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General Motors Corporation
Company typePublic (NYSE: GM)
IndustryAutomotive
Founded1908
HeadquartersDetroit, Michigan, USA; manufacturing facilities in 30 U.S. states and 33 countries
Key people
Rick Wagoner, Chairman & CEO
Robert A. Lutz, Vice Chairman
Frederick Henderson, CFO
Kirk Kerkorian, third-largest shareholder
ProductsAutomobiles
Engines
RevenueIncrease$192.604 Billion USD (2005)
10,315,000,000 United States dollar (2022) Edit this on Wikidata
Decrease-$10.567 Billion USD (2005)
Total assets208,300,000,000 United States dollar (2017) Edit this on Wikidata
Number of employees
326,999 (2006)
Websitewww.gm.com

General Motors Corporation, also known as GM, is the world's largest automaker. Founded in 1908, GM today employs about 326,999 people around the world. With global headquarters in Detroit, Michigan, USA, GM manufactures its cars and trucks in 33 countries. In 2005, 9.17 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo (now defunct, but replaced by Chevrolet in Europe and in some other countries), Holden, Hummer, Oldsmobile (now defunct), Opel, Pontiac, Saab, Saturn, Vauxhall. GM operates a finance company, GMAC Financial Services, which offers automotive, residential and commercial financing and insurance. GM's OnStar subsidiary is a provider of vehicle safety, security and information services.

GM is the majority shareholder in GM Daewoo Auto & Technology Co. of South Korea, and has product, powertrain and purchasing collaborations with Suzuki Motor Corp. and Isuzu Motors Ltd. of Japan. GM also has advanced technology collaborations with Toyota Motor Corporation of Japan, DaimlerChrysler AG and BMW AG of Germany, and vehicle manufacturing ventures with several automakers around the world, including Toyota, Suzuki, Shanghai Automotive Industry Corporation of China, AutoVAZ of Russia and Renault SA of France.

GM Parts and accessories are sold under the GM, GM Performance Parts, GM Goodwrench and ACDelco brands through GM Service and Parts Operations, which supplies GM dealerships and distributors worldwide. GM engines and transmissions are marketed through GM Powertrain. GM's largest national market is the United States, followed by China, Canada, the United Kingdom, and Germany.

History

The Renaissance Center in Detroit, Michigan, is General Motors' world headquarters

General Motors was founded in 1908 in Flint, Michigan, as a holding company for Buick, then controlled by William C. Durant, and acquired Oldsmobile later that year. The next year, Durant brought in Cadillac, Elmore, and Oakland. In 1909, General Motors acquired the Rapid Motor Vehicle Company of Pontiac, Michigan, the predecessor of GMC Truck. A Rapid became the first truck to conquer Pikes Peak in 1909. Durant lost control of GM in 1910 to the company's bankers, because of the large amount of debt taken on in its acquisitions.

Durant left the firm and helped establish the Chevrolet Motor Company in 1912 with brothers Gaston and Louis Chevrolet. He returned to head GM in 1915, with financing by Pierre S. du Pont. Chevrolet entered the General Motors fold in 1916. Du Pont removed Durant from management in 1920, and various Du Pont interests held large or controlling share holdings until about 1950.

GM surpassed Ford Motor Company in the 1920s thanks to the leadership of Alfred Sloan. While Ford continued to refine the manufacturing process to reduce cost, Sloan was inventing new ways of managing a complex worldwide organization, while paying special attention to consumer demands. Car buyers no longer wanted the cheapest and most basic model; they wanted style, power, and prestige, which GM offered them. Thanks to consumer financing, easy monthly payments allowed far more people to buy GM cars, while Ford was moralistically opposed to credit. During the 1920s and 1930s, General Motors bought out the Yellow Coach bus company, and helped create Greyhound bus lines. They replaced intercity train transport with buses, and established subsidiary companies to buy out streetcar companies and replace the rail-based services as well with buses. GM formed United Cities Motor Transit in 1932 (see General Motors streetcar conspiracy for additional details).

General Motors produced vast quantities of armaments, vehicles and even aircraft during World War II, and also had sizeable interests in Nazi Germany [1]. During the war, the U.S auto companies were concerned that the Nazis would nationalize American owned factories in Germany. In the spring of 1939, the Nazis had assumed day to day control of American owned factories in Germany, but decided against nationalizing them. GM's William P. Knudson served as head of U.S. wartime production for President Franklin Roosevelt who had referred to Detroit as the Arsenal of Democracy. Today, Detroit is the headquarters for the U.S. Army Tank-Automotive and Armaments Command, known as TACOM.

General Motors bought the internal combustion engined railcar builder Electro-Motive Corporation and its engine supplier Winton Engine in 1930, renaming both as the General Motors Electro-Motive Division. Over the next twenty years, diesel-powered locomotives — the majority built by GM — largely replaced other forms of traction on American railroads. (During World War II, these engines were also important in American submarines and destroyer escorts.) Electro-Motive was sold in early 2005.

At one point GM had become the largest corporation registered in the United States, in terms of its revenues as a percent of GDP. In 1953 Charles Erwin Wilson, then GM president, was named by Eisenhower as Secretary of Defense. When he was asked during the hearings before the Senate Armed Services Committee if as secretary of defense he could make a decision adverse to the interests of General Motors, Wilson answered affirmatively but added that he could not conceive of such a situation "because for years I thought what was good for the country was good for General Motors and vice versa". Later this statement was often misquoted, suggesting that Wilson had said simply, "What's good for General Motors is good for the country." At the time, GM was one of the largest employers in the world – only Soviet state industries employed more people. On December 31, 1955, General Motors became the first American corporation to make over one billion dollars in a year.

After GM's massive lay-offs hit Flint, Michigan, a strike began at the General Motors parts factory in Flint on June 5, 1998, which quickly spread to five other assembly plants and lasted seven weeks.

In the late 1990s, GM had regained market share; its stock had soared to over $80 a share by 2000. However, in 2001, the stock market drop following the September 11, 2001 attacks, combined with historic pension underfunding, caused a severe pension and benefit fund crisis at GM and many other American companies and the value of their pension funds plummeted. In successive moves, GM responded to the crisis by fully funding its pension fund; however, its Other Post Employment Benefits Fund (OPEB) became a serious issue resulting in downgrades to its bond rating in 2005. The company expressed its disagreement with these bond rating downgrades. In 2006, GM responded by offering buyouts to hourly workers to reduce future liabilty; over 35,000 workers responded to the offer, well exceeding the company's goal. GM has gained higher rates of return on its benefit funds as a part of the solution. Stock value has begun to rebound - as of September 14, 2006 GM's market capitalization was about $18.88 billion.

Nevertheless, since 2000, GM has remained the world's largest auto maker by ranked according to sales. After oil company mergers, GM's rank changed to the 5th largest company in the United States and the world in terms of sales.

Renault-Nissan proposal

On June 30, 2006, Kirk Kerkorian, whose Tracinda Corporation is the third-largest shareholder of General Motors, proposed a global alliance between GM and the Renault-Nissan group. Carlos Ghosn, the CEO of both Renault and Nissan expressed interest in possibly acquiring a stake in GM. GM held an emergency board meeting to examine Kerkorian's proposal; GM's board reaffirmed its support for CEO Rick Wagoner and GM's turnaround plans. On July 14, 2006, after a meeting with Carlos Ghosn, Rick Wagoner decided to study the matter for 90 days, including non-alliance forming ventures. On October 4 2006 the companies announced the end of the discussions about an alliance, determining "that significant aggregate synergies might result from the alliance" and "the parties did not agree on either the total amount of aggregate synergies or the distribution of those benefits."[2]

General Motors Hughes Electronics

Main article: Hughes Electronics

GM Hughes Electronics was formed in 1985 when Hughes Aircraft was sold by the Howard Hughes Medical Institute to GM for $5 billion. GM merged Hughes Aircraft with its Delco Electronics unit to form GM Hughes Electronics (GMHE). This division was a major defense contractor, civilian space systems manufacturer and communications company. The defense business was sold to Raytheon in 1997 and the space and communications division was sold to Boeing in 2000.

Auto racing

General Motors has an extensive history in numerous forms of racing. Vehicles of most, if not all, of GM's brands have been represented in competition, with perhaps Chevrolet being the most prominent. In particular, the Chevrolet Corvette has long been popular and successful in international road racing. GM also is a supplier of racing components, such as engines, transmissions, and electronics. GM's Oldsmobile Aurora engine platform was successful in open-wheel Indy-style racing throughout the 1990s, winning many races in the small V-8 class. An unmodified Aurora V-8 in the Aerotech, captured 47 world records, including the record for speed endurance in the Motorsports Hall of Fame of America. Recently, the Cadillac V-Series has entered motorsports racing. GM has also used many cars in the American racing series NASCAR. Currently the Chevrolet Monte Carlo is the only entry in the series but in the past the Pontiac Grand Prix, Buick Regal, Oldsmobile Cutlass, Chevrolet Lumina, and Chevrolet Malibu were also used.

Corporate structure and leadership

Current members of the board of directors of General Motors are: Percy Barnevik, Erskine Bowles, John Bryan, Armando Codina, George Fisher, Karen Katen, Kent Kresa, Ellen Kullman, Philip Laskawy, Eckhard Pfeiffer, and Rick Wagoner (chairman). Jerome York, who was elected to the board on February 6, 2006 to represent Kirk Kerkorian abrubptly resigned on October 6, 2006, following the decision by GM to break off talks about an alliance with Nissan and Renault.

Rick Wagoner is also the chief executive officer of the company (since June 1, 2000), succeeding John F. Smith, Jr.

Chairmen of the Board of General Motors

Chairmen of the Board of General Motors[3]

  • Thomas Neal Nov.19,1912 - Nov. 16, 1915
  • Pierre S. du Pont Nov.16,1915 - Feb. 7, 1929
  • Lammot du Pont Feb.7, 1929 - May 3, 1937
  • Alfred P. Sloan, Jr. May 3,1937 - April 2, 1956
  • Albert Bradley April 2, 1956 - Aug. 31, 1958
  • Frederic G. Donner Sept. 1, 1958 - Oct. 31, 1967
  • James M. Roche Nov. 1, 1967 - Dec. 31, 1971
  • Richard C. Gerstenberg Jan. 1, 1972 - Nov. 30, 1974
  • Thomas A. Murphy Dec. 1, 1974 - Dec. 31, 1980
  • Roger B. Smith Jan. 1, 1981 - July 31, 1990
  • Robert C. Stempel Aug. 1, 1990 - Nov. 1, 1992
  • John G. Smale Nov. 2, 1992 - Dec. 31, 1995
  • John F. Smith, Jr. Jan. 1, 1996 - April 30, 2003
  • G. Richard Wagoner, Jr. May 1, 2003 - Present

Chief Executive Officers of General Motors

Chief Executive Officers of General Motors[4]

  • Alfred P. Sloan, Jr. May 10, 1923 - June 3, 1946
  • Charles E. Wilson June 3, 1946 - Jan. 26, 1953
  • Harlow H. Curtice Feb. 2, 1953 - Aug. 31, 1958
  • Frederic G. Donner Sept. 1, 1958 - Oct. 31, 1967
  • James M. Roche Nov. 1, 1967 - Dec. 31, 1971
  • Richard C. Gerstenberg Jan. 1, 1972 - Nov. 30, 1974
  • Thomas A. Murphy Dec. 1, 1974 - Dec. 31, 1980
  • Roger B. Smith Jan. 1, 1981 - July 31, 1990
  • Robert C. Stempel Aug. 1, 1990 - Nov. 1, 1992
  • John F. Smith, Jr. Nov. 2, 1992 - May 31, 2000
  • G. Richard Wagoner, Jr. June 1, 2000 - Present

Presidents of General Motors

Presidents of General Motors [5]

Corporate issues

Environmental and social policies

General Motors was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mothers magazine. For example, GM has given millions of dollars in computers to colleges of Engineering through its PACE Awards program. General Motors has promoted its clean burning Flex Fuel vehicles which can run on either E-85 (ethanol) or gasoline. GM has more vehicles that lead in their class in fuel economy than any other automaker, including large vehicles as exemplified in its redesigned full-sized SUVs in 2006.

Alternative vehicles

General Motors has long worked on alternative-technology vehicles, and has recently led the industry with clean burning Flex Fuel vehicles that can run on either E-85 (ethanol) or gasoline. The company was the first to use turbochargers and was an early proponent of V6 engines in the 1960s, but quickly lost interest as the muscle car race took hold. They demonstrated [1] gas turbine vehicles powered by kerosene, an area of interest throughout the industry in the late 1950s, but despite extensive thermal recycling (developed by Chrysler) the fuel consumption was too high and starting torque too low for everyday use. They were also an early licensee of Wankel engine technology, even developing the Chevrolet Monza around the powerplant, but abandoned the alternative engine configuration in view of the 1973 oil crisis. In the 1970s and 1980s, GM pushed Diesel engines and cylinder deactivation technologies to disastrous results due to poor durability in the Oldsmobile diesels (this was a modified gasoline engine) and drivability issues in the Cadillac 4-6-8 variable cylinder engines.

In 1996, GM introduced the EV1, the first modern mass-produced electric car, which was available by lease only. Despite the positive publicity generated by this vehicle, and a long waiting list for the cars, the company cancelled the program after only a tiny production run, reportedly due to a "lack of consumer interest". GM forced return of EV1 vehicles, even though some owners wanted to keep them. The story of GM's non-support for its own product is related in the 2006 documentary Who killed the electric car?.

Hybrid initiative

GM delivered the first commercial hybrid vehicle and was early innovator in hybrid vehicle development, building Diesel-electric trains since the 1930s (but without stored energy recovery) and buses since the 1990s. In May 2004, GM delivered the world's first full sized hybrid pickups, and introduced a hybrid passenger car. In 2005, the new Opel Astra Diesel Hybrid concept vehicle appears. The 2006 Saturn VUE Green Line will be the first hybrid passenger vehicle from GM, but it too is a mild design. GM has hinted at new hybrid technologies to be employed that will be optimized for higher speeds such as are encountered in freeway driving.

Hydrogen initiative

GM has prided its research and prototype development of hydrogen powered vehicles, to be produced in early 2010, using a support infrastructure still in a prototype state. The economic feasibility of the technically challenging hydrogen car, and the low-cost production of hydrogen to fuel it, has also been discussed by other automobile manufacturers such as Ford and Chrysler.

Marketing

Each of GM's automotive divisions were once each targeted to specific market segments and, despite some shared components, each distinguished itself from its stablemates with unique styling and (to some extent) technology. The shared components and common corporate management created substantial economies of scale, while the distinctions between the divisions created an orderly upgrade path, with an entry-level buyer starting out with a practical and economical Chevrolet and, (assuming progressive prosperity of the buyer), moving through offerings of the several divisions until the purchase of a Cadillac. The divisions were not competing with each other as much as passing along the same customer, who would thus always be buying a GM product, with the profits flowing to this single corporation.

The postwar industry became enamored with the concept of "planned obsolescence", implemented by both technical and styling innovations, with a three year product cycle typical within the industry. In this cycle, a new basic body shell is introduced and then modified for the next two years by minor styling changes. GM, Ford, and Chrysler competed vigorously in this new environment.

By 1958, the divisional distinctions began to blur, with the availability of high-performance engines in Chevrolets and Pontiacs, and the introduction of higher trim models such as the Chevrolet Impala and Pontiac Bonneville that were priced in line with some of Oldsmobile and Buick's offerings. By the time that Pontiac, Oldsmobile and Buick introduced similarly styled and priced compact models for 1961, the old "step-up" structure between the divisions was nearly over.

By the mid 1960s, most of GM's vehicles were built on a few common platforms and in the 1970s, began to use nearly identical body panel stampings, differing only in internal and external trim items. This was seen especially in the compact passenger vehicles offered by the divisions. Nonetheless, the 1960-75 period was perhaps the greatest in GM's history, as it eventually held slightly over 50% of the U.S. market.

The subcompact Chevrolet Vega, introduced for the 1971 model year damaged GM's reputation more than perhaps any other vehicle in its history. Plagued by rust problems and an aluminum engine that was prone to failure at low mileage, the car was not designed and built to the standards consumers expected from GM.

By the 1980s, GM frequently "rebadged" one division's successful vehicle into several models across the divisions, all positioned close to one another in the market place. Thus, a new GM model's main competition might be another model spawned off the same platform. This led to so-called market "cannibalization", where GM's respective divisions spent time stealing sales from one another, while other more co-ordinated efforts (notably from the Japanese manufacturers) were allowed to increase their market penetration. Even today, the company's GMT360 mid-sized light truck platform has, since its inception in 2002, spawned the basic Chevrolet Trailblazer, an extended version of the Trailblazer, the Oldsmobile Bravada, the GMC Envoy, the Envoy XUV (an extended Envoy with a reconfigurable tailgate) and later, the Isuzu Ascender, Buick Rainier, and, to a lesser extent, the Saab 9-7X. Though each model had a more or less unique mission, without custom engine choices or radically different suspension settings and trim choices, the cars can hardly be discerned from one another.

In the late 1990s, the U.S. economy was on the rise and GM and Ford gained market share producing enormous profits primarily from the sale of light trucks and sport-utility vehicles. From 2000 to 2001, the Federal Reserve, in a move to quell the stock market, made twelve successive interest rate increases. Following the September 11, 2001 attacks, a severe stock market decline magnified the effect of GM's history pension and benefit fund underfunding, precipitating a crisis. At the same time, this crisis happened at other U.S. companies with similar histories, such as Ford, DaimlerChrysler, and United Airlines. GM began its Keep America Rolling campaign, which boosted sales, and other auto makers were forced to follow suit. The U.S. automakers saw gross margins deteriorate.

In 2004, GM redirected resources from the development of new sedans to an accelerated refurbishment of their light trucks and SUVs for introduction as 2007 models in early 2006. Shortly after this decision, fuel prices increased by over 50% and this in turn affected both the trade-in value of used vehicles and the perceived desirability of new offerings in these market segments. The current marketing plan is currently to extensively tout these revised vehicles as offering the best fuel economies in their class (of vehicle). GM claims its hybrid trucks will have gas-mileage improvements of 25%. According to EPA estimates GM's new line-up of SUV's provide more power and better fuel economy in their respective class than the foreign competition. [dubious – discuss]

In the summer of 2005 GM announced that effective immediately, its corporate chrome emblem "Mark of Excellence" will begin appearing on all recently introduced and all-new 2006 model vehicles produced and sold in North America. The move is seen as an attempt by GM to link its name and vehicle brands more closely. The company's vehicle brands include Chevrolet, Pontiac, Buick, GMC, Cadillac, Saab, Hummer and Saturn.

GM promoted sales through an employee discount to all buyers. Marketed as the lowest possible price, GM cleared an inventory buildup of 2005 models to make way for its 2006 lineup. While the promotion was a temporary shot in the arm for sales, it did not help the company's bottom line. Thus, GM has begun a renewed emphasis on product features in its ads, not just price.

Economics

As is the case with the two other U.S. automobile manufacturers, international exchange rates tend to help Japanese and Korean imports (though not sales of vehicles manufactured in America). Japan and China were accused of manipulating exchange rates to gain a market advantage through purchases of U.S. Treasuries after the September 11, 2001 attacks in violation of Article IV of the International Monetary Fund Accords in hearings before the U.S. Senate Committee on Banking, Housing, and Urban Affairs May 1, 2002 by economist and former Ambassador Ernest Preeg on behalf of American manufacturers. [6] The expected future entry of China into the U.S. automotive market is likely to be advantaged by unrealistic currency exchange ratios.

In March 2005, the Government of Canada provided C$200 million in incentives to General Motors for its Ontario plants, and last fall it provided C$100 million to Ford Motor Co. to expand production and provide jobs, according to Jim Harris. Similar incentives were promised to non-North American auto companies like Toyota, Premier Dalton McGuinty said the money the province and Ottawa are pledging for the project is well-spent. His government has committed C$400 million, including the latest Toyota package of C$125 million, to the province's automobile sector, which helped finance $5 billion worth of industry projects.

For the first time, in 2004 the total number of cars produced by all makers in Ontario exceeded those produced in Michigan.

GM in China

General Motors is the top-selling foreign auto maker in China, with a 12.5% market there. The Buick brand is especially strong, led by the Buick Excelle subcompact. Cadillac initiated sales in China in 2004, starting with imports. GM pushed the Chevrolet brand there in 2005 as well, transferring the formerly-Buick Sail to that marque. The company manufactures most of its China-market vehicles locally, through its Shanghai GM joint venture. The SAIC-GM-Wuling Automobile joint-venture is also successful selling trucks and vans under the Wuling marque.

Corporate restructuring

After gaining market share in the late 1990s and making enormous profits General Motors stock soared to over $80 a share. However, in 2000, twelve successive interest rate hikes by the Federal Reserve to quell the stock market, and a severe stock market decline following the September 11, 2001 attacks, caused a pension and benefit funds crisis at General Motors and many other American companies. General Motor's rising retiree health care costs and Other Post Employment Benefit (OPEB) fund deficit prompted the company to enact a broad restructuring plan. Although GM had already taken action to fully fund its pension plan, its OPEB fund became an issue for its corporate bond ratings. GM had expressed its disagreement with the bond ratings; moveover, GM's benefit funds were performing at higher than expected rates of return. Then, following a $10.6 billion loss in 2005, GM acted quickly to implement its restructuring plan. For the first quarter of 2006 GM earned $400 million, signaling a turnaround had already begun even though many aspects of the restructuring plan had not yet taken effect.

In February 2005, GM successfully bought itself out of a put option with Fiat for $2 billion USD (€1.55 billion). In 2000, GM had sold a 6% stake to Fiat in return for a 20% share in the Italian automaker. As part of the deal, GM granted Fiat a put option which, if exercised between January 2004 and July 2009, could have forced GM to buy Fiat. GM had agreed to the put option at the time, perhaps to keep it from being acquired by another automaker such as DaimlerChrysler competing with GM's Opel and Vauxhall marques. The relationship suffered, and Fiat had failed to improve. In 2003, Fiat recapitalized, reducing GM's stake to 10%.

In February 2006, GM slashed its annual dividend from 2.00 to $1.00 per share. The reduction saved $565 million a year.

In March 2006, GM divested 92.36 million shares (reducing their stake from 20% to 3%) of Japanese manufacturer Suzuki, in order to raise $2.3 billion. GM originally invested in Suzuki in the early 1980s.

On March 23, a private equity consortium including KKR, Goldman Sachs Capital, and Five Mile Capital purchased $8.8 billion, or 78% of GMAC, GM's commercial mortgage arm. The new entity, in which GMAC will own a 21% stake, will be known as Capmark Financial Group[7].

On April 3, 2006, GM announced that it would sell 51% of GMAC as a whole to a consortium led by Cerberus Capital Management, raising $14 billion over 3 years. Investors also include Citigroup's private equity arm and Aozora Bank of Japan. The group will pay GM $7.4 billion in cash at closing. GM will retain approximately $20 billion in automobile financing worth an estimated $4 billion over three years.[8]

GM sold its 8% stake in Isuzu on April 11, 2006, to raise an additional $300 million.[9]

On June 26, 2006, 35,000 GM workers had agreed to company buyouts, well over the company goal significantly reducing GM's operating costs and future liability.

On June 26, 2006, 12,600 workers from Delphi, a key supplier to GM, agreed to buyouts and an early retirement plan offered by GM in order to avoid a strike, after a judge agreed to cancel Delphi's union contracts. 5,000 Delphi workers were allowed to flow to GM.

GM continues to open new plants and modernize existing plants which tends to go unreported. With improving sales, GM could modify its plans. Plants scheduled to close under the planned GM restructuring include (source: General Motors Corporation):

Plants Location Closing Role # Employees
Scarborough Assembly van plant Ontario 1993 Van assembly 2,700
Moraine Assembly (3rd shift) Ohio 2006 Mid-size SUV assembly 4,165
Oklahoma City Assembly Oklahoma Early 2006 Mid-size trucks and SUV assembly 2,734
Lansing Craft Centre Michigan Mid-2006 Chevrolet SSR roadster assembly 398
Oshawa Car Assembly No. 1 (3rd shift) Ontario Mid-2006 Mid-size sedan assembly 3,600
Spring Hill Manufacturing Line 1 Tennessee March 2007 Saturn Ion sedan and coupe assembly 5,776
Doraville Assembly Georgia 2008 Minivan assembly 3,076
Lansing Metal Center Michigan 2006 Metal fabricating 1,398
Portland Distribution Center Oregon 2006 Parts distribution 95
Saint Louis Distribution Center Missouri 2006 Parts distribution 182
Pittsburgh Metal Pennsylvania 2007 Metal fabricating 613
Ypsilanti Processing Center Michigan 2007 Parts processing 278
St. Catharines Engine Ontario 2008 Engine/Transmission parts 1,699
Flint North 3800 Michigan 2008 Engines 2,677

Controversy over electric vehicles

File:Evcrushed.jpg
EV1s crushed by General Motors shortly after production

On June 30, 2006 a documentary about the demise of the EV1 and other electric vehicles entitled "Who Killed the Electric Car?" debuted in theatres across America, sparking criticism of the motivation behind the cancellation of their electric car program.

Consumer advocates, activists, commentators, journalists, and documentary makers claim GM had deliberately sabotaged their company's zero emission electric vehicle efforts through several methods: failing to market, failing to produce appropriate vehicles, failing to satisfy demand, and using lease-only programs with prohibitions against end of lease purchase.[2] [3] [4] [5] [6]

The process of obtaining GM's first electric vehicle the EV1 was difficult. The vehicle could not be purchased outright. Instead, General Motors offered a closed-end lease for three years, with no renewal or residual purchase options. The EV1 was only available from specialist Saturn dealerships, and only in California.[7] Before reviewing leasing options, a potential lessee would be taken through a 'pre-qualification' process in order to learn how the EV1 was different from other vehicles. Next came a waiting list with no scheduled delivery date.[8]

Several weeks before the debut of the movie, the Smithsonian Institution announced that its EV1 display was being permanently removed and the EV1 car put into storage. GM is a major financial contributor to the museum, and both parties denied that this fact contributed to the removal of the display.[9]

However, General Motors disputes the existence of any conspiracy surrounding the death of the EV1. An entry was posted on the GM FastLane Blog in 2006 in which GM defended its decision by saying that it was unable to guarantee the vehicles could continue to be maintained in a safe operating state. The automaker acknowledges that perhaps the events could have gone differently, but that in the end they did what was in the best interest of consumer safety.[10]

General Motors has responded to complaints about the scrapping of the EV1 program: During the four years available to the public, only 800 EV1's were released. Over $1 billion was spent on the EV1 program, with a great portion used for consumer incentives and marketing. With a waiting list of 5,000 applicants, only 50 individuals actually were willing to accept a lease on the EV1. Suppliers ceased production of replacement parts due to the low demand for the EV1. This made repairs and continued safety of the vehicles difficult.

According to GM, not all of the EV1's were destroyed. Many were donated to research institutions and facilities, along with musuems. [11]

There is no other major automaker on the road offering a fully electric vehicle designed for everyday use on public transportation routes. [12]. However the Norwegian built electric car Think Nordic, which Ford bought and mothballed after a similar lease-only release, is still very popular in Norway thanks to the government's policy to promote the use of electrical cars. EVs in Norway are exempt from taxes, have free parking, pass toll roads for free, and are allowed to drive in the bus lanes avoiding traffic congestions. This has lead to many Norwegian consumers buying back second-hand the many Think cars that were recalled after the failed lease programs in other countries.

Further reading

  • Barabba, Vincent P. Surviving Transformation: Lessons from GM's Surprising Turnaround (2004)
  • Chandler, Alfred D., Jr., ed. Giant Enterprise: Ford, General Motors, and the Automobile Industry 1964.
  • Cray, Ed. Chrome Colossus: General Motors and Its Times. 1980.
  • Farber, David. Sloan Rules: Alfred P. Sloan and the Triumph of General Motors U of Chicago Press 2002
  • Gustin, Lawrence R. Billy Durant: Creator of General Motors , 1973.
  • Halberstam, David. The Reckoning (1986) detailed reporting on the crises of 1973-mid 1980s
  • Keller, Maryann. Rude Awakening: The Rise, Fall, and Struggle for Recovery of General Motors, 1989.
  • Leslie, Stuart W. Boss Kettering: Wizard of General Motors Columbia University Press, 1983.
  • Maxton, Graeme P. and John Wormald, Time for a Model Change: Re-engineering the Global Automotive Industry (2004)
  • Maynard, Micheline. The End of Detroit: How the Big Three Lost Their Grip on the American Car Market (2003)
  • Rae, John B. The American Automobile: A Brief History. University of Chicago Press, 1965.
  • Sloan, Alfred P., Jr. My Years with General Motors, 1963.
  • Weisberger, Bernard A. The Dream Maker: William C. Durant, Founder of General Motors , 1979

See also

People

Books and Films

  • Final Offer - A documentary film that shows the 1984 GM contract negotiations, that would result in the union split of the Canadian arm of the UAW. A very interesting inside look at union negotiations.
  • Who killed the electric car? - A documentary film charting GM's launch, then self-sabotage of the electric car EV1.

Brands

Subsidiaries

Categories

References

  1. ^ Ford and GM Scrutinized for Alleged Nazi Collaboration By Michael Dobbs, Washington Post Staff Writer, Monday, November 30, 1998; Page A01
  2. ^ "GM-Renault/Nissan talks called off". Associated Press. 2006-10-04. Retrieved 2006-10-04.
  3. ^ Chairmen of the Board of General Motors
  4. ^ Chief Executive Officers of General Motors
  5. ^ Presidents of General Motors
  6. ^ MAPI (2002). Preeg Paper on Exchange Rate Manipulation Manufacturer's Alliance
  7. ^ "article". Detroit Free Press. Retrieved March 23. {{cite web}}: Check date values in: |accessdate= (help); Unknown parameter |accessyear= ignored (|access-date= suggested) (help)
  8. ^ "GM to sell 51% of GMAC for $14 billion". Automotive News. Retrieved April 3. {{cite web}}: Check date values in: |accessdate= (help); Unknown parameter |accessyear= ignored (|access-date= suggested) (help)
  9. ^ "GM sells Isuzu shares for $300 million". Detroit News. Retrieved April 12. {{cite web}}: Check date values in: |accessdate= (help); Unknown parameter |accessyear= ignored (|access-date= suggested) (help)
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