Fritz Henderson is not a happy camper. Speaking at the Automotive News World Serious, GM’s Chief Operating Officer came off all emo, revealing a string of bad news without the usual spin. Of course, the event’s host chose to focus on the more, uh, upbeat side of Fritz’ speech. Henderson washed his hands of HUMMER, Saab and Saturn, albeit without announcing a “final solution.” And although “Pontiac is toast” isn’t the brand’s official tag line, it might as well be. “Henderson said the four core brands [Chevy, Cadillac, GMC and Buick] comprised 83 percent of GM’s total sales volume in the United States last year. Going forward, the Pontiac brand will ‘shrink substantially,’ Henderson said. But the fact that GM is investing heavily in the Buick brand in China will benefit that brand in the United States. ‘When you see the new LaCrosse, it will be very familiar to the one you’ve seen GM reveal in China,’ Henderson said.” And now, the real deal, brought to you by the MSM…
‘”GM received an initial $4 billion in emergency funding from the U.S. Treasury on December 31 and had expected to receive its next $5.4-billion payment from the government last Friday.
“That payment was delayed, Henderson said, because the automaker was pressed to submit additional information and because Treasury officials were busy with other funding requests and the change in administration in Washington.
“‘If we don’t get the second installment of our funding, we’ll run out of cash. It’s that simple.”
“‘The situation can always get worse,’ Mr. Henderson said, speaking at the Automotive News World Congress in Detroit. ‘We need to accept responsibility for radical actions to address events that are outside our control.’
“Despite the foreboding tone, Henderson reiterated his confidence that GM’s recovery plan, presented to the U.S. government as a condition of winning up to $13.4 billion in federal loans. He said GM’s decision to ask for money to avoid a bankruptcy was a ‘sad day’ for the company.
“‘The happiest day of my career will be the day we repay the loan,’ he said…
“Mr. Henderson described a meltdown of global auto markets today in last year’s fourth quarter that took GM by surprise. Rising unemployment and a credit crunch in the U.S. combined with an economic slump that spread around, slamming the auto maker on all fronts, he said.
“‘We didn’t necessarily see this freight train coming,’ Mr. Henderson said. ‘2008 almost killed us.'”
Note the word “necessarily” and the idea that 2008 was responsible for GM’s precarious position. Fritz is still in denial. Perhaps the bondholders refusal to swap debt-for-equity will provide a wake-up call. But then it’s way too late for that.
I took out a Cadillac sales catalogue from 1980. Was this the beginning of the end? In this book, they made the Olds diesel the standard engine for much of the 1980 line.
After this engine destroyed the reputation of 75 years of Cadillac what does GM do? They replace the diesel with an 8-6-4 V8 that didn’t work in 1981. By 1982 with no apologies they go back to the old technology and never look back. However, many of GM’s most profitable customers never looked back either.
So, it is nearly 30 years that GM has seriously been making unforgivable errors and simply picking themselves up and getting on with their business life. There motto should have been, there is no error so great you can’t paper it over in the next model year.
Today, it is different, too broke to bring out new flawed technologies, GM has to take it mainly obsolete car line and continue to see it lose market share. From flawed innovator to retread in one generation.
How many more books will be written after the smoke clears the wreckage?
“That payment was delayed, Henderson said, because the automaker was pressed to submit additional information.”
Really? What could that have been? The burn rate in December and their planned incentive behavior in January?
“‘If we don’t get the second installment of our funding, we’ll run out of cash. It’s that simple.”
Is that as close as it gets to an admission that they’ll run out of cash unless they’re subsidized for a long, long time?
I sat in my buddy’s C6 last night and just had to shake my head…the potential for GM to get things right is so…so…there! If they’d just have the cajones to do what really needs to be done. Dumping HUMMER and SAAB is a start in the right direction…and Saturn is probably DOA, along with Pontiac (I guess my father’s last year available Firebird Firehawk may well be worth something one day, after all). But it’s most likely too little, too late. The whole product line needs to be revamping and massively improved, not just one or two halo cars.
Its tough times in the car buisness,I just read that Mazda is begging for money.Everybody everywhere is hurt,n.
A deal is a deal is a deal.GM agreed to submit additional information.So WTF is the hold up?
Get the info in, the governments of the USA and Canada honour thier commitment.If they havn’t
got thier shit together by March 31 its game over right?At least thats how I understood it.
I saw this on Headline News this morning too. Wow. If this broken system worked as well as its PR machine, America would have the best cars in the world.
Nice job GM, threaten the new president with bankruptcy without giving anyone a viable turnaround plan (and a timeline would be nice) for the last 5-10 years. And to think they’ll probably get away with it!
jerry weber : You forgot the Vega. That was the beginning of the end.
If my math is correct, if everyone who went to the inauguration yesterday put $1000 into a hat for GM, this would still be less than the direct government money it has received over the last 4 weeks. And is still not enough.
Alas, I remember the great handwringing over Chrysler in 1979-80. A mere 1.2 billion in GUARANTEES. No govt. money involved unless the company went under. And it had a new management team and a pipeline full of new, relevant product. Nobody thought Chrysler was entitled to help, and Chrysler’s financial team had to work their butts off to get the guarantees, then to line up the lenders.
What gripes me so much now is that GM acts like it IS entitled. No new management. Incremental product development (the Volt pipe dream aside) and a history of outright horrid designs crammed down the throats of its formerly loyal customers that makes even the Volare look like a 70s Mercedes by comparison.
But it’s “Give us the money or else.” So we give them the money. And give them the money. And give them the money. And from my distant perspective, I see no actual change in the way the company is run. Just talk about what they are Going to do.
Boy that new Buick looks like a Ford Five Hundred in that pic.
Mr. Henderson described a meltdown of global auto markets today in last year’s fourth quarter that took GM by surprise.
*Punches monitor* Seriously, Mr. Henderson, NO ONE is buying that crap.
I know this is an obvious question, but why are Way-goner and Putz still in charge?
I understand Chevy, Cadillac and Buick (Buick mainly because of China). But why GMC? They have a medium duty commercial division (Top Kicks and rebadged Isuzu cab-overs), but all consumer products are re-badged Chevy’s.
Is the GMC thing to give trucks to Buick/Pontiac/GMC dealers…oh wait that’s just Buick/GMC dealers. But if GM kills Pontiac, there is no reason you couldn’t have just Buick/Cadillac/Chevy dealers with no overlap.
So unless this GMC thing is just the commercial stuff, GM still doesn’t get it.
The ventilator machine is making the corpse’s chest move up and down … but the patient is still dead.
Pull the plug and get on with C11.
There new 2010 LaCrosse so far colors me unimpressed. 4000 LB curbweight. Bloated dumpy unbuick like exterior styling that could be confused with many other derivative sedans. AWD only offered on the mid line trim with the lower torque 3.0 liter V6 (211 ft lbs), lower mileage ratings than last years model despite Direct injection, 6 speed automatic transmission and new designs. The Volt is interesting but the weirdly named Cruze looks boring and generic and is obviously hiding the mistakes of the previous Cobalt so under the carpet that name goes just like the Cavalier name went in 2005. The 2006 designed Impala is about to be blindsided by the new 2010 Taurus and what is GM’s response to that? “The current Impala will soldier on until 2011 as is and after that we have no idea what to do with it”. The Lucerne is left to wither and die
leaving Buick with a stunning NA lineup of no less
than TWO vehicles. And then there is Pontiac. Can you say Alphanumerics, NUMMI Toyota, badge
engineering, Holden clones and very little
driving excitement! Honestly I think Kia could have handled this brand better and been more focsed than GM!
@NickR: that’s the current Chinese Buick LaCrosse, same platform as the NA version.
Maybe GM can take some of that money they’re getting from us and at least buy some lube and a package of condoms this time.
The ventilator machine is making the corpse’s chest move up and down … but the patient is still dead.
Cue Terry Schiavo piloting a Aztek in traffic, poorly.
Pull the plug and get on with C11.
They don’t want to do that since it will upset the UAW.
They want to keep all their present labor force or retire them at 50 years old with a full pension for the next decades of their lives.
C11 would force reality on the companies and the government is terrified that the immense number of pensioners would be dumped in their laps. It is just a matter of time anyways.
This is why you do not run a business with thirty years work and then out to a rich retirement package. It is unsustainable.
50merc-nicely put.
Quick estimate from Fritz’ numbers gives a cash burn of approx. $3B per month.
Nine “very large” down the tubes and we are still exactly where we were before.
Anyone have an estimate of what this cost us per vehicle for three months time?
How about per GMNA employee?
Why do I have the feeling that simply having the Gov’t paying their current wages until they find something else and shutting this mess down would end up way cheaper?
Bunter
“Its tough times in the car buisness,I just read that Mazda is begging for money.Everybody everywhere is hurt.”
Mikey, that just gave me a good idea of what Obama should handle GM.
What Mazda wants is for the Japanese government to pay the wages of the workers at the plants that have been idled. If you ask me, that is what they should do here. Just pull the plug at GM and let them go down, and then use the money to help out all the workers who will be put out of work due to GM’s death. It makes more sense then propping up a dead company just for job security.
2008 did kill you, Fritz. You’re a zombie company and you apparently don’t even know it. You live only by sucking on the blood of those still living, and if you are not killed off, will pull many more down with you.