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Rediff.com  » Business » GM: Of vanilla ice-cream, 9/11 and wars

GM: Of vanilla ice-cream, 9/11 and wars

Source: PTI
June 02, 2009 16:52 IST
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It vowed to 'Keep America Rolling' after 9/11 terror attacks and also solved a puzzle about one of its Pontiac cars not liking vanilla ice cream, but it could not avoid bankruptcy, even with the help of the United States government.

Besides, the iconic car maker weathered two World Wars and the Great Depression of 1930s, but the current financial turmoil happened to be too much for GM to keep running in safer alleys and it was finally steered into the bankruptcy on Monday (June 1, 2009) as it had reached a point of no-return.

The dominating icon of American capitalism, 1908-founded General Motors reigned as the world's largest car maker for over 75 years.

In the process, it also launched a 'Keep America Rolling' campaign after the September 11, 2001 attacks, that had left dumbfound the entire US, including its economy. But the GM campaign boosted its sales and was followed by other car makers too.

When things were going good, then also GM continued to lead by example -- for example its 2005 sales-boosting program of extending its employee discount scheme for all buyers, when it cleared its entire inventory pileup of about a year.

It did not help the company's bottomline, but started a wave of heavy discounts in the car market and the customers were not complaining.

One of the most interesting stories about GM happens to be related to ice creams. One of its customers, after just buying a Pontiac car, complained to its customer care division that his vehicle refused to start whenever he purchased vanilla ice cream.

Making things stranger, it was not the case when the ice cream flavour was chocolate, butter-scotch or anything else and the car was giving trouble only if it was vanilla.

The complaint appeared crazy, but the company went ahead in its quest to solve the puzzle and an engineer was sent to the customer.

The engineer accompanied the customer on his vanilla ice cream shopping and the car actually gave problems in starting there after. The next few nights, it was chocolate, strawberry and some other flavour and there was no problem.

Refusing to accept that the car was allergic to vanilla ice cream, the engineer continued to study the pattern, took all his notes, thought over it and finally got his answer.

Whenever it was vanilla, the time taken for return to the car from the shop was minimum, and the other flavours were taking longer time. The reason, vanilla, being the most popular flavour, was always kept stocked nearer to the shopkeeper, while others were relatively at a distance.

Finally, the engineer reached out for the real problem-- which was in the car's vapour lock as the additional time for purchase of non-vanilla ice creams was allowing the engine to cool down considerably and vapour lock was getting dissipated, leading to problems in its start.

At the same time, the customer was coming out of the shop with vanilla ice cream early and the engine still heated enough for the vapour lock to dissipate. The problem was found and the vapour lock was fixed.

But the current problem of GM happened to be too big to be solved even with the government help and the only solution left for its revival is filing for bankruptcy restructuring.

Faced with mounting losses and plunging sales, the auto giant explored various options including massive layoffs before succumbing to the inevitable bankruptcy.

Teetering on the verge of collapse, a few months ago, the US government pumped in nearly $20 billion into the car maker. As the going became more tough, the car maker had sought more taxpayers money after presenting a viability plan to the Obama administration.

Some of the world's best known and luxury car brands including Cadillac and Chevrolet belongs to it.

The collapse comes just one month after its rival Chrysler sought bankruptcy protection. The two major failures almost brings the end to an era in the auto sector, which saw the dominace of Detriot's Big Three -- GM, Ford and Chrysler.

In an unprecedented move, the Obama administration forced out GM's CEO Rick Wagoner in late March, as the entity continued to grapple with dwindling fortunes and handed over the reins to its Chief Operating Officer Fritz Henderson.

Started way back in 1908, General Motors has seen the worst and came out unscatched too. The century-old journey of the car maker has seen two World Wars and the Great Depressions of the 1930s.

In a reflection of the worsening economic situation, the auto maker incurred losses to the tune of $30 billion last year.

The auto maker employs more than 244,000 people and currently has presence in nearly 140 countries. But the revival is expected soon, at least if the example of its rival Chrysler is to go by and still-strong business being done by GM. Chrysler, which filed for bankruptcy protection about a month ago, is also said to be coming out in coming weeks.

At the same time, despite its troubled times, General Motors sold 8.35 million cars and trucks worldwide in 2008.

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