My opinion as to why GM has gone into bankruptcy

June 1, 2009 – 11:22 am – No Comment

Over the past few months, I have written some fairly hash articles and entries about General Motors and its course to bankruptcy. If any of you have read my articles up to this point, I’m sure that you’ve all noticed, I’m not a fan of the company.

Well, it was announced today that GM is going to be under chapter 11 bankruptcy protection for a little while and I believe that the whole situation could have been avoided if the company would have simply taken some steps in the right direction years ago.

First, GM was once called the “heartbeat of America.” Well, if that’s the case, then I suppose America had a massive coronary in the 1990′s because that’s when the heart stopped beating. What I mean by that is that in the 90′s (possibly even beginning in the 80′s) GM, and other American car manufacturers, started skimping on quality. The cars weren’t lasting through the loan period, and definitely not past the warranty.

While I really enjoyed having a car, and my 2000 Chevrolet Cavalier got me from point a to point b, there were definitely days when I didn’t think it would, and a few when it didn’t. I can’t tell you how many times I had the same two parts on that car fixed before I wrecked it. Although it wasn’t an “old” car, everyone I knew would joke about how it was held together with duct tape and bubble gum (probably because it actually sounded like it).

Second, GM has let Toyota, Ford, Honda, etc. just blow them out of the water with Hybrid technology. Last year when everyone was wanting a hybrid so they could save a bit of money, what was GM doing? They were pumping out Escallades, Tahoes, Z71 pick up trucks, and cars with awful fuel efficiency. When Ford was able to tout their fuel efficient line, what did GM have? The Cobalt also known as the replacement for the Cavalier.

How long has GM had the Chevrolet Volt in development? It was a few years ago that the model was introduced, and it still hasn’t seen full scale production. You can’t buy them. You know what you can buy? Tahoes.

While I don’t blame GM for trying to cash in on the SUV craze, they knew that it would be coming to an end once gas prices started going up. If they were going to continue producing the cars that they already had, perhaps producing smaller and more fuel efficient cars would have saved them. It appears that is what Ford did, and they’re doing alright.