On August ninth, GM Car Czar Maximum Bob Lutz announced that his employer had increased incentives in response to its competitors' spending– not to shore-up sliding market share. On Elvis' Death Day (August 16), Bob pronounced himself "reasonably pleased" with the month's progress– despite our spies' reports that GM's sales were continuing their disastrous slide. Yesterday, GM ended the charade (at least for anyone other than Bob Lutz) by announcing production cutbacks on their cash cows: pickup trucks and SUVs. Reuters reports that the automaker has eliminated previously scheduled overtime through the rest of the year at truck-making plants in Arlington, Texas; Janesville, Wisconsin; Silao, Mexico; Fort Wayne, Indiana; Flint, Michigan; and Oshawa, Ontario. Spokesman Tom Wickham explained that "reducing overtime production enables us to reduce pressure for excessive incentive spending." True, but it also reduces the amount of cash GM's North American operations will generate. If August pans out the way we've heard, look for more production cuts AND increased incentives.
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The timing is interesting…just as the labor negotiations are getting intense.
In other news, of the two major new midsize car intros this fall, 2008 Accord and 2008 Malibu, which will launch WITHOUT a 6 speed automatic tranny? The answer may surprise you…
By selling fewer vehicles, GM will stop bleeding money. Ugh.
The accord has the 5 speed and the malibu the 6 speed but I looked at the high resoulution pics on another site comparing the two and while the malibu is attractive and has one of GM’s better interiors it still seemed to lag the accords interior. Still if Honda finds a model is lacking in something, they usually correct it as opposed to ignoring the deficiency for years and years
Great, so when the new Malibu’s 6-speed dies at 10,000 miles, I can endure 3 weeks wait time at my local pain endurance test center (commonly known as a Chevy dealer) for repair, while I have the honor of commuting in a four year old Chevy Aveo loaner with no air conditioning, a strange organic smell, and that rumble coming from the brakes which “is normal”.
What’s the saying, fool me seven times shame on me, fool me eight times, etc. etc.
Seriously, just being good won’t cut it for me (and bout a third of the car buying public). To get me into a GM dealer again, the car would have to be so stunningly superior to a Honda or so insanely cheap compared to a Honda (say $7K brand new fully loaded) for me to even test drive it. It may sound unfair, but I’m actively hoping the Malibu lands flat on it’s face. If any company deserves death, it’s GM.
So what are they going to build if they aren’t building trucks? Interesting times…
While you’d need to climb to the top of the 2008 Accord (coupe) line to get it, a 6-speed manual transmission is availabe. It’s exclusive to the “Accord Coupe EX-L V-6 6MT”, according to Honda.
And there’s an available 268-horsepower V-6 for the coupe, too:
268 horsepower @ 6200 rpm, 248 lb-ft. of torque @ 5000 rpm. (EPA Est. 17/25 mpg.)
Chevy thinks this is going to get cross shopped with the Accord and Camry? Hah! Chevy is bragging that the hybrid version gets 24/32. The ’07 Accord NON-HYBRID gets 24/34.
I think the message GM is sending is, “We think you consumers are really stupid. To prove it, let’s see how many takers we get on a brand new, good looking, but overweight, inefficient and quite likely unreliable ride”.
No government (aka consumer) bailouts when this train wreck of a company finally takes a dirt nap.
So does this mean we might see some suprises from the UAW contract meetings(like real concessions and no strike), or have they finally run out of money and figured out that having a HUGE stock of trucks/SUV’s isn’t going to help them during a strike if people aren’t buying them.
If they are losing money on there cars(when they sell them) and there trucks and SUV margins were helping keep them a float, where is the money to keep the operation rolling going to come from now? Is the Malibu there last ditch hope at this point?
Personally I see this as the end drawing very near, but I have been waiting 10 years for this so what do I know.
# morbo:
August 23rd, 2007 at 10:02 am
“To get me into a GM dealer again, the car would have to be so stunningly superior to a Honda or so insanely cheap compared to a Honda (say $7K brand new fully loaded) for me to even test drive it.”
I’m glad I’m not the only one to think that way. A coworker was just questioning my truck choice because Toyotas are “like $4000 more” than Chevys. Hell, price the Toyota at $50K and I’ll still buy it–i’ll just wait longer to get it. You’d have to practically *give* me GM product to get me in it.
As has been said on this site a thousand times: good enough isn’t good enough anymore. GM will have to CRUSH the competition in quality or price.
A few thousand in rebates doesn’t make a dime’s worth of difference.
It would have to be a $10,000 Lexus LS400 perfect copy to get me to even consider them. Ok that’s a flat out lie, that wouldn’t even work.
I think a lot of people can’t afford the financial risk of trying to support GM for the 3rd, 4th or 5th time. They have just burned too many bridges in the past to be able to get back that market share.
Oh no! Saturday O.T cut?Gee we can only sell 6800 full size pickups a week{Oshawa production only}.
I find myself getting a little tired of Bob L,and I’ve been one of his supporters.Last week shares were going bellow 30 $U.S Bob makes a couple of statements,and up we go again.I guess thats what they pay him for.
Now morbo your not being fair.When the Malibu is launched and the critics and the good folks at TTAC have all had a look/drive.Then and only then we can decide if its a winner or a loser.
No, I hope that the Malibu doesn’t fall flat on it’s face.
Now as far as G.M. deserving death goes.Even an uneducated factory rat such as myself knows the following.
Their is no Mr G.M. anywhere[if therewas I wouldn’t wish death on him]There is though shareholders,everything from pension funds to millionares,to little old ladys in Sebewaing Mi.If G.M. dies they are all wiped out.
You also got a massive dealer network how many people out of work?Suppliers,and thier shareholders how many more?
And then of course the 1/2 million or so employees at all but the most highest level[Rick W and his flunkys are all bankrupt protected]Throw in a couple of hundred thousand retirees.
I guess morbo,you like many others have had some bad experiences with a G.M. product.I can’t really blame you for buying a Honda{I’ve heard there not perfect either}
Being pissed of at G.M is one thing.I don’t believe that anybody wants to see million or so people behind the 8 ball either.
So as the saying goes “be carefull what you wish for”
@RF: (a little) sorry for hijacking the thread
@ the Malibu haters: you guys miss the point. Most folks here continue to believe that (insert Toyota/Honda/Nissan here) have absolute technical superiority over (insert GM/Ford/Chrysler). So I think it’s reasonable to point out when it isn’t true. It’s evidence of the product renaissance at GM, and also evidence that Honda, like Toyota, is getting stretched pretty thin these days.
Mikey, I have to agree. I hate Ford and Pontiac because of all the problems my friends and coworkers have had from their cars. Chevy I could care less about. But I certainly hope they get their act together and don’t go tits up and here’s why:
My cousin is the service manager at the local Chevy place.
A childhood friend from the neighborhood works there, too.
At the Pontiac place across the street another friend from college is the sales manager. One of his salesmen is a local businessman who used to be partners on a family-owned grocery store before the chains showed up and put ’em out of business.
A friend from high school is the leading salesman at the Ford place on the other side of town. The manager of the grocery store where I worked in high school is another.
The Dodge dealership closed its doors several years ago. Losing the other domestics will put a few dozen more people out of work. These are good jobs in a poor rural part of the country that has few enough decent employers as is. I don’t want to see my friends and family working at Wal-Mart for $8 an hour because some jackass at GM dropped the ball.
Now I’ll admit, I won’t buy their cars. I hope to afford a house soon so for now I’m in the econobox market and the domestics don’t have anything worth looking at. But I just can’t wish bankruptcy on any of the big 3 because that stinky stuff will roll right down the hill and land on people I care about. It always does.
Captain Tungsten:
In other news, of the two major new midsize car intros this fall, 2008 Accord and 2008 Malibu, which will launch WITHOUT a 6 speed automatic tranny? The answer may surprise you…
The answer is: Neither. Malibu 2.4/6AT won’t be out until next year.
2008 Accord’s specs came out this week, with deliveries starting in 3 weeks. Unless Lutz pulls a miracle out of his hat the Malibu will look good against the Accord – the 2007 model.
Yes, I’m biased towards Honda – mine is red over grey, 1 speed rear wheel drive when I bother to use it, and 1 cylinder OHC.
For the record Mikey, I drive a Ford Ranger and a Mitsubishi Diamante.
That said, it’s not that I want little old ladies to lose their pensions. I want the behemouth known as GM gone Or the behemouth known as FoMoCo. Or Chryslerberus. It will cause chaos and disruption. it will hurt a lot of people. It will also open the flood gates of creativity, engineering, and focus at the remaining competitors. Only with the fear of death will “American” car companies produce product people are willing to buy (the “Americaness” of an Japanese sourced Mexican built Ford Fusion or a Korean engineered/built Chevy Aveo are best left for another thread).
Union bashing aside, fear and greed motivate us. The Big Three went overboard on greed for four decades. Now comes the payback in fear. By the end of the next decade, either Ford will be a true world class competitor in auto production. Or GM will (I’ll admit I don’t buy Chrysler’s next 100 years sales bit). But not both. One must die for the other to survive.
But getting back on thread topic, pickup sales are just following the general overall trend in the economy. The economy will falter until after the election. Once that uncertainty is removed, things will ‘pickup’. In short, whoever’s pickup is newest and hottest in mid/late 2009 will win. Which probably means Ford or Dodge if they’re planning all new 2010 models.
mikey
The thing is that if one had the luxury to evaluate each worker on the floor as to whether they justify their 75$+/hr wages and benefits we would probably find some. We would also find some worth keeping at a lower price point, and some that wouldn’t be worth the 8$ WalMart would pay.
There is a lot of support for the good guys, but there is a lot of hate for the bad guys.
This is so strong that in view of the union not allowing the inmediate and outright sh*t canning of the bad guys and only given the choice of either or, then it’s thumbs down.
If the union were thrown out, the good guys would have a job the next day. This is the advantage other manufacturers in right to work states have, the good guys still make the money, the problem workers are gone.
I would consider it even if they publicly executed the management that has blatently taken advantage of and crapped on the American public.
I have no anamosity toward the average Joe on the line if they are hard working and repectful of the end customer, but they need to get rid of the daed weight that gives everyone else a bad name.
Captain Tungsten
Actually, you’re missing the point. 6 speed tranny or not, the Accord will still likely get better fuel economy with it’s 5 speed. The Malibu’s 4 cyl is inefficient and just can’t compete with the Accord’s 4 cyl engines, and the Malibu’s V6 can’t match the slick technology of the Accord V6 which allows it to run on 6, 4, or 3 cylinders depending on the situation. GM’s AFM system only allows 6 or 3 cylinder operation on their V6 engines. The Honda system goes a step further. The 2008 Odyssey will also get the updated VCM system.
Yep, it’s a warmed over Aura, the car that LaNeve himself has said, “The Aura has underperformed my expectations a touch. I expected this car to leap out of the gates, and it didn’t.”
Link to the 2008 Malibu Order Guide with full specs, 4 speeds just about everywhere. Sadly, there’s a 1FL model, I’ll give you one guess what that means:
http://eogld.ecomm.gm.com/NASApp/domestic/proddesc.jsp?year=2008&butID=1®ionID=1&divisionID=3&vehicleID=5236&type=0#
jkross22-Minor point, but the MPG ratings were redone for model year 2008 vehicles. The 2007 Accord 4 cylinder automatic gets 24/34 under the 2007 numbers, but under the 2008 numbers (as the 08 Malibu uses), it would get 21/31. The manual 07 Accord 4 cylinder gets 26/34 under the old numbers, 23/31 under the new. So the Malibu hybrid still has lousy numbers for a hybrid, but it at least beats the 07 Accord non-hybrid (and, by chance, gets the exact same 08-style numbers as the 07 Accord Hybrid, which was a “muscle hybrid” with a V-6 plus an electric engine, though.
morbo-Actually, when one of the Detroit Three goes bankrupt (by bankrupt I mean out of business completely or nearly completely (turning into a niche player), not just a Chapter 11 reorganization with little changes in production, although I believe a Chapter 11 would eventually be fatal anyways), it will give the two remaining Detroit makers much needed breathing room, assuming it happens fairly soon. Simply put, Toyota and Honda are running at 110% of capacity. Just because GM or Ford or Chrysler disappears doesn’t mean all that demand disappears, and with the foreign makers mostly not able to capatize on it, the winner will be the remaining two Detroit players, who have production capacity to spare-which also means the pressure for them to innovate will be reduced.
Now, if it takes awhile (decade or more) for the Detroit Three to go out of business, Toyota et al will have increased production to the point where they can take over. This seems to be Toyota’s master plan-Toyota most certain does not want one of the Detroit Three to go kaput any time soon, because they can’t capitalize on it properly and might get blamed by politicians, getting stuck with higher tariffs on thier imported vehicles.
In Japan when top managers and company directors make mistakes, they go public with it, state their contrition and apologize for having badly mismanaged the company’s resources and failed their consumers and the public.
Over at GM, when they screw up, they screw their customers and blow hot air. Who do you think has the mindset required to turn out superior product?
GM does have a lot of exceptional talent and resources, unfortunately the place is also thick with clueless managers who do their best to sabotage the talent.
When the Malibu is launched and the critics and the good folks at TTAC have all had a look/drive.Then and only then we can decide if its a winner or a loser.
I think that sales of the Aura, which is the Malibu’s badge-engineered Saturn sibling, are a good indicator of things to come. And it’s not selling particularly well.
I expect that the market will be relatively indifferent to the Malibu. It is not particularly unique or interesting enough to steal many Camry, Altima and Accord buyers from their preferred product. I’m sure that Avis will like it, though.
GM takes baby steps when it needs to be leaping and bounding. Benchmarking a five-year old Accord and still missing the mark in the process is simply not enough to turn skeptical car shoppers into buyers.
Speaking of The Enemy, the new 2008 Accord will be out soon enough. Is there really any doubt which one of these two is going to win that race?
Pch101:
GM takes baby steps when it needs to be leaping and bounding. Benchmarking a five-year old Accord and still missing the mark in the process is simply not enough to turn skeptical car shoppers into buyers.
Exactly. GM is introducing the Aura and Malibu 1 year apart, but for what? to avoid cannibalization? The two cars are dimensionally almost identical. Hard points appear to be unchanged, and the Malibu’s back seat is fractionally smaller than the Aura’s. The 1FL’s light grey interior trim will be right at home with Avis. It’s just one step away from badge engineering, not what would be described as thinking out of the (3-)box.
Contrast that with the previous Accord and Acura TL, where the cars were also 1 year apart but are visually and dimensionally quite different. Camry and Lexus ES350 are another example, but launched simultaneously.
That’s difference between a company with the big Mo and a company without, which takes us all the way back to the original news article and GM’s need production cutbacks.
Pch: Aura sales are not a good indicator of how Malibu will do; there are way fewer Saturn dealers than Chevrolet (GM probably wishes it were the other way around…) Chevy will have way more marketing $$ behind the launch and whereas most people (correctly) think an Aura is what surrounds the face of God, Malibu is one of the most well known names in the industry, and the car is true to the heritage of it’s name(midsize, good value, performance and comfort). I think the sales performance of the Malibu will be a much bigger signal of whether GM is “back in the game” than Aura ever will be, a shame since Aura is a fine automobile.
Malibu is one of the most well known names in the industry, and the car is true to the heritage of it’s name(midsize, good value, performance and comfort).
The Malibu’s heritage is that of a rental car!
That alleged “heritage” (if one dare call it that) is an albatross of a burden, not a benefit. GM might actually start producing real profits if would just bite the bullet, recognize that its badges and nameplates have largely negative value, and figured out how to rise above its present status.
As it stands now, the Accord is going to eat the Malibu for breakfast and spit it out for lunch. There is absolutely nothing that is so compelling about the Malibu that it can expect to gain much in the way of conquest sales. It’s just too little, and it may already be too late.