The most definitive difference between Chrysler’s swift conversion from Old to New Chrysler and the General’s “reinvention”: the element of surprise. Or lack thereof. The General’s list of creditors on GM’s court filing (dealers, parts manufactures, advertising media, bondholders, et al.) are all painfully aware of what happens when “The Fix” is in. They now know what it means when The President of the United States promises the public that “we will get this done in a swift and expeditious manner.” Forewarned is forearmed. And there’s another crucial difference between Fiatsler’s transformation and the plans for Government Motors: the GM dealer body is a wealthier, more connected group of businessmen than the Chrysler dealer body. In other words, “Old” GM may not go so quietly into that good night.

While much has been made about GM’s financial face plant, the automaker’s dealer body as a whole has enjoyed decades of immense profits, largely on the back of Suburbans, Tahoes and Silverados. The GMT900 SUV platform wasn’t enough to save the corporate mothership, but it’s been a profit center to the GM dealer that the public cannot even begin to fathom.

When the new Suburban was introduced in 1992, the majority of the metro GM dealers retailed the product for up to $3,000 over MSRP. For several months. The Y2K Suburbans and Tahoes were sticker plus units. I recall buying three new Suburbans from Troy Aikman Chevrolet for full MSRP, titling them on my dealer license and selling them to dealers that same week at the Dallas Auto Auction for $1,500 over MSRP. When the supply caught the demand curve, dealers discounted the model—all the way down to full MSRP. Dealers still made thousands of dollars per unit.

The same story unfolded for the Suburban’s horizontally-challenged little brothers (Tahoe/Yukon). The truck trough didn’t dry up even (especially?) when GM built a $75,000 Suburban called Escalade EXT. The Suburbans delivered huge profits to dealers all through the ’90s, into the next century. Same story for GM’s pickup trucks, only more so. If the gas price shock hadn’t happened, if the economy was still relatively robust, a GM franchise would still be a license to print money. Why do you think there were so many of them?

Up until the crash, GM dealers amassed huge fortunes. They used this money to gain tremendous political power, on every level (local, country, state and federal). As TTAC points out, car dealer cash fueled the political ambitions of presidential aspirant and current Secretary of State Hillary Clinton. Some dealers, being dealers, pissed-away their money. Others, many of whom recently received their walking papers from GM, have a significant war chest and an embarrassment of riches stashed in the political favor bank. As you can imagine, they’re not afraid to use either.

GM dealers witnessed the shellacking that Chrysler dealers just received. Even the ones that survived the recent dealer cull know that their time may be at hand. The Chrysler dealers took a few swings at the Obama politico machine but did not have the raw muscle to connect their punch. Take it from me, the GM dealer body is tooled-up, ready for a brawl.

Chrysler was “sold” to Fiat, the UAW and American taxpayers. There is no “buyer” for GM other than the feds. It’s just a default with a forgiveness. This would be a realistic strategy—if The General was not disowning a large percentage of its dealer body during this transition. But they are. Which puts the company’s new owners, politicians, straight in the middle of the dealers’ crosshairs.

The General’s bankruptcy will get hamstrung in court. The National Automotive Dealers Association and state dealer associations are going to have more success wrestling this bear back into its cage than we saw with Chrysler. GM’s C11 is in real danger of becoming so convoluted with legitimate legal concerns that the bankruptcy will end up converting to a Chapter 7 liquidation. The brands and assets will be carved out into packages and sold to the top dollar suitors.

The news story of the future is not which dealer was terminated but that all dealers are suspended until the liquidation sales have commenced. Dealers will put on their best-pressed suits to court the new owners of their family heirloom name plates, while rapidly encouraging them to become their districts’ new Chevrolet, Cadillac, Buick, Hummer, and possibly even Pontiac dealers, just as many of their grandfathers and great grandfathers did in the middle of the twentieth century.

Either that or The Presidential Task Force of Automobiles will dip into the public purse once again and arrange enormous payouts to abandoned dealers. After all, politicians can resist anything except political pressure. But any such payoffs will worsen GM’s reputation as a welfare queen, and sour voters to the whole project. No matter how you look at it, this dog won’t hunt.

You know what I loved most about car advertising? There was never a shortage of money to play with. I’m no longer tracking these things, but in 2007, GM spent $3 billion on what we call “measured media” alone. Measured media is defined as television, print and outdoor advertising. The unmeasured expenses, what’s called “below the line,” in the vernacular, are usually just as huge, maybe bigger. Above and below the line, GM must have spent the GDP of Mongolia on advertising.

Volkswagen’s budget resembled the GDP of a much smaller country, but I thoroughly enjoyed helping them to put it to good use.

One of these big ticket “below the line” activities are launch events. Read More >

A week ago, we predicted that Volkswagen, buoyed by stellar numbers, would soon swat nuisance Wiedeking once and for all. It didn’t take long. Ferdinand Piech, chairman of the supervisory board of Volkswagen and co-owner of Porsche, pulled out a big gun and put it to the head of Wendelin Wiedeking, CEO of Porsche (and theoretically Piech’s employee). Piech said (we are paraphrasing in the interest of brevity): “Say uncle by Monday. Or you’re dead.” Nice family.

According to Der Spiegel, VW and the state of Lower Saxony set Wiedeking a deadline. If he doesn’t accept the offer by Monday, Porsche’s already dire financial situation will become untenable.

The joint ultimatum goes like this: VW buys 49 percent of the Porsche AG for anywhere between €3 and €4 billion. The money goes to the Porsche Holding, of which Piech owns a good chunk. As a next step, the Emir of Qatar will buy the options for 25 percent of VW stock, which are held by the Porsche Holding. Then, VW and Porsche will merge.

When everything is said and done, the Porsche/Piech families will end up owning more than 40 percent of VW-Porsche, Lower Saxony will keep its 20 percent, Quatar will have 15 percent, another unnamed sovereign wealth fund (any guesses?) will hold five percent. Less than 20 percent will be publicly traded, which should keep the stock scarce and high.

This plan is the joint work product of VW CEO Martin Winterkorn, VW CFO Hans Dieter Pötsch, Lower Saxony’s Premier Christian Wulff and of course Ferdinand Piech. Der Spiegel didn’t name sources for the story. The details of the transaction are fine grained. There must be a big leak in the executive washroom on the top floor of the Volkswagen Hochhaus.

What if Wiedeking says no? Will he find the head of a horse in his bed? This is Germany, and the dealings are more subtle: If he says no, VW will recall its €700 million loan they had given Porsche last March to save them from bankrutptcy.

Should it come to that, the Emir of Qatar will walk. He made clear that he’s only interested in a Porsche-VW company where the owners share a common goal and are off each others’ throats. With the Emir gone and the loan recalled, Porsche AG (the car company) is DOA. If Wiedeking gives in, his job is DOA.

The story jibes with the information collected by the Süddeutsche Zeitung. Bankers told the SZ that Qatar has its eyes on big Volkswagen. They were only talking to little Porsche to get their hands on the VW options. To sweeten the deal, Qatar could deliver a chopped head to Wolfsburg: Wiedeking’s. Qatar doesn’t want to “fight with Wiedeking against the rest of the world.” To win over Piech and Lower Saxony, Wiedeking has to go. Judging from the ultimatum, Piech, Lower Saxony, and Quatar are already in agreement.

There is no other white knight that may ride to Porsche’s rescue. Daimler was rumored to be interested. Today, Daimler’s Zetsche gave Die Welt an interview and Porsche the cold shoulder: “If we would be interested in Porsche, we would tell them.” And: “Porsche is closely integrated with Volkswagen’s activities. It doesn’t make sense contemplating to replace this integration with another one.”

Zetsche also intimated that Porsche had leaked the possible link-up with Daimler: “I can understand that spinning the same story again and again can get boring. One likes to drop other names.” In other words: Porsche, get lost. Daimler has its own problems.

So what’s left for Porsche? All they can do is fume.

“Porsche’s chairman is furious with Volkswagen AG. Wolfgang Porsche said in a statement Saturday that the sports car maker would not be “blackmailed” into a merger with VW,” Automotive News [sub] writes.

More than miffed, Wolfgang Porsche flames in the direction of Wolfsburg:

We are deeply concerned and irritated by the wording of the ultimatum. The 21st century is not the time for ultimatums. We wonder what the whole matter is really about and whether the focus is still on our common cause at all.

We will not give in to such pressure or blackmail. Such action does not help anybody. It is detrimental to the entire cause. This is not the way to support and uphold common interests.

We sincerely hope that the perpetrators of the ultimatum, in consideration of our common interests, calm down again and follow up their proposals in internal discussions and not through headlines. We are open to such talks at any time.

The missileve was co-signed by Uwe Hück, Wolfgang Porsche’s deputy on the board and representative of the worker’s council. Workers and managers, unite! They must have been close to tears when they wrote this. All smugness is gone. The strongly worded protest confirms that Der Spiegel has its details right.

On Friday, Porsche had bragged it was close to reaching a deal with Qatar. At the same time, Qatar, Piech, and Lower Saxony got a little cozier. Now, all that’s left to Porsche is to whine and to invoke noble principles. It won’t work.

Thaddeus writes:

I’m looking to build more in depth automotive knowledge, and I think that (re) building a motor in my Manhattan apartment is a great first step. (Wife be damned.) With the hot summer coming around, and no vacation days left, this would also be a great summer hobby to keep me inside and cool.

I’m currently thinking about finding an old Ford flathead, as know how, and books on these is readily available–do you have a better suggestion? I’m looking for a block that’s well documented, has parts, or spares to be had, and won’t require a CompSci degree to fix or tune . . .

The end state of this project is to put it into some sort of hotrod, but that’s another question–for when I have a bigger apartment.

PS: Sub question…should I even attempt to fire this thing up inside if I get it built?

Read More >

Communist witch hunters called Americans who supported the battle against Francisco Franco before World War II “premature anti-fascists.” In other words, they were right for the wrong reasons. There’s a lot of that going around these days. For example, Chrysler and GM’s claim that they need to cull dealers is spot on. But trimming overheads, as the automakers claim, ain’t it. [See: number three after the jump.] By the same token, it’s also true that New GM is doomed to failure. But not for the seven reasons that Seeking Alpha sets forth. Still, Jason Mathew’s analysis is worth a closer look . . .

1.) $1400 in per vehicle costs went untouched to ensure re-election and voter satisfaction rather than shareholder value

Not exactly. GM’s “reinvention” is facilitating a rapid decrease in the number of GM employees (despite Senator Stabenow’s “jobs, jobs, jobs!” pro-bailout rallying cry). Many of these disappeared have agreed to buyouts that limit their pensions. In any case, as the employee count decreases, as the old guard shuffles off to the great assembly line in the sky, GM’s pension costs are going down. Pension costs for retirees come out of the pension, not GM’s bottom line. For whatever that’s worth.

2.) Bankruptcy court ruling did not establish labor rate parity with Toyota (TM) or Honda (HMC)

GM’s direct labor wages were already close to parity with the transplants. As TTAC’s Ken Elias taught us many, many moons ago, the domestic automakers set the bar for automotive assembly workers’ hourly pay. GM’s real excess labor costs: the Other Post-Employment Benefits (OPEB) paid out to GM’s massive retiree base (e.g. health care). The real labor problem: highly paid workers who don’t contribute bupkis to production (thank you UAW work rules).

3.) Reducing dealer count will have nominal impact on GM’s cost structure yet significant downside impact on market share

Dealer count, market share, dealer count. Chicken egg chicken. GM needed to cull dealers to eliminate overlap, lower inventory costs and kill brands (to focus branding, products, marketing, etc.). In theory, less inventory on the ground should reduce GM’s carrying costs, reduce bureaucracy (improve accountability) and speed-up cash flow/turnover.

Any way you look at it, there are too many GM dealers to support the bankrupt automaker’s diminished—and diminishing—market share. What’s not clear: whether GM can sell the same number of vehicles (at retail) with fewer dealers. Or, if you prefer, what is the right number of GM dealers? I’m not sure I’d want the same GM suits who were working the old dealer system without complaint to establish the new one. In fact, it’s a really bad idea.

4.) Government and UAW as majority owners = poor management

Ya think? But the United Auto Workers (UAW) likely won’t have, nor do they desire, a strong influence on GM’s management. For one thing, the UAW doesn’t want accountability. The more it interferes, the less it can bitch and moan and (when needed) duck and cover. They’ve done just fine without saying anything about GM’s current plans. Why start stopping now?

Besides, the UAW’s “independent” union health care VEBA owns GM stock, not the UAW itself. The UAW has publicly stated that it just wants to get full value for its stock and cash-out ASAP. Believe it or not, I believe them.

[Seeking Alpha’s scribe would have been better off just saying “Government = poor management” and be done with it.]

5.) GM will be at a strategic competitive disadvantage with no ability to financially engineer sales with 0% loans and extend consumers credit

Wrong. GM will not be at any disadvantage in this regard; GM pays GMAC for those financially engineered deals, and the government more or less owns both organizations. Bottom line: if GM wants to hold fire sales, toe tags sales, zero percent deals, cash back specials and get America rolling promotions, you, the taxpayer will pay for it.

6.) GM Europe operations will only get worse, supply base is weaker than the U.S. and surviving brand equity is weak

Huh? GM’s off-loading its European operations to someone at some point soon. Or not. Either way, the corporate mothership is busy washing its hands of the whole deal.

7.) 35-MPG energy requirements in 2016: GM currently has one vehicle that meets that standard today

First of all, loopholes. Lots and lots of loopholes. Secondly, do we seriously expect the Feds to put its $50 billion investment in GM and Chryco at risk by regulating GM (a.k.a. themselves) to death?

The real problem for New GM is the same one that led it to its first bankruptcy: it doesn’t know how to make the products that Americans want to buy at a sufficient profit to take in more money than it spends. In other words, it can’t compete. To think that a government-run GM can make that happen when a privately held GM could not is the worst sort of folly. The folly for which I have to pay.

David Holzman writes:

There was a killer traffic jam on the way into the Holland Tunnel from the NJ [turnpike] last weekend. I covered a mile and a half in about 40 minutes. At the start of that jam, my 99 Accord (manual and 159k) began overheating. When the scan gauge said the temp was 231, I put the heater on full blast, and kept it there, which brought the temp down below 216. (In normal driving, the temp stays within a few degrees of 182.)

In Manhattan, I tried putting water in the radiator, but it only took about 2 cups before it was full. Leaving Manhattan, traffic was thick but not stop and go on the West Side, and the temp remained in the 190s-200s (I can’t remember if I had the heater on or not at this point), and once the highway was clear, the temp remained below 190 and mostly around 182 without the heater on all the way back to Boston–as it had been from DC to the Holland. Haven’t had any trouble driving around town since. Car has a 3 month old t’stat. I took it in, and they couldn’t get it to overheat. Any ideas?

Read More >

By all accounts, the refreshed Ford Taurus is an excellent car. Easy-to-drive, economical, well-built, comfortable, capacious and handsome. As a sign of its pre-launch success, the vehicle’s critics are focusing on its sticker price. As a firm believer that something is worth exactly what someone will pay for it, it remains to be seen if Ford’s priced the refreshed Taurus out of the market. Meanwhile and in any case, Taurus Gen 6 won’t “save” Ford like the 1986 model. The 2010 Taurus may be a singular automobile, but it is not a signature automobile. To survive in today’s crowded, shrunken, hyper-competitive new car market, Ford needs vehicles that clearly differentiate the brand from the competition; and marketing to match. Ford recognizes the problem but fails to rectify it.

“Drive the Ford Difference.” Well, exactly. But what is the Ford difference? Even as The Blue Oval Boyz spend millions promoting their latest brand slogan, they continue to struggle with its meaning. The tag line’s tortuous evolution indicates their inveterate indecision. Lest we forget, “Drive the Ford Difference” has just replaced “Drive One,” which replaced a farrago of consumer exhortations: “Drive Quality,” “Drive Safe,” “Drive Green,” “Drive Smart.” Ford’s gone from pick a slogan, to an anti-slogan, to guess the slogan. The Glass House Gang is in real danger of descending into inscrutable, Coke-like zen koans (i.e., Ford is).

This is Ford CEO Alan Mulally’s Achilles heel, and you can see the protruding arrow. In terms of manufacturing process, Big Al has cleaned house: eliminating much of the corporate behemoth’s sloth, waste, fraud, duplication, bureaucracy, indecision, intransigence, etc. The $25 million man (first year) has also been lucky enough to prove that it’s better to be lucky than smart. The company’s rep is riding high on its decision to shun the federal bailout buffet—ignoring the fact that it only did so to protect to Ford family control and recently tapped a $5.9 billion, no-interest, taxpayer-provided “retooling loan.” More to the point, Big Al has done nothing to save the Ford brand.

Automotive branding—deciding what vehicles to build, how to build them and how to sell them—requires what George Bush famously called “the vision thing.” Mulally’s administration suffers from a failure to synthesize. In other words, truck buyers know the F-150 is built Ford tough (complete with its own logo). But how do you link that selling point with the 2010 Ford Fusion Hybrid’s claim that it’s “the most fuel-efficient midsize sedan in America®”?

Or the Mustang head vs. heart, heart wins campaign? And how does that jive with the Dirty Jobs guy’s claim that the Fusion beats the Toyota Camry and Honda Accord for quality? Meanwhile, the poor (but excellent) Ford Explorer is reduced to promoting roll-over protection while the Edge urges you to “drive past gas stations faster.”

Note: it doesn’t matter if any of these selling points are true. They’re just too damn many of them. The Ford brand stands for everything and nothing at the same time.

No surprise there. Big Al inherited a failing automaker rife with warring fiefdoms: corporate enclaves defined by country, brand, product, specialty and, of course, personal loyalty. Ford’s undeniable product excellence is not the result of a overarching corporate effort in any one direction; it’s the offshoot of individual pockets of excellence working to equally admirable but largely uncoordinated ends.

No question: Mulally has moved the entire organization towards a less inchoate structure; one where employees understand that they must reconcile personal ambition with what they have to do for the “greater good.” Unfortunately, efficiency is not a rallying cry upon which great organizations—or brands—are built.

Sure, Toyota gets maximum props (from Big Al as well) for its lean manufacturing system. But it’s product reliability that defines the Toyota brand for both its workers and consumers. Blessed with an overarching brand promise, ToMoCo is free to fuck up and recover. The FJ Cruiser may be a misbegotten platypus of an off-roader, but it didn’t ding the public’s understanding of the Toyota brand.

Bereft of focused, coherent and compelling branding, Ford has an almost infinite number of ways to fail. And few ways to recover. The Flex? What was that all about? How about, say, any Lincoln product? The Lincoln brand? Volvo? Mercury?

Quality, safety, fuel efficiency, technology, luxury, value. Must. Choose. One. Once that’s done, Ford has to build cars that embody that brand promise better than anyone else in the market—regardless of the cost. As I said when I drove the execrable, warmed-over Focus, Ford can’t afford to make money. Not when their brand is in such dire jeopardy. They should cut their portfolio to the bone, choose a shtick and use it to beat everyone in the entire company. And then sell the beJesus out of it. Relentlessly. Endlessly.

Frequent Piston Slap contributor Theodore writes:

I just put my 1992 Ford Thunderbird (V-6, stripper, ex-rental car) on craigslist, but I don’t know if I can really bring myself to part with it.

The automatic transmission is dying for the second time. Leaking badly, hesitates before going into gear, tries to downshift from fourth to third at 50-55mph, makes a weird sound that I can’t even describe except to say that it sounds like something is spinning way faster than it should. Its latest trick is a neat one: sometimes the whole front end will shudder while turning at low speed.

Is there any hope for the patient? Can the automatic be salvaged, or is a manual transplant possible? Practical? Sane?

Read More >

I can’t decide whether GM’s “reinvention” will fail through government action or inaction. On one hand, I share the commonly held belief that GM’s product portfolio will be skewed towards small cars, to satisfy the Obama administration’s love of all things green and beautiful. Even without express orders to do so, GM’s craven executives will seek to please their elected overlords’ politically-driven desires. On the other hand, paralysis. The last thing GM’s cumbersome, dysfunctional management needs is another layer of command and control—especially one where accountability is measured in votes and patronage, rather than dollars and cents. The tendency to do nothing slowly, as is the way of all government, is great. If I had to guess which way this is going to go, I’d say both.

There’s a superabundance of evidence that the Obama administration will actively intervene in GM’s affairs. First and most incontrovertibly, the feds are on the brink of nationalizing the company, assuming a sixty percent share of “New GM.” In fact, the administration’s promises to be a “hands-off” owner reminds me nothing so much as Rasputin’s philosophy: sin is the key to redemption. We have to be hands-on to be hands-off. You have to wallow in sin to know the value of repentance. We had to fire the CEO to find a CEO who could operate effectively without government influence. Same deal.

More metaphorically, the feds have broken their interventionist cherry. Why not continue to fuck with GM? The government’s already bobsledding down that slippery slope; from appointing the entire GM Board of Directors to killing brands to killing dealers. The Presidential Task Force on Automobiles (PTFOA) says the changes are necessary, but that it will back off when post C-11 GM finds it sea legs. In this case, momentum speaks louder than words. Once a pattern of behavior is established, continuing it is easier than changing it.

Ah, yes, change. In announcing its one trillion dollar health care reform package, the Obama administration is once again showing us its willingness to enter a realm formerly reserved for free enterprise. Just as Obama wants a federal health care program to go toe-to-toe with private insurers, a federally owned GM will be soon be competing with privately held automakers.

The rationale underlying Obama’s intermingling of private and public organizations: Something must be done! As Obama said today, “the status quo is untenable.” GM can’t fail. Health care can’t fail. Same deal. Here’s another quote:

The German and American New Deal may have been merely whatever Hitler and FDR felt they could get away with. But therein lies a common principle: the state should be allowed to get away with anything, so long as it is for “good reasons” . . . It represents the triumph of Pragmatism in politics in that it recognizes no dogmatic boundaries to the scope of government power.

Author Jonah Goldberg is dismissed as a right wing crank by his many detractors, but there’s no getting around the fact that president Obama is shunning free market principles to boldly go where Chrysler’s previous elected saviors didn’t dare go before (federal loan guarantees are a far cry from public ownership). The conflict of interest in is inherent. The same government that regulates the entire automobile industry will now have an enormous stake in one of its biggest players.

This will undoubtedly lead to unwelcome distortions, and, ultimately, disaster. Because even as the feds attempt to literally reform GM, they will be unable to institute the dramatic changes GM needs to survive. It’s not just a matter of political meddling, of which there will be plenty. It’s also a question of corruption.

If you think GM’s previous Board of Bystanders was incapable of policing GM’s arrogance, stupidity and sloth, wait to you see what won’t happen when Uncle Sam is paying the bills. Actually, there’s no need to wait. In today’s New York Times, we learn that the United States trustee overseeing GM’s bankruptcy case (another layer of management) called the fees collected by GM’s bankruptcy consultants “staggering” and “excessive.”

In one year, Alix Partners and Evercore soaked the taxpayer to the tune of $130 million, including a $17.9 million “success fee.” Oh and an as-yet-unknown “discretionary fee” with “no boundaries in amount and scope . . . calculated in an unknown manner.”

As anyone familiar with government procurement knows, that’s small beer. Suffice it to say, in this regard, New GM will not be a microbrewery. Anyone who thinks that the feds will cancel these fees—or institute the kind of product planning, brand building and financial controls that New GM needs to earn a profit—is as delusional as a government that thinks there will be a graceful exit strategy for this unbridled adventurism. There’s but one way out of this mess, and the Obama administration isn’t even looking for the door.

Adam writes:

Hi Sajeev, I own a 2002 Honda Civic Si Coupe 5spd. It has almost 140,000KM on it and I am trying to keep it in good health out of warranty. Recently I decided to go through all my service receipts to see what has been done so far to the car. I noticed (shockingly) that the manual transmission fluid has not yet been changed. There is a side note in the service guide to do this every 96,000KM or 36 months. But this service isn’t part of their regular A,B,C,D and E type service packages. Nobody in the service department EVER reminded me about this while owning the car. Furthermore, when I called my Honda dealer to ask about its importance, the service advisor put me on hold for several minutes to get second opinions.

Read More >

Did I hear someone ask “How about more capsule reviews such as a 1930 Ford Model A where 0-60 is measured with an hourglass?” At Curbside Classic we aim to please; I’m on it. And although I didn’t rustle up a Model A within 24 hours, I came pretty close: a 1936 Plymouth. The only problem is that the Plymouth never did make it to sixty. Read More >

Joe from Boston writes:

Here’s what happened to my 2003 Murano with 145k on the clock: the “service engine” light came on. So I took the car to dealer. They said the oil was low, and they put car on computer and said it needs a new engine, for a mere $7,000. I thought they were joking: they claim the computer says the engine is failing internally and there is nothing they can do about it. I had the oil changed and by my calculations, the car is consuming about a quart of oil every 1,400 miles.

Read More >

Did you ever hold a 70s vintage Volkswagen car catalog in your hands? You know, the ones without a picture of a car on the cover? Just “The Rabbit,” “Der Käfer,” “Le Golf?” One distinct color per model, that’s it? Yes, those were the handiwork of yours truly.

My cartalogs were even exhibited at the Smithsonian in Washington, D.C. In a “mass production” exhibit. A shockwave assaulted my artistic pride. After it had abated, I had to concede that the museum was right: We cranked the catalogs out in assembly line fashion.

At the time, I had advanced from lowly copywriter to the lofty title of Creative Director of our advertising agency in Düsseldorf, Germany. I was in charge of a horde of 20 creative types. Rumor had it that when it came to hiring, my decision making was guided by physical factors alone: Copywriters had to be big bruisers, engage in body building, martial arts, and motocross biking. Art Directors had to be thin, sicklish, and at least had to look effeminate.

The most important part in the creation of a new catalog was the decision where to shoot the pictures. Read More >

As part of its “reinvention,” GM wants to leave behind products liability claimants. “New GM” wants to jettison its legal responsibilities to “old” customers who were seriously injured by defective products—including customers who bought products from pre-bankruptcy General Motors who haven’t yet been injured. In this there is precedence. As I discussed here on my Bankruptcy Litigation Blog, Chrysler stiffed products liability claimants when they restructured post C-11. Is this going to be a case of deja vu all over again? Not if I can help it.

I’ve decided to step into the fray by filing this Objection to the GM Sale and this Memorandum in Support. On the brief with me is Public Citizen’s Adina Rosenbaum and Allison Zieve, counsel for the Center for Auto Safety, Consumer Action, Consumers for Auto Reliability and Safety, National Association of Consumer Advocates, and Public Citizen. I thank the Coleman Law Firm’s own Bob Coleman for his generosity in dedicating the firm’s resources to this important pro bono effort.

TTAC will be following my progress. Meanwhile, here’s a sample of my clients’ stories, taken from the filed objection. The only thing my clients did wrong: buy a GM car. For this act of brand loyalty, they have paid dearly. “New GM” should not be allowed to walk away from their “old” responsibilities.

[Keep in mind, this is NOT a debate over the underlying merits of how much GM is liable for, if anything, in any particular case. Rather it’s a debate over what a bankruptcy court is empowered to do by statute (the scope of section 363), by Congress (the scope a bankruptcy court’s jurisdiction), and by the Constitution (due process).]

• On August 17, 2004—a week before she was to start college—18 year old Callan Campbell was a front-seat passenger in a 1996 GMC Jimmy when the driver of the vehicle lost control while attempting to make a left turn. The vehicle entered a driver-side leading roll and rolled 1.5 times before ending on its roof. The roof collapsed over Callan’s seat, partially paralyzing her. The strength-to-weight ratio of the GMC Jimmy roof is about 1.9, which is among the lowest of all GM vehicles. GM’s own tests revealed that roof strengths in rollovers should be 3W to 4W. Callan’s paralysis could have been avoided at a mere fifty dollar cost to GM. Callan’s medical bills total $200,000 for the life-saving treatment she received immediately after the crash. Additionally, Callan’s parents have spent $160,000 renovating their home to accommodate Callan’s physical and medical needs as a C6 incomplete quadriplegic. A life care planner has estimated Callan’s current and future needs for extra doctor visits, medicine, durable equipment and home modifications at $4,518,831.00. An economist has predicted her work loss based on total disability at $4,120,538. Callan is also entitled to significant compensation for pain and suffering including loss of life’s pleasures, loss of dignity and independence, loss of the use of her limbs, and disfigurement.

• Kevin and Nikki Junso are the parents of Tyler, Matt, and Cole Junso. On April 25, 2006, Tyler and Cole Junso were involved a single car rollover accident while driving a 2003 GMC Envoy. During the rollover, the windshield and side windows were knocked out, reducing the strength of the roof structure. The Envoy sustained catastrophic damage to the roof structure, which buckled violently inwardly toward Tyler and Cole. Despite being belted, both occupants were partially ejected from the vehicle during the roll over. Seventeen year old Tyler, the driver, sustained massive skull and neck injuries and died at the scene of the accident. The evidence showed that Tyler’s head was partially outside the vehicle during the roll over sequence, due to the broken window and lateral displacement of the roof structure, and made contact with both the ground and the roof during the accident. The paramedics found Kevin, the passenger, with his left leg out the windshield and his right leg out the passenger side window. Kevin sustained serious injuries to his arms and legs, which eventually led to the amputation of his right leg below the knee.GM has been aware of the significant risks of “occupant excursion” if the safety mechanisms in its vehicles fail. Despite this knowledge, GM failed to introduce cost effective safety measures into its designs, which could have included side window plastics or laminates or seat belts resistant to excessive spool out. Not only has the Junso family lost a son as a result of GM’s failure to correct the strength instabilities in its SUVs, but Kevin has also lost his right leg. To date, Kevin has incurred medical bills totaling $555,204.19, and his future medical expenses are predicted to exceed $800,000.

• Edwin Agosto was driving his 2000 Chevrolet Blazer on September 22, 2008, when he lost control of his vehicle causing him to cross the center line and strike a tree. After striking the tree, the car once again crossed the center line and collided with a guardrail where it finally came to rest. Edwin’s airbags failed to deploy throughout the course of the entire accident. Because of that failure, Edwin suffered injuries including multiple spinous process fractures, a heavily comminuted fracture of the left scapula extending into his scapular spine and glenoid, multiple rib fractures, a humerus fracture, a subclavian vein injury, and a post traumatic subdural hygroma upon striking his head on the windshield. Due to these injuries, Edwin spent the next two and a half months of his life in a coma.

• Joseph Berlingieri was parked in a driveway on September 21, 2006 when the driver side impact airbag in his 1998 Cadillac DeVille malfunctioned and deployed. The air bag struck Joseph in his left ear, arm, and shoulder causing trauma injuries including hearing loss, tinnitus, and other serious injuries. The vehicle had previously been recalled for faulty side airbags, and after its repair was warranted to Joseph as being free from defect and suitable for purchase. However, the vehicle was not suitable for use, and was sold to Joseph despite the defective airbag mechanism.

[click here for more inside info at bankruptcylitigationblog.com]

That’s not exactly what GM CEO Fritz Henderson said to BusinessWeek, as part of the bankrupt automaker’s charm offensive. The exact quote was “I know I have to re-prove myself.” So, just as there’s a “bad” GM (the one that latched onto the federal teat) and a “good” GM (the other one that latched onto the federal teat), there’s now a “bad” Fritz Henderson (the one who weaseled his way to the top of GM’s dysfunctional corporate culture) and a “good” Fritz Henderson (the one who wants to reform the stultified system that spawned him). As we say in these parts, good luck with that. Those of our Best and Brightest who’ve seen large companies try to reform their not-so-wikkid ways will recognize the resulting lip service . . .

In the meantime, Henderson is tackling GM’s glacial decision-making process. A couple of four-hour meetings have been cut in half. Gone are the “premeetings,” when the agenda for the real meeting was set. “I don’t have time for that,” Henderson says. Delegation, never GM’s strong suit, is now an imperative. In early April, just after Treasury made him CEO, Henderson and several executives were discussing whether to add some pricey features to a future Buick model. Some wanted to save a few bucks while others figured they needed to step out and show consumers that the brand is truly upscale. After some debate, Henderson turned to Buick-GMC boss Susan Docherty. “You’re the vice-president of Buick,” Docherty recalls him saying. “Make the call.” She opted to spend the money, and that was fine with the CEO. “Fritz is creating a culture where we don’t need 17 meetings,” Docherty says. “In the old GM, we would have to hear from everybody.”

A couple of points . . .

1. Did Fritz have a pre-meeting before the meeting to decide whether or not to lose the pre-meeting before the meeting that eliminated the pre-meeting? What’s that about SEVENTEEN meetings? Is that hyperbole or “out of the mouth of bankruptcy babes”?

2. Where are the consultants? Promoting this kind of stuff—both internally and externally– is what helps America’s consultants afford/drive BMWs. Oh here they are!

Last month, Henderson hired Booz & Co. consultant Jon R. Katzenbach to help make GM’s middle managers less risk-averse and more willing to make decisions. Katzenbach and his team have begun scouring the company for mavericks adept at getting their ideas past a recalcitrant bureaucracy. Katzenbach asked each department chief to name five candidates. In most cases, he says, they aren’t top managers or people on the fast track. Typically they have toiled at GM for a long time and know how to game the system. The plan is to make their attitudes and work habits the norm, not just a rarity among the few who will buck the system.

Did I say “good luck with that” already? But rest assured that Booz & Co. understand automobiles. Well, engines. OK, “empathy engines.” Katzenberg’s paper is full of piercing glimpses into the obvious, but one of his bullet points is worth repeating vis à vis GM. “A fundamental misunderstanding, by a company’s executives, of the real nature of the customer experience their company provides.” How does Mandark laugh again? Haa ha haa, haa ha ha ha ha!!!

You want to talk about self-delusion?

In a June 1 blog post to employees, Henderson asked for suggestions and criticism. Several workers said people are afraid of challenging the status quo. When pressed in an interview on the culture of fear, Henderson said he gets criticism all the time, and then added: “I’ve never had a situation where people were afraid to speak up.” Maybe so, but that doesn’t mean managers further down won’t discourage new ideas from their underlings.

A perfect example of using “maybe so” to mean “you’ve got to be fucking kidding me.” Translation: Henderson is so insulated from genuine criticism, so drunk on GM Kool-Aid, he thinks he’s drinking coffee. A point which BW can’t resist making. Ish.

Henderson also says GM’s product planning group is just fine. Yet it has routinely missed major trends and rarely sets them. GM’s top-selling Chevrolet division, for example, is just this year launching decent crossover SUVs; rivals have been selling them for years. Plus, the product planners’ indecisiveness has led to many delays on new programs. It’s not that GM’s designers and engineers can’t work fast. They often wait for the “numbers dummies,” as GM product adviser Robert A. Lutz calls them, to hash over the research. By the time the green light comes on, GM has missed the moment.

So Lutz blames GM’s culture for his own failure. No wonder they’re keeping him on; he’s just stupid enough to blow the lid off of GM’s global incompetence. Of course, by thy bankruptcy thy shall be known, guys.