Will GM Follow Ford’s Lead and Exit Cars? Barra’s Answer

[Gorehamj]

John Goreham
Contributing Writer, GM-Trucks.com
4-27-2018

 

Ford has announced that it will begin to phase out of the passenger car market. The most recent announcement caps a long list of hints by Ford that the company could not seem to build cars that are competitive or that were profitable to make domestically. Ford will be walking away from a volume of business larger than the total sales volume of Volkswagen in America. The Mustang will stay, but most of the Ford cars will not have a next generation.

 

FCA recently canceled two Dodge and Chrysler models, deciding to keep only the luxury and rear/AWD muscle cars that it can also sell to government agencies. The natural question to ask, given that both Ford and Chrysler are walking away from mainstream family cars, is will GM follow the examples?

 

Mary Barra, GM’s CEO says GM will not follow the example. At least in the near term. Here’s what Barra told investors in a recent conference call:

“We launched very efficient architectures in the midsize and compact (segments) proving to be good platforms going forward with fairly minor changes…And the segments are still significant. Because we’ve made the investments, we need to deploy little to no capital going forward, so we view (cars) as an opportunity. What you’ll see us do is play very efficiently in a segment that, although it is declining, there is still an opportunity.”

 

That does not mean that GM won’t retire individual car models across its brands. Barra has already said that the Volt will go away eventually as GM switches to battery-electric cars (fully electric like the Bolt). Cadillac, Buick and Chevy also have some cars that are moving so slowly the market is killing them off, regardless of what GM wants. All but one Cadillac car, ironically, the front wheel drive one, the Lacrosse, the Impala, and the Sonic all look like models that could eventually be replaced by crossover models.

[pickmeup]

it is really quite a historic announcement that Ford is conceding the car market to others. But lets face it American auto companies lost touch with their cars in the early 70's. They somewhat seemed to get tuned back in during the 80's but then the wave was lost again. Sadly American cars have been in a slow agonizing death spiral ever since it seems. Pretty bold move to finally take them off life support and let them die. Not a Ford fan but still somewhat saddening to see it go.

[Spurshot]

Competition keeps a market healthy.  It's a loss to all to see Ford step away from the car market. If I were king, I'd focus on being the best in the market segments for the products I made.  That could very well be the strategy for Ford. 

 

To pickmeup's comment about American auto companies, my observation is that until the 70s, the American companies had no competition in North America.  They were never challenged. In the 70s, the Japanese makers started making inroads into the bottom of the market,  then they took over that segment and started marching upward thru the market classes, one area at a time.   IMO, this happened because of the Japanese culture.  They are a proud people culturally.  Especially from WW2 forward until about a generation ago. There was no "Army of one" mentality.  It was always an "Army of millions" mentality.  They were team players.  IMO, the U.S. lost the team player spirit in the 60s and it bottomed out in the 70s.  I think we've seen a resurgence of team spirit, but it's not comparable to countries like Germany and Japan.

['01LS1]

1 hour ago, Spurshot said:

 

 

   IMO, this happened because of the Japanese culture.  They are a proud people culturally. 

 

 Obviously this is all opinion. But to me it seems that brand loyalty died more so than it being a culture thing. In the 70's-80's, you did not take a chance on those foreign brands. By the 90's, those generations were passing on. Trucks & sports cars to some extent have held onto the reigns of loyalty arguably better than any other segment. 

 

 Each general location is different across the country. But 40 years ago, there was a GM product in virtually every other garage as GM had like 45% market share in 1980. Am thinking Ford was usually second in market share back in those days, but do not know the percentage. 

 

Can anyone imagine telling someone in 1980 that GM, Ford & Chrysler would a cede a majority of the entire car market to imports by 2020? 

[O_J_Simpson]

I just purchased a new car for a family member that needed some help. When it comes to cars, the young generation knows outside of the Mustang and Camaro, Ford and GM offer nothing but over priced turds for cars. To see what the imports offer blows away everything Ford and GM have to offer. For about 18k, you can get an import with panoramic sunroof, in dash navigation and a very mice XM radio and a bunch of other items only offered on Ford & GMs top trim levels while having a much longer warranty. Remember, GM just slashed their warranty in a money saving move. The down side is we will never get these kids back into a Ford or GM dealer again later in life.

[Daryl Z71]

42 minutes ago, O_J_Simpson said:

I just purchased a new car for a family member that needed some help. When it comes to cars, the young generation knows outside of the Mustang and Camaro, Ford and GM offer nothing but over priced turds for cars. To see what the imports offer blows away everything Ford and GM have to offer. For about 18k, you can get an import with panoramic sunroof, in dash navigation and a very mice XM radio and a bunch of other items only offered on Ford & GMs top trim levels while having a much longer warranty. Remember, GM just slashed their warranty in a money saving move. The down side is we will never get these kids back into a Ford or GM dealer again later in life.

 

 

I can't speak for Ford, but the resale on GM's cars is pretty horrible as well.

[Grumpy Bear]

From the 70's onward car makers downsized and then downsized some more. Weight and frontal area were key to good fuel efficiency. Still are.The governmental demand of even greater numbers lead to lighter materials and stark interiors. Metals got so thin that some pretty abrasive body lines (creases) are now employed to stiffen structures enough to hold their shapes. It even converted the public to FWD, mostly with lies about traction in ALL conditions based on traction in ONE specific rarely experienced situation. It was just actually lighter and allowed more cabin space from a smaller envelop. Lemmings are such guppies. 

 

Now all the sudden we drive behemoths quad cabs with double the frontal area and a thousand pounds heavier than say a 1965 pickup and bulbous SUV's that as this forum claims get no better mileage than a 65 Ranger with a 360/390 (14/17 mpg) A political push for battery electric in the making. We failed to make our mandates. Well yea....D'ho...you threw them away!! Ya can't fix stupid.  

The first question is..."How do U.S. automakers expect to make 2025 fuel standards by elimination of the very platforms that gave them a fighting chance and promoting those that set those goals back 40 years?" 

 

Second question...."Does this mean that U.S. automakers have decided that the bottom income 2/3's of all U.S. citizens, widows and single parents and youngsters just getting a start and the retired do not DESERVE a car at a price point the majority of Americans can actually afford?"

 

Third. None of the big three is loosing money so it isn't a question of making a profit. Is it now a matter of not making an OBSCEEN profit? 

 

How's that for 'vision'? Anyone else see Bailout 2 hitting the movies soon? 

[pickmeup]

If there ever was a opportunity for GM to gain some traction on getting some more of the lost car sales back it just may be now. One has to ask how can the Asian mfg. turn out a model that people buy in good numbers and the American mfg . unveils a competing model with little to at best barely moderate interest? The only answer I can come up with is ''corporate culture'' must be vastly different in Asian vs. American thinking. How is it that Asian mfg comes out with model that youth likes and buys and it holds up well. Usually well enough that as they progress to mid life they are still buying the Asian auto just perhaps a different model to suit their changing midlife situation. Further as they near retirement they still stick with them. American mfg meanwhile captures a few youth and usually can't wait to get rid of it and rarely considers another make or model from American mfg.in mid life or retirement ? There has to be some serious core value and culture values . Remember the old adage ....shit starts at the top and rolls downhill.

[Grumpy Bear]

At a local GM dealer tonight. Cruze. nearly 30K. Mid 20K for a Spark! There's a clue. 2017 Silverado like Pepper but long box. 5.3 motor and LT trim. Over 40K Peppers new stick was 29K. That's a pretty expensive V8 and radio.  

[Likarok]

So Ford must be going to switch to Mustangs for NASCAR! 

 

I think this is a major mistake on Fords part! Personally I will never drive anything Asian or European! The Millennials think they have all the answers. In thirty years when the world is screwed we will have them to thank!

 

Glad I won't be around to see it!

Edited April 30, 2018 by Likarok

[pickmeup]

2 hours ago, Likarok said:

So Ford must be going to switch to Mustangs for NASCAR! 

 

I think this is a major mistake on Fords part! Personally I will never drive anything Asian or European! The Millennials think they have all the answers. In thirty years when the world is screwed we will have them to thank!

 

Glad I won't be around to see it!

Yes would assume Mustang in Nascar and who knows ...Mustang Police Package for cruisers ?

[truckofwinandawesome]

5 hours ago, Likarok said:

So Ford must be going to switch to Mustangs for NASCAR! 

 

I think this is a major mistake on Fords part! Personally I will never drive anything Asian or European! The Millennials think they have all the answers. In thirty years when the world is screwed we will have them to thank!

 

Glad I won't be around to see it!

I'm a Millennial and even I think Ford is making a huge mistake; because if nobody hasn't seen them yet, Gas prices are starting to creep up again!

[j-ten-ner]

Or they have something up the sleeve.

 

 

so long

j-ten-ner

[Colossus]

8 hours ago, pickmeup said:

Yes would assume Mustang in Nascar and who knows ...Mustang Police Package for cruisers ?

Nope..  no need for that.  They do just fine with the utility (Explorer)  Chevy no longer has the Caprice (Holden) and only has the Silverado and Tahoe police packages.  Many departments around here use the Explorer and the Tahoes, a few still like the Chargers (most are V6)  and Colorado State Patrol has a healthy number of Charger V-8s.  (and Tahoes and a few of the Ford Taurus PIs)

[Colossus]

As long as Dodge continues to offer the Charger police package, the sedan need is filled.  Who knows.. if Chevy keeps the Impala around we may see a police package return to it.  (2016 or 17 was the last year of the Impala Classic that was the 2007-2013 civilian and fleet design kept over for fleets only)