By on October 4, 2006

lutz.jpgGM’s September sales figures are out. Despite generous Labor Day incentives, zero per cent financing to anyone with a pulse and an easy year-on-year comparison (GM was in the post-Fire Sale mode last September), vehicle sales are down seven percent. Given GM’s upcoming production cutbacks, there’s only one way sales can go from here: down, taking GM’s declining market share with it. Never mind. According to GM Exec Maximum Bob Lutz, "Whatever our market share stabilizes at in the US— 22, 23, 24 percent— I don’t really care. The idea that GM… has got to get back to 30 percent is a wacky notion with all this global competition we’ve got."

Obviously, Mr. What Me Worry? is a whack job. The fact that the septugenarian ex-Marine has any power whatsoever within GM– never mind his multi-million dollar annual salary, huge pension and Gulfstream perks– tells you all you need to know about GM’s ability to manage itself. At the risk of stating the obvious, shouldn’t the guy who calls [at least some of] the shots for the world’s largest automaker understand that the faster GM’s domestic market share shrinks, the closer The General gets to the tipping point of no return? Call me a weenie (SIR!), but I’d expect an ex-Marine to know when he’s fighting a rear-guard action.

By the same token, you’d kinda hope that GM’s so-called “car czar” would know that The General’s inability to find new homes for their cash cows is putting his employer in a world of hurt. Pardon me for not being a goldfish, but I distinctly remember Mr. Lutz standing on the running board of a new[ish] Tahoe telling the world that GM’s GMT-900’s would take the [declining] market by storm and save GM’s bacon. Well they haven’t. Yukon, Tahoe and Suburban sales are soft, and getting softer. Surely the opposite of success is failure, and the logical response to failure is to acknowledge the damage and formulate a new plan– rather than obfuscation, prevarication and denial.

Top execs like GM marketing maven Mark LaNeve may be happy spinning the dismal parade of declining numbers– claiming that rental fleet sales and limited production are clouding an otherwise bright picture– but the numbers don’t lie. GM is in a death spiral that no amount of “missing” Chevrolet Aveos, Cobalts and Malibus can cure. GM claims its GMT900 pickups are the next next big thing, but they simply can’t create enough cash flow to sustain The General’s distended product portfolio.

In fact, Maximum Bob put his finger on the nub of GM’s problem: the company has lost its ability to fight import owned competition. GM’s September sales results are bad enough, but Toyota’s are far worse– for GM. The Japanese automaker’s sales climbed a staggering 25%. And it wasn’t just parsimonious econoboxes fueling the company’s financial combustion chamber. Year-on-year sales were up for the Sequoia (37.7%), Land Cruiser (1.7%), 4Runner (8.9%), Highlander (16.1%) and RAV4 (93.4%). Bottom line: Toyota’s September SUV sales rose by an average of 54.8%.

The numbers are alarming in extremis. GM's new[ish] GMT900’s have not only failed to sell in absolute terms, they’ve also failed to stem the growing tide of customers abandoning domestic products for import-owned vehicles– on GM's home turf. As for cars… fuhgeddaboutit. “All this global competition” has left The General in a corner, fighting Ford and Chrysler for a dwindling supply of hard core domestic-buying consumers.Unless Ford goes belly-up first, unless GM's new products beat-back Toyota, Honda, Hyundai and the rest of the “newcomers;” the market share stability GM’s Car Czar seeks is almost impossible to imagine.

Meanwhile, reports are filtering in that GM CEO Rabid Rick Wagoner has finally called off the Nissan – Renault alliance talks. This may have a little something to do with new rules enacted yesterday by GM’s Board of Bystanders. The language is a bit convoluted, but the rules make it easier for the Board to remove pro-Renault investor Kirk Kerkorian’s man Jerry York, and prevent Captain Kirk from adding new members. So Rabid Rick’s covered his ass and told Kirk to take a flying leap. As we predicted, things are getting ugly over at RenCen.

The battle for control of GM is just beginning. Kirk is sure to retaliate against GM’s CEO, and The Lion of Las Vegas is nothing if not resourceful. Regardless who ends-up the last man grandstanding, the war's already been lost. GM’s products are falling further and further behind the competition in the sales charts. The recent cuts to the automaker's production and staff will help the bottom line, but they indicate that GM's is fighting harder and harder for less and less. At some point, the company will starve to death.

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69 Comments on “General Motors Death Watch 94: Table Scraps...”


  • avatar
    dhathewa

    What did you mean by ‘“missing” Chevrolet Aveos, Cobalts and Malibus’?

  • avatar
    BimmerHead

    So… is there an answer for GM?

    Let’s suppose for a moment that they name Robert Farago the new CEO of GM, after reviewing your multimillion dollar income package, what steps do you take to bring the general back from the brink? Your deathwatch series points out lots of problems with GM, but I have not heard much in the way of reasonable solutions (maybe there really aren’t any at this point).

    Short of Chapter 11, I don’t see any way out, but then again, I’m no CEO.

  • avatar
    Alex Rashev

    This reminds me of a speech by Danny DeVito’s character, Larry the Liquidator, in Other People’s Money:

    It’s too late for prayers.
    For even if the prayers were answered and a miracle occurred, and the yen did this and the dollar did that, and the infrastructure did the other thing, we would still be dead.
    You know why? Fiber optics. New technologies. Obsolescence.
    We’re dead, all right. We’re just not broke.
    And do you know the surest way
    to go broke? Keep getting an increasing share
    of a shrinking market.
    Down the tubes. Slow but sure. You know, at one time, there must have been dozens
    of companies making buggy whips. And I’ll bet the last company around
    was the one that made the best goddamn buggy whip
    you ever saw.

  • avatar
    1984

    September Sales Figures

    http://phx.corporate-ir.net/phoenix.zhtml?c=84530&p=irol-salesproduction

    GM continues to reduce its reliance on low-margin daily rental sales. Sales to daily rental companies were down 26 percent compared to year-ago levels, while our commercial fleet business was up 12 percent. This ongoing planned pull-down of low-margin daily rental sales resulted in total September sales of 338,380 being down 6.8 percent compared with a year ago on a sales day-adjusted basis.

  • avatar
    SherbornSean

    That the talks with Renault-Nissan are dead is no surprise – GM will only merge and its management abdicate under supreme duress, and they are not there yet. Ford, on the other hand, may be.

    There is a good argument to be made for combining Ford’s European operations with Renault. And despite all the pining by American car nuts for the European Focus and Mondeo, there is really no synergy today between Ford NA and Ford Europe – they might as well spin the European Operations off for shares in Renault, which will surely appreciate from elimination of redundant platforms.

    Then Ford NA can eliminate its own car engineering teams, relying instead on Volvo and Mazda to do the heavy lifting while they put razor blades on the front ends. Then, Ford can essentially retreat and make its last stand with the F150. Sounds like a plan.

    Oh wait, I’m off topic. This is a GM deathwatch. Sorry. Anyhow, yeah, big SUV’s aren’t selling well, and neither will big pickups. OK. But what was GM supposed to do?

    As I recall, the GMT800 platform is responsible for about 1.5 million in annual sales, at GM’s best prices. So if GM has a single dime to invest, this is where they should put it. Not into overweight, pretty Miatas that only sell 40K units per annum. Not into B segment econoboxes that they’ll never collect more than $15K on, and not into AWD Evo/STI-fighters.

    As far as I can tell, GM’s product introductions are into the heart of the markets that they need to win. Think of it this way, if they didn’t launch the GMT900 platform now, where will they be next year when the new Tundra comes out? Down 100K+ units, that’s where.

    GM’s next big intro is the Lambda architecture, a big CUV slotted between a minivan and a luxury SUV. Great market segmentation, although success will depend on GM’s engineering skills. The Pacifica, Freestyle and R350 haven’t quite hit it yet.

    After that, GM will hit us with RWD and FWD midsize platforms, again right in the heart of the volume markets. With every introduction, the Malibu gets more competitive, maybe they will pull even with Camry this time.

    My point is that GM is doing the right things, just maybe not at the pace that critics outside the company would like to see. The leadership appears to be the right combination of financial manager/team builder (Rick) and visionary car-guy (Bob). I’ve taken part in a couple of turnarounds, and I know from the inside how ugly they can be. GM management is trying to turn around a leaky oil tanker that took 30 years to get where it is today.

    At the end of the day, GM remains in the game. If that is the extent of Rick/Bob’s legacy, that in itself is a lot to be proud of.

  • avatar
    1984

    SherbornSean,

    I agree with you but… I hope you have a flame suit on.

  • avatar
    Glenn

    Hey Sherborn? Packard had some absolutely knock-out designs and prototypes in mid 1956 when the banks pulled the rug out from under any chances of the Packard plant staying open – and any true chances of Clipper and even Studebaker surviving for long. (They had finalized designs for a basic body architecture to share between the 3 lines, much as Chrysler shared basic construction between all their brands). Chrysler’s ’57’s were low, finned and long – and their sales increased. The planned S-P cars were low, finned and long – and sales would have increased.

    Studebaker’s hireling, Brooks Stevens, designer extraordinaire, had some gorgeous designs ready for 1964-1965 and 1966 Studebakers, and 3 prototypes built. There were plans for gas turbine cars, superchargers (which came to fruition), and even plans for a $1000 fiberglas unitbody compact station wagon with front wheel drive, undercutting the VW by $600, to be built in South Bend.

    The management decided to concentrate on Onan generators, Gravely garden tractors, and STP instead and closed out car production. They’d diversified and car production was expendable. So, it was “gone.” (So was the UAW pension money, which was not “vested” and it would have soaked up Stude profits for years to re-fill the coffers).

    GM is in a worse situation than Studebaker-Packard was, because contrary to what people think, S-P actually survived the cessation of auto manufacture, merged with a Canadian conglomerate called Worthington (forming Studebaker-Worthington) and then were absorbed later by McGraw-Hill, I believe it was.

    GM has un-diversified. Sold off all the family silver. Once the bankers finally realize “this is just a money pit – no more cash” (as happened to Packard in ’56), it’s GAME OVER.

    As in, Chapter 7 bankruptcy, close the doors worldwide and watch the other car companies scramble to add production.

    One must look at history to learn the mistakes of others and avoid them. GM hasn’t learned a thing in 40 years.

  • avatar
    Glenn

    Put another way: if wishes and cool car designs “for future prodution” and even prototypes were gold coins, each of us (as well as GM) would be billionaires.

  • avatar
    SherbornSean

    1984
    Thanks for the advice. I have yet to master the fine line between stating my opinion and dumping on others’. I meant no offense, especially to Robert to whom I am grateful this site exists

    Glenn,
    Thanks for the history lesson – all I know of Studebaker is a rebodied Camaro called Avanti.

    As far as lessons for GM go, it’s not as if the Lambda and midsize architectures won’t happen – GM certainly has cash to hold on another few years. I think it is a smart move for them to sell off non-essential assets. They need the cash so they can avoid being dependent on outside financing. GM doesn’t need to own all of GMAC car financing (or mortgages) to sell cars. While there were some neat things they could do allied with Subaru, Isuzu and Suzuki, they were non-core.

    I will get worried when I start hearing statements like: “Well, Ford got $1B for Aston, what could we get by selling off Corvette?”

    I guess what I mean to say is that no one will dispute that GM made a mess of things for the last 3 decades. The issue is whether the team in place today is doing the right things. Overall, I vote yes, and will probably look to buy stock on the next dip.

  • avatar

    The missing Aveos, Cobalts and Malibus refers to LaNeve's comment that GM numbers were bad because they couldn't produce enough of these models to satisfy demand. So they're producing less of the models people don't want, and less of the models people do. Go figure. GM's CUV's will cannibalize sales from the higher profit GMT900's.

  • avatar
    Justin Berkowitz

    I have to wonder if there is any car GM could sell in the US that would get people to trade in their Camrys, Accords, Pilots, and Highlanders. The General’s image is so tarnished among mainstream buyers and people south of 30, their products (which have been getting increasingly better) don’t even get a look.

    A friend shopping for a tall wagon or crossover SUV under $30k was asking for advice, which really meant approval of her interest in the Highlander. When I suggested she check out the Saturn Vue and Ford Freestyle, she looked at me like I had 3 heads. There was no universe in which she’d consider one of those, even if they were cheaper and got better mileage than the Toyota she drives now.

    So my question is, if GM rolled out the 2009 Impala tomorrow, with 300 hp and it got 75 mpg, would most of the Toyota-buying public even give it a look? I don’t think so. If my hyperbole is even partially right, GM is totally screwed.

  • avatar
    Chiboy

    The spotlight seems to be on when GM will file for Chapter 11. The real question is if GM can survive a Chapter 11. While bankruptcy will eliminate the crushing legacy costs of the automaker, this result may actually be too little, too late. A GM BK would take a long time to resolve. Not many people would want to risk purchasing a vehicle from a bankrupt automaker given the uncertainty of warranty honorability and parts supply. If the drop in business is drastic enough, the Chapter 11 (Restructuring) may quickly turn into a liquidation (Chapter 7). A GM bankrupcty filing will also push many suppliers over the edge into bankruptcy. On a final note, if you think the execs and hourly workers at GM are overpaid, wait till you see how much the bankruptcy will costs in terms of legions of $600 per hour lawyers, consultants and other experts.

  • avatar
    1984

    SherbornSean,

    It’s just good to see other opinions on here. There is a lot of “anger” towards GM for some reason which I struggle to find the true motive.

    The fact is GM has to stop the bleeding first before it’s ready to shoot magic bullets to regain some of its former glory. If that means slowing production and letting the imports continue to gain ground than so be it. I say let GM continue to break the unions and cut overhead cost.

  • avatar
    SherbornSean

    Robert,
    You are correct that GM’s CUVs will take sales away from the GMT900 SUVs.

    But if GM is going to lose the sale of a Tahoe (and the $10K margin that let’s say goes with it), would GM rather that the customer buys an Acura MDX or a Buick Enclave (with say a $5K margin on it)?

  • avatar
    1984

    Justin Berkowitz

    So my question is, if GM rolled out the 2009 Impala tomorrow, with 300 hp and it got 75 mpg, would most of the Toyota-buying public even give it a look? I don’t think so. If my hyperbole is even partially right, GM is totally screwed.

    If Toyota becomes the size-of-GM and starts to believe they are invincible it’s a possibility that the same problems could infect Toyota in the future….Total role reversal… Cracks in the armor of “legendary quality” are already starting to show under the pressure of production volume.

  • avatar
    MW

    Give credit to Lutz — he understands the problem is how to shrink his company. Having seen this type of situation from the inside, it’s very, very hard to do. Most companies can’t. When the size of a business shrinks, overhead doesn’t shrink along with it. People and processes that have built up over years don’t simply go away, and people will cling most fiercely to every scrap of real or percieved power when they know the axe is swinging.

  • avatar

    Sure, GM’s right to offer a CUV product for its customers who are fleeing their SUV’s, and if the margins are worse, well, there’s not really much of a choice.

    But GM’s got three main problems in this regard:

    1. Is the Enclave a truly competitive product?

    2. Is the Buick brand damaged beyond repair?

    3. How can they make money on vehicles with smaller margins when they have such huge overheads and their non-union competition has a fundamental cost advantage?

    My take:

    1. We’ll see

    2. Nothing is beyond repair– with the right people and resources. So, yes.

    3. They can’t.

  • avatar
    Steve_S

    I think GM is actually doing better than Ford as far as strategy. The problem is they are late to the party as always. Just like government it’s a huge ship and takes forever to change course. The GMT-900 was already in development and even if sales are low is still a large profit center for them so they had to continue the development. The Lambda platform will sell to all of those that didn’t really need a body on frame SUV in the first place but like the size. The Saturn Outlook is a good looking vehicle with respectable MPG. Even better if they bring out a Greenline version. The Buick Enclave is a gorgeous design inside and out and will sell as well. The Acadia is just too similar to the Outlook and should have been shelved.

    It also appears that GM will be bringing over the Holden Commodore now as early as next year and will continue to bring over Opel designs for Saturn. Camaro has been greenlighted and while late to the party if you they can provide something close to the Concept (the Enclave is almost spot on as well as the Solstice) and get 30 MPG from a 400hp motor with cylinder deactivation you will have a seller.

    Time will tell, if GM does file chapter 11 I think they are done.

  • avatar
    JimHinCO

    Justin:

    I certainly see that as a valid concern. For many of the populus, an American car (Ford, Chevy, Dodge, GM, Saturn) isn’t even a consideration…but for many others, it is.

    As much as I avoid American made cars, a 300hp, 75mpg car/suv would certainly perk my interest. Actually, the could shoot all the way down to 50 mpg to get me looking. A 100K mile warranty on the drive train? Blah…

    :)

  • avatar
    GMrefugee

    My take on Robert’s take:

    1. We’ll see
    – Indeed we will. Need to include the Saturn Outlook and GMC Acadia in this regard, especially the GMC which will be in the same showrooms as the Yukon.

    2. Nothing is beyond repair– with the right people and resources. So, yes.
    – Unfortunately I don’t see a need for both Cadillac and Buick so I agree with Robert here. However, GM’s plan for Buick and Pontiac is far better than the costly shuttering of Oldsmobile. Now that they are consolidating those brands under a single dealer roof with GMC, they can allow them to live or die as needed without buying out the dealer who will still have GMC, I hope.

    3. They can’t.
    – They can. Since these are new vehicles in a new(ish) segment, margins should be big enough for GM to clear profits, even if not the $10k or even $5k they will be foregoing vs. sales of the large utilities.

  • avatar
    SherbornSean

    Robert,
    I agree with your analysis and with points #1 and #2. As far as #3 goes, well,…

    The issue (as you laid out in your prevous deathwatch) is more about legacy costs of retirees than union vs. not. In fact, the transplants pay their labor pretty much identically to union wages.

    Can GM overcome a $2K per unit cost disadvantage? Well, it sure won’t be easy, but it will be fun to watch.

  • avatar
    KingElvis

    GLENN: wonderful post on Studebaker!!

    Here’s another parallel, Packard had the chance to merge with Nash/Hudson but turned it down…sound familiar? The original plan was to merge all the “independent” makers and the shortsightedness killed them.

    The whole problem was with economies of scale and being an ‘independent’ surrounded by mega-oligopoly type companies.

    Secondly, when I hear about all the wonderful products coming down the pike, I’m reminded of a story I saw from 1987:

    Basically the GM execs were talking about how the GM10 midsize replacement for the A/G bodies were going to be so popular they were actually worried about production capacity…(!) This when GM still had something like 38% market share.

    Remember this was for the G body, the Regal version of which was the best selling Buick in the mid 1980s. So they were convinced the FWD Regal would actually outpace it.

    Jesus, if wishes were horses, beggars would ride.

  • avatar
    CliffG

    I keep looking a GM and wondering if they aren’t spending a lot of time bringing out a better version of Kodachrome 64. Great slide film, but so what? At the same time the lab has this great 8mb digital camera, but they have decided to sell it everywhere but in North America. Lutz just looked up in the last couple of days and realized that if he waited until 2009 to finally drag the rwd Holden into America Pontiac might only be known for being an Indian chieftan. For some reason GM is consistently late to the party as if they are THE low cost producer and can afford to just copy the competition and beat them on price. I do not disagree that GM products are better than they were, and the truck upgrade was mandatory, but have you actually seen a Cobalt? Seriously, it has rent-a-car written all over it. So does a Kia. Whoop de doo.

  • avatar

    Sept. 06 sales:
    compared to September 2005:
    GM total vehicle sales down 6.8%
    GM retail vehicle sales down 3%
    Toyota vehicle sales up 25%
    DMX ” down 2.3%
    Ford ” up 4.7%
    Honda ” down 4.1%
    Nissan ” down 5.6%
    Hyundai ” down 13%

    I thought GM’s numbers were bad until seen in context. Toyota’s numbers are/ have been awesome. That should have been the big story.

  • avatar

    For years, GM didn’t employ people to make cars; they made cars to employ people.

    They cranked out vehicle after vehicle and sold a lot to rental car companies.

    They kept thousands of employees to crank out hundreds of thousands of mediocre cars.

    Now GM is:
    1. significantly cutting back rental fleet sales.
    2. puposely and purposefully giving up artificially high market share stemming from aforementioned fleet sales.
    3. making significant workforce cuts/buyouts.

  • avatar
    rtz

    The future…. is in China. If this car gets built and is of good quality and it doesn’t cost them too much to ship it back over to the US… Ford/GM/Chrysler will move production over there so fast… Like over night fast.

    http://www.jalopnik.com/cars/news/a-chinese-bee-chery-to-build-dodge-hornet-204865.php

    What if a plan was hatched to let Chinese companies “buy” enough GM stock to own GM so the move across the ocean could happen? That is one way to get around the UAW. Or move all production to Mexico and Canada? Kerkorian could buy enough stock and “give” it to the Chinese company in order to move production over there. Then they could give it back since he only really loaned it to them so they could move production…(He’d still own GM).

  • avatar
    jsevenseven

    No one has mentioned that even though Maximum Bob’s been employed by the General for over 5 years, GM still make zero cars that people want to buy. Yeah the Solstace looks cool, but those resources would have done more for the bottom line if GM had brought back the Camaro sooner instead of waiting for Ford to force their hand. GM doesn’t even have anything that can compete with the Ford Fusion or Chrysler 300 let alone anything from Honda or Toyota.

  • avatar
    jerry weber

    Many still don’t get it, but Farafgo does. If your chrysler with two lines dodge, chrysler, you can be 13% of the market, it your ford with two lines you can be 17% of the market, but if your gm let’s count saturn, caddy, buick, chevy, hummer, gmc, I think that’s six lines. your can’t be 22% of the market. You can downsize but how will you finance the administration, advertising, model change, basic engineeering and all the related superstructure involved with 6 domestic brands? They can’t, and will continue to fall behind in the one place they always have to take out the money engineering and it’s related model changes. Toyota who is killing everyone sells two basic brands toyota & lexus scion being a sub set of toyota and the same dealers. It’s a compact administrative and easy to advertise for structure. Then when you throw in the legacy costs toyota doesn’t have ($2400.00)per car, game over.

  • avatar
    SherbornSean

    J77,
    You make a good point. I think the GMT900 SUVs are top of their class, and the new pickups at least lLOOK like they are best in class, although obviously there is more to a truck than a pretty interior.

    In cars, the Cobalt isn’t there, nor is the Malibu/G6 or Lucerne. But the Saturns that are coming out appear to be best in class, the Aura has been well reviewed (at least with the high line drivetrain and Morocco leather) and the upcoming CUVs look great.

    Given that it takes 4 years to get a car built, I think Bob deserves another 2 years before we tar-n-feather him. At this rate, TTAC will be on deathwatch #45,687 by then.

    Keep the faith?

  • avatar

    Jerry Weber,

    All your points about GMs excessive number of brands are legitimate and I think we all recognize them here.

    I would argue that in addition to the downsides you mentioned, their are upsides to having multiple brands. That is the much maligned badge-engineering. Granted, when it’s done wrong, it’s a horrendous embarrasment. But when its done right, it’s sound business strategy. Invest once to engineer a platform, but sell it three (or four) different ways dressing up the interior and exterior with different knobs, quages, headlamps and rims. You know; the superficial stuff that consumers look at and we sniff at.

    Yeah GM could still stand to cut one brand, but as long as they can turn around brands the way they’ve done with Cadillac and are doing with Saturn, they’re (literally) in business.

    Don’t believe that brands are a necessity? Look at Nissan. They’re pigeon holed as sophisticated and sporty. Not a bad place to be, but they can’t break out in certain segments (e.g. full size trucks, minivans). Nissan could use an additional brand or two. They know it and that’s why they’re considering aligning with Ford or GM.

    What about Hyundai? If they want to keep growing, they’re going to need to add a brand in addition to plugging away with their flagship and Kia.

    Toyota recently added Scion because they knew that while their business wasn’t going GMs way, their reputation was (i.e. old and conservative). Would anyone like to bet against me that we’re going to see a re-badged Camry as a Scion within 3 years? I’m not positive they’ll do it. But are you positive they won’t? What about a Scionized Rav4?

    A fist full of brands can be a liability, yes. But if used correctly, it’s a tool and a weapon.

  • avatar
    Rastus

    ThriftyTechie,

    I don’t agree with you regarding Nissan needing “another brand or two”. Why? Because your name says it all…literally. Aren’t you Thrifty??

    Believe me, there is an entire sub-culture out there who will shop at Costco or Sam’s Club (go to either one on a Saturday and you will catch my drift) and who truely do NOT care about a “Brand”.

    I buy $12.99 jeans at Sam’s Club and I swear by them. Comfy and they fit me like a glove. They are my jeans of choice…and dammit if they don’t last.

    And I personally know two people who own Hyundai Sonata’s. They LOVE them. I’ve riden in them both as a passenger and have taken one out for a spin myself. And yep, for the money you absolutely cannot beat them. Solid….thus, “sold”!!

    Not all people chase the latest “fads”, ie, “logos”, or “Brand Names”. They actually ENJOY finding that little diamond in the bucket of coal. They do it (ie search and re-search (research)) because they are smart and don’t have money to piss away on trendy crap.

    If Nissan and Infinity isn’t enough, do you honestly believe we need another “brand” to portray the “rough and tough SOB cowboy hauling 8 tons of twine-bailed hay around on a beautiful Sunday morning” IMAGE???

    Nope!! And I certainly don’t think another “brand” will help sell the Titan any more. Marketing? Sure…but another brand? I highly doubt it.

    Brands are “mass brainwash” on the largest scale.

    What you are implying is that a good/excellent vehicle just isnt’ enough….that we must create this phony sense of “family”, of “belonging”.

    Well, to be honest, most teenagers go through that phase, but most adults have left that long behind.

    I love Costco…absolutely. It’s where great products speak for themselves. If the price is right, sold. I can’t even recall the last time I set foot in a real shopping mall (with its “jewelry” stores, “furniture” stores, “clothing” stores, etc.).

    Check it out….you may be pleasantly surprised.

  • avatar

    1. Bob’s still a septagenarian.

    2. Toyota’s growth is perhaps eating more out of Ford and Chrysler’s market share than what you’re letting on here.

    3. Mark LaNeve may be the single biggest problem GM face with public perception right now. Lutz’s interview with Autoweek was straightforward in a way that LaNeve couldn’t even begin to understand.

  • avatar
    GS650G

    I see it all this way.
    Cars are goddamn expensive. Interest rates are going up and so are payments. Even more expensive are the out of warranty repairs. And then we come to trade in.

    Trade in is killing the domestics. Hyundai cars, not exactly the most desireable even, are actually reselling higher than the 2.5 cars.

    People are betting on the future whether it is gas prices, reliability or trade in. Gas could go to 6 bucks a gallon any time in the future so buying a gashog SUV isn’t a bad idea, it’s stupid.

    Replacing a transmission or AC system after the limited warranty or paying a deductable to get it fixed hurts, you see foreign cars going into 100K with virtually no problems.

    Then the same smiling man who sold you the car comes back from his boss’s office with a trade in price so low you can’t even pay it off at the door.

    Just like home buyers have had enough of speculation, Americans have had enough of the 2.5 We are looking at a swing in consumer sentiment that ends with GM as a Corvette company.

  • avatar

    Rastus:

    Costco edtion Quest.

    I rest my case. =)

  • avatar
    MW

    Rastus,

    Good points, but I think you’re looking at “branding” in two narrow of a framework. It’s not just about convincing teenagers to waste money on trendy junk. Anyone who forks out $15K or more on a consumer product does so with expectations about how it will perform and fits in with their life and values. That’s what branding is about — how you relate to the product, not how much flashy advertising the maker throws at it. For example, many people who buy Hyundais are buying into the brand proposition that they want an inexpensive, reliable car. An auto brand is one phrase that articulates a car’s value to the consumer. For example:

    Volvo = a safe, comfortable, well-made vehicle for people who have some money to spend but don’t want a status symbol
    Honda = a well-engineered, economical, extremely reliable vehicle for intelligent people
    Cadillac = a big, powerful car for big, powerful people who aren’t afraid to show it off

    A lot of GM’s problems relate to the fact that, with a few exceptions, they just can’t seem to do this right. They have screwed up the strong brands they do have — anyone for a lumbering, top-heavy Saab built on a truck chassis? At the end of the day, people aren’t excited about the opportunity to own most GM products because if they say anything, they say “generic vehicle for a generic person.”

  • avatar
    jerry weber

    To say branding done right is a good thing comes right back to dollars. Billions of dollars to make each model different with body panels and interiors etc. GM lacks the money to support the brands properly so two things happen. They buy grilles and tailights for their different models, and they keep them almost forever in the mix. So let’s say I’m, honda and my civic competes with a particular saturn. I change every four years and gm does it in say seven, in two model changes honda is out of reach. Then another product of saturn competes with huyndai and they change often and gm can’t quickly change it’s product. Each of the competitors is honing their particular product with ever increasing model changes as it is just on of a few things they are responsible for, so all their resources go into it. GM which can’t count all of it’s models must dilute the money and in each segement fall behind some foreign competitor who is targeting that particular line with all their resources. It,s like dying from a thousand cuts.

  • avatar
    tulsa_97sr5

    There’s really nothing wrong with GM selling lots of cars to rental fleets. For people like me that’s GM’s only chance to make me consider buying one. Problem is, every GM I’ve ever rented has reinforced my belief that they can’t build a car I’d like, and they aren’t building cars that will last. The rental HHR I drove for a few hours this spring should have been taken out back and shot. I can forgive problems that may stem from rental abuse, but it was clearly flawed on the drawing board, and not aging well at 10k miles.

    Contrast that with a Liberty we rented a few years back, and an Avalon we drove last summer. Both cars really surprised us, the Avalon so much that my wife was ready to trade her mini cooper on one. Done right selling to rental fleets can be a real plus for auto makers.

  • avatar
    KingElvis

    Rastus:

    Don’t you realize “branding” (not with hot irons) has become a massive sub-industry within the advertising business?

    Why did the VW Phaeton flop?

    Why didn’t Toyota bring out a high dollar V8 luxury car in 1990 under the Toyota name? How about Honda’s Acura? How about Infiniti?

    The problem is not nameplates, it’s the number of “me too” models. GM needs to shave each division down to just two platforms, mostly so they don’t compete against eachother, Like Impala SS a.k.a. Grand Prix GXP.

    In GM’s glory days of the ’60s, you could only get two basic sizes of cars per division except Chevy with four and Cadillac with basically one.

    Consolidating dealers like the recent B/P/GMC move was a step in the right direction.

  • avatar
    Kevin

    The missing Aveos, Cobalts and Malibus refers to LaNeve’s comment that GM numbers were bad because they couldn’t produce enough of these models to satisfy demand.

    Someone aid THAT?? No, Honda can’t produce enough Civics and Fits; Toyota can’t produce enough Priuses and Yarises. You see very few or none of those cars available on the lots.

    But you go to a Chevy dealer, you can’t swing a dead cat without knocking the dust off an Aveo or Cobalt or Malibu. Gimme a break.

    For Bob Lutz, well GM’s share in California is 14% and DECLINING, wonder how he likes the sound of that for the whole country?

  • avatar
    Rastus

    ‘Morning, KingElvis,

    I agree wholeheartedly with you. Which is why I said “Nissan and Infinity” is Enough :)

    I didn’t say do away with name brands entirely…I just don’t agree with the fellow who stated Nissan needed a few MORE brands.

    Ok, so I just took a shower with my Kirkland shampoo, put on a fresh Kirkland tee-shirt, I have my morning Kirkland coffee in hand and am about to show my “Individuality” (by, of course, my selection of automobile…only to find myself in a 5-lane river of automobiles and trucks creeping along at 7 miles per hour!!!

    Life in SoCal!! It feels WONDERFUL to express my individuality and “taste” in fine products!!

    Do a Google on “what your watch says about you”…tell me…either it’s totally BS (my belief), or maybe you need a change of watch.

    But then again, Costco will be happy to sell you a Breitling too (for you “sporty” “adventurous” and “SUCCESSFUL” people out there ;)

    Have a wonderful morning!!

  • avatar
    Jack Shry

    Rabid Rick Wagoner, Maximum Bob Lutz, Silly Billy Ford and the blue oval team all trying to compete in a global economy.
    All men challenged to quickly change huge inertial momentum that has been building for a hundred years.

    I’m sensing in this string of comments, the first real, dare I say optimism?

    Even more important is the distillation of ideas. Good ideas with improved understanding of the hurdles we all face.

    I believe that Mr. Farago has provided a much needed forum to telegraph these ideas to the Captains of Industry.
    Thanks Robert; it just keeps getting better and better.

  • avatar

    Jerry Weber,

    Again, your argument is valid.
    We differ a bit on perspective. The way I see it, the auto sector is a microcosm of all consumer markets which are becoming nichier and nichier if not nicer.

    Days of Lee vs. Levis is long gone. There are hundreds of jean brands out there.

    Similarly gone are the days of Civic vs. Corolla.

    Fit, Yaris, 3, Mini, Cobalt, Focus, Scion A, B, C, Versa, HHR, Caliber, Aveo, Civic, Corolla, Sentra, Elantra, etc

    The point is that in everything from toothpaste to clothes to computers there are micromarkets for things. The compact car market is now composed of submarkets: you want bargain basement? Sporty? Funky? Hatch? Utility?

    The problem for automakers is that making a car is a bit more labor intensive than other doo-dads. The corollary is that in order to fill the dozens of niches out there, they’re going to have to dress up what they’ve got in different ways.

    I see “customizing”, new trim levels/special editions, badge-engineered models and new brands becoming more important for all auto manufacturers in the coming years.

    Of all the things dealt to GM, multiple brands, unlike unions, are somthing that GM can work with.

  • avatar
    starlightmica

    RF –
    Could you give us the numbers again? You know the big depressing ones: income/stock sales/cash pile vs. bonds/debts/pension obligations/etc. What the neck, for Ford, too?

  • avatar
    Glenn

    KingElvis mentioned the planned merger of American Motors (Nash and Hudson merging) and Studebaker-Packard, into a “big fourth” manufacturer in the mid-1950’s. Correct.

    It was apparently the personality (and ego) clashes of George Romney, President of American Motors, and James Nance, President of Studebaker-Packard, which nixed this. The pre-merge collaboration had already started (Nash and Hudson began using Packard’s new V8’s and TwinUltramatic transmissions in 1955 and also through part of 1956).

    I guess, the more things change, the more they stay the same? (Right, Mr. Wagoner and Mr. Ghosn?)

    The irony is that George Mason, the previous President of Nash and then American Motors, “knew” that the little 4 merging was the only way to survive against the big 3. Mr. Mason died just after the merger of Nash and Hudson, so the fulfillment of his grand plan was halted.

    Mason had approached Packard’s board in 1948 about Nash and Packard merging and was rebuffed. It is thought that he would have then bought up Hudson and Studebaker, and possibly even Willys Jeep.

    Yes, George Romney DID go on to be Governor of Michigan and it is his son, Mit Romney, who is Governor of Massachussetts right now.

    Mr. Mason (a big heavy man, always with cigar) is not forgotten, he started a lot of conservation and wildlife preservation organizations which lasted to this day, was a good leader and did well for the customers, workforce and stockholders. He insisted on Nash building the Rambler, which saved it, as well as the Metropolitan (which at one point, was the 2nd best selling import in the US after VW).

    Mr. Mason had been President of Kelvinator, an appliance company. When a very old Mr. Nash needed to retire, he wanted a good man, Mason would not budge, so Nash merged his company (1937-8?) with Kelvinator just to get Mr. Mason (who WAS a “car-guy”, by the way).

    Ironically, Packard hired Nance from Hotpoint in ’52, where Nance (a non-car guy) had also done stellar work. That time, the magic did not work, as we all well know. After Packard’s demise, Nance was hired by Ford to preside over the EDSEL Division (to be fair to him, all the decisions had already been made), after which he gave up on both cars and appliances, and became a banker.

    Just goes to show. Car companies need “car guys” (or “car gals”) to be in charge, not bean-counters. Without passion in the planning, products are just boring “appliances”.

    Now I’ll really upset the applecart and tell everyone that I think my 2005 Toyota Prius is anything BUT an “appliance”, because the company, management, engineers and designers all had a “vision” of passion behind the concept and it shows through in the car, if you understand what you are looking at, riding in and experiencing! THIS is why Toyota and Honda are going to continue to succeed.

  • avatar
    Steven T.

    Glenn, you’ve offered a good overview of the plight of the independents in the 1950s. I’d like to build upon your thoughts.

    I’ve mentioned before that it may have been a good thing that George Mason left the picture when he did, because George Romney had a more realistic sensibility. This has bearing on the present discussion regarding GM, so please bear with me.

    Nash under Mason was arguably the first American automaker to aggressively diversity its model line up. Whereas the Big Three tended to base virtually all of its products on one or two platforms, Mason went hog wild: In addition to the big Nash, he introduced the subcompact Metropolitan, the Nash-Healey sports car, and the compact Rambler. It’s no wonder that Nash was unable to remain competitive in the full-sized field, because the automaker spread its resources far too thin for its relatively low volume.

    When Romney took over, he wisely recognized that the fledgling American Motors did not have the economies of scale to compete against the Big Three unless it made some tough choices. Romney chose to buck the conventional wisdom of the time and concentrate on an emerging market the Big Three had avoided (compacts).

    Right now GM could use Romneyesque leaders who have the ability to 1) better focus the automaker’s dwindling resources, and 2) anticipate market trends rather than wallow in retroville.

    Traditional performance cars, such as big RWD V8 coupes, are fun. However, even in a best-case scenario they can be only one element of GM’s salvation.

  • avatar
    Glenn

    Good points all, Steven T.

    GM could do a LOT worse than to simply clean house and start fresh, much as it did with such success in 1955 by developing a new (and more-advanced-than-anything-else) small block Chevrolet V8 and new car to put it in. Mixed with a “George Romney” of picking your fights and sticking to your guns. (AMC was selling Ramblers faster than Chrysler was selling Plymouths early in the 1960’s but by 1965, AMC was on the ropes – new management decided to compete head-on against the Big-3 and do large Ambassadors again).

    Perhaps GM could really think outside the box. Throw away almost everything and start from scratch, and think bravely.

    Now when you go to any car dealer, you see as many as a dozen and a half “vehicles” with a brand-name. So, what does that brand name stand for?! Goodness knows.

    How about:

    ONE Chevrolet line. A Prius-sized notchback sedan with hatchback, and folding rear seats, lots of room inside, two sliding doors for access to all seats, micro-turbine hybrid able to run on any liquid fuel, front wheel drive. $17,000 – $20,000

    ONE GMC line of full sized pickup trucks, V6 diesel-full hybrid.

    ONE Suburban line of unit-body semi-large SUV like vehicles with V6 diesel-full hybrid, all wheel drive. Always sold by the best of the GM dealers in any given area, dualled with other GM brands.

    ONE Pontiac, a sporty, V6 hybrid with rear wheel drive, based on Holden architecture. $21,000 – $25,000

    ONE Saturn, a compact 4 cylinder hybrid based upon Daewoo architecture. $14,000-$17,000

    ONE Buick, a front wheel drive car based upon the current Saturn Aura, with V6 and hybrid, front wheel drive. American styling, please. $26,000 – $31,000

    ONE Corvette line, branded by itself, sold through only the best GM brands (and always having dualled dealerships).

    ONE Cadillac, an over the top luxury car with cylinder deactivation V8 plus hybrid, rear wheel drive, American style.

    ONE Saab, a funky crossover V6 hybrid with all wheel drive.
    $26,000-31,000

    ONE Isuzu, a light mid-sized pickup truck with V6 diesel.

    Obviously, there are three major problems with my ideas.
    a) GM management haven’t got the brains nor the b*lls to do it and b) they also haven’t got the money to do it. c) they no longer have the resources to engineer or manufacture them.

  • avatar
    gunnarheinrich

    Give the Buick division some credit. They increased quality drastically since 2000 to build some true contenders. Plus, let us not forget just how popular the Buick brand is in the PRC.

    The AutoWeek interview with Bob Lutz also stated that GM is positioning itself as a global company and that U.S. sales are amounting to less than 1/4 of the company’s total picture – especially upon considering the General’s growth in Asia. This might be mere propaganda – but the General’s relative success in other markets is hard to ignore.

    This year GM supplanted VW as number one foreign automaker in China.

  • avatar
    GodBlessTTAC

    Glenn, not everyone in the world wants a hybrid…

  • avatar
    KingElvis

    Glenn

    Dayum! Thanks for the detailed history lesson – I saved it for future reference!

    BTW, in ’48 Willys was still “really” Willys, but by the ’55 rejection of the merger, it was still called Willys (and would be until 1963 – its even said some of the first Wagoneers had a “Willy’s” badge) but it was actually purchased by Kaiser in ’54.

    Imagine that lineup!

    Packard is your ‘Cadillac’
    Hudson is your ‘Oldsmobile’
    Studebaker is your ‘Pontiac’
    Nash is your ‘Chevrolet’
    Jeep is your ‘GMC’

    It seems quite plausible that with consolidation, Packard and Studebaker could’ve survived for decades more. Hell, Jeep could have carried lots of weight. Kaiser made it all the way to 1970 just selling the Jeep brand – that’s of course when AM bought Kaiser and became AMC.

    Consider that the Avanti beat the Mustang to market by nearly two years – AM even had the Marlin before the Charger came out.

    What would a Studebaker style GTO or Hudson Toronado have been like? Oohh what could’ve been!

  • avatar
    geeber

    Studebaker was so mismanaged that it would have seriously crippled – and maybe even sunk – any other partner. Its labor costs were way out of line in the early 1950s, and its plant was outdated even for that time. Productivity was terrible in South Bend.

    About the only way the Studebaker could have survived is if the stronger merger partner did what Nash did to Hudson – close the main plant, and resume production with rebadged versions of the stronger partner’s vehicles. Even that only bought Hudson a three-year reprieve.

    AMC hit the skids once the Big Three invaded the compact and intermediate segments in the early 1960s. Romney successor Roy Abernethy tried to meet the Big Three on their own turf, and has been heavily criticized for this decision ever since. Realistically, however, the Big Three were encroaching on AMC’s turf with cars like the Falcon, Fairlane, Valiant and Chevelle. He didn’t have much choice.

    It’s significant that AMC’s industry ranking started dropping in 1962 (because its sales weren’t growing as fast as those of the rest of the industry), when Ford came out with the Fairlane and Chevrolet introduced the Chevy II. Remember, Romney left the company in 1962, so those vehicles and product plans bore the stamp of his approval, given industry lead times. Abernethy can’t shoulder the blame for that. The all-new (and very attractive) 1963 Classics and Ambassadors set sales records for the company, even though they couldn’t boost the company’s standing in the industry rankings.

    By 1964, AMC sales were down, despite a handsome, all-new American and a booming market. That was the year that the 800-pound gorilla – GM – entered the intermediate market with the Chevelle/Malibu, Tempest/LeMans, F-85/Cutlass and Special/Skylark. AMC never hit its 1963 sales peak again, even though the market grew in the late 1960s and early 1970s.

    GM is like AMC in the early 1960s. The competition has brought the battle to GM on ITS turf, and it looks increasingly hemmed in with no where to turn.

    Realistically,GM can’t survive by exploiting niches, primarily because in today’s fragmented market, there are precious few unexploited niches left. And depending on GM to succeed by doing better it than anyone else…well, that’s a bit like Waiting for Godot.

  • avatar
    Glenn

    Too true, King Elvis! I agree, American Motors (encompassing Packard, Hudson, Studebaker, Nash and probably later, Jeep) was one aspirin away from happening, had Mr. Mason survived. After the merger of all, in hindsight, Romney would have been the man to lead the company through the 1960’s after Mr. Mason’s retirement.

    Look at how brave the “independents” were. Almost NONE of the advances and technological break-throughs were done by the “big 3.”

    Step-down unit bodies (Hudson) which raced with flathead 6’s and beat OHV V8’s in NASCAR – wow, they could take corners and the engines could rev HARD because the valves were actuated directly by the camshafts (flathead engines had advantages in that regard, just as OHC engines do) plus the chrome-steel cast blocks were near unbreakable. 5000 rpm with a long-stroke flathead SIX? Yep, if it was a Hudson.

    Seat belts (1950 Rambler), dual circuit safety-brakes on low priced cars (1963), unit bodies (stronger, lighter) and economical engines in an era where there needed to be an alternative to the monster V8 – Rambler (Nash). Packard with Torison-Level, the world’s first automotive air conditioning (yeah, before the war), the first independent car company to engineer their own automatic. Studebaker with disc brakes, superchargers, the first independent to develop it’s own modern V8 (1951) and co-develop a modern shifting automatic (1950, with Detroit Gear Division of Borg-Warner).

    Because the US government “demanded” that Studebaker purchase REO truck engines for their contract built 2 1/2 ton military trucks (whereas GM could supply their own engines for the GMC contract), I “suspect” that REO would have been bought up by 1956. REO, another “independent” car company (which reluctantly quit cars after 1936) “invented” the self-shifter transmission with no clutch (we know it as an automatic), and brought it to the public in 1933! GM, ever ready to take headlines, claimed their 1938 “safety transmission” (renamed Hydramatic in 1939) was the first automatic – not so. (White Truck snapped up REO in the late 1950’s and merged it with Diamond-T truck).

    Yeah, in fact, I agree with you about the Avanti being the first pony-car. Had Studebaker been part of a larger American Motors, they could have afforded to tool up the car for production with steel bodies and priced it at $2500, just as the Mustang was 18 months later, and Avanti would have been the car to carry the company through the early 1970’s, just as Mustang did for Ford. Lee Iacocca would have sh*t a brick.

    Just think, here we are looking back at what could have been, and in 10-20 years, GM’ers will be doing the same thing, with nostalgia.

    They only will need to fish out the TTAC GM Death Watch to get an idea of a litany of errors that GM did to bring about its own demise.

  • avatar
    Glenn

    Yes, geeber, Studebaker needed to close South Bend Main, and use the smaller, new, wartime Chippewa Avenue “pickup truck” plant south of the city for cars (actually, they did start this process – 1956 Hawks were built at Chippewa!) just as Hudson needed to lose their old, hemmed in Jefferson Avenue plant in Detroit (which AMC immediately did after the merger). Cars would have been rationalized (AMC did this by “losing” the Hudson Jet immediately after the merger).

    As for my ideas about hybrids for GM, well, look at how I waited 9 1/2 months for my Prius. Look at Toyota sales. How much as gas a mere 6 weeks ago, again? How much do you think it’ll be if there are bad hurricanes next summer?
    And finally, have you seen ANY GM dealer talking about customers paying retail price and waiting for 9 1/2 months for any of their current products?

    And oh yeah, what car companies are doing exceptionally well right now, world-wide? Companies building hybrids.

    I stand by my suggestions!

  • avatar
    geeber

    Glenn: Do you think James Nance would have let Romney run this merged company? From what I’ve read, Mr. Nance wanted to be the top dog at any merged company, and he denigrated Romney’s abilities.

    As for the Avanti – it’s an arresting design, but, even if it were built with a steel body, I think it would still have been too “far out” for most Americans of that time. Where I live a lady was driving around a very nice, but not perfect, Studebaker Avanti…it looks like an exotic, foreign bodied car.

    The Mustang had the blend of American and European design features that did a better job of hitting the sweet spot in the American market.

    The Avanti design is like a finely crafted foreign film that appeals to a small but very dedicated slice of the market. The Mustang is the well-done blockbuster that even the film buffs can appreciate (even if they would never go to see it).

  • avatar
    Martin Albright

    Since we have some automotive historians on the board, I have to ask a question: When International Harvester went belly-up in the mid-80s and emerged several years later as Navistar, what happened to their previous obligations? Who was left out in the cold? The pensioners, the creditors, the buyers or everybody? And did Navistar/International agree to assume any of those debts after they’d been discharged?

    Inquiring minds want to know. IHC was the last big US automotive concern to go Tango Uniform, that I’m aware of, so it might provide some guidance as to what could happen when/if one of the big 2.5 hits the skids.

  • avatar
    stryker1

    BimmerHead

    There is no solution. Thats what puts the point on this series. Its a deathwatch, not intensive care.
    There is no happy ending for GM as we know it now. As Farago so frankly put it in a previous post.
    GM Must Die.

  • avatar
    Glenn

    Hi geeber. Had Packard and Nash merged in 1948 or 1949, this would have been 3 or 4 years before Nance was even on board at Packard. In fact, Nance was still “making his name” over at Hotpoint. So the catbird seat would have been for Romney once Mr. Mason passed away in 1954. Packard and Nash-Kelvinator may have actually done a true merger, whereas in 1954 when Packard and Studebaker actually did the deed, Packard actually (foolishly) purchased Studebaker.
    Studebaker management had intentionally misrepresented their break-even point at South Bend Main during the discussions, a dirty deed which was the ruination of Packard.

    Let’s recall that the big-3 were way stronger than the independents all through this period.

    1948 model year production places Hudson at 117,200, Nash at about 110,000, Packard at 92,251 and Studebaker at 184,993. Hudson had just brought out their step-down car, my guess is that Hudson would have not merged (yet) and Studebaker hadn’t yet been brought down off the pedestal of “biggest independent”. Plus, George Mason had only just taken over Nash from the recently deceased Charles Nash in June 1948.

    By 1949, Hudson’s step-down was selling like hot-cakes, 159,100 cars, Nash about 130,000 cars, Studebaker 129,301 and Packard 116,955.

    Packard’s board were desperately trying to find a better management team and company President. They only needed to have merged with Nash, right then and there.

    By 1950, Studebaker sales had skyrocketed to 320,884, Nash was up to 171,782 (up due to the new compact Rambler), Hudson was at 121,408 and Packard plummeted to 42,627.

    1951 sales were Studebaker 246,195 (down considerably, you’ll note, despite a brand-new V8), Nash at 205,307 (up considerably, again), Hudson was up to 131,915 and Packard was up to 100,713 (due to a brand-new car).

    1952 sales were Studebaker 167,662 (again down a lot), Nash at 154,291 (down, also), Hudson at about 70,000 (disasterous), Packard at 62,921.

    Thus, I think that Hudson may have been bought and brought into American Motors (Nash and Packard) in 1952 and the Hudson plant closed, with cars being based upon the senior Nashes (as happened in reality after Nash and Hudson merged, in 1954).

    1953 was the year that it was generally acknowledged that the “seller’s market” was officially over for car manufacturers.

    1953 sales for Studebaker were 151,576 (down again, despite some of the most beautiful coupes ever built), Nash at 121,793, Packard at 90,252 and Hudson at 66,143.

    1954 was the year that GM and Ford had a price-war, with cars being sent un-ordered to dealers – thus GM and Ford dealers were selling cars for $10 over cost to offload them, nearly bringing about the ruination of Chrysler and the independents.

    Nash sold 91,121, Studebaker collapsed to 68,708, Hudson sold 50,660 and Packard had a very off year at 31,291.

    Thus, late 1953 or 1954, Studebaker management would have been “begging” to be brought on-board American Motors, in my estimation, and would have wanted to sell out.

    Let’s not forget, however, that Romney’s able leadership brought Nash (renamed Rambler) to #7 on sales charts for 1958 (a recession year), at 162,182 cars; #6 on sales charts for 1959, at 374,240 cars (way ahead of Buick, Dodge, Mercury brands), #4 in the sales charts for 1960, at 458,841 cars (ahead of Pontiac, only 25,000 cars behind Plymouth), and #3 in 1961, at 377,904 cars (ahead of Plymouth). In 1962, Rambler was down to #4 behind Chevy/Ford/Pontiac, but increased sales to 442,346. For 1963, all-new cars for Rambler helped bring sales up to 464,126 but this was only good for #6, as Plymouth and Oldsmobile passed Rambler.

    After 1963, it was a slow downhill slide for Rambler then AMC later Eagle brand. No other brands to be “up” while they were “down” and vice-versa.

    Had American Motors been formulated in 1949 with a merger of Packard and Nash, with Hudson joining in 1952 and Studebaker in 1954, we would have probably had a “big 4” in this country rather than a “big 3”.

    After the demise of Kaiser and Willys automobiles in 1955, Kaiser management were left only with Willys Jeeps and morale was low; I suspect they would have sold out by 1956, bringing Jeep into the fold. (Nance looked at buying Jeep in 1956 but was busy collapsing Packard and jumping ship, so the deed never got done).

    I suspect that by 1961, the year Rambler passed Plymouth in sales, a company which would have included Rambler, Studebaker, Jeep, Hudson and Packard brands would have been in a position to nearly trump Chrysler Corporation that year in overall sales, and would have given Chrysler a run for their money all through the 1960’s and 1970’s.

    Rambler would have been the “sensible shoes” brand (much like Subaru is regarded today?), Studebaker would have been the slightly up-market performance car brand much as Pontiac was in the 1960’s for GM, Hudson brand would have been the upper-middle class aspirational brand retaining some sporting overtones (still racing at NASCAR), Packard obviously would have been the luxury brand.

    Having TWO sporty-oriented brands would have greatly benefited American Motors through the 1963-1972 “sporty car – go fast!” US car market timeframe.

    Could and Packard inclusive American Motors ended up buying Chrysler group in 1979, or in 1987? Wow, the mind boggles.

  • avatar
    Glenn

    I guess Bob Lutz actually seems to AGREE with my assessment about hybrids. See for yourselves.

    http://www.autobloggreen.com/2006/10/06/bob-lutz-admits-mistake-with-hybrids-but-still-sees-promise-in/

  • avatar
    dhathewa

    FYI–

    Kerkorian Pulls Back From G.M. Investment
    By THE ASSOCIATED PRESS 13 minutes ago
    The investor said he would not increase his 9.9 percent stake. Also, his adviser resigned from G.M.’s board.

    — from the New York Times web site, just now.

  • avatar
    Glenn

    Wagoner & Lutz 1, Kerkorian & York ZERO.

    Not that it matters in the long run.

  • avatar

    York has resigned. Proxy fight next. Like I said, it’s gonna get ugly.

  • avatar
    nonce

    Why a proxy fight? What would Kevorkian gain out of that?

    I would love some falsifiable predictions, in any case.

  • avatar
    cykickspy

    I got an idea!
    why dont GM, Chrysler, and Ford all merge together and than we can have the american VS asian vehicle war!
    GM cant fight off this deluge alone.

  • avatar
    Joe C.

    York’s letter makes for interesting reading:

    http://www.msnbc.msn.com/id/15160176/

    GM stock lost 6.28% today. I wonder what Monday will bring.

  • avatar
    taxman100

    York’s letter is sour grapes because it appears it will be more difficult for Kekorian to bleed as much cash out of the stock and/or company as possible to put in his old whithered, greedy hand.

    Mr. Burns has met his match.

  • avatar
    ZoomZoom

    Glenn:
    October 5th, 2006 at 3:37 pm
    “…As for my ideas about hybrids for GM, well, look at how I waited 9 1/2 months for my Prius. Look at Toyota sales. How much as gas a mere 6 weeks ago, again? How much do you think it’ll be if there are bad hurricanes next summer?
    And finally, have you seen ANY GM dealer talking about customers paying retail price and waiting for 9 1/2 months for any of their current products?

    And oh yeah, what car companies are doing exceptionally well right now, world-wide? Companies building hybrids.

    I stand by my suggestions! “

    All good points. I lucked out, and only had to wait about two months for my Prius. I was willing and prepared to wait much longer. And yes, I would have done it all over again!

    I have never been able to say the same about any of the GM cars I have owned.

    So maybe Glenn and I are two peas in a pod. But if there are two of us here on TTAC, wouldn’t it stand to reason that there might be more of us out there? Maybe even a lot of us?

  • avatar
    jerry weber

    All of this talk of independents; with the one paragraph of the car glut after 1953 collapsing the market for even ford and gm tells the story. When the WWll car drought was finally caught up with Even chrysler a solid perfomer for 30 years was teetering in the early fifties. No company without deep reserves, strong dealers and overall staying power was going to make it very long past 1955. That AMC survived the longest is indeed a tribute in niche marketing. They built the small cars Detroit never wanted to. For any independent To build head to head with the big guys for the long pull just wasn’t to be.

  • avatar
    dhathewa

    “So maybe Glenn and I are two peas in a pod [who really wanted a Prius and would wait in line for it]. But if there are two of us here on TTAC, wouldn’t it stand to reason that there might be more of us out there? Maybe even a lot of us?” – ZoomZoom

    Actually, there’s about 10,000 people like you. Per month.

    The hot new GM products, the Solstice and Sky; there’s about 2500 people looking for them each month.

    Which would you rather be selling?

  • avatar
    cykickspy

    this just in:

    http://www.bloggingstocks.com/2006/10/09/could-toyotas-growth-challenges-bring-a-ray-of-hope-for-gm/

  • avatar
    Glenn

    The clock is ticking, ticking, ticking for Delphi and thus, for GM.

    Will the clock simply stop?

    Have a peek at the article here

    http://www.detnews.com/apps/pbcs.dll/article?AID=/20061011/AUTO01/610110404/1148

    Then, this article just goes to show that the UAW leadership are totally out of touch and quite obviously part of the reason for the big 3’s imminent demise or partial demise. DEMANDING that GM keep the “jobs bank” where “workers” (used in the looses possible way possible) sit around in empty plants and play cards and get paid? Yeah, that’s what the UAW wants to continue in the 2007 UAW contracts with GM. Read it for yourself. That is, assuming there IS a GM in 2007.

    http://www.freep.com/apps/pbcs.dll/article?AID=/20061011/BUSINESS01/610110421/1014


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