The Presidential Task Force On Automobiles (PTFOA) came, they saw, they laughed. Well, maybe not laughed. But there’s a kind of humor in the fact that the PTFOA shot holes in every single one of the company’s assumptions. The quango’s “Determination of Viability Study; General Motors Corporation” is, to say the least, not kind to the automaker’s assertions. Looking forward, some of GM’s stakeholders have a lot to worry about. Dealers: “These underperforming dealers create a drag on the overall brand equity of GM and hurt the prospects of the many stronger dealers who could help GM drive incremental sales.” European ops: “The European business is seeking additional capital beyond the funds requested from the Treasury. These funds have not been allocated and thus represent a risk to the viability of GM’s current plan.” Strangely missing from this report: any mention whatsoever of labor costs. Nothing, save “legacy liabilities.” Huh.
Wow, Obama appointed smart people who saw through the smoke and mirrors.
Maybe part of their research included reading through the TTAC Death Watch series!
I can’t wait to read the companion piece on Chrysler.
What’s the PTFOA’s TTAC handle?
“Product design: GM has refined its product design process to create global vehicle platforms, thus allowing GM to reduce engineering costs and improve the content of its cars. These global platforms leverage the scale of the business and allow GM to amortize product development costs over a large range of models. “
Explain to me how they are going to do that without Saab and Opel/Vauxhall? Is it GM/Daewoo they are hoping for? Chinese Buicks? Remade Holdens, two years after the fact? Tell me…
Pretty much sums it up. A few words shorter and a bit less dry and it could be a Death Watch editorial.
“GM has been losing market share slowly to its competitors for decades. In 1980, GM’s US market share was 45%; in 1990, GM’s US share was 36%, in 2000, its share was 29%. In 2008, its share was 22%. In short, GM has been losing 0.7% per year for the last 30 years.
• Yet, in its forecast, GM assumes a much slower rate of decline, 0.3% per year until 2014, even though it is reducing fleet sales and shuttering brands which represent a loss of 1.8% market share….”
Looks like this doc was thrown together in 20 minutes – not even time to change from Times New Roman and the hideous default MS Word bulletpoints (or even get them consistent from one paragraph to the next :-))
cheers
Malcolm
Ingvar:
Saab is insignificant. Opel is much more significant, but then I don’t think they ever planned to entirely cut it loose.
Michael Karesh:
Yes, I can understand that. What I’m interested in, is knowing why that conclusion isn’t included in the statement. While the PTFOA reckons GM can survive with the help of its overseas branches, GM has more or less fire-saled the lot, lock, stock and barrel.
So building a Hummer based on a Chevrolet Suburban was a bad idea? How about that Daewoo uh, I mean, Chevrolet Aveo huh? A slow Honda Fit kicks the Aveo to the curb.
At least there were SOME bright points. CTS-V is an awesome car. So is the new Camaro and possibly the Malibu. Too little, too late though.
Oh well, I suppose. GM will… uh… Oh WOW hey look over there is that the Ford SHO?! Oh dang I have to get one of those!!! Forget about GM, I got my (future) money (probably after the GTI 6 purchase) ready Ford!!
Well, the labor costs besides the “legacy” labor costs are indeed supposed to be almost in line with the transplants’ labor costs. That’s not the biggest issue.
Most people who have looked at the situation have concluded that for GM to survive you need to address: (i) # of brands; (ii) # of dealers; (iii) management; (iv) labor costs and labor rules; and (v) labor legacy costs. If the president does little or nothing about the labor costs and work rules, I think the sand will continue to pour down the rathole, even if he addresses the other issues.
Furthermore, in the current plan, GM has retained too many unprofitable nameplates that
tarnish its brands, distract the focus of its management team, demand increasingly scarce
marketing dollars and are a lingering drag on consumer perception, market share and
margin.
Wha…? That’s the first I have heard of this.
Frankly, I found this and the Chrysler doc to be somewhat refreshing, i.e., a rational assessment of the situation.
So Wagoner’s gone…no one walks the plank at Chrysler?
“So Wagoner’s gone…no one walks the plank at Chrysler?”
The feds know Chrysler is going to be liquidated by the end of next month. Then EVERYONE will walk the plank.
Not fast enough, smart enough, current enough,etc.,etc. Pretty much sums up what TTAC has been saying all along.
The PTFOA’s WTF report could have been written several years ago by anyone who has been remotely astute at watching the Big 2.8 spiraling around the drain.
There’s no thought leadership there. Or at least no evidence of it.
“So Wagoner’s gone…no one walks the plank at Chrysler?”
When Cerberus jumped ship, they broke the plank…
Fiat is going to “give” chrysler it’s best platforms? Where does the money come from to completley retool existing chrysler plants? If there is no bankrupcy, who picks up all of the existing chrysler liabilities? If gas stays low, who buys these Fiat economobiles anyway? If gas goes up, who buys these Fiats anyway? You need credibility to sell high end merchandise. The Japanese and Germans have it, the Koreans are getting it and the dynamic duo of GM & chrysler. have lost it. Bringing Fiat to the USA to do battle with the likes of Hyundai, Honda, and Toyota is not really a fight at all. The Asians have crafted their cars over 30 years for the American market. The stuff we get here is not ususally seen in Japan or Europe. You just don’t set up shop from Europe and find that sweet spot here. You also don’t help Chrysler’s quality image with the name Fiat. The fat lady is arriving, see you all.