Sorry to bang on about Fritz Henderson. But, well, there he is. Again. Still. With every passing post-C11 day, the GM CEO is sealing his position as the “Uncle Walt” of the federal automotive bailout. With every news conference, media suck-up and, now, congressional inquiry, it’s increasingly clear that Government Motors’ masters aren’t going to give GM’s mustachioed public face the old heave-ho anytime soon. Or, more accurately, soon enough. Let’s face it: the Presidential Task Force on Autos should have sent Fritz his walking papers on the same day they defenestrated his mentor: GM’s last CEO. In and of itself, this failure to excommunicate is enough to abandon all hope of the zombie carmaker’s resurrection (which is an inherently ridiculous idea anyway). Drilling down deeper, we hit nothing but sewage.
Since assuming the position (so to speak), Fritz has abandoned his faster, deeper, oh baby! mantra. He now has one message about “new” GM for its new owners (that’s you!): leaner, greener, stronger, smarter. Astute readers will notice that this is actually four messages, only the first of which makes any sense.
Leaner? That’s what happens when your market share collapses like a dwarf star. Spinning GM’s formerly bloated now emaciated soon to be lifeless corpse as some kind of egg-white eating athlete fools no one save GM’s own corporate flunkies (nothing new there). Americans equate large with successful. Why shouldn’t they?
Greener? Who gives a shit? I know that American industry, the MSM and public school teachers have been selling “green” this, that and the other thing for nearly a decade. But I reckon anyone who wants a “green” automobile is driving a Prius. And that’s pretty much that. Placing “greener” as new GM’s number two priority smacks of financially fatal, congress-pleasing political correctness.
Stronger? Does Fritz seriously expect US consumers to consider buying one of its products—or, more to the point, not not consider buying one its products—because $50 billion worth of taxpayer subsidies has bolstered Government Motors’ bottom line? As a homeowner with a big ass mortgage, I’m here to say that The Mother of All Re-fis is not an indication of Government Motors’ financial strength. Deficit financing, indeed.
Smarter? Anyone with a horse in this race (that’s you!) wants to know if GM’s “new” management (i.e., the old management) is going to make the same dumb-ass decisions that led it to complete collapse. Parsing the propaganda, do GM’s federally-funded spinmeisters mean smarter as in “intellectually superior” or “politically astute”? Either way, no.
The Henderson administration’s breathtaking lack of intellectual firepower was on display at yesterday’s Senate hearing re: GM dealer closures. The CEO singularly, spectacularly failed to make his case.
A smaller, more healthy dealer network reduces GM’s costs, primarily related to support we provide for information technology systems, dealer and sales person incentives, field sales, service and training, service parts, and advertising. This support costs GM roughly $1,000 per vehicle, or a multi-billion dollar expense.
Note Henderson wants a “healthy” dealer network, instead of a “profitable” one (“profit” replaces “bankruptcy” as new GM’s new “Voldemort”). Also notice that the Fritz seems be asserting that the less cars GM sells, the more money they make. When pressed on his pretzel logic, Fritz said the dealer closures would lower the aforementioned dealer costs by . . . $100 per car.
Henderson isn’t an idiot. He just plays one on TV. We can debate the wisdom of GM’s dealer cull, but showing up at The United States Senate without a compelling explanation of how his team ran the numbers leading to the politically-charged confrontation that led to the public hearing is either the height of hubris or just plain dumb. Anyway you look at this we lose.
Henderson’s squirming would be funny if someone else was paying for it. Particularly galling: Fritz began his statement with a promise of transparency and fealty to the United States taxpayer—and then resisted Senator Rockefeller’s request to turn over a list of dealers slated for closure. His rationale was almost as well engineered as a Chevy Aveo; “We’re giving them a 12-to-15-month window to decide what to do with their business.”
Crap. Now where’s the goddam list? Meanwhile, we’re forced to listen to a refrain which makes an alcoholic’s promises of sobriety seem credible. “This is our last chance to get it right,” Henderson said, and not for the first time. “To fix permanently those parts of the business that have diverted us from consistently building winning cars and trucks and the consumer experience to match.”
Crap. If only this was GM’s last chance to fix their business (you know; since the last last chance). They’ll be back, if only because their top man somehow got the idea into his head that GM was diverted from its success. In other words, we were doing everything right except what we were doing wrong. Hey, what do you expect from a dead CEO walking?
What is the compelling reason to purchase a GM product? Right now none! That said a CEO who wants to save what is left of his or her reputation would stop arranging the deck chairs and fire all the fools who screwed up in the first place. Henderson unfortunately is part of the problem not the solution.
The key driver of this business is product that appeals on whatever level one wishes. Right now between poor dealer support and service as well as models that are not competitive, our money would be better spent somewhere else!
I think it’s clear that the aim is of the GM management is to not return to profitability. Taking their actions into account and not their words, that seems to be the clear case. Congressional hearings are bad theater and never un-earth the truth. They’re now a public display of Fascism.
How could you have a government who is “lobbied” by the private sector hold the private sector accountable? Who holds the government accountable? The voters? In voting for whom? The candidates the private sector bank-rolls?
Welcome to the new American.
The have had, and continue to have, a people problem. Nothing changes until they fix that problem.
I sense that the purpose of the “green” spin is not to sell cars. Rather, the goal is to sell the bailout to the public as an investment in a Company of the Future which will be a contributor to a healthier tomorrow for our children. GM’s partners in Washington need the cover this provides. That’s why the Volt was trotted out as a prop in this exercise in political theatre, and why the faithful gather so conspicuously to sing the Volt’s praises. As a spinoff effect, this green halo allows management to posture as a pantheon of visionaries.
OT: I’ve been stewing on GM’s campaign to close dealerships. The best explanation I can come up with is that GM has calculated that a key element in Toyota’s and Honda’s superior profit margin per car is fewer dealers – which results in less competition between dealers to sell the same vehicle to a given buyer. Said another way, GM is trying to create scarcity that drives up price.
Mr. Farago,
You ended up being correct in your GM Death Watch series.
What do you predict is going to be the ultimate fate of the New GM?
Thanks.
+1 for rpiotr01.
We would know if there was a real commitment to change GM by one action – an independent review of all ‘leaders’ in GM earning more than 100k/yr being interviewed and asked, “What would you do to fix GM.”
Those with no balls would give the corporate line answer, thinking that’s what was desired. Leaders would emerge through this process.
The biggest problem I have with this whole fustercluck is the complete disregard for the open market by the FEDERAL GOVERNMENT of all people. How can it NOT be considered a conflict of interst to have GM owned by the Government? There HAS to be some sort of anti-trust issue involved in this whole mess. How can Ford even begin to think it can compete with a GM that now will have ZERO debt, AND the complete backing of all the government cash they can beg for. It’s going to take another 5 or so years at least for the governemnt to realize what a black hole GM is and cut the substantial loses. When that happens any GM exec involved in this scam should go to prison for extortion from the untold billions that will be poured into the company. Will this happen? No chance in hell.
GM has ZERO chance of coming out of this mess. They have no plan, never had a plan, and won’t have a plan any time in the near future. A baby will suckle at the tit until they are no longer given the option, GM is no different now. By that time it will be too late anyway.
I’d like to see a sequel called “Fritz and me.”
Mike: you there???
Even beyond “what would you do to fix GM”, I would rather ask them, “What do you think GM is all about? What does it stand for? What SHOULD it be about?” I don’t think anyone in charge there has the slightest idea.
I mean, Honda – build practical cars for lots of people. Jeep – off-road oriented, preference for the outdoors. You can go on with different brand names.
I don’t know where GM fits in with all of this (same with Chrysler, and frankly Toyota heading there a bit). How can you have a successful company if the people in charge don’t know what the company is all about? If they have no vision they’re doomed. It also doesn’t help that they also lack business savvy etc., but even at a basic level, they’re like captains of a ship who don’t know where the ship is going or where it was going before they came aboard; as far as they know the only point of the ship is keeping itself afloat.
This isn’t to wish failure on these guys. I just started checking out this site and I’m surprised at the vitriol towards GM and Chrysler and the desire to see them go down in flames. But their predicaments make perfect sense based on recent leadership.
Crazy as this may sound, I give Chrysler a better shot at coming out of this than GM. Make fun all you want, but I can’t see Marchionne taking a company on if he didn’t at least have an idea of what he wanted to do with it.
jkross22,
“Leaders would emerge through this process.”
Yes they would. And they would promptly be crushed / discredited by the current GM hierarchy.
Tex
“Leaders would emerge through this process.”
Yes they would. And they would promptly be crushed / discredited by the current GM hierarchy.
You’re probably right, but the goal would be to weed out the majority of non-leaders so that those remaining were set up with better odds of succeeding.
Sounds pollyanna-ish, but since we the people own the dump, why not at least try to make it better.
jkross22,
“we the people own the dump”. Great line! I’m picturing a 15 year old rusted out beater with a brand new “scented tree” hanging from the mirror. Thanks for the laugh!
Tex
But I reckon anyone who wants a “green” automobile is driving a Prius.
I’d like a greener vehicle, for example a small diesel pickup. Vehicles with 6 speeds so overdrive actually means something other then the gear after 3rd. Gas prices are slowly inching up (again! still?) and hurricane season is upon us. So $4 a gallon could be back before you know it.
Given a choice between two EQUAL vehicles just about everyone on this planet would pick the one that gets better mileage/less emissions… but GM’s problem is they don’t make “equal” vehicles to being with, thus competing on greenness ain’t going to work.
+1 for you Antone, for calling a spade a spade.
Further, check out Slate’s take on GM’s new “propaganda campaign”:
http://www.thebigmoney.com/slideshow/gm-trying-brainwash-you
But if the government dismissed Fritz and brought in someone entirely new, then that new person would have some leverage and political power. By keeping someone discredited around, the political masters ensure that they remain in charge.
gave Fritz benefit of the doubt. doubt over, he’s s Wagoner clone. close to time to launch another Red Ink Rick campaign. any suggestions?
I don’t agree with much of this editorial, but no matter, it’s not clear to me that Fritz will be around long term. The board of the new GM will be appointed by the U. S. Treasury. Depending on their choices, senior management’s tenure could be in grave danger (is there any other kind?) The PTFOA is aware of the politics of the situation, and have shown they are not afraid to bite….
True, they are not afraid to bite….tax payers.
“Green” GM products won’t sell unless the government subsidizes them; hence, the Volt. But why buy an untried Volt for $40k when I can buy a Gen III Prius for half that much?
A fresh government “investment” in GM will begin around 2012, which should be thrilling at election time.
Typical GM (or other) corporate empty suit talk. Blah. Blah. Blah.
Further, check out Slate’s take on GM’s new “propaganda campaign”:
http://www.thebigmoney.com/slideshow/gm-trying-brainwash-you
I’m not sure why people think this is a unique situation in any manner. Modern society, especially American society, is full of implementations resulting from psychological experiments. Much of “politics”, what you see in the media, etc, is deliberately shaped by other people.
Do you really think these are even remotely original thoughts you’re thinking?
What percentile of society do you really think do their own investigative journalism or depend mainly on those who do?
I lead into it slightly at end of a prior thread:
https://www.thetruthaboutcars.com/editorial-general-motors-death-watch-258-stein-x-leikangers-gm-politburo/
Obama Inc. knows GM could negate a second term. The new and improved BOD will torpedo GM on the captain’s command. Does ‘Packard’ work for TTAC?
Ayn Rand got this so right.
It’s quite sad and telling of the human condition that despite massive progress in all sorts of technical sciences, the masses still believe that truth resides in works of fiction.
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hmm, that’s wierd, the post I replied to disappeared.
Everyone “in the know” gives GM a better chance. Chrysler has a product pipeline problem (“PPP”). Since its divorce from Daimler, Chrysler is a shell of its former self, formerly regarded as an engineering franchise second to none. Now it’s thirtieth to none among auto brands.
Of course, Fritz is probably capable of repeating GM’s past mistakes.
I wish that President Obama and his cabinet would read allpar.com now and then.
According to the News section there, not one of the top 20 best-selling cars for May ’09 and not one of the 20 best-sellers for January-May 2009 is a Prius, Insight, Ford Escape Hybrid, etc.
To force people taking govt. bailouts to build much more of what the public doesn’t want jeopardizes chances that the public will get ANY return for its money.
That is the least convincing comboverspeech that I have ever seen- unless you count “I did NOT have sex with that woman, Miss Lewinsky.”.
That is the least convincing comboverspeech that I have ever seen- unless you count “I did NOT have sex with that woman, Miss Lewinsky.”.
It’s advisable not to use quotes around statements that are not actually quotes. Also, speeches usually last longer than one sentence.