Bogley

[Iceaxe]

The following rant is from Autoextremist, one of my favorite websites. Enjoy...

What was unthinkable not too many years ago has finally happened – Toyota is now the No. 1 automobile company in the world, surpassing General Motors in sales in the first quarter of this year. Toyota announced yesterday that it had sold 2.348 million vehicles worldwide in the January-March quarter, surpassing the 2.26 million vehicles GM sold during the same period. Yes, it’s only one quarter, but the momentum has been building for years now, and I don’t expect Toyota to lose their lead any time soon.

To a lot of people in this town, it's a sad day. And not just for GM old-timers, either. General Motors wasn't just the largest U.S. automaker, it was the largest business enterprise in the world, a glittering showcase of American industrial might that mirrored the upward trajectory of this country in the blue sky '50s and go-go '60s. GM was a source of pride for Detroiters of all stripes, because along with Ford and Chrysler, the center of the automotive universe was right here in the Motor City - and we liked it that way.

GM's heyday was a time when giants roamed the earth - with larger-than-life characters flaunting larger-than-life egos running the most dominant industrial enterprise in the world. Back in the day, it was often said that a divisional General Manager for GM had more power than some heads of small countries. And it was true. GM dictated to the market in terms of design, engineering, vehicle content, pricing, segments - even down to the paint colors offered. GM was the New York Yankees of the auto business with the best players, the top salaries and profit championships won, year after year. GM was so dominant at one point that there was actually talk in Congress of "breaking up" the company when its sales approached 48 percent of the U.S. market.

Now? GM is clinging to a 24-25 percent share of the U.S. market, with clinging being the operative word.

GM's long slow slide to second-tier status and Toyota's meteoric rise to the top went hand in hand. While GM continued to bask in the arrogance that came with being the most dominant player in the automotive world, it became complacent and mired in yester-think - which went perfectly with its obsolete organizational structure and burdensome divisional lineup - and the mediocre, yester-tech cars and trucks that they unloaded on the American landscape beginning in the late 70s and that continued all the way to the mid 90s.

Meanwhile, Toyota never wavered from its path of focused consistency, with each product offered better than the previous one, each bristling with a level of durability, quality and reliability that was light years beyond anything GM and the rest of what was formerly (and now quaintly) known as the "Big Three" was offering. And along with building better cars and trucks, Toyota built its dealer network from the ground up, too, offering up high-caliber, enthusiastic dealers who weren't stuck in the past and who were hell-bent on pushing Toyota to the top.

And when the inevitable criticism of Toyota and the other Asian manufacturers became the hot topic in Detroit and Washington, with Detroit's market share slipping and jobs being impacted, and the cry came from auto executives and sympathetic legislators to "let them build factories over here and we'll see how they do" - they proceeded to do exactly that. And while Toyota (and Honda) were building sparkling new factories in regions of the country free of the crushing costs associated with union labor contracts, GM and the other Detroit automakers were collectively crafting the most egregiously overinflated and overwrought labor contracts in history with the United Auto Workers union - which ultimately led the domestic automakers to the brink of oblivion in just 20 years.

GM plodded along, talking to themselves in an endless loop of "It won't be long now!" and "The good stuff is just around the corner!" - only the corner was never turned and the turnaround never came. Instead, its market share continued its inexorable march downward.

And like a cautionary tale straight out of Hollywood, by the time the alarms went off and GM finally got religion and decided to radically change its approach and get the company off of its ass, Toyota's momentum could not be stopped.

It was too late.

Due to a series of dramatic product missteps, strategic blunders, managerial incompetence and flat-out arrogance confined to a crucial period over the last 30 years, GM is waking up today for the first time in, oh, let's just say history for all practical purposes (1930 to be exact), as the No. 2 automaker in the world.

So now what?

Ironically, despite this historic upheaval to its place in the automotive pecking order, GM has a lot to tout right now. It is the number one automaker in China - the fastest growing market in the world - and its inroads in the Pan-Asian markets are gaining momentum.

And GM's product renaissance, led by the legendary Bob Lutz, whose energy, gut-level instincts and sheer will to succeed have literally pulled the company up by its bootstraps, is showing signs of coming to fruition - big time. There's no question in my mind that GM has some of the most distinctive and forward-thinking products either in-market or due to arrive shortly - competitive entries in terms of quality, content, design, engineering and detail.

But three crucial problems remain for GM that will continue to vex the company going forward:

1. They need a favorable labor contract with the UAW in the upcoming negotiations this summer. Without major concessions from the union, all bets are off.

2. GM's divisional structure here in the U.S. is still constructed around an era when they controlled almost half the market. It's a no-win dance that is simply untenable with the current and future realities of their situation. With too many models, too many dealers and too many divisions, GM is flailing away trying to prop up a system that was obsolete 25 years ago at least. And it's killing the company.

3. But the most difficult challenge facing GM? Trying to convince the American consumer just how good the new products they're offering are. It does absolutely no good for GM's new products to be great in every respect if the American consumer public doesn't believe it or buy it. The negativity in the market that's eating away at GM is fueled by a 20-year period of mediocrity when GM built crappy cars with poor quality, uninspired designs and dismal reliability. And now that GM has seen the light and is finally building first-rate cars and trucks, they're finding it extremely tough to make inroads with American buyers - in households where there has never been a domestic-sourced car or truck in a generation. If GM can't make inroads with these consumers - and can't change their negative perceptions - then its market share threatens to plummet even further.

GM employees at all levels will find that their new No. 2 ranking in the automotive world will not go away or be swept under the rug quickly. Instead, this historic moment will stick in their craw and linger over everything they do going forward - as well it should, because after all, GM has squandered one of the great industrial legacies of all time. In 30 short years, a phalanx of GM managers has presided over the biggest swoon in the history of corporate America. They took their eyes off of the ball and just assumed that everything would be as it always was, only to wake up and find that they're No. 2.

Could it have been avoided? Absolutely. But it's all over but the hand-wringing now, and as I said earlier in this column, GM better get used to its new world ranking, because unless Toyota abandons its "way" and just slacks off, GM will never see the top spot again.

A sad day indeed.

http://autoextremist.com/page2.shtml#Rant

[accadacca]

Good article. I enjoyed it.

[price1869]

Yeah, but toyota is still #4 in Nascar.


TALLADEGA!!!

[Iceaxe]

price1869 wrote: Yeah, but toyota is still #4 in Nascar.

It pains me to say but I believe Toyota will destroy NASCAR that same way they have every other sanctioning body they have been involved with for any length of time.

Note it on your calendar.... you are witnessing the high point of NASCAR.

:popcorn: