The U.S. government is now the major shareholder at General Motors. Is this good or bad for sales of GM cars? Before answering, please watch this 9 second video:
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Government Takeover Bad for GM Sales?
July 13th, 2009 @ 5:30 am
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1
bobfranks111
RE: Government Takeover Bad for GM Sales?
It's hard to edit or proofread a paper that you've just finished writing?it's still to familiar, and you tend to skip over a lot of errors. Put the paper aside for a few hours, days, or weeks. Go for a run. Take a trip to California. Clear your head of what you've written so you can take a fresh look at the paper and see what is really on the page. Better yet, give the paper to a friend?you can't get much more distance than that. Someone who is reading the paper for the first time, comes to it with completely fresh eyes.
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2
Sid Herron
RE: Government Takeover Bad for GM Sales?
Please show me in the Constitution where it says it's government's job to fix ailing industries and companies.
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3
Lorenzo H
RE: Government Takeover Bad for GM Sales?
I don't understand why they were they forced to ditch so many dealers? Is it not the dealers who produce CUSTOMERS?
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4
Geoffrey James, Sales Machine
RE: Government Takeover Bad for GM Sales?
Re Note 3:
Not the question, Sid. -
5
Geoffrey James, Sales Machine
RE: Government Takeover Bad for GM Sales?
Re Note 4:
I may be wrong about this, but I think the dealer dumping was the last dumb act of the existing top managements. I think there's a good chance history will look back on that action as one of the single stupidest business moves of all time. A prime sign of management stupidity is firing the sales force when you need more sales. -
6
EASTeam
RE: Government Takeover Bad for GM Sales?
Yes ~ this was bad for GM. Yes ~ the "Dealer Dump" was beyond dumb, it was certainly immoral & maybe illegal...time will tell... But a good insight into the decision making process huh?
If the free market had been involved, dealers impacted by these moves would have at least been afforded an opportunity to sell to their competition vs. being handed out by the Government, err uhh, Government Motors. Essentially, this is what's taken place. This is a fertile environment for corruption at best...
I've recently posted via my Blog re: GM believe your readers may find them relevant: http://tinyurl.com/GMinFWayne & http://tinyurl.com/GMcomparedwithNCR
Thanks,
Kirk -
7
tywalters65
RE: Government Takeover Bad for GM Sales?
Not one mention of Unions and their impact... why?
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8
Geoffrey James, Sales Machine
RE: Government Takeover Bad for GM Sales?
Re Note 8:
The pay and benefits at non-union automobile plants in the U.S. is not greatly different than pay and benefits at union ones.
Much of GM's actually manufacturing is outsourced to non-union shops. UAW membership has plunged from 1.5 million in 1979 to 600,000 in 2005, and even less today.
The notion that unions are the "problem" with GM is right-wing, fuzzy-brained goobledegook. Consider: Ford is doing nicely by comparison and is just an unionized as GM. -
9
farango
RE: Government Takeover Bad for GM Sales?
How do you know Ford is doing nicely? They borrowed cash before the credit crisis and that is what they are surviving on. Geoffrey PLEASE tell me how the auto jobs banks are a good investment. Unions aren't the problem - they are a problem. Also, is their belief that brand drives product instead of product and word of mouth driving brand.
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10
Sid Herron
RE: Government Takeover Bad for GM Sales?
Re: Note 5:
I was responding to this statement: 'But the idea that ?government is the problem? when it comes to fixing ailing industries and companies is just plain stupid...'
I disagree, and would argue that the assumption that it's the government's job to fix ailing industries and companies is indeed a very large problem. If that's not the question (or at least a question), why make the above statement, and why kick off this post with the Reagan video? Your points about the changes needed to support sales could have been made without a gratuitous swipe at Reagan and those who agree with him about excessive government intervention. But I suppose that's just more "right-wing fuzzy-brained gobbledegook." -
11
MWI Negotiation
RE: Government Takeover Bad for GM Sales?
Don't forget - GM now has a HUGE brand loyal customer to boost those sales!!!
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12
Geoffrey James, Sales Machine
RE: Government Takeover Bad for GM Sales?
Re Note 11:
Sid,
Put aside your ideology for a second. Pretend that GM was being taken over by a private entity. If they were, the moves that the government is forcing them to make -- as I described in the post -- would be considered brilliant in every way.
The question wasn't whether the government takeover was a good idea, but whether the implementation was good for sales. It IS good for sales and the decisions being made are the right ones.
As for the "gratuitious" swipe, it's clear from your posts that you see the situation almost entirely through the lens of your ideology and are unable to see anything positive in the situations, simply because it offends your own idea of what's right politically.
Your politics are trumping your business sense, which is too bad, because I know from your other comments that you have a pretty finely honed sense of what works in the business world. -
13
reesie1960
RE: Government Takeover Bad for GM Sales?
I, for one, will not buy a GM car ever again. Call it ideology if you please, but it must be figured in to the equation.
I'm pretty sure the new Camero was in the works before Obama decided to "fix" GM. To give the government credit there is absurd.
I would say that your ideology is showing. -
14
Geoffrey James, Sales Machine
RE: Government Takeover Bad for GM Sales?
Re Note 14:
Yes, of course the Camero was in progress prior to the takeover. But the emphasis on product, and future product, rather than brand, is new. The point is that the government is forcing the exact same changes that a talented management team from private enterprise would demand. The "rightness" or "wrongness" of the takeover is basically irrelevant to the question.
By the way, Reesie, if you're going to stop buying products that have been subsidized by the government, I hope you plan on throwing your computer out the window and stop using the Internet, because the government bootstrapped both the silicon chip and the Internet. Also, please move somewhere that's not defended by the U.S. military and never use the U.S. post office again. -
15
druggles
RE: Government Takeover Bad for GM Sales?
Of course the Gov't takeover is bad for GM sales, but liquidation would be worse for GM sales, dontcha think?
Arbitrarily cutting a bunch of your customers won't help sales much either. Dealers are GM's ONLY customers. We'll see how that works out. Retained dealers will never trust GM again.
I don't know why everyone is always talking about sales as if that is such an important thing. You gotta have sales but if you don't make money on your sales, what's the point? I'd rather sell 100000 units at a $10000. gross profit than a million at $1000. They bottom line will look much better despite less potential for service and parts sales. If GM sells a bunch of low margin small vehicles, as the gov't seems to want, how will they make profit? -
16
EASTeam
RE: Government Takeover Bad for GM Sales?
Here's the easiest measure I can think of to discern if this is a good idea or not, as follows:
In lieu of TAX dollars, would these same politicians invest their PERSONAL money in GM? Think we all know the answer...
Kirk Abraham
www.engineeringsolutionsteam.com -
17
Geoffrey James, Sales Machine
RE: Government Takeover Bad for GM Sales?
Re Note 17:
Again, the question isn't the wisdom of having the government own a part of GM. The question is whether they're making the right business decisions, once that ownership has been established. I maintain that the government is forcing the right decisions.
It was correct to fire the CEO. The business world needs a LOT more CEO firings! It is correct to dump a large percentage of GM executives. They are the problem; you can't fix it until you clear them out and interrupt the culture. It is correct to focus on potentially hot products rather than brands.
These are all good moves that are good for sales. Which was the question.
By the way, I have one more remark for anybody who plans to "refuse" to buy a GM car because of the takeover. Here it is: "If you're male and don't want one of those new Cameros so bad it makes your gut aches...ooops! I guess you're not male after all." -
18
upshift
RE: Government Takeover Bad for GM Sales?
Unless the price of gasoline rises dramatically and rigid fuel
efficiency standards are enforced, environmentally friendly
vehicles are going to be a tough sell. (i.e. relatively too
expensive and no payback period for most owners)
Question: America has by far the lowest price of gasoline for
all major industrialized countries such as Europe, Japan.
Should the government raise gas prices in line with other
major industrialized countries?
(Not more and not less!)
Geoffrey I do agree with your comments on unions. If the
products are bad, the workers could be working for a $1.00
an hour and people still wouldn't buy. -
19
reesie1960
RE: Government Takeover Bad for GM Sales?
Comparing the subsidizing of the internet and post office to the take over of GM is disingenuous.
Military defense IS a legitimate fuction of government. Perhaps YOU should move to Europe, where socialism is the accepted form of government. -
20
Geoffrey James, Sales Machine
RE: Government Takeover Bad for GM Sales?
Re Note 20:
Ooohhh, scary scary European socialism! Five week vacations, paid family leave, high-quality healthcare that costs a fraction of what it costs here, laws that prevent CEOs from making hundreds of times more than their employees, reasonable work hours, strong environmental regulations...
Yeah, I forgot that Europe was such a living h**l. Whatever was I thinking? -
21
Geoffrey James, Sales Machine
RE: Government Takeover Bad for GM Sales?
Re: Note 20 again:
I thought about it and I repent of my evil ways. I now believe that:
1. Government is always the problem and business is always the solution.
2. Every executive in the private sector -- no matter how big an a** he might be -- is more intelligent and talented than ANY public servant.
3. Every company in the private sector -- no matter how screwed up it might be -- is more efficient and effective than ANY government agency.
4. Every Conservative policy initiative -- no matter how badly it screws up -- is better than ANY Progressive policy initiative.
5. Everything that happens in the U.S. -- no matter how broken it might appear to a sane person -- is better than ANYthing that happens ANYwhere else in the world. Go USA! -
22
Sid Herron
RE: Government Takeover Bad for GM Sales?
RE: Note 13
Geoffrey,
If we both put aside our ideology, and simply consider what GM is doing without regard to who is forcing them to do it, the moves appear at first glance to be positive moves. They will ultimately be judged to be brilliant if, and only if, they succeed in helping GM return to being a solidly profitable company.
They may help sales, if indeed people do want to buy the models they start concentrating on. I don't think that's a given, because an awful lot of people seem to want to buy big, heavy SUVs when given the choice, so long as they believe they can afford to run them.
So time will ultimately tell whether the implementation will be as good for sales as you believe it will be.
See - we can have an objective business discussion. I just start having issues when it becomes clear that you're letting your ideology leak through into an otherwise excellent sales blog. -
23
mastercaster
RE: Government Takeover Bad for GM Sales?
Mr. Sales Machine, you seem to have a strong ideology of your own. In Note 21, I detect the obnoxious sound and stench of Marxism.
As for GM's future sales, I predict that if they make (soon-to-be-Obama-mandated) tin-foil go-karts with two-stroke engines and giant batteries, their sales will continue to plummet. No right thinking, self-respecting MAN who loves his family, loves his country, and loves free market capatilism would drive one of those tiny effiminate death traps. I love my full-size 3/4 ton Chevy Silverado pickup and my gigantic Z-71 Suburban, and as long as GM will continue to make those fine vehicles, I will continue to buy them. -
24
Geoffrey James, Sales Machine
RE: Government Takeover Bad for GM Sales?
Re Note 24:
Ha ha. If you think I'm going to fall for such an obvious troll comment, you've not read this blog much. -
25
reesie1960
RE: Government Takeover Bad for GM Sales?
Geoffrey,
Ideology is your driving force, which is quite obvious from your posts.
Your "all or nothing comments" about government intervention and executives in the private sector show where your allegiance is.
Again, I say move to Europe if it is the utopia you believe it to be... -
26
Geoffrey James, Sales Machine
RE: Government Takeover Bad for GM Sales?
Re Note 26:
The only "ideology" in this post is intellectually bankrupt Reaganite ideology that government is ALWAYS the problem. It isn't ideological to point out that sometimes a government can actually run a business better than bunch of culturally inbred executives. It's anti-ideological. It's based upon simple observation.
The problem here is that you are so hung up on your "government is the problem" ideology that you're incapable of looking at the situation objectively. Because you disagree with the policy that you're not willing to look objectively at whether the implementation of that policy (foolish though the policy itself may well be) makes business sense.
Pointing out that, in one single case, a government might be better able to execute a business strategy than a private enterprise isn't the ringing endorsement of socialism that you seem to believe that it is.
You have completely failed -- point by point by point -- to counter the arguments in the post itself. Instead, you want to argue whether the policy itself made sense. As I've stated repeatedly, that's not the question.
Of course, I WAS aware that if I couched the remarks in the context of Reagan's sophomoric jingoism, it would surface some knee-jerk conservative comments. So I suppose I should thank you for being so predictable. -
27
reesie1960
RE: Government Takeover Bad for GM Sales?
I know I will not get through to you with your mentality, but I will give it one last shot.
If corporations were not allowed to run to the government for bailouts in the first place, perhaps they would have made changes that were needed long ago.
You, not being omnipotent, can't see what the long term outcome will be from government intervention, though you are now their cheerleader.
It is good to see that at least you now admit that you were indeed trying to bait your readers by using the Regan clip, and then in typical liberal fashion, castigate those who would disagree on that basis.
Your, "Reagan's sophomoric jingoism," comment really says everything, and explains your unyielding support of the current administration's destruction of our country.
I'm sure that you are a big UN supporter as well.
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28
mastercaster
RE: Government Takeover Bad for GM Sales?
Mr. Sales Machine, if you're looking for sophomoric reasoning, look no further than your statement above. ("GM?s one problem and only problem was that sales weren?t taking place.") GM's problems (and there were many!) were REVEALED by their plummeting sales. All of the major automakers have seen unprecedented declines in sales volume. GM (and Chrysler) didn't have the fortitude to withstand the downturn. Their manufacturing costs were WAY too high, and when the cash flow dwindled, the extreme drag on the company due to the out-of-control costs brought it to a screeching halt. Sure, GM was top-heavy (as are most of the others) but their labor costs and long-term benefits liabillity were unsustainable even at high sales volumes. Add to that the insanity of even more ridiculous CAFE standards and the never-ending barrage of other regulations and the looming specter of higher taxes, and it becomes painfully obvious why GM was doomed.
I find it laughable that in your comparison of GM and the government, you describe GM as having "a broken corporate culture", "massive overhead", "hundreds of . . . drones", each with their "parasitical staff members". All of those characterizations can be applied to our government, except that in EVERY category, our government is exponentially WORSE!
You did approach accuracy when you said that the Chevy Volt was a car that people "MIGHT" want to buy, and you are correct that the new Camaro is a really cool car. It is selling very well, and will continue to do so, because it is a gas-guzzling 300 horsepower muscle-car! There's a message contained somewhere within those two facts. See if you can figure it out.
You are also correct that I do not often read your blog.
What is a "troll comment?" -
29
Geoffrey James, Sales Machine
RE: Government Takeover Bad for GM Sales?
Re Note 28: Once again - GM's CEO needed firing, GM's executive ranks needed thinning, GM's brands needed pruning. None of that was happening under private ownership. It's happening now. It's good for sales. Whether it's a good use of taxpayer money or whether it will be ultimately successful is irrelevant to the post, which was whether the takeover was improving the possibility that sales might improve.
Re Note 30: All of what you say about GM's cost structure has some truth in it, but none of it would be a problem if GM were still selling 50 percent of all the cars purchased in the United States. In addition, GM's cost structure wouldn't have been so out-of-whack if every car sold in the U.S. (even the foreign owned ones) had to be build using union labor. Of course, if that were the case, all cars would be more expensive, but then, if we had strong labor unions in the U.S., wages would be higher, too, so people could afford them.
As for your overgeneralization about government agencies, you're just wrong. While most government agencies are more bureaucratic than most private enterprises, some private enterprises are more bureaucratic than some government agencies.
You might want to read that last sentence carefully, because it contains a certain subtlety of thought (i.e. a shade of gray) that's not evident in your comments. For instance, it's just possible that one type of customer might want a muscle car and another type of customer might want an electric car. I realize that goes against your normal way of thinking, but that's the way the real world works. -
30
reesie1960
RE: Government Takeover Bad for GM Sales?
By the time the current elitist intellectuals in DC are through, no one will be buying anything.
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31
Geoffrey James, Sales Machine
RE: Government Takeover Bad for GM Sales?
Re Note 31:
Absolutely. The last people you want running your government is the meritocracy of the educated. After all, the founding fathers were all average men. -
32
Sid Herron
I just don't get it
Geoffrey,
Here's what I don't get: As I've observed before, when you're writing about selling, you produce excellent material. I really enjoy reading it, and find that I agree with it more often than not. If I were in your shoes, I would want to maximize the number of people who wanted to read and constructively contribute to my blog.
But, believe it or not, there are a lot of people in the sales profession who are politically conservative. Some might actually have something positive to contribute to the subject of selling from time to time. How does it benefit you or bnet if you go out of your way to bait them so that you then have an opportunity to insult them when they rise to the bait? Sure, controversy can generate a certain amount of "buzz," but if it goes on long enough, some people are just going to get tired of it and walk away. Isn't that counterproductive? Do you simply not care if they get sufficiently hacked off that they stop reading your blog?
If you want to write a poltical blog, by all means, have at it! In fact, come on over to LeftCoastBlues, and we can debate ideology until the cows come home. But why go out of your way to alienate a large segment of your readership in a blog that is supposed to be about selling?
I honestly don't get it. -
33
reesie1960
RE: Government Takeover Bad for GM Sales?
If they were behaving as the founding fathers, there wouldn't be a problem. The founding fathers understood the concept of freedom.
"Children should be educated and instructed in the principles of freedom".
John Adams, Defense of the Constitutions, 1787
If men through fear, fraud or mistake, should in terms renounce and give up any essential natural right, the eternal law of reason and the great end of society, would absolutely vacate such renunciation; the right to freedom being the gift of God Almighty, it is not in the power of Man to alienate this gift, and voluntarily become a slave.
John Adams, Rights of the Colonists, 1772
That, as a republic is the best of governments, so that particular arrangements of the powers of society, or, in other words, that form of government which is best contrived to secure an impartial and exact execution of the laws, is the best of republics.
John Adams, Thoughts on Government, 1776
Now, I have no more time to waste with you. I work for a living. -
34
Geoffrey James, Sales Machine
RE: Government Takeover Bad for GM Sales?
Re Note 33:
Yeah, there's something in that.
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Geoffrey James
Geoffrey James has sold and written hundreds of features, articles and columns for national publications including Wired, Men's Health, Business 2.0, SellingPower, Brand World, Computer Gaming World, CIO, The New York Times and (of course) BNET. He is the author of seven books, including Business Wisdom of the Electronic Elite (translated into seven languages and selected by four book clubs), and The Tao of Programming (widely quoted on the Web as a "canonical book of... more »
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