So it’s finally happened. After decades of bad decisions and being on the brink of it, General Motors has finally declared bankruptcy today. This giant, the maker of cars from groups such as Saturn and Pontiac, has come crashing down to earth like many of us who have run into financial difficulties, though not all of us can look at our history and say “we messed up.”

How did they mess up? I can only offer speculation and opinion, but in my mind, I think they messed up by forgetting something that other automobile makers forgot; people can only own so many cars. There’s only 300 million or so individuals in this country, only half of whom probably drive, and yet the average number of cars that have already been purchased is almost 2 cars per person. No one can drive two cars, and not everyone is a collector. Too many cars, too many dealers; almost like a Ponzi scheme, only GM was the sucker.

That’s number one. Number two, foreign auto makers came up with brilliant 10 year, 100,000 mile warranties, and made cars better so they wouldn’t be seeing us all the time. Not everyone makes it to the ten years, but they’re certainly making it past the 2-3 year period where car makers start sending those letters saying how they’ll give you a great trade in offer if you will bring your car back.

Three, gas mileage. I used to drive a Grand Prix, bright red, and loved it, but in regular driving I only got 19 miles a gallon. If I’d had that car last year,… well, I might not have gone broke, but I wouldn’t have been happy. Toyota’s average 30 MPG, and the Prius gets over 50 MPG; nice. GM? Hummer, 10 MPG; bad boys,…

GM filed Chapter 11, which means they won’t close, but they’re going to emerge a much leaner car company. Lean how; that’s the question. No matter what, though, the car industry has already changed, and one way or another, GM will either change with it, or this bankruptcy will be permanent.

Share on Facebook0Tweet about this on Twitter0Share on LinkedIn0Share on Google+0It's only fair to share...