Category Archives: GM

The Cover-Up

We as Americans have always thought of ourselves as the good guys. That’s because our nation is founded on principles like truth, justice and the American way. So why is it that big companies and government officials seem to be blatantly violating this nation’s laws with little to no consequences?

We saw it when Wall Street came crashing down in 2008. And now we’re seeing an epidemic of criminality and cover-ups by automobile manufacturers. Is this behavior new? Is it some breakdown in decency that just recently began to happen, or has this been part of the accepted culture for a long time?

Of course, the latest in this long series of dubious activity resulted in General Motors (GM) agreeing to pay $900 million in what was labeled a “criminal settlement” over a cover-up of ignition switch defects. Those defects are linked to 124 deaths.

Read the whole article here on F&I and Showroom.

Shop Click Die

I just spent two hours reading 30 pages describing General Motors’ new Factory Pre-Owned Collection, a program designed to open up the automaker’s remarketing channel to consumers through an online portal. GM dealers, you’re about to be royally screwed over on your last real profit center.

The “Shop Click Drive” program, the car-buying service consumers will use to purchase the more than 30,000 used cars that will be made available through GM’s online portal, has always stunk of the incompetence, greed, and anti-dealer sentiment that has infected GM at the highest levels, and it’s about to get worse.

Your manufacturer is eyeballing control of off-lease, rental returns and other program cars — vehicles with less than 37,000 miles on the odometer — as a potential additional profit center at the expense of their dealers. They’re rolling out the most absurd and ill-conceived program they’ve come up with to date.

Read the whole article here on Auto Dealer Monthly.

The Cover-Up

We as Americans have always thought of ourselves as the good guys. That’s because our nation is founded on principles like truth, justice and the American way. So why is it that big companies and government officials seem to be blatantly violating this nation’s laws with little to no consequences?

We saw it when Wall Street came crashing down in 2008. And now we’re seeing an epidemic of criminality and cover-ups by automobile manufacturers. Is this behavior new? Is it some breakdown in decency that just recently began to happen, or has this been part of the accepted culture for a long time?

Of course, the latest in this long series of dubious activity resulted in General Motors (GM) agreeing to pay $900 million in what was labeled a “criminal settlement” over a cover-up of ignition switch defects. Those defects are linked to 124 deaths.

In the settlement, GM admitted it had hidden the defects from both consumers and the government. I am going to assume GM officials knew these switches were killing their customers. The question is, did they value money over the lives of the people who bought GM vehicles? It sure seems so.

Read the whole article here on F&I and Showroom.

Sergio’s Last Stand

Forever the old-movie buff, sometimes I can’t help but relate fictional film characters to the reality of current events.

Errol Flynn was a star before I was born, but I’m fascinated by his old movies. One in particular flashes to mind when it comes to FCA CEO Sergio Marchionne and his seemingly stressful effort to find another auto company willing to merge with his.

The movie I’m thinking of is the 1941 epic “They Died With Their Boots On.”

The definitive scene in the highly fictionalized film shows Errol Flynn as General George Custer and what was left of his troops fighting to the end as the entire Sioux and Cheyenne Indian nations encircle them. If you didn’t know the historical outcome, you’d get the impression Errol Flynn was going to get out of this jam.

The auto industry increasingly is getting the feeling Marchionne is up against the wall. You wonder what the outcome will be.

Wait a minute, Ziegler, Chrysler dealers are knocking it out of the ballpark aren’t they? Sales are outdistancing most of their competitors. Jeep is on fire and Ram trucks are increasing market share. I still get mad when I have to call it FCA, but on the surface it seems like Chrysler, OK FCA, is bulletproof.

Read the whole article on WardsAuto here.

Can GM Get Its Mojo Back?

General Motors is on the ropes, knees buckling, as it takes repeated body blow.

The recalls keep coming. And the federal government’s $35 million fine is only the beginning of a series of escalating payouts before all of this passes.

Someone told me GM will be fine. After all, it is sitting on a $35 billion cash reserve. Well, I seem to recall that is almost the identical reserve GM was sitting on when Rick Wagoner took the helm not so many years ago. It took less than a decade of losses to burn through that before the automaker entered bankruptcy.

I’m not predicting that will happen again, but Mary Barra inherited the whirlwind when she became GM CEO this year. At least a decade or more of cover-ups and admitted misdirection falls on her. It’s too bad the reckoning arrived on her watch.

GM just announced an additional four recalls affecting another 2.5 million vehicles. It announced five recalls the week before that.

It is approaching 14 million vehicles and $400 million in related costs just this quarter alone, not counting litigations and additional fines. A recall doesn’t automatically mean something is wrong with a particular car, but the recurring recall message to consumers seems to be GM cars aren’t safe.

Read the full article here on WardsAuto.

Total Recall

Close your eyes and pick a number between 13 and 500. Got it? Okay, now go before Congress and tell them how many deaths were caused by a defective ignition switch in your vehicles.

I don’t envy Mary Barra. In a few short months, she went from newly minted General Motors CEO and media darling to the impossible position described above. She has been forced to order the recall of at least 2.6 million vehicles for the ignition switch problem and, weeks later, another 1.5 million units that could suffer a loss of power steering.

Worse yet, we don’t really know how many ignitions switched to the ACC position and disabled the airbags in vehicles that crashed. The manufacturer has linked 13 fatalities to the defect. The Center for Auto Safety, a public interest group started by Ralph Nader and the Consumers Union, puts the count at more than 300 people based on federal data.

So, yeah, GM is facing a lot of heat over this. But where was the National Highway Traffic Safety Administration for the last 13 years? According to a report in The Detroit News, U.S. Transportation Secretary Anthony Foxx is asking the same question. He has directed the NHTSA and the department’s Office of General Counsel to conduct an internal review of the agency’s handling of the recall. He did the same after Toyota’s faulty accelerator pedal recall.

Read the whole article in Auto Dealer Monthly here.