On April 1st, General Motors announced that they were having “computer system” issues and that their March sales figures would not be released until later in the day. The company eventually reported a year over year sales gain of about four percent versus an estimate of less than a one percent gain. This came as GM CEO, Mary Barra, was preparing to testify at hearings over the recent GM recall scandal which is reported to have contributed to at least 13 deaths. Coincidentally, GM share price had been taking a hit as well.
My immediate thought during the sales release delay was that the company was not quite done cooking the numbers. Of course, this is speculative and just my opinion, but the fact that GM has been anything but trustworthy in the past led others to share my sentiment. One website title read, “General Motors Delays Sales Announcement Due to Totally-Real Glitch.” The author sarcastically called the delay an “amazing coincidence.”
It seems unlikely that computer systems went down coincidentally at a time when GM share price desperately needed support as Mary Barra headed to Capitol Hill. It also should not take the entire day to fix the “glitch” only to have the numbers available at market close. It is still unclear if that glitch really was fixed, since GM relied on “backup” data for its numbers.
Of course, given GM’s cozy relationship with the Obama Administration, it is possible that the company had Kathleen Sebelius’ IT team working for them and the computer failure was real. Barring that, I just don’t buy the “glitch” story. One of the primary reasons to question the sales numbers accuracy is that they don’t match up with what some dealerships were saying about sales during the month; especially the all-important truck sales. While GM admitted that the Dodge Ram truck outsold the Chevy Silverado for the first time since 1999, there is a chance that the true numbers are even worse for GM than reported.
A Bloomberg article from just a day prior to the sales announcement quotes a GM dealership owner who has a total of four Chevy stores in the varied markets of Michigan, Florida and Georgia. Here’s what was said:
“Our truck business has been hammered,” said Stewart, who has four Chevy stores in Michigan, Florida and Georgia. “It’s hard to sell a pickup right now with our competitive approach. We don’t equal Ford’s incentives and we don’t even come close to Dodge’s.”
“We can sell trucks like popcorn when they price them right,” Stewart said. “Things go just as bad when they price them too high and that’s where we are right now.”
A Chrysler dealer in Ohio agreed with the sentiment, stating:
“We’re just kicking Chevy’s butt right now, and we’re doing it in a GM town,” Eddy said. “We always had the truck that chased everybody else, now they’re chasing us.”
A little reported fact regarding GM’s sales figure release was a caveat from the company itself as they warned, “These results reflect sales reported through GM’s primary and backup dealer systems and we believe they accurately reflect March sales…”
GM “believes” March sales figures are accurate! Excuse me for smelling a rat. Why hasn’t GM confirmed the sales figures, since the glitch most certainly should be fixed by now? Does the GM culture allow for a little fudging of sales figures?
I’m sure that I am not the only one who is skeptical of the supposed computer glitch that reportedly caused the release delay. The fact is that GM has lost so much credibility that it is hard to trust them when they come out with such suspicious acts. They lied about the demand and potential for the Chevy Volt, they have been accused of having a history of inventory stuffing to help prop up sales figures and, most recently, they have been less than transparent regarding the deadly recall delay. It will be some time before GM regains the trust of those who have paid attention to their past seemingly deceptive antics.
Mark Modica is an NLPC Associate Fellow.