Jinking through traffic somewhere above the ton, it quickly became apparent that the Lexus IS 350 wasn't the ideal car for the job. The erstwhile sports sedan bumped and jiggled over surface imperfections like a tied-down tunermobile. It rolled through directional transitions like a luxobarge, helming with unacceptable imprecision and unwelcome lean. While the powerplant provided more than enough shove for the work at hand, the IS 350's dynamics drew a definitive line between "doable" and "enjoyable." If further proof were needed that I was in the wrong car at the wrong speed, the BMW M3 keeping pace provided it.

After a few polite lead exchanges, the M3 dropped the hammer and disappeared. I rejected the idea of visiting V-Max. The IS 350's 3.5-liter V6 holsters a surprising percentage of the mighty M3's oomph (at a fraction of the price), but it's no Bimmer beater. More specifically, maxxing-out a 3-Series anything is like gently drifting through the tunnel of love, compared to the baby Lexus' Autobahn of Doom stunt show. What upmarket motorist needs THAT kind of excitement? Indeed, why would anyone suffer the slings and arrows of outrageous ride and handling when any number of similarly priced cars offer a more pleasurable driving experience?

What's the difference between a rental car and a mass market motor? Not a lot. But this much is true: the new Fusion's headlight switch wouldn't seem out of place on an EASY-BAKE oven. Actually, Ford should be so lucky; Kenner has sold over 16 million cookers since the feminist's least favorite toy debuted in 1963. The probability that the Fusion will deliver similar amounts of EASY-PROFIT depends entirely on the Y factor. Why would anyone buy an automobile that's had any hint of personality professionally removed by a crack squad of cost-conscious engineers? Purchase price? Reliability? You tell me and then we'll both know.

If customers swim into their local Ford dealer's fishbowl to spawn between $17k and $21k on behalf of a new Fusion, they won't be doing so because the sedan's sheet metal haunts their dreams– unless it's a nightmare about being pursued by a giant razor. The Fusion's three-blade front foil is the car's only attempt to make a visual statement; to my eyes it looks as if it's saying "I want to be an Infiniti when I grow up". From any angle other than the front, Ford's family four-door is so generic that the binocular fusion required to scan it hardly seems worth the effort. To be fair, the Fusion's Euro-blanditude obscures its proletarian roots with unrelenting unobjectionality. How great is that?

For years, Volkswagen’s diesels were like cod liver oil: a worthy medicine that few American consumers could stomach. The stripped-down oil-burners hidden in the back of US forecourts seemed specifically designed for penny-pinching college professors and health food store managers. Customers who considered engine clatter, black smoke and lack of comforts (creature or otherwise) a badge of honor. When $3-a-gallon gas arrived stateside, hordes of “normal” customers suddenly joined the Euro-throngs clamoring for their daily dose of diesel. And no example was– is– more sought after than the VW Jetta TDI.

If it wasn't so funny, it would be sad. GM loses billions in ill-advised overseas 'investments', produces an over-abundance of vehicles that are two model cycles behind the competition, can't build a single hybrid, completely cocks-up production of its Solsticial one hit wonder, cedes US market dominance to Toyota, plays "Let's Pretend to Make a Deal" with its union, announces its intention to sell-off majority interest in the only profitable part of the company, refuses to outline its turnaround plan, and the stock market yawns. The federal Securities and Exchange Commission (SEC) discovers GM's accountants have lost four hundred million dollars behind the couch and the stock tanks. What's that all about?

Before the SEC probe, like many other industry watchers, I was laboring under the impression that GM's stunning incompetence and epic lethargy reflected management myopia. In other words, The General's G5 corporate culture had insulated Rabid Rick Wagoner and his well-paid minions from what you and I would call reality. They honestly believe their own hype. Now, I'm not to sure. Although the $400m was "misreported" rather than "lost", there are ominous rumblings that GM's mea culpa is the tip of the proverbial iceberg. Lest we forget, the SEC's main focus was/is GM's multi-billion dollar pension and benefit schemes (vis-a-vis bankrupt auto parts supplier Delphi). Yesterday, the federal Pension Guaranty Corporation reported that Delphi's pensions are underfunded by $10.8b.

If GM's been cooking the books, people will soon wonder if Rabid Rick's secretly hired Dorian Grey's portrait painter. After all, GM maintains an entire ledger of accountants to ensure that The General's financial statements are on the up-and-up. The audit committee in charge of these pusillanimous pencil pushers reports directly to Rabid Rick. So, if the SEC finds that GM's increasingly obvious use of "aggressive accounting" tipped into pension and benefit-related GBH, the chances that the shell game was a devious plot concocted by a rogue element with The General's ranks are minimal. The discovery will reflect Rabid Rick's willingness to encourage– or at the very least tolerate– corporate duplicity.

This would put us back in charted waters: in Enron territory, watching arrogant execs manipulating the public trust for personal greed and glory. And that sucks. Because it would mean that GM is deeply, fundamentally corrupt. That all the garbage we've been interpreting as corporate "spin"– our cars are terrific, our new SUV's are high mileage heroes, we're sorting the brands, badge engineering is dead, discounts are dead, crossovers are coming, hybrids are coming, fuel cells are coming, etc.– is actually a deliberate cover-up of executive malfeasance. It's a slippery slope from PR to lies to cutting corners to criminal conduct. The SEC probe could reveal that Rick's riding a Flexible Flyer.

Sadly, it makes perfect sense. Perhaps Rabid Rick can't turn GM around because he's lost in Nixonian paranoia, struggling to maintain his administration's hold on executive privilege at all costs. Wagoner is, after all, a straight-from-biz-school boffin without any work experience outside of GM. Rabid Rick's moral and ethical compass was handed to him by GM's heavy hitters. His managerial mindset was forged by the plots and plans of The General's inept dictators. Personal power could well be his primary goal– rather than the greater good of the company, its customers, employees, suppliers and stockholders. If you want evidence of this perspective, drive a GM product and ask yourself a simple question: why isn't it better?

I know: it's a deeply cynical portrait. But GM is a deeply cynical company. After launching and vigorously defending its post-fire sale "value pricing" strategy, after going to all the trouble to retrain its front line salesman to switch from deal-making to product pushing (at a cost of millions), The General has just announced a year-end "Red Tag" sale to once-again clear its bloated inventories. At the same time, they're taking credit for building-up their inventories [supposedly] in preparation for the inevitable Delphi strike and resulting production shutdown. Is this first-class crisis management, gross incompetence or a reflection of something darker, something rotten in the heart of RenCen? I'm beginning to lean towards the third option, and so is Wall Street.

Financial analysts like Banc of America's Ron Tadross haven't suddenly "woken-up" to The General's fundamental flaws and looming troubles. They've simply begun to see that The General's generals don't have a viable plan for winning the battles– never mind the war. And like Kirk Kerkorian, they can smell imminent exsanguinations from a mile away. Each day, the likelihood grows that Captain Kirk or another similarly voracious corporate raider will swoop down and buy Rabid Rick's alma mater, sell off the entire GMAC finance unit, pocket the profits and flog the unprofitable automaking side of the business for chicken feed. Either that or just close the factory gates and walk away.

For over 30 years, Maryann Keller's kept tabs on The General. The auto industry analyst has watched GM lose billions in overseas investments, surrender great chunks of market share to its rivals and sacrifice shareholder value in an endless pursuit of The Next Big Thing. According to Keller, GM's inability to face-up to its structural weaknesses is nothing new. Nor are the excuses coming from RenCen. "It's one big idea after another," Keller said. "This time it's crossovers. Well, they've used that 'there's a new product in the pipeline' routine for years. GM's problems are NOT temporary." OK, but are they terminal?

Like most observers, Keller's brain balks at bankruptcy. For one thing, The General is sitting on an estimated $30b cash pile– which will grow by another $12b or so when GM jettisons controlling interest in its GMAC mortgage and financing business. For another, Keller says bankruptcy would have a cataclysmic effect on GM's business. "Customers would disappear," Keller says. "They'd think, who's going to pay for my warranty claims? What will my car be worth? And what bank would write a loan for a car sold by a bankrupt company? Would fleet customers do business with them? I don't think so. The long-term damage to GM would be incalculable."

That said, there's no doubt in Keller's mind that GM's current situation is extremely bad, and getting worse. "In October, GM pulled down a 22% market share. If you remove fleet sales from those numbers, they actually had a 13 to 14% share. That's less than Toyota. November and December aren't going to do anything for them, and if Delphi goes out on strike, there's no telling how long current inventories will last. Even as it stands now– 14% of the market, eight brands, 70 plus models– it's simply not sustainable."

Keller is convinced that this doomsday scenario's increasing likelihood will motivate GM's management to address the company's flawed fundamentals. Call it the cornered car company concept. Keller points to Nissan and Chrysler's comebacks as examples of automakers brought back from the brink because… they didn't have a choice. Keller predicts– and clearly longs for– a signal from inside GM that reality bites. She hungers for a bold and comprehensive recovery plan that acknowledges the full extent of GM's problems and pledges the company's full resources to solve them. She calls it the "moon shot solution":

"What I'm hearing is platitudes. What I'd like to hear is a plan. A plan that says we're going to the moon. We're going to spend as much money as it takes to rebuild the brands– even if we don't make a profit on a single car for ten years. We're going to use that money to build substantially better cars than the competition, and significantly under price them… This is not rocket science. GM needs to give customers more than they expect at a price they can't ignore."

Keller doesn't see the unionized elephant in the room as an insurmountable obstacle to this as yet unexpressed turnaround plan. In fact, Keller says GM's recovery is doomed without "shared sacrifice" from management, the United Auto Workers (UAW), suppliers, bankers and dealers. In that sense, Keller feels the UAW is getting a raw deal in the court of public opinion. "It's currently in vogue to blame GM's ills on runaway health care costs, but if things are that bad, why is GM 'giving away' money in the form of stockholder dividends… The only way GM's going to solve its union problems is if they solve all the other problems at the same time. There's no way out of this mess except for GM to fix it."

While I agree with Keller's analysis, I don't share her optimism in the power of self-preservation. Keller says "People buy one car at a time." By the same token, people contemplate their employer's future one person at a time. Nothing I've read, heard or seen convinces me that any of the participants pulling the levers of power in this twisted saga have enough at stake to make them, as Keller puts it, "do things that are not in their character". Even on the fateful day they clamber aboard their golden lifeboat and watch the mother ship sink beneath the waves, they will insist that they did the right thing. To paraphrase Richard Nixon, they will accept none of the responsibility, and none of the blame.

Capitalist enterprises have a way of bouncing back from adversity. Even so, it takes more than a comprehensive plan. It takes leadership. Until and unless GM dumps Wagoner, Lutz, et al. from their lineup, and finds a team with genuine backbone, the company will not have the will nor the skill to sidestep the looming disaster. As Keller says, "Despite its success, Toyota operates with a sense of urgency. I still don't see that from GM. I wonder if I ever will."

Generally speaking, I'm not partial to cars that remind me of death. But I respect Lexus for selling a model lineup that keeps faith with their "luxury car as mobile mausoleum" brand heritage. That said, the Japanese automaker's sensory deprivation shtick has taken a couple of major hits since the debut of the LS400, in the form of leathered-up, badge-engineered Toyotas. But the "new" GS300 is a far more worrying development: a bespoke model that turns its back on everything that made The Big L successful in the first place.

Visually, that's a good thing. The new GS300 represents a bold and beautiful break from Lexus' amorphous aesthetic. The four-door's front end seems a bit of an 8-Series crib, and the rear is as confused as an absinthe drinker, but the GS300's hunkered stance and nose-heavy proportions project a genuine sense of aggression. The rear pillars are especially wikkid, and the swageless sides add a statement of streamlined modernity. If ever a car promised to give the BMW 530i a decent run for the money– and quite a lot of money it is too– the GS300 is it.

So, Ford has a new guck. I only caught a few seconds of the ad touting The Blue Oval's "Grand Unifying Concept", but I'm reasonably sure Mr. Bill promised that, from now on, all Ford motor products will be known for… innovation. Should reality somehow mirror hype, Ford's eight brands will heretofore produce cutting edge vehicles that do way cool stuff that will make both consumers and the competition sit up and say "Whoa, Dude!" Maybe, but I reckon innovation is as likely to save FoMoCo as a GM buyout.

For one thing, most people view innovation (a.k.a. change) as only slightly more desirable than hepatocellular carcinoma. Automobilists don't want to drive the radical new machine bristling with innovative technology and design. They want the same car as the one they're driving, only a bit newer. How else could you explain the fact that GM continues to sell cars that are two product cycles behind the competition– to the same people who bought one before? Sure, automakers put a lot of gee-whizzery in mass market motors, but there are still a large number of motorists who'd rather celebrate their birthday at the Registry of Motor Vehicles than program a sat nav system.

You don't need to own a Brush Motor Company friction drive car to know that automotive history is littered with manufacturers who went out on a technological limb that snapped beneath them. Even successful carmakers regularly fall prey to feature sleep. When BMW's 7-Series introduced its pioneering iDrive [you nuts] mouse controller, the system flummoxed the faithful and alienated aspirants. When GM created an SUV with a power roof section above the cargo bay, the advance was met with spectacular apathy (save waterproof grandfather clock collectors). Bill Gates may be sniffing around the auto world, but he does so at his peril.

In fact, the more innovative the automobile, the less saleable it is. For every pistonhead who feels enriched by the latest engineering brainwave, for every Ferrari owner beta testing kludgy software and clever-but-dainty mechanicals, there are a million consumers who understand that the last thing you want in a 4000lbs. piece of metal hurling itself through a world of solid objects is unreliable– I mean "innovative" technology. Besides, you'd think that Ford has suffered enough product recalls without reinventing the wheel, and everything attached.

And then there's the cost. If Ford is serious in their newfound determination to boldly go where CAD-CAM computers make treads, they're going to have to plow a lot more of Mr. Bill's inheritance into research and development. To stay ahead of the technological curve in every automotive technology– from fuel cells to LED lighting– Ford would have to spend Portugal's gross national product on Xtreme engineering. Per year. Technologists will argue about the difference between in-yer-face innovation and behind-the-scenes boffinology, but splitting hairs isn't going to save anyone any money. No matter how you program it into you spreadsheet, high tech costs big bucks.

Innovation asunder, you've can't blame Mr. Bill for wanting to tell consumers why they should buy from the family firm. The 80's motto "Quality is Job One" certainly helped pull Ford back from the brink the last time 'round. Unfortunately, Lexus now owns that piece of real estate. More worryingly, Toyota's snagged reliability (with Hyundai in hot pursuit) AND innovation (by Prius engagement). Honda has bagged the quality engineering gig, GM lives (and dies) on the cheap, DCX does bling, Porsche is performance, Audi loves luxury, BMW is bitchin' and Mercedes still snobs-out. Ford is left wandering in brand image wasteland.

As someone who's good with the guck, I offer the following suggestion: safety. While performance and style grab the headlines and make marketeers feel macho as Hell, the average motorist is motivated by more prosaic concerns: their social, physical and financial security. Any car that protects their personal status quo is in with a chance. Under that remit, the term 'safety' encompasses design, handling, braking, traction control, ergonomics, repairs, finance, etc. So yes, an Aston could be a 'safe supercar'. Lincolns and Jaguars could feature all that expensive hi-tech safety stuff, like heads-up displays and cruise control radar. Mazda could embody nimble safety. Land Rover would be the off-roader that gets you there… and back. (Volvo's a done deal and Mercury can go fish.) Whether you're blasting in an Aston or fooling around in a Ford, the Blue Oval's got your back.

Sound familiar? GM flirted with a company-wide safety campaign earlier this year. Of course, The General's ADD reasserted itself and the safety guck disappeared. So the way is clear for Ford to refine and sell its entire product range under the overarching brand umbrella of safety– from the cars themselves through to the ownership experience. Mr. Bill could even make it hip. Safe! OK, it may not be the sexiest answer to Ford's imagectomy, but it is the safest.

While GM models continue to debut and disappear like Manolo Blahniks, the Chevrolet Corvette stays the course, slowly evolving towards excellence. To mark the retirement of Chief Engineer Dave Hill, Car Czar Bob Lutz posted a short honorific on GM's fastlane blog: "Dave was often disruptive, stubborn, unwilling to take direction, unwilling to take advice, unwilling to accept constraints or limits — in other words, the perfect man for the job." In other other words, Hill was a successful guardian of the Corvette flame DESPITE GM, not because of it.

Lutz' unintentional condemnation of his employer's corporate culture won't surprise anyone who's had dealings with The General. I've received dozens of emails from GM workers and suppliers. They describe an organization so complex it makes the legal system in Kafka's The Trial seem like basic addition. One story convinced me that the phrase "institutional paralysis" was coined by a seat bracket designer. Another persuaded me that "matrix management" and "total chaos" are synonymous. And another reminded me of A Confederacy of Dunces, and left me wondering why more GM managers haven't followed author John Kennedy Toole's example.

In all the discussion about GM's perilous financials, it's often forgotten that the company itself is a disaster. Think of it this way: no one at GM wakes up in the morning and says, right, let's go make some vehicles that are two product cycles behind the competition at a price that will bankrupt The General within the next year. [Mr. Hill would have probably sacrificed his left testicle to equip the 'Vette with Audi-esque soft touch plastics.] But something happens between morning muesli and Miller time that kills GM workers' creativity and stifles the company's competitiveness. That something is bureaucracy.

It's not about size. It's about focus. Toyota is living, breathing, money-making proof that a multinational automaker can produce millions of vehicles without tripping all over itself. To do so, to create an organizational structure lean enough to consistently produce genre-dominating cars, a carmaker must maintain laser-like focus. It must first decide EXACTLY what it wants to do, and then it must do it better than anyone else. As a corollary, the manufacturer must accept that it can't– shouldn't– do everything. It's about choosing your battles wisely, fighting them tenaciously and then protecting your territory with steadfast ferocity.

Domestically, GM has eight brands: Hummer, Buick, Pontiac, Cadillac, Saturn, Chevrolet, Saab and GMC. Which one of them has focus? Which one of them sells a coherent lineup, where every single model does [the same] one thing better than anyone else? Are all Chevy's economy cars? Do all Buicks lead their competition in interior quietness? Are all Pontiacs sexy? What do all Saabs, Saturns or GMC trucks do that no other vehicle in their class can match? Sure, all of GM's domestic brands sell cars that don't fall apart, get reasonable mileage, are reasonably comfortable and don't cost a fortune compared to the competition. But what's their unique selling point? Why bother buying one?

It's General Motors by name, general motors by nature. Once you go down that road, it's no wonder that the Chinese walls separating the brands disappear, and dozens of models across the eight brands emerge on their respective forecourts courtesy of the bloodless process known as badge engineering. Since all the cars within each of GM's eight brands must do everything pretty well, but none are asked to excel in any one area (save Hummer, but give it time), it makes perfect sense to save money by sharing management, designers, workers, models, parts, marketing, etc. Is it any wonder that GM's company culture rewards measured uniformity rather than breakthrough creativity?

Of course, inside any large organization, there will always be employees striving to realize their personal vision of product excellence– despite the internal forces ranging against them. Dave Hill was one of GM's "mavericks'; I'm sure he could tell plenty of stories of missed opportunities, needless compromise and administrative lethargy. In any case, Hill's success is an anomoly: the exception that proves the rule. Just think of all the nameless managers who were prevented from creating something great because they had to satisfy GM's overarching desire to do something good…

We've said it before. We'll say it again: GM must die. You can't fix this company. Even if GM's unions agreed to join their Chinese colleagues and work for $1.50 per hour, even if several of GM's 14 (count 'em 14) crossovers are a runaway success, the company is deeply, fundamentally, culturally flawed. Shuttering Buick, Saturn and Saab would help, but nothing can save a car company that's a jack of all trades and master of none.

In a news article entitled "UAW, GM near deal on Health", Detroit News reporter Daniel Howes claims that the United Auto Workers and General Motors are about to sign agreement that will trim $1b off The General's health care payments. The doyen of Detroit sums-up the current state of play in his usual comprehensive and no-nonsense style, but a thorough read of his report reveals that his premise is based entirely on rumor. And the rumor is based on hope. And the hope is false.

It's easy to understand why even seasoned journalists would give voice to such illogical optimism. While we've been charting and predicting GM's demise for some time, the actual implications of that cataclysm are so enormous they defy rational exposition. When a GM lawyer enters federal court holding the General's bankruptcy petition, the entire US automotive industry will change forever. Initially, everyone will suffer. It's no surprise that industry insiders hope against hope that the main players will see sense soon enough to dodge the bullet that will kill the status quo.

What observers fail to understand is that GM and the UAW signed a suicide pact a long time ago. Back in the day, when GM's profit-gorged, short-sighted management traded job security for freedom from strikes, they backed the union into a corner. That's right: the union. Once union members were made fire proof, the union could never, ever agree to their dismissal. Pay raises, working conditions, pension contributions, even health care– they're all negotiable. But any UAW boss that says to one of his members "The company doesn't need you anymore. That's it, you're done; you're outta here" wouldn't last five minutes.

Make no mistake: guaranteed employment is killing GM. While everyone is talking about health care payments, the key fact is this: a large percentage of The General's workforce is completely unnecessary. And yet GM is forced by its UAW contract to keep paying these workers, either by continuing to spew out cars no one wants or by putting them in a "job bank" where they receive full salary and benefits for doing nothing whatsoever. While most people understand the insanity of the job bank, few realize that one of the reasons GM makes far too many products is that the union deal means it would cost them almost as much NOT to make them.

All the UAW can say is, well, it's your fault for not designing, marketing and selling vehicles that people want to buy, which would create enough demand to keep our people employed and help you make enough money to pay our salaries. It's not a bad argument, really, but it was formulated at a time when GM owned the US auto market lock, stock and barrel. And even if it's true, it's not important. The chances of GM's design team pulling a dozen or so rabbits out of its hat are now smaller than a Chevrolet Aveo.

Despite all the media hype and hope, the current situation is a Gordian knot. GM can't live with their UAW contract, they can't get out of it without a strike, and they can no longer afford a strike. Meanwhile, the General is bleeding out. Their market share has evaporated, their new products aren't cutting it, Delphi is about to saddle the company with a $7.5b pension bill (and a catastrophic interruption in the flow of parts), their credit rating will soon be sub-junk (nuclear waste?), their losses are completely unsustainable, and so on. Today's fire sale of their stake in Fuji Industries to arch enemy Toyota is just more proof that their time is up.

In fact, GM is already dead. They're already locked in the corporate version of John Kennedy's plane crash: a death spiral headed straight to a violent, inescapable conclusion. Accepting this premise, we can understand GM's recent behavior in terms of Dr. Elisabeth Kubler-Ross' Five Stages of Grief. We've heard the denial (our products are great!); we've felt the anger (the media hates us!) and now… bargaining. As you read this, GM and UAW reps are at the bargaining table, trying to find a way to deal with their mutual loss. They may establish what Ross called a "temporary truce", but they will eventually have to move on.

When Delphi goes belly-up, I reckon the whole lot of them will make the transition to the final stage: depression. When GM itself follows suit, the depression will become chronic. The media will bemoan the loss of American pride and jobs, the UAW will get all sullen and melancholy, and GM's current management will sulk off into the distance, riding their golden parachutes without comment. All that will be left will be acceptance. Kirk Kerkorian and his pals will take charge of this final stage of the healing process, telling the world that it's over. Deal with it. And after that? Who knows? Hope springs eternal.

Today's 11th hour deal between GM and the Canadian Auto Workers (CAW) is yet another example of The General's singular inability to take the bold action needed to avoid bankruptcy. Instead of reasserting its ancient right to fire workers it doesn't need, GM once again agreed to subsidize idled employees. The General will point to the 1000 jobs sliced from its Canadian operations, but the cuts will be achieved through attrition. CAW President Buzz Hargrove knows what's what, and he isn't afraid to spell it out: 'People will either have work or wages."

The idea that an auto worker deserves full salary for not working is insane. But it's not half as crazy as subsidizing the concept with shareholders' money. In case you thought, well, at least GM exchanged impregnable job security for some benefit reductions, forgeddaboutit. The General's 16,400 Canadian blue collar workers also received a 3.5% pay increase over the life of their contract AND increased pension contributions. Industry experts estimate that the pension top-up will cost GM an EXTRA $179m during the three-year period.

As a warm-up for the '07 negotiations with the United Auto Workers (UAW), GM's Canadian caving expedition is roughly equivalent to a prize fighter preparing for a title bout by working on his tan. The General's crack negotiators couldn't even get CAW assembly line workers to reduce their break time by two minutes. Of course, GM's abject failure to stem the spurting artery of red ink known as "legacy costs" is neither new nor surprising. Rabid Rick Wagoner and his minions have continually staked their fortunes on changing the bandages covering the company's wounds, rather than radical surgery. And by surgery, I mean a strike.

There's no question that a tough stance by GM against its Canadian workers would have triggered a walkout. It's equally true that a strike would have severely dented GM's US operations. In 2004, The General's Canadian factories built 824,619 transmissions, 682,000 engines, 603,660 cars, 320,055 trucks, 24.6 million parts and shipped 117,022 tons of steel. Even if the UAW didn't walk out in sympathy with their neighbors to the north, the disruption to GM's food chain– and its effect on beleaguered suppliers like teetering Delphi– would have been catastrophic.

But survivable. GM's Gulfstream-friendly execs wimped-out because A) they're chicken and B) they don't think they need to draw a line in the sand, ever. Simple logic will convince the UAW to surrender members' entitlements. Shrewdly enough, the UAW has catered to this delusion by commissioning an "outside review" of GM's financial health. GM's leaders believe the UAW will read the report, see the writing on the wall and take one for the team. The General's generals figured a Canadian showdown would have put the UAW in the wrong mood for the conciliations to come.

Hello? Am I the only one actually listening to Big Ron Gettelfinger? When asked about the possibility of surrendering union benefits to ensure GM's continued existence, the UAW Prez said: "There comes a point in time where you think, 'We either move forward or we all go down together…' You can't just take, take, take, take, take and that's the mood that's out there right now.' I'm no labor relations expert, but Big Ron doesn't sound like the kind of guy who will extend the hand of friendship across a bargaining table in the name of mutual self-interest. I mean, if Big Ron thinks he's being abused NOW, what hope is there in '07?

None. GM should have forced the CAW to strike. Considering the inescapable fact that GM will eventually face a UAW strike (and/or Chapter 11), it would've been better for The General to have its labor showdown start in Canada. From a PR point-of-view, Americans would be a lot less likely to support a strike on behalf of Canadian workers than one mounted on behalf of UAW employees. This is also a time when GM's inventories are low, and the company's prospects dim. Better to have it out now, heading for the winter doldrums, than later, when sales will be there for Toyota's taking.

A crippling strike would've also offered GM an excellent opportunity to kill half its brands– and blame someone else. But hey, who am I kidding? You only have to look at the timing of the Solstice, HHR or any one of the company's "new" gas-guzzling SUV's to know that the word "proactive" simply isn't in The General's vocabulary. They're used to playing defense. That's what they'll do until the opposition rips off their head and uses it for a football.

In his first podcast, Maximum Bob Lutz insists that the full-size SUV market will survive the changing economic climate, albeit in a diminished form. What, no Cat 5 devastation? Nope. GM's Car Czar reckons around 750k Americans "genuinely need" a jumbo SUV (down from last year's estimate of over a million). Yes, well, a man who flies an L39 fighter jet for fun may not be the best judge of how gas prices affect the average SUV buyer. In fact, I reckon MB's market estimate is too optimistic by half.

Lutz' cigar-scarred voice claims that the full-sized SUV's core clientele need their gargantuan gas-guzzler because they 'tow a boat' and 'carry lots of kids". Where's the data for that assertion? In truth, it's highly unlikely that even 50% of full-size SUV drivers ever tow a boat. What's more, there are plenty of capable sprog carriers out there– most now available in four-wheel-drive– that don't suck gas with the jumbo SUV's unrelenting extravagance. So unless these owners of full-sized SUV's tote more than three kids AND a boat, they're free to downsize.

Or not. Now that buyers of large SUV's are almost as rare as Oprah magazine cover girls, now that all the low-fertility, non-boating SUV owners who can afford to jettison their land yachts have done so (or will do so at trade-in time), the value of pre-owned XXXL SUV's has collapsed. A large percentage of full-size SUV owners owe significantly more money on their behemoth than it's market value, leaving them unable to escape their loan/vehicle. That's bad news for GM's new Tahoe, Escalade, Yukon, Yukon Denali and the eight (yes eight) other GMT900's headed for dealers' parking lots in '06.

Even those who can afford to pay the freight for these sleeker, more cosseting SUV's won't. The General's previous party line– that people who can buy a $40k to $70k SUV aren't overly concerned about $3-a-gallon gas– is moot. Despite Lutz' belief in his customers' maritime/progeny-based buying motivations, the popular movement into large SUV's was fashion-led. The popular movement OUT of them will be equally stylish– with one important distinction. The current fug of anti-SUV negativity is so poisonous it will only take a few months to destroy an automotive trend that was decades in the making.

For GM stockholders, employees and suppliers, it's a tragedy of the worst kind: preventable. While you can't blame The General for making full-sized hay while the sun shined, the automaker should have seen this coming. Unless you believe that GM's market analysts were paid to play Tetris, unless it's OK to enrich a CEO by $7m+ a year when he can't tell which way the wind's blowing in a howling gale, GM had time to get it right. GM could have– should have– dedicated every resource in their Empire to designing, manufacturing and selling the world's most fuel efficient SUV's. A 20 – 30% improvement in fuel economy would have forestalled much of today's "truck flight".

Of course, arrogance is the engine of tragedy. When Rabid Rick Wagoner met with Toyota Chairman Fujio Cho in May, he should have bowed with appropriate reverence (to put it politely), bought the Japanese automaker's hybrid technology and ordered it installed in all GM SUV's– even if it meant a two-year production delay. Instead, Wagoner-san flew back to Detroit, pulled the trigger on GM's great SUV giveaway and ordered production of GM's "refreshed" SUV's brought forward. Vehicles that get one mpg more than the old ones.

Wagoner's hubris stems from his profound faith in the power of perseverance. (It was the key to his rise within GM.) Rabid Rick clearly believes GM will answer the clarion call for improved mileage with new, world-beating technology… eventually. As in too late. Lutz, on the other hand, is a Marine. His hubris comes from his conviction that a warrior's heart conquers all. Listen to his podcast. Check out Maximum Bob's strange combination of bravado, bluster and battle fatigue. We HAVE what it takes. We CAN bunker down and hold out until the hybrid cavalry arrives. We WILL be OK. Except when Bob says "we" he means "I". [Business Law Number Seven from Maxi Bob's book on Chrysler: 'Teamwork isn't always right.]

I digress. Bottom-line: I'd be surprised to see large SUV sales top 400k a year. And yet Lutz' podcast tells us GM's winning: their new-shape SUV's will maintain a 60% share of the disappearing market. Meanwhile, over at the other tables, the croupier is busy shoveling The General's chips in Japan's direction. If it wasn't so funny, it would be sad. Actually, it is sad. Once upon a time, America's largest companies were known for their ability to bring technologically advanced products to market quickly, cheaply and efficiently. If the world's largest automaker can't re-engineer its vehicles fast enough to avoid a completely predictable market meltdown, then maybe it shouldn't BE the world's largest automaker. Ipso facto.

http://fastlane.gmblogs.com/archives/2005/09/first_podcast_w_2.html

Peter DeLorenzo latest rant tore US automakers a new orifice. The Autoextremist accused US manufacturers of putting all their eggs in an SUV shaped basket– despite clear warnings that rising gas prices and political correctness would eventually destroy the genre's over-arching popularity. Although Mr. DeLorenzo's essay is a cogent and scathing indictment of the automakers' short-term thinking, he's sure to face some stiff rhetorical competition from the environmental groups who've been railing against SUV's since the first Suburban burbled its way into the American housewife's heart. Guess what? I'm not joining the chorus.

While I'm happy to condemn GM et al for responding to US market trends with all the alacrity of a three-toed sloth, I reject Mr. DeLorenzo's argument that Detroit artificially induced America's "need" for lumbering leviathans. Did Colgate create the "need" for whitening toothpaste? No; they identified a desire, created a product to satisfy it and marketed the Hell out of it. As a capitalistic enterprise, automakers are obligated to follow the same process. Taking automakers to task for making XXXX SUV's handle like cars– instead of simply abandoning the entire genre as "woefully inappropriate"– makes Mr. DeLorenzo more of an Autoelitist than a player of extreme games.

The truth is that no one forced Americans to buy SUV's. By the same token, no one can force US consumers to abandon their "wasteful mastodons" (providing we accept the idea that gas hikes are the result of limited supply rather than conspiratorial collusion). Of course, the combination of high running costs and political incorrectness HAS created an SUV exodus of appropriately epic proportions. But the fact that the Big Three made hay while the sun shined, and used their influence to promote an SUV-friendly legislative environment, is nothing more than good business.

If the party's over, it's over. There's no use blaming Detroit for providing the revelers with jumbo-sized kegs. Everyone involved was, after all, an adult. You can, however, wonder why the Hell GM killed a rear-wheel-drive car platform in order to freshen-up its SUV's at the exact moment when the genre was, no-doubt-about-it, headed for the dumpster. Or what Ford was thinking when it deep-sixed its entire minivan business. Or when DCX will get around to producing a hybrid anything. According to DeLorenzo, these failures are a result of Detroit's lack of "vision, creativity and conviction". In other words, whilst gorging on truck-based profits, the automakers forgot to plan for the inevitable SUV sales crash.

Again, I'm not buying it. Yes, the knuckleheads at GM were dramatically trumped by Toyota in their car-based R&D investments, but you can hardly accuse of them being asleep at the wheel. They've unleashed plenty of new cars over the last five years, and there are more to come. Ford proclaimed last year "The Year of the Car". Their Focus, Fusion and Mustang are an admirable attempt to live up to their own admonition. DCX has also kicked some major car-based butt, what with the 300 and the Town and Country taking their segments by storm. Clearly, the Big Three do have a Plan B. It's just that they also have a Plan C, D, E, F, G and H.

The problem with Detroit is not that they made too many gas-guzzling SUV's; it's that they make too much everything. I've already ranted at length about the patent idiocy of GM running an eight-brand US portfolio, complete with multi-brand product overlap and blatant re-badging. Lest we forget, Ford also sells eight marques stateside, and many of their products compete with each other for the same customer. Is it any wonder that tri-branded DCX is doing better than its domestic brethren? I think not. They have to do more with less.

All three automakers have products appropriate to a marketplace geared towards mileage rather than, um, machismo. It's just that they're not good enough. And that's because no company can do everything well– especially if they're trying to do it eight different ways. If GM, Ford or DCX wants to knock the Accord or Camry from their perches, they should create a single competitive product and keep hammering away until they succeed. Meanwhile, until and unless The Big Three downsize their entire organizations–product, administration and production– they will win some battles, but lose the war.

The Big Three's success in the jumbo-sized SUV market should be a source of inspiration, rather than vilification. After all, the secret to their domination of the genre was their limited portfolios and single-minded product development. In fact, if Detroit uses the death of the large SUV as a cue to pare itself down and concentrate its resources, the gas-pumped shaped comet that's wiping out the large SUV market could be a blessing in disguise.

http://www.autoextremist.com/page2.shtml#Rant

You get a terrific view from the top of a roller coaster– but there's only one way to go. GM execs would have known the feeling at the beginning of August– if they were paying attention. They weren't. Despite all the experts' warnings, The General's top brass were too busy high-fiving each other over the 'success' of their Employee Discount for Everyone (EDFE) program, talking-up their plans to gently wean customers from discounts and incentives. Well hands in the air boys, the August sales figures are in…

Ward's AutoInfoBank reports that GM's sales are down 16.5%. [All figures cited are in comparison to August '04] Lest you think the results were a simple case of a sinking tide stranding all boats, Autodata reveals that the US automotive market as a whole rose 3.8%. While Daimler Chrysler and Ford eked-out small gains (1.2 and 1.4%), check out their Japanese competition: Toyota (+9.5%), Nissan (+10.6%) and Honda (+18.6%).

What happened? Truck and full-size SUV sales tanked. Although the media has been busy upbraiding consumers for daring to buy the General's discounted gas-hogs (ignoring their eco-moral responsibilities), the press gang failed to realize that the EDFE blowout was the last charge of the light truck brigade. Look at August's top 15 sellers and clock the change. Only two pickups and two SUV's made the list. More to the point, GM's entries on Ward's automotive hit parade were off a whopping 35.4% (Chevrolet Silverado) and 17.5% (Chevrolet Trailblazer).

August's big winners were relatively small cars like the Ford Focus, Honda Civic, Toyota Camry and Nissan Altima– still. Only more so. Sales increases for these vehicles were well into double digits. Although GM has three Chevrolet automobiles in play, two of these models lost sales and one remained static. The Pontiac Grand Prix was the only bright spot in the General picture, up a staggering 78.4%. One problem: the new G6 (developed at a cost of hundreds of millions of dollars) was supposed to be the bright star in the Pontiac firmament…

Obviously, post-Katrina gas prices will accelerate the trend away from low mileage leviathans towards more fuel-efficient vehicles– at the exact moment when GM expects its refreshed trucks and SUV's to carry the can. Of course, any company with 70 models will have a number of products appropriate to a conservation-minded climate. On average, GM's fleet is a fairly frugal bunch. But neither statement obviates the fact that GM has ignored clear and consistent signals that truck-based vehicles were a dead genre guzzling. The General's divisions are still lousy with pickups and SUV's, with no automotive cavalry waiting in the wings. Oops.

Not that you'll hear that expression from inside GM. They're too busy backpedaling from earlier assertions that rising gas prices would not damage their SUV-based plans to finally pull the company out of its tailspin. For months, GM has been insisting that its middle-class customers are insulated from high fuel prices. (No suprise there: The General delayed some mid-sized car programs to speed the launch of their full-sized SUV and pickup programs.) Now that the gas prices are disappearing into the stratosphere, GM's spinfolk are admitting that the cost of gasoline may have a "psychological impact". Spinelessly enough, they're implying that GM's current and impending woes will stem from of potential customers' misguided timidity, rather than The General's abject failure to adapt to market trends.

In any case, the debate over gas hogitude probably suits the suits. It draws attention away from the elephant in the room: sales brought forward by the EDFE. Every industry analyst worth his pocket protector has been saying that GM's summer sales bonanza was the result of customers buying sooner rather than later. Well, it's later. In fact, it's a lot later than GM thinks. The General's rivals are rapidly and inexorably siphoning-off GM's market share. Yet Rabid Rick Wagoner's mob have yet to downsize their operation or 're-negotiate' GM's onerous labor costs to match its dealers' diminishing ability to sell GM vehicles at a price that can generate a profit for the corporation.

GM's reaction to the latest crisis was predictable enough: they extended the EDFE program through September. More significantly, the program now includes many '06 models– a tacit admission that GM has abandoned its ambitious plan to leave their Wal-Mart image behind. At a press conference yesterday, The General's chief industry analyst entered England's understatement hall of fame. After calmly predicting that oil would eventually stabilize at an SUV-friendly $50 a barrel, Paul Bellew admitted that "September will be a challenge."

While GM clings to euphemisms for comfort, corporate carnivore Kirk Kerkorian made an equally predictable play: he bought more of GM's cheapened stock, raising his stake from 7.2 to 9.5 percent. Mr. K's spokesman said the octogenarian billionaire has "confidence in the company, the American auto industry and the US economy as a whole." And, no doubt, the wisdom of firing the boneheads who brought the world's largest automaker to its knees, selling off GM's assets and completely restructuring the business. Hang on folks; it's going to be a wild ride.

Toyota is the most successful automobile company of modern times. By some calculations, they've passed Ford as the world's second largest automaker (a position Ford held since 1952). It's only a matter of time before Toyota surpasses GM for the number one spot. And no wonder: the Japanese company builds an impressive number of highly popular cars and trucks. While its rivals study Toyota's stars– the Camry, the Lexus SUVs and the Prius hybrid— the real recipe for their dominance is found elsewhere.

The most interesting aspect of Toyota's business is how they handle their failures. Take, for example, their forays into the US minivan market. Chrysler invented the genre with the introduction of their Dodge and Plymouth minivans. A few years later, Toyota responded with a small, boxy, mid-engined van, reminiscent of the cargo vans that Chrysler, Ford and GM had sold for years. Needless to say, Toyota's entry didn't even appear on the minivan buyer's radar screen. Toyota then spent a huge amount of money and restyled this van into the smooth and bulbous Toyota Previa. Again, buyers were lined up none-deep.

Toyota's third attempt was closer to a direct copy of the Chrysler vans, but smaller. Although it offered front wheel drive, the vehicle still captured a very small segment of the minivan market. By this time, the big three domestic manufacturers would have thrown in the towel. But Toyota doesn't work that way. They built yet another completely new minivan, the Sienna. Toyota finally got it right, and rapidly carved out a major portion of the minivan segment for their own.

Compare Toyota's persistence to Ford's reaction to the failure of the Freestar/Monterey minivans. After fielding a pair of vehicles that were never designed to be 'best in class', Ford appears mystified that they didn't sell as well as the previous Windstar van. Ford promptly fired the managers responsible and announced that they were getting out of the market.

How about another segment that the Americans appear to rule (at least for now): the full sized pickup truck? Toyota fielded their first full-size truck ten years ago, the T-100. As the pundits predicted, the machine languished in the marketplace. Toyota's response: try again, this time with the Tundra. Although the new truck was hardly a rousing success, it's a decent competitor that sells a lot better than Nissan's new Titan.

But Toyota isn't happy with being an also-ran. Rather than dole out huge incentives to move the old truck, Toyota has committed over a billion dollars to a new plant and a new truck. The plant, situated in the heart of pickup truck land (Texas), will produce a truck sized and powered to take on the Fords and Dodges and Chevrolets roaming the ranches. Will it succeed? I wouldn't bet against it.

Remember Toyota's response to the Fiero? The MR2 was a better-engineered automobile than Pontiac's roadster, but butt ugly. After the Fiero flamed-out (following a rash of engine fires), Toyota persevered. A complete restyle erased the uglies, and the MR2 soon won a deserved reputation as a vest pocket Ferrari. The sports car was the centerpiece of Toyota's performance image for many years. Although it failed to earn its keep in pure profit, it helped burnish Toyota's performance credentials for many years.

GM reacted to the Fiero's shortcomings by discontinuing the car. Not long afterward, the Mercury Capri came and went. But Toyota spent many years developing the MR2 and sporty Celica, and learned many valuable lessons about building budget-minded performance cars. You can bet that experience will be brought to bear on the two machines' inevitable replacements.

Seen the new Toyota convertible? Not many people have. The Solara, aimed directly at the Chrysler Sebring, remains practically invisible. At the moment, Chrysler owns the convertible image, if not the market. But with Toyota's can-do attitude and long-term committment, it's not unreasonable to expect ongoing improvements to the Solara's engineering, styling and marketing which will eventually make it a credible Sebring competitor.

Contrast this with the product development ethos at Ford or GM. If a car isn't an instant success, they cut off development money. Everyone associated with the program is considered persona non grata. In fact, the employees responsible are often sent to engineering Siberia or simply pushed out of the company. The knowledge gained, at great cost, is lost. Even the worst failure has a few features worth incorporating in future products. Developments from the Mark VIII, for example, could have been used to great advantage in the Lincoln LS to increase its competitiveness. Instead, everything about the Mark was tainted by failure. As a result, the successful parts of the Mark program were lost forever.

Continued commitment to product is the secret of Toyota's success. Everything else is just window-dressing.

As I write, a group of Wall Street analysts are bunkering in GM's corporate HQ for an update on The General's recovery plans. The morning session will feature a PowerPoint pummeling entitled 'The Solstice Will Come out Tomorrow'. The post-prandial spin session will address the big issue: how GM plans to stem the torrent of red ink spewing from every corporate vein, artery and orifice. As TTAC was denied admission to the confab, we thought we'd Blackberry a few questions to our secret admirers…

1. When is GM going to cut UAW benefits?

Early this summer, Rabid Rick Wagoner stood in front of GM shareholders and solemnly swore to cut the automaker's 'legacy costs' (the communist era health care and retirement benefits enjoyed by current and former United Auto Workers' employees). The UAW responded by hiring an accounting firm to justify their intransigence, nickel-and-dimed dozens of hapless GM negotiators to the brink of insanity by 'exploring cost cutting moves within the existing contract', issued a press release expressing concern about the effects of high gas prices on GM truck sales and bought a Ford Escape Hybrid for their President.

For its part, GM has done… nothing. In fact, the company recently confirmed the status quo with a new contract at its Vibe-making California plant. All Rabid Rick's dark hints about unilateral action (emboldened by independent assertions that GM would win the inevitable court battle) have turned out to be nothing more than feeble posturing. Clearly, Wagoner does not want to trigger a company-crippling UAW strike. Clearly, he must.

2. When is GM going to cut its executives' salary?

While it's not a crime to draw a multi-million dollar salary when your company's swirling around the toilet bowl, the annual compensation paid to GM's top brass (Wagoner, Devine, Briggs, Cowger, Burns, Lutz, LaNeve, et al) gives the UAW the moral high ground. When push comes to shove, when the barricades are manned, the execs' high life will not play well in Peoria. GM's top brass should shred the class warfare card NOW, before the UAW can play it.

3. When is GM going to downsize?

With eight divisions deploying over 70 models, The General is still relying on the sheer weight of numbers to overcome its enemies' tightly-focused, niche-driven insurgencies (e.g. Toyota's Prius and Scion). While the sales chart proves that GM is winning battles, the company's continually decreasing market share and non-existent profits show that it's losing the war.

It's well past time for GM to cut the deadwood. Buick, Saturn, Pontiac, Saab– one or all must go, no matter what the cost in dealer lawsuits and/or UAW retaliation. Failing that, each GM division should be wrenched from the corporate tit; freed from administrative tyranny, corruption and waste. Each division's troops must learn to operate quickly, efficiently and, most importantly of all, independently. Platform sharing yes. Inter-divisional pencil pushing, no.

4. When is GM going to commit to no-haggle pricing?

The "Employee Discount for Everyone" program proved beyond a shadow of a debt that customers prefer pricing clarity to marketing spizzarkle. And yet The General is committed to returning to a bewildering combination of incentives, equipment packages and finance deals, now called "value pricing". While the promise pleases GM's profit-squeezed dealers, it will piss away the one thing that money can't buy: customers' good will.

5. When will GM make a car with a decent interior?

There's no question that many GM products now offer class-competitive build quality. There's even evidence that the company is beginning to understand what makes a visually compelling vehicle. But The General's complete inability to create a car, truck or SUV with an aesthetically attractive interior made from high-quality materials– from the Aveo all the way to the Cadillac STS– is symptomatic of its structural problems.

GM's ergonomic engineers are no worse than Audi's. They're just hamstrung by a monolithic bureaucracy that rewards penny pinching over design excellence. A car's interior is inextricably linked to perceived quality; get that right, and people will believe the company's 'best built' mantra. Car Czar Maximum Bob Lutz knows the drill, and was supposed to sort this shit out. He hasn't.

6. When will GM clean up its act?

GM is stuck in a vicious circle. Its leaders refuse to publicly acknowledge or confront its problems, which creates delusional behavior, which alienates customers and employees, which increase its problems. In other words, GM is lost in a forest of fundamental dishonesty.

For example, the Pontiac Solstice's launch is delayed. No one will tell the media why the delay occurred or commit to a new delivery date. Maximum Bob recently announced that Solstice production has finally started and handed over the keys to a couple of hundred buyers. Only customer deliveries haven't started, really. Dealers don't even have demonstrators. When will that happen? When will GM tell the whole truth about this, and their other challenges? About the same time Mr. Wagoner's mob finally finds its nerve– or unfurl their golden parachutes.