The Case for GM: “We Will Get the Job Done”
We hope that many of you were able to watch the press conference with our new President and Chief Executive Officer, Fritz Henderson, yesterday. There’s no question that we have a lot of work to do, both in the next 60 days and in the months and years ahead. But we’re confident that we will get there.
One of the things we wanted to highlight from Fritz’s comments yesterday: The recovery and reinvention of GM will be taking place on two fronts, both equally important but one getting a bit more focus right now in the media. Yes, restructuring is important, and we’ll be working toward that goal in the coming weeks and months. But we’re also going to continue to focus on building the best vehicles in the market — cars and trucks that consumers want to buy, cars and crossovers that place our stake in the ground as leaders in design, technology, quality and reliability. At the end of the day, restructuring GM is about better positioning us to sell cars. That’s what we do. And that’s what we’re going to continue to do moving forward.
Here are Fritz’s closing remarks from yesterday’s press conference, on his vision for how to make GM competitive and viable in the future. - Christopher Barger, Director Social Media, GM
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GM… you should have pushed for this “restructuring” before you took an government money. This is a joke. We all knew bankruptcy was the only real solution given the complexities of your contractual agreement with the UAW, pensions and the health care obligations that tie you down, but now you are on the hook to a government that seems to know no boundaries, over-steps the Constitution, and has no clue in what they are doing. Look at Ford. They were smarter. You should have followed their lead. But you didn’t, and now not only is our government against you, but a large portion of the American public as well. Once you begin this “restructuring”, the public’s feelings will only increase in anger as they see all those tax dollars were for nothing. Good luck getting past this pending PR nightmare. I am so disappointed, because I saw GM really making good changes in their vehicle designs and execution of those designs. But good luck now. Obama and his crew will begin to tell you WHAT you can make. Welcome to the new Government Motors, or even worse, the new Green Motors, both of which will be an abject failure, as government does not have a clue how to run a company, nor do they understand what the consumer really wants or needs. This is a very shameful time for American business.
Fritz seems to be a welcome change as the new head of general motors. I think he will be much more aggressive and active on tackling the tough issues the company faces. he knows what is at stake and has a background in finance, two major benefits on his side. hopefully he and his team will be able to act/react quick enough to truly make the meaningful changes to sustain the company long term. good luck.
I have to agree with David. You have some nifty products. The new Cadillac CTS, Chevrolet mid-size sedan and others. I also love Suburbans. I was raised in a family that only purchased GM cars. But, I am now miffed that you took bailout money in December when you should have filed bankruptcy. You have wasted mine and millions of other folks money. GM management, and that includes you, Fitz Henderson have not been doing your job. You have been part of management for many years. Ford is leading the way. I do not expect that I will purchase another GM vehicle.
I am also miffed that GM let it go so far that President Obama made a decision to ask Rick Waggoner to step down.
I hope Mr. Henderson’s background in finance doesn’t become the wet blanket that extinguishes all glimmer of hope for exciting, fun to drive cars. It is not all simply about basic transportation. Nor do we all need 556 supercharged horses to gather groceries. Economical, green, sustainable; those are benchmarks to achieve, but lose sight of beauty, style, grace, engineering marvel and you lose the buying public.
By the way, if there is still anyone in the building, gm.com needs updated to reflect the ascension of Mr. Henderson.
The cure is already inside GM. Spread Buick’s engineering and production practices across GM. Convince President Obama to waive regulations on diesel engines in 2009 and 2010 so you can get your better looking European designs to the US market quickly There should be Chevy-branded Opel Corsa diesels rolling off US assembly lines and being exported around the world. Is there an easier way to beat the Prius’s mileage in a more attractive design? There are many other GM Europe designs that applies to. Make as many Camaros as demand will allow and put a diesel engine in those. A V-6 Diesel Camaro would get about 35-40mpg at least. There’s no better time to get some of these harmful regulations waived than now. The argument should be if they’re clean enough for the EU, they should be clean enough for the US.
There are many posts and comments with some outrage over the government mandated firing of former GM CEO Rick Wagoner. I am someone who believes in capitalism and the free markets, but you are not a company of the free market when you ask for over $30 billion just to stay in business. When you ask the government to become a major shareholder in your corporation and allow you to live based upon federal tax dollars, you better believe government officials and the american public have a say in the leadership and management direction.
Why would we as investors and taxpayers want an incompetent individual who had a hand in shoving GM down a path to implosion to continue leading after 8 years of mishaps? The government saw a major issue and didnt want the money we have already invested in General motors and the money they continue to ask for to be wasted on a leader who has proven himself ineffective.
In some of my other posts on other stories i detail in great length the many many mishaps that occured under the leadership of Rick Wagoner, that is neither here nor there. the point is the government should be viewed just like any other shareholder. we are a major shareholder in GM and do have the ability to impose certain conditions and replace ineffective leadership to make sure we recoup our investment instead of waste it all.
This move doesnt mean the government can replace every CEO of every company as many who have predicted doomsday by this one move would have the entire blogging community believe. but you better believe if you take billions of dollars from the U.S. government and have a board of directors that have stuck with long time wrong headed CEOs who got their companies into the brink of financial disaster, dont act shocked if the government wants different leadership to transform the company into a viable one, whatever company it might be.
I can already see a huge sea change with the appointment of Fritz Henderson as CEO. when was the last time Rick Wagoner let the bloggers on the GM blog site in on important details of the GM restructuring. Fritz has been CEO for 3 days and already has three different articles posted here detailing the company’s restructuring and pod-casts and news conferences held in the past several days that have shed more light on the company’s problems and how he intends to solve them than Rick Wagoner ever did. By many this is a welcome change!
If GM is going to focus on building the “best cars in the market”, which I hope they succeed in doing, there’s much work left to do. Compared to the lowly Hyundai Sonata SE, mfd in Alabama, the four cylinder Malibu, proclaimed as one of GM’s big successes, has less horsepower and torque, bigger turning circle, weighs 200 pounds more, has less interior room and shorter warranty coverage, but costs a couple thousand more when similarly equipped. But hey, its interior is better than the old Malibu, the styling is attractive, and it gets 1 mpg more highway mileage than the Sonata, so there’s hope…
GM success or failure is going to depend on building and selling the vehicles that people need and will want to buy. Having the company run by “bean counters” has brought the company to this point of failure. Continuing to dictate design “by the numbers” won’t work.
Alex D,
You know that manufacturers need credit and the credit markets are frozen. Car sales worldwide area down right now. But they will hopefully rebound soon.
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The customers are the ones with the stake here. We want nice American cars of all kinds to be made for us to buy. We are excited about the future prospects for GM.
Free markets work government mandates cause problems.
The new Malibu beats the Camry and Accord on mpg, it was the free market that did it not the CAFE.
Performance is important to consumers as well, a small block V-8 direct injection with active fuel management excites us to buy, a V-6 is uninspiring.
Much profit is made at the top of the line and we want GM to be free to offer top of the line products in order to make lots of profit so that they can innovate across the board.
Hopefully, we will soon see the GMC xt Denali hybrid 4.9L SIDI V-8 VVT with Active Fuel Management. This would be a fantastic product that will lead the way to GM making market share gains.
http://www.gmc.com/denali-xt/?seo=goo_|_2008_GMC_Retention_|_IMG_GMC_Denali_Hybrid_|_GMC_Denali_Hybrid_|_denali_hybrid
Will this be the engine that will power GM’s luxury car line-up? Sounds like a great choice.
GMC line-up and GM’s new luxury sedan line-up are very important to GM customers. This is where GM can earn profits from its best customers to fund future innovation and operations.
Let’s hope that GM can make the Ultra V-8 engines for a line of super luxury and super profit. V-8’s with active fuel management offer more prestige and probably the same of better fuel economy for inspiring the luxury/sport customer than an uninspiring V-6.
Make money and gain share with a perfectly tiered assortment of flagship luxury sedan/coupe to beat BMW 535, Mercedes E, Lexus ES/Avalon/Camry, Maxima/Infinti G, Acura:
STS (larger trunk)
Riviera sedan/coupe (66-67)
Bonneville J8/GTO (66-67) – No dark lens standard – No heavy moldings standard.
Target Lexus IS:
Cadillac Alpha sedan/coupe (Shanghai Riviera concept goes to Cadillac).
Cadillac alpha roadster.
One of the best front ends in the Michael Sabatini concepts is the Toronado:
http://www.rolfebatsieandcompany.com/A_Olsmobile_Page.html
Hope you are watching your competition. Notice that this 2012 Toyota Camry concept takes design looks from the Oldsmobile Aurora:
http://images.businessweek.com/ss/07/08/0821_art_center/source/9.htm
That means your Riviera sedan/coupe and Bonneville J8/GTO has to be competitive on looks. We should be seeing Buick and Pontiac concepts to beat these.
This Firebird Bandit Trans Am wakes them up:
http://media.photobucket.com/image/Firebird%20bandit%20concept/Manoah2u/designs/banditbird.jpg
Despite its precarious condition, General Motors had the ways and means to use internal staff and external consultants to put together a coherent and viable proposal. It’s naive to think otherwise. Lobbyists, bankruptcy attorneys, and creative bean counters were at their beck and call, for fees which a fraction of the bailout monies they’ve received would have paid for. But GM didn’t want to be solely responsible for the cuts that would have had to be made in order to get the government nod.
Enter DC, stage left. The plan’s not viable, they say. Off with Wagoner’s head, they say. Decisive action, at least on the surface, that doesn’t yet alienate the GM employees, who a cynic would say are seen as voters, not workers and families with an uncertain future. What’s next for the company is not presented immediately, but as the week proceeds, with the President safely distanced in London for the G-20 economic conference, it’s clear that GM is headed, with the government at the wheel, for a carefully orchestrated declaration of bankruptcy. A bankruptcy that’s meant to occur without causing the kind of panic that one would expect to follow such a declaration from an American industrial icon.
So far the massage is working. No riots in Detroit (at least not yet), although the internal psychological state of its residents must be fragile at best. The blame has been spread around to the degree that there’s no one party to whom all can point with an accusing finger.
http://www.loosekannon.com
Wagoner did a lot for GM. GTO, G8, sky, CTS, Enclave, Aura. But he promised no more badgenering!!! pontiac G4??? Too many cars for the masses. Few targets. Few Hits. Other than the vette, what Chevy car is an class leader? Whats the best overall car a person can buy for 20,000? Its not from GM!!
If you’re only as good as the competition, but cost more when equiped the same, you will fail.
If time to market doesnt improve, you will fail. No longer are you Americas first choice for cars. The best truck and SUVs. Corvette and CTS ( especially V series) are winners. But the average city person, out of college, is not looking in your direction. So when they upgrade there civics and jettas, GM is not on the Radar.
Former owner of a monte carlo, silverado, blazer, coupe d ville and buick estates wagon.
” Other than the vette, what Chevy car is an class leader? Whats the best overall car a person can buy for 20,000? Its not from GM!!
If you’re only as good as the competition, but cost more when equiped the same, you will fail.”
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Build the best and market share will improve.
GM needs to compare each vehicle it builds to the best in class and ask why it fell short and fix it.
One or two quality vehicles will not cut it. Bad word of mouth from clunkers with poor quality will tarnish the brand.
If you buy a GM vehicle and Consumer Reports rates it as poor quality you feel cheated. Changing model names every few years does not fix the problem.
I do not feel a sense of urgency to turn GM around. Will market share improve or will GM continue it’s long slow decline?
Hyundai is grabbing market share with Quality, Value and Fuel Efficiency.
Ford is picking up market share with Eco-boost products.
Where are GM’s small and mid size flex and hybrid vehicles?
When gasoline goes back to $4 or $5 a gallon what will happen to GM sales?
Thinking positive here…
Sustainable:
What would be the likelihood, of picking the brands you wish to continue, and redesigning them to be upgradable? Build a car (utilizing recycled older models?), which doesn’t necessarily solve all the problems of today, but is built in such a way that components can be modified or added later on as new cost effective technologies become available. Is this possible? Encouraging green initiatives, recycling and waste reduction, driving the tech sectors to think about the new components possibilities. Building a cheaper / smaller car becomming more dangerous, and less useful seems limited in it’s appeal. This might solve the pressing issue, which is what can be done today to help for the future success of the auto industry…
Laid off workers retirement relief for today.
Direct a portion of a particular tax incentive from the purchase of any new/used car governments (I’m Canadian so it would be GST), to go directly to the pool of affected recently laid off workers pensions.
Just some thoughts…
Proud GM Truck owner
Wishing God speed to Mr. Henderson. GM can pull this off. I could not imagine it otherwise.
GM has been a part of my family forever. I will never forget that 63/64? Pontiac Grand Prix – 4 on the floor – teak interior – midnight blue – bucket seated – V8 beauty. Perfection as only GM could make it.
We look forward to another century of wonderful automotobiles built in the USA by the finest car makers in the world.
If GM abandons the Retirees, they will abandon GM.
GM is a great company they build many 4 door that do do 14s in the 1/4mile. They build motors that can out perform in cost output and ease of MFG. I am stockholder and a owner. People run there mouths that Obama is going to make them make boring sedans well isnt what you Americans buy? You love the camry and accord both are gutless slow and ugly. These are the qualities Americans hold dear. I guess you are what you buy. I worry about the B word may be i was worried about what Rikki said about chap 11 then chap 7. I could live with losing 800 shares of my stock but i realy do want to buy another Pontiac or GM car in about a year. My 2005 pontiac has been great thanks GM. As for the people worried about what the gov does with your tax money dont worry non of us where going to get Social security any way lol. General motors allowing poor people to get some power to the ground. Good luck Fritz
Just finished reading the weekend USA today Test Drive section 10/9/09 on the Buick LaCross.
Sounds like you made a good start but you still have room to improve…..
Seats: “Look great , and the bottom cushions are fine, but the backs are lumpy. The lumbar support won’t retract enough — common to GM cars. It’s not as if there aren’t good seats to copy: most Volvos and Porches, some Acuras, VW’s ans Audis”
Trunk Hinges: “They are the crude gooseneck style that swipes trunk space”
“and there’s the still-not-correct GM Hydra-Matic transmission.” But the testers, a front-wheeled drive CXS and all-wheel-drive CXL, shifted poorly.”
There is more but you get the idea. So So is not good enough… you need to produce excellence in every category. (Interior, Exterior, Performance, Safety, Value, Technology)
Quality is the in buyers perception…… You need to be able to convince the auto reviewers that you can produce the best.
GM is coming out of bankruptcy… how many more chances are you going to get to get it right?
Quality and Value….
A bad dealer experience is bad for GM.
GM needs to start a dealer rep “secret shopper ” program and go into dealers and see if customers are being treated fairly.
No up sales, no jacking of interest rates higher than you qualify for, no expensive unnecessary add on’s just value for the dollar. Just a quality vehicle at a value driven price.
No one ever walks out of Walmart feeling that they got cheated.
Walmarts market share has increased over the last 20 years. GM’s has decreased.
Maybe that Quality and Value thing is important.
Where are GM’s small and mid size hybrid, electric or flex fuel vehicles?
All the other auto makers are filling the space. Will GM be able to compete in this segment of the market?
Dear GM, I would like to offer you advice on getting back to market dominance.
1. Fire all chauffeurs. GM executives should drive 5 year old GM products. They should have to take cars in for maintenance themselves. This is how they will learn their business. They are 100% isolated from the auto industry if they sit in brand new cars driven by chauffeurs. Cancel the executive car programs. Make them go into dealerships and buy their own cars. Experience GM as a customer. You will then be able to understand the benefits and frustrations of owning a GM car.
2. Follow Hyundai’s example of how to turn quality around. They were the worst in the business in 2002. Today, they have overcome all quality obstacles. How did they do what you haven’t been able to? They are also backed by their government. Use that relationship to improve your position in the market.
3. Question each layer of middle management. How much do they add to your profitability? Who has the knowledge of the industry in your ranks and who are the “administrators”? How much bureaucracy is needed? How much administration is wasted cost? What patterns of operations and style drove you to bankruptcy? What were the common failures in Oldsmobile, Pontiac, Saturn, Saab and Hummer that caused you to shut them down? Are the causes moved to other remaining divisions (Chevy/GMC, Buick, Cadillac)? Why keep GMC as an exact duplicate clone of Chevrolet?
4. Look at the best of GM over the past 100 years. Sales are the key to regaining market share. This should be your primary focus for the company. Standard, fair pricing practices was the best thing about Saturn. Everyone would like to have a new car, but ~80% of the buyers don’t want to buy through a dealership. This is marketing basics – set the price, offer web sales options to eliminate the “I’ll have to spend 45 minutes talking to the finance manager to see if we go that low on this car” game. Buying a GM car is no fun. The customer has to spend a lot of time waiting for the dealership in the sales room. I went in knowing what car I wanted to buy and was in the dealership for over an hour. If you can recognize this as a sales opportunity, you may be able to get back in the lead in some automotive category. The rear-wheel drive Caprice/Lesabre/Bonneville/88/Deville (B-bodies and C-bodies) of 1977 to 1996 were the best car in the industry. Sales were your best ever. Used prices are still excellent. Why did GM cancel the line and hand the market over to Ford for big rear wheel drive cars? Design changes in 1991 seemed odd given the classic style of the 1990 Caprice, however. Is that when sales dropped off? To run the company you need to know what went wrong.
5. Study your competition and re-learn the auto industry. The current staff at GM is worried about their jobs. The way forward is to break the cycle of leadership weakness. All the problems of the last 20 years at GM are caused by bad leadership decisions and odd car designs. Leaders at the company have ignored any negative criticism which would have helped them get back on track. The bad leaders would groom the next generation of bad leaders in an endless downward spiral of treading water. The executives have taken a lot of money out of GM over the last 20 years. What did GM get for that money paid out? Not much.
GM is no longer the industry leader and has sat idly by as the competition
GM executives should drive 5 year old GM products. They should have to take cars in for maintenance themselves. This is how they will learn their business. . Make them go into dealerships and buy their own cars. Experience GM as a customer. You will then be able to understand the benefits and frustrations of owning a GM car.
John,
Great ideas. I’ll second that.
The customer experience at the dealer is important. GM needs to understand no detail is too small to overlook.
If you build a quality vehicle and the customer is treated poorly at the dealer there is no upside for GM.
GM needs make sure customers are treated fairly by the dealers.
What a comment ! —– If a bankruptcy can not force you to change and change quickly I do not know what will.
GM needs to move with a sense of urgency to change the culture that allowed it to ignore customer complaints and declining market share for 30 years.
Can GM turn itself around — YES
Will GM turn itself around —- ????
Hyundai went from poor quality and reliability to good quality and a great reputation in a few years.
GM market share is declining — Hyundai market share is increasing
Is Quality a factor in market share?