Read Our Viability Plan
Two weeks ago, in response to the domestic automakers’ request for emergency bridge loans from the federal government, the US Congress asked General Motors, Ford and Chrysler to provide detailed business plans for long-term viability. Today, GM submitted our plan to the American people, and to the Congress. The plan details both the significant efforts we already had underway, and the even more aggressive restructuring we’re undertaking in the face of the current crisis in order to return to long-term profitability.
If you’d like to read it for yourself, please click here.
Meanwhile, here’s a video featuring Ray Young, our Chief Financial Officer, discussing and explaining elements of the plan in some more detail. - Christopher Barger, Director Global Communications Technology, General Motors
- Posted in Business, The Case for GM
bornfromjets03
While I realize that this “plan” of yours in only in its beginning stages, and will need to be tweaked, I will take this time to say that your “review” of SAAB is the dumbest thing on the whole plan!
I’d really like to know why you guys don’t get that if you really want a brand to succeed you need to WORK at it. aka cadillac. You expect SAAB to succeed when all you do with it is make a BLS?!?!
Saab has the potential to seriously help GM out of this ____hole its in right now.
it would be really nice for someone to send me an email explaining such a decision.
Thanks,
bornfromjets03
Frank T
I’m very happy to see Pontiac and Buick staying, move some of those nice Saturns (Sky/Aura) into the Buick line up. Good Luck GM!
Ted Lewandowski
I started to read the Plan and halfway through - it began to sound a little redundant - actually rather boring (you would think someone would actually draw a nice corporate logo to dress up the report and not copy and paste something low-res that looks like it was done for a high school class report).
However, I should say I was startled to see that GM needs an ‘immediate’ $4 BILLION ‘to insure minimum liquidity levels through December 31, 2008′ - I mean that’s 28 days from NOW!!!
I hate to say it but that’s not going to happen with a lame duck president - and really GM should have thought about selling the corporate jets a year ago - not after the fiasco of Rick Wagnor flying to Washington last month.
GM should make all vehicles immediately special order - not just blindly producing models that no one wants to buy - while providing the buyer a 10-20% discount for paying in advance. This will inject all the capital that GM needs as ALL cars would be pre-paid and be significantly more competitive with Toyota/Honda/Nissan at the same time.
This will not alter the current dealer network as the dealers would still need to have models for people to test drive but it would also make the dealers more profitable as they will no longer have to floor-plan 200-300 models per month.
Don’t worry about the cars/cross-overs mix - just build cars that have Mercedes-Benz quality - not perceived quality as you currently use - and fuel economy that makes owning a GM car equivalent to the Asian vehicles.
What GM really needs to do NOW is to close all the factories for the month of December - give all the employees a nice Christmas bonus - SAVE 75 MILLION DOLLARS A DAY and rethink your PLAN.
It is not outrageous as you might think - most European plants close for close to 30 days over the Holidays.
It will give you time to rethink your PLAN - and add some future models into the PLAN to get people excited - you are selling cars after all - not Fruit-of-the-Loom underwear!!!
Dr. Turkey-Belly
It’s is truely misguided and disgusting that the focus has been on how Mr. Wagoner and the others travel. The press has mis-led the America public as to what is important here.
The automotive sector is crucial to US independance and its long term economic leadership.
If a loan is not granted (note, it’s not a bailout but a much needed loan) than I predict that the US economy will never fully recover and this will be a text book example (literally case studied in textbooks) of what NOT to do - just as in my doctorate studies, we covered the errors of the central banks during the great depression.
Best of luck to you all.
Good luck - I mean this to all Americans.
stas peterson
I had thought that outside of getting the new products right as in the Malibu, Caddy STS and CTS and of course the VOLT, Rick Wagonner was pretty much muddling along.
I had NO IDEA that the consolidation of the dealer body had progressed that far. I didn’t know that GM had fully 80% of its PBG sales come from consolidated troika PBG dealers. The job is much further along than I thought. Commentators made it look as a Sisyphean task, fro a decade or more.
I had NO IDEA that four brand in the US represent 83% of sales. Chevy, Buick, Caddy and GMC are that dominant. It makes it relatively easy to handle Hummer, Saturn and Saab and Pontiac.
I’d spin SAAB off to OPEL/Vaughaul ie GM Europe an possibly make the Saturn dealer network an export arm of pf GM Europe too. Why redress up an Opel as a Saturn, as that is what you are selling anyways? Toss in SAAB too for that matter.
I think it ’s smart to restrict Pontiac to a sub-brand for certain models. You don’t have to fully duplicate a model lineup top top bottom. PBG dealers wil bellyache for small car volume and Pontiac could supply all the below mid-size models for that dealer chain. And perhaps a performance model like a Goat or Solstice too, if that doesn’t seem appropriate for a Buick..
Interesting enough, I now see the way for GM to absorb Chrysler too. Simply substitute Dodge/ Jeep (dropping Chrysler) for Pontiac in the PBG channel and the sales channels are complete and rationalized. A GMC large SUV would fill a void at tthe top of Jeep too.
Rick W, you may not be making much money, but you are doing a damn fine job, wihtout a lot of attention…
JDC
I hope this all works! Good Luck and God Speed!
Bruno Eiras
I believe GM will pull through these tough economic times, but to do so it needs to be trimmed. I have always had tremendous respect for GM and SOME products. I am looking forward to becoming a customer soon, but I want some brands to be trimmed first. Hummer needs to be eliminated not sold, instead GM needs to focus on trying to sell its SAAB brand. In addition to this Pontiac and Saturn need to be eliminated. In order to compensate for the loss of Pontiac at Pontiac-Buick-GMC dealers, we need a few new Buicks. Pontiac should not be a niche brand, it should be eliminated, no matter how many times the G8 turns my head. Buick needs both the Chinese “Pontiac G8″ twin, the Park Avenue, to take over the Lucerne’s uncompetitive sell figures and a small Buick, possibly the Buick Excelle also marketed for the Chinese consumers to fill the void left by the Pontiac G5. These changes along with the new LaCrosse and the Enclave should help boost some consumer confidence in GM.
SteveG
The problem is you guys change plans all the time.
Pontiac was supposed to be a niche brand 3 years ago, then you add the G5 and now the G3.
You couldn’t forsee Saturn having trouble moving upscale? Come on.
Buick, what have you done to the brand? 2 cars? Both mediocre. Changing the name from Regal, which won quality awards, Lucerne? Why? LeSabre, Electra, Park Avenue all would have been better.
Now, you decide to change the name of the Cobalt. Why? And to the Cruze-worst name ever for a car. Why should we believe GM is worth saving when you come up with stupidity like this?
Cruze!? Good lord. Fire your entire marketing department.
You need a new CEO, you need a plan, a good one, and you need to stick to it.
Your quality is sub-par. You should close any Plant that gets poor build quality marks. Lordstown doesnt deserve to build another car-the Cobalt’s build quality is poor.
You keep using defective parts, and don’t change them when you know there’s a problem. Does Toyota, Honda, or any reputable manufacturer do this!?
You know the steering columns and other steering components are defective in the Cobalt, Impala, Aura, and who knows what other nameplate that is infested with these shoddy parts, yet when something goes wrong with them you replace them with the same exact defective parts!
Again, why is GM worth saving?
Get your quality act together starting NOW. As for your remaining brands:
You want to know what your product portfolio should be? Here it is, for free:
Chevrolet:
Metro (Corsa)
Cobalt (NOT Cruze)
Malibu
Impala
Caprice (G8) or Chevelle (4 door Camaro)
El Camino (G8 ST)
Camaro
Corvette
HHR
Orlando
Equinox
Traverse
Tahoe
Silverado
Avalanche
Buick:
Skylark (Astra)
Regal (Insignia)
Park Avenue (Chinese Park Avenue)
Riviera
Bengal (Sky)
Enclave
Cadillac:
BTS
CTS
DTS
SRX (although I would have preferred the name CTX)
XLR
Escalade Hybrid
GMC:
whatever they have
No reason for Pontiac and Saturn to exist anymore-they are damaged goods. I would only keep Pontiac if they went back to heritage names-Sunfire, Grand Am, Grand Prix, Firebird. Otherwise just put it out of its misery.
Nate
I just finished reading your document to the US Government…. Well it was a nice attempt GM. I have a lot of comments and questions. But overall I’m not impressed. It seems to be the same thing as before just worded in a crafty way. There are a few good points but nothing that I’d be willing to put my Tax dollars toward.
Darren
Good work……..so bummed about Saturn, such a great product lineup and for some reason it just has not hit. Question, what happens to the Opel/Saturn Relationship………there was a lot of planned product synergy there?
Does Pontiac essentially keep product alignment with Holden?
Anthony M N
I’ve read the material. It sounds and looks good. I hope it works.
I do have doubts as to whether you’ll be able to manage your legacy costs (over US$ 103 Billion dollars spent over the last 15 years!!!!), particularly with competitors who do not have anywhere near the same level of legacy costs (in some cases near-zero real legacy costs), and work with a non-unionised workforce (meaning, no UAW pressure which enhances fiscal flexibility). I have serious doubts as to the long-term viability of the situation GM currently is in, and the sad thing is that it has nothing to do with the vehicles.
I think GM vehicles are quite good (there is a major perception gap, with a lag stemming back to the 1970s and 80s), but the problem with GM currently is NOT its automobiles. The problem is two fold:
a) the almost two-decade old perception lag, where people still perceive GM vehicles as ‘not as good’ (true story: the FIRST DAY of a class I was taking on business process mgmt in university, the professor started with a rant on how Ford vehicles had let him down years ago …something about a gear box or something like that, and his views of what F.O.R.D meant. Think of that …a professor starting off the semester with an almost 30 minute rant on Ford, and while I know this is a GM board, the same views obviously have major spillover effect). Thus, negative perception is a major problem. This is also coupled by one section of the political spectrum (primarily the Republican/Conservative side, of which I am one) perceiving the UAW as blood-sucking leeches who don’t care about the overall health of the firm but are just after taking all that they can get. This is obviously not the case, but that is the perception (and to be honest I do think that the UAW leadership is, in effect, risking killing the Golden Goose).
b) The second problem is legacy issues. If GM falls under, it will not be due to bad vehicles or low sales. It will be due to sales/income from vehicles not being enough to COVER legacy costs. You guys just have a badly skewed fiscal mileau. Think of it …isn’t the company having a negative bal sheet of US$60b if you look at current and projected legacy costs? This makes it appear that, even if you get a bailout (and I hope you do get some assistance), that it is only temporary. That in a year or two it will be the same story again.
A company like Toyota doesn’t suffer the same hindrances, it has a smoother flow, and it can even invest what it could have spent paying people who retired 2 decades ago on new vehicle technologies.
That is not a competitive advantage for Toyota …that is competitive dominance.
Thus, the issue with GM is not its vehicles. I would gladly buy a GM vehicle (I am actually a strong candidate for a Corvette purchase in the next 24 month time-frame ….right now I am doing German sedan for business purposes, but I intend to blow some steam and not even the best from Germany, no M3 or AMG, can provide the same satisfaction as a Corvette). However, I fear the impact of the mix of negative perception and ESPECIALLY legacy cost issues (coupled with UAW leadership that apparently does not realize that they are killing GM by taking the hard stand …it was hilarious hearing that guy saying that GM leadership needs pay cuts. You could pay all the top executives at GM a Dollar a year, and unless the UAW changed it would make no difference to GM’s viability).
Unless something is done about those 2 issues, GM is simply (if it gets the money) receiving a stay of execution.
The problem is not your vehicles. There are a number of GM vehicles I would easily buy. The problem is perception, and legacy costs.
(There was a cartoon that showed GM as a sick dying old man connected to machines in a hospital, and then a doctor comes running in with blood ….however, next to the patient sitting on a chair, is a vampire caricature with the words ÚAW’ written, salivating at the prospect of more blood)
I wish you all the best, and continue making good cars. However, watch your six for the real issues that will bring you people down: perception, and legacy costs. Carry some garlic and a crucifix for you-know-what.
Adam
I really hope the plan for Pontiac will return it to it’s roots as the performance division of GM. If the G6, G5 and G3 are the division’s future you might as well put it out of its misery now. If the G8, G8 ST and the Solstice are what’s kept, then you will be able to call me a customer for life.
Chad Christenson
If you sell/kill Saturn, you better revamp your other dealerships to model how Saturn dealerships worked. They are the epitomy of customer service, friendliness, and no pressure. It’s why I bought a Saturn, instead of going to the larger Chevy dealer.
Tyler Haberer
I was just wondering what will happen with the co-op program here at GM. I just began this year and I am very worried about what will happen.
Matt
Very interesting report as well as all of the comments…but I would like to add my two cents to the mix.
I really do not under stand the logic in keeping Buick and GMC. Buick has only one product doing well and that’s the Enclave. The others are crap. So move the Enclave over to Cadillac and get rid of the large SUV’s. Drop in the 2-mode and you have a great CUV hybrid.
GMC…redundant of every Chevy truck. WHY!?!?!? Get rid of GMC and just make a Denali package on all Chevy trucks if you want to have a high trim level. This really is a no brainier.
Saab should be blended into Opel since it is a European company. Keep the models but make them Opel. There are alot of us that like this style of vehicle and are rather disappointed in the lack of commitment from GM on Saab.
Saturn should be turn into Opel here in the US. No rebadaging; no name changes; just Opel vehicles. Again, there are alot of us that like the European style and drive of those vehicles and I really think that GM can gain alot from this synergy between GM Europe and GM NA.
Pontiac…..now this is a tough one; I really like the brand but again most of the vehicles are redundant to Chevy vehicles with the exception of the G8. It would be great if this vehicle could find a home in either Chevy or Cadillac. Living in the Northern part of the country a RWD vehicle doesn’t really suit me but I was blown away when I drove one this summer. It is a great car and priced right. Maybe for Pontiac could be niche line for all of those great Holden vehicles that don’t have a home.
So there you have it; the new GM line up……Chevy, Cadillac and Opel with maybe a side line of Pontiac. Now all you have to do is develop a product portfolio to cover all market segments from minicars to SUV’s and GM will have a winning line up that will rival Toyota/Lexus, Honda/Acura, BMW/Mini, & Mercedes/Smart.
Go Get’em GM! And Good Luck.
Augie Churchill
Is that the actual plan you sent to Congress? With all respect, the layout and typography of the plan don’t look very professional ~ or give me much confidence.
GM’s defense role
After an admittedly fast scan of the plan, I couldn’t help but notice there was no mention of GM’s role as an essential part of America’s heavy industrial base. A base that would be essential were we to become once more involved in a major land war as in World War II.
All of the automakers played a significant role in WW II when they shifted production from cars to heavy trucks, tanks, airplanes, machine gun barrels, and other war goods in order to supply the material our armed forces used to defeat the forces of Totalitarianism. Having a base of heavy industrial capacity that could do the same again is important to national defense.
You should have mentioned GM’s role as part of our country’s strategic reserve in the event of world-wide armed conflict.
Plan has too much corporate-speak
Obviously your plan has to offer some detail, but you offer too much that is extraneous to what you want to do. Your entire plan could have been as simple as: “When better cars are built, GM will build them. We plan to offer high-quality, affordable, fuel-efficient cars. We will build and sell cars that will beat the pants off our competitors ~ domestic or international.”
Start with that mission statement, then explain the details of how you will accomplish that.
Hawkshaw
Interesting small story in today’s AvWeb - a website of aviation news:
Auto companies selling off flight departments
John Cass
Hi Christopher,
I read through the document, and hope that congress responds positively for the American car industry. Perhaps you can suggest more ways for individual citizens can help?
One area of marketing and customer service that I did not see addressed in the document is how the company is going to deal with the issue of perception. I truly believe the American Car industry has an opportunity to use social media to connect with critics and supporters online, to resolve issues and garner support in the same way Dell succeeded with their social media efforts. What plans does GM have to help change the perception of N. American car buyers about your product? The proposal provides a lot of great information about the quality of GM trucks and cars, I just don’t think the message is getting through. What plans does GM have to use social media to achieve a change in perception 1) by making other needed structural changes, and 2) using social media to communicate those changes. (here I am suggesting you engage the community).
Also, would you have liked to see a mention of social media in the proposal?
Dell managed to do a great job of changing perceptions about the company through its micro efforts, but also understanding the importance of engaging the social media community, who would in turn traditional media. Why not follow the same strategy?
Michael J. Zalucki
GM:
Don’t dump Saturn!, it’s your best product portfolio and best dealer network! Change name to Opel, since most Saturn models are Opel based anyway. It will cost more to buy out the dealer network (Oldsmobile, anyone?), than to change the name. Opel has a history in the U.S. and could give VW a run for the money.
Corky Estrada
Matt said: “GMC…redundant of every Chevy truck. WHY!?!?!? “
Matt,
It must be because GMC trucks are “professional grade.” I guess that would mean Chevy trucks aren’t.
Wingo Wango
From the Wall Street Journal: “Mr. Wagoner plans to drive a Chevrolet Malibu hybrid to the hearings, while others in his group will travel in a Chevy Cobalt hybrid and a Buick Lucerne that can run on 85% ethanol, said a GM official.”
Will that be a specially-prepared Malibu, or one straight off the production line? I hope it is one they selected at random off an assembly line, or from a dealer’s lot waiting to be sold.
Rick had better hope there are no breakdowns. (What do you bet GM will provide a van full of technicians to follow the GM convoy in the event something goes wrong?) If they do have to stop to repair something, how will you keep the media away? That would be a PR disaster.
What are the chances that flex-fuel Lucerne will find an E85 station between Detroit and Washington at which to refuel? Or can it make the 500+ miles on a single tank?
What is the point of driving a hybrid on a long-distance trip? Hybrids are at their best in stop-and-go urban driving.
Nate
Dr. Turkey-Belly,
How GM uses its money is what we are talking about. Having corporate jets that cost 10K per flight and millions a year in expenses is just one small way to save money.
I thought you were an economist? How does GM burning money out of a jet pipe help the company when they could get there ALMOST as fast chartering a smaller plane or flying first class?
GM doesn’t need to be bailed out.. people need a reality check. How is a loan/bailout going to help the US tax payers? Assume GM takes a loan out for the requested amount and pays it back… they have to pass the costs on to their customers who are tax payers who have ALREADY floated the bill. It makes very little sense. Why doesn’t GM just heavily discount all of their cars sold in the US… the net effect is the same. Either way its coming out of your pocket and mine.
Are you saying that GM’s future customers are going to take the hit on their gross negligence? Because those customers are the ones who end up paying back the loan/bailout.
Has the US economy fully recovered from WWII? Has Germany’s or Japan’s? I think your point is meaningless “fully recover” only means something IF GM weren’t in the spot their in… but all the events that happen lead up to the actual state of the economy. Your logic is flawed.
This NEEDS to be an example of what not to do. If GM gets bailed out everyone will think “well if we screw up the government will rescue us” What incentive is there to be responsible with their resources?
The truth is people don’t learn the lessons of history because they forget them AND they don’t have the foresight to look far enough ahead. If this weren’t the case the US economy wouldn’t be how it is. But thats OK America needed a reality check.
Joe
Thanks for this plan.
I’ll read it later tonight, but I appreciate the transparency. It says mountains about the company to anyone who’ll listen.
And for anyone reading who actually considers alternative viewpoints…the governement loaned money to Chrysler in the 70s, and actually turned a profit off the deal. Relax (a little). You SHOULD be complaining about the gov’t throwing money at the finance sector without complaining about thier corporate jets or mulit-million dollar CEOs…..you should complain about the gov’t truly bailing out the CAUSE of the country’s current turmoil.
You should not be acting like this is some great sin against capitalism…this issue is peanuts that the stupid politicians are turning into a Public Relations armageddon. And the public is buying it.
Augie Churchill
“Either way its coming out of your pocket and mine.”
Nate,
Actually, it won’t come out of our pockets. In case you haven’t noticed, the U.S. national debt is now more than 10.7 trillion dollars. The really inconvenient truth is that we actually do not have the money to bail anyone out.
What will happen is we will print the money to loan them. That will drive the value of the dollar down. If we keep that up, hyperinflation won’t be far behind. We are doing roughly what Germany did in the 1920s after WW I when they printed money to pay the retributions they owed after the Versailles Treaty.
Whether we bail out the auto companies or not, it’s not going to be pretty.
Nate
Stas Peterson,
83% of the sales to WHO? Car rental companies?
I think we are talking about a GLOBAL GM problem not just a US GM problem. I think GM is better off axing all their products except the Vette and CTS and bringin Opel and Vauxhaul in as new brands.
The PBG branding makes no sense.. its not ONE brand its three you might as well call that GMA and let Chevy and Saturn be GMB.
So you think its smart to have a GM car from Chevy Called a Pontiac G6?
I think its smarter to get rid of this messed up branding and have one brand one model per car. you buy a Buick G6 or a Caddy CTS, no one calls it a GM. Pontiac shouldn’t be a sub brand just drop the word Pontiac.. Make it a Saturn G6 or a Chevy G6 or whatever brand you want to put them under…. a Buick Aura (sounds better to me) or an Opel Malibu…
The only brand of Chrysler GM should keep is Jeep. The rest are useless junk.
Bruno Eiras,
I almost agree with you entirely. Though I think GM should dump SAAB or give it away anything to get rid of it.
I think Buick would be well off with a G6 done up Buick style on the inside. I think the whole idea of branding PBG is dumb. Bring Opel in and replace all of them with it. OR keep Buick, Caddy and Saturn (or if absolutely needed Chevy.. just PLEASE give Chevy a new logo).
If GM replaces the Buick LaCrosse and LuCerne with the Riviera concept, the G8 and something like the Opel Insignia it’ll be a win. Those cars have the power to appeal to modern buyers.
SteveG,
I agree GM’s plan is half brained as always. If they did something that made sense they’d actually be doing well. I don’t know who runs them or what they are thinking but….
Get Rid of Chevy Replace it with Saturn….
Why do you insist on American names? I think GM would be better off telling its foreign car buyers that it is trying to win back “Hey we make good cars we build the same thing that you can buy in Europe with the same names” Give people something NEW thats worth being new not the old names on new cars. Its simple….
I think Chevy is way more damaged then Saturn. Every Saturn owner I have talked to has had good luck with their Saturns. They are definitely a different target crowd then GM’s other brands but at least people bought them because they got what they needed… a decent car at a cheap price.
All,
Why does GM need to rely on its foreign divisions to produce cars that sell? This tells me there is something wrong with how GM is run in the US. If Pontiac is using Holdens and Saturn Opels (some of which are the SAME cars) then why even bother with a GM US?
Anthony M N,
GM vehicles are inferior to their competition. Sorry I’ve driven them for almost 15 years now and have only been slightly impressed with one of them. GM might make everyone THINK they are decent but they aren’t.
Matt,
Buick needs to be kept in my opinion because it is a quality mark. I have liked almost every Buick I have owned. Their ride on the highway is excellent and I think aside from the reputation of being an “Old person’s car” Buick has a reputation for luxury and comfort For that reason alone GM should keep Buick… HOWEVER if they replaced Buick with Opel I wouldn’t be upset.
I think Opel should be a high level brand not an entry/cheap brand. Opel to me has the ability to and ring that is on par with the likes of Infiniti, Acura and Lexus… maybe their current cars aren’t that good but the name alone and the emblem are enough to put that brand on the high end.
Saturn needs to stay Saturn and keep making affordable small cars for people.
Perhaps a rename of the Malibu and Cobalt/Cruze would work well for Opel. Make them a premium brand on the high end and a quality entry on the low end. I could See a GM network consisting of only Opel and Cadillac and Corvette and Chevy/GMC trucks. That would work well i suppose.
Why not just bring Holden, Opel and Vaxhaul over and get rid of all but Caddy and Corvette?
For that matter globally why even bother to have all those brands… it appears to me that GM is a nice conglomerate of a little of this and a little of that. Perhaps what they need to do is combine all of them into a few brands. Why would they market a Holden which is the same as an Opel or Vauxhaul when they could save the marketing costs and put them all under one or two names?
Maybe the best thing is for GM to make it Opel/GM Special vehicles and Chevy Trucks… then they could put all the cool odd ball vehicle under the GM special Vehicles like the G8, CTS, Riviera, etc…
Augie Churchill,
I agree that the plan they sent is rather elementary looking.
I dont’ think GM’s role as a heavy industrial base matters… GM certainly isn’t a heavy industrial manufacturer… they are a medium sized manufacturer that happens to be huge. Meaning they dont’ have the capabilities to make huge products like ships which would constitute heavy industry in the US. GM makes medium sized products.
I agree there is to much corporate speak. GM doesn’t go into any detail on HOW they plan to do that. Which is what is important. They need a clear plan of what steps they are going to take and down what road they will go to fix their problems… some details that make sense and are actually doable would be a great idea.
GM,
Your plan is not very good right now. You lack the detail that makes me think that GM actually has a shot.
The following things need to be addressed:
Where you are now. How you got there (what mistakes were made in the past 20 years)
Where GM wants to take the country in the next 10 to 20 years
How GM plans to get us there.
What steps will be taken to not repeat past mistakes.
What things do you need to make this happen. What changes need to be made to regulations and the country to help you and other auto makers get there (I’m talking about energy independence here).
How will the survival of GM benefit the US in the long run? Will GM foster new technologies that will aid in addressing the energy usage problems this country has? Will GM push for the government and other industries GM works with to help them create a lasting solution. Or will GM just do what is convenient and profitable for the next few years?
How is a restructure of GM going to help in the long run? How will each brand be effected and updated to obtain an edge? And how will GM keep these edges?
How will GM plan and manage future growth to ensure this type of problem doesn’t happen again?
How will GM better listen to its fans and critics and address the needs of them?
Again when I read the report it was all business and dollars no actual information on your future product goals. You have to have the product goals and meet them in order to even think about dollars and cents goals. GM needs to address its technical.
Chris (Toronto)
Nate:
Easy on the doc. Interestingly, the three countries you mention as having not fully recovered from WWII are among the three largest economies in the world.
Nate also said:
“This NEEDS to be an example of what not to do. If GM gets bailed out everyone will think “well if we screw up the government will rescue us” What incentive is there to be responsible with their resources?”
Well, they’ve already bailed out the Wall Street fat cats, who actually produce nothing, yet they won’t bail out (read: lend to and be repaid by) the firms that directly or indirectly provide 1 in 10 jobs in the US ? What kind of logic is that ?
In addition, given the salaries of the execs, it is probably cheaper for them to take a private jet than drive, regardless of the optics. But I am not sure.
Of course Nate, you can always buy a Toyota, only about 1/3 of which are made in the US (the rest coming from Japan, where all of the CORPORATE PROFITS GO as somebody here has mentioned).
Think of that the next time your taxes are raised while the standard of living you provide for your loved ones declines. That’s logic for you.
edvard
I felt the plan was well-written. I think its important to understand that many in Congress likely don’t know as much about the inner workings of GM or the domestic car making industry , and likely less than many of us here. So its important to show more recent and ongoing improvements, such as the Volt, Malibu, and Cadillac CTS. The plan’s language served to bring those reading up to date.
I especially liked the section describing more open, national cooperation in developing advanced technology. That’s how things like sending men to the moon happen: focussed development and contributions from many companies and individuals.
Good luck.
Joe D., Cleveland OH
Reliability and word of mouth. Forget JD Power initial quality reports. They’re bunk. Anyone today makes good quality stuff “initially” (that means, before you start the engine, nothing is worn out, so of course the initial quality is great.
You want to get back to profitability? Simply make cars that people want. High fuel mileage (with a few low mileage cool cars for those of us who don’t really care about fuel economy) and long term reliability. Cars that go for 150-200,000 miles with nothing more than simple routine maintenance. Power window motors should last that long. So should radios, wiper motors, and the chasis and interior alignments that make for a solid rattle free interior.
Get on your dealer’s behinds and whip them into shape! They need to start providing top notch customer service, no matter if it’s Chevy or Cadillac. Every dealer needs to start treating customers like they love them and kiss their buts. Get rid of any salesman or service manager who does not completely meet customer’s needs. I don’t know where you get your data from, but every GM dealer I’ve been to the service department seems to be less than thrilled to help their customers out.
Robert Wilson
Nate you are just plain wrong. GM’s vehicles are as good and better than the competition. You’ve not driven a new Malibu or Vue or any of the Cadillac lineup. GM also offers more hybrid vehicles and is the only competitor with operational Hydrogen Fuel Cell vehicles on the road right now. It is also the only competitor that has operational hybrid technology in large buses which is saving more fuel than all of the Prius’ combined.
You just don’t know what you are talking about, and you don’t realize the tremendous impact that GM has had on the United States over the last 100 years. The patents, the facilitation of transportation, the jobs. GM has played a major role in establishing the middle class of this country over the last 50 years. In addition, without the production GM provided during the world wars it is safe to say we would not have had such a positive outcome to such tragic events.
So go ahead and wish that the US auto industry is gone. Let’s not bother that our government has “given” $700 Billion of our money to the Financial Industry without so much as a public hearing. Gives $20Billion to Citigroup on a Friday and $150Billion to AIG. Where were the submissions of their plans and the scrutiny of travel by executives of those companies? Do you think the finance execs traveled by train from NYC to DC? Don’t you think it was bank leadership that decided to pursue high risk/low quality loans? They should be taking significant salary cuts in order to ease the burden on tax payers and show they are serious about sacrifice in order to improve their competitive position.
When this country is in a recession do you think it will be the banks that will bring us out? We can start selling our banking prowess globally and then when Pakistan launches nuclear war we’ll just convert our banks into mass production facilities for whatever will help us win and protect our troops and our families. Maybe the foreign manufacturers will let us lease their plants to produce the things we need to protect ourselves.
Charles
FAIL.
First, as others have noted, is this really what you sent to the government? The document itself is sloppy.
But style aside, there is no substance. No REAL change. Just face-saving propaganda and business-as-usual reshuffling a few things around.
The same tired excuses and the same tired promises and the same insistence that none of this is GM’s fault (oh sure there are mistakes in the “past” but we’re going to spend more ink here discussing Fannie and Freddie and how much money THEY got).
The sentence, “GM believes that as a business necessity we must look to advanced vehicle technologies to reduce petroleum dependency and greenhouse gas emissions, and has structured this Plan accordingly,” is inaccurate. Or has GM’s Chairman of North America, who INSISTS that greenhouse gas emissions do NOT cause global warming, been fired? (where you do think the name “greenhouse gas” comes from…)
I have some questions about this sentence, “While GM acknowledges that it has made mistakes in the past, the company has been pursuing a major transformation of its business model for the past several years, and accelerating its plans to produce more fuel-efficient vehicles.”
Tell me, was Hummer a “mistake in the past” or was it part of the “major transformation” to produce more fuel-efficient vehicles?
Was suing the State of California in 2006 a mistake? Or part of the “major transformation” and “acceleration” we’ve supposedly seen in recent years?
The report says, “We paid a steep price because of quality problems and relatively low customer satisfaction during the 1970s and 1980s.”
Do you believe quality problems were not present after 1990! HA HAHA. Of course they were and they continue to this day. I wrote a post criticizing the poor quality of the Malibu I rented and the response from every GM cheerleader was, “well, sure, if it was a model prior to 2008! By the way, it wasn’t. But what about the people who did buy a Malibu in 2007? Were they aware quality problems ended in the “1980s?”
I think the problem with GM, more than anything, is that it believes it’s own spin! It keeps telling the same story again and again hoping someone will believe it.
Well this time WE THE TAXPAYERS are the investor. And I vote NO. There is nothing here to convince me this is a good investment. It’s not bold or innovative or inspiring. It’s impossible to respect or trust the management that has led this company to the brink of bankruptcy.
As an investor I would pass. 60% of the public, according to a CNN poll today, agrees. Bankruptcy it is.
Miguel Gonzalez
Ray Young, well done presentation. GM needs more people like yourself to demonstrate and sell itself as an organization with talent, vision and know-how.
The pdf file with “The Plan” lacks any luster and totally fails to convey the urgency and details Ray is able to broadcast about the future of GM and how to get there.
Personally, “The Plan” seems to be as put together by a couple of temps doing their first year of MBA and lacks any academic rigor necessary to sell itself and achieve its intended goal. This kind of document would be thrown back were it be read by a Sovereign Fund sheik as a “total crock of …..”
Some free pointers for Rick and Bob to think about on their Cannonball Run:
- Sell GM as the company to pull America out of the dependency on foreign oil and refineries. Bring us cars powered by Hydrogen, which it’s already in your vault, fast and safely to the market. Clean diesel, vegetable oil, etc, are also some viable alternatives.
- At least make a commitment to stop fighting all and any efforts to increase fuel efficiency for the remainder of this and the next decade. At best, GM would lead all global auto manufacturers on fuel efficiency, no fleet tricks allowed.
- Donate 10% to charity. Seriously.
As a side note, all those auto workers present with Ron Gettelfinger’s day view presentation look well fed and seem to be in need of a diet. Wait, those are the Union chief stewards that used to stop all the efficiency studies and invoked The Contract every day. Time to join the ranks of Americans that study and work hard and can’t make over 100K arguing about what The Contract buys for them.
Gerry
I’ve read through the document, and have read what the UAW has been discussing. Unfortunately, this plan seems like just another warmed over half hearted attempt to just get by.
Toyota and Honda have decimated your market share over the last 30 years. Today, Toyota gets by with three brands, Honda with two. Yet this plan keeps four brands, and still doesn’t kill off Pontiac and Saturn. Is somebody seeing different sales numbers than I see? As an earlier poster pointed out, the only desirable product in the whole Buick lineup is the Enclave. Rebadge it and put it in the Cadillac lineup! As far as the rest of the Buick lineup, all GM did was “Dress up the Pig”. The cars are boring at best.
Also, as pointed out earlier, GMC is also redundant. Sell trucks and vans under the Chevy label, and if you need to have an upscale level, do it under the Chevy name!
Slim down GM to two brands, Chevy and Cadillac. KILL EVERYTHING ELSE. That further reduces model mix, variations within the same platform. In all likelihood, the volume on what remains will increase, quality will increase due to the decreased model mix going through the same line, reduced part numbers procured from suppliers etc. A whole host of support staff to support the other brands becomes unnecessary. Engineering costs will decrease due to the smaller number of new models necessary for two brands. It works for Toyota and Honda, why can’t it work for you? Methinks there is still too much nostalgia tied to Buick, Pontiac, and GMC. Too many people have already shown that these brands deserve to die by purchasing competing brands, which is why you are in this current mess.
As far as the UAW, does Mr. Gettlefinger really think that the average American views the “concessions” of a deferred Jobs bank, and deferred health care payments by GM really amount to anything? How about some real sacrifice here, just like just about every other American has gone through over the last 20 years. Co-payments on insurance coverage equal to what the GM salaried staff now has to pay. Elimination of “30 and out”. No health care coverage in retirement. I’m not talking about new hires here, I’m talking about the high seniority work force that seems to think they have an entitlement to live a lavish lifestyle by virtue of being a unionized auto worker. As an American that is being asked to provide loans to keep this company alive, I don’t think it is unreasonable for equality of sacrifice equal to other Americans, and for that matter, any low seniority UAW brethren, including the component workers.
Now on to GM management. Pay yourselves at a rate equal to what the Japanese auto executive ranks make. If I recall correctly, that is somewhere in the range of 10 times what the average hourly worker makes. Does Rick Wagoner and crew actually deserve anything more than that? If they were worth more than that, GM wouldn’t be looking to feed from the public trough, they would be suffering through this recession like most of corporate America, but with sufficient cash reserves to weather the storm.
Forget pay tied to performance. All that causes is “financial engineering” to make sure that the current year numbers look good to allow for executive bonuses and stock options. Why did GM have to restate earnings for so many years? Did any executives have to give back bonuses when those numbers were restated?
I’d like to see GM “re-engineer” themselves, prosper, and once again grow. But I don’t see this current plan as doing all that is necessary to ensure that. It is a half-hearted attempt to bamboozle the politicians and the public. I hope that Congress sends you home to have another whack at the plan. Maybe then you can come up with something that is worthy of 18 BILLION of the public’s money.
Kathie White
I really don’t understand getting rid of Pontiac. Here in the South, the G6 is a HUGE seller. GM’s other brands don’t come close to the style and personality of the Pontiacs. Are Pontiacs really such poor sellers elsewhere in the US?
GMisCARKING
I have absolutely no idea how GM could use up the last $16 billion dollars and stil needs another $4 billion for the last quarter of 2008. You must be daydreaming to think that you can get the loan easily. Let me tell you the truth: The Bush administration wants the Big 3 to fail. GM’s bankruptcy is enough to bring down Ford, Chrysler and the domestic auto industry. And the reason is simple. The Big Labor aka UAW is a big donor base of the Democratic Party. The Republicans have just lost terribly. It’s the last damage they can do. They have nothing to lose. Bringing down the Big 3 will wipe out a huge support base of the Democratic Party. It’s their evil plan all along. Bush administration has made it clear than the $700 billion pot of gold is theirs. Yours is only $25 billion and nothing else. The shroud of the Dark Side has fallen. The Jedi Council(Nancy Pelosi et al) have no idea what is happening. Chancellor Palpatine(Bush) uses the gridlock in the Senate to his advantage. The Sith(Republicans) will have their revenge. The Jedi Order(Democrats) will be doomed. If Nancy Pelosi does not use the $25 billion to save GM ($12 billion before March) and $7 billion for Chrysler, it is the end for Detroit.
And can’t you save the last $16 billion to at least until next year until Captain Obama arrives? Why could GM be so incompetent and stupid? Why Granholm and Levin could think GM will get the loan? Can’t you see, it is their plot all along to let the Big 3 fail!!!!
Brian K.
I have been following Saturn as a brand since 1989. I have had 7 Saturn’s since 1993. I love this company so much that I quit my job several years ago to go sell them. I didn’t do that for the money, I did it because of who and what Saturn stood for. I no longer work for Saturn, but the passion, love, and connection I feel with this company (THAT STARTED MORE THAN A DECADE BEFORE I STARTED TO WORK FOR IT) runs deep in my veins and my heart. I have been one of the most vocal supporters that you can find for this brand, and GM as a result. I have sung the praises since I was laughed at for buying a plastic car form a one car…Car Company, to now when they have the single best domestic car lineup hands down. I have stood by this company when GM was starving it of product, stripped it of its great ideas for its other brands, and treated it as a bastard stepchild to keep other divisions happy.
During this time I would have bought foreign brands if it had not been for Saturn. Saturn has had me as a sales conquest since 1993. I love the service, innovation, styling, and the fact that I am buying from a brand with a direction and is reliant on teamwork. I don’t get that from any other domestic manufacture.
All I can think about with this realignment that GM is talking about, is how wrong the path that they are seeking is. Buick is a 3 vehicle division that has a beautiful gas guzzling SUV in the Enclave, and 2 cars that have a sales demographic that will be deceased in 5 years. While Buick may sell a lot of cars in China, they don’t have those cars or sales here. So why not make Buick a Chinese brand only, the only people that will complain in this country will pass away from natural causes soon enough that they won’t be a problem, and they would just move up to a Cadillac anyway.
Saturn is now the Mid-grade division that Oldsmobile and Buick once were. Plus Saturn can fight the imports on even footing now that they are getting GM’s best vehicles…..OPEL. People should feel sick when they see the garbage that GM gives us stateside in comparison to what GM Europe gets. Saturn was about to change that with the right support and product mix form Opel and Vauxhall if given the chance.
Meanwhile, GM wants to keep Buick, Pontiac (sort of), and GMC instead of Saturn? I’ve already shown my dismay at the Buick decision, now for GMC and Pontiac which have the same problem as one another. All cars at Pontiac are rebadged or reskinned Chevys with the exception of the Solstice (reskinned Saturn), G8 (rebadged Holden), and Vibe (rebadged Toyota with a stupid and outdated manufacturing arrangement). Pontiac doesn’t have one car that is their own domestic product. I can go to other brands with the exception of the G8, and get better versions of the same vehicle. As for GMC, can anybody show me something from that division that I can’t get at Chevy? And if you can, why not just give it to Chevy?
Pontiac and GMC don’t sell anything that isn’t already being sold by another division of GM in this country. Buick is too small as a division, sells inefficient cars to old people that can buy the same thing at Cadillac, and also does not have any vehicles that aren’t shared domestically. Meanwhile Saturn makes Hybrids, has vehicles (and was supposed to be getting more vehicles) that no other brand would share in North America. Saturn fights the imports by importing cars (and designs for domestic production) from GMs’ best division OPEL.
Saturn a different kind of company / Saturn a different kind of car
While this may have changed with product lines, designs, contracts, and factories over the years with Saturn….the above statement still holds true today. As long as Saturn stays on the path it has been on the past couple of years, I will continue to buy them, and by default stay a GM conquest customer. But if GM hurts, shrinks, sells, or dissolves Saturn, GM can say goodbye to me (Saturn owner), my wife (Saab Owner), my dad (Saturn Owner), my mom (Pontiac owner), my grandparents (Saturn owners). The reason for this is I am an auto enthusiast that many people come to for their purchasing and leasing advice, or in the cases above, I go with them and basically make the decisions for them. There are many Saturn fans like me, who are as vocal and enthusiastic to the people around them as me. Not only have I directly made the purchase decisions for the people above, but I have swayed the purchase decisions for many other family members, friends, neighbors, and co-workers for years, and I will continue to do so. I know people like me affect the outcome of a lot of purchases each year, and you can speculate how many and then multiply that number by the number of people who are out there like me, and you will start to understand the type of sales influence over all that we have each year.
If GM does any of what I described above to Saturn, I will take any of my future sales, and as many of my direct and indirect families, friends, neighbors, and co-workers sales along with me till the day I die. Let me give you a big hint before you make any rash decision GM, here it is…”HATE IS LOVE REJECTED OR LOVE SCORNED!” The Saturn fan base is among the most loyal and loving fan bases of any car company, and you are about to reject and scorn our love for this company. You are about to try and save 3 of your brands out of nothing but stupid and misdirected tradition, when they currently make no sense as car companies. They are rebadges without innovation, identity, and future fan or loyalty base. Saturn has a bright innovative, original, and objective future if you can get rid of the divisions that don’t make sense, for the future of the one that does. OTHERWISE MY VOICE MAY ONLY BE 1 OF 280 MILLION VOICES IN THIS COUNTRY, BUT I WILL MAKE SURE THAT AS MANY PEOPLE AS POSSIBLE UNTILL THE DAY I DIE HERE THE CRY OF “NEVER BUY A GM CAR OR TRUCK AGAIN!!!” And at that point you might as well consider me a future Volkswagen, Honda, Mazda, Toyota, Nissan, Audi, Bmw, or ECT owner and any one that I can convince to come with me!
Long live Saturn!!!
Brian K.
Laramie Jordan
“Mr. Wagoner plans to drive a Chevrolet Malibu hybrid to the hearings…”
Apparently Mr Wagoner made it to Washington without incident.
Will CEO Wagoner be writing a driver’s report for this blog on his long-distance trip in the Malibu? This is probably the first time he has driven a Malibu for an extended time (other than a lap or two around the test track) and am curious about whether he encountered any problems with the car, and what his impressions are? Did he notice any of those hidden dashboard squeaks or rattles that used to be so prevalent on GM cars?
Was the car he drove specially prepped for the trip, or was it a stock Malibu taken straight from the assembly line or off a dealer’s lot? I hope it was a stock Malibu ~ selected at random ~ so he was able to get a first-hand impression of what’s coming off the assembly line.
Why don’t all auto CEOs take long-distance trips in their cars?
A CEO needing to take a fairly longish trip in one his company’s products can’t help but be a good thing. It’s probably something the CEOs of all the U.S. auto companies should do on a routine basis. If their stockholders required they had to drive one of their cars (selected at random) from Detroit to Kansas City and back each month, the automakers probably would have long ago started building better products. (Just the thought of former CEO Roger Smith driving a 1970’s-era Vega or Chevette from Detroit to Kansas City and back makes me break out laughing.)
Augie Churchill
“I dont’ think GM’s role as a heavy industrial base matters… GM certainly isn’t a heavy industrial manufacturer…”
Nate,
You’re right, GM is not a heavy industrial company. They couldn’t build a submarine, a jet fighter, or an aircraft carrier, but nevertheless, their industrial capacity was vital in winning WW II and it would be vital in the future if we ever become engaged in a major war.
That capacity represents a strategic reserve that is an important part of U.S. warfighting capability. If necessary, GM’s plants could quickly start making personnel carriers, machine gun barrels, heavy trucks, and all the other little odd bits and pieces necessary to fight a war. We certainly couldn’t count on contracting that from Korea or China when the crunch comes.
I think GM should have pointed that out in their plan to Congress.
Barry
I used to post on here quite regularly. While I have great admiration for Bob, most of my comments were critical in nature. I’ve spent my reasonably young career consulting with executives on how to transform their businesses and I am very intimately familiar with the auto industry. This crisis was an eventuality that GM could have avoided. You market the hell out of large cars yet you still have lost market share for forty years. Bob has started a renaissance in design but its all around large vehicles. Your labor costs are partly your fault because you have a smaller and smaller base to operate from because you make less cars today than forty years ago. Rick Wagoner had eight years to turn around GM. He failed. He has no jeopardized the lives of tens of thousands of people and the board sits in silence. Forget about the business outside of North America. I told you that business would crater as well. And, that China and oil prices would both implode.
You should not take this personally, because it is purely analytical. GM must unlock the potential of its great intellectual capital and Rick Wagoner has shown an inability to do so. He is simply a steward. The value of GM is its employees. Not the CEO. Find a new CEO. And, while you are at it, find an accountable board. GM can not only survive, it can dominate once again.
John
If GM can not afford to meet their credit obligations now, how do they intend to repay their bailout loan ?
If I had annual imcome of, let’s say $100,000 and owed $200,000 annually, would I be able to get a loan and pay it back when if I make more money in the future ?
Mike W.
I pray that GM and it’s domestic competitors–Ford and Chrysler–all pull through. But, I am a GM “baby.” My mother is a retired GM salaried employee. I’m on my second HUMMER lease and feeling great disappointment that I may not be be able to get a third in 2010.
As GM works through a necessary restructuring, I agree with the notion that the company should focus on core, profitable brands and nameplates. But, I disagree with one aspect of the plan. Clearly, Chevrolet, Cadillac and Buick are strong and should be preserved. I don’t understand the need for a GMC division. Every GMC truck and SUV is a Chevy duplicate and the Acadia crossover is offered as a Buick, Saturn and, now, Chevy. If you want to keep a unique, rugged truck brand, hold on to HUMMER and do the following: Change the focus from luxury brand to rugged, mass appeal. Reduce the prices to be more in line with other full-sized and mid-sized, 4×4 SUVs and trucks. Make fully-capable H2 models available by special order. Most customers who buy HUMMERs don’t buy them for use off-road, they buy the look and SUV size. Removing all the unnecessary weight would greatly improve fuel efficiency and reduce the price. Introduce an H4 model based on the Hx concept and take the Torrent from Pontiac and make it the HUMMER H5.
Yes, Saturn models (Aura and Sky) could go to Buick. i don’t think the Astra fits the Buick mold.
Yes, Pontiac messed up by introducing G5 and G3 models. (Is the G3 the same as the Saturn Astra?) The G8 is hot and I like the Solstice. Bringing back the Firebird (New Camaro) would be a good move!
Dump Saab. They’re not attractive vehicles, inside or out.
So, the GM I’d like to see:
Chevrolet
Cadillac
Buick/Pontiac
HUMMER
GMisCARKING
http://news.yahoo.com/s/ap/20081204/ap_on_go_co/congress_autos
Gene L. Dodaro, the top official at Congress’ watchdog agency — the Government Accountability Office — agreed with Dodd that the $700 billion package set up in October “is worded broadly enough” to permit it to be tapped for the automakers.
Dodaro testified that the Federal Reserve also has the authority under existing law to make loans to the domestic auto industry if it so chooses.
Dodd said that both Paulson and Fed Chairman Ben Bernanke had been invited to testify at Thursday’s hearing, but had declined.
Earlier, Senate Majority Leader Harry Reid, D-Nev., said prospects for Congress to act this year seemed slim.
“I just don’t think we have the votes to do that now,” he told The Associated Press.
Gereon (Germany)
As I already proposed a long time ago: Replace the Saturn-brand by Opel. Once Saturn was supposed to be an import-fighter. How could GM better fight against imports, than with an own large-volume import-brand, which, BTW, has a tradition of more than 100 years (instead of 23 years of Saturn). This way you could eliminate a brand, but without cutting one of your strongest model-portfolios in the US, which Saturn certainly has in the meanwhile. As these models mainly would be designed and engineered over here in Rüsselsheim, the costs of operation for the Opel-brand in the USA should remain modest. BTW, such a step certainly also would boost GMNA’s reputation in Germany.
Robyn Henderson - GM Communications
John, The Viability Plan ensures taxpayer transparency and full payback by 2012. It involves GM immediately engaging current lenders, bond holders and unions to negotiate agreements to reduce the debt on GM’s blanace sheet. It also calls for the creation of a Federal Oversight Board to monitor and authorize loans to the industry. The Board’s job is to ensure taxpayer transparency, confirm that the loans are being spent for their intended purposes and monitor company performance. Check out the full plan in the post above. Thanks for listening.
Buick Diesel
The turnaround plan is missing detailed and fair concessions from the UAW.
Here is a direct quote from the Wisconsin State Journal, Madision, WI:
“The ‘jobs bank’ that permits laid-off workers to receive most of their pay was created in the mid-1980s as a trade-off to the UAW for increased factory automation. But the system became a symbol for the unition’s largese when workers were paid for years after the factory closed.”
Were paid for years after the factory closed?! I invite the UAW to name another business in the US where that would be tolerated. Earth to UAW: This is 2008, not 1958.
Phil
GM has once again come up with a plan that, if anything, should have been implemented 5 years ago.
It’s so ironic that, just as they arrive at the summit of super-vehicle superiority, they face the most
embarrassing of liquidity crises.
Read Edmunds on the CTS-V!!
http://www.edmunds.com/insideline/do/Drives/Comparos/articleId=136636
Standard of the World!
Go to Road & Track, Car and Driver, Motor Trend, and Automobilemag websites and read all the reviews of 2008 and 2009 GM vehicles. You’d think nothing could stop this product juggernaut !
But since that only represents a certain portion of the entire portfolio, and it’s only the last 2 years, people don’t yet have the full confidence, (or the snob-peer-pressure), to go in and buy these cars, and save us from depression, which IS WHAT WILL HAPPEN IF THEY GO UNDER. DON’T DREAM OTHERWISE. THE GLOBAL AUTO SUPPLIER NETWORK WAS ALREADY NEAR BANKRUPT BEFORE THIS CRISIS, SO BELIEVE IT.
Well, let us hope that private institutions, (backed by the government), match the loans given by Congress so that we can get the Insignia, Cruze, new LaCrosse, Impala, a better small car for
Pontiac, and those Theta/Epsilon CUV’s without delay, and in fact faster.
A question I have for Rick Wagoner and the other CEO’s is,
WHY CAN’T WE ASK THE GOVERNMENT TO ASSIST IN BRINGING THE DAY OF THE VEBA IMPLEMENTATION TO JAN 1, 2009????
This loan would take care of the BIGGEST COMPETITIVE ROADBLOCK IMMEDIATELY.
WELL???????????
GMisCARKING
I have emailed the comments I posted here to President Obama, Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi, Governor Granholm, Senator Levin, Senator Barbara Boxer, Senator Dianne Feinstein, Senator John MCain and the Democratic National Convention. Ihave tried my best. The rest is up to you. What I suggest is keep the usage of the $16 billion to a minimum until President Obama arrives on Jan 20.
Felix
Dear GM
I read your plan but in my openion you still do not have the right plan. Your plan should be no less than to build the best built using the best material, the best performing in all aspects of the performance relm(acceleration,stopping,handling,ride and gas milage),the best backed and best looking cars and trucks on the planet. You should offer them at the best prices in each segement. Not by offering rebates but suggested retail price. You need more seperation between the vehicles offered and each division do not need to offer the exact same vehicles. If you had a plan like that and was sincer and comitted to following through on it,you could convince and maby even congress.
Beaugrand®™©
Interesting that bankers, who are primarily responsible for this economic mess, got essentially a blank check to spend US$700 Billion as they wished, with no oversight whatsoever; yet Detroit is pressured to provide a detailed restructuring plan and required to undergo stringent oversight to borrow a small fraction of that amount…
I’m thinking it might have to do with the idea that domestic car companies are not much loved by most Americans. Here’s a theory: maybe GM management and labor are despised because of the anti-management posture adopted by labor over the past several decades- and anti-union posturing by management. Congratulations, it’s worked, both sides are universally despised.
I see lots of posts blaming GM’s problems on either labor or management; it seems to me they need each other to succeed, and they’ll sink together on this if they fail. I’ve never understood how someone could love a GM/Ford/Chrysler product, yet hate the people who run the company, or bolt it together?
I’m all for the “bailout” or the “bridge loan,” because I don’t like the idea of hundreds of thousands of people thrown out of work. Unfortunately, I don’t think the car industry leadership yet grasps the concept that over 60% of taxpayers (CNN poll) oppose the car industry “bailout,” and it isn’t because the media is hostile, or the public doesn’t understand, or that the competition has somehow acted unfairly.
Nate
Chris (Toronto),
Who is going to pay the GM loan off? WE the US PEOPLE will… we pay either way… doesn’t make sense to me.
why not just give me a discount on a GM product? It’d be the same net effect.
Why wouldn’t’ GM listen to its consumers and make better cars then profit would goto GM but people want to put the money into American jobs not Canadian or Mexico jobs.
Robert Wilson,
I’m well aware and I have driven the vehicles you’ve mentioned except the CTS. I have little doubt the CTS is a decent car… a bit more polishing and it would be hard to beat it.
I have an idea of what GM has done in the past 100 years… but what have they done in the past 5. Their consumer credit is bad. having a good record for 100 years doesn’t excuse 10 or 15 years of poor decisions without explanation and a plan to fix them in a logical way.
My home town used to be site of one of the best body works in the country (or so I’m told). I know what GM has provided. I also know what they CAN do and what it takes to do that today (to some extent).
I do agree the banks need to be fixed but look at the magnitude of that versus GM… and for that matter why doesn’t the government go after all the stock holders who made out on it all.. and for that matter where did that money they made go?
Sure its not right but the country is stuck in a circular problem and the people with the ability to fix it don’t want to. Oh well….
Charles,
Well stated.
You are right GM believes its products are the best thing.. of course if you never own or drive the competition how would you ever know. I’m sure every employee drives a GM product too….
I would vote NO as well to this. GM hasn’t shown me enough evidence that it is ready to swallow its 100 year old pride and do what it needs to to fix ALL the things mentioned on these blogs. IF GM wants to fix it build a car keep the branding off it and show it. Let people scratch their heads to figure out who makes it… wonder even more once they drive it…
I don’t think the rest of the government is going to bail out all the other debt out there… credit cards, student loans, car loans, house loans, small business loans… is it black friday at the banks?? are they handing out money to pay everyone’s bills… if they are lets look at GM for a second… if not I vote no.
Augie Churchill,
That capacity once was and is no more. Back then GM had skilled metal workers who could make parts from scratch… and for that matter the aircraft weren’t much different then the cars of the time. The processes and knowledge bases were the same.
I’m not sure how much of that still applies. I suppose it still holds in some regards but the number of people with that knowledge has decreased. Today for a fighter jet for example its advanced composites, computers, ceramic coatings, alloys, aerodynamics, etc… GM has that knowledge somewhere in the country but whether its able to be applied to that technology I doubt.
But the real question is “can that UAW workers manufacturer high tech fighter jets if needed or submarines” I doubt in today’s world that some of them could even get security clearance.
The talent in this country is getting ready to retire and there isn’t as much new talent ready to step up in my opinion.
We COULD do that but the business people that run the businesses in this country continue to send things overseas (heck GM even talks about it in their letter to Congress). Then the people in America buy foreign with no problem. But why? They don’t care about the country they want quality products at low prices….
Barry,
I agree there are many people on these blogs that would be more then willing to help GM figure out what they need to do. But in many regards they go unanswered.
Bart
Nice to hear alot off good words about Opel.
(I’m employed at GM Antwerp wich manufacters Astra Saturn)
I agree that GM is creating too much brand names.
For example;
Here in Antwerp we make Astra Saturn, Opel, Chevrolet, Vauxhall.
All the same car just differnent logo.
About Saab, they never made any attractive product, never made any profit.
Just ditch this one. The new Opel Insignia is more attractivve tehn any Saab.
The chevrolets used to named Deawoo, should be upgraded at interieur.
The HHR is acctually the first one i would buy, butt…
As the rest of the porofolio you can’t choose every option like u can with Opel.
if they wanna introduce low cost cars in Europe u should listen to European people.
Not trying to sell it the US way.
I read someone asking for closing factories during december.
This in example to us the european ones.
Note that this is done with lose of income.
To give u an idea, just take your monthwage and reduce it with 50%.
That’s what we earning for 3 months in a row now.
So be lucky, the closier and a holiday.
For last I hope that we all employees from GM can be saved. Butt reading their planing, I’m getting more concerned for my job.
Closing factories is equal to reducing manpower.
They should be looking other ways to save money instaed off always hitting on the workers.
Start with reducing the wages off our topmanagers. Butt don’t let the little guy pay for your stupidities.
Signed, Opel employee
taylor
I agree with a few others. That plan is so basic that an undergrad intern or a high performing high school student could of put it together.
You gloss over hybrids (the proven future in car technology) and the ones you are developing tend to be hybrids and OMIT the gas mileage improvement versus gas.
Flex fuel is NOT the future. We never would be able to grow enough crops to sustain the need and it SIGNIFICANTLY would harm the food industry if brought up to a large enough scale to be positive impact on the environment.
You ARE NOT and WILL NOT move forward and this plan proves it. I sincerely hope you don’t get this bail out and the stunt of riding to washington in a hybrid was a sad marketing ploy that was vapid at best.
Unfortunately (for all of us) foreign car companies are the future. Until you learn to SWALLOW YOUR PRIDE (which it appears will NOT happen) and learn to make a new kind of business found on electric cars (which you previously destroyed any chance of a few years ago) you never will deserve or earn the trust of intelligent americans (or humans for that matter).
GMisCARKING
Here’s a fantastic review of the CTS-V by Edmunds.
(http://www.edmunds.com/insideline/do/Drives/Comparos/articleId=136636) The CTS-V got 1st place when compared to BMW M5 and C63 AMG.
Augie Churchill
“But the real question is “can that UAW workers manufacturer high tech fighter jets if needed or submarines” I doubt in today’s world that some of them could even get security clearance.”
Nate,
I believe I said previously that GM couldn’t build submarines, aircraft carriers, or jet fighters.
That’s pretty funny what you said about some UAW workers not being able to get security clearances. Unfortunately, that’s probably correct.
“Back then GM had skilled metal workers who could make parts from scratch… and for that matter the aircraft weren’t much different then the cars of the time.”
Yup, the workers in auto plants have mostly become parts assemblers, instead of skilled craftsmen that know how to make things. In WW II building a B-24 wasn’t unlike building a car ~ same metal bending and machining techniques, but on a larger scale.
Tim
Taylor,
Where has it been “proven” that hybrids are the future? Last time I checked all hybrid still use some sort of fossle fuel. Sorry, that isn’t the future. It’s a stepping stone.
Flexfuel is also not the future, but a stepping stone, but on your point of not being able to grow enough crops of course that’s true. That’s why everyone else has moved on the cellulosic ethanol. Which will be able to be made from watse so it won’t impact the food supply. How about you go get all the facts before you start talking.
Oh, and the “stunt” of riding in a hybrid to DC - what would you want them to do? I mean, they got chastised for flying (which was a pathetic attempt by congress and the media to discredit them). And now apperently driving “the future” of automobiles (according to you) is only a stunt. You have no idea what you are talking about.
You say they won’t swallow their pride - what else do you want them to do? I mean, they are begging to Congress for a LOAN.
Oh, and electric cars? I guess Toyota, Honda, Nissan, BMW, Mercedes, etc don’t have the trust of humans either. Because last time I checked none of them have electric cars available to the mass market.
Trevor Bainbridge
Tim said: “Oh, and electric cars? I guess Toyota, Honda, Nissan, BMW, Mercedes, etc don’t have the trust of humans either. Because last time I checked none of them have electric cars available to the mass market.”
Tim,
See below. A super efficient diesel-electric from Audi that will get 95 mpg. The Volt is far from being alone in the world.
Audi gives green light to produce a super-efficient small car
—————————————————-
“That’s why everyone else has moved on the cellulosic ethanol. “
Exactly who is the “everyone” that has moved to cellulosic. Can you give us a citation? True, there are a lot of people working on cellulosic, but it is not yet a commercial success, and no one has yet shown it will have a positive net energy balance. We can hope someone will make a breakthrough, but it hasn’t happened yet.
Hawkshaw
Augie and Nate,
NPR had a story this morning on the subject the automaker’s role in National Defense:
Detroit Bailout: A Matter Of National Security?
Look like opinions are mixed. GM certainly is in no position to quickly ramp up to build specialized military equipment, but the Detroit automakers could provide a surge capability in a true emergency, and the automakers do keep a lot of smaller manufactures and suppliers alive that could also augment emergency production.
Canadian-American
Many people are strongly opiniated and often lack some basic objectivity in evaluating the situation and the possible solutions. Qualifying some products as junk or crap is a perfect example. Most vehicles today may not be best-in-class but they remain good products offered to a wide variety of consumers (all price ranges, all tastes, all needs). That includes GM products as well. And some are definitely best-in-class or very competitive. This is a very competitive market with more product offerings than ever from domestic and foreign manufacturers.
The whole bailout issue (or loan) is all about the future of the domestic manufacturers. If you believe that the US automakers can recover from the current economic crisis based on their plans and on how fast the economy will recover, then it is worth a government loan, which could even pay off (Re: Chrysler in the 80’s). If the US automakers are deemed doomed in the short term without a doubt by “experts”, then the loan/bailout may not represent the best investment for the taxpayers. However, their downfall would come at a huge cost for those same taxpayers. It would also be the ultimate takeover of a critical industrial sector by foreign automakers, another one.
I do believe the domestic automakers have a future and the plans submitted to Congress show their commitment (and the UAW’s) to right size their operations to survive a crisis. Is it a coincidence that only the domestic automakers are requesting help? What do they do differently, what do they have in common? They all are old corporations that had to downsize their operations with a significant increase of competitors, and have to deal out-of-control health care costs for their large number of retirees. Those generous benefits and legacy costs are from another era that made the middle-class. This is not possible anymore and the future impact on the population is still misunderstood (taxpayers will bailout themselves).
Many are giving up on the US automakers for the wrong reasons. GM is very successful elsewhere in the world. Automobile critics, often very critical of GM, recognize that many of their models are outstanding (Corvette, CTS, Malibu, G8, Aura, Enclave, etc.). Hummers are chastised but they are niche products with enthused customers. GM is still a leader in R&D.
This loan could end up being a great investment for the taxpayers. The downfall of the UIS automakers would just make the recession worse and longer.
Gerry
I love this quote from Gettlrfinger in the Wall Street Journal”
“”We’re going back to the bargaining table” as long as the companies, suppliers, creditors and others agree to take haircuts as well.”
This is exactly the entitlement mentality that cheezes off the bulk of the non-union American public. Can somebody explain to me why suppliers should have to take a “hair cut”? Most of the largest suppliers have already entered, or are very close to bankruptcy. The big three have been beating down suppliers and squeezing margins for years. What have they got left to give? Not only that, but the way GM treats suppliers is totally different than the Japanese. A supplier to the Japanese is a partner. There is a committment. With GM, if your price this year isn’t good, here today, gone tomorrow.
Why should a creditor “take a hair cut”. People invested in GM with the expectation to make money. People purchasing stock are already taken quite the hair cut thank you very much. The bonds, junk status.
Yes, I agree the company should take a hair cut in the management compensation arena.
Want to impress me Mr. Gettlefinger, offer to make the following deal with the management of the “Big Three”.
The entire UAW membership will accept the same wage structure and benefits as specified for new UAW hires. That means that all the high seniority guys get to “take their hair cut”, and get treated just like low seniority UAW brethren. Retired UAW workers over the age of 65 will no longer get health care. Younger than 65, they pay the same deductables as current GM salaried employees. If GM takes away that benefit from salaried retirees, then you lose it to.
In turn, all GM executives have to agree to get paid no more than 10 times what the average worker on the factory floor make. No bonus plan, no company car, no corporate jets, the same salaried benefits as every other low seniority (post 1993) GM salaried employee.
Make the agreement good for 20 years.
When I see that level of sacrifice on both sides, I’ll know that GM and the UAW are serious about change.
Tim
Trevor,
That Audi isn’t in production either. So taking a quote from you: “True, there are a lot of people working on cellulosic, but it is not yet a commercial success” Just appy that to electric cars. There are a lot of people working on electric cars, but none have been a commercial sucess yet. I never said the Volt was alone, I was just pointing out that since Taylor thinks humans can’t trust GM until they embrace electric cars, then he shouldn’t trust any car company (except for maybe Tesla…) since none of them have electric cars on the mass market right now. Maybe when the new Audi comes out, he can trust them, but right now, he can’t. Oh, and did you notice in the article the previous generation of their electric car was “slow selling”. Plus, I don’t see how they can call that car an electric car. It’s still has a gas or diesel engine, it’s not different than a Volt or Pruis (depending on exactly how the driveline will be setup). So I guess Taylor can’t trust them either, since they won’t have an electric car.
On the ethanol topic, I never said it was available. But I think other than corn farmers, everyone knows that corn ethenol won’t work (which I agree with) but like you agreed with, there are many companies working on cellulosic ethenol. I don’t have time to find the articles I read a while ago, but I’m pretty cure Koskata has shown a very large return on energy in their patented process, and others have as well. True, it’s not a comericial success, but I think (my opinion) it will be in the fairly near future.
Ted Lewandowski
It’s widely acknowledged that the auto loans to the Big Three Auto Companies could cost between $75 - $125 BILLION DOLLARS. (This was quoted by Mark Zandi - chief economist of Moody’s Economy.com and appeared in today’s London Financial Times)
With GM hoping that the Volt will save the company - maybe Ray Young the CFO should address how just 10,000 Volt models to be produced in 2010 ( a whole two years away) might even attempt to put a dent in the above figures.
BTW, did Rick drive the not so subtle Hybrid from Detroit or just from his hotel in Washington, DC?
Judging by his freshly pressed suit and the Michigan Congressman Sander Levin in the back seat as ballast - I doubt he even drove the car more than 10 miles. Also did someone steal the hubcaps - the black steel rims really don’t compliment the car - prototype or not.
Oh yeah - this is totally unrelated to GM but I was wondering how many times Ray Young gets carded - he looks fresh out of high school - what’s your secret Ray?
As an inside note - lose the dark colored glasses - makes you look sketchy
Chris R
Nate, when you asked GM it’s mistakes over the past 20 years, or 25 really, and then asked what they plan to do to not repeat them I noticed a problem. GM doesn’t recognize that the level of brand management that they have is a mistake, and is destructive. GM used to have divisions, run almost like separate companies, owned by GM, that had the ability to share parts and engineering resources. That changed when one of their former fearless leaders introduced brand management during the 1980’s (he was fired not long after if I remember correctly). Many, or most of his policies were quickly reversed, but his legacy of brand management remains. I keep asking why. It makes no sense, as i think it’s a major contributor to why GM seems confused as to what it’s divisions ought to be doing, and why there seems to be a generalized lack of direction at GM.
Alex
GM needs to articulate a well defined business model that explains the mission of the company. A good mission statement should be communicated in a few words. This statement should be shared with employees and customers. Looking at the landscape of the car companies from a buyer’s point of view, I think I understand the mission statement of some car companies such as MB, BMW, Honda, Toyota and even Hyundai. These are relatively successful companies. Frankly, I don’t think I understand the mission statement of domestic auto companies, specifically GM. Mr. Young seems to be showing a direction for the company as becoming a green and technology leader. If my understanding is correct, this is the first time that I have heard this message about GM. Clearly, the current crop of the cars does not support this mission. But if this is an indication that GM has finally figured out a clear direction that it wants to follow going forward, that is indeed a great news. But then every soul in the company from the management, workers, to the dealers must accept and follow this goal. I believe this will require that GM should retrain everybody in the company (including the execs) about what it means to produce efficient cars and become a technology leader.
Dr. Turkey-Belly
Nate said to Chris (Toronto):
“Who is going to pay the GM loan off? WE the US PEOPLE will… we pay either way… doesn’t make sense to me.”
Nate,
Either the US people pay to loan them the loot they need, to be repaid later, or the US people will pay a great deal more over many years in terms of unemployment, lower tax revenues, etc etc etc. This is big and scary and the path of least pain is to get these firms back on track. Gov’t oversight ? Sure ! Just get it done.
Nate
Bart,
I think the Opel Insignia is nice and the G8 equivalent.
If I could make a recommendation to the Opel Astra group. It is to fix the interior up and make the front end a bit sportier. I’d love to see a more Insignia or Malibu or CTS or Enclave like interior on the Astra. With a new sporty bumper it would be direct competition for the A3 Audi and VW Golf/Rabbit.
I also think the look of the logo is key. The logo has to match the car. Imagine a BMW or Lexus or Infiniti with a sharp edged logo… The Opel logo to me fits the sleek styling of the new G8, Malibu and Insignia. I hope GM gets the hint.
Sorry but the GM plants in he US have to much misused labor compared to the Japanese and European plants.
GM needs to make their operation more efficient.
Taylor,
I agree GM needs a more detailed plan that resembles a business plan. This is pathetic coming from a 100 year old company that used to be as powerful as it was. If I went to an investor with that kind of plan I’d probably get laughed out of the room.
Flex Fuel is a Solution to our current cars. Electric isn’t the only solution (I’ll post the reasons soon).
There need to be many solutions.
GMisCARKING,
I have no doubt that a CTS-V is a great car, at that price it better be good. But thats a high end car… Why can’t Gm put that effort into other cars?
And for that matter the CTS-V and Z06 and ZR1 represent a very very small percentage of GM sales. I don’t think you can use them as examples of GM’ products.
Tim,
Hybrids (cars with regenerative braking) are the future. You’d be foolish to say otherwise. An electric car is a hybrid by my definition. Hybrid cars do not have to use fossil fuels. They can use hydrogen (fuel cell hybrid), or compressed air or even artificially produced natural gas.
Do you have all the facts? I doubt it its almost impossible for any one person to have ALL the facts given the magnitude of the problems we are talking about.
I personally think driving the Real Volt would have been better. But it would have been nice to hear a turn by turn review of the drive in the Volt Powered Malibu.
Swallowing their pride means admitting to the American people that their cars have a long way to go. To admit they had issues with their cars that can be addressed now. I haven’t really heard that. Claiming your cars are the best out there or are competitive with the competition when sales numbers show otherwise is totally foolish and shows their arrogance.
When GM bloggers write in and GM makes little effort to carry on conversations with their bloggers it shows a lack of caring about customers. If GM were to swallow its pride they would ask customers “I see you commented on _____ car. What would we have to do to make the car better suite your liking” Thats what GM’s competition does one way or another… Except GM’s competition thinks far enough forward that they rarely have to do that. They foresee customer demands before hand (most of the time).
Toyota, Honda, Nissan, BMW, Mercedes have ALL made strides to make their cars better and more customer focused. GM has just recently gotten that hint after tough sales numbers.
Hawkshaw,
Those manufacturers would be around no matter what but in different industries or serving different car companies.
Canadian-American,
You are right to a point, except that GM isn’t selling product because their cars aren’t best in class. Cars today are way ahead of cars 30 years ago which were way ahead of cars 90 years ago. That doesn’t mean we should stop trying to better them (or does it?).
My issue with a government loan is that either way I’m paying (since I would be buying a GM car IF they got bailed out). I just don’t want to see GM continue the way they are and make cars that are overpriced and undervalued. If they do that I’ll buy foreign.
I don’t see how the tax payers are going to have a huge cost. So i costs us some money until we figure out where to go next. But thats how it goes. Best case we make new industry or wake up and do things differently. Its not an all or nothing here. Its a one thing or something else.
They are all old corporations!!! Bingo!! They are huge, old and slow to change and that IS their problem. A bailout isn’t going to fix the mentality and culture, after they start making money and get the bailout they will go back to their old ways. Just as American drivers have since fuel prices dropped. Nothing gained, nothing learned… not worth the sacrifice. Bankruptcy will be the needed wake up call.
Health care costs? GM did that to themselves through foolishness and arrogance.
Please explain to me how taxpayers will bail themselves out!!! Is that like saying they really don’t owe themselves anything? There seems to be a logic flaw there.
Sorry to be so harsh but I must have missed something here.
GM’s problem: They are still American made and American made isn’t cool right now.
Gerry,
You are absolutely right. In the US today people have no reason to do something well… just chasing the dollar and the cheapest most profitable solution. There is no pride, honor or other traditional values in that.
GM suppliers should be partners.
Right there IS the problem ‘people invested in GM with the expectation to make money’ it has driven GM to where it is. Collective and individual greed has done this. No matter how I look at it it is the same problem.
What should GM do? Well everyone should volunteer their time until the company is solvent. Thats what people do when they start a new business. They take initial losses in hopes to make something of their time and efforts. You can’t do that when you have a zillion people to pay.
Your last paragraph was dead on.
Chris R,
Please further explain your reasons and logic for being confused about brand management.
JohnP
I still have an issue with corporate GM declaring Buick and Cadillac are core brands and that Pontiac is not and therefore will get zero development dollars and will only fill in what the others don’t want to build (that’s the way the report reads) For the past several months/quarters Pontiac has soundly OUTSOLD both Buick and Cadillac (as well as every other GM brand except Chevy and GMC) in the US market. In fact Pontiac consistently is selling approximately 90% of the combined numbers of B and C here at home. Currently you only sell 3 models under the Buick nameplate. It would make more sense to have propsed turning Buick into a niche player while expanding Pontiac’s role in the company. Unless, of course you are using different numbers than those which you publish. http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gmnews/viewmonthlyreleasedetail.do?domain=6&docid=50747
Ted Lewandowski
According to Bloomberg.com - GM posted close to $73 BILLION IN LOSES since the end of 2004 - and that is in relatively good times for the auto industry - so my question is how are they going to manage operating over the next two years where the annual rate of vehicle sales will probably dip below 10 Million units - 2.5 MILLION LESS than GM needs to return to at least break-even or show a small profit.
The Volt - at least two years away will initially be a money loser for GM as they will need to produce 100,000 units just to get a return on the investment (Chevrolet will only produce 1/10th of that figure in the 1st year).
Bankruptcy for GM is not an option either as it will create a vicious cycle of people not buying because of the fear of having warranties that might not be honored as well as dealer service issues - and I am certain that is ALREADY AN ISSUE with some prospective buyers - so what can GM do RIGHT NOW?
The European Opel division is already represented in nearly 40 countries - YES! FORTY COUNTRIES and the NEW Opel Agila (Google Opel Agila to see the beautiful car) consumes only 4.5 liters of fuel for 100 kilometers - US equivalent would be nearly 55 MPG - not a misprint - 55 MPG with the commonrail diesel engine and more important 120 grams of CO2 per kilometer (a new European benchmark and a level that no vehicle has achieved here in the States yet).
So why not bring the Agila here -either as an Opel or rebadged as Saturn (which already sells several European based Opels). The other models might not be sales successes because GM again equips them with engines that a dreadful - Ecotec 2.3 liter is one example.
Give customers engine choices that they have in Europe - usually 3-4 engines per car model - and the market will decide - not the other way around.
No need to wait two years either as the OPEL Agila can be fast-tracked to confirm to the DOT/EPA regulations - plus you can make it available NOW as a special order vehicle and have the car paid for before it is built. It can be sold as a Pontiac G2 or Chevrolet CityCar.
Ford is bringing several European-based models here - the Ford Transit Connect Van will be available next year - which is just around the corner actually.
Conclusion - GM ALREADY PRODUCES small and efficient cars in Europe - with great clean burning diesel engines that get OVER 55 MPG and have LOWER emissions than gasoline engines - so why not offer these models here?
The SOLUTION might be staring you right in the face.
I for one would buy the Opel Agila in a Chevrolet heartbeat!!!
Edwin
Customers trust GM quality. They buy design, quality, and utiltiy.
GM is missing luxury business, the way to achieve more luxury is to strengthen GM’s core brands in order to market its flagship luxury cars more effectively.
GM’s flagships help the company’s bottom line. Thus, GM must focus on invigorating its core brands first, instead of going off on a tangent with Saturn. From an outsider enthusiast perspective, Saturn takes investment away from the core brands. Saturn products should be dispersed among Pontiac and Chevrlet immediately.
The cold hard truth is that Saturn will never make it as an enthusiast brand. The Astra may as well be a Pontiac. The G8 could be named the Pontiac Aura for example.
Saturn has been a distraction all along, taking investment away from GM’s core brands and undermining the profit generated from a luxury focus within GM’s core brands. With strengthened core brands GM’s average retail sale would rise. This is evident from the Malibu.
Imagine for a moment how many more Saturn Skys would already be sold if it had been named a Chevy Stinger. Whoever heard of the Saturn Sky?
The Firebird bandit will energize the small car enthusiast. The Camaro will energize the classic coupe enthusiast.
Cancelling Oldsmobile was a mistake. We hear it from the faithful everywhere. GM’s core brands have many names which can create a value added demand. Saturn is not one of them. The issue is has not been the number of brands. GM brands target the competition. The issue has been design and investment in GM’s core brands. If GM had the investment dollars Saturn might be ok, but Saturn is the last priority and it needs to go under the present circumstances.
The best decision going forward is for Pontiac to takeover Saturn. Disperse Saturn models to Pontiac and Chevy immediately. RENAME all Saturn dealers, Pontiac.
A brand may need 4-6 models.
In order to improve sales and target the competition, Pontiac G6 needs more trunk, a more distinctive style, and more comfort. A classic look and classic name would improve sales.
Pontiac needs a new grille and a return of some of its classics like the GTO, Lemans and the Firebird Bandit.
GM should get away from the generic bubble look that some seem to refer to as badge engineering. Thus its not the badge, its the bubble look they are decrying. The public is tired of the generic jelly bean bubble look.
——————————————
During the 1990s the Big 3 American auto makers gained market share and made record profits. The foreign competition mainly tends to gain during recession. Thus, the drive-by media and the Wall Street flunkies try to use recession to thump their anti-American brouhaa.
After 9/11/01 attacks, the US savings rate sunk to an all time low. Corporate debt across the board in the USA rose 34 percent. Over half of US companies had a junk bond rating. Wake-up. To quote, ” ITS THE ECONOMY STUPID.”
——————————————–
The US manufacturing base is a part of the county’s national and economic security. This is an indisputable fact. The synergies created from the American auto industry and the suppliers has created a highly skilled work force capable of manufacturing any type of need for the US Military. The American auto industry is the key employer of highly qualified engineers. Indeed the region is the epicenter for engineering employment. The American auto industry elevates the standard of living across the USA for millions of Americans as well as well as in communities around the world.
The American auto industry is the leading customer for American software, American electronics, American glass, American steel, and America plastics.
The American auto industry accounts for one in ten jobs in the United States, not the foreign transplants.
On the other hand, the foreign auto industry has most of its engineering in foreign countries. The foreign auto industry takes vast profits out of the United States.
Foreign transplants also receive tax exemptions as foreign trade zones.
————————————-
The American auto companies build the best products in the world, this success creates jealousy. They do this inspite of competition, inspite of heavy handed government unfunded mandates.
Also, the foreign auto makers receive subsidies and aid from their own business friendly governments which pay for the health care of their workers.
Yet the US government is hostile to its business and workers.
The American auto companies can lead American out of recession very soon.
A pro-longed recession only harms everyone.
Therefore, it makes no sense whatsoever to delay aid to the American auto companies.
Ted Lewandowski
Uwe Muller - the chief designer of the Opel Agila explains the design of the car at the Frankfurt Auto Show posted on YouTube.com
GM needs a car like this in the States before the Volt makes it to production.
BTW, you don’t hear anything about GM of Europe having fiscal problems?
Please take two minutes to look at this beautiful car!!!
http://www.youtube.com/watch?v=jUZkYtppHdk&NR=1
When I showed this clip to my family - EVERYONE said they would buy this car - five people all together - and that is just ONE HOUSEHOLD!!!
Now that I think about it - rebadging this Agila as a Chevrolet CityCar (C2) would be a brilliant move!
getalifeagain
If this GM blog were to discard (not post) any comments with grammatical errors, there would be very few.
This is the same logic as letting GM go bankrupt.
Edwin
If the U.S. Congress doesn’t give the auto industry a fair and clean bill, then GM should move its headquarters out of the US to Canada, and do what is necessary to clean-up US costs up to and including giving the pension and heath care funds back to Uncle Sam.
The American auto industry has got to start pushing back in order to win. There is a pattern with both parties. Notice that both parties in the U.S Congress exhibit hostility to business.
The American auto companies should build supporters in Congress over time just as they should be on top of the media and culture. The y-generation wants to hear anew why they should buy American, they desperately want to understand what it means to be patriotic in these times.
Let the U.S Congress and President compete for jobs, if that’s the way they want to act. If the latest jobs report isn’t enough to wake-up the U.S Congress and President, what is?
Maybe having your headquarters in a more business friendly country would wake them up. Let them know straight-up that Chapter 11 means that the US automakers will move their headquarters to Canada or some other business friendly country and begin a gradual process. Have you asked Canada or Australia?
Do NOT merge. Mergers are a mistake. Do NOT buy Chrysler.
Small car companies can make money too, there are plenty of them around the world. Chrylser should remain independent. Business cannot cost-cut its way to prosperity. Prosperity comes from the product line-up and marketing plan.
Edwin
Critics and skeptics of the plan do not seem to understand that helping the auto industry balance the VEBA funds which have been thrown out of balance by the economy is the right thing to do.
With the funds in balance they are not a burden to the companies.
The American auto companies have agreements going forward which are very competitive, they are simply asking Congress for a bridge loan. And they have our support.
The American auto industry can lead the U.S out of recession very soon.
There is no reason whatsoever to delay the aid or prolong the process. That will only prolong the U.S recession.
Delaying aid to the automakers will slow the supply chain and cause damage to countless businesses in America.
Mergers are the wrong thing to do, this would also cost countless jobs, and cause damage to the U.S economy, and create uncertainty. NO mergers.
A quick recovery is in everyone’s best interest.
If Congress acts quickly, we have confidence that the auto companies will easily pay back the loans and get the U.S economy on track.
Congress should not delay, this would only cost more, and damage sales.
Beaugrand®™©
Maybe it would help to get back to the core business of building large numbers of inexpensive, economical, affordable vehicles, beginning with a mid-size 4-door sedan and wagon/crossover/minivan on a common FWD platform. It worked for Chrysler back in the ’80s.
Do more about corrosion resistance and parts support for older vehicles. The used car market has the same economic clout and dollar value as the new vehicle market; anything that enhances resale value will make it easier for buyers to trade in their old vehicles for new. To that end, a 10-year 125,000 mile warranty would do wonders for the GM quality image, and would help reduce those costly rebate programs.
Ted Lewandowski
What is Plan B for GM in the event of a Congressional filibuster and no loans get appropriated until sometime next year? No offense but Rick Wagoner should step down right now to show GM is ready to make immediate structural changes - after all what does he have to show for being the CEO for the last couple of years - just BILLIONS in losses and a worthless stock - let the figures speak for themselves - no spin needed.
Ben
Before I comment I will say that I have owned 14 cars and all but 3 of them have been GM products. Most were used, however as of lately I have been able to buy new. My last 4 cars were Saturns. I was amazed at first that GM could build a car like that! The little S series was the car that could. The first one I had was used (6 years old with 125,000 miles) and I drove it for 4 years to 170,000 before I sold it to some one else. I regret selling it and buying a new Ion as a replacement.
As a Saturn owner (and Saab wannabe owner) all I can say is I read the plan and good luck GM. Get rid of the two divisions that actually had modern ideas (4cyl & Turbo or 4cyl & composite panels) that were distinctive. I have already replaced one of my two Saturn Ion’s with a Honda Civic (last month), the warranty ran out. My wife didn’t want the car anymore after 3 years and 39,000 miles.
Can’t say that I blame GM either after what they did to the Saturn brand. My Ions were run of the mill bland GM badge engineered cars that suffered from quality problems like there GM siblings. Quality may have improved in the mid size and large size markets for GM but not in the compact market.
I will commend GM on the 2.2 Liter Ecotec. It is actually the second (behind the 1.9L Saturn motor) American engine I have seen that can compete with it foreign rivals (probably because it was designed by foreigners). I have one question though, how come the Japanese can do it better with smaller displacement and better gas mileage after 30+ years of competition. The country that landed men on the moon and probes on mars can’t beat the Europeans and Japanese making simple cars? How come they can build 5 speed autos in there base model cars? How come they can offer a VTEC motor in a 15K car? Could it be that GM just didn’t think it needed to compete there?
I think that is the real problem, GM didn’t see the writing on the wall. Anyone here really think that gas would be cheap for ever? I think the Japanese know how to make nice little cars, and they want to tap the up scale market too. GM abandoned the compact market in for greedy profits on large vehicles. Too bad gas went up, otherwise they would be making money hand over fist, Chrysler would be doing good too (my god who thought the Chevy Suburban or Jeep Commander were good ideas). Too bad the credit dried up too otherwise the people that don’t mind over paying for low mpg cars would still be buying.
GM prides it self on the most cars that get over 30 mpg but they never pushed further here. My 94 Saturn got 31 mpg, and my 07 Ion gets 29 mpg (city/highway average). In 13 years they couldn’t do any better? Oh wait, now that gas is a problem they suddenly can pull out 4 mpg more out of a Cobalt? Imagine a 2004 Ion (same car as a Cobalt) being sold for $10,225 (what mine cost) that could get 29/36 mpg and a decent attempt at styling (look at the 06-09 Civic if you want to see what styling is). You think Toyota, Honda, Kia, Hyundai, Suzuki or anyone could compete with that? A dose more styling on the sedan and S series quality? Instead you imported a Euro model that cost $16K and doesn’t have any of the Honda features.
GM has to face it, they don’t make the best mousetraps at the best price and the consumers have spoken (including me). Their game plan failed and the market is now in the compact cars, where they chose not to complete.
The Volt looks promising but the upcoming Insight looks better. Lets see $30K vs $18K. Even if gas was $8 a gallon which is a better buy? I wonder if the EV-1 had not been scrapped what the price of an electric would be by now? What could GM sell if for after 12 years of production, development and amortization of tooling costs? What did they sink into Hummer that could have been better spent on EV-1?
You have made your bed GM, time to lay down in it.
Alex
Opel Agila is definitely the kind of car that GM needs to bring to the U.S. I think it will compete very well with Mini. But the car must get much better ranking than Aveo compared to other similar-sized cars in this market.
James
Mr. Young,
Products, Products, Products.
Fix the products and customers will return.
I stopped shopping GM when they (as a company) showed no willingness to correct horrible design flaws in their products.
Kay
We are all praying while holding our breath. I don’t understand why so many people have miss conceptions about our company, wish us to fail and seem like they hate us so much. My grandfather worked for GM starting in the 1930’s until retiring in the 1970’s. My father worked for GM from 1962 until 1992. My step father worked for GM from 1960 to 1996. My husband currently works for GM starting in 1978 until present. I have several brother inlaws, cousins and a sister inlaw that also work for GM. Some are hourly employees, some are management employees (engineers) and my husband is a Skilled Trades Shop Committee Person for Local 599. They have all worked hard, took pride in their work and enjoyed a nice middle class life. Isn’t that what we are suppose to do? Why are we demonized for working hard and bringing home a paycheck so we can raise a family, own a home and pay our bills? None of us are rich. We are just average, middle class Americans.
My husband and I have purchased new GM vehicles since 1979. We have never had any problem with anything we have purchased and we have purchased 17 vehicles over the years. I have a Chevy Avalanche right now that I have driven for 7 years and has 178,000 miles on it. I have had no problems at all with it, just normal maintenance. Everyone I know in my family and all of my friends all drive GM vehicles and none of them have had problems with their vehicles. My adult children both have Chevy Cobalts that get 33mpg. I just went through the vehicle specs on here and found 14 vehicles that get 30 mpg or more, 6 Hybrid vehicles (4 of them SUV’s), several crossover vehicles and the new Chevy Volt is to be introduced in 2010 (1 yr away is all). So, what is the problem?
The UAW members wages account for less than 10% of the GM budget. So why are we so demonized? We have taken several concessions and agreed to new hires wages to be cut in half. It’s not our fault that health care cost so much, talk to the health care companies and their lobbyist in Washington. It’s not our fault or the companies fault that we are paying for 1 million peoples retirement and health care. If we don’t pay for the health care and retirement that cost fall back on the federal government, the tax payers. I just don’t get it as to why we are hated so bad????
People complain about us building trucks and SUV’s, well we have to. There are 1,000,000’s of business that depend on trucks to operate. How would anyone tow a large boat or camper without one? If you have a family with more than 3 children how would you transport them anywhere without a SUV, Van or Wagon? Businesses also use SUV’s to function. As a matter of Fact, whenever I see federal government employees emerge from a vehicle 9 times out of 10 it’s a SUV. In fact Barack Obama is always in a black SUV now. It’s for his protection. So, stop blaming the Auto Companies for producing these vehicles. There have been higher mileage vehicles available from GM for years, but the customers have choose to purchase larger vehicles and SUV’s. That’s like blaming the grocery store because a customer bought a Candy Bar from them and not an Orange.
People don’t realize that GM, Ford, Chrysler and all of their suppliers are one of the largest corporations in the world. If they were to go out of business it would set the entire world into a tail spin. I am quite sure that our economy would definitely go from a recession to a depression. I don’t know if people realize what a depression is. If not I think they should read something about it. Also, the banks and Wall Street that caused all of this had money thrown at them from the government with no questions asked and no oversight. I don’t hear people complaining as much about that. They didn’t have to go to Capital Hill and be grilled and humiliated by the House and Senate. Just one more point on that subject, the LOAN that the 3 Auto Companies are asking for is 25 billion dollars. Take all of the 3 million peoples jobs it will effect taxes and add them together. WE ARE ASKING TO BORROW OUR OWN MONEY, NOT YOURS!!!!!!!!!!
GMisCARKING
Thes following is the personal reply I received from Senator Christoper Dodd, Chairman of Senate Banking Committee:
Dear Mr. Simpson:
Thank you for contacting me with regard to a Federal financial assistance package for the United States automotive industry. I appreciate hearing from you on this important issue.
The automotive industry has long been an important sector of our economy. Over 25,775 people in the state of Connecticut are employed in either the manufacture or sale of motor vehicles. Nationwide, it is estimated that over 3 million jobs are dependent upon the industry. As you may be aware, the financial situation faced by domestic auto manufacturers-Ford, General Motors, and Chrysler-is serious, and they have requested that funds from the recently passed Emergency Economic Stabilization Act or from another federal source be made available to help them continue operations.
On November 18, 2008 the Senate Committee on Banking, Housing and Urban Affairs, of which I am Chairman, heard testimony from the heads of these companies regarding this issue. While I am sympathetic to the needs of the industry and the urgency of their situation, I believe that the American people need to be assured that any federal money granted to these companies be used to implement a business plan that will ensure long-term viability for the industry. For this reason, Congress has asked these companies to furnish detailed plans as to how any funds given to them would be used prior to taking any action. Please be assured that I will keep your views in mind in the coming days as these plans are submitted for Congressional review.
Thank you again for contacting me. If you would like to stay in touch with me on this, or other issues of importance, please visit my website at http://dodd.senate.gov and sign up to receive my regular e-mail issue alerts. If you would like more information on my actions as Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, or on this or issues before the Committee, please visit our website at http://banking.senate.gov. Please do not hesitate to contact me again if I may be of assistance in any way.
Sincerely,
CHRISTOPHER J. DODD
United States Senator
CJD: jh
Tim
Nate,
According to Websters the word “hybrid” means “something of mixed origin or composition”. Therefore I would assume an electric car or hydrogen powered car is not a hybrid, because it only has one source of power. The reason a gas-electric car is called a hybrid is because well it has mixed composition - two sources of power. I agree electric (and maybe hydrogen) cars are the future. Hybrids are not (at least not long term).
Ted,
Are you seriously complaining about the lack of hubcaps on a prototype car? GM is trying to save money, and obviously putting hub caps on PROTOTYPE cars costs money. Who cares what a protoptype looks like. It purpose is for development, not for car shows.
Big Burger
The reality: The Japanese Gov’t helps fund Japanese automaker R&D.
It is amazing that GM lasted this long, so slanted is the playing field against them and the other domestics.
Sheth
Kay,
Everything you said makes sense. Its amazing that people who have never worked for GM or been to Michigan come here and preach about how GM is run or how little it’s changed. People who have never met a UAW worker are now experts on how “greedy” they are and how they resist change. People who havent owned a GM vehicle in 20 years are experts on GM quality. People who know nothing about how GM’s stock price was in the $40 range last year come here and say Rick Wagoner’s tenure has been a complete failure. The internet allows anyone to have an opinion and unfortunately many of those opinions are ill informed.
Americans need to get a hold of the concept that they will not get a dime back if GM fails. Many people are saying their tax dollars shouldn’t be spent to help save 2M jobs but the reality is that if the auto industry doesnt get it the money will simply flow to banks. Americans do not get to chose how their tax dollars are spent so they have to hope they are invested wisely. One thing is for sure, GM has done FAR more than any of the banks to show how the money will be spent and how our investment will be protected. The money given to banks was handed out so fast most of us have no idea how it will be paid back or what changes the banks made to ensure future success. GM responded to what people in congress demanded and should get the loans. They didn’t cause the credit crisis and they are not responsible for the fact that Congress hastily approved $700B for financial institutions with few questions asked. They should not be punished because Americans are upset about the bank bailout.
I do find it ironic that highly paid media types feel that UAW workers are overpaid and not entitled to any retirement benefits. I’m sure non of the talking heads would trade salaries with a line worker.
Nate
Tim,
Technically I suppose you are correct… however the implied meaning of Hybrid in my opinion is a car that gets better mileage. And that said both an electric and hydrogen car would get better mileage due to the ability to regenerate their power source.
In the case of electric its simply charging batteries or capacitors. In the case of hydrogen fuel cells the cells can be operated in reverse and generate hydrogen and oxygen from the water they normally generate. The hard part is usually storing the hydrogen… but it is possible. (and by the way that simply makes hydrogen a different type of battery).
Additionally in the case of a Hydrogen fuel cell car there are really two energies at work. One chemical and the other electrical. It is not very different then a combustion engine. A fuel cell combusts hydrogen with oxygen in a different way. But the net result is electric. And to argue “hybrids have gears” is incorrect as only parallel hybrids do this series hybrids work like electric trains.
There really is no reason hybrids can’t be the future. It depends on what the hybrid runs off of. There are plenty of other energy sources and generation methods that can be used to power an electric motor driven car. I think GM would be wise to make a new architecture where new drive systems can be bolted in without much change to the rest of the car. To bad thats not very realistic. It sure would be nice if I could upgrade my old car with a new drivetrain for less cost then a new car. But I guess when you design cars the purpose of making new cars is to sell the whole thing and make more money. I sure do think reusing a chassis is cheaper then buying a whole new car though. Thats what they do with aircraft. They re-power them several times even put new interiors and avionics in them….
Ted,
If you are complaining about aesthetics I agree GM probably has a few prototype wheels sitting around or even a few spare production ones. But they could have just wanted to keep the car look like a prototype. On the other hand perhaps hubcaps would have improved the aerodynamics of the wheels and gotten an extra half mile/gallon.
Nate
GMisCARKING,
I guess I have to write in to tell them not to give GM the funding until a better plan is made. If a small business owner has to make a detailed plan for a small business…. GM’s plan better be on par with the system requirements delivery for an F-18 or F/A-18…. In case you don’t know the requirements were delivered in a few tractor trailer trucks worth of paper documentation.
GM better deliver a plan that shows they have thought 20 years ahead. And I hope in that plan they include a request to the government to support future expansion of new energy sources (ie hydrogen and electric).
Anything less is purely irresponsible on the part of all parties involved. And I know that’d never stand for my personal finances nor should it for a company or sum of money that large.
I want to see GM acknowledge their flaws on all the cars made in the last few years…. you know say “we know the interiors aren’t up to expectations and we will fix that…” and the list would go on. Then I want to hear them ask the buying public what they want. Though they should already know.
But just knowing that our input into this blog site would be a great help.
sheth
I just watched the video and found it far more comprehensive and informative than anything I have heard from our esteemed members of congress or our anti bailout (for the auto industry only) media. The questions posed by the skeptics were answered in detail for all those who wish to listen.
Tim
Nate,
I think we think the same thing but are getting caught up in the wording. I still don’t consider an electric car or hydrogen powered car a hybrid. I do think electric cars the future, I’m not sold yet on hydrogen, because of the storage issues, the filling issues and since it’s viturally impossible to make a hydrogen system completely leak-proof.
I never argued that “hybrids have gears” so I don’t know where you are coming with that. And you say that hydrogen pwertrains are two energies the chemical and electrical. In that vain, you can say a normal ICE engine has two energies then too - chemical and mechanical, and yet we don’t call those hybrids.
Reusing a chassis could be an idea, but it’s like buying a new drum for a laser printer. Ususally it’s cheaper to buy a whole new printer than just the drum. My dad had to do it twice on his laser. I also think a lot of people want a whole new car so that it looks nice and everything. I personally wouldn’t want a rust out car with a new powertrain.
And for the prototype wheels: The added weight and rotational interia of the hubcaps could negate that added half mile/gallon.
Ted Lewandowski
Regarding Nate’s comment in the above post….
Nate I was just pointing out that the hybrid that Rick drove to Capital Hill should have looked more production ready and not be equipped with black steel wheels as it would be seen by millions of people here in the States.
The photo that I was referring to was posted in the London Financial Times so it was seen by all over Europe as well.
These are little details and it might seem trivial but I would’ve make the hybrid look as close to showroom condition as possible - and without the gaudy Hybrid decals plastered all over the car - a couple of small decals would’ve been sufficient.
In any case, to most people the hybrid looked like it was parked in the wrong neighborhood overnight and someone took the wheel covers as souvenirs.
Lou DiStefano
As someone born in Rochester, NY (GM Town) and family members including my Father who worked a lifetime at GM, and even as a huge Chevy fan myself I think GM should not take a dime from the Government with all it’s strings. Gm should file Bankrupt and and restructure the company, leave union friendly states set up new plants with contract workers not a part of a union, move your home office to the south, Florida, Tenn or another right to work state. shed the Saturn brand, Pontiac And GMC trucks. start telling the truth to congress that Government EPA and Saftey standards are keeping you from selling cars you have in Europe that get almost 60mpg. Reducing costs will save the company and it’s the only way. If your avg. Employee costs are $30 an hour higher than the competition and you pay 2 million people an avg. $30 an hour not to work and all the legacy costs that is why you have no money. It’s time to start over with Bankruptcy.
Nate
Tim,
Well a hydrogen fuel cell car is essentially an electric car with a hydrogen powered battery. Hydrogen fuel cells are chargeable if set up right… so to me thats a hybrid it has regeneration ability (not necessarily capacity).
I agree I think hydrogen isn’t quite there yet I’d rather see CNG derived from hydrogen and carbon (yes that takes energy input to make). Its a much more feasible storage medium.
As for the gears comment I think I was just saying that there are two types of hybrids… series and parallel.
Hydrogen is two energies electrical and chemical and mechanical (electric motors)… current cars are only chemical and mechanical (engines and gear boxes)… and hybrids are all of the above electrical, chemical and mechanical (some have shafts and gears while others only motors).
The main differentiation I put between hybrids and electric cars and conventional cars is regenerative braking and the ability to be powered by more then one source…
So would you consider a fuel cell vehicle electric? or a hybrid? the names are irrelevant to me I suppose. What is important is the ability to store energy electrically and chemically and then use it (the definition of a hybrid in my opinion).
It never used to be cheaper to replace things until about the past 15 years. Even my OLD laser printer it was way cheaper to repair it then to replace it… that still holds today with many printers.
Unfortunatly reality will catch up with people as the cost to make new cars goes up as more and more old cars need to be reclaimed. It is also getting harder and harder to reclaim new technology. For instance my grandfather’s 1957 Chevy is almost all steel, a bit of rubber and some zinc here and there… its very easy to reclaim that. A new car with modern polymer based paints and all the plastics etc… it is getting tougher.. hopefully that is being addressed as we speak.
I don’t think new is the answer. It is very expensive to keep using new….. Old isn’t the answer either.. something in between sounds about right.
Hubcaps don’t way that much and the rotational inertia would be minimal…. Aluminum wheels would have been better.
Nate
Brian,
Good point. GM targets millions in sales… But they need that to offer a vehicle thats competitive AND to be able to turn a profit and make new vehicles.
If was designing one vehicle only I could sell it much cheaper then anyone else because I don’t need future R&D Costs just productions costs…. Thats GM’s OTHER problem.
I do agree sell less cars for now and less models and less brands and they’ll be fine. But they’ve out supplied their demand at the cost people are willing to pay (the key part).
Tim
Nate,
I guess I would call a hydrogen car a hydrogen car, just like I call a gasoline powered car, as gas car. I still think hybrid means two power sources because like in a Prius, you can be powered by the gas engine and electric motor at the same time. It doesn’t really matter though. I say TomAto, you say TomUto.
That is true that it has only been somewhat recently that it has been cheaper to buy new then repair, but it still remains that in some areas it is cheaper to buy new.
I agree modern cars are harder to reclaim because of all the new materials being used. However, most of those materials are needed for safety/weight/durability/emissions etc. If we could build your Grandfathers 57 Chevy and pass all the modern customer and government requirements I bet we would.
Do you think that the improved aero from hubcaps will improve FE that much while driving in DC traffic? Please don’t take me too seriously, I’m just trying to point out that for everything good, there is something bad (kinda like Newtons Laws (can’t remember which one)).
Anyways, I think this will be my last post on this blog. I can’t take the utter hatred and mis-information being said here (not pointing at you Nate, usually your posts make sense, even if I don’t agree with everything).
The Ream
As a current saturn Aura owner I have been debating what I would do if saturn goes away. I’m not sure I would switch to Chevy. My first car was a Buick. I currently have a Nissan too. I almost bought a Fusion rather than the Aura because I could get the manual transmission.
You could likely keep my business with a Buick Insignia/Regal under a few conditions…
1. They need to ride and drive more like the Aura and less like a marshmallow.
2. They need to be priced closer to Chevy than Cadillac if you intend to keep Saturn people. I would buy a Buick Insignia based on the Epsilon II but I know that it is very similar to the Malibu under the skin.
3. Buick dealers better treat me like saturn dealers. I have owned several Saturns and helped my sister buy two. The experiences have all been very good.
4. How about a little icing? Bring the 211hp 2.0 turbo AND the six speed manual!
Gerry
I was heartened to read today that the bailout plan is getting significant resistance from Republican senators, and may not pass without significant concessions, including concrete concessions from the UAW. It is about time that our elected officials held their ground on this bail out for something concrete, instead of a bunch of empty promises that will have all of these companies looking to eat from the public trough the next time an economic downturn occurs.
Kay, as a former GM salaried employee with a great deal of experience working in a UAW environment, I’d like to comment on your post.
First off, your husband is now a Skilled Trades Shop Committee person. Correct me if I am wrong, but when I was working with the UAW, that meant that this position didn’t actually perform skilled trades work, they did union business. Not only did the Shop committman do union business on straight time, but had right of refusal on overtime anytime a skilled trades worker worked overtime, so that there was always “representation” at the factory whenever UAW people worked.
IIRC, the UAW Health and Safety representative was / is in the same catagory. I don’t remember if they had the same overtime rights as a shop committmen, but I used to see them in there on Saturday’s too. This individual wasn’t doing productive work either.
Then there is the Local President. Not a productive worker either.
The production workers had their own shop committee person, he didn’t do any productive work either.
Add on to this overly restrictive work rules, restrictive job codes, never ending negotiating sessions with management personnel in the attempt to settle grievances etc.
The UAW currently has a plethora of benefits that are not shared by the bulk of the American public, nor by the current Salaried GM employees, such as:
Cost of Living Allowance
No insurance co-payments for primary converage
Jobs Bank
30 and out retirement (still a salaried benefit only for those hired after 1992)
Holidays like the day after Easter, the Friday before Memorial day, and “Bambi” day (Friday after Veterans Day)
All of this and with the exception of new hires added since the signing of the latest contract, the hourly rate for an “assembler” is $26.09 / hour plus an additional $1.77 / hour COLA. Skilled trades are paid even higher. In good times, when the overtime is flowing, 1 1/2 on Saturdays, double time on Sundays.
I do not hold any anomosity towards UAW members, they never got any benefit that any company was not willing to give. For that, I fault GM (and Ford and Chrysler) for never standing their ground, and show a willingness to take a strike the way Catepillar was willing to do. But the UAW leadership must have had their heads in the sand if they couldn’t see that what they were demanding wasn’t a realistic goal to keep these companies going in the long term. Now it is time to “take a hair cut”, just like just about every other middle class American has taken over the last 15-20 years, and do your part to allow Gm to once again grow and flourish. The UAW is not THE problem, but you are definitely a significant PART of the problem.
I continue to hope that enough elected representatives will continue to withhold assistance until meaningful change is brought to the UAW contract, as well as changes in executive compensation, and management change that includes the resignation of Rich Wagoner, as well as his board of sycophants.
Only then will there be an atmosphere that will allow for meaningful change at GM that will allow for development of world-class vehicles, and an opportunity for future growth in North America.
Dennis
Hi there!
Today I’m investing several tausend of dollars in GM-stock - thats my contribute.
I think GM need a strong CHANGE and new forward-looking products. But its possible!
The new slogan is ………. “YES, WE G.M. !!!”
Nate
Tim,
No offense taken. You are right that at low speeds hubcaps don’t make much of a difference. But as an Aero Engineer who has seen wind tunnel tests.. small things add up. The turbulence from no hubcaps does matter but only at higher speeds like 50-80 MPH. At these speeds side mirrors matter too.
I agree there are always gains. A hyrbrid would be a good thing for DC traffic. My daily commutes to work used to be 45 minutes for 12 miles. And in the heat of summer that took a lot of fuel to keep my car cool.
I don’t blame you for not posting on here anymore. There are times I decide not to. But GM needs real input if they are going to make a come back. And someone has to keep a technical voice in the comments here. I find that many people aren’t familiar enough with the technology to really comment. I hope I can bring some balance to that side of things. These blogs find themselves all over the spectrum. I hope GM can have its level headed realistic minds read and look into all this. Maybe they could find a good balance that will get them back on their feet. I certainly know from a technical aspect that their energy solution problems aren’t going to be easy with what the public demands. But I also know that they are required based on the public’s current habits. There is no free lunch in the world us engineers know that and have to deal with it every day as we use the laws of physics to make cool and useful stuff. Unfortunately many others don’t get it.
My biggest comment to GM is to fix their interiors and stop overselling their cars as more then they are.
Mike
When are the Big Three (GM, Ford & Chrysler) going to wake up and stop taking it? They are not powerless in all this auto company bashing that is going on in congress. I would like to see the auto’s shutdown ALL manufacturing operations outside of Michigan. This includes any vendor’s services obtained from companies outside of Michigan. They need to remember their roots! Michigan is where they achieved greatness not Mexico, Europe or even any one of the other (49) states. It was Michigan. They owe Michigan and Michigan will always be loyal to them.
Picture this scenario. If the Big Three did as suggested above then we would be re-opening moth balled plants and even building new plants. If they cannot find the workers here in Michigan then those displaced elsewhere will come here for jobs. If the Big Three cannot find the vendors they need here in Michigan then advertise the need and vendors will flock here to open up shop. Think of what it would do for the housing market here in Michigan. We would have to build again. The Michigan economy would go from the 50th worst in the Nation to the best.
I realize the effect on the displaced workers elsewhere but hey welcome to our misery. It is not like they will be totally abandoned it’s just that they would have to come to Michigan to find work. Is that so bad? Nobody is crying the blues for all the trades’ people that have had to move to Arizona or Nevada because they are growing so fast they do not have enough skilled laborers.
If the Big Three did this you could bet the next time they were collectively called to Washington to face Congress it would go like this. The oversized egos in bloated suits and dresses would be sending their private jets to Michigan to pick the CEO’s up and fly them there. Once there the slimy politicians would be wining and dining the CEO’s and asking them what could Congress do for them so they might consider expanding their manufacturing base into their districts to help their poor state economies. The Big Three would answer “work for one dollar a year and we will get back to you”
Mike from Novi
mike
Someone above was interested in his Saturn to Buick transition.
Below, some good sense (I hope ) notes:
- In case of cutting Pontiac and Saturn and supposedly launch “the replacements” - Buick Insignia, LaCrosse, Park Avenue, Vue could be advertised intensely for months. This also means that models may be transferred to Buick - Vue is a good nameplate and would be awfull to lose those customers.
- Former Saturn\Pontiac buyers could be attracted by incentives for buying Chevy\Buick\Cadillac.
- For good or worse if Saturn is dismissed, the Saturn dealers should be kept. Considering customers appreciate the dealership experience, it is more likely they would like to purchase their next cars (Buicks) and get serviced by the same familiar people that didn’t disappoint them. So, Saturn dealerships could become Buick-GMC dealerships. If dealerships cuts are required, former Saturn dealerships could be spared. (Interesting that Saturn dealerships would not be closed\pay for closing)
Richard Wu
Dear Ray,
The crisis of the American auto industrials haunted around my mind for several days. Now, I have some ideas to help auto industrials to go through this difficult time.
The high benefit package of the union worker was the blame for the crisis of the auto industrial. On one hand, it is burden for the corporation. On the other hand, the reputation of the high compensation for its worker was the incentive to attract talent people working for the company. My point is not how to execute or assign the high benefit package. My point is how to squeeze out the competitors and regain the market share back to American auto industrials. Unfortunately, everything went opposite way now. The competitors try to squeeze out our industrial and occupy our market. The patriotic will not help us to compete but the better strategy will.
First, let us analysis how the foreign company steal American auto market. They use two strategies to invade American auto market as every other industrial. One is improving the auto quality. The second is lowering the cost. We can compete with them for first point but failed on second.
Here is the strategy based on above obvious reason. The strategy is very simple. For the small car models where the foreign companies dominate market, we could move out the same car model to the China to lower the cost. We even don’t have use our own money. All we needed to do is persuade Chinese government use their money to invest on our certain models that can compete with the foreign companies on small car market. After we squeeze out our foreign competitors out the market, we have the power to determine the prices. We even don’t need worry about the Chinese because they only make the car for us and we control the techs and markets. We still take big share of the profit through that kind of cooperation. In addition, we also can occupy the Chinese auto market through our cooperation.
For other car models which American auto markers dominate the market, we still can keep in the American. Plus, we will invest on new models which can beat our competitor in the future. We can obtain the invention and patent profits by investing the future car models and keep our auto industrial survived in American soil.
The best management strategy is always grabbing your competitor’s throat. Never let your competitor grabs yours.
Richard
Nate
Mike,
Are you kidding me? Shut down their non Michigan operations. You must really have missed it on this one. Michigan didn’t make GM what it is. The whole US did. GM used to use a plant near my town in PA. Of course that was long ago but still it made GM what it is today.
GM plainly has the wrong attitude and apparently some in Michigan do to. GM needs a HUGE change to fix some of their problems.
Wow are you off base.
Saturn isn’t a brand I’d cut… Chevy is…
Mike
Why doesn’t GM merger Pontiac and Buick and call it Buick.?They could bring back great Buick names for the G6 G8 G5 - Century Wildcat and Skylark. They are in the same showroom so why not? The move would simplify the product lines for customers.
mike
Hi Mike! Do we have similar nicknames or what?!
I kinda like my lower case version of ‘Mike’
Shelley
After reading the paper I’m curious to know how GM seemingly takes no responsibility for the state the company is in. It blames the current economy, housing issues, financial institution failures which obviously have contributed over the past months however GM’s problems started long before, citing known plant closings, loss of marketshare that predates recent events. Further, GM has not lead the market in innovation rather continued to be a follower. The Volt, for example, should never have taken the length of time to go to market that it inevitably will - one would have assumed that the design engineers would have had a viable solution for the battery requirement prior to now.
FInally, if Ford can do it, why not GM? Based on resource leveling, you’ve put the UAW into an incredibly difficult position by having a group of workers at a wage which your company cannot support..
Without significant shake-ups in executive management, innovation and design and time to market, there is little point in the American tax payer being held responsible for this silliness.
RCO
Good-bye, General Motors. The plan isn’t of the necessary clarity, not have you described the fix that changes the fact that Toyota makes money off of every car sold and GM loses money off of every car sold. It is a shame that you didn’t see this coming each time you negotiated with the UAW. However, I don’t blame the UAW, I blame GM, Ford, and Chrysler management. What we built was in fact a Ponzi scheme. The US Government didn’t help by ignoring basic economic principles, but it was still the fault of business management. Ponzi grown large.
G.S. Hicks
GM is killing the wrong goose. Saturn is the best line if vehicles they have. We have had three and were considering two more. My in-laws have two. Saturns have been the ONLY GM vehicles I have ever owned. So much for the Viability Plan. If Saturn is not what GM expected it to be, it is GM’s fault for trying to change it. Furthermore, by announcing the end of the Saturn line, you’ve guaranteed that the new vehicles currently sitting on the lots will be discounted far, far below manufacturing costs. And I won’t be buying one of them, let alone two. One more thing: if you allow Congress to tell you what kinds of cars to build, you will die, or the government will take you over completely. People will always buy what they want, not necessarily what you make.
max
Common sense….GMC =Chevrolet……..any idiot can figure that out. You guys are shooting the wrong cows…..
Ryan Sapulding
While it’s true that Saturn, Saab and Hummer are a drag on GM and need to go away, creating more boutique divisions (with a few models each) out of Pontiac, GMC and Buick is mapping a road to market failure. Boutique car lines are generally the domain of exclusive premium brands and not a specialty of GM.
If you want to generate excitement in the mid price range (which is GM’s domain) you need big, exciting car lines with many models in order to get the mainstream consumer’s attention. Since GM has a big gap between Chevrolet and Cadillac it makes better sense to expand Buick, phasing out Saturn and Pontiac and directing some additional car lines to Buick (adding 5-6 new car/SUV lines to Buick’s three). A larger, modern and aggressive Buick division could re-brand, Saturn’s Sky, Vue and Astra. (Chevy could take the Solstice and Vibe.) The Pontiac G8 and G6 coupe and convertible would be a success as say, a Buick, Grand National and Wildcat and you could still keep the new LaCrosse.
Further, the GMC pickups could remain but the Yukons SUV line would gain more attention as big and mighty Buicks. Where this strategy really hits home is at the retail consumer level: When a customer walks into a GM dealership, they shouldn’t see a collection of small brands with a few models but instead be offered wowed by a wide choice under one major brand.
GM needs to consolidate but instead of continually appearing to be in market retreat, it must get the consumers attention and generate excitement by doing something positive and aimed at growth of a brand. Creating a bigger, broader and more fabulous Buick would generate the marketing excitement they need going forward.
Edward
It’s not just a downturn, it’s a broken way of doing business on taxpayer life-support.
I wish i could buy american cars again. I grew up back when american cars were still the cars you wanted to own. So who screwed it up and how? It would make a great case study for some business schools to do. Here’s my take for what it’s worth.
Yes they are bankrupt, dead whatever you want to call it. We the taxpayers are paying to keep them alive. None of us would have the luxury of begging for tax dollars to keep us afloat, so they better listen to what we have to say!
In my view 3 things have happened to bring it about the death of US automakers.
1. GM and other US automakers lost touch with their customer. -
Build a quality car that won’t fall apart. You’ve heard it time and time again. The car I have now was built in the US by a foriegn automaker. It has over 110,000 miles on it. All I’ve had to do with it is change the oil and preventive care. If auto sales tell you anything over the past 20 years, americans demand reliabilty!
2. Management lost focus and control of vehicle development -
Build cars people want to own. Too many GM cars are compromised so much that they’re reduced to second rate over-branded cars. Copying is not a bad thing if you’re giving the customer what they want. Look at the success Hundai is having. There’s nothing new in their portfolio of cars, just a bunch of bland look alike cars at an affordable price with an awesome warranty and reasonabley good quality. The key is that they gave the customer what they wanted. They copied the conservative design of cars that customers are paying for and answered their demand for reliability with a warranty that pretects them from the future costs of poor craftsmanship.
(no i don’t drive a hundai nor am i endorsing them. I’m just pointing out that it’s no mystery what the customer is looking for.)
3. The unions lost all sense of reason and competition . -
Here’s something to think about. Look at all the foriegn automakers building quality cars that last in the US. Now think of how many people that they employ. Instead of looking at the jobs left standing at US automakers, why not look at the foriegn automakers in the US and see them as jobs lost by the unions. I work in automation technologies. Every company that does business with a US auto-plant knows that it will take twice as long and cost twice as much to get the job done in order to satisfy union labor rules. It takes time and money to get 7 different people involved to do a 2 person job. Are the unions fighting for jobs or just sweet bene’s for themselves and as many of their close freinds that they can accomodate?
One last note to GM
Customers buy a car not a portfolio! That’s 100% corporate groupthink. When I’m shopping for a car, I’m much more concerned about Consumer Reports quality rating than I am about your portfolio. Who cares if you have the largest portfolio of cars that won’t last without falling apart.
When are you people going to get it?
Give the customer the long term reliabilty they want, and we’ll buy it!
Jack
GM needs to realize that the people who structured should not be the ones to restructure. Over the past many years, GM had been a case study in wasteful expenses and overspending, lavishly over employing its overseas operations ( Middleeast operations for example) with ornamentary staff and in some cases highly corrupt and wasteful in paying through the nose for subcontracting consultants employed to deliver explenses except value.
GM should ideally submit itself to a thorough scanning for avenues for reduction of wastages. The best consultant to do will be an outside agency appointed by the government. Now this may sound rude, but if GM wants the bloody loan, better realize that the time is up for bullying tactics
michaela muench
Please save Pontiac.
Beef up & “electrify” the firebird!!
The phoenix would be a great representation of Pontiac’s future!!QA true rise from the ashes!!!
America’s best ass kicker rises again!!!
jinwa
So now that Obama has hijacked GM - the reluctance by GM to do a Chapter 11 re-org a couple months ago looks like another bad decision. I don’t agree with any government removing a private company CEO, but GM continued to make bad decisions.
Now they get to go through Chapter 11 with the government telling them what they can build, how many, where and when. I look forward to many soviet style cars from GM (Government Motors).
I would have bought a car from GM under self imposed Chapter 11, but not under Government controlled chapter 11. I hope the Corvette does not die in the process.
Shari
My sentiments exactly. Hijack. Government Motors. Each day something more unbelievable happens from the folks who promised change you can believe in.