fire. German engineering means the vehicle handles great when it's not in the shop.

Which goes to the root of my argument (which others accused me of being an idiot) that WallStreet produces NOTHING. It is starting to look like all the prosperity of the past several years - the so-called consumer driven market, was a total f'ing sham. That is something I long suspected was true. Are we now going eat that paper wealth? I guess so. So we off-shored all our damned jobs and lying economists would point to the 'healthy' job market (all job increases were in the low paying Starbucks jobs and the high paying analyst jobs) as proof that this globalization is working. Really? For whom? And, as usual, the rich will hide their wealth under the proverbial mattress and let the rest of us rot. I am less than happy about this mess: the housing bubble, the oil bubble. I am sick of this $h!. I have done my bit and sank my life savings into the supposedly healthy Canadian banks, only to watch 30% of it evaporate in the past month or so.

.... then why did you have 4 of them?

what's wrong with disco?

If this were just limited to GM's plight, I'd tend to agree that GM has made their own bed, now lay in it, but that clearly is not the case. There are more powerful forces at work and I have to admit that I am growing more panicky by the day. Simply put: where has all this 'wealth' vanished to? Entire countries are teetering on the verge of insolvency: Iceland, much of the former USSR republics. The Russian and Brazilan stock exchanges are closed more than open lately. Manulife, one of Canada's biggest insurance companies is now whining about needing a government bail out because they 'over sold' their amazing GICs and now the value of their stock won't cover the IOUs they've writte - OOPS! We are smugly told that Canada is in beter shape: yeah? Then explain why 24% of my mutual funds have evaporated in the past 6 weeks (more if I include how much they were worth at their peak in June!) This is more than bailing out Detroit. There is something fundamentally wrong with our capitalist system. We have 100 years of economic history to learn from - something those who lived through the 1929 implosion did not have. How has this mess happened and where has this wealth gone?

Given the perspective of the day, the original 'cab forward' cars were ahead of their time in nearly every way. I rented a Neon in September '94 when I was in Victoria, BC for a week. I loved the car. Design-wise, it was leagues ahead of anything else on the road at the time - and it had a darned cute advertising campaign to go with it. However, Chrysler's nagging quality problems killed the lead that they enjoyed with this car. Hell, if the Neon had turned out to be reliable as hell, we could have a Dodge as the #1 selling car today, rather than the Civic. I also seriously considered a '94 Intrepid when they first came out. I was amazed at the back seat room being more accomodating than my '91 Caprice at the time. I loved the look/finish of that car. There is no doubt in my mind that Chrysler was the Queen of the auto show circuit in the '90s with their exciting new designs. Where did the wheels fall off? Was it Lutz's retirement? Was it incessant tranny/a/c and other issues that Chryslers were plagued with? As with GM, we could speculate endlessly all the 'what-if' scenarios out there.*

It would only be prudent for GM to be 'announcing' that they are going to quit themselves of these behemoths as they beg for money from Washington. It would also be prudent for them to focus their precious resources on small and mid-sized offerings in this new world economic order. As long as there is demand for large, truck based SUVs for towing, contractors, etc., I am sure GM will continue to build them. It's not like GM hasn't sold ANY this year. As I posted earlier, this hyper-shortened truck revamp schedule that we've seen since '98 could not be sustained even when GM was making buckets of money. If there is one thing we can be sure of in these interesting economic times, it's that we can't be sure of anything. If GM survives 2009, then they can take a look at the big brutes and their long term survival.