In Defense of Blackface Minstrelsy
I’m sorry. That title should read: “In Defense of General Motors”. The confusion derives from the similar esteem among the class of people whose opinions are deemed relevant. If you don’t like my wordy pieces about automobiles, you may as well move on.
Within this post I shall discuss factors which appear relevant as to whether General Motors Company of Detroit, United States may become a viable, consistently profitable company. I intend to additionally address whether following the public offering of stock, whether that stock may be or could become a worthwhile investment. This is an opinion piece with factoids and morsels of data added for spice.
The article proceeds under the following assumptions:
- General Motors Company is perceived by the public at large as either the successor or the very same organization as General Motors Corporation and its various divisions and subsidiaries.
- Your humble narrator is concerned primarily with the business in GM’s largest market: North America. Sorting through what I know and what I think I know about the business elsewhere is simply impossible.
- Although GM owns token amounts of non-automotive companies, these are not relevant to the affairs of the company as a whole. These are not likely to be sold, moved or generate notable revenue or costs any time soon.
I was forwarded an article on Friday which discussed how terrible it is that General Motors sells hundreds of thousands of cars every year to high-volume, repeat customers profitably and have done so since 1911*. That is, fleet sales. My correspondent appears to have fallen for the delusion common in popular economics media that GM’s fleet sales are somehow sales at absurd prices of products not otherwise salable. The fact of the matter is that these are volume sales which are typically ordered and planned months or even years in advance. They sell hundreds of thousands of vehicles every year in this way. It is an essential part of their business. Were GM to disappear tomorrow, considerable trouble would be caused by the absence of their vehicle and parts supply to these customers.
That Toyota and Honda do not participate in this kind of sales in the United States is not evidence of GM’s inadequacy, but rather that GM was in this business over fifty years before the first Honda automobile or post-Toyopet came to our shores. The buyers of fleets wanted known quantities into the 1980s. Toyota does have a less successful fleet sales organization.
It is worth mentioning in this context that among General Motors Company’s long-term fleet customers is American Honda Motor. Honda does not make trucks. Soichiro Honda was an admirer of the occupation-era GMC trucks with which he was familiar. If you would like to read typical internet commentary pissing all over the corpse of America’s industrial might, here’s all you can eat.
GM arranges for the disposition of vehicle trade-ins within this program. While many cars are auctioned regionally, some are returned to corporate service centers and Detroit itself. Those vehicles are then totally dissembled and assessed. Not to put too fine a point on it, but touch points and initial fit and finish aside, this is how you get a mid-size American car that achieves over 30 miles per gallon for 300K miles. Oh, you didn’t know this? You didn’t know you could get a Chevrolet Malibu or Buick Lacrosse and not have to fuck with it for a couple of decades? Perhaps that is because poor people, workers and the like buy these therefore unacceptable cars. Often used. It may not have the most fashionable technology or exclamation points for the salesmen, but when whats-his-name bought that BMW 5-series or Lexus LS/GS the car he really wanted was the Buick.
I grant that you see more GM vehicles broken down by the side of the road, but those cars are twenty or more years old. Most of the acceptable-brand vehicles at that age are long-since recycled. That Chevrolet, Pontiac, Oldsmobile, Geo, or Buick was being used by some twenty year old dude as a daily driver. Alas, durability and comfort mean nothing.
Unless Americans develop an aesthetic which eschews badges and branding nonsense, GM remains doomed. Unless [famous for being famous person] pulls up in a GM vehicle or is seen putting the kids or plying the Ikea booty into a GMC, Chevy or such, I can’t see it happening. I want to believe in a world in which the universally praised so far, Lordstown, Ohio built Chevrolet/Vauxhall/Opel Cruze becomes the default first-new-car purchase not unlike Toyota Corolla was in the 90s and beyond. I want to believe that the if-you-drive-it-you-buy-it GMC Terrain becomes the mom-mobile of the ’10s, like the 245, Caravan/Voyager, and Explorer before. Not only do I want to believe, I do believe. For the Novas that burned me, literally, the Cavalier with the inexplicable mounts which prevented replacement of the head gasket, and of course my well remembered ’68 Impala Hardtop that would not start in the summer without sitting for four hours …
I believe that General Motors, and by extension America and all the dumb asses who live there got the stuff. I don’t understand the Corvette, but by God I know what it means. I don’t want a mid-sized car with a four-speed automatic, but do appreciate that this is the used car I can afford today and it will run for a half-million miles. However …
It’s the people worth paying attention to who matter. If the nice, white people don’t buy into it, it may as well not exist. If Anderson Cooper doesn’t buy a Cadillac CTS why would anyone else? As long as GM broke St. Ronnie’s commandments about, uh, something, why participate? The imminent Chevrolet Cruze could sell in irrational numbers. The Terrain could become an annoying stereotype and it would not matter. The CTS or upcoming full-sized Cadillac could lead to people on all six continents where GM builds and sells automobiles to wonder why the Sonderklasse is allegedly worth the money. The company which builds these machines could provide unprecedented dividends. None of this matters.
What matters is how cool they are. This is the controller of the stock price. GM is terminally uncool. That anyone who attempts to take over the company will lose billions as they sell away the assets is of no consequence. GM broke the rules Whitey just made up and must be punished by death. When the moron capitalists understand the ramifications of their actions, it will be too late.
Understand that the trucks who deliver food to the stores where your servants purchase will not have service parts for a couple of years while that is sorted out. The mechanics who repair or tow your automobiles will not be able to get to the authorized service center. Forget about air conditioning, laundered clothing or delivery services for a few years. Yep, all GM fleet service customers.
As I type it looks like somebody wants to IPO GM before it is stable. The only rationale is to pump and dump. Good luck selling plants in a saturated market. Good luck selling brands in a market which does not care. When you can’t get anyone to sell you food Whitey, I won’t care.
*GMC established a department to cope with the needs of trucking companies in 1911. GM’s Fleet division descends from this.