Fate of GM: This time it’s personal
There’s been much hand-wringing over the federal government’s relationship with General Motors now that Uncle Sam owns 60% of the company.
But the situation is no less troublesome for consumers, who, as taxpayers, will share in GM’s fate. As owners of the company, are we obliged to buy its products to maximize the value of our investment?
Put another way, are we now hurting ourselves any time we buy non-GM vehicles? After all, if you owned 60% of Macy’s, you’d be kind of foolish to do your shopping at Target.
I put these questions to drivers at several gas stations in West Los Angeles on Tuesday, a day after GM filed for bankruptcy protection and the government committed another $30 billion in taxpayer money toward keeping the automaker afloat.
The bottom line: We may own the company, but many of us don’t want what it sells.
L.A. resident Gary Hawkins, 46, said he owns a 1975 Chevy Monte Carlo and loves cruising around in it. But if he had to buy a new car today, he wouldn’t go anywhere near a Chevy showroom.
“I’d rather buy a Honda,” Hawkins said. “They’re more dependable.”
I heard that a lot, especially when it came to Hondas and Toyotas -- you get more bang for your buck.
And even when I pressed people on how they could shop elsewhere when they own 60% of a company, they stuck to their guns.
“Japanese cars last longer and don’t break down as much,” said Lennox resident Armik Craft, 22. “People I know with Chevys and Fords make more repairs.” Craft drives a 1997 Honda Accord.
“I didn’t choose this investment,” he said of the government’s GM stake. “I don’t want these cars.”
There isn’t a single GM car Craft would want?
He considered a moment. “Well, maybe a Saturn. That’s GM, right? I like the Saturn.”
Um, that’s one of the brands that GM says it will either sell off or kill.
“Man,” Craft replied, shaking his head, “It’s hard to work with these guys.”
But it wasn’t all gloom and doom on the GM front. I did meet a number of drivers who either swore by their GM vehicle or were open to test driving whatever the company comes up with.
“I feel pretty good about owning GM,” said Indianapolis resident Travis Boruff, 38, who was visiting L.A. with his family. “Back home, I drive a Pontiac Torrent and a Chevy Malibu.” He was so enamored of the car, his rental was also a Malibu.
“But you should ask my mother,” Boruff said. “She used to work for GM, and she isn’t happy.”
He opened the back door of the car and introduced me to Mom -- a.k.a. Kokomo, Ind., resident Debra King, 58, who said she’d worked as an inspector for GM and parts maker Delphi (a former GM subsidiary) for 30 years. She retired in 2000.
“I like GM,” King said. “I like their products. But because of this bankruptcy, we could lose our health insurance and half our pension.”
Yet she’s now an owner of GM.
King nodded at the irony. “I feel like I’m being robbed by my own company.”
For Inglewood resident Melvin Robert, 52, an upcoming birthday means he’ll finally indulge his automotive fantasies.
He said he’ll be buying either a Chevy Corvette or a Porsche.
“I’m leaning toward the Corvette,” Robert said. “Because it’s American.”
And because he co-owns the company?
“And that,” Robert agreed, although he admitted that Porsche may still win out. “It’s my dream car.”
Ultimately, people will buy the car that represents the greatest value. I heard repeatedly that if GM or another American automaker can produce such vehicles, great.
If not, people will head to another showroom.
“This is the first foreign car I’ve bought,” said West Hollywood resident Lorraine Crossman, 56, standing beside her 2004 Toyota Prius. “It kills me not to buy an American car. But this is the best purchase I ever made.”
Then there was L.A. resident Marty Carroll, 27, who drives a 2008 Saturn Outlook.
He said that he grew up in Arkansas and that the only cars his family has ever owned have been made by GM or Ford.
Carroll is jazzed about owning a piece of GM’s action.
“It’s awesome,” he said. “I really like GM products. They’re really reliable.”
So what’s Carroll’s message to other new shareholders who may be leery about buying cars from the company?
“I don’t think you can do any better than a GM product,” he declared, grinning.
I hope he’s right.
Cheap socks
Speaking of U.S. manufacturing woes, I got a lot of reaction to my recent column about Steve Rochman, a Los Angeles businessman who helps U.S. companies outsource production to China.
He insisted that he performs a valuable service by boosting the competitiveness of businesses.
“You go to Wal-Mart and buy three pairs of socks for $7 instead of $30,” Rochman told me. “That’s not a bad thing.”
This drew an angry response from Dennis Martin, president of NC Sock Co. in Hickory, N.C.
“Mr. Rochman and others who import products from low-wage countries are the cause of, not the solution to, our current economic downturn,” he said.
Martin said that his company’s business has fallen about 60% over the last five years and that there’s little hope things will turn around.
“As long as wholesalers and retailers are buying their socks in places like China and Mexico and Honduras, companies like mine won’t be able to compete,” he said.
Could be worse, though. Martin could own a carmaker.
Oh, that’s right. He does.
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David Lazarus’ column runs Wednesdays and Sundays. Send your tips or feedback to david.lazarus@latimes.com.
