someone said…poor Rick, he just inherited too many difficulties…
I replied…
do you have all night? he could have stayed away from Zarrella, he could have left John Rock alone at Olds. he could have shut Saturn down long ago. he could have stayed the hell out of Fiat. could have kept Delphi inhouse, could have held marketing staff resposible. could have ousted Deloitte and rotated auditors to generate accurate and truthful financials, and of course…could have let LaNeve go forward with implementing Return to Greatness.
he could have kept an eye on Eric Feldstein at GMAC and not let mortgages be written that would jeopardize the future of GMAC. he could have listened to Jerry York and changed the Board meetings to an actual working environment. he could have detailed plans and earnings guidances instead of offering nothing more than that smug smirk, stutter, and eye twitch.
he could have held annual meetings in Detroit where the people are, he could have gathered individuals from the industry for the Board instead of British Petroleum, Goldman Sachs, and Astra Zeneca. he could have kept the great car names of our past, he could have put people to work in some capacity instead of idling them in the Jobs Bank. he could have let natural attrition replace long term employees over time instead of throwing money at them with reckless abandon. he could have left the retirees alone to enjoy their well earned security (after all they are our greatest ambassadors). he could have should have but didn’t
well said.
I second that, well said Buickman!
Agree–well said.
This morning I heard Bob Lutz on the radio (1st time I have ever heard him speak) and I was amazed at how he came across. After reading about him for years and what a great car guy he is, instead he came across as bitter old blue hair indicative of GM’s massive problems. In reference to the possibility of bankruptcy, he used Wonder bread and Hostess cupcakes as examples of why bankruptcy won’t work for the automakers. Geez, how about a reference from this century?
Someone needs to print this, send it to a tattoo parlour, and have it transcribed onto the foreheads of every member person who thinks that Rick is hard done by.
You can sort-of let Mullaly off the hook for not being that that long. You can almost allow Nardelli the courtesy of the same, given Daimler’s wrecking of Chrysler. Rick Wagoner has been in a position of authority at GM for twenty years, and absolute for nearly ten. He’s had enough time to steer the ship.
The Hostess & Wonderbread reference has more relevance than you would think.
Interstate Bakeries Corp went into Ch11 in 2004 and is just now exiting the process. Of course there is a lot less risk purchasing a pack of ho-hos or twinkies than a car from a insolvent company.
Ummm, wow. I actually agree with Buickman.
Actually, Buickman has posted some well-reasoned arguments. While I dont’t always agree, he has the passion.
Merry Christmas, Buickman!
Quote RedStapler: ” The Hostess & Wonderbread reference has more relevance than you would think.
Interstate Bakeries Corp went into Ch11 in 2004 and is just now exiting the process. Of course there is a lot less risk purchasing a pack of ho-hos or twinkies than a car from a insolvent company.”
Ba-Da-Bing…if it took a bakery 4+ years to emerge from bankruptcy….
I will say this with as much respect and politeness as I can, Rick Wagoner is a moron.
With his record I would not allow him to flip burgers let alone run a company, and I am sorry for insulting burger flippers.
It wouldn’t hurt me to hear more about this:
could have let LaNeve go forward with implementing Return to Greatness.
He has a point with John Rock and Delphi.
Viva BUICKMAN!
I was hoping that Wagoner would get a working over at the hearings, but of course the politicians were too busy burnishing their image as whatever. Buickman would have made a fantastic expert witness. Ditto Maryann Keller who predicted this outcome 20 or so years ago.
I’ve read several comments lately about Wagoner having great knowledge of depth and scope. But he’s not paid as a scholar. He’s been paid to make the right decisions, and in this he’s failed.
buickman, good summary. Each time I read a summary of the boneheaded moves Rick has made and the lack of any leadership within the halls of GM that can make a meaningful impact, I realize that nothing will save GM. Not $50B, not $100B… it’s a company with stage 4 Hodgkins.
The problem is not 10 million cars a year, but that even after they lost a significant part of their market share, GM, lead by Wagoner, did not have contingency plans drawn to deal with reduced volume. Ford at least appears to have settled on reduced market share, and somehow or other, Honda makes money on a total vehicle volume which is far less than that of GM.
In fairness to Rick and the current GM management, their predecessors kept planning for an “ain’t gonna happen” resurgence by a moribund line of products. Drunk on profits from trucks and SUV’s in the 1990’s, they simply did not plan a financial scheme which gave them “outs” in the event a sharp downturn occurred as has happened in the past.
Given an equally shortsighted union, GM could at least have given themselves wiggle room for the contingency that market share slipped below 30,27 or 23%. But that would have required cooperative negotiation, something neither party has been able to do for years.
“Return to Greatness” assumes that the product is fine, and that only the marketing needs tweaking.
In my view, that’s a bad assumption. Marketing will not improve the cars or make them more desirable for the public.
If anything, GM has already spent 40 years using a version of the Return to Greatness strategy. It has erroneously believed that advertising and changing the names of bad cars could fix GM’s problems.
A strategy that ignores the product gap is doomed to fail. The public is not stupid and knows that advertising doesn’t increase a car’s reliability or appeal.
it all comes down to selling cars. got a leak, call a plumber.
Yes, it does all come down to selling cars.
The first part of that is building cars that the market wants to buy, for a price at which you can make a profit.
The second part is sizing your operations appropriately for the volume of cars that you can realistically sell profitably.
And then, yes, supporting the product with appropriate marketing is important as well. But without executing on the first two points, it’s pointless.
Just for playing the purpose of the Devil’s advocate, if these things had actually worked out then he’d be considered a goddamn genius. I’m no fan of Mr. Jeep Grand Wagoneer, but it’s simply pragmatic to grant that at least a few of his decisions look poor due to hindsight.
… he could have left John Rock alone at Olds.
I actually agreed with the decision to shut down Oldsmobile. Few people at GM had a desire to do anything at all with the brand, and had it stayed around (here comes hindsight again) it would have been just one more branding millstone around GM’s neck.
he could have shut Saturn down long ago.
Saturn had more brand value than Oldsmobile did. The fact that Saturn is sitting next to Hummer in the airlock all but waiting to be jettisoned shows that it was good to get rid of Oldsmobile while they actually had the cash to do so.
… could have held marketing staff resposible.
GM has moved to different advertising firms since he took over and during his tenure, hasn’t it? This isn’t a challenge, just a request for clarification (since I can’t actually remember).
he could have kept an eye on Eric Feldstein at GMAC and not let mortgages be written that would jeopardize the future of GMAC.
You can’t realistically blame the mortgage market and the financial crisis on Ricky not sticking his head in another company’s executive’s office.
he could have detailed plans and earnings guidances instead of offering nothing more than that smug smirk, stutter, and eye twitch.
Detailed it with whom? You? I’ve never understood this particular criticism of GM; how would advertising its specific operating plans help them, beyond just pissing off their detractors more? A lot of people have been pissed off at how the Iraq war thing is going, but General Petraeus buying ad time during the Super Bowl to broadcast future troop movements wouldn’t make things better. Having loose lips about GM’s specific plans would better facilitate their competitors destroying them in the marketplace as far as I can tell.
he could have gathered individuals from the industry for the Board…
All the good and successful ones were gainfully employed elsewhere. :p
he could have kept the great car names of our past…
Did any of them survive the Seventies and Eighties? Having a new and middling car with the name of a bottom-of-the-barrel car on it won’t help sales. Name recognition is a great thing, but his predecessors at GM screwed that all up with poor offerings in the past. Besides, Impala, Malibu, and Camaro all came back.
… he could have put people to work in some capacity instead of idling them in the Jobs Bank.
Doing what, exactly? Having a screwdriver collecting dust in your toolbox is not reason to try and cook eggs with it.
he could have let natural attrition replace long term employees over time instead of throwing money at them with reckless abandon.
Why? You just complained about the idiotic Job Bank and the insane UAW contracts drafted before he came along prevented him from simply firing people, so all he could do to shrink his inflated workforce was pay off the older set to retire early.
he could have left the retirees alone to enjoy their well earned security (after all they are our greatest ambassadors).
Agreed. It was Ricky’s predecessors’ fault that retirees had such excellent benefits, but those employees still worked to earn those over a long career and earned the right to them.
Even with gas back to 1.50 a gallon no one believes it will stay there for long. If market forces don’t take it back to 3.00+ then government taxes surely will. 5-8 years is a long time to be driving a vehicle that gets 21 on the highway at best. People never figured out what they spent in a year on fuel, now they do.
Back to RIR, they were hoping for a return to .99 a gallon somehow and it ain’t gonna happen.
Campisi:
Olds. a million unit seller driven into the ground
Saturn vs Olds? get a life.
moved firms? and why? ’cause he has no clue what to do.
do blame him for GMAC.
earnings guidance are expected from good management.
Board essential, ours backwards. Wag the Dog.
LeSabre.
normal attrition conserves cash.
thank you call to customers, quality checks.
Respect Retirees.
thanks to many
Merry Christmas to all.
Saturn had more brand value than Oldsmobile did.
I’ve seen multiple references to Saturn NEVER having been profitable. If anyone has proof to the contrary, I’d like to see it. Otherwise, I don’t see how Saturn has any brand value. Even assuming that some fraction of the population would buy a car from Saturn that they wouldn’t buy from Buick or Pontiac, it seems very probable that the far larger number of BPG dealers compared to Saturn would yield more sales of a given vehicle. Far more people have a BPG dealer nearby than do a Saturn dealer, so service is much easier to obtain.
Just a little checking regarding sales of like vehicles is telling:
June/July of ’07:
Saturn Sky 1,097/912
Pontiac Solstice 1,882/1,463
Saturn Outlook 3,869/3,345
Buick Enclave 3,659/3,041
GMC Acadia 7,006/5,694
How many more sales would GM have had over the Saturn years if they had directed the products to Buick and Pontiac instead of Saturn. And after nearly 20 years Wagoner wants to do one of his strategic reviews.
Amen, Robert.
Red Ink Rick is a bit like Romeo Crennell of my beloved Cleveland Browns. Everyone agrees he would make a great next door neighbor, but the team keeps losing.
Thanks, Buickman. An analysis doesn’t have to be perfect in every detail to be useful. It’s a shame the Board of Bystanders seems oblivious to Wagoner’s blunders.
One point I wonder about is “he could have put people to work in some capacity instead of idling them in the Jobs Bank.” That’d be sensible, but I thought the contract with the UAW prohibits GM from reassigning a worker to different tasks. Of course, even if that’s so, Wagoner had years to try to change the contract.
Olds. a million unit seller driven into the ground
Saturn vs Olds? get a life.
GM saw potential in Saturn, whereas Oldsmobile was just a collection of rebadges that they had no desire to continue producing. Every single car they sold when killed off in 2004 was available from another division and Oldsmobile as a brand had no mission left, so why would they keep it around? To save some money in the short-term, at the expense of the long-term?
moved firms? and why? ’cause he has no clue what to do.
If an ad firm isn’t performing as well as necessary, they are replaced with another one. That’s what GM has done many times even in the last couple years.
do blame him for GMAC.
… That doesn’t really address my statement.
earnings guidance are expected from good management.
To the board of directors and to shareholder meetings, sure. They’re not going to release anything beyond maybe a vague and sanitised version of such things to the media, though, and expecting them to seems strange to me.
Board essential, ours backwards. Wag the Dog.
Come again?
LeSabre.
If they renamed the Lacrosse “LeSabre” tomorrow morning, do you really think people will rush out and buy them in droves?
normal attrition conserves cash.
The idea behind buying out an employee is to pay him up-front a fraction (big or small, but usually less than 100%) of what he’d make over the course of working at the firm until retirement in exchange for retiring early. In the long run, it’s cheaper.
I believe that some of the points Buickman is making are valid.
You can have a great product, but without great customer service, sales will eventually suffer. Buickman feels that customer service is cheap to provide and that when the great products come along, sales will easily follow.
With regards to marketing, it has been pointed out on this blog and others, how GM has squandered name recognition on many of their most popular models. Names like “LeSabre”, “Cutlass”, “Electra Park Avenue” and others, have been either cheapened or eliminated altogether.This is unlike Honda and Toyota that have maintained the names of their most popular models for decades, exploiting a marketing technique that costs no money and actually saves the companies the expense of tooling new badges every few years. Believe it or not, there are many people that buy cars based on the name they know. Many LeSabre and Electra owners have no idea what a Lucerne is and aren’t bothering to find out. All they know is GM stopped making their car.
At 2007 the Detroit Auto Show I overheard 2 fiftyish gentlemen speaking at the Buick display.
One said: “Where the heck is my Park Avenue?”. His buddy replied: “The LeSabres gone, they’re all gone. Buick’s gone.” I think their unsolicted comments sum up what happened to Buick. Buickman is correct on this score.