Tom Friedman says:
Having Toyota take over General Motors – which based its business strategy on building gas-guzzling cars, including the idiot Hummer, scoffing at hybrid technology and fighting Congressional efforts to impose higher mileage standards on U.S. automakers – would not only be in America’s economic interest, it would also be in America’s geopolitical interest.
I’m not sure I know what my wife from Detroit thinks. What do you think?
I have my own problems with GM, but I think that Friedman goes a little over-the-top here.
What would be more helpful would be a real forward thinking energy policy that would benefit people who buy and drive energy efficient cars, such as being able to write off interest on a car loan for cars that achieve at least 25/mpg in the city. Or a policy that rewarded areas for increasing ridership levels on mass transit systems and somehow rewarding those people who use mass transit.
What would be more helpful would be an honest cost analysis discussion of the long-term effects of sprawl without people getting defensive about moving out to the middle of no where.
While GM has done a number of awful things, taking them out won’t address the real problems
You beat me to it. I grew up in Detroit, and most of my family made its living by working for one of the auto makers, so I can’t claim to have an unbiased eye on this.
I have my share of problems with GM, and I think their getting on board with sensible transportation policy and actually finding the political will to see it through will do far more for this country than a change in ownership. This would also help the cities themselves; goodness knows the metro Detroit area could use a regional transit system.
What tends to worry me the most isn’t who owns what; it’s what happens to the workers? GM has its problems, but if it went down a lot of people would pay a very high price. And that really bothers me.
As an aside, I would guess you’d more likely see a merger of domestic automakers before you’d see Toyota running GM.
My dad is a Ford retiree and I worry that as Ford stock plummets that they will cut off his benefits.
The auto industry has really done a number on itself and I don’t know how they will get themselves out of it. In the meantime, all of us will pay dearly.
if we are talking about General Motors. They are plenty diversified, and despite recent “junk” status on the stock market I believe they will turn it around. I’m not xenophobic, but I am disturbed by what appears to me to be more and more businesses and land owned by “foreign” investors. We’ve lost so much of our industrial base in this county already–can we afford to lose more? Don’t get me wrong, I realize that if this happens Toyota won’t be packing up all the production facilities tommorow and moving them overseas, but I don’t like the implications. They currently build some vehicles here, GM builds some there, I like the balance more the way it is than the way it would probably end up. I’m not “buy American at all costs”, but I do believe in buying primarily American made goods when they are available–which in many industries they are not. Tried to buy a jacket made in America lately? I went to six stores looking and found one type at one store–and that was eight years ago. I’d hate to see that happen with automobiles.
that the US carmakers are somehow more “patriotic” or concerned with American workers than “foreigners”. Baloney. GM and its Detroit brethren are no less likely to chase cheap labor around the world than anybody else.
I think Friedman is an ass most of the time, but at least he gets credit for having the guts to follow his “free market” worship where it logically ends: the final demise of any corporations that can be thought of as “American”.
I’m not saying that GM isn’t outsourcing and moving jobs outside the US. They are, and will continue to. But I do believe that the interests of Americans will be better served by GM staying more or less as they are–primarily based here in the US. How, exactly, will it benefit us to have Toyota buy them out?
It won’t benefit and it won’t not benefit. It will make no difference. GM has no more or less concern for the good of America than Toyota.
How will GM staying here “better serve” the interests of Americans (as opposed to the interests of the American plutocracy)? Do you think it made any difference that Chrysler is now owned by a German company?
I don’t follow the logic of Friedman’s argument. For years the State of Michigan and the Federal Gov’t have been subsidising the US Auto Industry. The US Auto Industry also buys up pattens for more efficient cars and puts them in a safe to cut down on competition (an activity that I think should be illegal).
Friedman’s argument seems to be when the Governments (State and Local) engage in Anti-trustish behavior (protecting/susidising big business) it doesn’t work, so lets let Japan be monopolistic and have all the wealth from our oligopolies. Its nonsensical.
I have a better idea. Lets put those standards in place. Lets enforce the laws we have for all people participating in our market, not just us citizens and then lets stand back and let the market take care of it. If the US auto industry can create consumer friendly cars without subsidies horray. If not, if instead Jane Doe comes up with something great in her garadge horray again.
’nuff said
beware or question?
Both, I’d say.
He’s usually wrong and also rather untrustworthy.
I think Tom Friedman is an idiot, but that’s beside the point. I think US automakers have shot themselves in the foot repeatedly, and served everyone badly: their employees, their shareholders, and the American consumer. Many years ago, when my grandfather was a steel executive, his company developed a rust-proof alloy. They tried to sell it to automakers. They rejected it because it didn’t conform to planned obsolescence marketing model. “If people’s cars don’t rust out, they won’t buy the newest, latest model.” The Japanese developed a similar alloy, around that time. They used it, and proceeded to bury us. But, US automakers still haven’t learned that lesson. They’re always a day late and a dollar short. I haven’t been following GM’s troubles closely, but in general I think US automakers have made a lot of their own troubles at the short-sighted executive level.
Please excuse the vitriol, but FUCK GM!
I personally believe the vast majority of the nation’s — and by extension, the world’s — problems can be traced to the automobile. The car is the thing that separates us from our neighbors, the car ruins our finances, we’re fighting a war that could potentially lead to human extinction all because of the FUCKING CAR!
And who do we have to thank for this? General Motors. They sold us this bill-of-shit at the ’39 World’s Fare. “The World of Tomorrow,” they called it. It was a world of futuristic double-decker highways and privately owned vehicles. Trains and light rails? Nah, too quaint for the visionaries at GM. What we need is personally freedom. Freedom to hop in the car anytime we like and head to the beach — while suffering a lifetime of wage-slavery in order to pay for it.
Any of this sounding familiar?
Now GM is getting its cumuppence. I hope Toyota buys them and puts the brand out to pasture. They deserve
the corporate death penalty.
As to the workers, well Toyota probably understands how to take care of its people a lot better than GM ever did. And they make a better product. Daimler’s merger with Dodge has already led to the production of much better vehicles (check out the new Freightliner van, for example) and I think the same thing would happen with GM. They need to be forced into the twenty-first century. This would leave Ford as the only dinosaur left. They, too, are financially vulnerable, from what I understand.
Hey, I thought capitalism was all about Darwinian survival of the fittest. How much you wanna bet GM goes whining to congress for help, fucking laissez-faire asshole capitalists when it suits their purposes, and bleeding heart Marxists when it comes to saving their own bloated moribund ass.
Fuck ’em.
p.s. I’m forty-two-years old and I have never owned a car (I owned a few mopeds and motorcycles in my youth).
World’s Fare, hehe. How’s that for a Freudian slip?
My fear is that Toyota would be pressured to produce poorer quality cars to pay for the GM debt. But, maybe not. I commute to work because I can’t afford to live closer. I often really need 4×4 to get home in the winter (although we’ve been getting more rain and less snow the last few years) so any improvements in gas mileage would be a great help. My current car is a Toyota Rav4 and I’m getting 28-30 mpg in my daily commute.
I’m not in favor of eliminating the car. Far from it, as there are many people like you who cannot survive without one. We’re stuck in this hell thanks to the Big Three, Big oil and Big Tire. Ever seen Who Framed Roger Rabbit? Well, much of what you see in that film is true. This troika systematically bought up and dismantled nearly every light-rail system in the country during the 1950s. They wanted a world full of cars and that’s exactly what we have.
I wish I knew how to fix it. Unfortunately, we’re currently headed in precisely the wrong direction.
“This troika systematically bought up and dismantled nearly every light-rail system in the country during the 1950s.”
…then the appropriate response is a tax on cars to rebuild light rail.
The “death penalty” is fitting for GM, but maybe we can get some use from them yet before they’re history.
“Why would anybody want GM?”
…Market share. One less brand of cereal on the supermarket shelves; one fewer slice to be carved out of the same pie. The first employees to go would be the managers who decided to put the plans for small, efficient cars into the safe and throw away the key, in a world of Peak Oil.
Mergers in the auto industry are probably the wave of the future as oil runs out, as car making will be even more of a dying industry unless the current manufacturers develop alternatively powered cars soon at a price everyone can afford.
Yes, my mother used to tell me how easy it was to get around in San Diego when there were trolleys and trains. Then the oil companies tore the tracks up.
that Toyota could possibly want? Obsolete production lines tooled for useless gas hogs? The “design team”? The even less competent “management”? The unfunded pension and medical insurance liabilities? Or could it be the “loyal customer base” of (soon to be unemployed) retarded rednecks?
What has GM got that anyone (in their right mind) would want?
On the surface, Ford and GM have very similar problems. But look at how their leaders are reacting.
At Ford, the CEO takes responsibility –
(from MSNBC)
Meanwhile, at GM, the CEO blames his employees –
Wagoner said GM’s health care costs, which will total $5.6 billion this year, threaten the company’s and union’s future.
(from USA Today)
Which of these two firms is more likely to survive? It would be a shame if GM went bankrupt, but Chrysler’s bankruptcy led to a brilliant turnaround under Lee Iacoca, and maybe the same thing could happen with GM.
Ran out of patience, so I don’t know if this point has already been made..
The logic that Toyota would make GM cars more environmentally friendly because of Toyota’s past I think could be misleading. I think more often than not if a huge corportation has a policy that is slightly more environmently friendly, it is because it sells. In other words, Toyotas have traditionally appealled to a different audience than say GM’s. I don’t think that all of a sudden large SUVs and trucks are going to switch into to environmentally friendly appeal because Toyota takes over.. those vechicles still have a market.
But in the end, from the quote you included, it doesn’t seem Friedman is too off point on this. Toyota policies which were more environmentally friendly may affect some of the former GM policy.
The decisions that GM has made are hard to fathom. They seem to have completely surrendered the small car market as a place where they can’t make enough money per unit — while at the same time everyone from Audi to Acura has come out with “premium” small cars that have more profit per unit than the pickups and SUV variants that dot the GM lineup. GM has made some tough choices, eliminating or merging divisions and models, but even there their decisions have been hard to understand. Even Ford got a good slice of the “premium small car.” They were able to take the Mustang (which had been nearly stagnant for a decade), and recapture both imagination and sales by offering a vehicle that was exciting and affordable. The base model comes in cheap enough to get the college market. The top end caters to the enthusiast. Ford took this one car and made it almost a brand of its own. In contrast, GM took it’s equivalent Camaro / Firebird, which had been over-engineered into a monstrosity with more non-functional air scoops than a block of Swiss cheese (the Pontiac model gave every impression of having a hood topped by giant nostrils) and simply axed it. Ford planned more than seven years in advance for the Mustang replacement and carried on in the face of declining sales. GM folded. They pushed forward on models that had been ridiculed from the moment the concepts appeared at car shows (Aztek, anyone?) and left the models that had gathered favorable ink gathering dust. They dropped Oldsmobile, which at least had shown some gains and some interesting models, but kept divisions like Pontiac whose “beak nose” certainly makes it the winner for ugliest single line of cars on the planet (I say this as a man who has owned two Subarus).
If you had set out to sink the company, it’s hard to think how it could be accomplished more effectively.
While choosing not to compete in the small car market, and scoffing at the interest in new technologies, GM continued to do more of what it had done the year before, only more so. They dangled hydrogen technology that was two decades away as an excuse to keep delivering the same old, same old. As a result, they took it on the chin.
But there are two things they can do to fix this:
1) Be aggressive on the health care front
Every story about GM seems to include the obligatory “GM has to include $1,500 (or more) in every vehicle because of health care costs.” The implication from the corporate press seems to be that GM should turn this around by jerking health care away from its workers, but if GM wants to win, it needs to make a 180 degree turn. All those other companies don’t worry about these costs because their nations are providing the health care. GM should demand the same. GM should become the corporate leader in moving for single payer health care — this one issue may be the only thing that can save any segment of the industrial market in the US, and is more important to GM even than hybrids.
2) Leapfrog Toyota
Skip the current generation of hybrids and go straight on to plug-in hybrids. GM can confound Toyota’s own advertising, capture the green market, and really, truly make a better vehicle. And they can do all that with off the shelf technology. There are companies already offering to transform existing hybrids, and GM has helped to sponsor research on plg-in hybrids for a decade. Use it. Bring out a mid-sized car that in day to day commuting can go 30-50 miles off the grid and only kicks in the gas engine for longer trips. The materials cost should be no more than the hybrid style Toyota was using (and very likely cheaper). GM has recently made a good step by announcing that when their hybrid cars reach the market (2007-2008 is the current estimate), some models will be capable of using E85. Don’t stop there. Make a model that’s plug-in and flex fuels, and you could sell it every shade of red white and blue, because no other vehicle would go so far in ending our thirst for imported oil.
GM is not beyond saving. They still have the people and the funds that allows them to make one last, bold move to the lead. If they don’t make that move, they’ll most certainly continue to slid to the rear.
What GM has is an executive suite of idiocy and a corporate culture of idiocy. Nothing short of bankruptcy or takeover will change that, or allow them to do anything intelligent. If that were in their power they’d have done it long ago.
I don’t want to sound too negative on GM. I think they’ve done some really innovative work in the Cadillac division. It’s not to my taste, but I certainly know a lot of VP folks looking more favorably at the big family crest than they have in a decade.
GM also has a couple of the most attractive little roadsters I’ve ever seen coming out next year in the form of the Pontiac Solstice and Saturn Sky (the Saturn version is just flat cool).
The trouble with both these developments is that they’re niche vehicles, not the sort of bread and butter that could hold up the company. These are the sorts of things you do after you’ve fixed the bleeding in Chevy central.
Also, for what it’s worth, my son recently purchased a Chevy Aveo. This car, which is actually a rebadged Daewoo, has much better panel fit and frame stiffness than GM’s own models, and a nice quirky design that (among my son’s friends, at least) competes favorably with designs like Toyota’s Scion models. Now, take one of these little buggers and make plug-in hybrid out of it. Tell you what, GM, you do that, and I’ll trade in my Prius.
All Toyota has to do (when the necessary better batteries become available) is add a higher capacity battery pack and charger, amend their advertising to “Hybrid Plus”, and remain ahead. For Toyota all the rest of it, including all the engineering, product placement and marketing is already done. GM is left with unrecoverable development costs for something new, untested, and (yuck) “American”.
And how would GM market their “change of heart”? If they even hint that efficiency and fuel economy is “smart” they call their entire existing customer base stupid. Accurate, of course, but perhaps not the best advertising strategy . . .
While I love my Prius, it’s really not the best design for a plug-in hybrid. UC Davis has done several tests with various configurations. It appears that the highest efficiency would be a vehicle that always drives off the electrical system, regardless of speed, and in which the combustion engine served only as a means of providing charge to the battery packs. A high speed diesel of only about 8hp is one option.
That said, I’ll still line up the day Toyota lets me convert my Prius without saying bye-bye to the warrantee.
As for change of heart… hell, America loves change of heart. Just think of how we react and cheer for every former BushCo cronie who wakes up and sees the light.
and real world use it all comes down to driving patterns. Lots of low speed, stop and go “urban” driving and hybrids and “all electrics” shine. Lots of freeway driving and you never get a payback from the batteries and electric motor. Across the board the biggest benefits come from downsizing . . . less weight and less drag. That’s what’s counter to the GM “strategy” . . . and no “hybrid” or “electric” technology is going to solve the problem of the Hummer or the Silverado (what a joke the Silverado Hybrid is, especially since they’re initially targeting states with a high proportion of freeway driving where the “electric” part will provide no benefit).
and bring peace on earth would be even better, I think. Solve more problems and just as likely. I think I’ll write a whole diary on the advantages of this plan to save the earth.
So Friedman gets paid to write this crap?
has the solution for Iraq! Just double the forces to 260,000! That’s all. No problem.
Thank god for creative minds like Friedman’s. Now if only his mind can create the additional soldiers that his plan calls for, we can call it a day.
I pretty much hate cars, though I use one. If you have to have them, tho, Toyota is the best of a bad lot. They bring intelligent design, research, and planning to the table. The exact opposite can be said of GM.
I’m surprised no one’s mentioned the most glaring of the realities: GM and its Detroit kin have been whining for decades about how its American workers, the American government and other American scapegoats are holding it back. In the meantime, Toyota’s North American plants have been turning out vehicles every bit as good, reliable, and well-designed as the ones they make in Japan and elsewhere.
So what makes the difference? Only one thing left: the quality of management. Toyota’s are good at what they do, Detroit’s are assholes. Simple as that. But getting rid of this reverse meritocracy will be no easier than getting rid of the Soviet apparachiks, and it may take as revolutionary a set of events to accomplish it.
That said, Detroit IS right about government, but not the way they claim. It seems obvious that we wouldn’t be in this mess if Congress had applied a little common sense and mandated much more stringent fuel economy standards years ago. The overseas companies’ ability to provide decent mileage during the previous gas shortages gave them a boost that the domestics never recovered from. But was a lesson learned? Of course not. God bless America.
Would be a very dumb idea for Toyota. Why would they want to assume all those pension and healthcare costs that would make them less competitive. The proposal sounds like a dumb idea for Toyota management to try it.