In Friday’s interview with Automotive News (AN), Rick Wagoner snapped. When confronted with the fact that Toyota is set to overtake GM as the world’s largest automaker, the CEO stopped making sense and started talking to himself. “I can't argue that if you keep drawing the trend lines, your conclusion is correct. Is it inevitable? No. No it's not inevitable. If Toyota passes us, I guess they pass us. Do I like it? No. Am I willing to take us off our plan or to sacrifice our profitability or the implementation of our marketing strategy here? No, I'm not willing to do that. If we're going to stay ahead, we're going to stay ahead doing it the right way and a sustainable way."
So, here we are at Death Watch 100, and nothing much has changed. The good ship GM is still taking on water and it’s still steady as she goes. Rick’s turnaround plan– cut costs and build stuff people want to buy– remains unaffected. Don’t get me wrong: it’s a great plan, something along the lines of the classic “take in more money than you spend.” Only it’s not working. Quite aside from the fact that GM is still losing money, and has done so with remarkable consistency since we began the series (including a few truly spectacular financial quarters), Rick has failed to address the fundamentals dragging his employer into bankruptcy.
The General still has too many brands, models, dealers, legacy costs and overheads. Its UAW contracts and overcrowded smorgasbord of lackluster vehicles still make it a high cost automotive producer trying to sell heavily discounted products in a highly competitive market. And Rabid Rick is still talking as if simple persistence– rather than radical change– is the key to GM’s survival. Wagoner’s comments to AN about the infamous jobs bank– the ultimate symbol of GM’s management stupidity and union intransigence– tell you everything you need to know about Wagoner’s reformatory zeal.
"We'd like to reduce the cost of the Jobs Bank, yes. There are plenty of ways to do that… A lot of times people want to jump to the sort of extreme answer and that very well might not be acceptable to the UAW. If we've learned anything over the last decade, it's that if we sit down and work over the tough issues, most of the time we can make some progress."
He’d “like” to reduce the jobs bank? “Most” of the time we can make “some” progress? Methinks Rabid Rick may have learned too MUCH in the last decade; applying the rules of GM’s past labor negotiations (“give ‘em what they want”) to the current crisis. And make no mistake about it: GM is in crisis. The General has sliced production, sold off everything except GMAC, burned through the cash and still isn’t making enough money to stop the rot.
It can’t be that bad, can it? After all, Automotive News claimed that Wagoner is “unwilling to return to heavy incentives and fleet sales to stimulate sales.” So I guess GM’s just announced, much anticipated (by customers anyway) Toe Tag Sale– offering $5k discounts on selected ’06 vehicles and $3.5k on some ‘07’s– doesn’t count. And the same goes for the large number of generic GM vehicles that still find their way into fleets (roughly 25% of production). The truth is Wagoner has failed to reverse the increasingly accurate impression that GM is the overstock.com of cars.
For those who’re listening, the klaxons are sounding loud and clear. Check this excerpt from a GM press release regarding an upcoming $1.5b seven year secured loan (tied to machinery and equipment and special tools at US production plants).
"GM's ability under some of its existing bond indentures to pledge U.S. property, plant and equipment is likely to be affected in the future by new rules applicable to pension and OPEB accounting, which could cause GM's shareholders' equity in its year-end 2006 financial statements to be negative.”
In other words, the well has run dry. With 51% of its GMAC finance unit (a.k.a. cash cow) set for sale, GM can no longer borrow from this once dependable internal source. As of next year, GM still won’t be able to take out unsecured loans, while the terms of its bond indentures rule out secured loans. With a negative cash flow from its North American operations and no ability to borrow, with debt payments due AND the need to fund Wagoner’s turnaround plan (new products, severance pay, depreciation, etc.), GM’s cash crunch is going critical. The only money available: $8.5b (plus another $4b over three years) from the GMAC sale.
How long will that last? We’re going to find out. Or not. Rick says he’s “optimistic” that the GMAC sale will go through by year’s end. Should it fail, so will GM. In any case, watch GM’s dividend payments. If and when they’re suspended, that's it: the beginning of the end. Either that or just another stop along the way.
One word: YIKES!
Break out the ballons and the party favors! GM Death Watch has reached 100 essays!
I’m not being sarcastic. I think it is a real accomplishment to chronical the demise of the worlds largest auto company in particular and of American industry in general. I have saved everyone of these essays so that I can look back on it some years from now to see where the analysis was right on and where it was off.
Hats off to you Robert and the other contributors who have kept this series going. The discussions that it has sparked alone have made it worthwhile.
I read AN’s interview and didn’t get the impression that Rick ‘snapped’.
And ‘Tag it and Bag It’? A little premature perhaps.
In any event, congratulations on 100 installments
GM Ford & chrysler share the same union and work rules. This is because of pattern bargaining the UAW has used for decades. I see the scenario like this one of these three will bail out with a bankrupcy, they will get relief from the courts where the jobs bank will be eliminated and the entire contract with the UAW will be amended, includeing the pensions and medical benefits. Finally this company will emerge from the reorganization in about the same shape as to the costs of operation asthe Japanese plants here in the US with one of the three unionized companies now reformed can the other two carry on the party alone much longer?
Whoever dclares bankrupty first wins.
the last chance the 2.5 have is for the federal government to bail them out on pensions and retirement costs. Look for this to become an issue next year during contract talks and beyond.
All these new models from the 2.5, I am just waiting for some chronic mechanical problem to come up that affects nearly all of them. transmissions, head gaskets, or something else that destroys resale value. What few customers they have left will be sitting in a Hyundai or Toyota dealership.
Will we make 200 deathwatches? how far wild Ford’s go and when will Chrysler join the party?
Rick didnt seem that Rabid, maybe sadly resigned to the obvious.
Funny thing is, we’d be up to “Death Watch 5000” if TTAC was around at the beginning of GM’s fall (the 70s maybe?).
Sure there is always a glimmer of hope, always a promise of “Things are gonna get better… We promise!”
I used to root for GM, I really did. Heck, I even thought the Allante was nice, and I even loved the look of all that plastic body cladding on my ’95 Grand Prix.
It’s like the just don’t get it… Always releasing their “next big thing” at the worst time, like new full size SUVs when gas prices hit an all time high. Refusing to learn the importance of small cars and a decent mid-size sedan. Always failing to capitalize on their strong products.
Like rooting for an inept sports team… It just gets too depressing to root for GM after a while.
"negative cash flow from its North American operations" Shut down the NA operations? Just build cars in Mexico, Canada, Europe, and China? That might send a message to the UAW. Move the corporate HQ to China? Sell GM to Chery?
I don,t no much US law,in the delphi saga the courts are reluctant to do Delphi’s dirty work like taking on the UAW.
I can’t see the courts doing it for GM either.
Fall of 07 UAWs 5yr contract comes up.Lets not forget it was GM that wanted 5yr deal instead of the traditional 3.
If GM is still alive and Rick is still behind the wheel, then we will see what sort of stuff he is made of.
Any way I can get my info fix from death watch.
Mr. Farago,
Do you expect Rick Wagoner to say anything substantial about the “jobs bank” one year before the contract is up?
They most likely haven’t even started talking yet.
Gettelfinger has to take time to bring the “true believers” down several notches (…and brother, those “saints” believe!). He already pretended to expect the “jobs bank” to stay in a speech earlier this year.
I don’t think Wagoner wants to stir the pot until it needs stirring–and not a moment sooner. Let Ron do the heavy lifting till the last moment.
You may argue that he should simply lay it on the line and resist talking “peachy”, but that makes for a demoralized workforce–one that is notoriously sub-par even on the best of days.
I didn’t expect him to say anything about it, but he did. And what he said qualifies as premature conciliation.
mikey–
if i recall, you work for GM in shipping and receiving (warehouse area?). are you part of the UAW, or are there other unions working for GM?
Note how Rabid speaks as if the UAW controls GM…Oh Wait… They do! (1935 Wagner Act)
GM is a retiree support company that happens to build automobiles as well. Hope they can extract high profits from their new CUV line because – 2008 Toyota Tundra.
Ugh.
Canadian auto workers nicknick our contract is up in 08 so I’m watching the US situation very closely
somethingtosay the sub par comment would be the moral right?Im sure you wouldn’t be slamming the folks working on the floor
GM’s only answer will be for the North American operations to split up – much as Studebaker separated manufacturing from sales before pulling the plug on South Bend Main and importing cars from Canada.
That way, the GM Manufacturing Corporation (or whatever name they come up with) can go Chapter 7 (total bankruptcy), close down, and GMCanada, GM-EU, GMdeMexico and SAIC-GM of communist China can export cars to GM Sales Corporation of North America (or whatever name they come up with).
Bye bye UAW contracts because – no UAW for GM. Instantly, production levels are cut down to the size required for the sales operation (which would shrink out of sheer shock).
Look at a 1964 Studebaker owner’s manual some time – it does not say Studebaker Corporation, it says Studebaker Automotive Sales Corporation.
December 22, 1963 – bye bye UAW and bye bye South Bend Main.
Think I’m nuts? They why else would GM-Europe be trying to buy the ex-Daewoo factory in ROMANIA if not for the extra capacity needed for exports to guess where?
Even more scary for the UAW – FORD is also trying to buy the Ro-Dae factory in Romania.
Boy, this Death Watch thing is really thrilling. I can’t wait for installment # 200.
Perhaps I can interest you my Toyota Death Watch series?
After all, perhaps 20 years from now Toyota will also be in financial trouble. After my Toyota Death Watch # 5,000, I could look like a real seer.
Regards,
Hal.
“For example, looking at carsdirect dot com, I can get a brand new ‘06 Aveo for $9,469. Now apply my 5k discount.”
No.
But higher priced models, the ones that carry more profits, are the one with the potential bigger rebates.
From the same website you point at, a 2007 Chevrolet Tahoe 4×4 LT, lists at 39,120, can be had for 34,194. And it’s just an example.
This is far from the ‘value pricing’ i.e. the price is the price. But it’s not the first time RW claims no more rebate to just turn around and announce red tag/employee/total clearance firesale.
From this 100th death watch article, I wonder, can GM be saved by their international arm?
In the US, we see GM as a domestic manufacturer, however, they are selling in a worldwide market, so I wonder if the (profitable) foreign arms of GM can sustain the NA operations waiting for the turnaound?
I’m one of those with rose colored glasses. Sure, I read TTAC death watch series, and I think to myself “wow, this is some scary situation, if I was RW, I’d be soiling my pants now”, but I can’t imagine GM filing for chap11 (or 7, double load in RW pants)
If RF can see the money being drained, the (ineffective) measures being taken, RW can too. I find it hard to believe there is no planned deus ex machina for GM to save them all.
They’re heading right to their giant iceberg, everyone is screaming at them, and yet, stay the course…
kinda sobering that they might actually go into receivership – but all is not lost. I have not been on a solvent american ariline in like 10 years, i think. Still got to where i was going.
So, here we are at Death Watch 100, and nothing much has changed. The good ship GM is still taking on water and it’s still steady as she goes. Rick’s turnaround plan– cut costs and build stuff people want to buy– remains unaffected.
Are you ignoring some of the recent TTAC articles showcasing GM cars?
Billons in the hole to almost breaking EVEN.
Increased warranty to 100K…
Union concessions…
52 week stock high
Just about every company except for Toyota lost money last quarter. GM lost only a small amount.
Last October was a record sales high for October.
“nothing much has changed”?
To say nothing has changed is ridiculous and a insult to everyone’s intelligence.
1984: Thankyou
Yawn. Yeah congrats on copying and pasting the same stuff 100 times. This is starting to make TTAC look bad.
The Truth about Regurgitation.
There are interesting points brought up now and again but it’s so annoying when the same argument comes up every episode. You could probably halve the number of deathwatches due to repertition, happy half century TTAC.
Please make it more interesting its getting boring now. Maybe just concentrate on Fords Demise for a while or start something new with Chrysler, the new housing market and how its failing and how the knock on effect of the US economy and its debts etc. SOMETHING thats going to provide new thought provocation until you can come up with something new.
I hate to say it but when the new product starts rolling out, you may just end up eating your words.
How do I get a job at this job bank? I get a paycheck now, but I have to like, wake up and go to work and stuff. It really blows.
Good point Boston Tea party,lots of new stuff coming But how about the old stuff, Impalas are selling like hot cakes,then theres the new truck.We ain’t dead yet.
I think the problem is that the new product may not be enough to save GM.
Despite the gains being made, there are fundamental difficulties that it faces–not the least of which are healthcare and pension burdens.
Any good news has to be viewed in that light.
Those costs need to go away (somehow) in order for GM to really make full speed progress.
The point is not that GM doesn’t have the right people, but that these people don’t have the resources to do what they do at full speed for too much longer.
I am unwilling to think, however, that Wagoner doesn’t realize this. If he has any plans, he’s keeping them close to the chest.
Congrats on running your chicken little “the sky is falling” installment on GM.
Impalas are selling like hot cakes
Yeah, with the help of an additional $1500 rebate on 06 and 07 models.
then theres the new truck.
Which has just now hit the market. I have yet to see one on the streets. (And last year it was “then there’s the new SUVs.”)
We ain’t dead yet.
No, but the breathing is getting shallow and raspy at times.
When i came over from europe i couldnt believe that people could be ‘fired/laid off’ yet still get 90% pay in so called job banks. What a joke. That has to be addressed with new negotiations. In this sense the UAW is the enemy of GM. We compared the various the benfits they receive to what regular non union GM workers get and its unbelievable what they get cost wise. No wonder UAW doesnt want to give much up, they’re onto a real free ride. sooner it dies the better. Bring on the free to work state in michigan for everyones sake. The rules you have to abide to to keep the UAW happy are unbelievable too. In Britain the unions were the original deathwatch for the UK auto industry, hope you yanks learn quickly. I really hope RW takes a leaf out of Maragret Thatchers book and crushes ’em where they stand.
If you did an apples for apples comparison, then i think you would find GM’s not in as worse a state as you think, remove all that UAW crap and the picture would be a whole deal different.
Boston Tea Party
I can assure that most Americans have no clue what a job bank is…that’s sort of a remnant of the “rust belt” region, from an era when jobs were literally life-threatening and there was no OSHA or other regulators to keep a watch on worker safety.
Here in Alabama, we have three world-class auto plants (Hyundai Sonata, Mercedes GL/ML/R, and Honda Odyssey/Pilot), and every line worker in them makes equal or better wages/benefits than any other employer in those areas can offer. No unions at all. They are known to get 10,000 resumes for every 100 open positions. And that doesn’t even count the 3-fold additional amount workers that the tier1 suppliers bring to those areas.
Sometimes it feels like GM management is just “phoning it in”, just like the last Elton John live concert. Say the words, hitting the notes, but not really connecting. Going through the motions.
There is no way that a GM lifer has what it takes to radically rip up the rule book and re-create General Motors. Old Sloan probably could have done it, because he understood the business at a level far deeper than Rickster does.
GM plays russian roulette with it’s brands and models. At any given time a few vehicles are given some needed attention, while the rest of the line suffers. There is no earthly reason for Buick and Pontiac to go onward. There is nothing these brands bring to the party which couldn’t be divided up between Chevy, Saturn and Cadillac. The Saab experiment is a bust as well. In fact, the best thing that the Swedes could do would be to have a home team buy Saab from GM (for $1 ) and whatever it takes to get Volvo away from Ford and combine the two into a national champion. Get some home team pride behind those two and make them something special while there is still a chance.
Now the only question is who goes Chapter 11 first, Ford or GM? I wonder if the Vegas bookies are laying odds yet.
I’m always amazed at how many commentators on this series fail to address the facts contained within a post. It’s easy to criticize the DW series for its existence, but it wouild be more informative if you could suggest specific areas where you believe I’m spinning or just plain wrong.
As for 1984‘s suggestion that I’ve missed GM’s rebound, it’s important to note that
1. GM’s recent “narrowed losses” are due to the fact that it’s put off downsizing expenses and taken on a great deal of questionable debt– both of which will come home to roost. [see: GM DW 96]
2. The increased warranty hasn’t increased sales.
3. Union concessions consist of accepting generous buyouts, forgoing a $1 per hour raise and (instead) banking $3b for health care costs.
4. The high stock price does not reflect sound fundamentals. Most analysts now recommend “sell,” including the pump and dumpers at Merrill Lynch.
5. Just because GM isn’t the only one getting its ass kicked by Toyota doesn’t make it any better for GM
6. GM’s October sales rose in comparison to last year’s cataclysmic post Fire Sale For All, helped by the launch of new products. It’s going to be a long, cold winter.
As I said, I’m happy to debate/discuss the specific issues involved with GM’s performance, and future. But to simply flame the site or me personally for raising the alarm on the most important automotive story of our time is, well, short-sighted.
I think that TTAC is one of the best autoblogs around. It still has some very good reviews and some excellent editorials.
However, the whole GM Death Watch thing is getting a little tired. I’m not sure if repetitive, catchy insults and phrases translate into quality writings.
Since the pros at TTAC don’t seem to mention much about the positive things happening at GM, but grind at GM for anything that TTAC finds bad, the Death Watch comes across as a crusade.
Proving that TTAC is tough, hard hitting and beholden to no one is a good thing, but you might have lost your objectivety here.
Naturally, when a few readers post their doubts about the Death Watch, you get a little defensive and pile on some more. Frank Williams’ post above is a good example.
Thanks for the opportunity to say my piece.
Regards,
Hal.
Merrill Lynch recommended the stock as “buy” when the stock was absolutely in the toilet. Now that the stock has hits a 52 week high and doubled the money of anyone that purchased it when they said… How in the world would Merrill Lynch NOT recommend sell?!
The increased warranty hasn’t increased sales.
No one knows what it has done, not even GM. Nor am I aware of any data or studies that have been released.
Mr. Farago,
My guess is that you’ll continue to be amazed….
Hal.
I won’t put words in Mr. Farago’s mouth, but I’d guess he’s like most of us who want GM to succeed, and hope that they’ll right the ship before it hits the rocks. We all know the disaster that a GM or Ford Chapter 11 would bring to our economy, and hope that it can be avoided. I think we’d all like to see the day Robert can write about GM’s historic turnaround, and cite the products and managers that made it happen. Sadly, that column may never get written.
Unfortunately, what he’s chronicling shows that GM may not have the money to make it, because they failed to address the major issues early in the game, i.e., the bloated dealer network, unnecessary brands, and exorbitant cost structure.
Case in point: The Acadia/Enclave/Outlook. Does GM really need three versions of the same CUV? And the development and marketing costs associated with bringing three nameplates to market?
Ummmm, NO.
It may be a great truck, but GM can’t support three nameplates. This should be a GMC. But because GM has Saturn and Buick dealers screaming for a crossover (and if it sells well, don’t ya know Chevy’ll want one), we end up with three trucks cannibalizing from one another, and GM has to spend precious marketing dollars supporting all three. I’d rather they were able to focus their efforts on one nameplate and do it well, than to spread themselves too thin on three.
You can shoot the messenger all day, but it won’t change the facts on the ground.
Why do most of the bloggers here actively root for the collapse of GM? Is it an anti American thing? What do they feel might be the upside of an event like this? Just curious.
Flame the site??!!
Robert does not want to see the 2.5 go out of business. He is a pistonhead afterall. I however do not care one way or the other. I just read this site for the repetitive, catchy insults and phrases.
Yes it tiresome watching gm go down, but farago is not off the mark. In manufacturing more is better and gm has been building less for years on end. When I knew them (1998-99), they said less than 30% could not be tolerated. Now it’s less than 25% of the market and who knows what can finally be tolerated as a bottom in market share? However, the legacy costs, have to be carried by less and less product each year. The question is can they downsize the legacy costs faster than the sales are tumbling? Even a bigger point is can they make a profit building cars? (ispo for ford & chrysler). Case in point the cadillac sts now being redesigned for China has dropped 25% in sales here in one year. This was a new model targeted directly at the foreign upscale cars. People still don’t consider GM for luxury cars and they don’t trust that any one will buy a used cadillac for anything close to it’s purchase price. Without this, all of the billions spent on cadillac will come to naught.
Sometimes Luther, you read whats been written and you have to wonder….
I would prefer GM to stay in business, albeit in a different form.
RF, why is that?
Because I love cars.
finger:
November 20th, 2006 at 5:36 pm
Why do most of the bloggers here actively root for the collapse of GM? Is it an anti American thing? What do they feel might be the upside of an event like this? Just curious.
I think you’re reading too much into this…I don’t read it that most respondents (I despise that “blogger” word) “actively root” for collapse of GM.
But it’s important to speak up. Public school educations notwithstanding, some of us have learned how to do mathematics….and we can see what’s on the horizon. And never forget, we’re pistonheads. We have expectations. Expectations not being met by GM.
You don’t seem to love GM ones, which do you think should be saved/concentrated on?
BostonTeaParty:
November 20th, 2006 at 5:55 pm
You don’t seem to love GM ones, which do you think should be saved/concentrated on?
Robert has written about this extensively in other editorials.
But ultimately, GM should be the one to make that decision, don’t you think? I have begun to wonder if they are even capable of making difficult yet fundamental business decisions about their own business?
The quotes in the first paragraph sound exactly like Donald Rumsfeld
I think my comments while regurgitated from a previous Death Watch comment address one of the points Mr. Farago brought up. The big problem at GM based on what I’ve heard from my brother-in-law, who worked for GM and now works for Delphi, is a CYA, don’t rock the boat attitude. He’s a design/production engineer and has been sent to manufacturing plants when there are problems. First he is expected to find what needs to be corrected in a couple of days, quality and quantity production problems. This are not simple, oops rivet xa3476 isn’t being installed correctly issues, either. Second he runs his recommendations by his boss, a middle level manager, who is certain to remove anything that might upset the upper muckity mucks. This ensures business as usual. Finally, nobody appears willing to stick their head up at the decision making level for fear of getting beat down.
I, too, think that these GM Death Watch articles are a bit redundant as well. It appears at times that the only purpose in the next Death Watch article is to post another one, not that there is anything really new to report.
One thing that seems to continuously come up when discussing Rick Wagoner’s tenure is his (and the current management’s) belief that next month/quarter/year will be better. Even though things aren’t quite the way we’d like to see them now, there’s hope. To justify this attitude, selective news and distorted facts are used (eg: huge leap in October 2006 sales!).
While I think Rick really does think he can save GM this way (without drastic action, no one has really changed the course over the last 35yrs), I’m still convinced most upper management are just in it for the money, to get every last drop until it all falls down.
On a side note, I’m really tired of all these people commenting “gee *another* GM deathwatch” – if you are so bored with it, why comment? The topics brought up aren’t even often discussed, suggesting some people don’t even bother reading the whole thing. What’s really starting to look repetitive is the comments section of a deathwatch series, which too many seem to use to reiterate their general opinion (pun…not intended) of a manufacturer.
They are recommending sell because they know that at any moment the stock will tank, and its best to reap your rewards when you can.
As Chairman of one of the largest corporations in the world, would you suggest that Mr. Wagoner not convey a message of optimism to the public?
As far as Executives “in it for the money”, I would guess that the stockholders they must answer to might also be in it for the money.
And you are probably right about being “tired” of another death watch. there have only been one HUNDRED so far.
GM’s “present rebound” is engineered in accounting and does not reflect profitable car sales.
No one wants GM to go belly up – but GM mgt. needs to sit down and take serious stock of the realities they are facing, and stop wishing for outside factors to save their bacon. They can control the relevance of their offering, the quality of their cars, the extent to which their brands engage customers and the energy with which they manage to give customers a positive after-sales experience.
Instead, the company has built irrelevant cars and sought to attract customers by offering insane incentives.
No way to run a car behemoth.
As to Death Watches – it’s taken quite a while for people to realize the severity of the situation. Now that we do we all want the patient to get out of bed.
Let’s see how it turns out.
What attracted me to TTAC was the fact that the site was willing to call it as it was — free of the spin delivered by Lutz and others who were all in their reality-free zone.
What I would like to see in the “GM Death Watch” columns are ideas that are actually POSSIBLE! The “just take bold action” talk and $4.00 will get you a cup of coffee at Starbucks. GM can’t tell the UAW (yet) to go piss up a rope. They can’t (yet) walk away from all of the pension liabilities. They can’t (yet) bury the jobs bank. Takes bankruptcy filing to do those three things or the UAW totally caving. And the UAW bending over and taking their long-deserved just rewards ain’t going to happen considering so many of the rank and file are somewhere to the left of Stalin. GM does not have the money to survive a strike. They do not have the money to buy out all of the dealerships for Buick or Pontiac and fold the brands. Considering what it cost I’ll bet they regret folding Oldsmobile. What can they do?
Looks like they are in a holding action with Buick and Pontiac (maybe a little subtle pressure towards the dealers to merge) while they strengthen full line Chevrolet, Cadillac, and Saturn (with its smaller dealer network). Hummer and Saab are boutique brands and have limited product line-ups. Sell assets such as GMAC to raise cash. I wonder why they didn’t sell all of it myself. (I would have just to get away from Ditech and all of their soon to implode home loans out there.) As long as Saab and Hummer turn a profit keep ’em but if things turn south starve ’em of new product.
What would Alfred P. Sloan do? Probably hire a bunch of thugs with tire irons to beat some sense into the UAW. I don’t think he would get away with that today.
The GM brass has something planned and I’ll bet the trigger is what happens with Delphi. They are waiting to find out whether it is even possible for them not to file bankruptcy themselves. Time will tell.
Congrats on #100, Farago!
Still refreshing to see somebody challenging all the PC BS that comes from the MSM and GM management.
Keep up the good work!
Folks keep writing that no one really wants GM to go out of business. News for you – many do including me.
The trash that GM sold me, causing many missed days of school and work while waiting for a tow truck will never be forgotten. The constant worrying about if that long distance trip will be successfull in the GM junk I had…
Thankfully, once out of school for a few years I could afford to buy a ‘real’ car and started buying Japanese cars. In over 15 years I’ve never missed work or an apointment due to having to wait for a tow truck.
I tell everyone I know who is even thinking of buying a GM all my horror stories. I try and convince them to stay as far away from GM as possible.
I hope GM goes bankrupt and the sorry UAW cancer dies along with it. Yea so the economy might take a small short term hit, oh well thats the price of progress (the end of GM junk as we know it)
Sounds like Sammy likes to hold a grudge…
Impalas are selling like hot cakes
Yeah, but let’s face, it’s no where near the sales success the Chevy Vega was and pretty much, that’s what they need.
Let’s see… I’ve owned/leased about 9 new GM vehicles since 1983. I have never experieced a breakdown. Am I the exception?
On a side note, I’m really tired of all these people commenting “gee *another* GM deathwatch” – if you are so bored with it, why comment? The topics brought up aren’t even often discussed, suggesting some people don’t even bother reading the whole thing. What’s really starting to look repetitive is the comments section of a deathwatch series, which too many seem to use to reiterate their general opinion (pun…not intended) of a manufacturer.
I would add, why are all the GM cheerleaders willing to settle backing a mediocre car company instead of pushing them to be a great car company and kick the shit out of Toyota? Have you no pride in American engineering and know-how? Do you REALLY feel that GM is the best example of it?
Many have brought up the Impala as proof that GM has turned it around. I like the Impala, but what kills me is that it has an antiquated powertrain (spare me the “pushrods are great” speech) and that most Chevy dealers treat you like crap during the sale and when you need service. That right there is the reason that people will go buy a Honda or Toyota.
Cars have been compared to appliances, especially Toyotas and Hondas. The majority of car buyers aren’t gearheads and are looking for “appliances”. If your refrigerator or washing machine gave you the same problems as many GM cars have and the place that sold them to you treated you as bad as GM dealers do when you go for service, that company would be out of business so fast, your head would spin.
The real surprise here is, why has it taken so long for GM to get to this point?
Let’s see… I’ve owned/leased about 9 new GM vehicles since 1983. I have never experieced a breakdown. Am I the exception?
How long have you kept them?
Leased, but not bought?
Smart guy.
What I would like to see in the “GM Death Watch” columns are ideas that are actually POSSIBLE! The “just take bold action” talk and $4.00 will get you a cup of coffee at Starbucks.
Have you read all the GMDWs?
Farago in many of them gives ideas on what could and should be done. I would venture to say that he doesn’t go too far on that lest he be accused of being an outside hack knowing nothing about the inner workings of GM.
But common sense and some math skills would help GM management.
Finger
I’ve had six and one required a dealer trip that involved a transmission replacement under warranty. Coulda been from towing the boat who knows. Shit happens didn’t cost me a nickle. Didn’t strand me I drove it in. I can live with that.
RJsasko
The starvation of Buick and pontiac is exactly that. Its evident that these divisions are being starved purposefully. Look Buick has 4 models. 4 thats it and the Ranier and Rondevous are on the way out. GM wants the GMC/buick combo’s to survive and the stand alones to die. This is the only way they can do it. Its calculated and it is happening.
Deathwatch
As far as this goes I fail to comprehend the positive spin on this Mr Farago. Let me put this a different way,
Theres a guy lying on the floor, everyone is kicking the shit out of him and telling him he’s a looser,idiot and retarded. Bystanders look at those kicking him and ask why in the heck are you doing this? Those kicking him say, ” If he dies its no big loss to us, our lives aren’t directly affected by him, we also figure if we kick him hard enough he might become successfull, we don’t want him to die, but were just having so much fun kicking him we can’t stop!
No, I’ve actually had a string of rather good to very good GM cars over the last 35 years – including a ’73 Vega GT that I ran in B-sedan autocross, and used it as a daily driver – and one absolute piece of crap (79 Monza wagon).
Other than that Monza, I’ve never had a worry about not getting to work or wherever on a daily basis with a GM vehicle – as long as I kept the maintenance (just the regularly scheduled stuff, nothing exceptional) up.
Mr. Farago said:
… it wouild be more informative if you could suggest specific areas where you believe I’m spinning or just plain wrong.
What you report isn’t plain wrong, but you omit the positive things GM has going for it in your editorials. It isn’t what you say, but what you don’t say that prevents your perspective on GM to really be the truth.
Rebuttals to a few of your points:
2. The increased warranty hasn’t increased sales.
Ummm… it’s been what? 2 or 3 months? Give it some time.
Also, it may never increase sales. It doesn’t make it a bad defensive move.
5. Just because GM isn’t the only one getting its ass kicked by Toyota doesn’t make it any better for GM
not necessarily true. My opinion is that it is probably GM’s best move to aim to be #2 in the near future. Beating Toyota in sales isn’t necessarily possible for a company in GM’s position. However, it is very possible to fend of Hyundai, marginalize Nissan, Mitsubishi, VW and Chrysler/Dodge in the U.S. market. Very, very possible. Next to Toyota, the only company I would put money on to succeed in the next 5 years is GM.
6. GM’s October sales rose in comparison to last year’s cataclysmic post Fire Sale For All, helped by the launch of new products. It’s going to be a long, cold winter.
We’ll see.
I think it’s “game on” when the 2007 UAW negotiations get going in earnest. Anyone been noticing that several old line corporations are realizing that part of their turnarounds have to include significant (not really radical) changes to their labor agreements.
Caterpillar successfully renegotiated their deal in the mid-90’s, it took a couple strikes to do it, but they succeeded. Most of the big steel companies that are still around have renegotiated their deals with the USW. AK Steel has their union locked out right now, and are successfully running the place with management labor.
Goodyear is on strike right now, production is continuing with management workers, and they’ve started restructuring the manufacturing operations, recently announced a (huge) plant closing in Texas.
Can GM run the place if the UAW strikes them? Great question. Given that about 35000 folks are out the door by the end of this year, and the lights are on and the cars are coming down the line, perhaps the place could be run by management. And, I wonder how long it would bake before you could get some of the new capacity in Asia cranked up to start production for NA? More to the point, does GM have the stomach for it? We’ll find out. Given the history and expectations of the union (apparently none of them have friends or family in Cleveland, Allentown, Coatesville, etc.) I don’t see how it Rick and the boys can avoid it if they want to stay in charge.
I drove a 1999 S10 for 3 years and never had one breakdown.
My father drives a 1994 GMC Surburban and it has 250k plus miles with no engine rebuild.
I’m not a GM fanatic but I cannot fault their quality from my experience, and in the future, when my Civic Si becomes inadequate for my living conditions I would consider purchasing a Colorado to do the dirty work…
(unless I can find a nice used Ridgeline….:D)
Rebuttals to a few of your points:
2. The increased warranty hasn’t increased sales.
Ummm… it’s been what? 2 or 3 months? Give it some time.
Also, it may never increase sales. It doesn’t make it a bad defensive move.
No, except for the fact that GM touts its extended warranty as a feature that it expects to increase sales. You can read all the hype about it on their “Fastlane” blog. While “give it time” is all well and good, it doesn’t make Farago wrong in his assessment.
5. Just because GM isn’t the only one getting its ass kicked by Toyota doesn’t make it any better for GM
not necessarily true. My opinion is that it is probably GM’s best move to aim to be #2 in the near future. Beating Toyota in sales isn’t necessarily possible for a company in GM’s position. However, it is very possible to fend of Hyundai, marginalize Nissan, Mitsubishi, VW and Chrysler/Dodge in the U.S. market. Very, very possible. Next to Toyota, the only company I would put money on to succeed in the next 5 years is GM.
Wow, talk about lowered expectations. So while you criticize Farago for not writing anything positive, you feel GM should be number two. How is THAT positive?
6. GM’s October sales rose in comparison to last year’s cataclysmic post Fire Sale For All, helped by the launch of new products. It’s going to be a long, cold winter.
We’ll see.
We’ll see? That’s it? I mean I appreciate saying things in few words, but how is this showing GM in a positive light?
Really, Farago’s commentary isn’t a personal criticizm as much as he’s reporting the facts. I’m sure that there was a GM “home run”, it would be writen about here.
GM continues with business as usual. They could easily have taken the decision to wind down Buick and Pontiac but clearly have not, because they keep spending money to design and market me-too vehicles for these brands. How much attention are the new crossovers going to get in this crowded marketplace when GM is doing a feeble job of introducing three of them.
As far as Saab, I’m pretty sure it has lost money for decades, including the whole GM ownership period. Saab’s dealer network is a shambles. Years ago GM should have simply sold Saabs through the Saturn network. Saturn had a well respected dealer network and no cars which competed head on with the Saab. Saab has had a crappy dealer network forever. Now it is too late. The Suba-Saab and Chevy-Saab have killed the brand for good.
John
Congratulations on 100, Robert! I would not bet against reaching 200, although the 2nd hundred should be more interesting (union negotiations, continued downsizing, GM #2 to Toyota, etc.)
I like GM – they are bringing a lot of new and interesting products out on the market – I’d say they are about 5 years ahead of Ford on getting their head out of their butts.
The new VUE, the updated Vibe, and the replacements for the minivans all look promising. Ditto for the new Malibu and the Impala.
I’m still holding my GM shares I bought last December at $18.50 a share, as well as my Ford I bought at the same time.
Ford – there is a screwed up company.
finger:
November 20th, 2006 at 9:31 pm
Let’s see… I’ve owned/leased about 9 new GM vehicles since 1983. I have never experieced a breakdown. Am I the exception?
I don’t know if you are the exception or not.
I can speak for myself, though. I have owned too many problematic GM vehicles in my day. As I’ve written before, it’s not so much the breakdowns that bugged me, it was the combination of design incompentence, dealer incompetence, service department incompetence, and all of the resulting delays that bothered me. And the truly intolerable thing was the MULTIPLE TIMES I had to take my car back! All the while, NOBODY was willing to stand behind their work/non-work.
That is why I will never buy another GM vehicle. Never is a long time, yes. But in my case, not long enough.
By all rights, I should be wishing GM a painful death, but I don’t. I just wish they would make a great car, and provide competent service IN ONE VISIT.
Even if they did, I would have to admit that I still would not buy it (I literally fear for my safety after visiting a GM service department). But even so, it would be nice to hear of one, just one!
Here is some interesting reading from the Wall Street Journal and Forbes.
http://www.post-gazette.com/pg/06303/734194-185.stm
http://blogs.forbes.com/digitalrules/2006/03/paleo_pat_wants.html
“At a meeting with union representatives, he[Ghosn] pressed them on worker absences. During lunch, he slammed the factory’s top managers for the high absentee rate. “We have a 4 percent rate….Peugeot and Toyota factories nearby have 2 percent,” he said. “Does your action plan include getting rid of those not playing by the rules?”
….
Yes, what an unfair advantage these manufacturers have down there in Tennessee and Alabama. Their workers actually show up for work. Imagine that! They have an average daily absentee rate of 2%. Up in Michigan, Buchanan country, the average daily absentee rate in a union auto factory is 10% to 12%.”
Is that 2007 UAW contract going to contain a clause about actually showing up for work?
Today I was at the San Francisco Auto Show and able to take a good look at the new Toyota Tundra. That looks like an awesome truck to me.
I think it’s going to cause quite a headache for Detroit; all of their trucks suddenly look outdated, including the new GM trucks.
That auto show was kind of depressing. What a miserable industry this is. All the car companies can think of is cost cutting. I found little particularly exciting. Blah!
Oh yes, there was Tesla Motors. They sell an electric Mazda Miata look alike for $90K. That kind of price point doesn’t excite me either.
Regarding GM’s new products that are supposedly going to save their day: just more blah. Saturn Aura? By far inferior to the Toyota Camry and the new Nissan Altima (looking good by the way). Chevy Tahoe? I have no idea why people buy these things; they’re not even big inside. Saturn Outlook? Just another overpriced crossover and ugly to boot.
What amazes me is how easy it is for all of you to makes GM’s decisions for them. How many out there would make all of these same decisions if it involved billions of dollars. It really easy to sit and criticize what is done and recommend solutions when you sitting in anice cozy office.
However, GM does ned to make a great car and soon. Although they have some cars that appeal to me none, have touched the “Gotta get me one” nerve yet. Then again neither have the bland looking Japanese or German vehicles so espoused here as great. All cars look pretty much the same except for subtle differences that motorheads like you guys will quickly point out. Increased fuel economy may be the reason since there is only one best aerodynamic shape and all car designers are heay towards that shape.
The only car company that seems to be stepping out a little is Chrysler, but they may have missed the mark too.
Just some ramblings of an old baby boomer, who rememers fondly the muscle cars of the late 60’s
To a youngster, all muscle cars look the same.
Congrats RF on #100
see ya at #1000
I think a Toyota deathwatch should be in the works soon when thier legacy costs come due.
GM legacy costs will eventually decliine as retired folks pass away as GM hasnt really hired anyone for the last 20 years. Eventually there will be very little people drawing a GM pension.
I think if the UAW doesnt take concessions than GM will move out of the USA and just build products overseas (Lower wages and no union to deal with)
nino:
5. Just because GM isn’t the only one getting its ass kicked by Toyota doesn’t make it any better for GM
not necessarily true. My opinion is that it is probably GM’s best move to aim to be #2 in the near future. Beating Toyota in sales isn’t necessarily possible for a company in GM’s position. However, it is very possible to fend of Hyundai, marginalize Nissan, Mitsubishi, VW and Chrysler/Dodge in the U.S. market. Very, very possible. Next to Toyota, the only company I would put money on to succeed in the next 5 years is GM.
Wow, talk about lowered expectations. So while you criticize Farago for not writing anything positive, you feel GM should be number two. How is THAT positive?
Who is number two right now?
GM cannot just stop losing business, it has to reconquest other peoples business. This I don’t see happening with their oversized lienup of “better cars and trucks”. In each segement they compete in, someone (usually Japanese or German has a product. ex. honda civic, accord, toyota camry, avalon, crossover suv’s, Vwgts golf, bwn mini. Gm (or ford or chrysler) cannot take sales from these brands with their offerings. They seem better at canobalizing each other’s sales. Some author testing the Saturn Aura V6, and said while improved, the six cylinder in no way is as smooth and sophisticated as honda or toyota’s. In other words the American cars are now equal to a six year old Japanese product, however the competition has moved the bar higher and by constantly refining their products continues to stay ahead in the critical area of refinement. This author did say that the saturn was a “good bang for the buck”. However, with their discounts in the last ten years, American cars have always been a good bang for the buck vis a vis the foreign products. That is to say, until you go to trade the American cars in, their own dealers can’t put any money on them, because they sell used a lot worse than new. Case in point, a friend bought last year a 2004 town car listing for $52k, for 24K used. He went back this year with it to trade on a new Lincoln suv (his has 20,000 miles and is cherry). On a new one he was offered $15k trade in. Even admitting they will discount the suv, the losses never end. I told him to cheer up at least he didn’t buy it new and be totally wiped out.
“Some author testing the Saturn Aura V6, and said while improved, the six cylinder in no way is as smooth and sophisticated as honda or toyota’s.”
I would venture to say that the unnamed author is just another babbling drone programmed to bash any domestic product and act as a cheerleader for the imports.
Umm, I heard this morning, on CNN, announcements from Consumer Reports, on car Safety. Not one domestic car made the list. Here is another sign, of decay for the American car industry….
Only safety ratings that are creadable are from NHTSA or IIHS. Consumer Reports crash tests 0 vehicles.
RX8guy,
I notice that there are no Toyota’s or Lexus’s on the list either, does that mean we need to start a Toyota deathwatch?
(Basically if a car doesn’t have Electronic Stability Control as standard it can’t make the list no matter how good it’s crash ratings are).
Regarding GM’s new products that are supposedly going to save their day: just more blah. Saturn Aura? By far inferior to the Toyota Camry and the new Nissan Altima (looking good by the way). Chevy Tahoe? I have no idea why people buy these things; they’re not even big inside. Saturn Outlook? Just another overpriced crossover and ugly to boot.
I’d venture to say you have not read any reviews of the cars you listed above. The Aura has gotten good, if not great reviews. The Outlook has gotten 1 review so far, a good one from TTAC. The Altima reviews I’ve read have been very luke-warm. From the reviews I’ve read of the Aura and Altima, I’d have to guess the Aura would win a comparison test. Then there’s is the new Sentra which has also received mediocre reviews, look like Nissan has several car duds coming to follow their truck duds (Titan, Armada, and QX56).
I know that the mid-term elections just ended and we’re all campained out, but the first thing that crossed my mind when reading that the UAW contract negotiations will occur in the Fall of 07 was the Presidential Elections. Campaining will start to ramp up right about that time.
I have no idea how one will effect the other, but it could play out in any number of messy scenarios. Especially if GM is teetering on the brink of bankruptcy to the point that it is openly discussed by everyone outside the auto industry and Wall Street…or if GM is already there.
As someone that found this website back at DW #7 and has read every editorial I feel TTAC has contributed greatly to the growing discussion around what used to be the largest company in the world. I personally don’t think the writers here are biased, but I understand why some of the commentors here think they are. No matter what side your on, I think…no…I know an open discussion about the performance of any management of a publicly traded company effecting literally millions of peoples lives is a good thing. Keep the discussion going with more DW articles and I hope against hope that GM can avoid bankruptcy.
“finger:
November 20th, 2006 at 9:31 pm
Let’s see… I’ve owned/leased about 9 new GM vehicles since 1983. I have never experieced a breakdown. Am I the exception?”
I would say so. I’ve owned two GM vehicles since I started driving in 1988. Only one really counts though, as the first one, which I still have is a 58 Chevy truck. Actually, the 58 Chevy has been more reliable that the other GM product I owned, an 02 Saturn Vue. Taking into account all factors, I would say that it is the worst car I have ever owned. Worse than the car that I had in college, an 83 Aries K car. A list of the problems:
A rivet wasn’t installed properly, which resulted in the sun roof jamming. It was sporadically spitting a green viscous fluid-like a very light oil-onto the ground when started nearly from day one. Dealership said that there was nothing wrong. I read later in another car forum a similar complaint. The source was right what I thought it was and told the dealership it was, the AC compressor. While on vacation I came out from a restaurant to find a large puddle of hydraulic fluid beneath the car; the clutch master cylinder had taken a dump. Then I started hearing an intermittent but very loud growl from the rear of the vehicle; it sounded like a go kart or small plane flying low overhead. I guessed a problem with the fuel pump. The dealership said that since they couldn’t reproduce the problem there was nothing that they could do. Came to find out later after I had dumped the piece of garbage that there was a known problem with the fuel pump. All of this in two years of ownership of a new car, my first new car. I now have a Mazda6s that I bought new two years ago. No repairs needed. Previously, I’ve owned two Nissans, one Mazda, and the previously mentioned Chrysler. All well used; all more reliable.
If anyone doubts that some of GM’s loudest critics are also saying that they do not want to see the demise of this once great car company, slide on over to http://www.generalwatch.com.
(Sorry I don’t know how to make this a live link). The site’s owner, Jim Dollinger aka ‘Buickman’ is a true believer in GM’s former greatness and the possibility of the return of that greatness. Yet, you will not find a more vocal critic of GM’s leadership, marketing and sales. Like RF, he says it as it is or at least as he sees it. Unfortunetly, Buickman is one of a long list of people who have ideas about what GM should do to save itself and whom GM refuses to listen to. Even if you don’t have any perticular interest in cars, the unfolding story of GM’s march into oblivion is as riveting as it is sad.
My $0.02
Yeah, the market cap meter at Generalwatch is thought provoking. Your link doesn’t work because you have a period after the .com
I’ve had the somewhat painful pleasure of working with GM management relative to marketing. And must actually be allowed to claim that I thought their competitors had planted moles at GM, with the mission to destroy the brands in their care as quickly as possible.
Buick man aka Jim D is a bitter guy with an angenda.He will be overjoyed IF GM goes belly up,so he can tell the whole world just how smart he is.
TTAC and DW wants to see a great company survive,even against all odds.
Form your own opinion folks read buick mans crap if you want
but take it with a grain of salt
Buick man wants Rick Wagoner tarred and featherd because he feels his beloved Buick division should be GM’s number one brand. A lot of anger over at his site.
I would have said GM possibly was marching towards chapter-11 about 60 Deathwatches ago.
Now however at DW100 the failure to recognize that chapter-11 is less likely (if not just about impossible now) than it was a year ago is an attempt to perpetuate the GMDW series status quo.
Face it, the GMDW creadability is hanging on by a thread (or one more quarter). The margin between loss and profitability is less than 100 million dollars for GM.
The “red tag sale” is an indication of nothing. All manufacturers clear out last year models this time of year and have done so since the beginning of time.
If Toyota advertises “Toyotathon” this year does that indicate they might be in trouble?
If Toyota advertises “Toyotathon” this year does that indicate they might be in trouble?
But you’re kind of missing the point.
Detroit is the INVENTOR of the model year discounts and as the Death Watch points out, it’s still business as usual. Toyota does some year end discounting, but see if they’ll discount their popular models the way GM does or discount them by as large a percentage as GM does.
What the Death Watch series shows is that at GM it’s business as usual, despite the crisis swirling around them.
As far as “Buickman” is concerned, I do agree that he has an ax to grind with present GM management. Still, Dollinger offers up some pretty good ideas GM could implement that would go a long way to help the company while costing it very little money. He talks about things like rewarding loyal GM buyers, rewarding GM workers and suppliers with exclusive discounts and incentives, proping up residuals instead of discounting prices, etc., all good ideas.
Also the Ford deathwatch should have started a long time ago. As soon as they tried to bail out of Formula 1 and their ingeni venture in London went tits up, that should have raised flags everywhere. It did in Europe.
SCHAUMBURG, Ill. — The Ford F-150 took first place in terms of new-vehicle sales registrations in September, with the Toyota Camry and Chevrolet Silverado 1500 coming in second and third, respectively, according to Experian Automotive.
“For the month of September, the Ford F-150 leads as the No. 1 selling new vehicle, up 11.6 percent from August,” explained Scott Waldron, president of Experian Automotive.
“In total, (more than) 1.35 million new vehicles were sold throughout the U.S. in September, a 9.4-percent decrease from August levels,” he continued.
According to state registration data that Experian Automotive said just became available, the top-selling new vehicles in September include:
1. Ford F-150, with 48,577 (first in August)
2. Toyota Camry, with 37,826 (second in August)
3. Chevrolet Silverado 1500, with 33,090 (fourth in August)
4. Honda Accord, with 32,411 (third in August)
5. Toyota Corolla, with 32,195 (fifth in August)
6. Honda Civic, with 33,150 (sixth in August)
7. Chevrolet Cobalt, with 19,974 (eighth in August)
8. Nissan Altima, with 19,889 (ninth in August)
9. Chevrolet Impala, with 19,101 (seventh in August)
10. Ford Mustang, with 18,697 (10th in August)
Meanwhile, Experian Automotive also reported the top brands for the month based on registration data:
1. Ford, with 217,899 (third in August)
2. Toyota, with 191,975 (second in August)
3. Chevrolet, with 183,050 (first in August)
4. Honda, with 119,952 (fourth in August)
5. Nissan, with 78,365 (fifth in August)
6. Dodge, with 76,947 (sixth in August)
7. Chrysler, with 43,400 (eighth in August)
8. Pontiac, with 36,365 (ninth in August)
9. Hyundai, with 35,793 (seventh in August)
10. Jeep, with 34,911 (11th in August)
Interesting to note that Pontiac outsold Hyundai.
Meanwhile, Experian Automotive also reported the top brands for the month based on registration data:
Is this data based on new car registrations, or are used car registrations part of the mix?
Cars are on sale this time of year to fight Santa and put as many sales into the current calendar year as possible. All manufacturers do it, and Toyota is not immune.
In my market Toyota is now advertising a “Thanksgiving Sale” of some sort, and “Toyathon”, the original car manufacturer year-end sale-running almost every year since 1974, is sure to make an appearance in December.
RF points out GM Red Tag to claim that the new pricing strategy has apparently failed. The truth is that the GM price reduction brought previous meaningless MSRPs down into line. GM said right from the start it was never meant to eliminate rebates (although they are offering no rebate on any 2007 Cadillac or most 2007 Chevy & Pontiac cars, and a max of just $500 on most other 2007 cars). With Red Tag dealers got a pool of incentive money ($250 per car in stock on November 8th) to put as bonus cash on the vehicles they saw fit. The max the dealer can offer on most 2007s is $500 and 2006s max at $2000, so most of the money is likely to go to clear out the few 2006 models left (mostly mid SUVS).
To support his DW assertions, RF must take everything that GM does and relate it to it’s inevitialbe demise. Being from Flint, I think he must have been profoundly influenced by “Roger and Me”, Michael Moores hatchet job on GMs supposed targeted destruction of the Buick City. No matter that the Flint, MI of the first 70 years of the 20th century would hardly have existed without Durants investment and near constant expansion there.
Michael Moore doing a hatchet job? Unthinkable.
General Motors has more work to do to complete its turnaround and meet its goal of cutting its structural costs to 25 percent of net sales, the automaker’s top North American executive said today.
In the text of a speech prepared for delivery to the Detroit Automotive Press Association, Troy Clarke, GM’s president for North America, said the automaker’s restructuring was “not yet finished.”
“The GM I grew up in no longer exists,” said Clarke. “We’re a much different company today, and we’re not done with our transformation.”
airglow,
Regarding my criticism of GM’s Aura, Tahoe and Outlook: this is based on what I saw at the San Francisco Auto Show.
Of course, I couldn’t take a test drive at the auto show, so my comment is entirely based on appearance (mostly interior design and materials quality).
Same disclaimer regarding my positive comment about the new Nissan Altima.
Let’s consider GM’s interior design. They have a rectangular panel of hard, black plastic in the middle of the dashboard that contains a bunch of buttons and displays to operate the sound system and the airco. The buttons don’t look bad, although they are too flimsy. However, I was astonished to see this very same black panel in each and every GM model. Even if the rest of the dashboard has a different color, let’s say brown! It is as if GM buys 4 million black panels per year in China and jams them in everything, interior design be damned. Now, if you’re in the market for a Cadillac Escalade, would you really like to see the same stereo panel as in a lowly Chevy HHR? The ultimate badge engineering?
“Only safety ratings that are creadable are from NHTSA or IIHS.”
Today IIHS announced it’s 13 top picks for the year. Exactly none of them were by GM, Ford or Chrysler’s US brands.
One Saab did make the list, the 9-3 which almost nobody buys. If the 9-3 was good enough to make the list, why not the Malibu, Aura or G6 which are derived from the same platform? Do you suppose GM cheaped out on the engineering of those implementations. No, that could never happen …..
http://www.iihs.org/ratings/
well, i saw a solstice today.
it is … beauiful.
there isnt even room for an overnight bag.
DAMMMMMMM
“Today IIHS announced it’s 13 top picks for the year. Exactly none of them were by GM, Ford or Chrysler’s US brands.”
And exactly NONE of them were Toyotas or Nissans or Suzukis (among many other makes) either. And there were 2 pairs of corporate twins on the list so the total SAFE unique platforms on the list is exactly 11…out of hundreds of platforms offered by dozens of manufacturers. GM, Ford and Chrysler are in good company here.
The IIHS sole aim is to cajole manufacturers into building vehicles that conform to their idea of what makes them safe, real world experience be damned. This list automatically excluded any vehicle that did not include Stability Control, which although will be required by 2010, the IIHS thinks ought to on every vehicle. And the IIHS also did not include SUVs on the list, where GM, Ford and Chrysler are likely to do better.
just thought you might enjoy this article
http://info.detnews.com/autosblog/index.cfm?blogid=127
cya
Close GM’s NA ops and move production to ROW (Rest of World)? Might be the best thing for GM and the industry as a whole…
Aside from my day gig as a marketing guy, I’ve been a professional musician for most of my life. In the early 70’s I worked for my dad’s music store, and had a ringside seat for the meltdown of the musical instrument manufacturing business in that decade. Here’s what happened…
Most of the drums made in the world came out of the greater Chicago area. The biggest of them were Ludwig and Slingerland, both in the Chicagoland area. In the early 70’s Japan, Inc. turned to maufacturing drums. All of a sudden, names like Yamaha, Pearl and Tama were seen no longer as cheap imports, but worthy competitors to drums made in the good ol’ US of A. American companies had high overhead (labor costs) and inflexible contracts. It didn’t take long for the low-cost/high quality of the imports to cause the American companies to begin hemorrhaging red ink. Slingerland bit the dust. The name is still around, having been bought and sold several times over. It’s now used on some really cheap products, imported by Gibson Guitars. (Ironically, Gibson’s then-parent organization, CMI, was responsible for bringing Pearl Drums into the USA.)
Ludwig, a storied company in the drum biz, and the last holdout in privately-held, family-run companies was suddenly facing ruin. They went to their labor unions and opened their books. They showed, conclusively, that they could not continue with business-as-usual, and explained that restructuring was the only viable option. The unions flatly refused. But then, lo, a miracle occurred…a number of furniture plants in the Carolinas had recently closed, leaving empty factories and highly-skilled, non-union workers in need of work. Ludwig returned to the unions and gave them two choices – renegotiate their master labor agreements or see Ludwig move, lock, stock, and drum key to the East Coast. The unions refused. Ludwig Drums are no longer made in Chicago.
Moral of the story: when unions think only of themselves, and fail to see the ‘big picture,’ they risk losing everything. While I’d hate to see GM become a company that exports all it’s manufacturing, it might be the only thing that can save it – and get the unions to negotiate for the sake of the industry and not their own, selfish goals.
Kerkorian cuts GM stake to 7.4% from 9.9%
WASHINGTON (Reuters) — Billionaire Kirk Kerkorian’s Tracinda Corp. investment firm reported today holding a 7.4-percent stake in General Motors, down from 9.9 percent.
In a U.S. regulatory filing, Tracinda said it agreed on Nov. 20 to sell 14 million common shares in a private transaction for $33 per share. More to come.
well I think a lot has changed since i started paying attention to GM’s troubles and testing their vehicles. For example the new Saturn Outlook (and it appears the Vue) should signal a resurgence for that brand and I think will sell exceptionally well. That’s one brand that is going to do just fine.
Buick’s enclave will help it until they can build a decent, unique sedan. If that ever happens.
They can build all three crossovers to answer another commenter because they get more return on their R&D with more nameplates.
The improved quality in the products is hit and miss(the Aura does drive better than the V6 accord yet the interior is still cheap). But there are plenty of top of the class too with the Z06, new trucks, 900s etc. That’s not a bad couple of segments to have going for you.
A lot is going to ride on the Crossovers and the new Vue I think will be huge. That will be the big slugout of LA: New Escape vs. New Vue.
RF can’t stop the deathwatch now but I didn’t like the idea when the first one came out. None of these companies will actually go bankrupt and they’re all building interesting vehicles with I think DCX behind the other two.
Also the crash test results were from the IIHS. ESC was a major factor and rear crash ratings which is why no Americans made the list.
Dave,
GM NA is cash negative, burning through their remaining liquidity. No matter how much cutting they do (recently “accelerated”), unless GM regains significant US market share, it will drown in red ink.
For GM to survive, their vehicles can’t just be good. They must be so good that they retake lost market share from the transplants– not just the domestics. Do you see that happening?
And even if that occurs, will they make the margins they need to make to keep the lights on? Consider their fixed costs and weep.
General Motors plans to cancel its next-generation minivan and abandon that vehicle segment.
Instead it will woo buyers with its mid-sized Lambda-based crossover vehicles, sources say. The minivans had been scheduled for the 2010 model year.
Chevrolet is scheduled to receive a crossover on the Lambda architecture by the 2010 model year. It will replace the Uplander minivan. Other minivans being killed are the Buick Terraza and Saturn Relay.
Crossovers off the front-drive Lambda architecture originally had been intended for more premium brands. The Lambda vehicles debut next month with the 2007 Saturn Outlook. The 2007 GMC Acadia follows early next year, and the 2008 Buick Enclave launches next summer.
GM’s product board has not approved cancellation of the minivan program. But those close to GM say it’s a safe bet the board will do so, based on declining sales in the segment, the high cost for GM and a belief that crossover vehicles can fill the void.
“The Lambda crossovers will do most anything a minivan can do – except for the sliding doors, which a lot of people don’t like,” says a source familiar with GM’s product plans.
Suppliers get word
One GM supplier says it was awarded work on the GMT511 program, GM’s internal code name for the new generation of minivans. But on Nov. 17, GM told suppliers it was canceling the program.
Jim Hall, vice president of the consulting company AutoPacific in Southfield, Mich., estimates GM had planned to spend $750 million to $1 billion on the minivan program. “They are in capital conservation mode,” says Hall.
U.S. minivan sales have plummeted 19.0 percent since 2000, to 1,110,541 in 2005. That’s a dramatic drop of 260,693 vehicles. The Chrysler group led the segment last year with 36.7 percent of the market, followed by Honda at 15.7 percent and GM at 14.9 percent. Last year GM sold 166,016 minivans.
This year, minivan sales are off 10.9 percent through October. Hall expects the downward trend to continue as buyers switch to crossovers and other vehicles.
Hall predicts minivan sales will continue to decline.
“There are not enough Gen-Xers to backfill. And as for Gen Y, nobody knows if they will want to buy minivans,” he says.
The Lambda-based Chevrolet crossover will fill the slots vacated by the Chevrolet TrailBlazer SUV and Uplander minivan. The Chevrolet crossover’s styling draws heavily from the Chevrolet Sequel concept, unveiled in September. GM plans to discontinue the TrailBlazer and GMC Envoy, although the timetable has not been announced.
This is the first year in over a decade where minivan sales aren’t expected to break 1 million units.
That will be the big slugout of LA: New Escape vs. New Vue.
More like TKO first round. Have you seen the spyphotos of the two? Unless price is dramatically different it will be like Mike Tyson versus Laila Ali.
I think the minivan is a really useful format. It gives you far more interior space than SUVs or crossovers with better fuel economy. Instead of discarding it, they should fix the ‘mommy mobile’ image and make minivans more masculine or sexy.
Here in California, the Honda Odyssey minivan sells at half the volume of the Honda Accord, so it’s not exactly a dud.
Here we have another GM disaster: instead of overcoming the problems, they give up and leave a whole segment to the competition.
Mark my words: minivans ain’t gonna disappear and the manufacturers who can do them well will thrive.
GM seems to see the world as all-SUVS, all the time. Crossover is just another name for unibody SUV.
Maybe the station wagon will make a comeback now. In the 1980s they were killed of because “nobody wants to drive the stereotypical mommy vehicle of the 1970s”.
John
On this day of Thanksgiving, let us bow our head in preyer:
Dear Lord,
GM, as you well know by now, …they isn’t doing so well lately. Please show some grace to those line workers who are now without a job. Please bestow your loving kindess on those communities who are now in the process of boarding up their shops and shutting out the lights…forever. Please show your kindness to the homekeeper…the one who used to wake up in the morning to feed her husband Oatmeal and coffee (black) to her husband in dungarees ready to de-ice his ’77 pick-’em-truck only to drive 8 miles in the snow and sleet to bolt wheels to Cobalts as they roll down the line. You see, Lord, life in the line isn’t what it’s all cracked up to be. The average GM worker shows up drunk or in a thicken stupor from too many methamphetamines the night before. Roll ’em on down the line…a never ending gerbil contraption if ever there was one.
But you see Lord, the line worker means well. He’s a plain-spoken “Honest” worker. He never done nobody no harm!!
It’s the “management”…the “suits”…the “RW’s” of this world which our out to “get ’em”. Yes, sir…those corrupt bastards ain’t got a lick of sense to their name. They’d soil themselves if themselves for a TWAT award, and well…I suppose that’s the highlight of their careers. The Golden TWAT!
But me, Lord, I do try…I think I’m gonna move down San Antonio way and try to git a job with Toyota building the new Tundra. Can’t beat ’em…may as well join ’em.
On this day of Thanksgiving…I DO thank the lucky stars above for this free frozen 12 lb. turkey they handed out like Salvation Army blocks of cheese…else I’d be eating bacon, eggs, and grits on this holiday.
Please dear Lord, won’t you buy me a Mercedes Binz?
Amen.