CAFE: The Other Reason GM Killed The Sedan
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Date: 2019-05-30
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Comments and reviews: 10
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Your assessment is far too narrow and ostrich head in the sand in nature. GM is starting the process of down-sizing production of ICE-powered cars. ALL such cars. not just the 6 models announced this week. To make it less painful (for GM shareholders, not its workforce, it will start rolling this more streamlined tech into more models, but only for the purpose of sweating the capital assets for as long as possible. Afterall, these factories are functionally redundant as EV and computerised cars start to take more of a hold - not just in the US, but globally. At the end of next year - around the same time of year as now - GM will make further announcements of plant closures. Ford will be doing the same, as will the likes of all other traditional automakers worldwide. GMs Chinese factories will probably survive, for they will be easier and cheaper to re-purpose to EV production, and will be in a market where not only is demand high for EVs, government policy and legislation will make it increasingly difficult and costly to sell ICE vehicles. The same may be true of GMs European plants, where re-purposing to make EVs is viable. Barra has taken a look at GMs balance sheet and seen that they have a few billion in reserve, and its now or never to wind down ICE tech, and focus on the future (which is rapidly approaching. She is obliged to put investors and shareholders first, which means paring down and stripping away both capital assets and costly production, of products that will have no place in the market by 2024 - 2025 (possibly sooner. GM will be a MUCH smaller company, producing far, far fewer cars, and (by 2023-24) will be 100% focused on fending off the Teslas, Rivians, Lucids (and many others - particularly Chinese EVs) - and the internal combustion engine and all its complex transmission systems will not even feature in their systems. My bet is that Ford will be making similar announcements in the early new year - plant closures and job losses on a huge scale. Then, the European, Japanese and Korean giants will be forced to follow suit - and very quickly. Many have left it too late. possibly even GM is too far behind the curve here - next year and 2020 will be the acid test.
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Your assessment is far too narrow and ostrich head in the sand in nature. GM is starting the process of down-sizing production of ICE-powered cars. ALL such cars. not just the 6 models announced this week. To make it less painful (for GM shareholders, not its workforce, it will start rolling this more streamlined tech into more models, but only for the purpose of sweating the capital assets for as long as possible. Afterall, these factories are functionally redundant as EV and computerised cars start to take more of a hold - not just in the US, but globally. At the end of next year - around the same time of year as now - GM will make further announcements of plant closures. Ford will be doing the same, as will the likes of all other traditional automakers worldwide. GMs Chinese factories will probably survive, for they will be easier and cheaper to re-purpose to EV production, and will be in a market where not only is demand high for EVs, government policy and legislation will make it increasingly difficult and costly to sell ICE vehicles. The same may be true of GMs European plants, where re-purposing to make EVs is viable. Barra has taken a look at GMs balance sheet and seen that they have a few billion in reserve, and its now or never to wind down ICE tech, and focus on the future (which is rapidly approaching. She is obliged to put investors and shareholders first, which means paring down and stripping away both capital assets and costly production, of products that will have no place in the market by 2024 - 2025 (possibly sooner. GM will be a MUCH smaller company, producing far, far fewer cars, and (by 2023-24) will be 100% focused on fending off the Teslas, Rivians, Lucids (and many others - particularly Chinese EVs) - and the internal combustion engine and all its complex transmission systems will not even feature in their systems. My bet is that Ford will be making similar announcements in the early new year - plant closures and job losses on a huge scale. Then, the European, Japanese and Korean giants will be forced to follow suit - and very quickly. Many have left it too late. possibly even GM is too far behind the curve here - next year and 2020 will be the acid test.
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Tyler D
its all bullshit. no offense on the host. but all these assumptions of consumers demanding suvs not true, regardless of where they spawnd the fake statistics rumored. gas us going nowhere but up. gas used to be 1. 00 1. 75 etc now it is 3. 30 average, that people are buying trucks and suvs whole hog, my ass. this economy is being controlled. consumers are being kept from buying sedans going forward, youre left with trucks and suvs, gas guzzlers when gas goes up youll be trapped. This is all by design not consumer demand, youll be forced to buy what they have. cars that drive themselves, with programmed restrictions, electric cars that can only go so far. you want to leave the border, guess what your car has limited range and your car has been remotely programmed to shutdown, breakdown or area restricted driveability. welcome to a super controlled society. the economy is fake a farce you cant buy what you want, you buy what they funnel you into. since when did consumers demand CAFE, since when does the US suffer in buying products that work and productive vs THE REST OF THE WORLD enjoying sedans and non effecient appliances that work like theyre supposed to. you spend hours of your day away from family and liberty to earn money that cant buy you what YOU want and NEED. what has the US turned into. This is not a real economy there is no real market where REAL consumer demand products that work like they need to. its the government and fake gov-shell companies that are telling you what to buy when to buy. watch out everybody we are in stealth socialism. HERE is a little preemtive test to confirm theory, watch wjat excuse toyota or honda will give to wliminate their sedans, mind you the demand for toyota sedans is guaranteed i foresee a sudden increase in recalls etc etc watch and learn. trust your assumptions instinct
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its all bullshit. no offense on the host. but all these assumptions of consumers demanding suvs not true, regardless of where they spawnd the fake statistics rumored. gas us going nowhere but up. gas used to be 1. 00 1. 75 etc now it is 3. 30 average, that people are buying trucks and suvs whole hog, my ass. this economy is being controlled. consumers are being kept from buying sedans going forward, youre left with trucks and suvs, gas guzzlers when gas goes up youll be trapped. This is all by design not consumer demand, youll be forced to buy what they have. cars that drive themselves, with programmed restrictions, electric cars that can only go so far. you want to leave the border, guess what your car has limited range and your car has been remotely programmed to shutdown, breakdown or area restricted driveability. welcome to a super controlled society. the economy is fake a farce you cant buy what you want, you buy what they funnel you into. since when did consumers demand CAFE, since when does the US suffer in buying products that work and productive vs THE REST OF THE WORLD enjoying sedans and non effecient appliances that work like theyre supposed to. you spend hours of your day away from family and liberty to earn money that cant buy you what YOU want and NEED. what has the US turned into. This is not a real economy there is no real market where REAL consumer demand products that work like they need to. its the government and fake gov-shell companies that are telling you what to buy when to buy. watch out everybody we are in stealth socialism. HERE is a little preemtive test to confirm theory, watch wjat excuse toyota or honda will give to wliminate their sedans, mind you the demand for toyota sedans is guaranteed i foresee a sudden increase in recalls etc etc watch and learn. trust your assumptions instinct
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jdnelms62
Its sad to see the death of the American automobile in my lifetime, but it was inevitable. Ive heard many theories on why this happened, including the excellent points made in this video and Ive come to believe that they are all true. It wasnt any one thing that killed the American sedan, rather that it was a cascade of circumstances. Navigating complex CAFE regulations, millennials not buying vehicles at all, aging overweight baby boomers preferring higher riding cross-overs over traditional sedans, the sudden imposition of poorly thought out steel tariffs, and a flooded marketplace filled with lackluster product, competing with equally priced but better engineered Japanese vehicles. As to the last point, Honda and Toyota may have won this battle, but it is an pyrrhic victory at best, since they are struggling too. Sales of perennial Japanese favorites such as the Camry and Civic are down substantially over previous years. Ironically, despite producing better designed and built sedans than ever, American cars still could not compete with Japanese quality. Ford, GM and Dodge are going with their strengths and doubling down on trucks, which may be a short sighted move in the long run.
reply
Its sad to see the death of the American automobile in my lifetime, but it was inevitable. Ive heard many theories on why this happened, including the excellent points made in this video and Ive come to believe that they are all true. It wasnt any one thing that killed the American sedan, rather that it was a cascade of circumstances. Navigating complex CAFE regulations, millennials not buying vehicles at all, aging overweight baby boomers preferring higher riding cross-overs over traditional sedans, the sudden imposition of poorly thought out steel tariffs, and a flooded marketplace filled with lackluster product, competing with equally priced but better engineered Japanese vehicles. As to the last point, Honda and Toyota may have won this battle, but it is an pyrrhic victory at best, since they are struggling too. Sales of perennial Japanese favorites such as the Camry and Civic are down substantially over previous years. Ironically, despite producing better designed and built sedans than ever, American cars still could not compete with Japanese quality. Ford, GM and Dodge are going with their strengths and doubling down on trucks, which may be a short sighted move in the long run.
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Scott Nosworthy
I recently read that GMs total sales in the USA total only about 30% of what their sales in China are, I dont know if thats true but it cant be far off. GM could give a rats ass what American consumers want versus what Chinese consumers want. Evidence of that is the destruction of the Pontiac brand which in the US. As recently as 2000 Pontiac was GMs top produced brand, produced more than even Chevrolet in the US that year coming second only to Ford and nearly tripling Buicks production. Yet GM axed Pontiac because Buick was its dominant brand in China and the Chinese had no interest in what Pontiac offered. GM is a once dominant American company among the worlds largest selling cars and a wide variety of other products around the world from American factories to becoming an American brand by headquarters only for the most part (for now) producing cars in China that Chinese consumers want while importing these same vehicles into the USA to sell to Americans. Times have changed and will continue to do so.
reply
I recently read that GMs total sales in the USA total only about 30% of what their sales in China are, I dont know if thats true but it cant be far off. GM could give a rats ass what American consumers want versus what Chinese consumers want. Evidence of that is the destruction of the Pontiac brand which in the US. As recently as 2000 Pontiac was GMs top produced brand, produced more than even Chevrolet in the US that year coming second only to Ford and nearly tripling Buicks production. Yet GM axed Pontiac because Buick was its dominant brand in China and the Chinese had no interest in what Pontiac offered. GM is a once dominant American company among the worlds largest selling cars and a wide variety of other products around the world from American factories to becoming an American brand by headquarters only for the most part (for now) producing cars in China that Chinese consumers want while importing these same vehicles into the USA to sell to Americans. Times have changed and will continue to do so.
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R.a. Wheeler
Well, part of this. a big part of this can be chucked up to Government intervention. For one the CAFE standards are not used to make us more safer, not by far but as a political tool to keep competition out of the market. If it costs billions to bring a car to market, how many new car makers are we likely to see? 2ndly Government bailed out and subsidizes GM and in turn enables bad business planning. If GM had to compete as they do in other countries, probably GM would make different decisions and they can be more careless. Next time GM fails, maybe they should go beg Mexico. lol I am just saying. Our government had no right, and no place to intervene in to the market this way and now were paying the piper a bit for it. That goes for Chrysler too. Had our government just setup safety standards and not gotten in bed with them, we would all be better off. Sure GM would be forced to compete and perhaps bankrupt, but is America any better having that dead weight on our economy? I think not.
reply
Well, part of this. a big part of this can be chucked up to Government intervention. For one the CAFE standards are not used to make us more safer, not by far but as a political tool to keep competition out of the market. If it costs billions to bring a car to market, how many new car makers are we likely to see? 2ndly Government bailed out and subsidizes GM and in turn enables bad business planning. If GM had to compete as they do in other countries, probably GM would make different decisions and they can be more careless. Next time GM fails, maybe they should go beg Mexico. lol I am just saying. Our government had no right, and no place to intervene in to the market this way and now were paying the piper a bit for it. That goes for Chrysler too. Had our government just setup safety standards and not gotten in bed with them, we would all be better off. Sure GM would be forced to compete and perhaps bankrupt, but is America any better having that dead weight on our economy? I think not.
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Michel Foshee
GM loyal buyers wont and have not bought Impalas since they are no longer RWD and would buy the Police Only RWD Caprice had the platform been available to the general public. The G8 & GTO actually sold very well in their short run. The SS was a fail due to lacking some modern features since GM seems always behind on technology. And the fact the SS was sold only as a hotrod big sedan, made its market attraction very slim. Ford on the other hand still made their RWD platform public available with the Crown Vic, but failed to update it in every way possible. Makes me think of Marathon Taxi cabs that looked like 50s cars but sold in the 90s. Chrysler Dodge sells the RWD 300, Charger and Challenger very well. They make V6, V8 and hotrod model trims that suit a large crowd. Their styling on a now aging platformis spot on, their performance is very good, they advertise them, etc. and they are still RWD. So the sedan failures at GM and Ford ate their own damn fault
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GM loyal buyers wont and have not bought Impalas since they are no longer RWD and would buy the Police Only RWD Caprice had the platform been available to the general public. The G8 & GTO actually sold very well in their short run. The SS was a fail due to lacking some modern features since GM seems always behind on technology. And the fact the SS was sold only as a hotrod big sedan, made its market attraction very slim. Ford on the other hand still made their RWD platform public available with the Crown Vic, but failed to update it in every way possible. Makes me think of Marathon Taxi cabs that looked like 50s cars but sold in the 90s. Chrysler Dodge sells the RWD 300, Charger and Challenger very well. They make V6, V8 and hotrod model trims that suit a large crowd. Their styling on a now aging platformis spot on, their performance is very good, they advertise them, etc. and they are still RWD. So the sedan failures at GM and Ford ate their own damn fault
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Aaron P
Thanks for the video, Alex. CAFE is definitely shaping the products offered to market, and the strategic decisions of the American manufacturers. Difficult to say if abandoning cars is the correct play for the American manufacturers, but it might be their only hope. The American manufacturers survive on high-margin truck and SUV sales. They rule most of those segments and niches. But they are soundly defeated by the Japanese and Europeans in the sedan segments. The CUV segments are up in the air, and sales numbers are close for many manufacturers, though Lexus may have an insurmountable lead in the luxury midsize segment with the RX. By dropping low-margin loss-leading cars, American manufacturers can dedicate more resources to the CUV market, which could make them more competitive. The Japanese and Europeans cant easily follow because they have so many satisfied customers buying their low-margin sedans. This could be interesting.
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Thanks for the video, Alex. CAFE is definitely shaping the products offered to market, and the strategic decisions of the American manufacturers. Difficult to say if abandoning cars is the correct play for the American manufacturers, but it might be their only hope. The American manufacturers survive on high-margin truck and SUV sales. They rule most of those segments and niches. But they are soundly defeated by the Japanese and Europeans in the sedan segments. The CUV segments are up in the air, and sales numbers are close for many manufacturers, though Lexus may have an insurmountable lead in the luxury midsize segment with the RX. By dropping low-margin loss-leading cars, American manufacturers can dedicate more resources to the CUV market, which could make them more competitive. The Japanese and Europeans cant easily follow because they have so many satisfied customers buying their low-margin sedans. This could be interesting.
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T.K. Morris
I seriously hate it for the employees of GM but I will be glad to see Government Motors go away. Our Government under Obama rule should never have bailed them out in the first place. I didnt get to vote on that, did any of you? I am not supposed to be paying taxes so some companies can get federal handouts. GM was no different than giving money to someone else that has not learned to be responsible, they just wasted more money because Obama gave it to them to waste. I am sure that most everybody knows someone that has a good paying job yet they cant get ahead in life due to the way they spend money needlessly. GM is like that but they are a company instead of being a single person. They should have been allowed to fail and we should not have had to pay for their managements poor decisions.
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I seriously hate it for the employees of GM but I will be glad to see Government Motors go away. Our Government under Obama rule should never have bailed them out in the first place. I didnt get to vote on that, did any of you? I am not supposed to be paying taxes so some companies can get federal handouts. GM was no different than giving money to someone else that has not learned to be responsible, they just wasted more money because Obama gave it to them to waste. I am sure that most everybody knows someone that has a good paying job yet they cant get ahead in life due to the way they spend money needlessly. GM is like that but they are a company instead of being a single person. They should have been allowed to fail and we should not have had to pay for their managements poor decisions.
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Jim Vogiatzis
well said alex my opinion is that KIA - HYUNDAI have put for and general motors in a bad position---japanese make very good sedans and gm and ford for over 100 year companies had there glory days i love american cars but 1 month ago i bought a 2007 chevrolet suburban i love that truck it is a dream of mine i can tow things ---i just got back from florida n im from canada --great truck but the future is going electric i would like to see hydrogen but the market will dictate so lets see who will take the rains like henry ford who is a great man in auto industry may be elon musk fits this new erra or are we going to cars driving them selves by sensors or will we take to the skies n fly in the future-all the best folks jim-canada
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well said alex my opinion is that KIA - HYUNDAI have put for and general motors in a bad position---japanese make very good sedans and gm and ford for over 100 year companies had there glory days i love american cars but 1 month ago i bought a 2007 chevrolet suburban i love that truck it is a dream of mine i can tow things ---i just got back from florida n im from canada --great truck but the future is going electric i would like to see hydrogen but the market will dictate so lets see who will take the rains like henry ford who is a great man in auto industry may be elon musk fits this new erra or are we going to cars driving them selves by sensors or will we take to the skies n fly in the future-all the best folks jim-canada
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C King
CAFE is another lobbyist JOKE ripoff the public again, there is no standard fuel MPG, because all the different poison additives added to the fuel plus the bull crap ethanol added to most all gas along with the winter additives decreased MPG drastically. The government, States, Lobbyists, oil companies all need to be accountable and sued for the high cost of fuel and engine damages for all small engines damaged and cannot run correctly on the gas of today with the ethanol added, being the public is forced to purchase over priced high octane fuel that only very little stations run WITHOUT ETHANOL ADDED. THAT IS CALLED A MONOPOLY AND PRICE GOUGING, FRAUD, WHICH IS RIPPING OFF THE PEOPLE.
reply
CAFE is another lobbyist JOKE ripoff the public again, there is no standard fuel MPG, because all the different poison additives added to the fuel plus the bull crap ethanol added to most all gas along with the winter additives decreased MPG drastically. The government, States, Lobbyists, oil companies all need to be accountable and sued for the high cost of fuel and engine damages for all small engines damaged and cannot run correctly on the gas of today with the ethanol added, being the public is forced to purchase over priced high octane fuel that only very little stations run WITHOUT ETHANOL ADDED. THAT IS CALLED A MONOPOLY AND PRICE GOUGING, FRAUD, WHICH IS RIPPING OFF THE PEOPLE.
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