Daniel Howes’ column for the Detroit News is based on an interview with GM CEO Fritz Henderson, while the latter was embarked on a national dealer handholding tour [your name suggestions below]. And here’s the first money shot: “It’s just really good to be back in the car business.” Howes reads TTAC; I’ve taken him to task many times for his transformation from kick-ass European correspondent to Motown pom-pom waver and, at best, chronic fence sitter. “Now, before all the cynics glom on to that single sentence as proof — proof, I tell you — that GM’s leadership is back to the bad ol’ days of denial, I’d offer this: There is more that’s changing inside GM today than staying the same, starting with the fact that the CEO and key leaders of his management team spend a whole lot more time talking about cars and trucks than the nonautomotive headache du jour.” This is all kinds of wrong.
Why would Howes think that Henderson’s statement indicates traditional Detroit denial? It has nothing to do with denial, which is, as we know, Maximum Bob Lutz’s bailiwick. In fact, the jefe’s comment raises entirely different, equally important questions.
Given that Henderson is a GM lifer—former GM CEO Rick Wagoner’s clone and hand-picked successor—what the hell was Henderson doing until now? What business was he in, exactly?
Unless he’s talking about Henderson’s love life or golf game, Howes’ “nonautomotive headache du jour” remark assumes there’s a separation between the business of GM (securing a mega-suckle on the taxpayer teat, protecting executives from defenestration and salary cuts, fucking around with Opel, etc.) and cars and trucks (building cars and trucks, selling them). To paraphrase the B52’s, “WELL THERE ISN’T!”
I get that Howes thinks GM is more product-oriented these days. But the chaos that is GM’s branding strategy, on-again-off-again model development and mislaid marketing plans (now where did I put that truck month?) continues apace. As they say, talk is cheap. Unless it costs $100 billion dollars of my tax money. Anyway . . .
I reckon Howes got the Hendersonian subtext right. The word “just” indicates that the CEO is losing his stomach for politics. You can almost here the sigh in his voice. Which is not a good thing considering Henderson works for the United States government [see: above].
Ironically enough, Danny provides us proof of Henderson’s ongoing inability to face market reality elsewhere in his opus.
“A consistent theme is, ‘Let’s go on the offense,’ ” [Henderson] said. [The dealers] like that GM has worked its inventories down to historic levels; that the next products hitting showrooms are competitive (or better) than the best in their segments; that the beginnings of a marketing campaign (designed in some 30 days, unheard of for GM) is featuring the products and standing up for its attributes.
Quick: which GM products—current or forthcoming—are better than their competition? (Maybe that’s why Howes mixed-up his pronouns.) And is it me or does this sound like the same old punch-the-fist-in-the-air-like-you-just-don’t-care GM?
I’m not suggesting the nationalized automaker should play defense, because that would make too much sense, obviously. When your market share is disappearing, you attack! Right? Screw defending what you already have. Faster, Pussycat! Sell! Sell! Sell!
Hey an all-attack all-the-time strategy worked for Winston Churchill. Oh wait, the wartime PM secured Britain’s defenses first. And he had a little help in the attacking department from the Russians and the Americans. Anyway, it seems that Howes loves Winnie, even if he hasn’t studied the Anglo-American’s military leadership.
Churchill: “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”
Howes: “It’s a start that is far from the end. The next few months are all about GM solidifying its bottom in the United States and rebuilding relationships with employees, dealers, suppliers, customers, a skeptical financial community and even the government, whose take on GM’s chances for success is the short side of a slam dunk.”
Farago: “GM is a zombie. A dead automaker walking. Chapter 7 is only a bailout or two away. Deal with it.”
By saying it’s good to be back in the car business, perhaps he means that it’s good to not have to spend all of his time focusing on how he was going finance laibilities that couldn’t be financed (CFO type stuff).
In terms of Chap. 7 and more bailouts, won’t happen. Next time there will be private DIP financing from a chinese (state) corporation who will have no problem accepting all of the companies stock in return for it’s loan, and will have no problem dumbing pensions and UAW contracts (and probably american and canadian manufacturing) altogher and very quickly you become competetive. The US bailout was a defensive manuever, it gave time, what those people, companies and communities do with that time….(probably believe that GM will never be allowed to fail and everything will be ok).
MacInnis: We missed a helluva opportunity to let GM slip ‘neath the waves this year. As in (like the demented killer always says in the bad B movies….) “If you struggle, it will only make it more painful.”
BTW….I can hear the puzzlement in the RenCen from here in Elkhart, as this post is e-mailed from floor to floor.
“Farago? Thought we didn’t have to deal with him forecasting our doom anymore….”
“Quick: which GM products–current or forthcoming—are better than the competition?”
Uh,Camaro,CTS,Malibu, Acadia,2010 LaCrosse, 2010 Equinox, Terrain,Corvette, Silverado, Tahoe, Suburban…
Churchill again: Criticism may not be agreeable, but it is necessary. It fulfills the same function as pain in the human body. It calls attention to an unhealthy state of things.
Well, Dan does love Churchill. We were roommates senior year at the C.O.W. He used to quote Winnie all the time. History majors…
Anyway, Danno, you could send back my Herbie Hancock/Chick Corea Live direct-to-disc double album any time.
‘Chard
Yah,yah but what is the old car? I’m guessing a 40-ish Cadillac
Wow what a fresh new and compelling perspective. You’ve never written this story before, well at least not in the last 15 minutes.
>>Yah,yah but what is the old car? I’m guessing a 40-ish Cadillac<<
Cadillac? You gotta be kidding! It's a Humber.
Bridge2far
Camaro-seen 2 recent loses to the ‘Stang of al things.
CTS-have yet to see it win head to head vs the G37.
Malibu-you’re kidding, zip wins in comparo’s, rarely better than third often lower
Acadia-seen it beat the Pilot and CX9…and lose to them-draw.
Silverado-split 50/50 in comparos with the Tundra when new-new Ram has done well against it in tests.
2010nox und crosse? Has anyone put them head to head yet? Presumptive, me thinks.
Vette-bang for the buck, clear winner. Refinement not so much.
Tahoe & burb-Tahoe has gotten spanked in many comparos since new and Iv’e see about 50/50 split with the Burb and Expedition XL.
Not saying they aren’t valid choices but they are far from throw down hands.
And that is their strong products.
Factor in a public that is justifiably leery of GM reliability and most folks will not find a compeling reason to buy GM.
Zombie=GM
Just some thoughts.
Cheerio,
Bunter
@Bridge2far… I agree with tou 100%. While getting an oil change recently I walked around the local Chev dealer. We have some fine looking cars. I checked out fit, and finish on a new Malibu..perfect. I couldn’t find a flaw anywhere. And I DO know what to look for.
If GM fails,it won’t be, the fault of the product.
Bunter1,
That’s a good point. The cars named are competitive products, on the whole about equal to the competition, but nothing volume(profit)-wise that truly stands out.
That’s an improvement, but is it good enough? Is it good enough to recapture enough sales to be profitable?
A lot of people left GM and are happy with their new car company. It may take some screwups from the competition for people to give GM another try.
…and are we s quick to dismiss Volt, Cruze? Buick has 2 new vehicles coming down the pike. Cadllac too.
Cheerio
If GM fails,it won’t be, the fault of the product.
They already failed once, with pretty much the exact same product they’re selling now.
Oh right the “perception gap”.
mattstairs-exactly, not dissing the product but they have just gotten competitive in some segments. There are no vehicles like the Honda Fit that flat mop up the competition.
GM’s reliability, on the average (there are some good ones), is mediocre to poor.
Finding one of there products that is both design competitive and well above average in reliability (but it describes virtually the entire Honda lineup) is challenging, nearly futile.
Take the CTS for instance, great car but CRs survey has shown poor reliability. Why should a satified owner of another make take the risk?
The ‘Bu? Good car, not great, reliability is a bit above average, not great (so far)? Why would a Camcordima owner even look?
The Fusion, on the other hand has had outstanding reliability and the refresh is very competitve. Worth a shot maybe.
Until GM really addresses reliability and has competitive designs across the board, with a few that look like world beaters to people that are not GM centric, they will lose market share.
They do not have the time to do this, IMHO. Ergo, they are dead. Again. 3-5 years.
Love and bullets,
Bunter
moedaman +1
Bridge: again, unproven future product is…what.
Sorry, I just don’t think GM press releases are a good indication of whether these products will be superior (Volt, Cruze etc).
Might just be me…
Bunter
Mark MacInnis :
September 25th, 2009 at 11:04 am
MacInnis: We missed a helluva opportunity to let GM slip ‘neath the waves this year.
And I’m sure that all those hundreds of thousands pf people who would have been tossed out of work would have regarded this as an “opportunity” in disguise as well, right?
The core competency of GM over the past few decades has been the design of products that fail quickly and predictably, in order to get loyal American buyers back into the showroom. They have this down to a science, just about every potential customer has figured it out, and until they ‘fess up and demonstrate that they are doing business different [sic], who cares how competitive the models rolling off the showroom floor are? The latest offerings can win all the Motor Trend accolades and JD Power 3-month quality surveys they want, but they’ll still have trim hanging off and power windows shot when the 5-year clock rolls around. Same old same old.
FreedMike:
And I’m sure that all those hundreds of thousands pf people who would have been tossed out of work would have regarded this as an “opportunity” in disguise as well, right?
Me: Given that people are going to buy x amount of vehicles, exactly how does keeping this rotting carcass in existence preserve jobs? It only preserves GM jobs, while preventing more deserving manufacturers from growing and adding jobs. Zero-sum game and major union vote payback. Now more than ever, what’s good for GM is good for America.
Truckducken :
September 25th, 2009 at 2:36 pm
Me: Given that people are going to buy x amount of vehicles, exactly how does keeping this rotting carcass in existence preserve jobs? It only preserves GM jobs, while preventing more deserving manufacturers from growing and adding jobs. Zero-sum game and major union vote payback. Now more than ever, what’s good for GM is good for America.
Yes, this company jacked itself up so badly that under normal circumstances, it deserved to die. But these aren’t normal circumstances, are they? No company this big, with this many workers, has ever failed, and no company this big has failed during as severe a recession as the one we are in now. The consequences of a GM liquidation would have been apocalyptic for our economy, and it would have caused untold misery for hundreds of thousands of our fellow citizens.
And since no carmaker in the world is in a position to absorb GM’s lost production right now, the consequences to automotive buyers would have been immediate and obvious: less supply, less competition and higher prices.
In my 45 years, I’ve had plenty of times to stand on principle, but there are times to set aside what you believe, hold your nose, and do what you need to do to survive.
Put differently: what’s more important: our need to prove we were right all along about GM, or our country’s need to have a manufacturing base?
Interesting we should be bandying about Winston Churchill here. England in 1940 and GM today have a lot of parallels.
Churchill led a nation that, frankly, deserved to lose World War II. Look at the historical evidence:
1) England helped enable the Germans to go on a continental conquest because they didn’t have the balls to go up against them militarily.
2) England’s ally was France, a militarily incompetent nation whose main defense strategy against Germany was built around the Maginot Line, a piece of WWI-era strategic thinking (i.e., trench warfare) writ large. But who could have predicted that the Germans would just bypass the whole Maginot line and enter France through Holland? Whoops.
3) England’s war machine, in terms of most materiel and manpower training, was nowhere as good as Germany’s – a result of poor political decisions on Churchill’s predecessors. The only exception was in aircraft, a lucky break for England.
4) In England’s first encounter with the Wehrmacht, they got their asses handed to them and ended up having to evacuate their army on any boat that would float across the English Channel. The bulk of their army’s materiel was left in Holland.
Talk about a country that deserved to fail! No wonder many Americans resisted entering the war on the British side – aside from the Battle of Britain, they hardly distinguished themselves as a potential military ally, and it was obvious that it would take vast amounts of American resources (and blood) to turn things around.
And even if we did succeed in helping the British, they still had to face down a radically superior enemy that had already kicked their asses off the Continent, and gone on the biggest conquest spree since Napoleon.
And let’s not forget: these were the guys who burned Washington to the ground 130 years before World War II.
For all these reasons, “Let ’em fail” was an entirely logical argument in 1940. Flash forward to 2009, and it’s an entirely logical argument with GM as well.
And it would be the worst move possible.
Given that Henderson is a GM lifer—former GM CEO Rick Wagoner’s clone and hand-picked successor—what the hell was Henderson doing until now? What business was he in, exactly?
I believe a certain Mr. J. Clarkson has an answer to this since he has, more than once, referred to GM as a pension and health care company that has an loss-making car building business on the side.
“It’s just really good to be back in the car business.” Fritz Henderson
“I’m ready for my close up, Mr DeMille.” Norma Desmond
Not sure about the WW2 British mentality versus present day GM, FreedMike.
The reason is simply that British war production peaked in 1940. Even my Dad, a college student in 1940, had to work at repairing damaged Spitfires and Hurricanes in the summer, as a production coordinator. Making sure the right parts were at the right place at the right time on a rebuild line outside Oxford. The nation was mobilized. It’s called fighting for your life. Everyone who could was doing their bit. My Mum was a fire warden on a factory roof at night during the Blitz, while working in an insurance company during the day. Those folks needed help, and were grateful for it when it came from the US and Canada.
Present day GM? Is everyone working hard and fighting for their life? Simply getting on with it? Seems like they are more worried about a perception gap, as they see it. The Brits were worried about a perception gap in the US, all right, but they didn’t swan around complaining. They got on with the job, whilst lobbying like mad as well. Their focus was clear, and Churchill crystallized it.
Where is the GM leadership in this time of crisis? Fritz is as unfocused as ever, with no real plan, and the Chairman of the board Ed “wit-aker” seems to think that wandering about an office offering 60 day free trials is the answer to all GM’s problems. They don’t seem to get that they need to connect at a basic level with their customers; instead they harangue them for not getting the notion that GM vehicles are just the bestest in the whole wide world. Out of touch or what…
BTW, the German war production peaked in 1944, when their backs were against the wall. Hitler’s war is a favorite study of mine, and I have well over 300 books on one aspect or another of the conflict.
“England helped enable the Germans to go on a continental conquest because they didn’t have the balls to go up against them militarily.”
One of the things that I noticed during our travels in England and Scotland were the WW1 memorials in virtually every city and burg. The British suffered enormous losses in the First War, so it is not difficult to understand that their citizens were in no hurry to repeat.
Hindsight gives clarity, that is not available in the present.
Still not buying the “GM is zombie” line.
Had the chance to interview a member of the Camaro engineering team at the New York Auto Show a few months back. Asked him how people could maintain morale during the darkest hour in GM history. He said they knew what products were coming up and they believed in them.
As I noted responding to a different article, I can’t think of a single Toyota product that is an absolute class leader. Right up there, sure, but I’ve seen Toyotas fall short in comparison tests, the scoring of which is usually so close that the top three are often about equal. Outright wins don’t matter as much as close scores. And when Malibus and CTS’s are achieving those scores, progress is being made.
Hyundais don’t score highly in the magazines either, but tell me their stuff isn’t competitive.
But there’s one thing that might render all of this moot. In the second quarter of 2009, 72% of GM’s sales were outside the United States. The sale of Opel might have a bigger effect on GM’s future than anything going on here.
“England helped enable the Germans to go on a continental conquest because they didn’t have the balls to go up against them militarily.”
I sure hope Vlad Putin isn’t reading this – especially with reporters from around the world wondering if Obama will “Man up” on Iran. Ho won’t: beauty queens rarely have balls and generally retire to being community organizers. Obama’s just come the other way.
wmba :
September 25th, 2009 at 6:59 pm
Not sure about the WW2 British mentality versus present day GM, FreedMike.
The reason is simply that British war production peaked in 1940. Even my Dad, a college student in 1940, had to work at repairing damaged Spitfires and Hurricanes in the summer, as a production coordinator. Making sure the right parts were at the right place at the right time on a rebuild line outside Oxford. The nation was mobilized. It’s called fighting for your life.
Well, yeah, that’s what the British had to do because they a) failed to stop Hitler at Munich, b) sided with a weak ally who got its ass kicked in a matter of weeks, and as a result, c) had to evacuate their own army on the fly in anything that would float. I give them props for fighting so bravely, but it was their own failures that put their backs against the wall.
The parallel is this: Britain in 1940 and GM in 2009 are two entities that needed bailouts to survive, and given the performance of each entity, it made perfect sense to say “no.”
But what would the consequences have been for the world if we’d abandoned Britain?
Sometimes you have to look beyond what’s logical and do the right thing.
jimmy2x :
September 25th, 2009 at 11:23 pm
“England helped enable the Germans to go on a continental conquest because they didn’t have the balls to go up against them militarily.”
One of the things that I noticed during our travels in England and Scotland were the WW1 memorials in virtually every city and burg. The British suffered enormous losses in the First War, so it is not difficult to understand that their citizens were in no hurry to repeat.
Hindsight gives clarity, that is not available in the present.
Helps prove my point – the logical thing to do isn’t always the right thing to do.
Given the vast amount of suffering in WWI, Britain and France had every reason to be reluctant to stand up to Hitler.
And in 1940, the logical thing for Churchill to do would have been to sue for a separate peace with Germany.
Flash forward to 2009: given the GM’s performance, there’s every reason to tell themselves to sit and spin. And yet, doing so would have been an epic mistake.
What do these three unrelated stories tell us? Sometimes, the logical move is the wrong move.