Earlier today, TTAC commentator Joe ShpoilShport asked if we had any good news. Here it is [via Business Week]: "If the company [GM] can gut it out through today's miserable car market, GM will reap billions in savings from last fall's landmark labor contract and come out a real moneymaker in about three years." Unfortunately, that's the theory. In practice… "Since last fall, its hoard has shrunk from $30 billion to less than $24 billion. And given the accelerating decline in sales of pickup trucks… one analyst figures that GM's cash pile could dwindle to $14 billion by the end of 2009. That's not much more than GM needs monthly to buy the parts and materials to keep its assembly lines rolling." Our spies tell us GM's set to top-up its cash hoard by $10b– which would raises its debt to $50b. Yes, GM owes $40b. It pays $3b a year in interest. BW floats the "Delphi strategy" (mooted here previously): hive-off GM's international ops and throw NA into C11. Meanwhile, in the magic year 2010, GM will have to pay $4.7b into its union's $37.5b health care VEBA. "Company insiders say GM might get the union to agree to let them pay its bill at a later date." And if you believe that, you'll believe that COO Frederick A. "Fritz" Henderson's contention that GM will learn to "generate bigger profits on smaller vehicles."
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Whens the Camaro going to be at the dealerships?
rtz:
Latest info: spring ’09.
…as a MY 2010 vehicle.
Thanks! I think.
When the Camaro finally comes out, it will be four years old already. People will crave the next big thing even before it’s launched. Like the next gen GT-R.
What do any of the prior posts have to do with the editorial?
Bill Wade: “What do any of the prior posts have to do with the editorial?”
What don’t they? Cash burn is also dependent on revenue. If one thinks the Camaro may aid revenue, it’s quite relevant.
I don’t believe it but…
rtz: “Whens the Camaro going to be at the dealerships?”
rf: “spring 09”
But I wouldn’t be too sure… During the April 1 Sales and Production conference call, one of the GM suits was going on about upcoming product and this, as close to verbatim as possible, was included in his list, “… Camaro, which will be coming at the end of next year…”
Have they shifted resources to something else? We shall see… I don’t think there’s been any formal announcement and maybe the suit (I think it was LaNeve) mis-spoke. Maybe. It didn’t get reported elswhere, so perhaps there was another briefing unbeknownst to me.
As regards the cash burn… I wonder what impact the Volt development is having? And this new hurry-up sub-Cobalt? GM appears to be upping the pace of some things and that increases costs by quite a bit. Perhaps they’ve turned the tap off in land barge development to compensate?
GM has an ugly history of blowing wads of money and energy by turning programs on and off, speeding them up and slowing them down, and so forth.
They’ve tried to kick this habit for years, realizing that Toyota’s highly cadenced approach is much more efficient, for many reasons. (The delay of the 2009 Corolla, which would have been typical for GM, was highly unusual for Toyota.) But they’ve never managed to kick the habit.
Neither the Camaro nor the Volt will do much for GM’s bottom line any time soon. They need to fix whatever has been slowing production of the Malibu (I’ve seen no stories, but something’s not right) and get a smaller car along the same lines out the door.
It seemed the real problems of declining pickup and SUV sales, health care obligations, interest payment obligations were taking a back seat to discussion of one model.
That was my only point.
The Malibu production problems are due to the commercials they’ve been filming in the plant touting their fit and finish…yuk, yuk.
“They’ve tried to kick this habit for years…”
Boy you have that right. I don’t know what is wrong with GM’s decision making, but it stinks. Recently the spent a pile of money to develop the Ultra V8, then shut it down. Factories get new investments and then closed. EV1. Hy-wire. Now Volt. Then there is the never ending RWD/FWD changeroo visa-vis the next Impala.
Part of the problem may be the too many brands thing. If GM had all of it’s energies focused behind the Malibu instead of juggling it alongside the Aura and G6 then perhaps they would have production running at the right pace.
GM building the Camaro on a new RWD platform is dumb. They should have spun a version off of the CTS platform and made it work. But no, that would be too expensive to build …. so lets take an extra 3-4 years to “take some costs out”. Duh.
The Camaro isn’t built on a new platform, it’s spun-off of the Holden Commodore/Pontiac G8. The Impala was also supposed to be using it but they’re sticking warming over the FWD stuff it currently uses. Big mistake IMO.
The Camaro starts running in Feb 09.
XCSC Do you have a problem with fit and finish on the Malibu?The experts rate it as world class,maybe you have some inside info you could share with us?
I should have said a new to North American production platform. Yes Australian GM has kept a rump operation of RWD large cars going, but they hardly have enough volume to drive costs with, and the costs of tooling up a US factory to turn out a specialty car like the Camaro seems a folly to me.
GM killed the Camaro and Firebird at the end of 2002 because there wasn’t enough demand to justify continuation, yet just a couple of years later they change their mind and start nearly from scratch. What is really strange is the Rick was CEO for both the decision to kill the Camaro and for the decision to restart it. WTF indeed.
XCSC Do you have a problem with fit and finish on the Malibu?The experts rate it as world class,maybe you have some inside info you could share with us?
I got a first time look at one today in a local parking lot and I gotta say the fit and finish is as good as anything from Japan or Germany. It was hard to fault it. I did not see the interior so I cannot comment there. Why did it take GM so long to get there. problem now is, it’s almost too late.
My understanding of the delays on the Corolla was that when the new Civic came out last year Toyota realized the bar had been significantly raised and had to make changes.
The Kappa platform has been on-and-off as well.
And selling imported Opels at a loss can’t be good either.
RedStapler :
My understanding of the delays on the Corolla was that when the new Civic came out last year Toyota realized the bar had been significantly raised and had to make changes.
I think that had been the assumption originally, but Toyota denied that was the reason behind the delay. They attributed it to wanting to get the quality right and taking a bit more of a deliberate approach to the ‘Rolla’s development to avoid some of the first year teething problems that the Tundra and Camry have had.