November 28, 2018

“Doomed” Oshawa GM plant got taxpayer-funded welfare for too long

David MenziesMission Specialist

It’s sad to see what’s happening in Oshawa, Ontario now that General Motors is leaving town after a century of making cars and trucks there but unfortunately, GM’s pullout comes as no surprise.


In fact, some analysts were predicting that assembly plant was doomed as far back as 2014, but in fact, the rot at GM actually set-in decades ago – and it was aided and abetted by government tinkering.

Back in 1962, GM had more than 50 per cent of North America’s marketshare.

Every second car on the road was a GM-branded vehicle, and at one point, GM was so big that the U.S. government considered breaking it up.

Oh, how the mighty have fallen! Today, the “Big Three” have less than 50 per cent marketshare combined.

What happened to the American auto industry is a tragedy fuelled by entitled union workers, cowardly management, a lack of vision by senior executives, systemic complacency and a taxpayer-funded safety net that always lurked in the closet, ensuring the brutal culture would continue.

There’s more of course, including the Environmental Protection Agency coming along to kill the muscle cars, and new players from Japan entering the market with cheap, fuel-efficient cars.

When GM received its 2008 bailout, the wheels were put in motion for a much-needed course correction by slimming-down its brand portfolio, but it was too little, too late.

GM is still burdened with too many plants in North America operating with just one shift producing too many vehicles that too few people want to buy.

All of which is to say, if a company is “too big to fail” and when it does fail it can count on a multi-billion dollar government bailout, where’s the incentive to get it right?

Comments
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commented 2018-11-29 18:26:53 -0500
This is the best analysis I have read so far.
commented 2018-11-29 08:02:04 -0500
Good analysis, David!

Let the market decide. No government bailout!
commented 2018-11-29 01:55:05 -0500
Oh Hell!… The GM quality scam versus overpaid union jobs was already apparent in 1968 when I left Toronto after graduating from Ryerson… I bought VW in those years and have never apologized for doing so, and then moving through the ranks of Honda and Toyota… Did own a Ford pickup for a few years though!…
commented 2018-11-28 23:43:29 -0500
GM has been deadman walking for years, their vehicles are junk, way over priced and poor quality. If not for brand loyalty and taxpayers bailouts they would have gone under years ago. Then to ensure failure and appease the PC crowd they appoint Barrera as CEO to seal their death wish. Let this dumpster fire burn itself out!
commented 2018-11-28 22:20:11 -0500
Liza, they think good business practice now is to get more bailout money. What they are doing, which Nicky Andrew believes is focusing on electric cars, etc, a proven failed plan over and over, but it makes sense as a business plan to virtue signal the electric cars to get more money, just using a different tool that governments pressured by special interest groups (the global warming scammers) are finding difficult to resist, for their own virtue signalling. It is all one huge failure, just another track to take another kick at the cat. And Nicky Andrew believes in it. It is almost funny, but extremely sick, which fits his narrative perfectly.
commented 2018-11-28 22:03:33 -0500
My Dad always bought Chevy’s until Honda’s came out. It was a culture shock, but the days of packing everyone in the chev to go to Lake Erie for the day were already long past. He loved his Honda’s.
Gov’t bail outs spoil good business practice, always.
commented 2018-11-28 20:27:50 -0500
David Menzies, I enjoyed that car history. Like you, I couldn’t believe that Cadillac would put their name on that small unassuming car that no one would ever take a 2nd look at, when a Honda or Datson looked and ran better at half the price.
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