To be sure, union greed has a lot to do with the demise of the US auto industry, but ultimate responsibility rested with management; they continually ceded market segments focusing on higher margin (e.g., truck and SUV) segments. There were multiple problems with that: e.g., if a foreign manufacturer could build high-quality smaller vehicles at a profit, it was just a matter of time before they aimed at high-margin segments; the domestic models would be forced to cut prices to maintain market share--unless they could wring out savings from suppliers and/or outsource relevant components, their margins would flatten.
There were other problems: the higher margin products tended to be less fuel efficient and particularly vulnerable to fuel price shocks. I remember in 2008 I did a lot of business travel and half the time got stuck with an SUV because they didn't have compacts.
But let's not pretend that the Great Recession did in GM and Chrysler. Yes, underemployed people and other people on a tight budget or worried about their jobs don't buy new cars. But the industry has survived many recessions over the years. GM's financial statements were in bad shape at least 2 years earlier. I used to subscribe to Consumer Reports and American makes for years barely penetrated top 10's or Best Buys; sub par reputations on reliability/repairs, although disputed by producers, have persisted for decades. Other competitors were nimbler in introducing new models.
I always saw a car in functional terms: a transportation device. (This is not to say that I didn't see other purposes. I may have mentioned in another post during 1998-9 I worked for a DC-based consultancy; I normally expensed auto rentals--typically the cheapest available subcompact/compact. One day the CEO's assistant called me in. They had agreed to an earlier tech manager's negotiation for his use of a Mercedes. I don't know the details, but they had funded his going to an Oracle conference and he was caught soliciting business for himself and not our employer. He was terminated but they were stuck with the lease. So instead of paying for rentals, they wanted me to use the Mercedes locally. I will say I never got as much attention from the ladies (off the charts) as when I drove the Mercedes. What I recall most about driving is was it felt like driving on a cloud and the soundproofing was awesome. A client contact in Glen Burnie saw me drive in and enviously asked if everyone in the company drove Mercedes. (No.) But to be frank I was more thrilled by getting a post card from a European academic asking for a copy of one of my articles than some lady interested in the bulge of my back pocket.)
I bought a used Chevy subcompact from a Navy enlisted man as my first car; I used to have to feed it a quart of oil every other fill-up, I had recurring electrical system issues. My first new car was a Ford compact; I had a negative purchase experience with a San Antonio dealer (beyond the scope of this post except to explain why I ruled out Ford for subsequent purchases). I drove the car for most of the following decade. My next purchase was early in my stay at UTEP ; I decided this time to buy a recent Olds Cutlass from a car rental company, in part based on the theory the cars were well-maintained. Literally within days I was sitting at an intersection when smoke started pouring out from under the hood--an air conditioning problem not covered under my purchase agreement.
Several years later i bought my current car, a GM model, during the 18 months I lived in California.
This past week I experienced the FIFTH power window failure in the last 8 years; oddly enough the failures were in counterclockwise sequence starting with the driver's side. I normally have had most work on the car done at local dealer service departments; there have been multiple other repairs done as well. I remember the last time the problem happened the service department, which operates normal weekday business hours only, told me it would take 6 days to fit me into their schedule. With short-term inclement weather expected, what was I supposed to do in the interim? "Two words: duct tape."
I called the dealership and was put into voice mail. No follow-up over the next 2 hours. I found an email link for the service manager which finally got a response. I wanted them to stand behind their original repair. At first, he was in a state of denial and told me I would have to prove it via repair invoices; I remembered the repair because I had just moved to Maryland and found the window down coming out of the supermarket--plus at the time I had an extended 7-year warranty which covered repairs after a $200 deductible. His response was that it didn't matter because they don't stand behind older repairs.
What GM does not seem to understand is that a customer judges more than its products; it's the total customer experience: salespeople and service departments serve as company ambassadors. Sleazy sales tactics and service arranged at the convenience of the dealership (do patients only become ill during peak business hours?) don't favorably impress future new car purchasers. In the real world I can't take time off work to have routine maintenance done. (I had a separate oil change maintenance agreement. My favorite GM dealer was in Libertyville back in Illinois: they threw in a free car wash with each oil change.)
I think my decision to buy domestic reflected my Dad's influence. :His point of view probably reflected labor protectionism. I was never really comfortable with that point of view. I don't think the domestic auto companies improve their competitiveness by American consumers having fewer choices or paying artificially high prices. I certainly don't want to reinforce government intervention, in particular bailouts of greedy unions and sclerotic bureaucracies and crony bankruptcies. Will my next car be a Ford or a foreign auto company with operations in a right-to-work state?
