- A picture of the General Motors building in Detroit, Michigan. (credit: GM)

Why does GM keep failing in the world industry?

Why does American Automotive giant General Motors keep failing in the world market?

1w ago

As someone who loves many of GM's older cars I always wondered where they went wrong. Growing up I remember many people, primarily my uncles talking about which trucks they drove, the economy, politics, etc. I of course took an interest in many of this, and as a result this has a lot to do with the story of GM's failures in the automotive industry.

Before the recession of 2008-09, General Motors had a healthy relationship with the American people and the city of Detroit. Being the largest American company in the city, and the largest American car corporation, GM had a lot of influence in American life. Primarily, by making some of the best vehicles ever seen. Such as the 1993 S10 (you can find my thoughts on the S10 here), and other classics like the Chevelle, the Camaro, and the Corvette.

General Motors was a household name in the United States and much of the world for a good long time. But I'm sure we all know about GM's legendary vehicles of the past. Why then do their vehicles not impress the modern consumer as they did in the past? A lot of it has to do with market competition. Many foreign companies have set up factories and operations in the Southern United States where taxes are lower on corporations and workers are plentiful. Many of these foreign companies include Toyota and Honda which currently dominate the American market.

A 2021 Toyota Camry (credit: Car and Driver)

A 2021 Toyota Camry (credit: Car and Driver)

Foreign companies such as Toyota and Honda, have taken over much of the competition in the American industry. According to Car and Driver, the 2021 Toyota Camry was the 6th highest selling car in America. Along the other 2021 Toyota vehicles, the Tacoma in number 10, the Corolla in number 11, the Highlander in number 14, and the 4-Runner in number 25. And that's just the Toyota cars, not including companies like Nissan, Mazda, and Honda. And other American manufacturers such as Ford and Jeep also have leading vehicles in sales , leading to more industry competition for GM.

On that same list made by Car and Driver, only a few GM vehicles made it on the list, including the 2021 Chevrolet Silverado and Equinox, along with the GMC Sierra. With the fierce competition from other companies which are renowned for reliability and MPG (something very important in the current market), along with GM's less than stellar reputation, making it very difficult for GM to compete in the current market.

The reason for GM's poor reputation in the American mind is what happened in the 2009 recession. During the recession the U.S. government gave a bailout to General Motors to keep the company from going under, but instead of spending the money on the factories and keeping American jobs in Detroit, GM instead spend the money on bonuses for their executives and cut jobs, shutdown factories and cut worker's pensions in Detroit. This, along with the already steady decline of Detroit already happening, led to disaster in the once great city. With the major car industry gone, the city had an unemployment rate of 29% according an article written by The Guardian newspaper in 2009.

Americans, needless to say were upset with what was going on the Motor City, some even writing songs about the decline of Detroit. Such as the song Shuttin' Detroit Down, by John Rich. Many Americans remember the fall of Detroit as primarily being the fault of General Motors for what the company did in 2009. This reputation is still with GM in the minds of many Americans, and is seen as the catalyst for the fall of the great American car company.

A GMC Canyon the vehicle found to be the least reliable in the 2019 survey (credit GM Authority)

A GMC Canyon the vehicle found to be the least reliable in the 2019 survey (credit GM Authority)

After being blamed for the fall of Detroit, and the misuse of American tax dollars in the form of a government bailout. GM is also known for its reliability issues. In a 2019 survey done by a group called GM Authority, it was found that Cadillac was ranked 30th, which was the bottom of the list, with Chevrolet being ranked at 25th, GMC at 22nd, and Buick at 18th. GM is clearly not known for making reliable vehicles. And generally speaking, no one wants to buy an unreliable car.

The cause of GM's fall from grace, was a steady decline away from reliability. Controversy caused by misuse of a government bailout. And competition from companies with far better reputations and more reliable, consumer friendly cars.

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Comments (76)

  • Great Topic John!!! Definitely one of my favorites to discuss!!

    I think many dissertations have been or should be written on this subject. I'll try and be brief here. Please note, I am going to talk about why GM fails as a whole, not specifically in world markets.

    1. GM NEVER learns from their previous mistakes (maybe it's because there is so much nepotism in the company but they ALWAYS seem to repeat the same old mistakes over and over again. The saddest example of them all has to be the Saturn division. It was developed as car of the future to really take on the Japanese. The manufacturing process was innovative and so was the agreement they had with the local UAW, no haggle pricing at the dealerships, to name just a few. The even had built real brand loyalty and had Saturn homecomings at the factory in Springhill, TN. It was all for naught as they turned Saturn into rebadged Opel's then finally killed the entire division off in the wake of the recession of '08. What did GM learn form this whole ordeal? How did they change? Was it millions well spent? Nothing and no!

    2. They are ruled by committee and this really hurts the passion of their products. If you look at any comparison of a GM product vs foreign competitors, over the last 30yrs or more, they always seem to be a about a C+/ B- never at the bottom of the pack but hardly EVER at the top. Ironically, if you use metrics like an engineer, on paper they seem to excel in almost all categories, but without passion the sum total of everything is pretty blah or put another way, just good enough. Not great, or wonderful, and not terrible either.

    3. Run by bean counters. This kind of goes back to the previous point, when you are run by committee and cost there is no passion.GM will generally use the cheapest suppliers and spend money on things that the end customer doesn't even care about.....developing an entire new engine (Black Wing) for 2 yrs?? Which segway's to my next point.

    4. Consistent direction and vision. This is something that has hit GM so hard if you look back over the years and has wasted so much of their precious money and resources. I could list so many examples it just makes me upset/ sad. The Fiero that they finally got right in '88 the year before they killed it. Pioneering night vision in cars with Cadillac and dropping it years before the Germans offered it. How about the innovative CRTs that controlled the HVAC and radio back in the mid '80's in the Rivera or Trofeo? Of course the largest and worst example being the EV-1 that could have been one of their crowning achievements but instead is just a footnote steamed rolled over by Tesla just a few years later. Without a consistent vision it's hard for them to know what to spend their R&D $$$ on when they have to develop these new technologies 5,10, or even 20yrs in the future. What about buying Saab and dumping it? It just seems that everything VW Group buys they improve and everything GM buys goes to $hite. Buying EDS twice?

    5. Design - this one is VERY subjective but I think hits GM the worst! As you may or may not be aware it was GM and Harley Earl that really brought a styling department and clay modeling to a major automaker back in the '20's/ '30's. All the way through the around the '60's GM was the leader in styling, at least in the US. They would pretty much set the direction and everyone else would follow. Now look at them, devoid of passion they are pretty much the followers!!

    John, now I think you should do a similar article on the downfall of the British Auto Industry. I don't pretend to be an expert at that and look forward to learning a lot!

      13 days ago
    • James May already did the downfall of the British Auto industry, but I forget what it was called.

        13 days ago
    • If you ever stumble upon it, please message me, I'd love to check it out!! I did find one BBC documentary that is on YouTube I watched a number of years ago that was pretty good.

        13 days ago
  • Detroit is what it is because of global outsourcing. It's cheaper to pay someone to build a car in Mexico 50 cents an hour than it is $7.00+ an hour in the USA. Not to mention lower safety standards mean less costs.

    Profit maximizing comes at the expense of quality. It was inevitable to happen sooner or later.

    America and even the UK's downfall is because of outsourcing.

      13 days ago
    • Sure it's cheaper to build in Mexico, but don't knock the quality just because it's low cost. The Mexicans build a more reliable car than pretty much anything GM had rolling out of Michigan by the time of the bailout. GM-Detroit built...

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        13 days ago
    • As true as that is, Dave they still are building new plants in the USA. At least foreign mfgs and Ford/ Mopar- Stilantis whatever they are. They still manufacture in the USA and Canada shockingly. But most new plants in the US are located in the...

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        13 days ago
  • The bailout certainly soured the public's view of them, but they were making awful cars long before then, all the way back since the 70s. They've been making consistently bad vehicles (with a few exceptions) for a while. GM gonna GM.

      13 days ago
    • Exactly, the bailout was just a symptom, not the cause. Years (decades?) of building crap was why they needed the bailout in the first place.

        13 days ago
    • 10000% agree!!! They make vehicles that are just good enough!

        13 days ago
  • This is a very complex subject and has been well covered by the original post and all the excellent comments. I’d never given much thought to GM’s spotty record of reliability, so I just went through the list of the 20 or so cars I’ve owned (or been supplied as company cars) in my lifetime (so far). I made this revealing discovery:

    Of all these cars, there are only three that I would consider to be lemons. Of all these cars, I’ve only owned three GM products. The three lemons happen to be the three GM products. I did not make this up! Here are the three cars:

    While living in Montreal, I bought a used 1956 Oldsmobile Rocket 88 Convertible. This was a fabulous car for a young man, but at the same time a major headache. In a short time, the power steering and power brakes failed (both life threatening experiences) and the V8 engine seized up. All repairs paid for by me.

    Then in Venezuela I had a 1978 Chevrolet Caprice Classic as a company car. Driving it home from the dealer, I was caught in a thunderstorm and the rain poured in through the rear window. Most of the weather seal around the window was missing or poorly fitted. I arrived home with an inch of water in the car.

    Also, during the two years I had this car, it would stall without warning. One stormy night, after a long trip, it stalled in a busy highway and I had to be towed home. The dealer never could fix this fault.

    My third and last GM product was a 1984 Buick LeSabre as a company car in Puerto Rico. Even though it was new, the automatic transmission failed two or three times requiring major repairs. Although there was no cost to me or the company, it’s unreliability was a huge inconvenience.

    I had ordered this car without cruise control, but it took me a while to learn that all the cars at this dealer came with cruise control, so all they did was disconnect it. After a few scary experiences of unwanted acceleration, I found that the disconnected links were still lying on top of the carburetor and connected to the accelerator pedal. Very dangerous!

    I have not consciously stayed away from GM products, and there are some I would love to own… the C8 Corvette for example.

      13 days ago
    • Great stories of personal experience with GM products! Thanks so much for sharing.

        13 days ago
  • Thanks for all the comments, I'm enjoying reading them. I'm just curious, would y'all like to see a history of the fall of Holden by any chance?

      13 days ago
    • I still haven't gotten around to watching it yet, but Shannons (the Aussie car insurance company) did a four-part documentary on Australian motoring, including the decline.

        13 days ago
    • absolutely

        13 days ago