Editorial: Between The Lines: New GM's First Press Release

I once asked a priest about confession. What was the point? I knew Catholics who’d sin, confess, sin, confess, wash, rinse, repeat. “It’s not a ‘get out of hell free’ card,” he insisted. “Confession means you fully acknowledge your sin, pledge to atone for the harm you’ve caused, promise God that you’ve learned from your mistakes and change your behavior.” Let’s say you do all that and commit the same sin. What good’s an unrealized promise? “None,” he said. “I have refused absolution to repeat sinners because I didn’t believe that they were ready, willing or able to abandon their sins.” And there you have it: New GM’s recipe for disaster. Let us turn to the first sentence of New GM’s first press release.

The new General Motors Company began operations today with a new corporate structure, a stronger balance sheet, and a renewed commitment to make the customer the center of everything the new GM does.

Leaving aside the fact that GM’s opening proclamation makes no mention of its bankruptcy, or what led to its bankruptcy, how can New GM claim it has a new corporate structure? Fritz Henderson was the CEO of Old GM. Fritz Henderson is the CEO of New GM. Mark LaNeve was Old GM’s VP of sales and marketing for North America. Mark LaNeve is New GM’s VP of sales and marketing for North America. Old GM’s ex-Car Czar Bob Lutz has been reinstated as New GM Car Czar. Meet the new boss . . .

Actually, GM is now run by the federal government, under the watchful eye of a twenty-five member, politically-appointed “Presidential Task Force on Automobiles.” As much as Old GM’s management needed a right royal arse kicking—which, as stated above, this isn’t—I still can’t see GM nationalization as something worth celebrating.

Sure, GM’s balance sheet is stronger than it was before the government assumed control. And yes, New GM is “only” carrying $11 billion worth of debt. But any realistic appraisal of its balance sheet must consider cash flow, current assets and future prospects.

New GM’s brands and product plans are in complete disarray. With the exception of its pickup truck, GM’s products are class-trailing. Incentives are high and getting higher (i.e. margins are low and getting lower). GM’s killer apps are, as always, on the horizon.

Meanwhile, when exactly was GM last committed to its customers? Before they allowed [now-bankrupt] Bill Heard Chevrolet to screw every single person that darkened the dealership’s doors because the man moved mountains of metal? Never mind because . . .

“Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers,” said Fritz Henderson, president and CEO.

Somewhere in the back of my mind, I hear Elton John’s “I’m Still standing.” But if New GM’s so new, why are we getting the same old song and dance from its old—I mean, previous and current, CEO?

“One thing we have learned from the last 100 days is that GM can move quickly and decisively,” said Henderson. “Today, we take the intensity, decisiveness and speed of the past several months and transfer it from the triage of the bankruptcy process to the creation and operation of a new General Motors.”

Here we are again: faster, deeper, harder, oh baby! Anyone remember Chrysler’s contention that speed was the primary advantage of private equity ownership? That didn’t turn out so well. Besides, does anyone really believe that a government-owned General Motors (with the aforementioned twenty-five member oversight team) will be faster than Ye Olde GM?

As I’ve said before, GM’s problem is not speed. It’s direction. GM still doesn’t have a coherent plan for their brands or the models within. Or do they?

“Our goal is to build more of the cars, trucks, and crossovers that customers want, and to get them to market faster than ever before.”

More, faster. See how that works? Or, in fact, doesn’t?

“The success of our recent launches and the exciting new vehicles and technologies we have in the pipeline are evidence of our ongoing commitment to excel at everything we do,” said Henderson. “Our goal is to make each and every General Motors car, truck and crossover the best-in-class.”

According to Fritz’s previous pronouncements, GM’s whittling itself down to 39 nameplates. What are the odds that all of them will be best-in-class? But hey, Fritz feels me.

“Beginning next week, we will launch a ‘Tell Fritz’ website where customers, or anyone else, can share ideas, concerns, and suggestions directly with senior management. I will personally review and respond to some of these communications every day.”

Glasnost at GM? Sounds good! But then, confession is good for the soul. As long as it’s genuine . . .

[NB: Fritz is having a webchat on the FastLane at 4pm EST]