The former PR spinmeister currently writing under the Autoextremist moniker has long been one of Detroit’s most fervent not to say (’cause that would be rude) ardent supporters. No more. Peter DeLorenzo has put down his pom-poms and finally faced the truth about both GM and Chrysler. “GM’s foray into the idea of a Chrysler takeover exposed that company’s dire situation for all to see. Burning through cash at a prodigious rate – a little more than $1 billion per month according to estimates – GM’s search for crucial financing is getting beyond desperate at this point, and now everyone knows it… GM’s situation grows more precarious by the moment, and if they don’t make a deal for that much-needed infusion of cash soon – in the next 12 months, preferably less – then we could be contemplating the unthinkable. And that means not only the end of GM’s 100-year reign as the largest American car company and one of America’s historical industrial touchstones, but the end of General Motors, period.” As for Chrysler…
Sweet Pete sees Carlos Ghosn’s Nissan – Renault as the more likely suitor for what remains of the Crisis Corporation. But, even if the Brazilian-born auto exec eventually assumes the reins in Auburn Hills, “At the end of all of this and no matter what scenario unfolds, Chrysler’s roller-coaster ride as one of America’s ‘Big Three’ – which saw boom and bust cycles playing out with much Sturm und Drang over the years – is finally over. It may hang on as an entity called ‘Chrysler’ for a few more years under Ghosn’s stewardship, but don’t kid yourselves, the U.S. domestic automobile industry is imploding at an alarming rate.”
And the good news? “Well Ford just may be the last American car company standing when this is all done playing out.” May?
Yes, I read it about 1/2 hour ago on his website. Have to agree with everything he said. For a change.
Ford will…but the follow up question is, “for how long?”
I’ve been reading DeLorenzo for a year or two, and I guess he never really struck me as that much of a pom-pom shaker. If you had been a Chrysler employee over the last year, that would be abundantly clear. He does favor GM, but highlighting what they do well occasionally does not a rah-rah boy make.
Just like to point out that he keeps referring to GM dying as unthinkable.
That it was unthinkable is precisely why it is happening now. Maybe if everyone from management on down hadn’t thought GM was immortal, they would have confronted their problems back when they were fixable.
From the consumer side.
I have been cross shopping 4WD small SUV/CUV recently. Looked at Escape, Rav4, Outback, Rogue, Murano. They all would “fit the mission”.
I really wanted to buy an Escape. The new engine/transmission is said to be fabulous. Once I sat in it and saw the interior styling and materials I knew I couldn’t live with it and thus buy it. I didn’t even test drive it. It does not cost that much more to significantly upgrade the interior materials but in a competitive marketplace Ford chose not to do it.
I realized that Detroit will probably not survive because they can’t/won’t make the really hard choice. That choice in my mind would be to restrain the MBA’s and other marketers and bean counters and concentrate on the product. Every day thousands of car buyers are making similar choices and Detroit is withering away.
US government support will not help the situation. Consumers (if allowed) will still buy the product of their choice. Only they will see some of their dollars go to support a product they did not choose.
IMO if Ford, given the situation it is in, could not get the new Focus and new Escape right there is little hope.
I’ve been reading DeLorenzo for a year or two, and I guess he never really struck me as that much of a pom-pom shaker. If you had been a Chrysler employee over the last year, that would be abundantly clear. He does favor GM, but highlighting what they do well occasionally does not a rah-rah boy make.
About a year or two ago, perhaps more, Peter started swallowing Bob Lutz’ PR feed hook, line a sinker. The problems were never GM’s products or leadership, but were the UAW, the cost gap, currency markets, governments, ungrateful coastal customers, the green movement and/or boneheaded marketing. It’s a shame because, prior to the Lutzification of De Lorenzo, the site was pretty sharp.
It actually got to be unreadable a few months ago. You couldn’t read a column without seeing the phrases “Intelligensia”, “Products as good as, if not better than…”, “Anti-car” or “Finger-snap” accompanying a rant about how humanity, or at least America in general, has become thoroughly debased since 1962.
I swear, it seems like someone had created a DeLorenzotron machine that more or less wrote the same column every week. It’s kind of contrite for me to say this, but he really started coming off as an old man; he was probably a few columns away from “Hey, you kids, get off my lawn!” status before GM’s impending implosion woke him up.
The problem with Peter is that he’s more or less a product of the same environment as Bob Lutz, and is thusly inclined to believe and agree with whatever Lutz says. It’s a form of ideological blindness, and I hope he’s realized that Bob isn’t some kind of thwarted genius, but is instead an anarchonism whose sole work for the past few years is to obfuscate GM’s true state.
“Contrite”?Perhaps you meant “contrary”?
Is it really a Cassandra Watch now that people are starting to listen, pay attention and understand?
Volvo:
I agree with your assessment of the Escape. Good mechanicals, Fisher Price interior. *Is it me, or has the current Escape interior degressed from the previous one? I think it has.
With rare exception (CTS is one), there’s often some comprimise to make with the domestics. They just don’t get it. They just don’t/won’t understand that buyers will “buck-up” for quality. This “value leader” persona has got to end.
It appears the Auto Extremist sees the hand writing on the wall. How could you not?
About a year or two ago, perhaps more, Peter started swallowing Bob Lutz’ PR feed hook, line a sinker. The problems were never GM’s products or leadership, but were the UAW, the cost gap, currency markets, governments, ungrateful coastal customers, the green movement and/or boneheaded marketing.
I’ll admit DeLorenzo has a serious case of “glory days” nostalgia for the era when GM ruled the world, and I’m sure that colors his analysis to an extent. But I’m not so sure his flag waving for GM’s product (quite good, maybe world-class) over the last 2 years and his recognition of their troubles as stemming from past indiscretions is too far off the mark. I feel, along with DeLorenzo, that much of the Lutz, et al, conundrum is inherited and the result of cumulative misteps over the course of many years. Lutz isn’t a superman, sure, but who is?
Well, whatdaya know, even Pete has picked up the Ford as Last Man Standing meme. Makes me proud of my May 2008 editorial for TTAC :).
I was going to comment, but psarhjinian threw down the end-all assessment of Autoextremist.com
Plus, the letters section amounted to shameless yes-man grovelings. The site it seems, like GM, is above listening to dissenting opinions.
I feel, along with DeLorenzo, that much of the Lutz, et al, conundrum is inherited and the result of cumulative misteps over the course of many years. Lutz isn’t a superman, sure, but who is?
Lutz had years (since 2002, to be exact) to try and turn things around, but instead of shaking up GM’s culture, he was absorbed. Every new product was supposed to be the “Lutz Signature” product, the one that proved he’d turned GM’s notorious “We don’t give a damn about normal cars” attitude around.
But, until the 2008 Malibu–six years into his tenure–that hadn’t happened. Six years. Nissan was gutted and reformed in far less time, even if you grant that Nissan’s problems weren’t anywhere near GM’s, it’s still depressing. But people kept buying the Lutz line because he showed flashy concepts that stoked the faithful, while saying the things that people who thought like him wanted to hear.
What’s worse, GM’s myopia and attention-deficit problems weren’t getting better, and Lutz was relegated to spinning PR to deflect attention from said problems. I think he would have done well if he had been given Cadillac, Pontiac or Holden to steer because those divisions suit his personality well. GM needed someone like Carlos Ghosn (or a post-EDS Ross Perot) to point out the drafty state of the emperor’s suit, not someone who’s trying to sell nudity as a fashion.
I don’t mean to lay all of GM’s problems on Lutz: Wagoner was there longer, has more power and has also utterly failed to steer the Titanic away from the iceberg. But Lutz gets far too many free passes from people like De Lorenzo precisely because he says exactly what they want to hear, rather talking about what GM needs to do.
psarhjinian :
Points all well taken. But in closing: as to much of GM’s woes being attributed to market conditions and/or oil prices, I submit a certain, brand-new, non-GM, under-utilized, full-size truck plant in San Antonio…
psharjinian: Lutz had years (since 2002, to be exact) to try and turn things around, but instead of shaking up GM’s culture, he was absorbed.
The problem is that the wasn’t hired to shake up all of GM’s corporate culture. He was specificially hired to improve and streamline the development process for new vehicles. Which he has done. The new models are much better than what went before.
Therein lies GM’s main problem. It only wanted Mr. Lutz to change ONE PART OF ITS BUSINESS. Management expected him to produce a few hits that would solve all of GM’s problems. Then he could retire with the appropriate fanfare, and GM would basically continue business as usual.
Mr. Lutz’s main fault is not realizing that he needed to do LOTS more to really right the GM ship. But changing the entire corporate culture wasn’t his mandate. Realistically, he is doing what GM hired him to do. And for that, despite the abuse that he takes on this site, I blame the board and top management more than I do him.
Points all well taken. But in closing: as to much of GM’s woes being attributed to market conditions and/or oil prices, I submit a certain, brand-new, non-GM, under-utilized, full-size truck plant in San Antonio…
That’s true, but it it ignores a big, big point about that plant’s owner: they’re still making money. GM should have diversified it’s product portfolio so that it would have had desirable products to move if the truck segment failed. That’s where Lutz and Wagoner fall down: they wouldn’t sacrifice tactical profits for strategic business success.
Toyota is taking a kicking on the Tundra, but they’re still selling Yarises, Corollas and Camrys, and, more importantly, they’re making a profit. A reduced one, sure, but it’s still black ink.
I stopped reading Pete a few years ago when I realized that I knew what he would say and what cliches he would use on most subjects. Big yawn.
His “pom-poms” may shake more side to side than up and down but they still have a “G” on the one and an “M” on the other.
psarhjinian-I think you’re correct on the Tundra plant. Fact is a strong company should take risks to stay ahead and they can afford it.
Also, Toy seems to be able to see farther than the most resent quarterly report. When it is just them and Ford (and the Nis-Ram?) in the truck market in a few years it may look like a good long term move.
Cheerio,
Bunter
I find it funny that people like to point to Toyota’s one or two mistakes in the marketplace to justify 30 years of GM’s mistakes that have led it to the brink of disaster. There is no excuse, no justification, for how this company has been run into the ground. None. At all. Toyota is a successful car company today, regardless of any mistakes it has made. GM used to be one a long time ago.
And if you’re wondering, I’m no cheerleader for Toyota. I haven’t liked anything they have made for years now. They don’t make any cars that interest me anymore, only boring transportation appliances. I realize that is what is required to survive in the market, but, as an example, if they can afford to make a full-size truck not many people want to buy then they can afford to make a Supra/MR2/Celica that not many people want to buy as well. It bothers me that Honda seems to be following their example in this.
I find it funny that people like to point to Toyota’s one or two mistakes in the marketplace to justify 30 years of GM’s mistakes that have led it to the brink of disaster.
Seeing as how I brought Toyota into this thread, I felt it necessary to highlight my earlier post a few boxes up:
I feel, along with DeLorenzo, that much of the Lutz, et al, conundrum is inherited and the result of cumulative misteps over the course of many years. Lutz isn’t a superman, sure, but who is?
My overall point was (and is) that a good deal of GM’s current problems are related to current market conditions and not to be laid at the feet of current management, and certainly not current product. Toyota’s current dilemma simply attests to that fact.
My argument pointed out GM’s past errors. It did not “justify” them.
psarhjinian nailed my evolving perception of Peter DeLorenzo as well. Several years back I used to look forward to Wednesday mornings because here (or there) for the first time a smart industry guy was saying things about Detroit I had been thinking and saying to my friends for years, plus he had inside access I could only dream of. But then, he went off the rails and down the rat-hole of the Gospel According to Lutz. At about that time, I discovered an even more interesting car website …. TTAC.
Hmmm, a guy who used to make a lot of sense and then develoved into an angry caricature of himself. Ummm, best not go there :).