Sunday, May 31, 2009

Change Is A Constant

Last Friday at 4:30 pm,cst. I sat in front of my computer and I felt very sad. Change is a constant I keep telling myself, but as someone who likes traditional things, this event was a bit hard to swallow. May 29th was the last full trading day for General Motors stock. It had fallen to $.75 a share, with a market value of $500 million dollars. Clearly, there was no more General Motors as we know it.

There will be books, documentaries, columns, etc.. for months and years to come about what caused this once barometer of our economy to collapse. It all comes down to management, but what decisions will be a lightning rod for critics is well beyond me. When Alan Mullaly took over the helm at Ford, he told senior management the company had been having a going out of business sale for the last 30 years. Apparently no one told GM that in time.

Rick Wagoner did not bring down General Motors, but he did not do much to save it. GM's terminal illness was too many brands and in China copied GM American's broken model. In China you can buy a Buick, Chevrolet, Vauxhall, Opel, Cadillac and Daihatsu and they are all made by GM. In contrast Toyota will let the Chinese buy a Lexus or a Toyota. Sound familiar?

Will GM be successful post bankruptcy? Any one's guess, but I have my doubts. First, management is not being replaced and that is unusual. In bankruptcy, the first thing to go is present upper management, the people who put you there. Second, the government will be the primary owner of the company. Historically we have not done this in the United States, but Britain tried this back in the 1970's with the disaster that was called British Leyland. They no longer make cars and Britain no longer has any domestically owned manufacturers. We consolidated the railroad under a government organization called Amtrak, and we still are subsidizing that decision.

There are those who are cheering the downfall of GM. And I can't blame them. Former customers who bought poorly designed vehicles and paid for repairs that they should never have had to. GM knew they would still sell cars, so why make customers happy. Despite the enormous engineering talent at GM, they have some legendary engineering failures on their hands. You knew the Pontiac Aztek was a looser when you looked at in the showroom. When your transmission went out or your diesel engine blew up after a few years that was a complete surprise.

Should you buy a GM product? I keep getting that question. In comparison to Chrysler, GM builds a better quality product. So the repair issue is less of a consideration. But since Chrysler went into bankruptcy, their products have been harder to finance as compared to Toyota, Ford, etc.. Several large lenders are now requiring larger down payments and higher interest rates. If you are a cash buyer or can secure good financing, you may be able to get a great deal if you have your heart set on a new vehicle.

But this is America. We live on a free market system. GM went into bankruptcy for a reason. Whey would you buy a product from a company that was so poorly managed? What cost cutting did they do the the product over the last year to save money? There are SO many vehicle options out there, why would you buy from a company that went bankrupt and possibly will not be there in the long term? What overwhelmingly compelling reason do you have to buy a GM product?

If you have to buy an American branded product, Ford makes a wonderful line of vehicles with the highest quality ranking for an American name plate. Some are higher then the imports. Ford outranks Nissan in quality as a company, but you don't hear that much. So go buy a Ford if you need a American branded product.

I do predict we will be without Buick (domestically) and GMC Truck eventually. Ford will outsell GM in 2009 and possibly 2010. If GM does fail in the next few year or so, it will be a HUGE black eye on the Obama administration and damage his presidency. You need revenue to exit bankruptcy, and if consumers shun GM products liquidation will be the next step as the revenue dries up.

You may gamble on a GM product if you like. President Obama has gambled on the entire company. Let's hope we're all winners.

Wednesday, May 06, 2009

Don't Buy It

Failed clock spring from my Grand Cherokee

They say the Irish never forget.

Well it's true. But then there are times I don't need to be reminded of what's left a bad taste in my mouth. It comes back at me screaming. Case-in-point, recent Chrysler products. Regular readers may remember the Grand Cherokee that I sold off last year. I was annoyed with the electrical problems that came from parts that should have NEVER failed on the car.

I won't bother to explain what the clock spring is on a steering column. Unless you own a Chrysler product, you won't need to know what it does. Well mine failed on the Grand Cherokee I owned and I replaced it. Not a fun job but not a hard one. The toughest part of the job is that it should never have needed to be done in the first place. I had hoped that Chrysler learned it's lesson with the part, but sure enough they did not. Automobile Magazine just wrapped up it's long-term test of the 2008 Chrysler Town and Country. At 31,691 miles the clock spring failed. There were a total of four warranty claims for their vehicle in 32,880 miles.

Today Chrysler announced incentives up to $6000.00 so consumers would purchase one of their vehicles during their bankruptcy reorganization. Rightfully consumers are shunning the brand and were doing so over the past several years. Consumer Reports consistently ranks them at the bottom for quality. I do not recommend a single product they produce to anyone and steer buyers to other vehicles that may suit their needs while providing a better product.

Yes I'm taking responsibility for assisting Chrysler into bankruptcy. Somehow they missed the quality bandwagon that everyone has been on for years. They make domestic cars look horrible with their underdeveloped products that are built with lower quality parts.

My beef with all of this is the bailouts that they will never be paid back. Everyone knows the merger/purchase with Fiat is going to be a disaster. The merger of Chrysler and Fiat will be truly a merger of equals as they are both known for abysmal quality vehicles. Chrysler will limp around for a while, it's dealer network (what's left) will be used to sell Fiats until the Italian's retreat again as they did in 1984.

If you're a fan of scratching your head wondering how/why that part of your car managed to fail, head to your Chrysler dealer for a great deal. There's no mystery why their product is so cheap.

Friday, May 01, 2009

Happy Trails To You

I think it's the longest I've ever owned an individual car. My Mustang is saying goodbye after four years in my stable. It was time to go though.

With so many cars that have come and gone over the last 24 years of driving, I can't keep up with them all. Some I don't even have pictures of, which I find hard to believe too. This is probably the most photographed car I've ever owned. While I've always worked on my cars, this is the first car I've "restored". I've clearly cut my teeth on this car with engine work and interior finishing. Along the way I've cut my fingers so many times that there's probably at least a pint of my dried blood throughout the car. I have a nice scar on my thumb from cutting the new carpet one day.

I took one last joy ride yesterday up to Hewitt, Texas to visit Latemodel Restoration Supply. There were some finishing touches I needed to apply before delivering the car. While I could have taken one of the other two rides up there, I thought one last ride to the place where I bought most of my restoration parts was fitting. With 113,000 miles on the odometer, the Mustang rode like a champ after two years of garage time. That 5.0L engine just goes and goes.

In the showroom was one of the first Mustang's I've ever really coveted. Back in 1978, when I was nine, Ford launched the Fox body 'stang. During it's introduction model year, it was named the Official Pace Car of the Indy 500. It was a real looker then, and it still is. Wow. I wanted to buy it...

But the reality set in. With work, a house to myself, two very energetic dogs, a social life and other hobbies, there was no time for two cars to keep up. A classic car is perpetual restoration project and this one had been put on hold for over two years now. I was not going to take it any farther then I had, and it was time to let it go. In truth, the BMW 635CSi is in better shape and requires less to maintain. It still needs work, but not nearly as much.

I'll own another Mustang at some point. It's most likely going to be something new though. Maybe one I can buy and maintain. The kinda car you don't drive on rainy days or let sit in the driveway. One that looks like new twenty years after you bought it.

Or I'll give in and get the '79 Indy Pace Car. You can count on one thing.

I'll have another car next year.