GM apologizes for "betraying" American consumers, focusing on gas guzzlers
by Sebastian Blanco on Dec 8th 2008 at 2:32PM 
GM's done it. The General has apologized to America in an ad today in Automotive News (and available all over the place, including after the jump). The stated self-flagellations are for:
- Vehicles that were "below industry standards"
- "Lackluster" designs
- Commitments to compensation plans that are now "unsustainable"
- Too many brands and dealers, and
- "We also biased our product mix toward pick-up trucks and SUVs."
That last one is quite an admission from the company that brought us the HUMMER, the Escalade, and the Yukon/Tahoe. GM's death list has got to be filling up fast. This apology wasn't issued to just clear the corporate conscience, but to explain why GM should get the huge bridge loan they're asking for from Congress (the $15 billion is just the start). As for what GM will do with the money - aside from things like actually being around to build the Chevy Volt - the ad says the company will "reduce U.S. dependence on imported oil" and "protect our environment." Read the whole thing after the break.
Whaddya say, America, you buying GM's apology?
[Source: Reuters, GM Facts and Fiction]
GM Apology:
GM'S COMMITMENT TO THE AMERICAN PEOPLE
We deeply appreciate the Congress considering General Motors' request to borrow up to $18 billion from the United States. We want to be sure the American people know why we need it, what we'll do with it and how it will make GM viable for the long term.
For a century, we have been serving your personal mobility needs, providing American jobs and serving local communities. We have been the U.S. sales leader for 76 consecutive years. Of the 250 million cars and trucks on U.S. roads today, more than 66 million are GM brands - nearly 44 million more than Toyota brands. Our goal is to continue to fulfill your aspirations and exceed your expectations.
While we're still the U.S. sales leader, we acknowledge we have disappointed you. At times we violated your trust by letting our quality fall below industry standards and our designs become lackluster. We have proliferated our brands and dealer network to the point where we lost adequate focus on our core U.S. market. We also biased our product mix toward pick-up trucks and SUVs. And, we made commitments to compensation plans that have proven to be unsustainable in today's globally competitive industry. We have paid dearly for these decisions, learned from them and are working hard to correct them by restructuring our U.S. business to be viable for the long term.
Today, we have substantially overcome our quality gap; our newest designs like the Chevrolet Malibu and Cadillac CTS are widely heralded for their appeal; our new products are nearly all cars and "crossovers" rather than pick-ups and SUVs; our factories have greatly improved productivity and our labor agreements are much more competitive. We are also driven to lead in fuel economy, with more hybrid models for sale and biofuel-capable vehicles on the road than any other manufacturer, and determined to reinvent the automobile with products like the Chevrolet Volt extended-range electric vehicle and breakthrough technology like hydrogen fuel cells.
Until recent events, we felt the actions we'd been taking positioned us for a bright future. Just a year ago, after we reached transformational agreements with our unions, industry analysts were forecasting a positive GM turnaround. We had adequate cash on hand to continue our restructuring even under relatively conservative industry sales volume assumptions. Unfortunately, along with all Americans, we were hit by a "perfect storm." Over the past year we have all faced volatile energy prices, the collapse of the U.S. housing market, failing financial institutions, a stock market crash and the complete freezing of credit. We are in the midst of the worst economic crisis since the Great Depression. Just like you, we have been severely impacted by events outside our control. U.S. auto industry sales have fallen to their lowest per capita rate in half a century. Despite moving quickly to reduce our planned spending by over $20 billion, GM finds itself precariously and frighteningly close to running out of cash.
This is why we need to borrow money from U.S. taxpayers. If we run out of cash, we will be unable to pay our bills, sustain our operations and invest in advanced technology. A collapse of GM and the domestic auto industry will accelerate the downward spiral of an already anemic U.S. economy. This will be devastating to all Americans, not just GM stakeholders, because it would put millions of jobs at risk and deepen our recession. By lending GM money, you will provide us with a financial bridge until the U.S. economy and auto sales return to modestly healthy levels. This will allow us to keep operating and complete our restructuring.
We submitted a plan to Congress Dec. 2, 2008, detailing our commitments to ensure our viability, strengthen our competitiveness, and deliver energy-efficient products. Specifically, we are committed to:
• produce automobiles you want to buy and are excited to own
• lead the reinvention of the automobile based on promising new technology
• focus on our core brands to consistently deliver on their promises
• streamline our dealer network to ensure the best sales and service
• ensure sacrifices are shared by all GM stakeholders
• meet appropriate standards for executive pay and corporate governance
• work with our unions to quickly realize competitive wages and benefits
• reduce U.S. dependence on imported oil
• protect our environment
• pay you back the entire loan with appropriate oversight and returns
These actions, combined with a modest rebound of the U.S. economy, should allow us to begin repaying you in 2011.
In summary, our plan is designed to provide a secure return on your investment in GM's future. We accept the conditions of your loan, the commitments of our plan, and the results needed to transform our business for long-term success. We will contribute to strengthening U.S. energy and environmental security. We will contribute to America's technical and manufacturing know-how and create high quality jobs for the "new economy." And, we will continue to deliver personal mobility freedom to Americans using the most advanced transportation solutions. We are proud of our century of contribution to U.S. prosperity and look forward to making an equally meaningful contribution during our next 100 years.
Reader Comments (Page 1 of 4)
mmstowes 2:48PM (12/08/2008)
I don't understand why GM is apologizing to consumers for focusing on gas guzzlers. It was the consumers who were buying them. I wasn't really for the bailout, but I love how the American people all of a sudden made them the scapegoats, like folks did absolutely nothing wrong and wanted fuel efficient vehicles for the last 30 years. The turn around time between concept to production is far longer than the average person changing his or her mind....
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ronEbear 2:55PM (12/08/2008)
They were buying gas guzzlers because many factors enabled them to. Such as:
- Of the world`s cheapest gas.
- Easy-to-get-even-a-jobless-idiot-could-get bank loans and mortgages (which have backfired by the way, 700 billion worth)
- The notion that you WILL die if you drive something that weighs less than 4000 lbs
- some other fourth thing
Government created the perfect conditions, in the words ex. officer Jim Lahey of Sunnyvale trailer park , the perfect shit-storm.
Richard 3:23PM (12/08/2008)
GM is to blame. They and Ford, and Chrysler made it impossible for the average male to purchase anything smaller than a behemoth without being ostracized and emasculated for driving anything but a big behemoth. You need look no further than the thousands of truck commercials with the deep voiced masculine voice overs depicting it's torque and horsepower. Never, ever, saw one commercial with a similar voice over and pitching a 4 banger. They marketed the trucks and SUV's extensively and never pushed the fuel efficient cars. It's the same reason the EV1 failed.
mmstowes 3:41PM (12/08/2008)
I know why people were buying them and I know GM's to blame. Neither was my point. I'm still not understanding why GM's apologizing for providing the product the customer desired.
Andrew 4:32PM (12/08/2008)
I think GM needs to apologize for the lack of quality, but not their portfolios. Yeah, better to have less brands out there- all they did end up doing was repackaging the same product for different brands. However, SUVs and trucks are NOT something they should be blamed for. They only sell what people want !! I have seen too many people driving trucks and SUVs when they actually do not need them. The rising fuel prices caused their sales to drop- and the instant that the prices went down, all I see are trucks and SUVs on the road. Even all the import manufacturers have a substantial portion of their profits from SUVs and trucks!!
Joel Green 10:05AM (12/09/2008)
GM just needs to get some cash and get on with things. There is a lot of misinformation that we are taking "hook, line and sinker".
- GM is not in this problem because they made SUV and Trucks
- sure they are seeing lower sales, (tho with 1.50 a gallon) because they were making a killing on trucks and SUVs
- they are stuck with UAW contracts while their Japanese counterparts are not.
- We don't seem to be mad at the banks for the 700B but are mad because of the 30B loans
Ultimately we have to decide if we will have any manufacturing in this country at all. I have a service job and won't be affected, but there will always be people that will need to have jobs like this. We gave loans to Chrysler in the 80s when everyone knew they made sucky cars.
This time around, it is not so cut and dry. GM made pretty good cars, they have cars that rate better than Toyota cars even too. They got greedy with one type of vehicle (light trucks) - which I would not blame them with there other big issue - UAW, which is really killing them.
I would let them file a structured bankruptcy and get loans that from Uncle Sam, and force higher c.a.f.e standards.
oldraven 2:01PM (12/09/2008)
@Richard
Toyota
http://www.youtube.com/watch?v=3zILLs7TF50
http://www.youtube.com/watch?v=uM-lLLAzeeU&feature=related
http://www.youtube.com/watch?v=bzZsJiyuc2g&feature=related
Any questions?
don langstaff 2:57PM (12/08/2008)
so, this means you'll stop fighting the continuing advances in mpg and emissions standards ? on both the federal and state level ??
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Ian 2:57PM (12/08/2008)
So, will consumers take out an ad apologizing for buying big ass trucks and SUVs they don't need?
I know a guy who moved here from the UK two years ago. blown away by what was in his mind cheap gas he bought a big ass pickup truck. A single guy who lived in a condo. Not a farmer, contractor, rancher or someone else who needs such a vehicle. A software engineer. Who doesn't need to tow anything.
GM and the rest built what people wanted.
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occ 3:13PM (12/08/2008)
GM is right to apologize to the American people. Yes, lots of American are to blame for being the SUV/Gas guzzling vehicles consumer, but half of that blame if for GM because there were few other alternatives from GM, so American buys Toyota and Hondas. GM should also apologize for blocking numerous safety, efficiency, and environmentally needed advancements and requirement that leads to legislations (and then blocking these legislations) to the detriment of both GM and American buying public.
Do the right thing when the times requires it, even as it goes against short term business interests, and we wont have to go through the expensive legislation processes.
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Steve 2:47AM (12/10/2008)
You got to be kidding me!
(but half of that blame if for GM because there were few other alternatives from GM, so American buys Toyota and Hondas. GM should also apologize for blocking numerous safety, efficiency, and environmentally needed advancements and requirement that leads to legislations (and then blocking these legislations) to the detriment of both GM and American buying public.)
I just love the stupid comments.
Gm has 8 brands,Chevrolet, Buick/Pontiac/GMC, Saturn and Cadillac/Saab/Hummer. Should I name all vehicles for you? What they need to make more to fill your needs? They have more cars in the line-up the trucks.
You talk about blocking legislation, why did you forget to mention Toyoda and Honduh and Nissan did the same thing? Can you please provide us links to this? Here's one - In September 2006, the state of California filed suit against General Motors, Chrysler, Nissan, Toyota, Honda, and Ford. The companies were accused of producing cars that emitted over 289 million metric tons of carbon per year in the United States, accounting for nearly 20% of carbon emissions in the United States and 30% of carbon emissions in California.
Then you act like Toyoda or Honduh have such a great line-up! ONE WORD "BORING" adj. Uninteresting and tiresome; dull.
And lets not forget the UNLEVEL FIELD that are transplants enjoy!!!
Yanquetino 3:14PM (12/08/2008)
This so-called "apology" fails to address what I want to hear from GM. I think that the government should demand answers to several key questions, with concrete evidence to back up those answers:
* How much did Texaco/Chevron pay GM for the NiMH patents? What did GM do with that money?
* What stipulations beyond mere cash-for-NiMH did GM agree to in that contract?
* Why didn't GM sell at least a few hundred EV1s to those interested buyers, and set aside the hundreds more for parts and repairs while they lasted? Why did GM crush all of them instead? If Toyota could do that with the RAV4-EV, why couldn't GM?
* Why did GM gut the few EV1s donated to museums or universities, rather than leaving them intact and in running order?
* Where is the study, survey, questionnaire, customer feedback data that substantiates GM's broken record claim that there was "no customer demand" for the EV1? Show us the data!
I would also like to see the government insist on this condition (probably more!):
* GM must also develop and sell to the public a pure EV model of the Volt, in which the gasoline generator is substituted with a larger battery pack sufficient to take the vehicle at least 125 miles per charge.
In essence, this isn't much different than selling a car with either a 4- or 6- or 8-cylinder ICE. Yes, the EV model will likely cost more than the PHEV version, at least until mass production lowers the price of lithium, but that's tough frijoles: they need to put them BOTH in the showrooms and let the consumer decide. As an alternative, they could resurrect the EV1 with lithium batteries, christen it the EV2, and put it in the showrooms alongside the Volt.
And... if I were on the board of Plug-In America, I would only let GM march with us in the inaugural parade if they agreed to borrow back the EV1 in the Smithsonian, restore it to pristine running condition, and drive it at the front of our procession.
Yes... I am still fuming about the EV1. And I just don't think that GM should get a dime of public money while still lying to said public about that debacle. Time to 'fess up.
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Yanquetino 12:32AM (12/09/2008)
Ah... now that I think of it, here is one more question that GM should have to answer to congress, with concrete evidence to back it up, before they receive OUR taxpayer dollars to bail them out:
* Why did GM place an explicit condition on the EV1 donations to universities that they could NOT restore them as pure electric vehicles, but only turn them into hybrids?
ray 6:00PM (12/09/2008)
I agree. What a bunch of morons at GM. Why put billions of dollars into R&D for the volt when they could sell the EV1 with metalhydrid batteries that would go 120 miles. If it didn't work they are not out that much. Oh yea it's cause the americans are short sited consumers that must have everything with no compramises. Plan your trips is that too much to ask.
Like they said in the movie. The electric car is not for every one, just 90 percent of the people.
Why did they have that nauseiating voice in the EV1 commercials? Award winning advertiseing campaign my ass. Those commercials were scaryer than hell and told nothing about the product. You deserv this GM. Why the hell did you waste the money making the EV1? To show us what you could do but not what you would do?
Rob O. 4:17PM (12/08/2008)
GM & their fellow American automakers bred into us the need for big, hulking, inefficient vehicles. They've spent millions over the past 5 decades hand-crafting the public’s perceived need for the kind of vehicles they want us to buy for decades now. Need proof?
"That thing got a Hemi?"
Pure genius. I didn’t even know what the heck a Hemi was when that Dodge advertising campaign launched, but I sure was checking the contents of my shorts, feeling so inadequate over not having a big honkin’ truck equipped with a Hemi engine. Think that doesn’t sell vehicles? Think again! Take note of how many big hinkin’, 8-cylinder, 4-wheel drive, quad-cab trucks and lumbering, oversized SUVs are on the road serving as nothing more than single-occupancy commuter vehicles.
Yup, American automakers haven’t needed to be concerned with fuel efficiency or catering to the small car market because they’ve had most of us securely under their spell for so long. They’ve snookered us into believing that bigger & more cylinders are better and that we need the horsepower to do zero-to-60 in 6.5 seconds or else we’re pansies. If you’re driving a small, inexpensive car with a fuel-efficient 4-cylinder engine, you must either be destitute (because affluent people drive big cars with beefy engines), or some kind of treehugging, rice-eating, commie-lovin’, testosterone-deficient hippie.
By golly, if you’re not driving a big-ass, rubber-burnin’, God Bless America, gas-guzzling GM truck, well, Bob Seger & John Mellencamp are going to come over to your house, beat ya up, drink up all your beer, and prolly take your girlfriend!
So, now that we've neglected to buy the American automakers' poorly-designed and grossly-inefficient crap, we're having to bail them out? They didn't get to gouge our pocketbooks up front, so instead they get to steal the money right out from underneath us anyway. I made a choice not to buy a GM or Ford, but now my tax dollars are going to be used to undermine that deliberate decision.
GM, your insincere and worthless apology is not accepted.
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Doug 6:00PM (12/08/2008)
This apologize is, I think, well warrented. I grew up in Detroit and lived with poor GM quality cars (except my first car, the Chevy Nova which was made at NUMMI by Toyota). Much of the anger over GM, EV1 not withstanding, stems from all of these bad experiences with working with GM. Bad transmissions, nobs falling off, low residual value all adds up to a lot of pissed companies. The Detroit 3 never figured that out. Americans were buying rather boring asian cars because...they worked. They were inexpensive and reliable, even if a bit plain (see '88 Camry). GM never figured out why - maybe they thought those other companies were lucky. They didn't figure that customers were voting with their dollars. Here we are.
I think the impact to the economy (and my home town) weighs more heavily than a bailout. This is a Trillion dollar problem that we can get out of for a mere $30/40/50/100 Billion. That's a bargain. Even if it's unsavory.
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UH2L 3:53PM (12/08/2008)
occ
GM is just apologizing to make people feel better about the loans. They shoud only apologize for their prior product offerings to the extent that there wasn't a wider variety of efficient products. But it's not as if they didn't sell fuel efficient vehicles. GM has always offered efficient alternatives in small cars and midsized cars. But PEOPLE DIDN'T BUY THE MOST EFFICIENT ALTERNATIVES THAT GM OFFERED! When given the alternative, why did people buy V6's instead of 4 cylinder engines? (Even so, Impala V6's and other GM mid-sized cars have been getting 30+ mpg highway for years.) Why did they buy generally wasteful and unnecessary 4WD? They wanted power and capabilities they didn't need and gas was cheap. That's not GM's fault. For a company that's already at a $1,500 cost disadvantage, they have to offer more vehicles that are more profitable. To skew the mix to small cars without appropriate demand at that time would have led to more losses. They did push SUV's and pick-ups, but don't Americans have the self-esteem to buy what is right and not what makes us fell manlier? You can't blame marketing for that. It's marketing's job to sell. If people really wanted fuel efficiency, the marketing for those products would have resonated more.
All companies fight regulation against themselves. That's because corporations exist to make money, not to do what is always in the best interests of the consumer. There is one example where GM has led and that is daytime running lights which have been proven to prevent accidents and is standard on all GM vehicles. Why doesn't Honda, Toyota, BMW make them standard? I think those companies should apologize too. Sometimes the blocking of certain regulations helps in the short term but hurts in the long term. We probably agree that raising CAFE fuel economy standards in a steady way over the years would have helped the Detroit 3, but I believe they weren't the only automotive companies fighting against them. This is where the government should have been stronger to resist the lobby, but George and the oil boys wouldn't have that. It would lead to lower oil consumption and lower profits.
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meme 4:11PM (12/08/2008)
"It's marketing's job to sell. If people really wanted fuel efficiency, the marketing for those products would have resonated more."
It's marketing's job to get people to buy things that they *wouldn't* have bought otherwise. If people would have bought product X anyway, then you don't need marketing.
Car commercials help set the trend for what style of vehicles are considered "sexy".
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Cellien 5:09PM (12/08/2008)
I want a Hummer HX.
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John Metcalf 5:41PM (12/08/2008)
I want a new style Malibu station wagon. Hybrid preferably.