2. Thirty years of pissing-off customers has finally come home to roost. In the 1980s, disgruntled buyers of GM, Ford or Chrysler products could only broadcast their displeasure at work or in bars. Today, the web has changed all that. Angry buyers put up websites. Or vent their spleens online in various forums. Bad news now spreads like wildfire.

In today's world, information technology provides potential buyers with a cornucopia of information about the vehicles they're considering.

Meanwhile, the sons and daughters of those angry '70s and '80s buyers continue to remember Pop's Bad Experience (from many dinner table rants) and buy Asian.

3. The Americanization of Japanese cars is now complete. In the 1960s and 70s, Japanese cars offered weird styling and lacked those little American luxury touches. No longer. A Lexus is more 'loaded' than a Cadillac DTS. Asian cars now look American ... or is it that American cars now look more Asian?

Many Asian-badged offerings have a higher domestic manufactured content than their Yankee-badged counterparts. Buicks are made in Canada; Chevy Aveos are produced in Korea. The Toyota Avalon has 70 percent American content, the Honda Civic - 75 percent, but Chrysler's PT Cruiser is only at 60 percent. The Ford Fusion and its Mercury Milan and Lincoln MKZ clones are made in Mexico. "American" brands, badges and emblems mean nothing anymore.

4. There is a convergence of features in automobiles. Once upon a time, a Cadillac or Lincoln would be equipped with convenience and luxury items not found in a lowly Ford or Chevy. No more - the differences between cheap cars and expensive cars are disappearing. Almost every car now has power windows; great sound systems are a frequently-specified option on entry-level vehicles. Safety features like multiple air bags, traction control, stability control and the like are no longer the province of Volvo and its haughty competitors. Hyundai and other low-priced vehicles now offer a myriad of safety features.

Meanwhile, luxury brands like Lincoln have "decontented" (a Detroit euphemism for "cheapened") their offerings over the last 10 years.

Once upon a time, people who purchased luxury cars were assured that their car would be better made than a lesser vehicle. If that were ever true, it is no longer. J. D. Power reports that the gap between luxury and non-luxury brands is narrowing. This year, owners reported an average 213 problems per 100 vehicles for premium brands, only 15 fewer than for mainstream brands.

5. Look-alike styling has become the Great Equalizer. If "racing influences the breed", isn't the fact that cars are getting more and more alike except for badges/decals representative of what NASCAR has been like for the past 15 years?

When I was growing up, I could identify makes of cars from 1/4 mile away. Now I can't tell the difference when I see them 10 feet away in a parking lot - unless I look at the emblem. So, how can I impress my neighbor with my new vehicle if he/she can't even tell what I'm driving? Or if his/her $18,000 ride has pretty much the same look and most of the luxury features as my $55,000 machine.

Summary: Detroit's business model of the past 60 years is no longer working. Hype and bullshit cannot compete with competence, product quality, manufacturing flexibility and the forward march of technology.

People buy cars based on facts and impressions. And we live in an age where a plethora of both is just a few mouse clicks away.

GM had a working capital deficit of $10.9 billion at the end of the first quarter, while Ford's was $9.04 billion, according to data compiled by Bloomberg. Chanos said the companies' working capital positions are "dire'' and that investors focusing on their cash balances are being misled.

The company now has the smallest market capitalization in the Dow Jones Industrial Average, of which it has been a component since 1925. GM share price closed yesterday (6/30/08) at $11.50. Shares have traded as high as $43 over the past year. In April 2000, the stock hit $93.62/share.

Toyota is now worth roughly 25 times as much as GM.

All of the Detroit automakers are in trouble. Sales are dropping precipitously, especially large pickups and SUVs. As I wrote in The Perfect Storm (10/06): "Start with a bad product mix. Or, more accurately, the wrong product mix for the times. You'd think that the Big 2.5 would have learned after the oil crises of 1973 and 1980. But they didn't. Instead of offering a balanced portfolio of vehicles, they continually reacted to the fad-of-the-moment, developing products which were no longer desirable by the time they were introduced."

That said, I think Chrysler is in the worst shape in terms of product desirability. But GM is a close second with too many offerings and a generally unappealing mix - at least in the eyes of consumers. (The Corvette is great; Cadillac's CTS as well as Saturn's new offerings have been praised by the buff mags but have not sold especially well.) Ford has pared its costs and is adjusting its product portfolio; the question is: can it finish the job before it runs out of money.

The 24/7 Wall St. site offers bankruptcy odds on publicly-traded companies. (Chrysler is excluded because it's now private.) Betting on bankruptcies between now and the end of 2008, the odds "favor" airlines, publishing media and financial firms.

The most likely to go Chapter 11 are: AMR (American Airlines) - given a 1 in 2 chance. Followed by UAL (United Air; 1 in 4), Northwest (airline; 1:5), Gatehouse (newspapers; 1:5) and Delta (airline; 1:10). General Motors is down the pack at 1 in 25 odds, behind Lee Enterprises (newspapers; 1:15) and tied with Lehman Bros. (brokerage house), Continental (airline) and Wachovia (bank).

When my wife and I visited the Philadelphia area in 2006, it seemed half of the banks we saw were wearing Wachovia signs. The 6th and Chestnut branch - catty-cornered from historic Independence Hall - had badly rotted wood windowsills on the ground floor. I should have taken that as a sign that there was rot elsewhere at the mega-bank.

Ford is given a 1 in 35 chance of bankruptcy this year. That almost sounds optimistic, compared with these other troubled corporations.

In March of 2006, I reported that I and three of my fellow geezer car buddies were convinced that General Motors would eventually go bankrupt. We still are. All of us are business-oriented, having owned our own firms. One is a ex-employee of a Tier I supplier to Detroit.

Forget sophisticated cash flow analysis, reading the details of 10-K filings, etc. It's our gut feel - based on lack of good product, GM's severe and continuing misreading of the market, the number of GM cars seen in rental lots, the substantial off-price deals being offered on too-many models and the lack of interest by any of our friends - or their children - in owning anything made by The General. Another tip-off is the bankruptcy of several key Tier I suppliers. These and other suppliers will force price increases on GM - a company which can't seem to raise its own prices in the marketplace because of low perceived value by prospective customers. That makes the squeeze tighter. And the cash burn faster.

We blame the once-great auto giant's demise on numerous people: 1) GM's top management (not just Wagoner but everyone from Roger Smith forward), 2) the UAW (and GM's top management for caving into the UAW's ever-escalating demands over the last 25 years) and 3) every senior GM marketing, brand and product manager from 1980 forward.

We bemoan all of the major and costly misfires by General Motors over the past quarter century, including the mid-80s look-alike sedans, the Cimarron, the shrunken Cadillac fiasco of 1986, the Catera, the Allante, the death of Oldsmobile, the demise of the high-profit Rivera/Toronado/Eldorado trio, the marginalization of Pontiac, the irrelevance of Buick, the unfulfilled promises of the Saturn brand, etc. The cumulative effect of these mistakes is the severe erosion of GM's once-loyal customer base.

The only thing which might buy General Motors some time is if Chrysler goes belly up first. It is very possible that this would drain some of Chrysler's customer pool into GM's dry creek. (posted 7/1/08)