The Voice - Student Newspaper

GM survival unlikely in harsh economic times

By Sergio Vaquera
Reporter, The VOICE

Over the past year the automotive industry has struggled to stay afloat. Unstable gas prices have led many American citizens to buy foreign cars. The uprising market of foreign cars in America takes away from trucks and sport utility vehicles (SUV) sales that many American car companies, such as General Motors (GM), depend on.

Production of heavy duty vehicles seems almost pointless as many seek to buy more compact vehicles with better gas mileage.

Hybrid and electrical cars have increased in sales to 25 percent in the first four months of 2009, putting Japanese automotive company, Toyota, at the top of the sales chart.

In the shadows of Toyota's success GM is suffering at the bottom of the sales chart. With sales below average, GM can't borrow any more money to produce and market their vehicles. GM had to slower production and lay off employees in order to stay afloat. GM also funds their retired employees and they pay their high demand assembly line staff far more than average in order to keep them.

In addition to the amount of money put into production, GM's advertising department has a tall mountain to climb in rivaling competitors.

Progressively, Honda and Toyota are being seen as better-built and longer-lasting vehicles leaving GM to play catch up.

As Honda and Toyota have put emphasis on their 2009 line of hybrid and electrical vehicles, it could be a little too late for GM.

Other automotive makers have been focused on such issues for years and the efforts have paid off as their companies still manage to make a profit even in these harsh economic times.

The problem lies within GM as their past mistakes have led to the struggles they face today. It is difficult to imagine and highly unlikely that GM will be able to dig itself out of the hole it dug itself.

Destined for bankruptcy, GM's numbers show no signs of improvement; a sad fate for a storied company that has persevered for over 100 years.

Please send comments to svaquera@gccvoice.com