Why does GM keep failing in the world industry?
Why does American Automotive giant General Motors keep failing in the world market?
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)
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)
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.