This one has less hilarity. But it is German, I mean germane to The Truth About Cars.

1973, at the tender age of 24, I defected to the enemy. BS, the former muckraking journalist, became a copywriter in a hotshot advertising agency. As the saying went, I didn’t sell out, I cashed in: As a junior copywriter, I was paid twice as much of what I had made before as the editor in chief of a muckraking journal.

Raking muck had paid shit. Advertising was paradise. Work was easy, no more nerve-racking and downright dangerous undercover research, just sit and write. Powered by pilsener. Soon, my salary multiplied. Times were good.

They put me on the Volkswagen account. I didn’t have the vaguest idea about cars. I didn’t even have a driver’s license. This qualified me as an utterly unbiased and unbelievably gullible tool of automotive propaganda.

One of my first jobs was to launch a new Volkswagen with a funny name: “Golf.” Read More >

We the people now own about 60 percent of General Motors. Thank God. I know the old joke about being from the government and here to help; I’m familiar the anti-socialist swell that’s been rising since Obama’s inauguration. I am also convinced that right now federal control of what was once the world’s largest car marker could be the greatest thing to happen to the company since Alfred P. Sloan.

Putting aside the obvious—that the General would not have survived the battles of the last 12 months without Uncle Sam’s support. A controlling interest of GM in the fed’s hands isn’t all that bad for one simple reason: the government isn’t all bad. The bad gets more press. There are lots of success stories out of Washington that for lack of drama, or surfeit of politics, don’t immediately enter the fray when the free-market arguments start.

Defeating the Nazis or putting a man on the moon are the easy ones and not all that appropriate for comparison. The outcomes matter, though. Government can work. Just look at the Federal Communication Commission.

Created by Congress in 1934, the FCC was tasked with regulating America’s airwaves. To do so, they worked with wildly competitive private companies competing in invasive technologies that would shape the progress of the whole world. That’s not terribly different that automotive industry.

The FCC did it right, allowing industry to flourish, without choking itself to death. Radio and television grew thanks to standards, not despite them. David Sarnoff, an early president of RCA said at the time, “Competition brings out the best in products and the worst in men.”  The FCC did, and kind of continues, to mitigate the worst aspects of capitalism, while allowing the best to develop.

Similar arguments can be made for the Food and Drug Administration, the National Aeronautics and Space Administration and (ahem) the Federal Reserve.

In each case Washington plays a role and the outcomes have been laudable. Ignoring an industry does not necessarily guarantee innovation. Sometimes the prescription is care and nurture . . . and that maybe the key to reviving General Motors, if not the whole auto industry.

When the government acts as an incubator, providing shelter from some—not all—market place stessors, the results can be strong. The National Institutes of Health, for example, provide funding and resources for research that is too new for the market or perceived as weak in profit potential. Genuine, important advancements in medicine, or any pursuit, frequently come from the long shots, as opposed to the safe bets. To date, the NIH has supported hundreds of raw ideas that turned into commercial ventures.

The Internet may be the best, most current example. Its core was conceived at the US government’s Advanced Research Projects Agency and based on a system pioneered by the US Air Force. Although it thrives in the force of the market, it took root well sheltered from those same forces. The original ARPANET that linked disparate labs had no business model. There would be no way to monetize the creation for next twenty years. That time gave the technology the opportunity to mature, bulk up and get ready for the world.

The exact mechanisms used by the Department of Defense or the NIH don’t transfer, but that is part of the point. The feds have, in some cases, actually been flexible. The capability is inherent in our system of government, even if it’s often ignored. In this case, there can be no cookie-cutter approach. We’ve never owned a failed car company before. But we own one now.

The benefit of which: insulation. The number one pressure corporations feel after they go public comes from the heat generated by quarterly reports. The stock market can provide a lot of energy to a company, and then too much. Investors focused strictly on three-month prospects, often do so to the determent of long-term goals. The market—especially in the hyper-capitalist USA—tends to make management near sighted. In an industry with relatively long development times, like automobile building, the trait can be disastrous.

With the federal government holding a solid majority of stock, General Motors will be more immune to daily market fluctuations. Our car company is no longer a slave to the quarterly report. It can look farther down the road; an attribute frequently sited as part of Honda and Toyota’s success. New GM can plan, hedge, execute and achieve.

And then we sell. I’m no Marxist. I just think big projects can do well with a big caretaker and there’s no one bigger than big brother. You want to establish the First (or Second) Bank of the United States, build a canal in Panama, an interstate highway system or re-establish a manufacturing icon, don’t be afraid of Uncle Sam. He is, after all, us.

China’s central government clearly isn’t enthralled with Tengzhong getting intimate with Hummer. If you want to get a feel for how they really feel, all you need to do is read Xinhua, their official news agency. Xinhua speaks for China’s government—with plausible deniability if something goes wrong. As far as Hummer goes, every single day Xinhua has sown FUD (fear, uncertainty, doubt) about the marriage.

Today’s Hummer Deathwatch, Xinhua style, opens as follows:

“General Motor’s Hummer is considered as an exaggerated and extreme example of a disregard for the environment and there are significant brand negatives for the Chinese company Tengzhong to buy it.”

Xinhua carefully selected “a U.S. financial expert” to say that: one Richard L. Wottrich, managing director, international, at Dresner Partners, an investment banking firm based in Chicago.

In case you’ve never heard of Wottrich (neither have I), Xinhua furnishes a flattering feature list of his achievements: “Wottrich has initiated merger and acquisition transactions in China and has delivered speeches at several influential events such as “2005 Summit of CEOs and Career Managers of Chinese and Foreign Enterprises” in Beijing and the Greater China Business Conference at the Kellogg School of Management, Northwestern University, in 2008.”

After establishing his bonafides, they let Wottrich go postal on the presumptuous planned amalgamation:

“The vehicle is too big, uses too much gas, and is viewed as a toy for the rich. These are rather significant brand negatives for the Chinese company Tengzhong to consider.”

“Hummer is a difficult brand name to reconcile with current global conditions and political thought.”

“The brand is based upon the High Mobility Multipurpose Wheeled Vehicle (HMMWV or Humvee), a military 4WD motor vehicle manufactured by AM General. It is an essential part of the landscape of war in Iraq and Afghanistan.”

“The final consideration is brand name development and new products. What market will Tengzhong focus on? The mature and stable Western markets have the negative views of Hummer mentioned. If they target developing countries, this becomes a symbol of wealth obtainable by few.”

In other words: Bu hao, no good. Give up, already.

Just in case someone hasn’t received the message, Xinhua reminds its readers: “The Hummer and other large vehicles have been a drag on the U.S. auto industry since fuel prices spiked in 2008 and the recession deepened. GM said it sold 5,013 Hummers worldwide in the first quarter, down 62 percent from the 13,050 that it sold in the same period of the previous year.”

What if someone doesn’t put credence in Wottrich? In a separate article, the second so far today on a quiet Saturday morning in Beijing, Xinhua presents an array of Chinese experts who say the deal is a dumb idea. Their crown witness: The Hummer dealer in Tengzhong’s hometown Chengdu.

“I had never heard of the company and was surprised at the news,” said Yang Cheng, general manager of Sanhe Hummer Sales Center, one of the two branches that sold Hummer in Chengdu, capital of Sichuan Province.

“Producing gas-guzzling brands is against the current trend toward energy-saving and emission-reduction,” Zuo Xiaolei, an economist with China Galaxy Securities told Xinhua Saturday. “Meanwhile, the company has no experience in producing passenger vehicles, adding difficulties for the company to manage the brand.”

“Wang Yukun, a researcher with the Yangtze River Delta Research Institute under Beijing-based Tsinghua University, said it would be hard for the buyer to “digest” Hummer.”

“Tengzhong plans to maintain the current management team for Hummer and develop more energy-efficient models, but it is just their fantasies. If the current team could prevent the brand from slumping in any way, they would have done so before,” Wang told Xinhua.

“It’s difficult for a company to digest something dumped by others,” Wang said.

That’s as close to “Tengzhong eats what GM secrets” as you will ever get in the officious Xinhua. Someone—or many—in Beijing are clearly displeased with Tengzhong. My prediction: The formerly unknown Tengzhong company managed to receive buzz from Hummer and can now go back to making cement mixers and bridge pontoons. With so much flak from Beijing, this deal will go down in flames.

Theodore writes:

So the other day I tested a Pontiac G8 GXP, just because I could. I ease away from a traffic light and as I go for the 1-2 shift, it gets hung up. Wouldn’t go into gear. I realize now that what I was experiencing was GM’s dreaded 1-4 skip-shift, except that of course I was trying to go into second, it wanted fourth, and, well, we just weren’t [synchro]meshing. Short of flooring it everywhere (not that I’d mind, just that you can’t always), what’s the best way to deal with – or outright eliminate – the skip-shift? And do any other cars besides GM’s family of V-8 six-speeds have this “feature?”

Read More >

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?

Longtime TTAC Commentator dolo54 asks:

You mentioned using GM syncromesh in your recent Piston Slap article. I have a 91300zx (NA) that has a very typical problem for the model. The syncro for the 5th to 4th gear change is worn (they were made out of too soft a metal until the 95 transmission). I use the recommended Red Line MT-90 transmission oil, which helped quite a bit. But I still get a bit of a grind unless I double clutch the downshift. I’m wondering if I could use this synchromesh safely. I’ve read that you can use a more slippery oil to cure the problem in the short term, but it increases wear and in a short time the syncro will be gone completely (great for a sleazy salesman I suppose). How does synchromesh work and would it speed damage to an already worn syncro?

Read More >

GM CEO Fritz Henderson has filed a deposition with the federal bankruptcy court [download here] pleading for a 363 motion that would create the “new” zombie GM from the corpse of old debt-ridden GM. “In the face of the global meltdown of the financial markets, and a liquidity crisis unprecedented in GM’s 100 year history, there is only one way to maximize the value and permit the survival of GM’s business and save hundreds of thousands of jobs associated with not only GM, but also its vast supplier and dealer networks: these chapter 11 cases and the prompt approval of the 363 Transaction.” While I don’t expect Fritz to say “GM has entered this crisis due to epic mismanagement of which I am a fundamental part,” it strikes me as odd that this blame avoidance arrives on page three. Isn’t it a bit early to say “it’s not our fault?” Apparently, early and often is the strategy here.

On page 5, again with the “it wuzzn’t me”:

Recent events, however — including both international competitive forces and the worldwide recession that has resulted in an economic contraction and dislocation not seen since the 1930s — have led to the dramatic financial distress of the world’s largest automotive company.

And again on page 6:

Most recently, GM’s sales have been materially affected by the overall decline in domestic automobile sales, which continued unabated given the deteriorating economy and financial markets. The Seasonally Adjusted Annual Rate (“SAAR”) of automobile sales for the United States industry declined from 15.6 million units in January 2008 to 9.8 million units  in January 2009, which is the lowest level since 1982. This affected all domestic OEMs, but GM in particular.

And again on the bottom of page 6:

As a result of the economic crisis, in November 2008, the Company was compelled to seek financial assistance from the Federal Government.

And again on page 16:

While foreign OEMs enjoyed, among other advantages, lower wages and far lower annual healthcare and benefit costs, the Company’s obligation to support pension benefits and provide healthcare and life insurance benefits (OPEB) for its former employees increased exponentially, even as its revenues eroded because of a drop in market share and the downturn in the national and global economy.

And again on page 18:

Notwithstanding significant progress in cost reduction and increased efficiency, competitive pressure on GM was exacerbated by (i) substantial increases in the price of crude oil to nearly $150 per barrel during 2008, which precipitated a sharp downturn in driving and sales in the large vehicle segments in which GM was dominant and most profitable and (ii) a sharp decline in the global economy, including substantial increases in unemployment and a freeze-up of consumer and business lending. The resulting drop in new vehicle sales led to a steep erosion in GM revenues and, in turn, significant operating losses.

And again on page 19:

Even as fuel prices stabilized and moderated to some degree during the fall of 2008, the Company faced sharply deteriorating economic conditions during the second half of 2008 and the first quarter of 2009, which can only be characterized as the worst economic downturn and credit market environment since the Great Depression. Significant failures occurred in America’s financial sector — including the forced sale or liquidation of two of America’s five largest investment banks, the crippling of the nation’s largest insurance company, the conservatorships of both Freddie Mac and Fannie Mae, and the financial distress of two of the nation’s ten largest banks. The financial market crisis not only affected large institutions, but also affected consumers, as both income and financing for buyers and lessees of automobiles evaporated.

And again on page 21:

Thus, the combination of the sharp run-up of gasoline prices with its direct impact on the Company’s most profitable vehicle segments, rapid declines in the housing/mortgage/credit sectors, the freeze-up of equity and debt capital markets, and the lowest levels of consumer confidence in nearly thirty years, had an unprecedented effect on the automotive industry generally and GM in particular.

This is the same page that contains the money shot:

Under these extraordinary conditions, the Company’s liquidity rapidly eroded to a level below what was necessary to operate the business. Consequently, GM had no choice but to reach out to the U.S. Government for financial assistance.

And again on page 36:

As discussed below, the deepening economic crisis has affected not only GM, but also the thousands of direct and indirect suppliers and vendors that provide components, products, and material to the Company. In light of the credit crisis and the rapid decline in automobile sales, many of the Company’s suppliers are unable to access credit and are facing growing and serious uncertainty about the prospects for their businesses.

I don’t think this is spin. The zombie now known as Government Motors doesn’t even know why it died. Henderson and his minions continue to believe they’re victims of circumstance. Even worse, I’m not sure GM’s First Step in its $100 billion recovery program is important anymore—and not in the way that Motown’s zombie cheerleaders might imagine.

TTAC Commentator Kericf asks:

I have a 1998 Isuzu Rodeo 4×4 with the ABS light starting to come on intermittently. The first time it happened I thought I heard a clicking noise under the dash like a bad solenoid. I had to replace the solenoid for my turn signals once and it made a similar noise when they would go haywire. A lot of forums on the Rodeos point to bad speed sensor on the rear axle, but if it’s just a bad solenoid that would be easier. The truck has 214,786 miles as of this email and I am wondering if I should also worry about rubber brake lines deteriorating. I can’t find any leaks but I don’t want to blow a brake line in Houston traffic.

Read More >

TTAC regular VerbalKint asks:

1. Should (can) any type of lubricant (ever) be used on the treads of bolts being torqued to specification?

2. Have you seen this site? I thought it was pretty well done, how ‘bout you? I really liked their section on oil scams additives.

Read More >

GM gave us some genuine peak experiences before its long fall. Their post-war summit was the mid sixties. Its stock hit $358 (adjusted) in 1965, and profits crested in 1966 at $15 billion (adjusted). What about the best year for its cars? That would have to be 1963, with the trio of Corvette Sting Ray, Pontiac Grand Prix and Buick Riviera. And which one gets the nod as number one? I can’t decide. But this Riviera happened to be sitting along the road on the way home from the lumber yard, so the decision was made for me. Read More >

Government Motors is launching a barrage of press releases in an attempt to shock and awe all naysayers. All is fine with its Asian operations, they are insulated from the bankruptcy of the mother ship, it’s great business as usual. As far as China (GM’s second largest market behind the United States) is concerned, business never has been better! It seems everybody is counting on the Chinese consumer to bail out the US government’s bailout.

GM China’s Prez, Kevin Wale, opened the salvo in China Daily: “General Motors Corp.’s fast-growing China operation will be unaffected by the parent company’s bankruptcy. Plans to open a new factory within five years will not change, even as GM closes US facilities.” Gettelfinger will be thrilled.

And, yes, “GM China is sticking with a five-year plan to double annual sales to 2 million units and roll out 30 new or updated models.”

More good news: Yesterday, GM China released their May sales—way before anybody else in China. Sales rose 50 percent over May 2008, Gasgoo reports. The Buick New Excelle, based on the Opel Astra Delta II platform, is selling especially well. So is the Buick New Regal, based on the Opel Insignia. And the Chevy Cruze, also a Delta II descendant.

Wale isn’t worried by the fact that many of his moving models are based on Opel technology: “The technology for the vehicles we sell is held by General Motors, and I don’t see any implications from the new structure in Europe.” Magna and its Russian partners may have a different opinion.

The Dept. of The Treasury even denied that there might be a secret deal to keep Opel and Magna out of the U.S.A. and China. “Newspaper accounts that Treasury is insisting that Opel stay out of the U.S. or Chinese markets are incorrect. The U.S. government strongly supports free markets,” Treasury spokeswoman Jenni Engebretsen said.  Treasury keeps a backdoor open: If Magna and GM cut their own deals, then that’s their own business, an unnamed Obama administration official said to Reuters. I zee nozzink, especially not the Sherman act.

GM China sent a statement to Gasgoo, claiming that “the court supervised reinvention of GM in the United States will have no substantial impact on Shanghai GM, and Shanghai GM will continue its normal business operations as usual.” The statement insists that the intellectual property rights of products produced by Shanghai GM will be included in the New GM, and that GM’s joint ventures in China are not included in the court filings. Kudos for the euphemism of the day: Court supervised reinvention. Sure beats extraordinary rendition (a.k.a. “impromptu concert”.)

Readers of Bloomberg are told that GM “did not include its international operations in a filing for bankruptcy protection.”

Readers of the Wall Street Journal receive the same good news: “It is absolutely business as usual in China,” the WSJ cites Kevin Wale. “None of General Motor’s operations outside of the U.S. are included in the Chapter 11 filing, including GM China, our joint ventures and our other China operations.”

TTAC’s B&B know better. A court document filed Monday with the United States Bankruptcy Court Southern District of New York, made available through TTAC’s resident court reporter, Justin Berkowitz, names the following Chinese companies as part of the General Motors bankruptcy: Pan Asia Technical Automotive Center Company, SAIC GM Wuling Automobile Ltd., Shanghai General Motors Corporation, Shanghai GM, Shanghai GM (Shenyeng) Norsom Motors Co. Ltd., Shanghai GM Dongyue Motors Co. Ltd., and Shanghai GM Dongyue Powertrain. That’s only a partial list of GM’s international operations named in the filing.

The list presented to the court was obviously done with care, and wasn’t just a cut & pastie from the latest Sarbanes-Oxley filing. GM Europe, handed over into the care of a trustee appointed by the German government, isn’t there. Also missing is GM’s Australian unit, GM Holden Ltd. Holden “expects to be part of the new GM and will not cut jobs,” Holden’s managing director Mark Reuss said to Bloomberg. Whether the listed companies will finally end up in a “Good GM” or “Bad GM” doesn’t change the fact that they are all included in the filing.

The list of GM’s 50 largest unsecured creditors, also filed on Monday, reads like a Who’s Who of the parts business. Delphi is owed $111 million. Bosch is owed $66 million. Lear Corp. is owed $44 million. Renco Group is owed $37 million. Johnson Controls is owed $32 million. Denso is owed $29 million. TRW is owed $27 million. Magna is owed $26 million. American Axle is owed $26 million. Continental AG is owed $15 million. Tenneco is owed $15 million. Yazaki is owed $14 million. International Components Corp. is owed $12 million. Visteon is owed $10 million. And the list goes on. No wonder that companies on that list have already declared bankruptcy themselves, or are listed as bankruptcy risks. Thousands of smaller suppliers are affected. According to CNN Money, “a vast network of companies outside Detroit are bracing for impact. Suppliers to the auto goliaths are going to feel the aftershocks of the industry’s titanic shift.”

Business as usual? Viewed through the eyes of GM, it probably is business as usual.

GM filed for bankruptcy today. From now on, TTAC will chronicle GM’s fortunes under the series name bestowed upon post-C11 Chrysler: Zombie Watch. For there’s no doubt in my mind that GM will not recover from its federal stewardship to emerge, as Dan Neil puts it, “smaller, leaner, smarter and hungrier.” Sure, I’ll spot Dan smaller (obviously). Leaner? An efficient government-funded company is an oxymoron to rival military intelligence. Speaking of which, smarter? GM is as far from smart as Steven Hawking is from professional wresting. In fact, listening to GM CEO Fritz Henderson bleat to the press today, it struck me that the automaker is pulling a Mark Mothersbaugh: it’s de-evolving. Less obscurely, the company is actually getting stupider.

To wit: when Bloomberg asked Fritz whether there would be any changes to post-C11 GM’s corporate culture (i.e., when would someone shit-can the overpaid yes men and women who’d run General Motors into the ground), Henderson said there was no need for an executive cull. “Natural attrition” would ensure fresh blood. Well, he would say that, wouldn’t he? After all, any such overdue housecleaning would start by sweeping Fritz Henderson out with the rest of the garbage hanging around RenCen (e.g., HUMMER).

Even so, it was a stunning admission that all that talk about GM’s preparations for a government-backed renaissance—trimming dealers, reigning-in the United Auto Workers, softening-up bond-holders, etc.— was complete and utter horseshit. More specifically, Henderson was spouting the same crap GM’s been foisting on shareholders since Nikita Khrushchev used shoe-leather to pound home a point.

The truth: GM’s management still doesn’t have the slightest idea how to right the sinking ship—sorry, raise the Titanic. Henderson point blank refused to specify a deadline for a return to profitability. No goals. No timelines. Nada. If I didn’t know better, I’d think Rick Wagoner’s hand-picked clone/successor was trying to give this GM Death Watch series closure, in that “here we are at the beginning again” way. But no; there is no plan.

Now you could say that Henderson can’t formulate a plan. It’s up to the next GM CEO—the one appointed by the same presidential administration that fired the old CEO and swears up, down and sideways it doesn’t want to run GM—to devise a detailed strategy for returning some $50 billion dollars to American taxpayers. And those pesky bondholders. To which I’d reply, sure; what’s the hurry? We’re from the government and we’re here to—say, are those fresh donuts?

More evidence of increasing numb-nuttide: on this historic day, GM signaled recently dismissed dealers that they company will honor their franchise agreements until they expire (Oct. 31, 2010). Huh? If GM doesn’t terminate the franchisees before exiting federal bankruptcy, they’ll lose the chance to do so without legal repercussions. The abandoned dealers will live to fight the “new” GM in all 50 states.

In other words, even Chrysler somehow managed to get it right where GM continues to get it wrong. Of course, both automakers are missing the golden opportunity to tell the United Auto Workers to FO&D. Damn! I forgot! This is a government-sponsored bankruptcy. When the feds pull the strings, the union owns you. Literally.

Meanwhile, and lots of it, the mainstream media seems obsessed with the idea that President Obama’s minions will force the automaker to build shit boxes to appease the environmental wing of the democratic party, and, thus, drive GM into bankruptcy. Oops. I should have said “continue to suck-up taxpayer money until British Leyland looks like a winning lottery ticket.”

It’s a ridiculous concerm. Government Motors has but one goal: nothing. Remember? No deadline. No timeline. Nada. Which makes a mockery of the most important part of Neil’s post C11 prognostication: the hungry bit.

Simply put, governments are not profit-driven. At all. On any level. Ever. So it doesn’t matter what kind of vehicles post-C11 GM manufactures. At all. On any level. Ever. Snap! That makes “new GM” the same as “old GM.” See what I mean about circularity?

OK, time’s almost up. How do I see this playing out?

Either the feds will sell GM to another automaker soon, or the feds will sell GM to another automaker later. By that I mean either Renault Nissan (or someone) will swoop in “to the rescue” (for bupkis), or the public will eventually grow weary of subsidizing Government Motors. At that point, Uncle Sam will jettison the public’s shares in GM for cheap. Some strip and flipper will buy it up and do what they do best.

In other words, one way or another, GM is headed for liquidation.

I’d like to say that this is the bankruptcy I recommended four years ago, which will allow GM to reinvent and reinvigorate itself. But it isn’t. So I won’t. I’ll just say so long and thanks for all the Corvettes. Although the interior still sucks.

It might be a bad day for GM but it’s a much worse one for Toyota. Really. The days (decades, really) of weak domestic manufacturers shooting themselves in the foot with bad design, poor assembly, and non-existent customer satisfaction in passenger cars are coming to an end. Toyota didn’t have to outrun the bear, it just had to stay ahead of GM, Ford, and Chrysler. Years of producing huge profits in North America hit the wall for Toyota in 2009, and they’re likely not to return. Ever. The game has now changed—and it’s not good for Toyota.

Thanks to US and Canadian taxpayer support, GM and Chrysler are about to get a new start. They’ll enjoy fresh balance sheets, with minimized legacy liabilities and serious money earmarked for new products. (The taxpayers are paying for Fiat to develop cars for North America; you didn’t really think that the Italians would take this risk on their own did you?) Ford, by dint of luck or smart management, borrowed what it needed years ago to make the transformation outside of court oversight.

By the end of this year, all three Detroit automakers will be restructured, resized to match production with demand, and re-energized. They will reenter the market as the lowest cost producers inside the U.S. market, with slimmer, trimmer product lines. These automakers are getting ever-closer to 100 percent capacity utilization.

Looking at product, Ford’s passenger car line up just keeps getting better. The 2010 Taurus looks hot, the Fiesta test drive campaign is generating good press with the Twitter/Facebook crowd, and a new Euro Focus will be here in a two years. Slowly but surely, more Americans are considering a Ford passenger vehicle. Its trucks still lead the category and will continue to do so. Better products, increasing quality, and slowly increasing market share is building FoMoCo momentum.

GM’s go forward brands—Chevrolet, Buick, GMC, and Cadillac—still have some vehicles that don’t cut the mustard with consumers. But the balance is starting to tip back towards the positive. The Malibu and Camaro represent some better efforts. The gorgeous new Buick Lacrosse might give the new Taurus a run for the money. Cadillac will extend the CTS line and bring a new SRX to the market shortly. The Corvette still leads the pack in dollar performance value. And maybe, just maybe, the Cruze and Viva will live up to GM hype machine.

GM’s perhaps two to three years behind Ford with its product development cycle. But it can now concentrate on fewer models. Recent successful launches suggest that GM just needs time to plug the holes for the weak sisters. It now has the money to do so and you can bet (if you’re taxpayer, you already have) that the efforts on fuel efficient passenger cars will receive the bulk of the dollar spend. GM won’t abandon trucks (no matter what Nancy Pelosi thinks) and volume wise, GM leads.

Chrysler can’t do anything under their new pasta-fed management until the re-tooled imports arrive here for production two years hence. Its cars still (mostly) suck, except for the higher-performance versions of its LX cars. But it isn’t going away and will still find some buyers for its products at the pace of the recent past. So this company will just hang on . . . and on . . . and on.

Now, stop and think about this. What has Toyota done for you lately? Is there one single passenger car from Toyota that excites you?

Let’s keep the new Prius out of this discussion for the moment; it’s not a car for drivers but techno-geeks and greens mostly with excitement provided by the fuel gauge, not vehicle dynamics. The Camry might lead the C/D class in sales for now, but will this continue? What happens when Americans actually consider a Malibu or Fusion-based product instead? In terms of design appeal, the Camry looks dowdy or boring (take your pick) and its reliability isn’t any better than the Fusion. Put a four-cylinder EcoBoost engine in that Fusion and Ford wins.

Go through the rest of Toyota’s passenger car line up and compare each vehicle to the current and near future offerings from GM and Ford. The question is: will Toyota customers do the same?

Toyota (or Honda) products have been the default choice. That “Easy Button” is starting to get harder to press for buyers. Yep, Americans will begin to come back to consider Detroit products (at least GM and Ford), and that’s not good for Toyota. And we’ve really never left Detroit for our big pickups and SUVs, whle the Japanese are still mostly playing catch up.

Yep, it’s a bad day for Toyota and a great day for America. You can look forward to a new Detroit that will be competitive, if not lead, in cars and trucks for mass market Americans. Count on it.

When I was a kid I wondered what it was like growing up in GM’s heyday of brilliant designs and well-defined brand delineations. I was a product of the 1980s, a time when emissions-choked Disco Iron and OPEC-induced minimalist boxes overshadowed yesteryear’s works of art. And what I learned from this generation is that General Motors is no stranger to progress, yet they never got over themselves to do the right thing.

I saw it on TV, heard it in my house: you can’t tell a Cadillac from an Oldsmobile these days. While acid-wash wearing youngsters knew the difference between a FWD Delta 88 and its chrome-laden Cadillac counterpart, my parents disagreed. And they had a point: GM products were far more distinctive when they immigrated to this country in 1965. Twenty years later, a series of Lincoln ads capitalized on their values.

As Pistonhead folklore has it, TV spots known as “The Valet” made Cadillac and GM the laughing stock of Detroit’s elite social circles. It showed a confused valet delivering mundane 1985 Buicks and Oldsmobiles to a frustrated rich couple waiting on their (equally dull) Sedan DeVille. While Ford made GM’s wrong wheel drive experiment look ridiculous, that wasn’t far from the truth. But the exception was the new-for-1985, downsized, Cadillac Fleetwood Seventy-Five Limousine: a Turd Blossom of the highest order.

Yes, the 1980s was a period of unflattering change for GM. Yet spending time in the Fleetwood Seventy-Five’s decadent cocoon makes the silver lining easy to spot. A product of decades-long cooperation between Cadillac and Fisher Body (a.k.a. GM’s internal Department of Redundancy Department), the Fleetwood Seventy-Five was a brilliant concept: cut a Coupe DeVille in half, stretch two feet and cram with a host of unique and unbelievably luxurious parts.

And the last of the Fleetwood Limos was no slouch, unreliable powertrain notwithstanding. Weighing a modest 3700lbs but sporting the same levels of space and luxury as the “good old days”, it was a great niche for an increasingly energy-conscious nation. Cadillac spoke to Wall Street sans Gordon Gekko: symbolizing everything right with the “old” GM while simultaneously acting as the springboard for their future.

But that never happened. The growing pains from Ross Perot’s EDS-infused technology, problems with too many parts, boring brands and benign platforms combined with decreasing market share made GM an overburdened automaker with a tenuous grip on auto and home finance. And there’s no better example of GM’s Blizzard of Bland than the staggering number of V6 engines produced since the death of the Fleetwood Seventy-Five to the passing of General Motors.

The first is the 60-degree pushrod V6, introduced with 2.8 liters of displacement. Never a finesse player, this motor became the foundation for the Twin Dual Cam in the Chevrolet Lumina Z34. Not one to let this sad sack lay, GM kept this motor as their “High Value” V6, powering today’s rental car queens with niceties like variable valve timing and even displacement on demand. Yes, really.

The other value-intensive mills are the 3.8L “Fireball” Buick and the 4.3L (small block Chevy derived) V6. The latter lived and died in brand-dishonest interpretations of the Chevy Caprice/Impala/Monte Carlo, while the former is known across all brands for excellent boosted or naturally-aspirated torque, respectable durability and three generations of inferior NVH (noise, vibration, harshness) characteristics from its physically unstable 90-degree architecture.

Today we have several flavors of High Value: 3.5L, 3.8L and 3.9L. All fit in the same car, target market and price point.

Maybe one pushrod V6 is enough. Better yet, consider GM’s “High Value” six bangers: the Northstar based ShortStar V6 in the Oldsmobile Aurora/Intrigue and the Alloytech 3.6L mill used in the Cadillac CTS. Too bad GM sent the limited-production ShortStar to an untimely death, and the Alloytech is far, far too late.
Instead of sticking with one design and refining it over several decades, GM threw everything on the wall to see what’ll stick: keeping antiquated motors for ancient platforms, praying their business model stays afloat.

Why make a pushrod V6 Buick Lucerne flagship, even if it costs less than a DOHC V6 Camry?

I thought General Motor’s days of indistinguishable products peaked when Miami Vice sailed off the airwaves. But GM’s initiatives from the 1980s went all wrong, and V6 engines are only one explanation for why the company failed. Make no mistake, there’s plenty more where that came from.

GM was supposed to install uniformity where it isn’t visible, keeping product uniqueness everywhere else. And hopefully making the equivalent of a Fleetwood Seventy-Five for all brands: we wouldn’t mourn the loss of General Motors if they trashed the unnecessary engineering, using their ingenuity instead for eye-catching (and profit-laden) redesigns of the Impala, Cutlass, Park Avenue, Grand Prix and Fleetwood. Better luck next time, General Motors.

GM was a politburo building cars. GM died for the same reasons that the Soviet Union died: because it killed initiative and proved unable to manage its resources at a pace that matched competing economies. Just as the Soviet politburo promoted the party faithful, demanding adherence to the party line, GM management brooked no discontent, and would get rid of any dissenting voices, banishing them to the corporate equivalent of Siberia: away from RenCen. The Soviet Union destroyed itself because of its unwillingness to accept reality. Spending untold billions on a show military force, it starved all other facets of its economic life. The Soviet leadership also accepted incredible inefficiencies in its production apparatus and failed to exploit its vast reservoir of natural resources. Ditto GM.

Among car makers, GM at one time had the size of the Soviet Union among nations (Russia alone covers 13 time zones). And just as the Soviet Union proved too big to manage, once the frailties had been exposed, GM also proved unmanageable, having been set on a course of self-destruction years ago. The leadership was unwilling to turn away from its crash course; that would have meant accepting they were wrong. The Soviet Politburo was never wrong. GM leadership was never wrong.

These were self-evident truths and had to be accepted. Filling its organization with sycophants and nodding-heads, the GM leadership willfully remained oblivious to the changing world outside its walls. Occasionally, demonstrating the obduracy and carelessness of Soviet leaders, they would dismiss what other car makers were doing, often ridiculing initiatives that would later prove their own undoing.

Living in the false security that they could always slap around any dissenters in their own ranks, thus ensuring discipline, GM let “too big to fail” cloud its judgment. The adage “What’s good for GM is good for America” permeated the walls, and allowed the company to grow complacent and ignorant.

Case studies will be mining the GM example in years to come, just as scholars of politics and international relations are still trying to come to grips with the fall of the Soviet Union. It’s worth remembering that until just a few months before the Soviet Union fell apart, the CIA and other intelligence bodies around the world were convinced no such thing would or could happen. This was because they and the nations and militaries they served, were dependent upon a strong Soviet Union for their own reason for being.

Likewise, with GM, we have seen a skull-clanking failure to accept the truth not just inside GM, but in the surrounding world. Corporate ignorance results when companies operate with blindfolds. It results in organizations that are change averse, and that think strength lies in never questioning its few basic tenets of faith.

One could claim that the fall of the Soviet Union was the result of bad engineering and outdated technology. If the place had been better run, if it had been in the hands of forward-thinking people, who allowed initiative and rewarded successful solutions, then we might not have seen the dissolution of the Soviet communist empire.

While the Soviet politburo devolved to cant and polemic in the service of a failed ideology, the GM politburo resolved to make money by financing cars that were subpar. Both believed propaganda could make up for the flaws in their products. Towards the end, GM was channeling hundreds of millions for campaigns that sought to establish differences among car platforms that were obviously similar to any outside observer.

Both organizations failed to “walk the talk.” The Soviet leadership rewarded itself with an opulent lifestyle completely divorced from the realities of life for ordinary people. In the end, the dissonance became impossible to hide or defend. Special auto routes for the apparatchiki through major cities; special airports; secluded residential areas; segregated shops and resorts—all contributed towards telling the Soviet “nomenklatura” that things were just fine.

Similarly, operating out of RenCen, the GM apparatchiki had also locked itself in a bubble. Occasionally, pronouncements from the elders would reveal how out of touch they were. Rich people didn’t care about the price of gasoline; global warming was a crock of shit; and it was hell to be standing in line at the airport, waiting for a flight.

The last hand on the rudder at GM was that of an accountant, and his manifesto was a spreadsheet. As the bow of the leviathan they had constructed struck land, the members of the GM politburo looked up from the spreadsheet, cried out for the people to save them and then abandoned ship.

The individual republics of GM, the car brands, have been left to their own. Some will disappear, a few will reconstitute themselves. All should curse the politburo that destroyed them.