The Fall of GM: A Visual Guide
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In recent weeks, GM has been making a last-ditch effort to deal with its mounting problems and somehow escape bankruptcy. The final outcome remains to be seen, but any bailout efforts or even the most drastic of moves at this stage seem to be, as visualized below, the equivalent of lifting massive, crushing weights with simple balloons. Yesterday’s announcement of the resignation of GM Chairman and Chief Executive Officer Rick Wagoner at the behest of the Obama administration was just the latest in a series of moves designed to reassure public confidence in the flailing automotive manufacturer.
We hope our infographic helps you grasp what has led to the current squeeze on GM.
For more personal finance visualizations see: WallStats.com
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45 Comments so far
leave a commentRight to the point! GM needs to wake up to what they’ve done to show such record losses. I own a GM made vehicle, bought it brand new, what a mistake, it’s been nothing but trouble since it hit 50 thousand miles. I’m not the only one with these problems, there are thousands of other unhappy GM owners and GM refuses to acknowledge there’s a problem. This time hiding their heads in the sand isn’t making the problem go away. I feel bad for the employees, they stand to lose more than the execs. This also hurts other companies that provide parts for GM, such as PPG, there’ll be some big lay-off’s there.
GM had it all with the Electric car and the GEO the could have been on top but they sold out to the oil companys for a large amount of monies. they deserve to be put out of buisness by companys who make fuel efficient cars like Toyota. i bought a new 2010 Prius and glad i did. i would have bought a elecyric car or a Geo but GM sold the american people down the river when they took payoffs from big oil companys to stop making 50 mile to a gallon Geos and the Electric car. hope the jerks die and go out bussiness.
I usually like these infographics, but some of the assumptions in this one (i.e.: “EV1 was the future” — no, electric vehicles are probably not a viable future for many reasons…) are just ludicrous.
Another one — “Plant worker pay is $28/hr before benefits” — It’s $28/hr before taxes, too.
That works out to about $58k/yr, which isn’t bad considering that it’s union scale and that some of those workers have been working with the same company since they began working, and that it’s an average and many “plant workers” these days are highly trained robotics technicians.
It seems to me the problem lies with the auto union and primarily cheap cars. Although a quick glance at your graph would seem to indicate that much of the fault relies on management.
Why would the 14.4 million CEO salary block be bigger than the block for retirees? 14.4 mil is a drop in the bucket compared to 60 billion dollars.
This is a nice graph, but your bias is pretty obvious in the way the graphics are presented.. Maybe it is unintentional, but even if it is it the presentation lends itself to a bias conclusion.
Back in December, Nancy Pelosi kept insisting that the GM bailout money was only a loan and that they would be made to pay it back. Now, it’s March and surprisingly little has changed.
Does anyone, today, still think that the money will ever be seen again? [sarcasm]I’m glad Nancy and company forced us into doing “the right thing” yet again.[/sarcasm] How about you?
If GM had spent more time creating higher quality cars rather then running a cheap line until it got a bad name, then changing the name of the line of vehicles to sell more they would not be in this problem. Let them die, who cares. Let the next car company that does not have these issues take there market share. It would just be one less problem child company in the world.
G M Deserves to go belly up for selling their sole to big oil companies. GM had it all with the electric car and the GEO, but they took pay offs from oil companys to stop making fuel efficient cars. i hope the Japanese burys GM.
Karl,
What are the reasons that EVs will not be viable solutions for the future?
It seems that the removal of dependence on foreign oil would be a great reason, so would the fact that we can manfacture and do R&D on batteries as well as the vehicles here in the us.
I will agree that there is a LOT of work, development, infrastructure, and public perception change that needs to happen before EVs becomes popular, but Id like to hear why you think EVs will not work in the long-run.
Just like the previous graphic, this one presents an impossible machine. The 3 large gears to the left of the Hummer are configured such that none will turn. The Hummer can never be crushed any more or less than it currently is. I get the idea of what is being said, but in reality the jaws of the machine would never move at all.
Last time I checked, Japan was in Asia. So saying “Japanese and Asian manufactures[sic]” is silly.
Does anyone remember that when Reagan was in office, he pleaded with car manufacturers to develop fuel efficient and alternative fuel automobiles? The car makers ignored him, the scientists ignored him and the big oil companies bought up any patents that showed promise. Now we’re paying the price.
In regards to GM, they were only concerned with the bottom line, while foreign car makers produced good quality, fuel efficient cars and sold them sometimes for less than an American made car. Now the “Big 3″ are crying the blues.
The bailouts are supposed to be a loan but I doubt we will ever see return on the loans. Big business has too many politicians in their pockets and we, the tax payer, pay the price over and over again.
Also does anyone realize that we owe China trillions? This country hates us and they have the means to destroy us without firing a gun. Ugh! I could go on and on about how we’re going down the tubes in a hurry.
Other auto companies, like Ford or Chrysler, started cutting jobs by the thousands when this financial crisis first started to emerge years ago. GM’s market share has been slipping for over 15 years and management never adjusted the size of its company accordingly. Poor business strategy leads to failure. This is capitalism. When someone fails to conduct business effectively they fail, and others whom know how to conduct business take their place. Ignoring a changing market and economy is nobody’s fault but their own. Neither GM nor the bankers deserve any money or sympathy.
I got three words for you!!
Toyota, toyota, toyota!!!
Gm needs to go to toyota schooling!!
According to a Reuters report in March 2009 GM lost $80 billion from 2005 onwards. So prior to their present problems they managed to lose approximately $50 billion in the space of under 4 years. These losses were made during the boom years so what hope of recovery can GM realistically have now. Furthermore before throwing good money after bad why did the Administration not take this into account prior to “lending” the money they gave?
I believe this time in our lives is very Dramatic, yet also very poetic….. think of all of the hard working people who have had to file bankruptcy because the people at the top of the chain needed all the money they could get thier hands on, and now it is thier turn ,to turn to bankruptcy, I feel bad for them ,if they were to ask I would even give them a ride to the courthouse in my toyota.
Karl strikes me as a person who works for this or one of the other North American car companies. That is the same union rhetoric that they will usually spit out when someone challenges the idea that these companies have been inefficient and wasteful for decades. This particular situation can not be blamed solely on workers, management has to step up and take responsibility for this as well. But so do the unions, they are the ones that fought tooth and nail, with standard tactics, to get workers 28 bucks an hour, and thats not even counting on the benefits. So in the U.S. with benefits your wages are upwards of 60 bucks, in Canada over 70 and hour. Ever wonder why these companies can’t survive, over paid employees, over priced vehicles, and years of producing garbage cars and trucks has finally caught up with them. Yes the new lines are better all around, but they still have not come close to most Asian made vehicles. Also Karl, the EV1 was the future of cars and trucks in general, at the time it was made it was questionable that it could be a viable line. But there have been vast improvements in battery technology. GM currently owns a patent made by a Canadian for such technology. But in their pig headedness, buried it in the archives so that they could continue to produce a sub-standard product, instead of focusing on something that would have surely saved there company. All the proof that you need that battery technology for cars is the way of the future is to look at the Honda hybrids. I would not expect them or you to admit the mistakes that they have made. After all, it’s business as usual.
The EV1 was a good car at the wrong time. nobody wanted it when it was produced. It can not be made now as it would not meet all of the crash standards in place now. All of the car manufacturers are their to make money, thats what a business does. The foreign makers are out for profit also. Many times it is more expensive to fix a foreign car than a domestic car. For some reason it has become hip to bash American cars. The foreign cars have as many problems, the press just chooses not to report them. Ask a mechanic who works on them they will give you an ear full. GM has the best quality it has ever had but there is a perceived better quality in the foreign brands. If we lose the manufacturing capabilities in this country we will be done for. 1 out of 10 jobs in the US is tied in to the domestic auto manufacturers. If we let that go I do not think that will help matters. Here in Michigan the unemployment rate is over 12% now.
If one more person says Toyota i’ll be ill. This misconception of asian cars being better is not true. The reality is north american cars have more bang for the buck. Its been like that for years. People you are all victims of great PR. and scewed surveys. North american vehicles are pound for pound cheaper to run. cheaper to get parts for and bring money back to north america. Just because the asians have some car plants in north america doesnt mean the moneys staying here.
So get your facts straight. Just because you have owned 2 cars in your life and 1 of them was asian doesnt mean they’re better. You can get a lemon in any brand you buy. Go North America.
Jerry said: “The foreign cars have as many problems, the press just chooses not to report them.”
Absolute nonsense. In the UK there is an annual independent survey called the “JD Power Survey” (google it), in which over 16,000 *genuine consumers* rate the cars they bought 3 years ago on how happy they are in terms of quality, service, economy, cost of ownership, etc. Remember – this is not the press – this is what *customers* think of the cars they *bought*.
FIVE of the top 10 manufacturers are Asian (mainly Japanese), the other five are German. Ford come in at number 15. The first GM company (called Vauxhall in the UK) come in at number 18 and Chevrolet number 26. FOUR of the top 5 models are Japanese. GM’s best model reaches 44th position.
Notice a pattern? Customers are buying ‘foreign’ cars because their *experience* of owning them is better.
Even if you assume that the repairs are slightly more expensive on foreign cars – if they don’t break down, they don’t need repairing. Quality means less need for repairs in the first place.
Gee what a surprise. The UAW, unwilling to make a single modification to their stranglehold on the automakers has watched their membership dwindle, and through their myopic support for only one party, they finally mismanaged their kingdom into a crumbling wreck, and the recipients of their years of slavish loyalty, the Democrats finally threw them under the bus. I hate to break it to you union folks, but you are 16% of the working Americans and you don’t matter anymore. And now that you have elected your socialist President, he doesn’t need you anymore. So, you have ran out of protectors and there isn’t any money to buy any more favors from Washington D.C.. You are Dead Man Walking and you just can’t see it. You couldn’t give me a UAW produced car. I would just sell it so I could go get a high quality vehicle that would last, and was made in a right to work state that votes Republican and won’t begin to consider Card Check. I wouldn’t ever support the UAW, who are even to the left of Michael Moore. Serves you right, you backed the wrong horse and the Dems like Pelosi who wouldn’t let her own hotel workers form a union, don’t care about you, and they never did. They just wanted your vote. Hope you find work at your local non-union Walmart. You won’t be seeing your pension anytime soon.
While we seem to be getting off topic, I have to put my 2 cents worth in about unions. Unions serve a good purpose, they keep employers from taking advantage of their employees. In the pre-union years the employer used many unfair and inhumane practices to get what they wanted from their workers. If workers went on strike, the company could legally hire replacements, often they’d hire immigrants “right off the boat”, and that’s one one of many, many offenses. Unions protect their members. But…some unions have become too powerful and have strangled the companies and, in this case, perhaps, into bankruptcy. I’m not surprised about GM having trouble, between the union’s stranglehold and the greed of GM’s management the company is now paying the price. There must be a balance between the union and the company. I don’t believe that unions should be abolished, they still protect their members but I do believe that they should be reined in.
Lets not forget that Toyota, Nissan and Peugot have all gotten bailouts from their respective goverments. Daimler got one from Abu Dhabi holding co.
This graphic was created by Jess at http://www.wallstats.com/blog/the-fall-of-gm-a-visual-guide/. I’m a big fan of Mint.com, but am kind of put off that you’d call it “our infographic” without paying any credit to the actual artist. Low class.
Awaiting an edit in your description…..
@justin, we credit WallStats.com 3 times, once at the beginning of the post, once at the end, and once in the infographic itself. This infographic is a revised version of the original, created specifically for us. We’re big fans of Jess too, which is why we regularly feature his visualizations on our blog.
Finally someone who can write a good blog ! I loved your post and will be telling others about it. Subscribing to your RSS feed now. Thanks
I must concede a big error!! In a 1,000 mph day, somehow I just saw through a filter and made an error in judgment. Sorry for the pounce, totally my bad.
Poor job of social justice policing yesterday,
J
salam,
I just wanted to know why is it Hummer H2 to crush.I mean there are many other GM products.Lilke esclade etc.
HA HA
I remember watching a video back in a college business class that featured an ex-exec. for one of the big American auto makers. He told a story about how the japanese auto makers were kicking their butts in making quiet transmissions. No matter what they tried, their transmissions were loud and prone to failure.
So eventually they bought one of the Japanese cars, brought it in and took it apart to see what made it tick. What they discovered was, in his words “they were actually building their parts to spec.” He was dumbfounded. The error tolerance to the specifications in Japanese cars was so miniscule compared to the tolerance in American cars.
It is not the fact that their error tolerance was so great that made me vow never to buy an American car again, it was how surprised the executive was that Japan was actually building their automobiles to spec.
It’s the difference between a mistake and a careless mistake.
RE Sam: The “big three” can’t figure out why people are turning to foreign made cars. You hit the nail on the head. American made cars are not built to specs. My car has a faulty fan clutch, I’ve replaced it twice, very expensive, GM is aware that it’s a factory defect but will not issue a recall. The rubber door seals fall off, and the fuel pump is positioned so that water and debris collects on top and corrodes it, after awhile it starts spewing gas as you drive. They didn’t issue a recall on the fuel pump but they will replace it. Our car manufacturers produce a faulty product, and will not stand behind their product. Now they’re crying the blues–my answer–boo hoo. I hate to see people lose their jobs, a lot of families will be hurt but GM needs a huge wake-up call. Make it better and we will buy it.
Sam – outstanding example of their complacency, and why the Japanese car makers deserve their success – they’re trying harder.
I enjoy anything that shows a Hummer being destroyed in some way. Plus it was a good graphic.
We should let this company fail…. we’re propping up failing industry when what we should be doing is investing in new industry. Greedy ownership, greedy unions, greedy consumers, laziness, and a lack of creativity/innovation all contributed to this. None of which are qualities deserving of taxpayer dollars.
This’ll bring the economy back in the long run and make us healthier in the process.
Two things to note — The news media hasn’t mentioned that the foreign car makers already got a bail-out from their own countries. They don’t need to go to our country for the money.
Someone sent me a forward that I really like. It says that the government should give 40 million people, over 50 and working, one million dollars each, with the requirement that they quit their jobs. This creates 40 million jobs.
They then will pay off their mortgages or buy new homes. This is good for the banks and mortgage companies.
They then will buy new American made cars. This will be a considerable help to the auto industry.
Now, this plan isn’t without problems but I like the idea. Unfortunately my husband an I wouldn’t qualify, he’s retired and I don’t work outside the home. But I think this is a great solution.
I think its silly to hate an American Icon like the Humvee. The Humvee never hurt anybody. Humvee is a vehicle that offer freedom for the riders. It don’t need roads and could be use in any weather conditions.
This graphic has problems. The ‘too focused on trucks and suvs’ should be a balloon. The trucks and the SUVs were the only lines making money. President Erkel wants to shut those lines down and produce more green vehicles that nobody wants. The only reason any bought those greenies is because gas got so high; and even then you did not get a return for the extra spent. President Erkel does not even know how to run the government let alone GM = government motors.
To some extent this is not even GMs fault. They have the unions dragging them down on one side and the government telling them what they can and cannot do on the other side. To many regulations on the industry and unions are driving all companies out of the US.
If people want a certain type of car then they should buy that type of car creating demand; not the government telling the company to make that car because its what we should be driving.
That was a great graphic, very simple and conveyed easy to digest information.
interesting… but the question is…. what will their new logo look like? here is one option… http://tinyurl.com/pr4k6q
The GMC truck division should not continue as a part of GM. GM and the US government have one chance to get the reinvention of the new GM right and avoid continued government and taxpayer support.
Domestic and import full-size truck and SUV sales are declining with fuel economy concerns, so manufacturing two of the same brand is not a profitable long-term business model. Chevrolet and GMC trucks and SUVs are essentially the same vehicles. Chevrolet models cost less, have equal or better quality and fuel economy, and outsell GMC models more than three to one. Toyota and other imports don’t manufacture two of the same full-size vehicles under different brand names; it does not make sense, economically, for GM to continue producing both GMC and Chevrolet.
Advocates who hope to keep GMC as the auto industry changes to more fuel-efficient models want to continue a business strategy that will ultimately be as unprofitable as the now defunct brands of Hummer, Pontiac, Oldsmobile, Saturn, and Saab.
Follow the import business model, eliminate GMC now, and save the costs associated with the extra GMC manufacturing processes and distribution channels, which will not be part of a long-term solution. The new GM will be more profitable going forward without GMC if Chevrolet produces and sells all of GM’s full-size trucks and SUVs.
GM won’t need government and taxpayer support again if GMC is eliminated now.
Another fan clutch bites the dust. Has anyone received compensation from GM for this ongoing problem with the defective fan clutch?
Not I, and I haven’t heard of anyone else recieving compensation from GM. GM admits that the fan clutch is faulty, at manufacture, but will not do anything for their customers with this problem. I traded my Trail Blazer, I’m tired of all the problems.
Oh, another problem, with the Trail Blazer– a wire that controls the shifter broke, we had to tear apart the entire console three times to find the problem and try to resolve the problem. So, keep you eyes open, the shifter will freeze, without warning. We taped the broken wire, I didn’t want to know what another wire harness for the shifter would cost.
GM invented the Catalytic Converter and was the really the first to use. It got a log of push back form other companies because it was expensive to produce.
The EV1 was never a viable option, either financially or technically. Cost a million dollars to produce, there was no market and the technology was a dead end. It was at most a proof on concept.
The real reason for the demise of GM are not empathized. Yes, retiree benefits and health-care are key but the denial of the senior leadership, the constant making of excuses rather than facing market reality and of course many years of lousy cars.
Any ass-hole company, GM, Ford, Chryco, that sets its design center at four years and depends on built in planned obsolescence over a Quality build, then expects me to come back for another financial beating for a m model change is as crazy as Hell, and deserves to die in the market-place! For years, my VW cars outlasted and outperformed the domestics I bought!. My Volvo’s were superior in every respect, and I got my money’s worth! Honda moved in and did well with Quality before rip-off marketing, and Toyota are famous for high trade-in value and longevity, as well as reliability! Why, pretty as they are, must American cars fall apart in such unrepairable, rust laced fashion! This is unfair marketing and finally we have caught on and moved to foreign cars, even Mercedes makes a good buck in the ’states! I bought a “Death Trap” Pinto – and couldn’t give the fvcking thing away after the truth was out! How could Ford do this to me? A faithful life-time customer? The Volkswagen I bought next gave me twice the service, and I sold it for almost as much as I paid for it in the end, due to inflation! My VW diesels all performed miraculously, and my Ford Falcon, the first car I ever had, became my constant reminder that Ford at one time could do things right, but chose another road for their company, much as GM did! Now the jobs are in Asia, who in hell is going to by the cars?