Yesterday’s New York Times published an article dissing Detroit in the Breakingviews.com bit of their Business Section. In a stunning if perhaps singular piece of journalism, the Gray Lady affirms TTAC’s nine-year rant record of castigating Chrysler, Ford and GM for refusing to remove their rose-colored glasses. In fact, Anthony Currie calls Motown’s mavens a bunch of deluded, delusional and/or deluding dunces—albeit in that gently chiding, hugely condescending, entirely arch way that typifies the Times. To wit: “It did not take long for Detroit’s carmakers to return to one of their favorite pastimes. As General Motors approaches 100 days since emerging from bankruptcy, each of the Big Three’s bosses has been indulging in painting rosy scenarios for their firms. But like pronouncements past, they’re a tad premature.” I used to play tennis with Tad Premature. Smashing fellow. A bit too cocky. Anywho, Currie starts his diatribe by taking Ford’s semi-canonized CEO to task for predicting a phantom sales revival for the end of 2009 (who saw that one not coming?). Followed by the usual FoMoCo fellating. Still, point taken. As for Chrysler and GM . . .
Currie begins his broadside against the nationalized automaker with a kiss for Fritz: he lets CEO Henderson’s team off the hook for running GM into the ground (even though it was they what did it). Even when it comes to General Messup, the girl can’t help it. A box of glazed donuts has less sugar coating.
But G.M. is still dealing with some of the mess that clogged its engine before bankruptcy. It still has some 10,000 more workers than it needs. And while it has finally managed to sell Hummer to Sichuan Tengzhong Heavy Industrial Machinery [really?], the failed sale of Saturn means G.M. could face costs of more than $100 million to compensate dealers.
And G.M.’s sales figures look horrendous, falling 47 percent in September. The good news is that last year’s showing was a result of huge incentives — slashed by $1,300 per vehicle this year — that increased market share to an unsustainable 29 percent.
Nicely played! Still, by Currie’s own admission, his piece presents GM through tinted eyewear.
Even putting a positive spin on it, though, cannot mask the fact that overall industry sales are still below where G.M. estimates it can break even — about 10.5 million a year — let alone make a profit. More sales and a few good quarters will probably be needed before talk of a public share sale is warranted.
Something tells me Currie’s a big fan of English understatement. In any case, Chrysler gets the worst treatment, as it’s now run by an Italian and it doesn’t have a hope in hell of surviving.
But it’s at Chrysler where expectations and reality diverge most. The chief executive, Sergio Marchionne, who also runs Fiat, expects Chrysler to be profitable within two years and possibly to seek a stock market listing. That seems a tall order . . .
Mr. Marchionne insists that Chrysler is not “bleeding” terribly. And the carmaker’s cash-for-clunkers showing was probably stymied by a lengthy furlough of its factories. But with few new products and no information on either finances or a business plan, which is expected in November, his claim of profitability rings hollow.
Currie’s conclusion: Detroit suits should STFU.
As car sales improve for the industry next year — as virtually all analysts expect them to — so should the Big Three’s fortunes. But if there’s one thing car company bosses should have learned from the last few years, it’s that Motown’s upbeat predictions invariably disappoint. They’d do better to keep quiet for the moment.
The top GM execs love the soundtrack from Annie. I think they’ve been playing “The Sun Will Come Out Tomorrow” at company meetings for 30 years now…..
rmwill
I am no longer responsible for comment moderation.
You know it would be absolutely stunning to see any outlet aside from the interwebs call these companies out in a truly blunt manner. It will never happen, but still. This piece from NYT isn’t exactly incendiary.
Once again, the New York Times successfully states the obvious. Huzzah for the alleged “Newspaper of Record.”
Hey the Italians think nothing of paying a lot of money to look good. Just ask the 10 Frenchmen killed in Afghanistan after the Carabanari moved out.
As a fairly frequent reader of this sub-column, it is important to note that its a regular op-ed type piece, and not representative of NYT’s editorial staff opinions which have been far more accommodating to the big three for reasons I cannot fathom. The breakingviews.com writers tend to be generally insightful.
a phantom sales revival for the end of 2009
That certainly is delusional. I don’t know how the post cash-for-clunkers market could possibly stage anything resembling a rally. Treading water would be an accomplishment. Ignoring discussions about emissions and whatnot, the fact is that cash for clunkers was exactly like the incentives that the former Big 3 used to love and which played a big part on their downfall.
Ford will hold up the best, GMs results will be grim, and Chrysler will be at ‘where’s that crashcart’ levels. I know that’s not exactly an out on the limb prediction.
Rod Panhard :
October 16th, 2009 at 10:23 am
Once again, the New York Times successfully states the obvious. Huzzah for the alleged “Newspaper of Record.”
We all have to remember that the average NYT reader is NOT a gearhead, and while this article restates the obvious to many of us, the average person may not be nearly as aware.
As much as I agree that auto execs continue to blow smoke in their public statements, I can’t think of any exec in any industry who tells a tale of despair and keeps his job. I don’t expect the public pronouncements of these guys to be full of cold, honest truth about the grim prospects of their business. Their public role is to be cheerleaders, and as such I pay little attention to the words out of their mouths. The real truth will only be found in the legal documents that must be filed under the risk of criminal and/or civil penalties. Now if we get reports from insiders that these guys continue to paint blue skies and rainbows to the board and top execs, that would be a serious concern. But I’ve worked for several large corporations, and I’ve learned never to expect anything but rosy promises of ponies and ice cream from mgmt in any kind of public channel. Truth is spoken only off the record.
Rod Panhard :
October 16th, 2009 at 10:23 am
Once again, the New York Times successfully states the obvious. Huzzah for the alleged “Newspaper of Record.”
jimmy2x is correct… most NYT readers are not gearheads. Also… other than on Web sites like this, have we really seen any mainstream media outlet actually connect the dots and make this point about Detroit? The Times piece is useful.
On a separate but related point, no one can truly predict the future. Granted, most of us on this site were predicting a GM bankruptcy for years. But it’s possible had the economy and financial markets not collapsed when they did, GM might have squeaked through. Maybe. We’ll never know. As for the “new” GM (and Ford and Chrysler as well), they make make it. They may not. But one thing is for sure: Management had better wise up and learn to under-promise and over-deliver.
“Mr. Marchionne insists that Chrysler is not “bleeding” terribly”.
Well, once you’ve lost all your blood….
“Shot the fsck IP?”
The file system check utility doesn’t usually have an IP address attached to it, and even so, how would you shoot it?
And what does this have to do with the auto industry?
@Axel: +1 for IT humor on a car website.
NYT: Chrysler
“In September, sales slipped 42 percent even though the company was offering an average of $4,200 of incentives per vehicle, according to Deutsche Bank. About two-fifths of sales were to fleet buyers.”
Chrysler dead man walking. Dealer cuts really a good idea?? Hmmmm, retarded to kill so many, the cars still need to be heavily discounted to be moved even in the slightest. With more dealers maybe they would have been moving a lot more.
I don’t appreciate hard words.
TTAC, why so long on the posting approval? Do I need to provide a screenshot to prove my point?
But I’ve worked for several large corporations, and I’ve learned never to expect anything but rosy promises of ponies and ice cream from mgmt in any kind of public channel. Truth is spoken only off the record.
Ding, Ding, Ding…. We have a winner!!!
On another note, here’s what I find interesting…. If you’re mad at the US auto industry, you must be ready to commit unspeakable acts to bank CEO’s that just received record bonuses.
We live in a sea of lies. It is a constant struggle for even the best of us to find reality.
@Telegraph
At least yours was posted.