Back when we TTAC didn’t have Ronnie Schreiber doggedly defending the D2.8, I contacted former GM PR spinmeister Gary Witzenburg to post an ed on the pro-Motown perspective. Big mistake. Despite– or because of– his exposure to our Best and Brightest, Gary went off the rails faster than the Polar Express. Other than an ex-girlfriend, he remains the only person I’ve ever blocked from my email. Let’s just say the man has “anger issues.” Actually, let’s not. Let’s revel in his vituperation and wonder if Autobloggreen is regretting letting him into their compound. “Here is what I’ll bet those long-suffering auto CEOs wanted to say, but couldn’t: You ignorant morons! How dare you accuse us of building cars nobody wants? We sold 8.5 million vehicles in the US last year and millions more around the world. GM still handily outsells Toyota here, Ford outsells Honda and Nissan, and Chrysler sells more than Nissan and Hyundai combined. How many of our new cars have you driven lately?” Personally, I think Gazza should have gone for the post-modern, hat tip to SNL approach, and begun with “Jane you ignorant slut.” More highlights from Gary’s take on “How to Win Friends and Influence People” after the jump.
“Would you recognize a good business plan if one smacked you upside the head? Have any of you ever run a business, made a business decision or even held a real job? Is there any more dysfunctional organization on the planet, any that more desperately needs a new business plan, than the US Congress?
“For decades, your national energy policy has been summed up by two words: ‘cheap gas.’ Now you want to punish us for building the big, capable, comfortable vehicles Americans wanted to take advantage of that policy…and for not building millions more smaller, more fuel-efficient cars that, until recently, almost no one wanted, and that we can’t make a buck on if we build them here thanks to the high business costs you’ve imposed upon us through the years.
“…you have rolled out the red carpet to predatory, low-cost foreign competitors who come here to take our market and pump hundreds of millions more dollars out of this country.
“Yes, we have lost a lot of market share. Where did you think all those millions of cars and trucks our foreign competitors import and assemble here in taxpayer-subsidized plants in cheap-labor states would be sold, and out of whose hides did you think they would come?
“Why continue to punish us, and the millions of incredibly dedicated, hard-working people at all levels who still depend on us to feed their families, for the sins of our predecessors?”
And now, the coup de grace.
“You know full well that this life-threatening position you have put us into is entirely your fault, not ours, and that our future viability depends completely on you. We’re anxiously awaiting your business plan for guiding this country out of the economic morass you have created, beginning with the bridge loans we desperately need.”
Wow. He is insane. I think I could write an essay describing how damn near everything he said is either wrong or just plain stupid.
But I won’t… I haven’t had my morning beer yet (I work nights.)
If Detroit hadn’t been building crap for cars they wouldn’t have lost market share in the first place. If they’d have had some balls in dealing with the union back when they were still on top they wouldn’t be saddled with all the legacy costs they’re drowning in now.
Just remember Gary, the first step towards recovery is admitting you have a problem. The U.S. taxpayers don’t want to be Detroit’s enablers.
Hmmm. Strange.
We sold 8.5 million vehicles in the US last year and millions more around the world.
Those vehicles were given away – first of all with silly incentives, including 72months/0% financing; but more seriously, with a loss on each unit delivered to customers.
You’d think that the accountants running GM would have figured out the profit/loss thing, at least.
When you transact something for less than it cost you to procure, it’s a gift.
They should send this guy to Washington to explain GM’s recovery plan. That would be a hoot.
Detroit has always viewed their relationship with Washington DC as adversarial. DC makes the rules, so Detroit fights them with lobbyists and their own personal congresscritters from Michigan. They have fought for, and gotten exemptions and loopholes in every regulation, and then they have built their ENTIRE BUSINESS PLAN to fit the loopholes. Now that angle of attack has proven to be short-sighted. So they no go back to DC begging for a handout? The levels of absurdity here are getting surreal.
–chuck
Gary has some points. Whenever has the government done anything but spend money? The government doesn’t create anything, other then regulations and more laws. I have had to laugh at Washington asking for D2.8’s business plan. Sure they not have much of one, but would Washington know of any good business plan? Washington only wants to see plans that result in ways that they can collect more votes (from the UAW for example) and raise taxes.
Well GM did sleep at the switch for decades, sure, they were happy to harvest profits in exchange for market share, and they now ran out of time. They treated their markets like cash cows- to be milked till dry.
But he is right on at least most of it. Certainly the impact of D2.8 death and of energy policy.
Guys, I don’t see him as totally wrong. The D3 did sell Americans what they wanted. Fact is due to the burden of the UAW legacy agreement they cannot compete cost wise on small cars. The comment about cheap gas is also correct. In Canada and Europe taxes on gas discourage the use of 6000 lb SUVs to take two kids to school.
Who could predict 140 bucks a barrel and then back to 50 bucks in less than a year?
Fix the labor agreements and I bet the D3 can compete effectively with the rest. It may take C-11 to resolve the UAW issue mind you..
@Airhen.
Seriously? Roads, infrastructure, military, gov. administration, school systems – could go on.
@Chuckgoolsbee
Yes – adversarial to the point of financing pol’s that would bend their way, and working against those who tried to poke sticks in their spokes.
Whatever. Personally convinced the entire transportation/mobility equation has to be rethought, from the ground up, and that what’s happening now is actually the best possible preconditions for that to happen.
But what a mess.
Is he channeling Pete DeLorenzo?
@rtr:
Yea, but all along the way they were actively sabotaging and lobbying against any measure that might have increased energy costs like fuel tax or mpg regulation in light trucks.
They got what they wanted, made a killing and forgot to plan for a change in weather.
Oh, and the cost/ small car argument: I think there is hardly a country with higher wages and more regulation than Germany. Yet VW builds the Golf there. Profitably.
Honda will be producing the Fit in the US. Profitably.
You know, I’m not so sure if the the quality is really there. I’ve encountered “squeaky” interior trim in a new rental Chrysler mini van, and flaky G6 (rental) rear tire pressure sensors. BTW, I’ve had no problems with my Asian brand rentals. My neighbors brand new 2009 Liberty had a roof leak the first week she had it and a gasoline engine with so much engine noise I thought it was a diesel. I had plenty of problems with my 97 and 02 Fords as well.
They’ve generated so much ill will over the years their brands are tainted almost beyond repair. Most of my family and friends would never buy a US brand. Just try suggesting to someone considering a Toyota Matrix that they take look at the Pontiac Vibe. The initial expression on their face tells the story.
Brilliant!! Hire this guy full time!
Seriously, while this rant is over the top, he makes some good points.
Yes, Detroit incompetence put them in this position to be unable to weather the storm, it was government policies that caused the current mess in the first place.
I like his style!
From the Frankfurt transit lounge, B
stein X:
good points…
for the past 5-6 years, they’ve been cannibalizing future sales with ‘cheap credit’…
WHY did the market need to grow as it did? – short term profit, that’s it.
It’s good to see so ‘few’ cars being sold these days…
He sounds exactly like a TTAC writer. Except he’s not agreeing with the popular opinion of the site, so he’s “off the rails”.
“The government doesn’t create anything, other then regulations and more laws.”
Hmmm, then where did the Interstate highway system, the Internet and GPS come from?
I’ve met Gary a couple of times. Great guy.
What we’re saying lately is a few journalists coming unhinged because the industry they’ve known and loved their whole lives is teetering on the edge. I can’t say I blame them.
Is Gary entirely right? Is this even entirely his position, or is he trying to channel the perspective of the CEOs?
Saying the situation is ENTIRELY Washington’s fault is clearly off-base. Somewhat Washtington’s fault? Sure.
He’s spot on with the energy policy. Because of its costs, Detroit has had to focus on whatever would be most profitable. And with cheap gas that meant trucks.
I’m personally sick of the idea that Detroit hasn’t offered more fuel efficient cars just because it didn’t want to.
Remember, Detroit in the end has to pay the bills. Journalists can say over and over, “If only you offered your overseas products here.” Then GM does, and they flop. And journalists just say, “Oops, too bad.” No recognition that the products journalists claimed would sell here, don’t.
Witzig.
“The government doesn’t create anything, other then regulations and more laws.”
All right, but apart from the sanitation, medicine, education, wine, public order, irrigation, roads, the fresh water system and public health, what have the Romans ever done for us?
–chuck
@chuck:
hehe
The CAFE rules with separate categories for car and truck fuel economy targets were written a few decades back with the aid of auto lobbyists. It would have really hurt to have just one category for all vehicles, they claimed, and the legislators acquiesced.
Following the letter of the law, the then-Big 3 took advantage of the SUV loophole, made millions of vehicles and billions in profits in the 1990’s. As long as the revenue was coming in, nothing appeared broken, and thus they didn’t bother trying to make much profit in cars.
In this decade, for multiple reasons sales of highly profitable body-on-frame SUV’s crashed, taking down the now-Detroit 2.8. The production of B-O-F vehicles implemented by Henry Ford & Co. about 100 years ago was no longer profitable enough to keep the 2.8 afloat. The competition had done just fine with a business model perfecting unit-body vehicles, not Detroit’s strong point. So, what to do?
I believe Alan Mulally understood this profit paradigm shift and had the right idea when he overruled his Ford underlings and started converting truck plants into car plants. Whether or not he can execute before running out of funds remains to be seen. Bob Nardelli has already testified to Congress that bailout money is but a bridge to a joint venture/merger/etc. Rick Wagoner & GM? Beats me.
“Hmmm, then where did the Interstate highway system, the Internet and GPS come from?”
The military. There’s a difference.
How many things in your home were invented or produced by the government?
If you want your hospital run like the DMV, have at it.
Stein X Leikanger :
@Airhen.
Seriously? Roads, infrastructure, military, gov. administration, school systems – could go on.
Only one and a half of those are actually government’s role, at least according to the constitution. The US Constitution is mute on the subject of roads (many roads in 1789 were private toll roads), infrastructure, and schools. The military is unquestionably a constitutional obligation of the federal government and I suppose administering its own affairs is as well. Had not the commerce clause, Article 1, Section 8, Clause 3, been used as a carte blanche to permit just about any federal activity congresscritters care to do, most of the examples you cited would be unconstitutional.
More to the point, all of those things indeed, as Airhen alluded to, cost money. Where does that money come from? Taxpayers. In the case of the South, Southwest, and DC area, taxpayers in the industrial Midwest, not the residents of those regions.
At the risk of being a one trick pony, a one note Johnny, government spending has a lot to do with the decline of the industrial Midwest. Taxpayers in Michigan, Illinois, Ohio, Indiana and Wisconsin essentially subsidized the roads, infrastructure and schools that make it easier for Alabama to have Mercedes, Hyundai and Honda plants.
“Hmmm, then where did the Interstate highway system, the Internet and GPS come from?”
The military. There’s a difference.
Good point. The interstate hwy system was pushed through Congress by the Eisenhower administration under the rubric of national defense. Otherwise, even under the very loose interpretation of the commerce clause it would have had a difficult time passing congressional approval.
You think those large radius turns, some with banking, are there so you won’t spill your coffee? Guess again. One of the original design specs of the interstates was that they had to allow a semi tractor pulling a very large and long missile to travel non-stop at a continuous high speed.
I’m personally sick of the idea that Detroit hasn’t offered more fuel efficient cars just because it didn’t want to.
And I’m sick of people who can’t see what’s clearly in front of their face when they rent an Aveo at the airport. ‘Their’ smallest car gets mileage which is nearly equivalent to a freakin’ Accord or Camry. A complete joke.
Look, GM might have to spend $1000 more than Honda to make a Civic-quality car. But they’d be able to sell said car for what the Civic makes; possibly making even a small profit. How much can they possibly be making on crap like the Cobalt when they have to discount them by thousandS (note S)? This ridiculous argument comes up over and over again – but if it was such a successful way to run their business, why are we where we are?
I’m with most of the saner commenters here. They fought CAFE tooth and nail, and then instead of investing the profits of their SUV sales on R&D on trucks and cars, like the Japanese did, they returned them to shareholders and lined their own nests. Out of money now that the SUV money train has finally stopped? Please die in a fire, then.
Hmmm didn’t Detroit push for that tax credit write off for small business owners who purchased new vehicles but only if they were over 5000 pounds. I know plenty of small business owners that made the decision to purchase a extra large SUV based on that law. Yeah government is to blame for listening to Detroit. They should have allowed small business owners to write off their entire vehicle purchase regardless of vehicle weight.
Robert,
As a Firesign Theater fan I’d have to say that Gary is not insane, or anything you want to say like that. Hyperbolic perhaps, but pretty factual. The only thing one can factually challenge is the “entirely your fault, not ours”.
Like I said on the Mullaly drives to Washington thread, Americans may be pissed at Detroit but they despise politicians even more. I think a combative response to grandstanding politicians who are clueless about the auto industry and using the upcoming hearings to not address Congress but rather go over their heads in a Reaganesque appeal directly to the American public might work. Some of the statements on Capitol Hill that have most resonated with the American public have not been from politicians’ speeches but rather those of witnesses putting those pols in their place. Things like Joseph Welsh’s wounding of Joe McCarthy with “Have you no sense of decency, sir? At long last, have you left no sense of decency?”.
People in the Midwest and elsewhere are getting a little tired of the double standard that demands answers from Detroit CEOs but gives bank CEOs a free pass (and hundreds of billions of dollars). The Detroit CEOs need to play to Americans’ basic sense of fairness. They should have a forthright mea culpa about poor decisions and poor products, and then an unapologetic laying out of their plans moving forward. F. Scott Fitzgerald was a great writer but he was wrong about about there being no second acts in American lives. On the contrary, Americans love the idea of pulling yourself off the canvas and getting back in the fight. Hell, there are even folks who think Pacman Jones and Plexico Burress should have another chance at redemption.
Of course the CEOs are going to be timid because they want money from those selfsame congresscritters, but ultimately even Congress dances to the voters’ tune. A little more Engine Charlie and less Red Ink Rick is called for.
By the way, the last time GM seriously tried to make good small cars, they actually succeeded – and they sold at a premium compared to what they get today. Remember all those first-generation Saturns that went out the door at MSRP?
They surely didn’t make as much profit as the Civics and Corollas did, but I bet they made a lot more (or lost a lot less) on those SLs than they make on Cobalts now.
Ronnie, most of the rest of the country has moved so far beyond Detroit it’s not even funny. It’s you that’s out of touch here.
Ronnie I believe many southern states were competing for those plants that ultimately ended up in Alabama. So tell me if all of those plants had instead ended up in Georgia instead of Alabama what would your argument be? I believe Georgia is taxed a dollar and gets back 99 cents. Those plants easily could have ended up in Georgia like the new Kia plant near La Grange Georgia.
Sherman,
I think it’s interesting that you chose Georgia as an example. Did you just pick a random southern state, or did you already know that unlike nearly all southern and sunbelt states Georgia doesn’t get a windfall of federal spending relative to tax dollars? Just a coincidence, or is it disingenuous?
Of all the southern and sunbelt states, only three are below $1.00 in terms of return on tax dollars 1981-2005. Of those three, only Texas isn’t close to the break even point ($0.90). Georgia effectively broke even at 99 cents on the dollar and North Carolina had a slight drain at $0.97. The rest had a huge windfall.
The fact remains that Mercedes, Hyundai and Honda chose Alabama, which got a buck thirty eight. That federal spending either directly or indirectly freed up the $650 million in incentives Alabama gave those firms.
Alabama $1.38
Arizona $1.17
Arkansas $1.33
Florida $1.05
Georgia $0.99
Kentucky $1.27
Louisiana $1.24 (without Katrina related spending in ’04 and ’05 it averaged $1.19)
Maryland $1.25 (DC ‘burbs, ’nuff said)
Mississippi $1.69 (without Katrina related spending in ’04 and ’05’ $1.67)
Missouri $1.34
New Mexico $1.97 (in 1st place)
North Carolina $0.97
Oklahoma $1.18
South Carolina $1.26
Tennessee $1.16
Texas $0.90
Virginia $1.46 (DC ‘burbs)
West Virginia $1.46
Hmmm didn’t Detroit push for that tax credit write off for small business owners who purchased new vehicles but only if they were over 5000 pounds.
The tax credit was intended to help small businesses buy commercial vehicles, like medium and heavy duty trucks. Detroit just let small business owners know that due to the 5000 lb limit, larger SUVs qualified so those business owners could get a tax credit on their personal vehicles. Did Detroit lobby to keep that the law? Sure. You’d do the same if you made and sold heavy passenger vehicles.
Lobbying isn’t a sin. It’s patriotic. Cf: The First Amendment, “petition the government”.
When I see you go to Washington to ask for changes in the tax code that are to your own financial detriment I’ll believe that you’re doing something other than piling on Detroit.
# M1EK :
Ronnie, most of the rest of the country has moved so far beyond Detroit it’s not even funny. It’s you that’s out of touch here.
“Most”? How do you define “most”? Would you say that 55% is “most”?
While most Americans still buy cars from the Detroit companies, the sad truth is that many Americans have moved “beyond Detroit” in the sense that so few Americans have anything to do with actually making things for sale. “Making stuff? Actual labor? That’s for the Chinese and illegal immigrants and is beneath me. I went to college. Me? I work in a cubicle pushing important paper.”
While most Americans still buy cars from the Detroit companies,
Many Americans still buy trucks and SUVs from said companies. Very few, outside the Rust Belt, buy cars from said companies, and those few that do are disproportionately among the financially distressed who have no other options.
As for the tax deduction – yes, I blame them for pushing for it to be so readily abused. It made our environment dirtier; hurt our national security; our economic security; and the money just lined the pockets of execs and shareholders – none of those SUV profits ever got reinvested into anything worthwhile.
American society became less conducive to producing cars competitively, over time, and the will to correct the various issues was not there, neither in government nor in business.
A small example is the unwillingness – perhaps for good reasons within the field of medical care, perhaps not – to institute health care for everyone, thereby handing an instant cost advantage to foreign producers.
Wow, this Gary dude sounds like he accuses Chestnuts of being Lazy and thinks he invented the question mark.
Crack is wack. Just say no.