Why General Motors cannot sell me a car

Many of us have been hearing how the rising employee costs are hurting General Motors and preventing them from becoming competitive in the marketplace. Many talk about the lavish pensions and healthcare guarantees that the UAW (United Auto Workers) has managed to blackmail GM into. Every now and then, various self-appointed pundits (like myself) talk about GM ditching their pension plans.

But let us look at reality for a moment. GM has created most of its problems itself. There was the EV1 disaster when GM, despite loud protests by its own customers, refused to let people continue to drive the EV1 that they had come to love. As recently as 2005, GM pooh-poohed the utility of hybrid cars, letting Toyota become the thought leader. Then there is the whole SUV mania. Despite rising gasoline costs, GM has continued to focus on gas-guzzling behemoths.

I am a car owner and driver. From my previous post, you would come to know that I have an 18-year old Toyota MR2. I love this car. It gives good gas mileage and is a nice peppy car. But I also need to replace it as it ages and gets louder. Recently, I heard about Saturn Sky, a new 2-seater model from GM. I decided to check out its specifications and compare.

Guess what? This 2007 car cannot match my 1988 car! The fuel efficiency is worse, the turning radius is more (imagine that for a sports car) and almost everything else comes out behind the 1988 MR2. Now imagine if you were in USSR and your 1965 Lada worked better than the 1985 Lada. What would you say? I bet you would say "Well, that is the way it is." But luckily for us, we are not in USSR. We are in the very cradle of capitalism. We are in the most competitive automobile market. And if GM cannot compete with a car that came out 19 years ago, they might as well pack up their stuff and call it quits.

My prediction is that before too long the federal government would try to give GM a subsidy. When that happens, remember that this is the same company that once said "No true blue American would ever buy a Japanese car". And make sure your elected representatives don't steal your tax money to prop up a defunct car company.

Happy driving...

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