By on October 7, 2009

(courtesy imagecache5.art.com/p/LRG/26/2675/TO2UD00Z/scott-berner-saturn-rocket-johnson-space-center-houston.jpg)

Today’s This morning’s GM WTF moment comes to us from CNN’s Assignment Detroit. It’s a damning report on GM’s post-bankruptcy travails, penned by veteran auto industry scribe Chris Isodore. You may remember Chris as the reporter to whom I recently gave shit about not giving a shit about GM’s refusal to release a secret list of closed dealers. Which TTAC’s number cruncher eventually created. Which all but the Orlando Sentinel ignored. Anyway, props to Isodore for doing a little barrel fish shooting, unearthing yet more disquieting factoids about your friendly neighborhood nationalized automaker. For example, “GM will now have to pay Saturn dealers between $100,000 and $1 million each to wind down, which will cost the company more than $100 million . . . GM spokesman John McDonald said that the company never counted on avoiding payments to dealers through a Saturn sale. So the collapse of the Saturn deal is not a setback.” Wait; what about the GM mothership’s lost volume/market share? Hope and change baby!

McDonald added that the company hopes to produce the same number of vehicles for its other brands that it would have if it was still making Saturns. GM has Chevrolet and Buick offerings that are similar to most Saturn models.

Saturn was small beer you say? Ja nir.

Saturn’s industrywide [sic] market share has fallen to a record low of less than 1% this year as buyers avoided the endangered brand and GM cut back on marketing efforts. But Saturn still accounted for about 4% of GM’s total sales in 2009. So any slip in sales could hurt GM at a time when it is struggling to end a period of market share declines in the U.S.

Could? Anyway, Chris goes on to highlight the fact that Opel’s sale will screw GM’s ability to create competitive products [paraphrasing, generalizing, teasing]. And he reveals the attitude that makes New GM such an old failure.

GM’s McDonald insists that missing the target date to close the [HUMMER]  deal is not necessarily a sign that there are problems. “Especially when dealing with an international buyer, missing a deadline is not uncommon,” he said.

Sure. So what’s the bet HUMMER goes the way of Saturn? If Saturn’s demise will cost GM $100 million, much will it cost GM to extricate itself from the HUMMER boondoggle? Ten million here, ten million there, and soon you’re talking about real tax payer money. Again. Still. Again. [thanks to gslippy for the link]

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32 Comments on “GM: Saturn Closing “Not a Setback”...”


  • avatar
    Richard Chen

    Saturn is part of Old GM (Motors Liquidation Co.) and I’m presuming those payouts would be from MLC’s funds. For New GM, they’re losing revenue that the Penske/Saturn operation would have paid them, but as Saturn sales were already in a terminal dive that’s not a whole lot of dough.

    As Saturn production ceased immediately, they can now open the floodgates on Malibu, SRX, and Enclave production…or something like that.

  • avatar
    menno

    Will Buick dealers now be given a re-grilled Aura to sell, in order to use up the parts sitting at the plant? Maybe they could call it the Oldsmobile (tongue in cheek alert…). Or sell them as the “new” Pontiac Tombstone series. (“Fleets only, please”), like the G6 is still in production “fleets only, please.” Just toss some of those left-over red-arrows in the grill and on the trunklid…

    My local Saturn dealer also sells (or tries to sell at a 2nd store) Pontiacs (last I looked they had one 2010 Vibe left, that’s it), GMC’s and Buicks, as well as having a Chrysler-Dodge-Jeep franchise.

    Thankfully, they also sell Hyundais at a 3rd store and so I suspect that franchise will at least be around for awhile.

  • avatar
    Juniper

    Read on here a hundred times GM needs to get rid of brands. Now they do and they get pillored (thanks Jeff). Yes, it costs money to get rid of brands. That’s why downsizing seldom works without protection, (C11)if then.

  • avatar
    John Horner

    I would wager than almost none of the lost Saturn potential customers end up buying something in another GM showroom.

    Remember when killing Oldsmobile was supposed to mean more sales for GM’s other brands? It didn’t work then, and it surely will not work with Saturn.

  • avatar
    menno

    By the way, Richard? Motor Liquidation Corp funds? They’re (or were) OUR funds. Taxpayers, right?

    Juniper, yep, excess GM brands needed to go bye-bye. In the sense that Saturn would have simply been a competitor to GM at a later date (with non-GM product), this may work out best for GM in the long run.

    But then again, that’s assuming there will even BE a GM for the long run.

    Anyone hear what happened to those dealers in southern Michigan who wanted to buy the Pontiac brand from GM before the “O-bankruptcy”?

    Did they give up, or will they try to buy the brand from the courts now and do what Penske was trying to do with Saturn – assuming, that is, that they have any better luck finding “someone” to build cars for them to sell as Pontiacs….

  • avatar
    lw

    Everything GM does is “wrong” until they start showing profits and paying back the taxpayer.

    This could go on for awhile…

  • avatar
    menno

    No, lw, I suspect GM and the UAW will get what’s coming to them in 2011, after the 2010 elections.

    The One won’t be able to single-handedly p*ss away taxpayer monies on his cronies without congressional sign-offs from a Republican Congress and Senate.

    Not that I am pro-republican any more than I am pro-democrat. The lesser of two evils is still…

  • avatar
    FreedMike

    Today’s $20 Word

    Schadenfreude: pleasure derived from the misfortunes of others.

  • avatar
    mattstairs

    GM had too many brands, or, another way of looking at it, not enough brands.

    Not enough brands with a clear, defined image that meant something. Brands filled with models that people were willing to buy, in large numbers, at a price where GM could profit.

    GM certainly wasn’t in BK because of niche brands like Saab (though a money loser) or Hummer. Among its various other problems, it was the cannibalization, waste of resources (rebadging), and marketing confusion caused by Chevy, Pontiac, and Saturn chasing the same consumer.

    It’s sort of like the dealer issue. Too many dealers? Yes, but it’s more complicated than that. Too many dealers in certain markets, with too few sales to too few customers was a problem. Dealerships in rural areas underserved by competitors? Not a problem, and should have been left untouched.

  • avatar
    FreedMike

    menno :
    October 7th, 2009 at 10:42 am

    No, lw, I suspect GM and the UAW will get what’s coming to them in 2011, after the 2010 elections.

    And when they get what’s coming to them, then what? We’ll have an economic mess that will cost a LOT more than $50 billion on our hands. To wit:

    1) The complete economic failure of the state of Michigan, which will require God only knows how many billions to fix;

    2) Immediate job losses in the range of 200,000, between GM employees, suppliers, and dealers. A high percentage of these jobs will never come back.

    3) Assuming 200,000 people lose their jobs in the process of GM “getting what’s coming to them”, the government will be on the hook for additional billions in unemployment, job retraining, and eventually, welfare and Medicaid. Figure 200,000 job losses, with each person getting about $24,000 in unemployment benefits, and you’ve got a $5 billion tab for that alone.

    4) Figure 25% of the 200,000 people who end up out of work end up losing their houses, and you now have 50,000 new foreclosures destroying real estate values and destroying profits for banks.

    5) Anyone who bought a GM car will instantly see the value of their vehicle plummet, causing the loss of untold billions of dollars in potential wealth.

    6) No one is naive enough to think that all the money pumped into GM will come back to taxpayers, but I guarantee you this: if the company goes tits up, NONE of it will come back.

    All this so that GM “gets what’s coming to it”? Who said revenge doesn’t have a price?

  • avatar
    fincar1

    Who said anything about revenge? It is more a matter of karma, or to put it another way, what goes around comes around.

    If the United States government in its majesty feels that the best way to help an organization that does nothing with money but waste it is to give it large infusions of taxpayer money to waste, why would anyone expect this to end well?

  • avatar
    jkross22

    @FreedMike:

    I have as much compassion as anyone else for the people of MI who are line workers and will pay the highest price when GM goes T.U.. At the same time, you have to really have Enron-like blind faith that GM is going to survive. Those folks need to read the tea leaves and do what needs to be done to take care of themselves and their families (i.e. get out of Michigan and move to a place where there is a future for what they do – the South.)

    Overproduction has finally caught up with the industry and it’s the weak players that are being hurt the most… the way it should be. Unless of course you believe in corporate and government welfare keeping people employed doing unneeded jobs and having the rest of us picking up the tab.

    Those that bought GM products in the last few years have either chosen to ignore or accounted for the company’s dim future in the purchase price of the vehicle. For a purchase that for many people is the largest they’ll make, they should have done their homework. Caveat emptor.

    Despite recent products that appear to be competitive, GM simply doesn’t have the time, corporate culture or money to turn that turd of a company into a competitive one… It took decades to ruin this company and will take decades to fix it. There is no emerging leader within GM with the intestinal fortitude required. I know this because if there was, he’d already be running the show a la Bill Ford bringing in Alan Mulally.

  • avatar
    mattstairs

    Not saying I in any way want this, but in the event of a GM Chapter 7, the plants, workers, dealers, and suppliers would not completely vanish.

    Even at a 10 million SAAR and a 20% GM market share, the rest of the auto world is not going to absorb all 2 million vehicles. They wouldn’t have to, because there are valuable pieces at GM. Someone, whether it be a foreign automaker or private equity, would buy select brands, plants, models, etc. out of bankruptcy.

    Someone would buy Chevy and certain plants that crank out certain models. Chevy dealers would still exist, service business would continue until the new owners would re-start production. Same would go for Cadillac.

    Now, getting to that point would be extremely ugly and messy. Plants would be shut down for months. GM dependent suppliers could fold. Dealers who couldn’t wait it out would go under.

    Of course, that would leave slack for other manufacturers to pick up, so other automaker plants, workers, dealers would benefit.

    It would be horrible for anyone connected to GM, but unless all GM customers quit owning and driving cars compeletly, not ALL would lose their jobs.

    Again, not saying I want that to happen at all.

  • avatar
    FreedMike

    fincar1 :
    October 7th, 2009 at 11:24 am

    Who said anything about revenge? It is more a matter of karma, or to put it another way, what goes around comes around.

    Well, if we’re getting karmic, what about tossing all those people out of work? I’m sure that might tip some karmic scale somewhere…:)

  • avatar
    ExtraO

    That’s an old picture of the Saturn V rocket. It’s been covered by a shed they built around it for a number of years now.

    As far as GM’s Saturn, Hummer & the rest: C’mon people, this is all just road kill. There’s nothing to see here, now back in your vehicles & move along please.

  • avatar
    FreedMike

    jkross22 :
    October 7th, 2009 at 11:40 am

    @FreedMike:

    I have as much compassion as anyone else for the people of MI who are line workers and will pay the highest price when GM goes T.U.. At the same time, you have to really have Enron-like blind faith that GM is going to survive. Those folks need to read the tea leaves and do what needs to be done to take care of themselves and their families (i.e. get out of Michigan and move to a place where there is a future for what they do – the South.)

    Interesting you’d compare this to Enron.

    1) Enron collapsed because of fraud.

    2) Not underrating the suffering of all the people who got whacked because of Ken Lay, but Enron’s failure did not threaten the viability of the national economy.

    3) I think the idea that former autoworkers should become 21st century Okies and head south is absurd. There aren’t enough jobs for southerners as it is; what will these transplanted northerners do – work at Wal-Mart until the big Korean auto plant opens (or so they hope)?

    The idea that GM can be saved is not naivete. It’s necessity. I think letting GM fail would cost the economy more than it will cost to save it. In any case, we have all this money invested as it is – why not do our best to make sure we get it back?

  • avatar
    jkross22

    @FreedMike,

    I didn’t compare GM to Enron. I compared the head in the sand thinking by the employees of Enron thinking their stock would keep rising with the blind faith of the GM faithful. But keep building strawmen arguments if you’d like.

    The idea that GM can be saved is not naivete. It’s necessity. I think letting GM fail would cost the economy more than it will cost to save it. In any case, we have all this money invested as it is – why not do our best to make sure we get it back?

    It’s necessity to whom? The ‘leaders’ of GM? I doubt that, as many of those that helped cause the collapse of the company are still there. There is still an amazing lack of accountability and leadership, without which the company is done.

    GM doesn’t have the time to change people’s minds. These silly programs like “May the best car win” or “60 day return policy” are gasps for air. If GM REALLY believed they had the best cars, they would equal or better a Hyundai warranty. They refuse to put their (OUR) money where their mouth is.

    Your use of the phrase ‘letting GM fail’ says all that needs to be said. GM’s survival ought to depend on one thing – consumer demand for its products. Without that, it’s not a viable business.

  • avatar
    Geotpf

    menno :
    October 7th, 2009 at 10:42 am

    No, lw, I suspect GM and the UAW will get what’s coming to them in 2011, after the 2010 elections.

    The One won’t be able to single-handedly p*ss away taxpayer monies on his cronies without congressional sign-offs from a Republican Congress and Senate.

    Not that I am pro-republican any more than I am pro-democrat. The lesser of two evils is still…

    The chances that the Republicans retake either chamber of Congress in 2010 are quite minimal. Now, it’s fairly likely they make gains in either or both, but the Democratic majority in both is too large for the Republicans to overcome in one election.

    That being said, I think it’s highly likely that Obama cuts off GM and especially Chrysler in 2011 or so, when it’s politically possible for him to do so.

  • avatar
    gslippy

    GM’s Newspeak Department doesn’t think anything is a setback these days. The 45% drop in sales in Sept 09 vs Sept 08 wasn’t a setback, but Q4 will be better. Onward and upward!

    The pending Volt failure won’t be a setback, but rather “we knew it was a risky endeavor from the beginning”.

    I guess when Chevrolet closes, that won’t be a setback, either. How would you like to work for Saturn and hear that your demise “isn’t a setback”?

    Monty Python: “It’s just a flesh wound!”

  • avatar
    njdave

    Freedmike,
    Saving GM is not a necessity, its an impossibility. My inlaws are big time union supporters, lifelong GM customers. They are so pissed off about the bailout they will never buy another GM product. If GM has lost the life long union customers, they are toast. The jobs you are so worried about are going to be lost anyway, even if GM survives somehow. They are not going to build cars in MI, they are going to build them in Mexico. And China. They are going to buy parts from Mexico and China too, to lower their coasts. So their suppliers in MI are going to die no matter what. For MI to just dig in and pray for the government to rescue GM and Chrysler and thus their state is pure foolishness. They must adapt or die. The state absolutely must find and invest heavily in new industries, and retrain their citizens before it is too late. Pouring more tax dollars into GM and Chrysler just delays the inevitable. Meanwhile my grandchildren and yours will be paying all this off. Now you want add still more debt so their THEIR grandchildren will be paying it off.

  • avatar
    geeber

    FreedMike: 2) Not underrating the suffering of all the people who got whacked because of Ken Lay, but Enron’s failure did not threaten the viability of the national economy.

    We’re long past the point where “what’s good for General Motors is good for the country, and vice versa.” A case could be made for bailing out GM late last year, as the supplier base might have gone down with it, and the economy was at a vulnerable point.

    But Toyota, Ford, Honda, etc., have taken steps to protect the supplier base in the event of a GM failure, and there comes a point where supporting GM becomes a drag on the economy, not a life support. We’re rapidly reaching that point.

    Even if GM did collapse, it wouldn’t totally disappear. There is still a market for GM’s full-size trucks and SUVs, the Corvette, the Malibu and the CTS.

    The good products need to be backed by competent management that operates in a corporate culture marked by honesty, accountability and a desire to compete. All of the bailout bucks in the world won’t bring about that corporate culture – if anything, continuing bailouts prevent this from happening.

    FreedMike: 3) I think the idea that former autoworkers should become 21st century Okies and head south is absurd. There aren’t enough jobs for southerners as it is; what will these transplanted northerners do – work at Wal-Mart until the big Korean auto plant opens (or so they hope)?

    What are we supposed to do – keep supporting zombie auto companies because someone might lose a job if GM goes under? If that approach worked, Great Britain would have had a booming economy by 1980.

    Maybe Michigan should take the hint and revise its tax code and spending policies to encourage new start-up companies and entrepreneurs to locate there. If state hasn’t figure it out by this point, it needs to learn that relying on GM, Ford and Chrysler as the basis for its economic growth and prosperity isn’t exactly a winning proposition.

    FreedMike: The idea that GM can be saved is not naivete. It’s necessity.

    The government can prop up GM, but only management can truly save GM by building products that paying customers want to buy at a price the earns GM a profit. The present bailouts do not seem to be bringing about that result.

  • avatar
    rnc

    GM doesn’t have the time to change people’s minds. These silly programs like “May the best car win” or “60 day return policy” are gasps for air. If GM REALLY believed they had the best cars, they would equal or better a Hyundai warranty. They refuse to put their (OUR) money where their mouth is.

    In a way that warranty in nothing more than a gimmick (an effective one), you can’t transferr it, Hyundai knows good and well that people (a large %) don’t keep cars for 10 years, usually not even 5 (that was the crazy time b/t 01-07). If the warranty was tranferrable it would be the greatest thing in the world (if someone knew they were buying a 5 year old car with 5 years of warranty left, think what it would do for the resell value).

  • avatar
    menno

    njdave is right, +1 on all points. GM has been slowly slipping Chinese parts into cars for years. And moving production out of the US. Chrysler, too. It did them no good.

    The Buick Rendezvous had Chinese engines and were manufactured in Mexico. Yet Buick SUV fans thought they were buying an American car.

    What’s American about a car made of plastic, in Mexico, with a engine sourced from a communist nation?

    Michigan has been “toast” for a decade now, at least. Though nowadays, the toast is burning.

    At the food pantry at my church, we went from 100 people assisted per month 3 years ago, to 200, now it is 700. That pretty well sums up the situation.

    The “last” Chrysler product I bought new (and last ever) was a 1999 Dodge Neon. 1998 Neons were built in Illinois, 1999 Neons were built in Mexico with 60 cent an hour wages. But the price didn’t come down one penny. Even with that, Chrysler couldn’t make money and survive.

    These kinds of facts should be red neon lights in everyone’s minds as they contemplate what’s happening around us.

    I never wanted any companies or states to fail – I’m not evil, an ogre, or hateful. But it’s happening.

    Throwing money at the carriage manufacturers in 1899 would not have saved them with the oncoming auto industry ready to take over.

    Wish I knew whether we were going back to horse & buggy times or onward to the future with something new, so I knew where to invest some money… hay, or rare earth mines?

  • avatar
    rnc

    Michigan has been “toast” for a decade now, at least. Though nowadays, the toast is burning.

    Maybe passing a “right to work” law would have helped that situation some?

    Yes GM should have had the balls in the 70’s (Iacocca admitted that there was so much money coming in that they just gave the UAW what they wanted to keep the lines moving, someone else would have to deal with the problem), the 80’s (after the health care accrual, when everyone knew what trouble they were really in and there would have been little sympathy for the union) or the 90’s (when they had the SUV cash hoard) to either restructure (either through a post contract contraction and dealing with the strike afterwards, or bankruptcy when it was salvagable).

    At the same time the UAW had consultants, they knew this was coming and did nothing except take as much as they could when they could. Did they think about whether thier kids could have the same well paying job and benefits that they did? a nice place to grow up? Did they think about the long term benefit of the union itself (membership)? No they just took and whined when they couldn’t take more and blamed when it started collapsing.

    In way the managment and the union are a nice reflection of this country in general, the government is GM and the people are the union and as long as both can take whatever they want and someone else will end up paying the costs it continues (until its time to pay, and then both will whine and blame)

  • avatar
    Steven02

    Old GM was selling Saturn, so this doesn’t effect new GM. Any royalties from making a few extra Saturn wouldn’t have helped the new GM’s bottom line.

    I do find it interesting how GM went through bankruptcy less than 4 months ago and everything should be fixed now. That statement is completely absurd. GM has made huge amounts of change. They are streamlining process (read that as mgmt shake ups), they have a much better labor agreement, and the newer products are selling well. Things I would look for in future GM products to know if this is really working.

    More timely MCE’s. Part of GM’s problem with products has been letting them wither on the vine. It is a great vehicle when it comes out, but changes to keep it modern take too long.

    Better Brand differentiation. This will take awhile to see. But having a Chevy/Buick/GMC/Cadillac version of the same vehicle isn’t going to be a great way of doing business. While some platform sharing is ok, it shouldn’t become over done.

    Profit. GM will have to turn profits. Simply the most important part of being a business. I don’t recall when GM said it expects to turn a profit again, but it needs to make that date. It can’t cut corners to do it either.

    Also, matching Hyundais warranty is a joke. Read the fine print there. Non transferable. Must be able to prove all maintenance is done appropriately. Just google KIA and timing belts.

    Last comments is about the 60 day buy back from GM. Of course it is a marketing gimmick. They are trying to attract a buyer who wouldn’t normally look at a GM product. Remember when Lexus was having adds about having the lowest cost of ownership for any luxury brand. Well that is true… for new cars. Used cars make so much more sense when talking about cost of ownership, luxury or not. Most marketing is gimmicks.

  • avatar
    FreedMike

    jkross22 :
    October 7th, 2009 at 1:27 pm

    It’s necessity to whom? The ‘leaders’ of GM? I doubt that, as many of those that helped cause the collapse of the company are still there. There is still an amazing lack of accountability and leadership, without which the company is done.

    It’s necessity to our country, which has invested too much money in this to wish for its failure out of a misguided sense of ideology.

    Accountability and leadership are all well and good, but in the end, product wins. What if Lee Iacocca hadn’t had the K-car and minivan to sell?

    GM has some very good stuff coming out. Let’s give them some breathing room, stop wanting them to act like a wanton spouse who’s begging forgiveness, and let them build cars.

  • avatar
    FreedMike

    njdave :
    October 7th, 2009 at 2:53 pm

    Freedmike,
    Saving GM is not a necessity, its an impossibility. My inlaws are big time union supporters, lifelong GM customers. They are so pissed off about the bailout they will never buy another GM product.

    I think that’s anecdotal evidence, at best.

    And how do we make the logical leap from “I’m pissed off about the bailout” to “GM should fail because I’m pissed off about the bailout”?

    It’s their tax money! If they don’t want to simply piss it away, then I’d suggest they at least stop wishing failure on the company.

  • avatar
    FreedMike

    geeber :
    October 7th, 2009 at 3:04 pm

    But Toyota, Ford, Honda, etc., have taken steps to protect the supplier base in the event of a GM failure, and there comes a point where supporting GM becomes a drag on the economy, not a life support. We’re rapidly reaching that point.

    Even if GM did collapse, it wouldn’t totally disappear. There is still a market for GM’s full-size trucks and SUVs, the Corvette, the Malibu and the CTS.

    OK, first: how, precisely, is GM a “drag on the economy”? If anything, I’d argue that any drag that they put on the economy is RADICALLY offset by the drag we’d create by kicking them to the curb.

    Second, yes, there are marketable “pieces” of GM, but in this environment, what automaker (or corporation, for that matter) has the money to buy them? I mean, if Volvo, which is a dead dog, low volume brand, is being bid to the Chinese in the $2-3 billion dollar range, how much would the bid be for Chevrolet, a huge volume seller with a full range of cars and trucks? Fifty billion? A hundred? No one has that kind of cash, and with the credit markets being what they are, no one has the credit either.

    That’s why selling GM was never an option to begin with.

    That’s why I think the whole “should GM die / should it live” debate is moot. We propped it up with tens of billions of dollars of our money, so it should live. The question is: how do we facilitate that?

    Answer: stop focusing on the corporate BS (which, to be frank, is the same kind of BS you get from EVERY company), and focus on what they’re building.

  • avatar
    mtymsi

    As everyone knows, many of the current auto industry problems are a result of the economy. There simply have to be losers with a 10mm annualized sales rate. GM’s prospects for survival are dim at best. The point is when the economy recovers and the annualized sales rate increases to a more normal figure the impact of GM’s demise will be far less than it is right now.

    The state of Michigan is well aware of the need to attract different industries, unfortunately that doesn’t happen overnight. Michigan’s long term planning places far less emphasis on the auto industry but the fact of the matter is that it will take time to achieve the diversification. The economic pain Michigan has and will continue to suffer is irrefutable fact, I don’t expect to see as vibrant an economy in Michigan as it once was in my lifetime. Between GM and Chrysler Michigan has many more economic lumps to take but that is the price of being the home of the domestic auto industry. At this point Michigan’s economy does not depend on GM’s survival, if they were to survive the blow would not be as severe but rest assured the state of Michigan’s fate is not based on GM’s survival.

  • avatar
    geeber

    FreedMike: OK, first: how, precisely, is GM a “drag on the economy”? If anything, I’d argue that any drag that they put on the economy is RADICALLY offset by the drag we’d create by kicking them to the curb.

    The problem plaguing the American auto market is too much capacity. The longer GM and Chrysler stick around, the more they hurt Ford, as many customers of those companies would switch to Ford, or even one of the transplants, if they went away (check out market share trends – this is already happening).

    The money spent by the government to prop up GM and Chrysler will have to be paid back at some point. It will either be paid back by GM and Chrysler after they become successful, or the government will have to raise taxes. One guess as to which avenue the government will be forced to take…

    FreedMike: Second, yes, there are marketable “pieces” of GM, but in this environment, what automaker (or corporation, for that matter) has the money to buy them? I mean, if Volvo, which is a dead dog, low volume brand, is being bid to the Chinese in the $2-3 billion dollar range, how much would the bid be for Chevrolet, a huge volume seller with a full range of cars and trucks? Fifty billion? A hundred? No one has that kind of cash, and with the credit markets being what they are, no one has the credit either.

    If there is an opportunity to make money, the cash will materialize. If no one wants to buy the remains of GM, that should give everyone a clue as to how viable they really are as independent businesses.

    The Obama Administration itself has said that it wants to “sell” GM to investors within the next year or two, so the idea that GM will be sold off is hardly farfetched.

    FreedMike: That’s why I think the whole “should GM die / should it live” debate is moot. We propped it up with tens of billions of dollars of our money, so it should live.

    Sometimes, it’s best to cut your losses and run. If GM needs more money by the middle of next year, this will be an excellent opportunity to put that proverb into action.

    The brutal truth is that, given what GM has in the hopper, it will be a miracle if it holds on to its current market share. If it is to really thrive, it must GROW its market share and steal sales from the competition. Sorry, but I don’t see that happening. Toyota, Honda, Ford, Nissan, Hyundai, BMW and Mercedes aren’t sitting around, waiting for GM to get back on its feet.

    FreedMike: Answer: stop focusing on the corporate BS (which, to be frank, is the same kind of BS you get from EVERY company), and focus on what they’re building.

    The problem is that the bailouts allow GM management to continue not only spouting corporate BS, but also believe it.

    And, truth be known, what they are building isn’t all that spectacular. The Malibu is a nice car – a big improvement over the previous generation – but it’s not going to get large numbers of people out of their their Camrys or Accords. Same with the CTS and LaCrosse versus their competitors. But that is what GM must do to really recover.

    GM needs to attract customers who are currently driving the competition’s products, not merely build products that wow people who already drive GM vehicles.

    Even worse, GM still hasn’t sorted out its brands, or given them distinct identities.

    Nor has it succeeded in giving its new cars distinct selling points that will resonate with customers.

    Why should anyone buy a Malibu instead of a Camry? At least with VW and the Jetta and Passat, one can say, “It provides a German driving feel and experience.”

    With the Ford Fusion, Ford can say, “It’s the most fuel-efficient mid-size sedan in America (thanks to the hybrid version), and it earns good quality ratings from Consumer Reports.”

    About the only thing one can say about the Malibu versus the Camry is that, “It’s made in America and buying one will keep GM workers employed.”

    The harsh truth is that people aren’t going to swap their Camrys for Malibus based on that line. And I see nothing in current management that suggests the right combination of talent, moxie and creativity to come up with a good reason, and make sure that the cars really do possess that attribute.

  • avatar
    yankinwaoz

    Steven02

    Why did GM recently quietly reduce the drive train components that are covered by their so called “excellent drive train warranty”? Gee, they excluded all the expensive parts in the fine print.

    Just wait for New GM car owners to find out they have been screwed again by GM when they bring their cars in for warranty service for things like problems with the electronics, fuel system, or clutch.

    Read about it here:
    http://www.thetruthaboutcars.com/gm-downsizes-100000-mile5-year-warranty/

  • avatar
    Power6

    Neons were built in Illinois, 1999 Neons were built in Mexico with 60 cent an hour wages.

    Menno, your ’98 Neon could have been built in Mexico. According to Allpar they were built in Toluca, Mexico (*as well as* Belverdere, IL) from 1995-1999.

    My ’04 SRT-4 was built in Belvedere. And Chrysler made money on those little angry bees too!

    I know it is nit-picking, but it takes away from your argument if you don’t have the facts straight, you start to sound like the “all american cars use all chinese parts” uninformed masses.

    Not that it isn’t bad in Michigan, and not that the Caliber isn’t junk no matter where they build it.


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