Thanks To An Earthquake, a Tsunami, and a Bail-out, GM Will Be World’s Largest Automaker Once Again

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Thanks to $60 billion+ in U.S. and Canadian funds that saved the company and a tremendous, once in a thousand years natural disaster that’s crippled Toyota production, General Motors will likely be the world’s largest automaker for 2011. GM was the world’s largest automaker between 1932 and 2008, before losing the title to Toyota in 2009. While the value of being the “world’s largest” anything is dubious, there’s no denying that some people think being the world’s largest is an accomplishment.

If you find yourself talking to a person who thinks GM’s sales title is some sort of accomplishment, I’ve got some talking points for you.

1. Who cares? Does being the world’s largest automaker come with some sort of technological or economic advantage? Does every GM vehicle owner get a $100 rebate check as soon as GM becomes the world’s largest automaker, or does their GM product get an extra mpg after the award is announced? There’s nothing noteworthy about this statistic other than the statistic itself.

2. All it took was a disaster. If Toyota’s production hadn’t been crippled by a massive earthquake and subsequent tsunami, they might have been able to hold on to the “world’s largest automaker” title. It’s one thing to sell more vehicles than your competitor fair and square, but quite another when your competitor suffers a natural disaster. Sort of like a sports team winning a championship because the opposing team suffered an injury to their best player…we’ll always wonder what could have happened.

3. Bail out taints GM’s ascendancy. GM loyalists will argue that GM would have re-gained the “world’s largest” title regardless of Japan’s earthquake, and they could be right. It’s hard to know what could have happened. However, we can be 100% certain that GM wouldn’t be the world’s largest automaker were it not for a $60 billion dollar bail-out as well as a series of government-mandated rules that:

  • Closed all of GM’s least profitable plants
  • Consolidated billions of debt at pennies on the dollar
  • Forced workers to take a significant cut in pay
  • Suspended the rights of factory workers to strike
  • Fixed all (or almost all) of GM’s cost disadvantages

Winning the “world’s largest automaker” award under these circumstance is sort of like winning a beauty contest judged by your own mother…losing would be more noteworthy.

4. Good riddance. The honor of being the “world’s largest automaker” seems to be more of a curse than a blessing. GM rode the title straight to bankruptcy, while Toyota suffered through a massive public relations disaster shortly after taking the title.

If this sounds like sour grapes from a Toyota fan boy, consider this: As consumers, we should care about resale value, ownership costs, quality, customer service, performance, etc. We should want the best vehicle available based on all of the criteria I’ve listed.

World’s largest automaker? Not on the list.

Filed Under: Auto News

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  1. Jon says:

    I think the Toyota recall witch hunt cause more damage than the natural disasters did.

  2. Jason (Admin) says:

    Jon – I can see that. Toyota didn’t lose their loyal customers as a result of the recall, but they did have to increase their incentive spending to bring people into showrooms.

    If there’s a silver-lining to this earthquake, it’s that Toyota has cut the size of their incentives. Hopefully they can keep them at this lower level once production heats back up.

  3. Marcus says:

    2011 F150’s are averaging 10.2 days on the dealer lot before being sold. The 2011 Tundra is averaging 76.7.

  4. Mickey says:

    Agree Jason. They lost the title in 09, but I had an 06 Silverado with so many issues like a leaky roof on a stormy night. All I got from customer service was a drip, drip, drip. If that’s what you get for being on top they can have it. Just like what happened to me when both tail lights fell off while going down the interstate. It’s just enough to say I give up on a problem truck. Jason the earthquake will humble Toyota into making better vehicles again. Ford trucks are in trouble again. Now NHTSA better fine them for not recalling the last and now this:

  5. TXTee says:

    Dang it, Toyota! You built such a good truck I doubt I’ll ever let it go. How in the world do you expect me to make another purchase to help you get back to the top? Maybe a Highlander. Oh but the 7 yrs old won’t die and all I’ve done are oil changes…hmmm maybe I should change those original brake pads that have survived 70K+ in case my pedal gets stuck. Very satisfied owner of multiple Toyota/Lexus products. I’ll go with the “Who cares?” part above…..

  6. Mike says:

    Quality control slipped as Toyota tried to make more and more vehicles. I would be much happier, as a consumer, if Toyota’s sales dipped some and they got a tighter hold on quality. With vehicles like Hyundai and Kai following the “Toyota Method” of inexpensive quality cars, I think there is going to be more competition over the next few years.
    I realize it is easier to measure success by the amount of cars sold, but I would encourage Toyota to remember their roots and measure success by the quality and lasting value in their product. I still remember our old 1994 Camry that was bulletproof. I’m sure that car is still racking up the miles somewhere.

  7. mk says:

    agree with Mike 110%. Kia and Hyundai are gaining market share and certainly have some good vehicles to choose from, but no trucks as of yet. Back to GM, if they are again #1, then how about re-paying all those billions instead of giving millions to their top execs. I am still ticked off that the fed. govt. bailed them out and did NOT put restrictions on any bonuses or incentives whatsoever until all the billions have been repaid in full. Still makes me sick that GM got a gift along with Chrysler and will take some more time to once again reconsider buying a GM vehicle after owning several dozen the past 20+ years of driving. Wife wants a camaro over our corolla, but with gas prices they way they are, front wheel drive 36 mpg corolla makes more sense than a rear wheel drive V6 that gets probably 29 mpg at most and cost an extra 10K to boot.

  8. Jason (Admin) says:

    Marcus – 10.2 days?! Says who? I just checked the Automotive News May 1st inventory report and it’s showing F-series at a 69 day supply. Toyota? 56 days, averaged across Tundra and Tacoma.

    SO, prove your data or go sell crazy somewhere else! 🙂

    Mickey – I agree that the earthquake will humble Toyota, and it will also give them permission to move more production out of Japan and into the USA. Good news for everyone outside of Japan.

    TXTee – You don’t have to do it all yourself…

    Mike – Well said. Agree entirely.

    mk – We’re on the same page too. I can see the Camaro over Corolla, but only if I don’t think about money, value, depreciation, etc…but man, a 300hp V6? Awesome. 🙂

  9. carbiz says:

    Really? Worldwide, Toyota outsold GM by a mere 46k units in 2010. How is that worth celebrating? After billions spent by Japan Inc trying to destroy Detroit – that’s the best they could do? If you take away the nearly 2M hostage sales that Toyota enjoys in the motherland, I think you’ll find that GM is solidly #1 world wide.
    The only thing the earthquake in March proved is how ‘non’ North American Toyota really is. All those lies about North American content have been proven false.
    And if the motherland took away the 0% financing, billions spent on devaluing the yen and subsidies for the Synergy Drive, Toyota would never have reached a point where its continued ATTACKS on the North American market would have crippled GM in the first place.
    I wonder what sort of drugs one has to take to become a Japanese car fanboy…………..

  10. Jason (Admin) says:

    carbiz – “hostage sales in the motherland” – Tell me another one. Are you honestly arguing that Toyota is given 2 million sales in Japan every year just because they’re Toyota?

    As for your argument that Japan attacked the US auto industry, you may be right. It could be that Rick Wagoner, Jac Nasser, and all the other crummy auto execs were really Japanese spies who were intentionally trying to ruin the companies they led. It could also be that the UAW leaders over the last few years who demanded massive benefits and pay increases were all Japanese agents too.

    Of course, maybe the US auto industry did itself in and all of these complaints about Japan are just excuses.

  11. carbiz says:

    I know I’m wasting my breath on a Toyota site (I sometimes check in at ToyotaNation for laughs, too), but with the OECD reporting both Korea and Japan tied for LAST PLACE among the 28 industrialized nations surveyed for foreign import sales of vehicles in 2010. DEAD LAST. Coincidence? I think not.
    Tell me, let’s assume that Detroit does build junk and that is why the Japanese don’t buy American cars. Fine. Then why does VW or Fiat, both who build great small cars and are very strong world-wide – why do they also not sell many vehicles in Japan?
    Gee, could it because MIITI (and its more subtle successor) blocks foreign competition.
    Do not make me laugh at the assertion that Detroit was ‘bailed out.’ The few billion that Washington MAY lose once the final stock offering is made is nothing compared to what the hapless consumers of Japan have endured for 40 years while Japan Inc assaults the markets in North America.
    (Interestingly, nowhere else other than North America or Japan do either Honda or Toyota sell very well. Another point that makes one go hmmmmm?
    Enjoy the kool aid. Drink deep!

  12. Jason (Admin) says:

    carbiz – It’s a commonly held belief in domestic automaker circles that Japan and Korea both “block” US imports. However, that’s an oversimplification. In both countries, so-called “minicars” are mainstream sellers.

    As far as I know, neither GM, Ford, or Chrysler-Fiat builds a minicar in the USA destined for export. Perhaps if they did, they could compete in these markets. Until then, they’ll sell a small handful of large vehicles while complaining about unfair trade practices.

    BTW, why is it that Toyota outsells Ford, GM, et al in other world markets outside Japan? Is that bias too?

    Or perhaps you should direct your anger at VW and Fiat, both of whom outsell American automakers in Europe?

    Frankly, I don’t see your point. Japanese and Korean people don’t buy F150s or Suburbans, which is too bad because up until very recently that’s all Ford and GM were good at building.

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