It’s frustrating and sad, because I was raised in the auto city and had family members who worked in the industry. I even spent a summer at the GM Tech Center (working for then EDS as an intern at the time). I’m perplexed by the company’s name which most of us recognize only as a vehicle company. But it wasn’t always this way.
There was a time when GM was diversified, and innovative. I was amazed by the poor decision making at GM when it recalled and promptly crushed their all-electric EV1s after bringing them to market in 1996. I drove an EV1 in California; it rocked! The company used to also make refrigerators starting in the 1920s under the Frigidaire brand and airplane components during WWII (my grandfather was an engineer who worked on a few).
So when, exactly, did the General Motors Corporation stop becoming a “generalist” industrial powerhouse making motors and instead, devote all its energies to making only motors in transportation vehicles and to lesser extent, but profitable one, vehicles for the military — you know, Humvees and the like?
“By the time Pearl Harbor was attacked in 1941, more than 7 million Frigidaires had been built and sold,” writes Katie Schlee, about how GM also made household appliances. “In the U.S. about 12,000 workers were employed in Frigidaire factories” [produced by Delco Light Company, a subsidiary of GM]. GM’s subsidiary also made clothes washers, freezers and air conditioners, all sold as a “Product of General Motors” and all made in America by American workers. When the U.S. joined the war, the refrigerator production came to a halt. “Frigidaire and General Motors produced aircraft and weapon parts for the U.S. Military,” writes Schlee. “By 1944, Frigidaire had produced air 200,000 machine guns and 400,000 aircraft controls.”
Back then, quality and durability was key for the Frigidaire. As testament to this quality, when we moved to our farm in 1996, it came complete with a GM-made refrigerator still humming along (we later replaced this refrigerator with a super energy efficient Sun Frost). GM finally stopped making refrigerators in 1980 (it’s now owned by Electrolux). To be fair, there were times when GM was known for their quality and durability of their vehicles as well, at least for some of their brands. During my youth, however, I just remember riding around in a Chevy Corvette with the headlights stuck up. Of course, this was a time where fuel-efficiency and the ability of being recycled were of little concern.
Outside of WWII, GM has been heavily involved in meeting the needs of the US Department of Defense. According to GovernmentContractsWon.com, General Motors Military Vehicles received $65,141,350 in Department of Defense contracts from 2000 to 2008. GM-GDLS Defense Group LLC was a joint venture owned in equal shares by General Motors and General Dynamics Land Systems until General Dynamics acquired GM Defense in 2003. They manufacture armored combat vehicles. According to the Center for Public Integrity, GM’s divisions and subsidiaries received total defense contracts of $1,518,037,285 between 1998 to 2003. War, however, never bids well for people or the planet.
GM’s Planned Obsolescence
In the post WWII period, GM continued their unsustainable journey on making mostly big, fuel inefficient cars, light trucks, vans and luxury vehicles for people who didn’t mind spending money on fuels imported into the U.S. or adding more carbon dioxide to a warming planet. Back then, though, gas was cheap and climate change was little understood.
Likewise, the US “consumer economy” was exploding. Following an earn-and-spend approach to living, the US created a consumption-based economy where now two-thirds of it is based on us buying things (many of which we don’t even need). The clever GM Corporation did seize on an opportunity to start designing vehicles for “planned obsolescence.” It was a process by which technical and styling innovations could be used for vehicles that would last about three years before a new one would need to be purchased. Having exclusively owned used cars my whole life, I couldn’t understand why someone would want to buy something that would lose as much as twenty percent of its value the minute they drove it off the lot. But to GM’s financial prowess, they did tap the “Better than the Joneses” mentality that prospered at this time, and GM with it. Sustainability, however, is about durability, wise use of resources and elimination of waste.
Rewarding Failure: the US Government Bailout Plan
All of GM’s history leads us to where we are today: a US-backed bailout of a too-big-to-fail failing automotive company called GM that over time, never grasped the present fate of the planet. Thanks to all the bailouts, now We the People may own as much as 60 percent of GM thanks to the US government-led plan for bankruptcy. On top of this, not long ago, President Obama also pledged to improve the fuel efficiency of the US government fleet by buying millions of dollars of new “fuel efficient” vehicles from GM, Ford and Chrysler. I wonder if any of these cars get about 42 miles a gallon that my VW Jetta TDI (diesel) currently does, or a Toyota Prius, for that matter. As many of you know, GM stopped production on their EV1 in 2003, just a few scant years ago.
So, let’s call the new company USGM, since We the People are now owners of United States General Motors.
Many of the loudest proponents of the GM bailout proclaim how important it is to save our industrial manufacturing sector. But as Gar Alperovitz so clearly points out in America Beyond Capitalism, while manufacturing made up about 31 percent of the US economy in 1950, today it accounts for a mere 11 percent and the sector is trending further downward. The service sector and public sector (with the ever-expanding federal and state governments) are booming. So what, exactly, does USGM mean to our American economy?
Apple, Green with Innovation
For Americans and American companies to fully embrace sustainability, we need to examine innovation through a lens of a restoration economy, not a destructive, life-depleting one. Perhaps, it’s an economy where we can generate some commerce in a way that respects nature, communities and each other — where we can earn profits on ideas rather than plastic or metal. We need an economy where products are made right here in the United States and not outsourced to a company somewhere else on the planet.
While hardly perfect (they’ve been very slow to remove toxic chemicals from their computers and parts still come from outside the US), look at Apple Inc. which now commands as much as 20 percent of the computer market in addition to dominance with telephones and music with their iPhones and iPods. Apple’s iPods, for example, revolutionized how we listen to music, rather than just the technology we use to listen to it. According to AMR Research, in 2006, “Apple sold $2 billion worth of iTunes downloads, something that requires exactly zero physical inventory and is infinitely and instantly available on consumer demand,” writes Kevin O’Marah, AMR Research’s chief strategy officer, related to supply chain innovations. Apple is finally going green, as well, with their latest line-up of MacBooks that use significantly less toxic materials in them. What I want, however, is for Apple to take back and reconfigure my computer so it never sees a landfill. What I want is, in essence, an affordable service contract for my computer, not the requirement that I must own it until it becomes obsolete (or the hard drive crashes).
GM briefly turned a corner in the emerging restoration economy when they came out with their all-electric EV1 vehicles. That is, before that recalled all their cars on lease to people and promptly crushed them. Electric motor cars available only through lease terms, not gas-powered behemoths that you had to own to drive, were big ideas that seemed to offer promise for the future of transportation (which is to say, zero-emission transportation). For proof, look to 2007 when Toyota Prius models outsold the Ford Explorer, yet GM kept advertising Hummers. The rapidly rising gas prices in 2008 resulted in a 30% drop-off of sales of GM’s SUVs — their most profitable product often returning profits in excess of $10,000 per vehicle. Around this time, of course, GM was touting the misdirected benefits of “going green by buying yellow” (by filling vehicles up with corn-based ethanol blends).
If my grandfather was alive today, I think he would be in complete disbelief that the United States of America has gotten into the automobile business. While I feel for many of the workers now set adrift as GM restructuring and reorganization transforms their personal lives, I also have trouble understanding why some executives, engineers and the like didn’t take more aggressive steps themselves to reinvigorate a company by exploring innovative new directions in anticipation of a changing marketplace and a degraded planet?
I mean, don’t these folks listen to an iPod or watch the news?
It seems that planned obsolescence finally caught up with GM. Now We the People are involuntary participants in this grand financial experiment by the White House and Congress. Maybe USGM will bring back the Geo Metro (a nice affordable fuel-efficient car we drove for years before our VW Jetta) or better, yet, the EV1. Who knows, maybe we won’t even be forced to own a car at all with an entirely new approach to personal transportation by leasing what we use to drive around. Maybe the US Government will provide a “free” fuel-efficient car for every America as a part of this new USGM.
Right now, however, Congress seems more interested in giving Americans cash to trash their “junkers” so they can go into more debt to buy a new car. Thanks, but no thanks. I’ll stick with my CitiCar recharged with a PV system, along with my used Jetta.
What do you think USGM should manufacture, sell or produce, now that we own most of it?