If You Can’t Beat ‘Em . . . Sue ‘Em!

When you can’t beat ‘em in the showroom, go after ‘em in the courtroom.

General Motors says the lawsuit it filed against FiatChrysler is all about FCA supposedly graft-giving union bosses under-the-table cashola to gain some kind of competitive advantage on labor costs.

The allegation is that FCA’s former head, Sergio Marchionne funneled payments to United Auto Workers bosses to secure wage and benefits deals more favorable to FCA and less favorable to UAW workers, which gave FCA an unfair competitive advantage over GM, and had not-as-favorable deals with the UAW.

But the numbers don’t appear to support GM’s claims.

The average FCA assembly line worker earns about $22 per hour while the average GM assembly line worker makes about $20 per hour (this figure is pre-strike and may be higher now).

GM, in other words, pays its workers less or at least did (before the recent settlement with the UAW).

A more striking disparity is how much GM management gets paid vs not just FCA management but the rest of the car industry’s managers. The Detroit Free Press recently published some enlightening data regarding this.

GM’s CEO Mary Barra is paid a base salary of $2.1 million annually plus stock and other forms of compensation that brings her total package to $21.8 million.

Over at FCA, current CEO Mike Manley (who took over for Marchionne after his sudden death in 2018) receives a base salary of $680,434—about a third of Barra’s base pay. Like Barra and other car company CEOs, Manley receives additional compensation, bringing his total up to $14 million.

But that’s still almost $8 million less than Barra’s haul.

The real problem, though, isn’t what GM pays Barra or what FCA pays its workers, but rather that FCA, the Chrysler (and Dodge and Ram and Jeep) part of FCA is doing really well by not selling electric cars. Before his untimely death, Marchionne publicly urged people not to buy the one pitiful example in the inventory, the electrified version of the Fiat 500.

And they haven’t.

But they have been buying other FCA cars—the same cars FCA was selling ten years ago—which continue to sell well because (here it comes) these are the kinds of cars that buyers want.

Big, rear-drive cars with big engines and without the big price tag.

Cars like the Dodge Charger, Challenger and their Chrysler-badged cousin, the 300. All of them date back to about 2008, with only minor tweaks since then.

It is very interesting that such “old” designs, without all the very latest features, continue to sell so well.

Could it because the new designs and latest features aren’t as desirable?

GM—and pretty much the rest of the car business—has rolled over like a cur dog and abandoned cars people like in favor of the supposed “inevitability” of electric cars, despite what ought to be the alarming lack of interest in electric cars.

That interest of buyers, at any rate.

The government is very interested in them. And its handmaiden press is working nonstop to confect an aura of interest in them that supports the false narrative of EV Inevitability—via credulous, almost carny barker “coverage” regurgitation, really, of the all the EV talking points, without any gimlet-eyed fact-checking, especially with regards to the never-to-be-discussed deficits.

In particular, the Affordability Problem.

EVs represents an increase in cost and a diminishment in what you get.

This can be illustrated by comparing what Dodge sells for less than $30,000 vs. what GM sells for more than $35,000.

For just under $30k ($29,895) you can buy a brand-new full-size Charger sedan riding on a 120.1 inch wheelbase with an appropriately-sized 3.6 liter V6 under its hood and limo-sized back seats (40.1 inches of legroom) that can travel 555 miles on a tankful.

Or you could pay $36,620 for a new subcompact/front-wheel-drive Bolt EV riding on a 102.4 inch wheelbase with four inches less backseat legroom that goes maybe 259 miles if you press it along at low speed and don’t use the AC much, before it requires an extended session at the umbilicus.

Leaving aside the respective looks of these two, which would you want to buy, on the numbers alone?

It can’t help that FCA’s Ram 1500 pickup is outselling the Chevy Silverado 1500, which had for decades been solidly the number-two-best-selling pickup after the perennially number-one Ford F-150.

Not anymore!

The why is not hard to understand, and is of a piece with the rest.

GM uglied-up the Silverado and, far worse, put a four cylinder engine in the thing. You can still get a V8 (and a V6) but the tone set by this did not sit well with truck buyers. There is a place for four cylinder engines. It is under the hoods of compact-sized economy cars.

You will find nothing smaller than a big V6 under the hood of a new Ram truck.

GM also mucked-up Camaro by practically turning it into a less-practical Corvette. It has less cargo room and a useless back seat with so little legroom that GM actually hides the specification by not publishing it (it’s about 24 inches; for perspective, the Dodge Challenger has 33.1 inches of backseat legroom and a 16.2 cubic foot trunk vs. Camaro’s ludicrous 9.1 cubic footer).

Camaro also comes standard with a four cylinder engine.

Cadillac is drifting; Buick is an irrelevance in America. GMC is just silly.

The bottom line is that GM is having trouble finding buyers for its new cars and trucks, while FCA is having trouble building enough of its old cars and new trucks to keep up with demand.

Rather than revise its thinking and its product line, GM is suing, hoping to cripple FCA in the courtroom rather than in the showroom.

It speaks volumes about what today’s GM is all about!



Photo attribution: Liz A. Arnsby licensed under the Creative Commons Attribution 2.0 Generic license.

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One Response to “If You Can’t Beat ‘Em . . . Sue ‘Em!”

  1. David Holzman says:

    Very interesting article. The comparison of the pricing and the respective ranges of the Bolt and the Challenger–humorous and sad at the same time. Where I live–Boston suburbs–there are significant numbers of people who buy electrics–although in my neighborhood of 60ish houses, there are ~10 Teslas and a single Bolt. I think there’s also a Volt.

    I could not see paying more for a car with a short range and a long recharging time.