Need More Proof That The U.S. Economy Is In Trouble? How About Talk Of General Motors Seeking Bankruptcy Protection!

Things are tough in Detroit. For the first time since 1922, General Motors will not pay it’s shareholders a dividend. Even more omnious is speculation that GM may have to seek bankruptcy protection (see NY Times / Associated Press article). There are even calls for dropping GM from the Dow Jones Industrial Average.

While much of what ails GM is related to the sad state of the U.S. economy, not all automobile manufacturers are suffering the way GM currently is. There are many reasons for this, including GM’s reliance on large, gas-guzzling vehicles which have become white elephants, thanks to fuel that is selling between $4 and $5 a gallon.

For us however, GM lost it’s appeal long ago. Not because of the quality of their products, which by and large we’ve been quite satisfied with, but rather because of what we believe is their total lack of respect for their customers. As we have written previously, we are a strong believer in buying products made in the USA, and indeed we’ve owned only US-assembled GM vehicles for the past thirty years.

We’ve never had a good experience with repairs covered under GM’s new vehicle warranties. We have always experienced dealer service that was inept, shoddy, defective, or incomplete, and which in many cases took days or weeks longer than it should have, while our vehicle languished in some dealer’s lot. Almost all warranty repairs we’ve ever taken our vehicles to GM dealerships for have required one or more return visits to the dealer, either because repairs were done incorrectly or not at all. We believe that GM dealerships prefer to not do warranty repairs, and will try to avoid doing them whenever possible. There never seemed to be any incentive to do things correctly. The experiences we’ve had over the years at GM dealerships convinced us to never ever allow them to do non-warranty repairs on our vehicles where we would be paying for the work out-of-pocket.

We’ve dealt with dealership personnel from salespeople to service managers to owners, who have been rude, indifferent and downright obnoxious. In our opinion, it’s not so much a lack of caring or pervasive incompetence (although there’s plenty of that), as it is a culture of contempt for the customer. We feel that GM and it’s dealerships view customers as little more than an annoyance. As if they were saying “we don’t value you as a customer, and we couldn’t care less about your future business”. GM’s “customer care” has proven to be a worthless farce every time we’ve ever turned to them in an attempt to resolve problems with our vehicles. We decided years ago that our current GM vehicle will be our last one. It’s a bit ironic then, that GM may not be around much longer to sell us, or anyone else, their next vehicle. We think that in large measure, they can blame their current plight on the way they’ve treated their customers. Forget about Harry Gordon Selfridge’s old adage “the customer is always right”. At GM, it has always seemed to us to be more like “the customer is never right”.

This fellow doesn’t think The General has much better regard for it’s current workers or retirees.

We won’t shed a single tear if GM goes belly up tomorrow.

Where was I ? …Oh yeah, the dismal state of the U.S. economy. See what happens when someone mentions GM to me ?

So, GM is hurting big time, banking institutions are in trouble, home foreclosures are at record levels, soup kitchens and food pantries are reporting big increases in families seeking assistance (while at the same time finding it harder to get food donations), and the cost of living is skyrocketing, despite what government inflation figures claim.

IndyMac Bank customers in Burbank, California

Associated Press photo / Kevork Djansezian

The FDIC has compiled a list of 90 banks it says are in danger of failing, victims of the U.S. mortgage crisis.

Consumers are seeing utility bills increase 20, 30, even 50 percent. In New York City, the local electric utility, Consolidated Edison, recently hiked electric rates between 22% and 25%. Because of steep increases in fuel prices, there’s sure to be more double-digit increases in store. In New Jersey, Verizon, a regional U.S. phone company, has gotten permission to raise basic telephone charges 50% over the next three years, and cut the number of free directory assistance calls a subscriber gets in half, while tripling the price. This will no doubt accelerate the trend of consumers dropping traditional phone lines and making their cellphone their only phone. This is not only because of the cost, but also because traditional phone companies like Verizon still don’t know how to be competitive in today’s telecom market where Cable TV, Internet and cellular telecom providers offer highly competitive or all-you-can-eat calling plans that include a smorgasbord of features at no extra charge, and companies like Google are providing FREE directory assistance services. Isn’t Verizon still charging extra every month if you have a Touch-Tone phone? They are clueless.

Healthcare costs are increasing so rapidly that many employers can’t afford to continue providing coverage for their employees, and an increasing number of individuals and families have no health insurance.

Trips to the supermarket induce shock, while a trip to the gas station produces gas pains.

We’re starting to see panicked Americans creating a run on the bank, such as these customers of IndyMac Bank this week.

And, of course, we are still at war.

America is the land of plenty, where we are enjoying a bumper crop of bad news on the economic, political and employment fronts. There seems to be very little good news these days.

– Routing By Rumor

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