Thursday, March 25, 2010

Saturn: How General Motors Screwed Up a Good Thing

This posting started out as a request for somebody to write a book with this title. I didn't intend to write a posting about it. I can imagine that Saturn: How General Motors Screwed Up a Good Thing, written by an industry insider, would make the nonfiction bestseller list.

Actually, a more appropriate title might append the word Again to the title, as GM has screwed up several times in the last few decades.

Moreover, GM has screwed up so many times that their mishandling of Saturn Corporation might end up being a single chapter (or three chapters) in a book with a simpler title: How General Motors Screwed Things Up.

General Motors Corporation have accomplished a lot in their corporate history. They are responsible for bringing many automotive innovations to the mass market, for use by the common man. And indeed, they have led the way with innovative features in their more elite market segments, such as the Corvette and the haute-luxury end of their Cadillac line.

But GM have had more than their share of screw-ups, too, one of which was their mismanagement of Saturn.

Saturn Corporation was an innovative way to run a car company, and the Saturn was an innovative product line. After the initial model release in 1985, Saturns attained popularity quickly, because they were perceived as something newer and better than the same old stuff Detroit had been churning out. But GM required Saturn Corporation to sell their models at a loss in order to build market share, so the subsidiary didn't show a profit (did it ever?). They could have jacked the price up to par or to a slim profit, and people would have paid the extra -- the cars were that good. But they didn't.

When it started in 1985, Saturn offered a different kind of car and a different kind of car-buying experience. The public loved the car, the no-haggle, no-pressure showrooms, and the customer-comes-first-and-we-treat-you-like-royalty service departments. As a result, the public bought lots of Saturns - and two bad things happened.

("Bad" depends on your point of view. These things were only bad from the point of view of other GM divisions, which, being much bigger, older, and more heavily invested than Saturn, had the ready ears of the executive suite and the boardroom. You'll see where this is going shortly.)

First, Saturn sales cut deeply into sales of existing GM product lines. That's no surprise, considering the unequivocal junk that Chevrolet, Oldsmobile and Pontiac were turning out in the late 1980s and 1990s.

Second, Saturn employees adopted a "snooty" attitude (GM's word, not mine) towards other GM employees. That's because Saturn employees, being nonunion, had to work hard for their success, and they had a lot of success to show for their hard work.

GM could have (and unequivocally should have) learned a lesson from both of these phenomena. They could have figured out why the public preferred the Saturn SL2 over the Chevy Beretta, for example, and either redesigned the Beretta to match the SL2's quality and features, or killed the Beretta, cut their losses, and consolidated their product line. Likewise, they could have taken a page from Saturn's playbook on no-haggle pricing and real customer service, and transformed GM's showrooms and service departments from a demeaning and distasteful experience into something enjoyable. Instead, they punished Saturn for their success. Rather than raise the rest of the corporation to Saturn's level, they lowered Saturn to the level of the rest of the corporation.

GM closed the dedicated Saturn factory at Spring Hill, Tennessee, and required all Saturn vehicles to be built on the same production lines as other GM cars, by the same people that built the other GM cars. Guess what happened to product quality? Yep: Down the toilet.

Then, rather than allow Saturn designers to design their own cars from scratch, GM imported designs from their European brand, Opel, and rebadged them as Saturns, thereby eliminating the uniqueness of the brand and the designed-in quality that had characterized the earlier models. Believe me, the public noticed the drop in quality, and while sales momentum held for a while based on the brand name, eventually sales dropped because the cars had become average.

(But the GM product line didn't completely regain its lost market share. Any idea who picked up the slack? It was Toyota, a resurgent Honda Motor Corporation, and a newcomer from Korea called Hyundai.)

The upshot of things was that while GM undercapitalized Saturn, they continued pouring money into crap like the Pontiac Aztek (and the entire Pontiac and Oldsmobile product lines) and excesses like the Cadillac Escalade and the Hummer product line.

Then, when the division was stumbling along, half-starved, without a loyal fan base, without direction and without the qualities that made it unique, GM announced that they were getting rid of it because it was no longer profitable. The executives and the board of directors at General Motors were directly responsible for meddling and mismanaging Saturn to death.

Sunday, March 21, 2010

Happy Equinox

The vernal or spring equinox is a happy time of year. I think it's worthy of its own celebration -- no wait, it does have one. But that celebration depends on an arcane calendrical reckoning, related to phases of the moon and other such nonsense, whereas the equinox itself depends solely on the earth's position relative to the sun.

I love being outside at 6 a.m. on the day of the equinox (or 7 a.m. according to Daylight Savings Time) and seeing the sun peek over the horizon, down at the end of the east-west street near our home. It's like my own private celebration of the event that really heralds the beginning of spring. If I ever have a house again, I'm gonna build a Stonehenge in my back yard, with markers for the solstices and the equinoces.

So what if it snows after the equinox? Who cares? The daylight hours are rapidly increasing, the flowers and trees are budding, the birds are back in all their joyful cacophony, and the hills (well, the parts that aren't white) are turning green. It's a time of joyful anticipation, hope, and wild hormones.

Happy vernal equinox, everybody.

Sunday, March 7, 2010

Pickup trucks are three of the Top Ten Selling Automobiles in the U.S.

I've written before about the Big Three Automakers bailout, and about their propensity to push pickup trucks and other high-margin vehicles on us. I think I wrote a thing or two about the "cash for clunkers" program, as well.

The Big Three are banking on our collective inability to remember things that happened more than three months ago. They continue to push pickup trucks and big SUVs on us. (Well, except for Hummer. GM finally pulled the plug on the Hummer brand after a Chinese buyer decided not to buy the division.) And although I hate to acknowledge the reality of it, the American public continue to buy pickup trucks.

Nobody seems to remember what happened to gasoline prices and truck/SUV sales in the summer of 2008: gas prices went way up, and truck/SUV sales went way down. Or perhaps they do remember, but either they don't care, or they have convinced themselves that it won't happen again. Hey, people! Summer's only three months away. Gasoline prices will jump again!

Pickups are especially prevalent here in the American West. Sometimes during my commute, I will count the number of pickups vs. SUVs vs. normal cars at an intersection in town. I'm amazed at the margin by which pickups outnumber normal cars, and SUVs outnumber both.

Okay, I would enjoy owning a pickup truck -- but I'm not willing to give up my commuter car for it. A pickup truck has its place, but it's not in the driveway or garage of a suburban home or on the dry, paved roads between home and work -- which is where most of them in this part of the American west spend most of their time.

And it's not necessarily in the mountains, either. In September 2008, I drove my little Saturn SL2 up a steep, rutted, gully-washed, mining road in the Rockies, to get to the Grays and Torreys Peak trailhead on the Continental Divide. I drove past a huge line of 4WD PUs and SUVs, all waiting for some brave soul to show them how to negotiate the road. After I went past, they all pulled in behind me and followed me up to the trailhead. After we had parked, several of the drivers approached me and told me that I was an inspiration to them: they weren't sure they could make it up the road until they watched me do it.

As for snow, well ... the missus and I still remember fondly a 60-mile drive to Denver in a snowstorm, when we counted 18 pickups, Jeeps and other 4WD vehicles -- and only 2 (two!) normal cars -- that had slid or spun off the interstate highway.

Executives and employees at the Big Three in Detroit have a derisive term for all of these pickup trucks they're selling: "air haulers." And I do mean derisive. They're glad to take your money, knowing full well that for 360 days out of the year, the bed of your pickup truck won't hold anything that couldn't fit into the trunk of a (smaller, cheaper, and more economical) Civic, Corolla, or even Impala.

Here is a list of the top ten selling automobiles in the United States in 2009, according to Reuters:

Rank Make & Model 2009 Sales 2008 Sales 2008 Rank % Change
1 Ford F-Series pickup 334,922 436,022 1 -23.2
2 Toyota Camry 285,069 379,270 3 -24.8
3 Chevrolet Silverado pickup 261,142 402,191 2 -35.1
4 Honda Accord 244,579 333,011 6 -26.6
5 Toyota Corolla 240,755 307,071 4 -21.6
6 Honda Civic 223,751 304,297 8 -26.5
7 Nissan Altima 169,435 241,529 9 -29.8
8 Honda CR-V 158,573 171,193 11 -7.4
9 Dodge Ram pickup 155,467 213,684 5 -27.2
10 Ford Fusion 148,045 128,381 20 +15.3

(I swiped the table from

Pickup trucks claim three of the top 10 slots, and two of the top 3 slots. Surprisingly, only one of the top 10 is an SUV, and it's not even a domestic SUV: the Honda CR-V. Japan's own Big Three have six of the top ten slots: three for Honda, two for Toyota, and one for Nissan. The only domestic non-truck vehicle that made the top 10 was the redesigned Ford Fusion, whose sudden rise in popularity vaulted it from 20th place to 10th place.

Now, I have some good friends who really do haul stuff in their pickup trucks, and they really do need their four-wheel-drive to get to where they're going. I say more power to them. One could even call them "legitimate" pickup truck owners. One of my friends has a beautiful old Dodge pickup. Most of the time, he uses it to haul old Dodge pickup truck parts. Like my dad said once, I'll buy a pickup truck when I have something to haul around in it.

Tuesday, March 2, 2010

"Defending" a Thesis or Dissertation

I always thought it was funny that they call it "defending" a dissertation or a thesis. The term conjures up some totally wrong, but immensely entertaining, images.

I picture a young-looking scholar with a prominent jawbone, enhanced by the clenched muscles in his jaw, clad in Oxford-style robes over a herringbone tweed suit, with a sheathed sword hanging under his belt, and time-worn but lovingly polished deep black English riding boots. The young man, carrying a handwritten, leather-bound tome, strides along stone-covered corridors, finally stopping at a tall wooden door, made of oak darkened by the centuries.

From the inside, the door opens with a low groan, the groan of all those centuries, and he is admitted into a chamber. The granite walls, also darkened by the centuries, are pierced along one side by a series of tall, narrow windows, through which brilliant white sunlight pours at an extreme angle, illuminating the backs of several old men and leaving their faces in shadow. The men are old men, some with grey hair and some with no hair, some with shaggy beards, some with neatly trimmed beards, and at least one with no beard, but a huge moustache instead.

The young man sets the volume on an an old wooden lectern like a music stand, about ten feet from the panel of distinguished gentlemen, and opens it so the pages are facing the panel. The pages are all parchment, slightly yellow in color, written in black ink with a quill pen, with meticulous penmanship. Then the young man draws his sword and stands in front of the book, facing the panel. The members of the panel rise from their chairs, reach under their robes, and pull out very ripe tomatoes.

And thus his defense begins.