General Motors CEO Mary Barra (center) tours the GM Fairfax Assembly plant with Plant Manager Bill Kulhanek and UAW Local 31 President Vicki Hale during the celebration of the 500-millionth vehicle.
General Motors CEO Mary Barra put in an appearance today at the maker’s Fairfax, Kansas, assembly plant, as part of a celebration meant to mark the roll-off of the 500 millionth vehicle the company has produced during the last 106 years.
While scholars might quibble a bit – this is, after all, the “new,” post-bankruptcy GM – few would deny the significance of this milestone. Industry observers say no other manufacturer has so far come close to the half-billion mark, and likely won’t for a number of years.
But while this might allude to the days when General Motors dominated the global auto industry like no other manufacturer, it is today far from the towering monolith of decades past. In fact, it very well could slip to fourth place among global automakers this year, at least when measured by global unit sales.
For years, the U.S. Justice Department considered ways to break up GM using anti-trust laws. In its heyday, in the early ‘60s, the maker built nearly two out of every three vehicles sold in the United States. But things began to change when the twin oil shocks of the 1970s opened the doors to Japanese imports like Toyota, Nissan and Honda, and a series of missteps allowed European marques Mercedes-Benz and BMW to overwhelm Cadillac in the luxury market.
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Through the 1980s and ’90s, the Detroit maker bled market share. By the turn of the new millennium, all of its brands combined added up to less share than Chevrolet alone held four decades earlier. And then, in 2008, the seemingly unthinkable happened. Toyota finished the year selling 8.972 million vehicles compared to 8.356 for GM.
For the first time in 77 years, ever since it displaced early industry leader Ford Motor Co., General Motors was no longer king-of-the-hill. Toyota briefly lost its grip on the lead following the devastating Tohoku earthquake and tsunami in 2011, but quickly rebounded.
Last year, GM slipped another rung down the ladder, Volkswagen AG jumping to second place and openly expressing its goal of topping Toyota by 2018 – if not sooner.
But despite the company’s declining dominance, Barra was all smiles at the Fairfax plant, promoting a bright future. “During 2015, we expect to sell more than 1,000 new vehicles per hour, 24 hours per day,” she said. “This adds up to nearly 10 million vehicles, the most in our history. I look at this extraordinary volume as 10 million opportunities to prove what kind of company we are and to say thank you.”
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Hitting “nearly 10 million” all but assures that GM will, at best, remain in third place for the year. In fact, the ignominy could grow yet worse. For the first two months of 2015, the Renault-Nissan Alliance nudged into third place and it remains to be seen if GM will be able to rebound as the months roll by.
There are some reasons for Barra to feel upbeat. Despite the massive and embarrassing recall crisis of 2014, the maker barely lost its stride. And while it is keeping up with the U.S. economic recovery, it is making even more aggressive gains in China, now the world’s largest automotive market. But even there, GM has had its setbacks. It is now lagging in second place behind Volkswagen – though well ahead of Toyota.
In Europe, GM continues to struggle, but it hopes to finally break even this year after more than 15 years of massive losses. Its effort to launch the Chevrolet brand on the Continent failed and its Opel brand is a shadow of its once-formidable self. GM has also announced it is largely pulling out of the troubled Russian market, closing its assembly operations there and retaining only Cadillac and a handful of mainstream models.
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Despite slipping down the sales chart, GM has built up such a strong tally over the past century that it will take decades for a Toyota or Volkswagen to overcome its historic sales total – those two makers debuting decades later doesn’t help.
But as any motorist knows, you can’t drive by solely looking into the rearview mirror. Under Barra, GM is struggling to shake off a legacy of bad management, crippling mistakes – and its 2009 bankruptcy. It is still running with the industry’s alpha dogs, but it has a lot to accomplish if it ever hopes to regain its position as leader of the pack.