The UAW Isn't GM's Only Problem

From spying on drivers to confusing the eco marketing, bad decisions abound.

It's been obvious for many years that the United Auto Workers membership isn't concerned with the financial health of their employers.  To deflect some of the criticism of their grossly inflated wages - UAW members cost more than $70/hr at their peak - they claimed over and over again that management couldn't design cars that Americans wanted to buy.

This was clearly false, despite being the media's favorite drumbeat, as the New York Post pointed out.

Some years ago, GM offered major price cuts; people bought their cars, and a great many were happy with them.  The problem was not that GM doesn't make cars Americans want to buy.  The problem was that GM can't make a profit selling cars Americans want to buy at a price Americans are willing to pay.

The Obama-assisted bankruptcy cut UAW wages enough that GM was able to return to profit.  The unions seek to restore wages to where they were when the companies nearly went under, but that's another story.

Getting it Right

GM management has made some rather clever moves.  Knowing that customers were concerned with reliability, GM developed a system called OnStar.  Computers in each vehicle monitored oil changes, tire pressures, engine health, and a host of other variables including where the car was and how fast it was being driven.

All these data were uploaded to GM's computers whenever the vehicle was in range of a station.  Collecting and analyzing this information helped GM know when to urge their customers to bring cars in for service, as well as helping engineers identify manufacturing problems and design issues.

Their marketing department had the opportunity to brag about how the built-in communications system let drivers call GM's help center.  GM claimed to have saved several customers' lives by calling ambulances at the right time.  As useful as that is, though, it was the smallest portion of OnStar's value to GM compared to the failure forecasting and engineering data collection.

To induce customers into OnStar's pleasures, new vehicles came set up with free OnStar for the first few months of ownership.  This was a reasonable time to look for manufacturing problems and to create opportunities to build a relationship with the customer; giving away the service for a while made business sense.  On-Star users whom I know were happy with the service, and many of them chose to continue paying on a subscription basis after the initial free period ran out.

A Bone-Headed Business Blunder

Then GM drove itself into a major flap.  An alert OnStar user named Zdziarski actually read the "updated terms and conditions" in an email he received.  This leaped out at him:

Unless the Data Connection to your Vehicle is deactivated, data about your Vehicle will continue to be collected even if you do not have a Plan. It is important that you convey this to other drivers, occupants, or subsequent owners of your Vehicle. You may deactivate the Data Connection to your Vehicle at any time by contacting an OnStar Advisor.

Having GM continue to collect information about his driving habits was irritating, but at least arguably a worthwhile tradeoff for OnStar operators being able to summon an ambulance from afar.  As the law requires, he'd also been informed that GM was planning to sell this information to other companies; again, not ideal, but not a big deal either.

Now, GM was saying that it intended to continue collecting and selling personal data even if you canceled your OnStar subscription - indeed, even if you sold the car to someone else entirely!  Zdziarski immediately canceled his plan, phoned OnStar to deactivate the Data Connection, and blogged about it.  He was particuarly upset about their claiming the right to collect and process what he thought of as his data "for any purpose at any time."

GM's promises of separating your name from the data about your car are meaningless - anyone can program Google Maps to figure out that the place where your car spends its nights is probably where you live and that it spends its days where you work.  One of the appeals of automobile ownership is that many people think of their cars as the last refuge of privacy, a space they can have to themselves.  With Big Brother tracking you at all times, a major psychological purpose of paying all that money for a personal automobile evaporates.

GM management can't blame the unions one little bit for this shot in the foot - not a single UAW worker had anything to do with it.

Electric Vehicle Owners vs GM

GM created another stumble for itself in dealing with its new electric car.  Green Californians have been hot for electric vehicles for years.  Driving one of those impractical, limited-range early models said that you Cared About the Planet; you could enjoy that warm glow of eco-do-goodery, or at least of no air conditioning, while waiting for a tow truck after your battery ran out unexpectedly.

One of the best ways to deal with "range anxiety" was to have some place to plug in the car when you got wherever you were going.  Back when the State of California had lots of money, electric car owners lobbied to have the state set up public charging stations.

A charging station looks somewhat like a normal parking place, of course.  To keep the polluting masses from blocking access to charging stations,  electric vehicles had to buy a sticker from the State of California.  Cars in charging stations without the blessing of a sticker were towed.

So far, so California.  Enter the Chevy Volt.

The Volt does not meet the restrictions imposed on cars that use public charging stations.  The law as written required that cars have "zero emissions."  The Volt has a gasoline engine to recharge the battery so it doesn't quality.

Not to worry, crony capitalism to the rescue!  GM has a research lab in California and persuaded their state Senator to introduce legislation allowing Volt owners to use the public charging stations.

The change in the law also eliminated the sticker requirement, which was clearly becoming an administrative pain in the neck.  In order to avoid being towed, a car in the charging station now merely had to be plugged in as living proof that it was truly an electric vehicle.

One wonders how soon conventional cars will sprout fake extension cords so that people can park illegally and "plug their cars in."  Will charging a cell phone in the car qualify?  What about recharging the starter battery?

As with all matters legislative, the devil is in the details.  Auto Observer reports:

What got plug-in advocate Chelsea Sexton and members of the advocacy group Plug In America up in arms is that the seemingly innocent change appears to spell an end to the collegial practice of "plug sharing" that California's BEV drivers have practiced for years as a way of maximizing the relatively few public charging sports available. BEV drivers in the state have always felt free, when arriving at a charger that was occupied by a car that was hooked up but done charging, to park in an adjacent spot, unplug the first car and to plug in their own vehicle. A whole set of protocols evolved that included use of dashboard placards on which drivers might write something like: "Plugged in at 2 p.m. Only need an hour's worth to get home. OK to unplug me after 3." Under Butler's new bill, however, a driver who unplugs another's car leaves that first car subject to being towed, and that has EV drivers in an uproar.

Assuming that the State of California really wants to give free electricity to electric car owners, it's a win for drivers to share chargers by unplugging cars that have finished charging.  Parking spaces can then share a charging connection, instead of requiring one plug per parking space.  Or is this a play by the California electricians union in an attempt to get more outlets installed at taxpayer expense than are strictly speaking necessary?

The Chevy Volt is the car long demanded by environmentalists and government leftists.  Along with lobbying for tax credits to reduce customer resistance, GM invested untold billions in developing it, presumably in the hopes that it would make their wares beloved instead of loathed.  And what do their shortsighted lobbyists do but slap their own prospective crunchy customers in the face!

No, the UAW isn't GM's only problem.  They seem to be able to get themselves in trouble all by themselves.

Will Offensicht is a staff writer for and an internationally published author by a different name.  Read other articles by Will Offensicht or other articles on Business.
Reader Comments

Where to start my rant on this article about GM's ineptness? With the union? Too easy. With management? Still too easy. With politicians? They are also too easy so where to start? I know, I'll start with the people that elected the rock stars into office. The electorate in California must be the biggest bunch of whiners in the nation. They want someone to do everything for them. They want the government to provide electric filling stations for them at no charge? The cars should be left on the side of the road to be towed to the dead battery dumpster is what should happen. And as for the unions, they should face reality like everyone else, they are not worth what they are paid by a long shot. Whenever someone has bought a GM car in the past they gave up quality, accessories, reliability, and price because they were dealing with a company that tried to sell a product at an inflated price because of the union. The company is as much to blame as the union for this scenario since anyone with walking around sense should have known that the wages that they committed to were unsustainable and would eventually implode the company causing the company to go out of business, workers lose their jobs and stockholders to lose their shirts. I for one will not be buying anymore GM cars, I was raised to be a GM guy but no more donations to the union or management. They should go bankrupt when the next turndown comes and be allowed to restructure in a right to work state where they might have a chance to compete. Until then look for the union to slay its provider, they have never helped any company be competitive and this will play out.

October 6, 2011 2:29 PM

I stopped buying GM years ago before it was cool. I have several friends who said they were going to stop buying GM after the bailouts. Then they saw some discounts and went right back to it. Principles are difficult sometimes.

October 7, 2011 8:37 AM

Does anybody know that since Obama 'bailed out' General Motors with their 'carefully planned' Bankruptcy...that General Motors has built a NEW CAR PLANT in MEXICO to the tune of $500,000,000 (Million)Dollars? what is this SHI** all about??? We are RE-BUILDING the ENTIRE WORLD!!! Either through WARS, BAIL-OUTS or MONEY!...and what about the American Citizens?...who's ELECTED POLITICIANS have given THEIR OATH to PROTECT! us from enemies FOREIGN AND/OR DOMESTIC! Who are these clowns?

October 9, 2011 6:20 PM

Be glad we have obama. He has shown us what a leftist government looks like. We have a real clear choice in 2012.

October 9, 2011 8:34 PM

@Margaret - that half-billion talk about is what the Obama guys blew lending to a solar energy company that was broke at the time. The whole point of getting power is to be able to reward your friends. It's gangster government. What would you expect? Obama trashed bankruptcy law and gave billions and billions of our money to the unions instead of to the senior creditors. Given that, why are you surprised they took a mere half-billion and built a factory in Mexico?

October 10, 2011 9:41 AM
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