GM should give a 10 year/100,000 mile powertrain warranty for all new vehicles and those sold in the past 9 years

Page 2 of 2  


You answered your own question. GM simply needs to chart out where the line of negative return is. If it is at 3/36, then they *are* building junk. My bet is that GM could go 6/60 with minimal additional cost and that warranty would boost sales significantly.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

I'm not so sure about that. I think most of the product lines will stand up well. I doubt seriously that there is a significant failure rate below 60K miles and 5-6 years that it would cost much. But, GM has the numbers to know for sure.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
James C. Reeves wrote:

But James, what about the 10 years forward, 9 years back warranty recommended by Horner? If I may quote your ealier response:
"> James C. Reeves wrote: > >> This is an excellent suggestion. "
Now you say 6 years. James the only thing consistent about you is your inconsistency.
In one post, you say "However, I still personally wouldn't buy a GM vehicle again." Now tonight you say: "Which *could be a GM*. I haven't written them off completely. ;-) " Well which is it James? You can't suck and blow at the same time. ;-)
James, with all due respect, you are all over the map on this issue. Just go back and see the contradictions in your own posts. What's that old saying James? "It's better to remain quiet and appear stupid, than to open your mouth and remove all doubt." Think before you speak James. That's all I'm saying here. 'Nuff Said!
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

I personally don't think the retroactive component of the idea would help to sell cars. However, it is worth studying to know for sure.

The idea, yes. The terms are up for study/debate.

If 6-years is where the ROI charts out, sure. It could be ROI is 4 years. It could be that it's 10 years. Some research would be required to know where the financial line crosses. The Op has no idea. Neither do I. The idea to take a look at enhancing the wrranty is a good one though.

I don't remember saying the word "again". If I did, it was a mistype. Place the period after the word "vehicle". The sentence will then be present tense, not future tense. Does that help?

If GM changes some things (not worth drudging up the voluminous list here again), I'd buy one in a second! Seems like a simple concept to grasp.

Perhaps these clarifications help. :-)
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Dad wrote:

People who do not have good arguments always resort to insult and other forms of personal attack. I guess that in your world GM is doing everything right and has nothing to worry about. Enjoy your world.
John
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
John Horner wrote:

What a wussy copout John! If you find it insulting that I criticize your ludicrous suggestion, you have to grow thicker skin. I find it ironic that the lack of common sense displayed by your silly recommendation is the same lack of common sense that got GM into trouble in the first place! How's that for irony?
In my world, GM is indeed doing a lot of things right. The recent U.S./Canada announcement was a major step for them. Only time will tell the full story. As someone said in an earlier post, GM still has the financial wherewithall to get through these tough times, now that major cost-cutting plans are in place and being executed. For my money, the GM execs are a lot brighter than you and Mr. Reeves. They have gotten through tough times before and GM will surely be in business when you and I are long gone! It's too easy to use that tired excuse "It's management's fault that the company has problems." That's another wussy copout John. You could say that every time a company fails. With a major, complex entity like GM, there are far too many influencing factors to pin the sole blame on management. Management don't have reliable crystal balls John that tell them just how effectively foreign competition is going to impact them. Nor can they forcast how many short-sighted Americans are going to buy imported cars for the short-term financial gain. Many detrimental factors are well beyond management control John. Open your eyes and mind John. There is none so blind as he who will not see!
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Although I'm sure John can speak for himslef, I don't think he was referring to the fact that you disagree with the idea. It is certaintly fine and respectable that you don't think the idea has merit (based on what basis of statistical/research, I have no idea). I believe he was referring to the use of tems like "wussy" and statements like "I bet this person is smarter than you are..." types of responses. Which, in the end, is more of a reflection on the person using such forms of dialog in a civil discussion than it is a reflection on the person it was aimed at.

There is a fair amount of truth to the statement that GM is doing a lot of things right. No question. However, the results in the real world (which is apparently a different world than your world, it seems) is that their business is failing and loosing market share by the minute. They have to do better in the areas where they aren't doing things right (or as well as they could).

And we are all with you in the hopes that you are right, I'm sure. However, that "announcement" only addresses the "cost" side of the balance sheet. They still need to address the declining "revenue" side of the balance sheet. The ideal company business model is to see *both* revenues and costs rising (i.e. growth). Management of a successful company will focus on what it takes to enhance the revenue side. Announcing "cost cuts" is, in business terms, admitting a declining business at best and defeat at worst. Hardly gives one the "warm-and-fuzzies" (Management in a position of being backed up against the wall right now by their own doing).

That certaintly could be the case. Perhaps it is likely the case (I don't know Mr. Horner). However that isn't relivant and isn't the point. Those execs you speak of have racked up $278 billion (yes billion!) in debt on top of a "profit" of negative $6 billion a year with just a little over 18-20 billion in cash. Do you have any idea how much money it takes to service the interest on a debt of $278 billion? Basically they have 2-3 years on the outside to make something drastic happen. With their corporate bond rating of "junk", the cost of money for GM is very high compared to their competitors. Another competitive disadvantage to add to the list.

I sure hope so, for my grandkids sake! There are some very respectable financial people that don't seem as sure as you do. Also remember the common investment advise! Performance history does not predict future performance. In other words, what transpired before had no relivance to what will transpire in the future. The fact that GM recovered before means nothing to the current situation. Each situation is different.

Who's fault is it?

Since when is it a copout for management to accept blame and do something about it? To say it's someone elses fault is the copout.

Of course! That *is* who is to blame. Copout and excuses noted.

No, but they have (or should have) technology like data warehouse systems and management reports that would tell them exactly these things. It isn't ricket science. If they don't have those tools, its their fault they don't (again).

Copout noted.
So, instead of doing some research and running some numbers to see for sure if looking into an idea like this might help to increase sales, management should just poo-poo it out-of-hand like you are and sit back and do nothing else except close plants and fire people? I'm not buying your version of a plan "dad". Remember, the revenue side of the balance sheet needs help and needs it badly.
Now, I'll ask again. What alternative ideas do you have that might increase sales?
o John has put forth the idea to look at increasing warranty coverage. o I say turn the damn annoying daytime lights off if a customer wants them off (among other things) o What do you say?
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
James C. Reeves wrote:

> Must be since most of the financial guys that study the books of companies > are quite worried. Probably more a denial thing, actually. GM isn't > beyond hope. All they need to do is figure out how to pay off ~278 > billion dollars in debt with the ~18 billion dollars they have in the bank > while loosing an additional 6 billion dollars a year. Should be a piece > of cake! ;-)
James, I am a "financial guy" and I'm puzzled by your debt figure, as well as your 18 billion dollar figure. I just visited GM's site and pulled off their SEC Filings. If you'd like to see them, they are at this address:
http://www.gm.com/company/investor_information/sec /
You will note therein that GM had "Total Debt" of $ 446 Billion at that time. But the most important figure is the company's "Current Debt", which was recorded at $ 74.7Billion. Now if you take a look at the Assets, you will see "Current Assets" of $ 53.8Billion. To this, you have to add the Current Assets of Financing and Insurance Operations, which look like this: Cash & Cash Equivalents $ 21.4Billion Investments in Securities 16.5Billion Finance Receivables - Net 177.0Billion
Loans Held For Sale 17.6Billion Assets Held For Sale 18.7Billion ------------------- Current Assets of $ 251.2Billion Financing & Ins. Ops.
Now James, if we add this figure to the $ 53.8Billion figure above, we find that as at September 30, 2005, GM had Total Current Assets of $ 305Billion, which would quite easily handle their Current Debt, which was $ 74.7 Billion. I fail to see the liquidity crisis you seem to allude to. Even if GM had a temporary liquidity problem at some point, they could raise Billions of dollars quite quickly by leveraging up some of their Fixed Assets, which I'm sure would have substantial value over Book Value. So let's not get out the shovels to bury GM just yet. Her demise is highly exaggerated and the funeral wake is premature. __________________________________________________________________________
James, you continue to use those financial numbers that you apparently dreamed up. As Stingray pointed out, you are way offse!

Respected by whom James? You and John Horner? Name one well-known respected financial person James. Or did you simply jump on the bandwagon of the uninformed? Oh right, that's exactly what you did, as demonstrated by your incredibly uninformed figures for debt and bank balance! *lol*

Ah, you're finally catching on!

Yours for buying imports! Unions for negotiating too well! The U.S. government for not ensuring a level playing field before allowing a major influx of imports! GM management in some cases! GM employees who drive imports to work every day! People like you who seemingly "make up" completely false financial numbers and then publish them! (By the way, where did you get those numbers?)

Read my comment again James! Come on James - you can do it - put it all together! You appear to have missed it! Let me quote: "It's too easy to use that tired excuse "It's management's fault that the company has problems. That's another wussy copout John. You could say that every time a company fails. With a major, complex entity like GM, there are far too many influencing factors to pin the sole blame on management. Management don't have reliable crystal balls John that tell them just how effectively foreign competition is going to impact them. Nor can they forcast how many short-sighted Americans are going to buy imported cars for the short-term financial gain. Many detrimental factors are well beyond management control John. Open your eyes and mind John. There is none so blind as he who will not see! "

You are too thick to be believed James! There are so many forms of risk that effect a company like GM James. Do you know what "sovereign risk" is James? It's a major factor for GM. Look it up! Do you know what "currency risk" is James? It's another major factor for GM. Look it up James! Both of these are risks beyond the ability of GM to control directly, although they can do some currency hedges (risky business in itself) to mitigate currency risk. There are literally hundreds of risks beyond the direct control of management in a mutinational company.

Well, it may not be "ricket science" but it's obviously beyond your comprehension! That previous paragraph was complete gobbledygook James. It makes no sense whatsoever!

Indeed!
You have just proven once again that you ignored Stingray's response to your post. He did the real research James. You're just blowing smoke. I challenge you to respond to Stingray. ;-)

Revenue looks pretty good year to year James. You'd better look at the real numbers at http://www.gm.com/company/investor_information/sec/ What numbers are you looking at? Ha, Ha!

I say that you sound like "Chicken Little", running around saying that "the sky is falling" when you still haven't taken the time to inform yourself by looking at GM's actual financial results! Go learn the truth James, then we can discuss these matters on a level playing field. Right now you're just making a fool of yourself because you're so far off-base with your financial comments. And that's what this discussion is all about James - GM's financial position. And when your whole position is based on an incredibly faulty knowlege of GM's financial position, it follows that your resultant comments are laughable at best and defamatory/libelous at worst. ;-)
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Dad, pardon my top posting here, but your exchange with James is pretty lengthy. You've brought up some good points and I would have to agree with you that James never read my post of November 29th. I'm glad to hear that someone did! *lol* I must confess that I was disappointed that James never responded to my message but I mistakenly thought that he had probably read it but didn't want to embarrass himself by responding. Clearly this is not the case. If he did read it, he must not have understood it. I hope he accepts your invitation to respond. By the way, it's StingRay, not Stingray. It's a long story but the early Corvette Sting Ray was two words. No big deal!

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
StingRay wrote:

respond to my post, just as he didn't respond to yours. It would be hard for him to defend his financial figures, since they are just plain wrong! Ha, Ha! His whole discussion was based on his screwed-up figures. No wonder he was so far off base. Maybe the reason he hasn't responded yet is because he has taken GM's SEC filings to his financial advisors for review! *lol* If we wait for James to review and understand GM's numbers, we will be well into 2010 before we hear from him on this topic again!
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

My MS newsreader didn't pick up tour post. Can you repost?
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Yes they have some leverage options that will get them through 2-3 years or so (all things remaining equal). I believe I already stated that. You'll note that they have "$21.4 billion" in "cash and cash equillivants" (close to my 18-20 "in the bank" statement). Interesting that one would choose to use "current debt" over "total debt" and then do the oposite for assets and use "total assets" instead of assets "currently available". Yes they can leverage those fixed assets, but then "total debt" raises further. Why don't we either look at apples-to-apples or oranges-to-oranges?

One source, http://finance.yahoo.com/q/ks?s=GM
Similar numbers have also been quoted on the cable financial channels when GM comes up for discussion and in some articles I've read these past few months.

I'm glad we agree on something. :-)

Nope, not me. Never have bought an "import". Neither has the wife or kids.

And management was asleep, apparently.

Curious as to what isn't level about the playing field. Can you elaborate? I'd like to know your thoughts. Honest. ;-) But let's start a new thread on that topic.

Yep. And in the rest of the cases too.

That's actually a bit surprising. One would think the employees would have confidence in their own product. Does this really happen? If so, sad as hell! The other problem with that situation is that it tells everyone else that the people building the cars don't have faith in them. True or not, that will be the perception for some people that know this is occuring.

One place is here (also similar numbers using Ameritrade Apex tools) http://finance.yahoo.com/q/ks?s=GM
Look for the section "Balance Sheet". In fact, this link shows the cash is now down to $15.1 billion from $18-$20 billion when I looked last (about 2-3 months ago).

And it's management's job to know what s happening ad adjust for the changing climate of the business. There really is no one else responsible for it. Those things you mention can be a contributing factor to the causes of failure, but they are not the blame for the failure. The fault (blame) rests with those that run the business and who didn't make the correct mitigating decisions/actions to compensate for them.

I'm very familiar with data warehouse (DW) systems and the management reports that *can* come out of them (if they are managed properly) . DW systems aggregate data from many sources into meaningful and actionable information. One common example in the data warehouse business is how a DW system made it obvious to the executives at 7-11 over 15 years ago that if they just put the diapers next to the beer they'll sell more diapers. It worked!
I'm guessing you aren't familiar with data warehouses. Sometimes called "knowledgebases". With the right data feeds/aggregation and reports, they're better than crystal balls. In fact, this could be one tool that could be used to determing the cost/expense curve for the inceased warranty idea.

Uh, my response was to the topic in the subject heading...to studying if the warranty idea has merit. And if so, what level of warranty could be extended before it produced an unacceptable diminishing return. I honestly belive (yet to be verified, thus a research needed), that GM makes good enough cars that a 5 or 6 year 60 month warranty would cost them very little and may boost sales by a good margin. That would be a good thing, right?

Since the subject heading/topic is about warranty associated with the car business, then separate out the other revenue sources and look at only the revenue numbers from the automotive piece of the business. Come back and let us know what the revenue trend is for the automotive piece. As a bonus, provide the market share numbers for the last 5 years and chart that trend as well. Then come back with a straight face and say that what you saw was good.

I noticed you still didn't answer the question. Do you want to contribute to some ideas that might increase sales and regain some market share? Still haven't heard any.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
James, in the interests of brevity, I will respond to those portions of your post which appear to be in response to my comments and I will snip "Dad's" comments and your responses thereto. Before proceeding, I would offer you two pieces of advice. 1) When entering into discussions on various topics, it is always adviseable to stick to topics on which you are knowledgeable and/or well informed. Finance is clearly not your one of your strengths James and it can be frustrating for someone with financial acumen to try to educate someone without financial expertise, all within the boundaries of one or two posts within a News Group. To demonstrate your apparent lack of financial knowledge, in an earlier post, you comment: " However, that "announcement" only addresses the "cost" side of the balance sheet. They still need to address the declining "revenue" side of the balance sheet." James, to anyone with financial expertise, those comments are like dragging your nails over a chalk board. This is because neither "cost" nor "revenue" are Balance Sheet items. Balance Sheet items are Assets, Liabilities and Net Worth components. "Cost" and "revenue" are Income Statement items. I would discourage you from engaging in financial conversations in the future. Stick to what you know and understand. 2) The term "brighter" is not limited to IQ alone. It also encompasses common sense and good listening skills. It is quite possible to possess a very high IQ, but very little common sense and poor listening skills. Such a person would not be considered bright, by any stretch of the imagination. While in University, I was encouraged by several educators to join a large Mensa organization. I attended two meetings but was appalled by the lack of common sense demonstrated by many of the group's members. I discontinued attending Mensa after two very frustrating sessions, during which everyone wanted to speak, but no-one wanted to listen.
On that note, I will proceed through this hodge podge of posts.

Close but no cigar James! First of all, your figure was not 18-20. It was ~18. A variance of $ 3.4Billion is a 21.4% variance!!! That's a heck of lot more of a variance than any of GM's year-over-year revenue variances! Having said this, it is a moot point because the figure of $ 21.4Billion that you quote for "Cash & Cash Equivalents" is the figure for GMAC & affiliates, not for the automotive side! I will elaborate further on this "Cash" issue in the next response hereunder.

James, it is only "interesting" to a non-financially astute person such as yourself. I didn't "choose to use "current debt" over "total debt" and then do the oposite for assets and use "total assets" instead of assets "currently available"".
Firstly, I posted the "Total Consolidated Debt" figure of $ 446 Billion, just to show you that your figure of "~278 billion dollars in debt " was way off-base! Where did you get that figure James? I'm not at all clear why you have such a fixation on "Total Debt" though James. From a "Balance Sheet" perspective, "Total Debt" plus "Shareholder Equity" always equals "Current Assets" plus "Non-Current/Fixed Assets". It's a very simple formula. No mystery here. The relationship between Current Assets and Current Liabilities is far more information.
Secondly James, you are just plain wrong when you say that I "use(d) "total assets" instead of assets "currently available"". " I at no point used any figure for "total assets". All of my asset figures were very clearly "Current Assets". I never once added in "Non-Current or Fixed Assets".
Thirdly, I focused on "Current Assets" and Current Liabilities" because that is what financial analysts do James. A company's "Working Capital" is determined in this manner. For your information James, Working Capital is defined as the ability of a company's "Liquid" or "Current" assets to meet their short term (Less than 1 year) financial obligations. It is the lifeblood of a company. "Cash & Cash Equivalents" is only one category of "Current Asset". The financially astute company does what GM has done and invests surplus cash into other short term, higher yield assets such as Investments in Securities, Finance Receivables, Loans Held For Sale and other short term Assets Held For Sale as well as the usual operational assets such as Accounts/Notes Receivable and Inventory. So James, Cash in the Bank doesn't mean a lot in itself. You have to look at a company's Current Assets in their entirety to know their ability to handle their Current Liability commitments coming due or payable within the next 12months. And in this regard, GM has strong Working Capital at September 30, 2005 with Total Current Assets of $ 305Billion, which would quite easily handle their Current Debt, which was $ 74.7 Billion. This leaves them with a Working Capital Surplus of $ 240.3Billion. There's nothing to be alarmed about here James!

James, the link that you provided is to a Yahoo Financial page and it is typical of the type of information available on any financial site. As it happens, I use Yahoo as my Home Page and often use their financial data. Yahoo provides select ratios and market performance over the past year. This is good information if you're considering buying or selling GM stock, but from an informational perspective, I find the company's actual SEC filings far more useful. When I'm thinking of buying any particular stock, I prefer crunching my own ratios because these financial pages do make mistakes. A good example of this is the Figure Yahoo shows for "Total Debt". You mistakenly assumed that their figure of $ 278.23B was correct. But had you clicked on "Balance Sheet" at the bottom of the page, you would have seen that their "Total Debt" was $ 446.7Billion, as I stated above. That's why I prefer crunching my own numbers and ratios from SEC filings James. ;-)

James, you have to understand that many cable financial channels employ messengers (reporters) who merely read the script in front of them. Very few do their own analysis. So when they receive "junk in", it results in "junk out". I often find myself laughing at these messengers. One of their most frequent Faux-pas' is comparing results over the same period a year earlier. I can't count the times that I've heard a reporter say "Profits for the 3rd quarter were up a whopping 230% over a year earlier." What they don't take the time to investigate is whether profits a year earlier were awful for some reason. If for example a company wrote down an unusually large amount of capitalized R&D or any other Asset for that matter, the comment that "Profits for the 3rd quarter were up a whopping 230% over a year earlier." is very misleading. In fact, excluding the "one-time" writedown, profits may have been down. So James, my advice here is simply to not believe everything you read on Yahoo Financial.

James, your comments weren't in response to my post, but I will respond that a lady who works at a GM plant in Oshawa, Canada confirmed this. From her comments though, I don't think it's that they lack confidence in their own product. It's more that they are simply short sighted and are often driven solely by price.

James, you make me laugh with this one! As an analyst, it is an "extremely good thing" that cash is down! Any company. large or small, should strive to completely eliminate "Cash" from their Balance Sheet. Cash is a non-revenue producing asset. Cash should be investing in some short term investment as quickly as possible. Unfortunately, that is nigh unimpossible with a large company, who on any given day have tens of millions of dollars flowing in and can quite easily end any given day with millions sitting in the account gathering dust, but no interest income! When Yahoo Finance or any other financial site shows you a figure for "Cash", you should always look for a downward trend or at the very least, the absence of an upward trend. The only reason financial sites show numbers for "Cash" is so you can gage how well a company invests their cash into higher return Current Assets.
Now the really bad news James, the figure of $ 15.3Billion that Yahoo uses for "Cash" is wrong. Again, if you go to the bottom of their page and click on "Balance Sheet", you'll see that GM's actual Cash figure was a shade over $ 35Billion. Another reason to use any company's SEC filings.

This wasn't my topic James, but I do have an opinion on it. Bear with me here. As mentioned, I do have a financial background. Dad brought up a very good topic of discussion when he mentioned political risk. Major banks and governments often lend massive amounts of money to both industrialized and developing nations. These loans can default for reasons beyond the ability of the lenders to reasonably anticipate in time to recover their funds. For example, the risk to lending money in Iraq increased sharply when the U.S. moved in. And the prospects of recovery of pre-existing loans dropped drastically and certainly before the lenders (including the U.S. government) could react.
Similarly, companies like GM make massive investments of capital in foreign countries. Using hypothetical situations, I would like to suggest scenarios where GM management might have little control or warning of increased political risk. Civil war in Mexico would have a drastic effect on U.S. interests in that country. Can you blame that on GM management? When they invested in Mexico, they would, of necessity, have looked at political risk, but political risk can change quickly and you certainly can't repatriate major capital investments on short notice! Another example that we have seen recently are acts of God. Can you blame management for losses attributable to acts of God? What about 911? Are the Trade Center owners responsible for the losses they incurred? Was that poor management?
So it is grossly unfair to label management of any company as responsible for everything that happens to a company.

James, DW systems, as you have pointed out yourself, are only as good as the input. Data bases are simply stored information and as you say, must be "managed properly". I have had far too many associates waste their time combing DW systems, such that we used the phrase "analysis paralysis" to describe the inability of many of them to use pertinent data to make an informed decision. Many would rather analyze than make decisions. There has to be a happy medium.

There's that Analysis Paralysis I mentioned! There you go trying to reinvent the wheel again! GM has already done this analysis for you. Why do it again? Read Note 7, Product Warranty Liability, on Page 15 of GM's SEC filing. As at September 30, 2005, there was Warranty Liability of $ 9.3Billion.
James, now to answer your question, a little Economics 101. If a company is losing money from any part of their business (in GM's case, let's take the automotive business) on a standalone basis, no Warranty can be offered, without impairing said company's financial position. There's your research James. No further analysis is required.

If GM is losing money on a per-vehicle basis James, increased Warranty costs and increased sales will only lose them more money. Simply, either profit margins per vehicle have to increase or costs per vehicle have to decrease. End of story. That's why GM has implimented plans to close numerous plants and substantially reduce labor costs. They can definitely improve their efficiency in the process. Hey, those GM executive may be brighter than us! ;-)
Here's GM's link again James, although you must already have it. As stated, Revenue looks pretty good year to year. But I won't be buying their shares just yet!
http://www.gm.com/company/investor_information/sec /
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
StingRay wrote:

Thanks for a very informative post StingRay! That clarifies a lot of issues for me.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
How things have changed !
When I was a kid ( in the 1950's ), people traded in cars at 35k miles. because soon they would need muffler, shocks, battery, tires etc. ....and many used cars made it to the scrap yard by 70k miles.
Now, we expect 200k service. And that's reasonable. Advances in design, materials, and assembly should translate to auto reliability.
If you exclude normal "wear-out items", tires, battery, brakes, plugs, oil, wipers, lamps.....
How long should a new car last ? 200k ? 250k ?
What else would you call "routine maintenance" ?
Will cheaper cars wear out faster ?
<rj>
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Well RJ - I'm a product of that same era and my observations mirror yours. For me, I've come to expect 225,000 - 250,000 from GM products with not much more than routine maintenance. I consider routine maintenance to include of course, the expendables you listed but I also anticipate I'll have to replace an alternator or two, a couple of wheel bearings, and I'm not shocked to encounter a sensor or two along the way that need replacing.
What I have embraced out of necessity, but do not feel I should have to deal with is the intake manifold issue. I've loved all of my GM's (except the 98 Malibu which is still in the family), but I find it inexcusable that GM hadn't addressed that problem by the second year it existed.
Bodies have gotten good enough that I can get 8-10 years out of them, even up here in the northeast. Sometimes an occasional touch up paint repair, but most of that has been from some adhesion problems where certain reds seemed to just peel right off the quarter panel around the wheel well. I've always thought a manufacturer should stand behind their paint longer than they do, but to their credit, these cars aren't rusting like they did in the 70's and 80's.
My cars look like they have far fewer miles and far fewer years on them when I let them go. I stay on top of my maintenance and repairs and I do all of my own work. They're not worth a plug nickel when I send them down the road, due to the age and mileage, but they sure don't look their age and they don't feel their age to a driver.
Will cheaper cars wear out faster? Remains to be seen. This year I made the great leap and bought a Hyundai Sonata for my wife. It's an '04 and it had 23K on it when we bought it. I am very impressed with the car, but I'll see what things look like when it has 150,000 - 200,000 on it. I've already discovered that because it's an interference engine with a timing belt instead of a chain, there is a 60K requirement to change the belt. I can handle the task easy enough, but it does show that no matter where you look, there is something about every car out there that will require a pretty significant effort if you want to keep them that long.
That Malibu I mentioned above is half way through that life expectancy I held. It's really been ok as a car, I'm just under impressed with ride characteristics, fit and finish, and the like. But - it's half way to that 250K number. <Groan...> I'm about to put the gasket set in it within the next couple of weeks or so, and I've had to respray the quarters on it, due to peeling. Beyond that, it's been sort of an unremarkable car in every way.
--

-Mike-
snipped-for-privacy@alltel.net
  Click to see the full signature.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Excellent and informative post. Thanks Stingray! With much of the OT stuff cleared up, we can now get back to the topic of this thread. :-) Thank goodness!
First I'd like to limit the discussion on the *idea* of warranty improvements and leave out the specific implementation the Op suggested.
To that end I have a few questions first.
Does the liability number you mention for cost of warranty address only the current program? In other words, the cost to GM for the current 3/36 program? If so, is it possible from that alone to know the impact of adding 2 years (as an example, but name your own number) to the warranty?
Since GM seems to be in a endless "discount" mode, can we tell from these financaials what the difference would be if comparing what the up front impacts of sales incentives/discounts has to profit margins as compared to the deferred cost of incremental enhancements to the warranty?
I'm not so sure we can tell any of that from these. But, I would be interested in your thoughts on it.
In support of the idea of a "warranty upgrade" include:
1. Improve on the consumers current (incorrect) perception of GM vehicles - The current peception by some consumers is that GM is a "discount brand" in each of their market segments. The label was well earned by the seemingly never ending discount programs of recent years. (Ford has this same problem as does Chrysler to a lesser degree). As we all know, many consumers will relate "discount" to terms like "cheap", "low quality", "less reliable" "less desired", etc. That is the message and it is the wrong message to send.
2. Improved consumer confidence in the product - It would demonstrate that GM stands behind the vehicles. This has a good chance to reverse the negative perceptions that the term "discount" create. Quality and reliability would enter into the mind of the consumer again. "GM would't pay for repairs 5 years (or whatever) out if the cars weren't good." This is the right message.
3. Improved resale value - The transfer of the manufacturers warranty to subsiquent owners can improve average resale value over the GM product lines. For those that turn cars over every few years, resale value is important to them. Naturally several factors go into. This is but one positive factor.
4. Improved profit margins - If consumers see the product as more desirabe, have more confidence in the product's reliability, know items are covered longer and can see better resale returns, they will likely choose the product more frequently and be willing to pay closer to market price for it.
5. "Discounting" could finaly be phased down - As we build upon the above mentioned, discounts can begin to go back to what they are better suited for (bridging seasonal sales fluctuations, moving overstoked inventory, etc.).
5. Parity with some competitors in the industry - GM is a "top-tier" producer of automobiles. GM has a opportunity to demonsrtate the leadership one would expect from a top-tier producer.
6. It could be cheaper in the long run - Compared to the tighter profit margins that discounting creates, an improved warranty may be less costly.
7. Deferring cost - Discounting implies up front cost. Costs of adding to the warranty won't hit until 4-years out.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

I think you owe John a big apology, cuz where I come from calling someone a Doorknob is the worst thing one man can do to another. Being called a doorknob is a low blow and can be very very hurtful to others. I was always taught growing up to never use the "D" word in a mean and hurtful way.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Related Threads

    Motorsforum.com is a website by car enthusiasts for car enthusiasts. It is not affiliated with any of the car or spare part manufacturers or car dealers discussed here. All logos and trade names are the property of their respective owners.