By on August 17, 2012

“President Obama is proud of his bailout of General Motors. That’s good, because, if he wins a second term, he is probably going to have to bail GM out again.” Sounds like our august founder, Robert Farago, sounding off about American Leyland the New GM. Nope, it’s Forbes this time, and they come to bury the General, not to praise him.

Louis Woodhill’s article pulls no punches. Using TTAC’s Winterkorn Meets The i30 article as evidence, combined with Car and Driver‘s decision to rank the 2012 Passat first in a family-sedan test (and the Malibu last), Woodhill states

Uh-oh. While Dan Akerson is busy rearranging the deck chairs on GM’s Titanic, Martin Winterkorn is leading VW to world domination via technical excellence.

Your humble author would suggest that it is Toyota, not Volkswagen, that has its foot on the General’s throat, but that’s a minor point.

The Forbes article rustled enough jimmies on Wednesday that the publication decided to run a counterpoint today, entitled “For GM, Bankruptcy Talk Is Its Own Fault”. The author, Micheline Maynard, argues that GM has a good cash position — sounds familiar — and plenty of ability to borrow more — which they’ve done in the past. When the best argument your defenders can make against bankruptcy is that you can borrow more money, you’re in bad shape. My AMEX is supposedly ready to charge a Lamborghini Aventador but that doesn’t mean I can pay for… hmm. Okay, I’m going to wrap this up. In unrelated news, TTAC may have a review tomorrow of the Lamborghini Aventador.

Get the latest TTAC e-Newsletter!

111 Comments on “GM Deathwatch Part 1! This Time, It’s Forbes Doing The Countdown...”


  • avatar

    One thing is for certain: there aren’t going to be any more bailouts.

    Obama is poised to win a 2nd term, but the anger in his detractors will probably cause him to be another “Bill Clinton”. Second term with a Republican controlled Congress. Just imagine how nice it would be for those maniacs to attempt to impeach him for anything they could impeach him for. Needless to say a republican Congress isn’t going to allow any bailout whatsoever.

    If, by chance, Romney wins, he’d never be allowed to do a bailout whether the Congress was controlled by Democrats or Republicans.

    Thing is, this isn’t the same atmosphere as it was in 2008. Bush skipped out right after the market CRASHED on September 15, 2008. The credit market was FROZEN. A car company in bankruptcy wouldn’t have had access to any financing options whatsoever and they’d have simply dissolved – and along with them, many jobs.

    The car industry is TOO BIG TO FAIL because even the Japanese car manufacturers get their parts from the same places American domestics do. If enough big car companies were to go under simultaneously, we’d all be screwed.

    Also keep in mind we are facing a fiscal crisis nationally, a student loan crisis and a healthcare crisis. GM won’t be the only car dealer with plenty of awesome cars but, no one with credit to buy them.

    • 0 avatar
      TEXN3

      But all Obama wants to be is like Bill Clinton…an ex-president who does speeches, travels around, and makes alot of money.

    • 0 avatar
      ithiel

      Nice deduction. It is true that the overall financial situation now is much different than in 2008 (with the markets having been frozen and all). However if, as you say, the car industry is too big to fail, and the government is unlikely to complete another bailout (agreed on both points), how would a floundering GM raise need money? If we arrive at a situation where another bailout is unpalatable but GM can’t secure loans, then what?

      While I would like to say we should just let them die (as is the “free market” way), I agree with you that the car industry is too big to fail; if a giant like GM went down, what would that do to the global supply chains?

      • 0 avatar

        ithiel

        CHINA has the money to buy GM 10 times over – thanks to the fact our corporations sold us out to them and 99% of our products are made there.

        I’m sure China would LOVE to buy out a brand image since they are 100% unable to create one.

      • 0 avatar
        geeber

        The manufacturing sector’s percentage of the U.S.’s gross domestic product has remained unchanged since at least the late 1970s (when the figures are adjusted for inflation).

        Manufacturing output has grown by approximately 30 percent over the last decade. What has declined by a similar amount is manufacturing EMPLOYMENT. Don’t blame the Chinese – blame automation and improved production processes. We still make plenty of things in this country. We just use a lot less people to do it.

      • 0 avatar
        racer-esq.

        Exactly. Anyone that sees factories full of thousands of Chinese workers and thinks those are all missing US jobs is beyond naive. In the US that work would be performed by machines and robots.

        What made the UAW push for jobs banks initially was the threat from automation, not the threat from offshoring.

        In China joint ventures use more employees than necessary to stay on good terms with the government, so even at Chinese levels of automation fewer workers could be used.

      • 0 avatar
        PaulVincent

        Who knows? But I think that this time we must find out. We cannot afford any more government rescues of GM.

    • 0 avatar
      28-Cars-Later

      Interesting observations. I think the whole system will have to completely fail until we realize debt based economy on non-backed fiat money is ludicrous. Although I wouldn’t worry too much about impeachment in a second term. After all Clinton was a career criminal with plenty of bodies in his wake and they went after him for perjury over a sex act. Fail. The current president has many more question marks behind him than Clinton, but I would imagine it will all be/has been suppressed and all knowledgeable parties previously liquidated. If you’re looking to watch out for something I would be wary of a coup d’état. It’s already more or less happened at once and possibly twice in our recent history… Kennedy was obviously a setup and there are some who argue Nixon was a silent coup. The stakes are about as high as they have been since the early sixties, given the current political and economic uncertainty, I would not discount it.

      • 0 avatar
        racer-esq.

        Even super amazing China and Germany use fiat currency. Maybe they know something that Austrian school theorists who have never functioned outside of academia and blogs do not. Which is not to say that much more transparency and accountability isn’t required in the incredibly nepotistic Federal Reserve. But what we really need to worry about is fluoride in the water. Also, Bush over Gore in 2000 needs to be added to the coup d’état list. Poor Nixon, in many ways he ushered in the modern world by normalizing relations with China and getting rid of the archaic gold standard. If only he was not a ruthless, indifferent toward the law politician with an obsession for tape recording.

      • 0 avatar
        romerjt

        “Obviously a set up”? I bet you can prove all this crazy talk with sources from the internet. Hey! the article was about GM so how do we get to be entertained by cockeyed political fantasies?

      • 0 avatar
        toxicroach

        It’s all fiat currency.

        So what if the government has a million tons of gold in Fort Knox. Unless you have a few armored divisions under your control, the promise to give you gold for cash will last until it’s no longer convenient. It’s all a promise.

      • 0 avatar
        28-Cars-Later

        “Bush over Gore in 2000 needs to be added to the coup d’état list.”

        Good point racer-esq, esp if you subscribe to some of the theories about the attacks and the invasion of Iraq.

      • 0 avatar
        jpolicke

        With Biden waiting in the wings to assume power Obama would have to barbecue children on the WH lawn before anyone would seriously consider removing BHO by impeachment.

      • 0 avatar
        MeaCulpa

        Wow, just wow.

    • 0 avatar
      tuffjuff

      I agree with your post entirely, BTS, but I guess where I’m confused (and this is more directed at the OP) is – where is GM “going under”?

      They’ve made one bad car. Certainly it’s an important car, but it’s only ONE car. One VERSION of one car, in fact – hopefully the non-Eco models aren’t as crappy, as they are lacking a few of the issues people have with the Eco model (weight and because of it fuel consumption).

      Perhaps we’re over-looking the $33B they have in the bank, or maybe the fact they make several other very competitive vehicles. I’m no GM apologist – far from it, I find the new Malibu and Cruze ugly and deformed, and because of the latter I bought a Focus and not a Cruze – but come on. The Cruze is one of the best selling vehicles, to my chagrin, in the segment. The Sonic is tearing things up. They can’t make enough of the Equinox, etc. They’re hardly going to have to declare bankruptcy by having one car be a pile of garbage. ;)

    • 0 avatar
      rnc

      “Exactly. Anyone that sees factories full of thousands of Chinese workers and thinks those are all missing US jobs is beyond naive. In the US that work would be performed by machines and robots.”

      Even that is changing, about 6-7 years ago we decided we needed a cheap chinese product to sell along side ours. The company we choose, when we first went over, were assembly things completely by hand, the last time we went over they were on their fourth factory, ten times larger than ours, full of beautiful, customized designed machinery, made to lessen human physical labor and increase automation and productivity. Not only that, but they were making the machinery, to make the machinery, to make the products (we traded a piece of custom machinery we designed for something that just sits in the back of the warehouse, they have hundreds of them now and are building to sell). We turned the company that was going to supply low-cost products to us (by teaching them) into the monster that’s going to kill us. Meanwhile, for 20 years our plant was a printing press, $30Mil rev and $10Mil NI and nothing was put back in, now the place is full of machinery made from the 1890′s-1960′s with electronic controls added in the 80′s. (when the 10 year contract they signed with us not to compete directly in our product catagories ends, its over), they make every other product catagory for everyone else already.

    • 0 avatar
      stuki

      If every single carmaker simultaneously decided to commit harakiri, taking every parts supplier with them to wherever dead carmakers go, “we” would still not be “screwed.” All the ingredients required to make all required parts will still be available. Margins would be fantastic for any first mover, who’d get to sell competition free; and pretty soon we would be back to so called “oversupply” again.

      Same goes for banks, by the way. And ‘health care”. And everything else; specifically including governments and the useless, self promoting slick willies populating them.

    • 0 avatar
      TomHend

      Poised to win?

      I will bet you a $1000 Obama does not win re election.

    • 0 avatar
      AJ

      Obama is poised to win a 2nd term? LOL

      • 0 avatar
        TomHend

        Just for the record I dont like Rommney either or Ron Paul, I live in NYC and Obama is hated here.

        Dewey defeats Truman.

        Bet me, TTAC can hold the money.

      • 0 avatar
        highdesertcat

        Obama has his re-election sewed up! It’s in the bag.

        I’m an Independent and don’t care for either of the candidates this year but those who claim to be Independents and take a side are not Independents at all, since one candidate is as bad as the other for America.

        That’s not being Independent. Voting against someone is the same as voting for the other. To be Independent you have to weigh both sides and then decide which side to vote for by giving up being Independent.

        A true Independent would abstain from voting for either candidate if the candidates are equally bad. That’s the problem with our two-party political system. No choice, if both sides are equally distasteful. Talk is cheap and that’s all politics is. Hope and Change anyone?

        Obama only cares about keeping his own job and his track record for the past term is abysmally bad for most of America, except for what he did for the UAW, GM, Solyndra and a host of other failed initiatives.

        Romney wants to be elected so he can have another feather for his accomplishment cap. He doesn’t need to work. He’s comfortable and well off without being elected president. Romney does not have the support of the majority in America so he can’t get elected.

        The biggest bone of contention is Obamacare and it is based on Romneycare. So what’s the diff? One is as bad as the other.

        The people who are paying for Romneycare in Massachusetts hate it, and the people enjoying the free health care love it.

        Creating jobs in America would require Congress to enact a national economic policy that rewards businesses to operate in America, not tax them to death as they are now. That won’t happen no matter who is president.

        The Dems and the Repubs will sort this thing out. It remains to be seen if true Independents can step up to the plate. Obama will easily get re-elected unless the Independents choose to back Romney. I doubt it will happen.

      • 0 avatar

        If you don’t see the writing on the wall, then you are probably one of those people who’se so hooked on Conservative news you thought Palin was leading in the polls by 3 points by November 3rd, 2008.

        Guess what – this election is about ENTITLEMENTS. Romney is gonna eliminate them, Obama is going to keep them – maybe even expand them. Obamacare can’t simply be eliminated – it’s with us like the Bush tax cuts now.

        If you really thing a bunch of cash poor Americans whose 30 year old kids (and spouses) are living in their basement because they either can’t get a job or can’t get a house are actually going to vote AGAINST Obama’s handouts, you are mad.

        Social Security is dead. Pensions are being eliminated to the generations following myself and our jobs are over in Asia.

  • avatar

    and they continue to do the same ineffective, brand damaging, and wasteful marketing… meanwhile expecting different results.

    Return to Greatness would bring 5 points of market share in 6 months and lower expenses. still no one at GM is willing to try it. any wonder there is another Death Watch? here’s to hoping RF chirps in.

    • 0 avatar
      tuffjuff

      +1

      Firing Ewanick, and all the stupidity that has been uncovered as a result, does them no favors, and their management, overall, seems completely clueless.

  • avatar
    BrianL

    While GM isn’t making the best cars right now and the mgmt isn’t great, talk of bankruptcy right now is very premature. They have lots of cash in the bank and are turning a profit every quarter. As long as they can do that, it doesn’t matter if they can borrow money or not, because they have enough to last a good while.

    • 0 avatar
      Mark MacInnis

      Hmmmmm. Where have we heard the phrase, “talk of bankruptcy is premature” before?

      One can only imagine the level of schadenfruede welling up at Chez Farago at this very moment…

      • 0 avatar
        BrianL

        GM is no where near the position they were during 2007 and 2008. So, sure why not compare the two statements to mean the same thing during completely different times.

        I agree that GM isn’t where it needs to be, but it is MAKING MONEY and has lots of MONEY IN THE BANK. 2 things that it wasn’t doing before bankruptcy. If GM was losing money again, we would be having a different conversation, but they aren’t.

        GM probably should have went into bankruptcy before 2007 the first time. But explain to me why we SHOULD be talking about barkruptcy now when GM is turning a profit and has money in the bank? Seriously, why?

    • 0 avatar
      jayzwhiterabbit

      Correct. There is really no reason for this entire “Deathwatch” article other than 1. to bash GM (as usual for TTAC), and 2. bash Obama. Even Forbes’ readers thought the original suggestion in that publication was ludicrous.

  • avatar
    Felix Hoenikker

    It’s all a ruse. GM planted this story so they can have some leverage closing one or more of the Opel plants in Europe. The general would be in pretty good shape if he wasn’t hemmoraging money at Opel.

  • avatar
    nickoo

    I read that article, frankly from a business standpoint, it was awful. I’m no GM supporter and feel they have made some terrible product/branding mistakes, but I expected more financial/investor analysis from forbes than that article provided.

    • 0 avatar
      KixStart

      I was about to post something similar.

      The article indicates GM is dying because they made a potentially poor decision on wheelbase for the 2013 Malibu.

      The Malibu is just one car. The design team didn’t pick a shorter wheelbase for fun, they expect to reap some kind of benefit from it.

      If GM is going to go down again, it’s going to take more than 4 years to do it. And, if we’re not in the middle of a fairly severe recession when this happens, it would probably be safe to let GM go into bankruptcy and reorganize in a more normal way.

    • 0 avatar
      iainthornton

      Forbes has become poor (although it was already overrated).
      It has always been too biased in it’s motivation.

      I remember one article referring to Sir William Lyons as Sir Lyons. I found it extraordinary that a magazine proclaiming itself to be of that calibre could let such a ridiculous slip be published.

    • 0 avatar
      Luke42

      “I expected more financial/investor analysis from forbes than that article provided.”

      Yeah, they were awesomely educational reading when I was a kid. I picked up an issue recently, though, and was greatly disappointed by the lack of analysis and the uptick in ideology — at least compared to what I remembered as a kid.

      I head Harvard Business Review’s blog, now.

  • avatar
    geeber

    The author of the article misses the real problem with the Malibu. It appears as though GM has largely phoned in the effort with the new Malibu, while lavishing time, money and attention on the Cadillac ATS.

    GM management still apparently doesn’t realize that it needs a Malibu that can beat the Camry and Accord more than it needs a Cadillac that can beat the BWM 3-Series. The ATS, of course, is much more glamorous and exciting than the Malibu, not only to journalists covering the business, but to the people who work in it. But Chevrolet is crucial to GM’s revival.

    Not to mention the fact that the ATS is as good as it is precisely BECAUSE the team working on the car was able to circumvent the normal new-vehicle development process to some extent.

    Talk of bankruptcy at this point is definitely premature. GM does, however, desperately need a thorough revamp of its corporate culture.

    • 0 avatar
      jkross22

      “GM does, however, desperately need a thorough revamp of its corporate culture.”

      It’s impossible to imagine a situation where a corporate culture chlorination will occur. BK was the opportunity, but like many things in 2008, opportunities were passed up to curry favor with those who would keep writing big political checks.

      Banking reform? Hah.
      Substantive changes to GM corporate leadership? Not when union checks need to keep flowing.

      GM is still the proverbial tired swimmer.

    • 0 avatar
      28-Cars-Later

      You make some very good points my favorite being this:

      “GM management still apparently doesn’t realize that it needs a Malibu that can beat the Camry and Accord more than it needs a Cadillac that can beat the BWM 3-Series.”

  • avatar
    Pch101

    The mediocre Malibu = bankruptcy argument is so incredibly bad that Forbes should be a wee bit embarrassed for allowing one of its bloggers to have published it.

    That isn’t to say that GM is a wonderful company (it’s mediocre) or that the Malibu is a fantastic car (the small back seat will probably prove to be the problem here), but GM has a decent balance sheet and modest margins, which don’t suggest bankruptcy in any way whatsoever.

    As far as short-run profitability goes, the most important product is the upcoming Silverado. If that can’t compete against the F-series pickups without severe discounting, then expect things to be fairly tepid.

    • 0 avatar
      geeber

      The concern about the Silverado is one that the article misses – namely, that GM’s latest new vehicles have been somewhat uneven in execution. The ATS appears to be a homerun, but the Malibu leaves me scratching my head. The Malibu, however, is probably the more important vehicle. Which suggests a continuing problem with management priorities and corporate culture.

      I honestly don’t know what to expect regarding the new Silverado.

      • 0 avatar
        Pch101

        “the Malibu leaves me scratching my head.”

        In part, some of the Malibu criticisms may prove to be excessive, in that the negative comments are largely confined to one drivetrain (the mild hybrid), rather than of the car as a whole. Since most retail sales will probably be of standard-issue four-cylinder models, that won’t matter much.

        The issue with the Malibu that is relevant is the choice to use a world platform for a segment in which world platforms typically fail in the US. Americans generally demand larger back seats in their midsize sedans than what is typical abroad, yet GM decided to save costs by going with one sizing. (What’s especially puzzling is that GM did this even though it won’t be selling the Malibu in those other markets; this is sounding pennywise and pound foolish.) Anyone who is serious about competing in this segment has no choice but to make a US-oriented product, with a rear seat to match.

        As for the ATS, I think that it’s reasonable for GM to try to compete against the Germans. (If anything, they have no choice.)

        The problem is that Cadillac is a distinctly American brand. BMW can build a 3-series and sell versions of it throughout the world with prestige and a price premium to match. In contrast, Cadillac is not a global brand and GM doesn’t carry the branding firepower to compete against the likes of BMW and Mercedes.

        GM can spend gobs of money on R&D for a luxury car, yet can’t expect to get a return on that investment because the sales will be low due to this lack of a global presence. Cadillac may have a shot in the American market, but the idea that the same branding will work globally is, at the very least, misguided.

    • 0 avatar
      dolorean

      We are also talking about a very right wing leading rag whose owner thought to run for President not too many years back. Steve Forbes had to be the character design for Crazy-eyed Guy in Adam Sandler’s ‘Mr. Deeds’, complete with that creepy giggle Steve has.

      • 0 avatar
        FreedMike

        Bingo. No accident that this article is appearing right after all those ads Obama’s running touting the revival of GM.

      • 0 avatar
        DrSandman

        So… Steve Forbes who never garnered more than 5% of any GOP primary employs a writer to write a financial story for his financial magazine, and this makes the Malibu a good car how?

        Leave politics out of this. This is a car site. Take your hatred of 1/2 the country elsewhere.

      • 0 avatar
        KixStart

        I think dolorean’s right. There’s no financial basis here for declaring GM dead but it is somehow important for Forbes to run an article declaring the bailout a flop?

        And it’s not “hatred of 1/2 the country” to say Steve Forbes has a political agenda near the way the cries of “Obama’s a Nazi” or “Obama’s not really a citizen” from disappointed McCain-Palin supporters was “hatred of 1/2 the country” – specifically the well over half that won the election when they voted him in.

        Plenty of people who have never garnered a single percentage point have political agendas. Forbes has proven that politics is extremely important to him by actually running for office. It’s shouldn’t surprise anyone when his politics spills over into his magazine.

        Forbes published an article by El Lutzbo the other day, attacking government interventionism, which is rich considering that El Lutzbo and his Volt could be poster pictures for government interventionism. But El Lutzbo now attacks the Obama administration, so he is welcomed to Forbes with open arms.

      • 0 avatar
        Pch101

        “Leave politics out of this.”

        I agree. However, Forbes has a tendency to politicize these things and to skew them to the hard right, even though it is purportedly a business magazine. If you want to complain about an inappropriate mixing of politics with other subjects, then go complain to Forbes.

        The “analysis” provided by the Forbes blog is garbage. If you wanted to use this guy’s assessments as a basis for making investments, you’d probably lose.

        GM has its issues, but pending bankruptcy is not one of them. Nobody who can analyze a financial statement could possibly believe that.

        (The wingnuts see things differently, of course, but they’re called wingnuts for a reason.)

      • 0 avatar
        tuffjuff

        @DrSandman

        If your question is “does somebody in a position of power and influence REALLLY want to impose personal opinion or bias on something that will changes somebody else’s mind” then the answer is YES, YES THEY WOULD.

        Duh.

    • 0 avatar
      DrSandman

      I would like to like the Malibu, but I don’t. My kids — my lovely girls — will soon be 6 feet tall. Or possibly taller, I guess. The problem is that we FEED kids here in the states.

      As much as I want to be selfish and get a “ME”-car, I’ve got to fit “US.”

      • 0 avatar
        bill h.

        However, I’ve seen news reports that in Europe and even Asia, the younger generation of adults are actually taller on average than their American counterparts, as nutrition improves elsewhere in the world (and presumably, declines in the US). How this plays into car rear seat designs and roominess is not clear to me.

      • 0 avatar
        CJinSD

        How much of that average height reduction is due to our changing demographics? I’m only 6’2″, but I look like Gulliver in Mexican vacation photos.

  • avatar
    TruthTorpedo

    The author of this Forbes piece is a well know Republican and all around hater of the Obama admin and GM.
    Forbes has already distanced itself from that poorly written and reasoned opinion piece
    http://www.forbes.com/sites/joannmuller/2012/08/16/leadership-not-another-bailout-will-fix-general-motors/
    I really like TTAC site and log in often but I wish their obsession with GM was a little more balanced.

    • 0 avatar
      28-Cars-Later

      I’ve brought up the frequent GM coverage in the past. I think part of it its GM generates so much drama and most of the other automakers simply do not. I’ve seen quite a few very good pieces on the other ones over time, the volume of GM issues just seems to be so much greater.

      • 0 avatar
        chuckrs

        GM does generate more drama. “Mentally deficient fella sticks fingers in light socket yet again” will always be more newsworthy than “moderately competent guy goes about his life”.

      • 0 avatar
        highdesertcat

        Even though I’m against government bailouts, handouts and nationalization of any kind, anytime, anywhere, to anyone, I had high hopes that the bailout of GM would be different and that GM could indeed stage a comeback.

        The drama is that we have a rich history, over decades, of the events leading up to GM’s demise in 2009, in spite of all the warnings sounded by the industry analysts over those same decades.

        Nothing appears to have changed because of the bailout. Unless and until GM can attract enough buyers to become a self-sustaining, viable company, we are doomed to repeat this scenario over and over again.

        It would have been better to dump GM like we did Chrysler. Then again, no one would have them. It only took $1.3B to bribe Fiat to take Chrysler off our hands, but baby, look at them go now!

  • avatar
    redav

    Would it be accurate to say that GM has their foot on their own throat? It seems that their biggest problem is their structure & culture, and without changing that, they will end up right back where they were.

  • avatar
    TEXN3

    It’s ironic that the person writing the counterpoint is associated with a car blog that posts worthless crap…and also posted a rather interesting lead to this same article yesterday. Yeah, I still cruise all the car blogs just to see the pretty pictures.

  • avatar
    Rick Astley

    If I may quote your august founder, Robert Farago, a quip from an aged GM Death Watch article:

    “Even with some pertinent strings, the money will simply enable Detroit to continue its addiction to stupidity, sloth, greed and arrogance.”

    If the Forbes article was written by an Obama booster or hater, there is certainly a feeling that the bailout of GM has not had a meaningful, measurable, impact upon the (percieved) corporate culture or product offerings.

    • 0 avatar
      FreedMike

      Anyone who thinks GM’s products aren’t a LOT better since the bailout simply isn’t paying attention, or has some built in bias. There’s no question they’re making better product now.

      As far as the Malibu is concerned, it’s not a dazzling car, but it’s certainly competent and appealing. In this segment, bland sells – sad but true. If that weren’t the case, then the bestseller would be the Sonata.

      • 0 avatar
        geeber

        A new model that is “better” than the previous version still isn’t enough, particularly if the company in question is tainted by 30+ years of subpar products and a recent bankruptcy caused by that salient fact.

        GM isn’t going to get anyone out of a Camry or Accord (or even a Fusion) by claiming that the current Malibu is better than the old one. It has to be BETTER than its competitors, and, so far, based on the reviews, it’s not.

      • 0 avatar
        Rick Astley

        I’ve taken two people shopping for cars within the past year and a half(something I abhore to do since the plebes tend to like such boring cars) including ill fated trips to the offerings from GM.

        Either their products are sub-par compared to the competition, the employees were plucked straight from the food bank line, or a combination of the two.

        Purchases from Toyota and Mazda were made.

        I grew up with a “chevy” family and could never understand why the family like the garbage they drove. If GM’s products were 400% better than they were 10 years ago then they would only be 200% worse than the competition.

      • 0 avatar
        Pch101

        “Purchases from Toyota and Mazda were made.”

        If there is an auto company that is likely to stop doing business in the United States over the next decade, then I’d place Mazda pretty high on that list, not far behind Suzuki and Mitsubishi.

      • 0 avatar
        jkross22

        Person A: I used to think correlation implied causation. Then I took a statistics class. Now I don’t.
        Person B: Sounds like the class helped.
        Person A: Maybe.

    • 0 avatar

      also from the illustrious one as he summarized things before walking away…

      “And there you have it: the one way General Motors could re-engage my interest. It’s left field stuff alright, but I’m tired of GM Groundhog Day. Without anything even remotely resembling real change at the top, there is no hope for a happy ending. Not for GM’s employees, customers or taxpaying patrons. Dollinger or die. That’s my final offer.”

      http://www.thetruthaboutcars.com/2009/10/general-motors-zombie-watch-18-hire-buickman/

      ‘luv the guy.

  • avatar
    FreedMike

    Obama is using the revival of GM as a selling point for his re-election and Forbes magazine is owned by a guy who twice ran for president as a Republican.

    http://en.wikipedia.org/wiki/Steve_Forbes

    And the writer himself? Well, if you look him up on the FEC website, you’ll find he’s given over $40,000 to Republicans over the years.

    Any questions?

    Didn’t think so.

    I’ll give Baruth, who rails all the time about journalistic ethics, the benefit of the doubt and say he didn’t pick up on the fact that this blogger, and the guy who’s writing his paychecks, are both right wing partisan opponents of Obama. I’ll just assume Baruth didn’t make the connection. I don’t want to entertain the alternative thesis.

    • 0 avatar
      geeber

      So, in other words, that means we can’t trust either one of them regarding their take on GM’s “revival.” Thank you. That still doesn’t address GM’s inferior financial results compared to Ford (despite Ford’s higher debt), the rather lackluster new Malibu or the continued turmoil in GM’s executive suites.

      • 0 avatar
        DrSandman

        Doesn’t matter how good enthusiasts think the car is. (Generally, “meh.”) Doesn’t matter who wrote the article. (Could be Heartland, Dick Cheney’s Minions, or any of the legacy alphabet “news” networks).

        All that matters is how much profit they generate for the corporation.

        You actually took the time to look up the political contributions of the writer? Jeesh! How deep is your hate?

      • 0 avatar
        FreedMike

        @geeber:

        Yes, I expect people to keep their politics out of articles, at least as much as possible. This guy doesn’t event try – it’s a hit piece, plain and simple.

        Most of the article consists of either standard right wing talking points about the bailout, how great VW is (apparently he loves the Passat because it has a big back seat), and how the Malibu placed last in a Car and Driver comparison test.

        He makes a big deal of the Malibu’s supposedly small back seat, but neglects to mention that the worst car in test in that regard was actually the Kia Optima.

        He might have also mentioned that the car that placed next-to-last is the Toyota Camry, which is the best selling car in the country, but then again, Obama didn’t save Toyota.

        He mentions how bad the Eco engine is (which is the main reason C/D didn’t like the Malibu), but doesn’t mention that there are currently other engines available.

        Worth noting: none of this necessarily means GM is going to bankrupt, which anyone with an ounce of neutrality would agree with, but that’s all this guy needs to proclaim imminent doom.

        Clearly this was a hit piece, and given this guy’s politics, the motivation for it couldn’t be clearer.

        My criticism would be the same if it were written by some I agree with politically.

      • 0 avatar
        geeber

        FreedMike:

        Do I believe that bankruptcy for GM is imminent?

        No.

        Do I believe that Mr. Woodhill accurately and concisely summarized why GM is still not firing on all cylinders?

        No.

        But I also don’t believe the president’s claim that GM is back on track or fully revived. It is most definitely NOT firing on all cylinders.

        This a company that had its debt washed away and received a substantial injection of taxpayer money. Two extraneous divisions (Pontiac and Saturn) were shuttered in the process, and its ineffective leader was removed by the president’s recovery team – both of which were sensible moves.

        GM should, therefore, be much more nimble and, one would hope, much smarter. But, from what I’ve seen, it is not.

        This is a problem that awaits someone with a more austute understanding of the automobile business than Mr. Woodhill to analyze and address.

        The fact, however, that a Republican-leaning writer who is a member of the Club for Growth says that GM is going bankrupt does not mean that ANY mention of continued problems at GM is either, a. false, or b., politically motivated.

        And here is Car and Driver’s take on the “standard” Malibu with the 2.5 four-cylinder engine:

        “In certain aspects, and for undiscerning buyers, the Malibu 2.5 can satisfy. It’s quiet in everyday use and offers decent power, but its handling doesn’t inspire driver confidence, and the interior packaging is disappointing. Substituting a different engine does not address most of the issues that pushed the Malibu Eco down the scorecard in its comparison test.”

        That’s not exactly a ringing endorsement.

    • 0 avatar
      FreedMike

      @DrSandman:

      I’m not sure why you’d think I hate the guy. My mother’s a Republican and I certainly don’t hate her. The question is whether this guy’s an active political opponent of someone he’s trashing in his article, and he clearly is. My concern would be the same if it were someone I agreed with politically. A hit piece is a hit piece.

  • avatar
    Rday

    Well I think that GM is a damaged brand. I only have one friend that drives a GM. And I have many friends. Most drive Toyotas or Hondas. So GM will get a certain number of sales from companies and rentals, but I think that they have already lost the game and the heart of the American consumer. They just don’t get it and probably never will. They will dribble away their worth and end up a much smaller company. I don’t think that the government will ever get their investment back. So why should hard working people care about a company run by overpaid and corrupted management and unions? They really need to go away and let some other company build cars the way that it is economically profitable and efficient. I think that GM is an embarrassment to the American people and our nation as a whole.

    • 0 avatar
      FreedMike

      I’m Mitt Romney, and I approved this message, but I originally didn’t.

      • 0 avatar
        jkross22

        Truth hurts, huh?

        It’s a pity you won’t acknowledge the obvious – that GM didn’t fix anything except having the government erase it’s debt and negotiate so that the UAW has a seat at the table. All of the cultural problems are still festering.

        I guarantee that if the government paid off my house, paid off my wife’s student loans, paid off my car and paid for my daughter’s pre-school, AND LET ME KEEP USING THE INTEREST DEDUCTION EVEN THOUGH I’M NOT MAKING HOUSE PAYMENTS, I’d have a lot of money in the bank.

        That is GM 2012.

        It’s one thing to root for your ideological team – quite another to not acknowledge reality.

    • 0 avatar

      wow. an excellent summation and expression that basically sums up the general attitude.

    • 0 avatar
      28-Cars-Later

      Yes excellent summation, simple and to the point.

    • 0 avatar
      200k-min

      And here’s my frusturation with American Chpt 11 bankruptcy law. It doesn’t let the weak and poorly run fail. This most often happens in the airlines where the weak are saved and the mostly unargued better airlines (Southwest, JetBlue, etc.) are never allowed to fill the void the failed airlines would leave if liquidated.

      GM FAILED in 2008, plain and simple. Sure, they have *some* good things and those should have been sold off in Chpt 7 liquidation. I’m sure the Silverado and Corvette and Suburban would still be around, but the management and the groupthink and all the fat would’ve been gone. Chevrolet has name recognition and I’m sure it would be a tough pill for a Chevy guy to swallow if his Chevy were owned by Toyota (or whoever) but that’s life.

      GM will fail again because they weren’t allowed to truly fail. The feds bailed them out and kicked the can down the road keeping in place all the things that were the problem. History will repeat itself.

      • 0 avatar
        jkross22

        “It doesn’t let the weak and poorly run fail.”

        You are correct to an extent. Ch 11 is a mulligan – a 2nd chance for a company to get it’s act together if it makes substantive changes.

        By this simple definition, GM did not go through bk. I agree with the broader point of your post. It’s still the same old GM.

  • avatar
    juicy sushi

    So Jack, how’s the Lambo?

  • avatar
    redmondjp

    Let’s leave politics out of this and focus on the interior elephant for GM: two decades of straight-arrow decline in market share. There is tremendous inertia there that will take an incredible effort to turn around. No matter how good their products may be now, if they can’t stop the decline at a minimum, they will become the next Rambler/AMC of the industry (with GM’s light trucks continuing on like the Jeep brands of AMC did).

    Take a look at the charts from this earlier post here at TTAC and it is plainly evident:

    http://www.thetruthaboutcars.com/2011/04/chart-of-the-day-gms-monthly-retail-market-share-2008-2011/

  • avatar
    rpol35

    “Your humble author would suggest that it is Toyota, not Volkswagen, that has its foot on the General’s throat, but that’s a minor point.”

    I think GM has its own foot on its own throat; they are their own worst enemy. Dan Akerson? “Meet the new boss, same as the old boss!”

  • avatar
    billfrombuckhead

    Japan announces that the government is going to subsidize Toyota moving production abroad. Maybe we should let China take over GM and let the People’s Liberation Army subsidize them like Korea does Hyundai and Japan does Toyota. America is never beaten by more capitalist nations but is routinely beaten now by more socialist ones. America doesn’t deserve a manufacturing based anymore, small government leads to 3rd worldlike irrelevance which is where America is heading. The Chinese government will do all the great things in the world and America will fade into becoming a backwater like the UK.

    • 0 avatar
      geeber

      “GM” is not synonymous with “America.” They aren’t the same entity.

    • 0 avatar
      CJinSD

      Wow. There really are people that would strip all of our freedoms and humanity to preserve organized crime’s grip on our manufacturing base.

      • 0 avatar
        billfrombuckhead

        Saving GM from unfair foreign competition and Wall Street driving the economy into the ditch= totalitarianism! ROFL! I guess those European socialist states are really gulags in disguise.

        BTW, as bad as China is it has less people in jail per capita than the US. The US is hardly the land of freedom anymore if it ever really was. Yes, one is free to buy a gun to shoot your neighbors and one is free from having to buy healthcare insurance or joining a union.

      • 0 avatar
        geeber

        Might help to dig a little and discover why China has fewer people in jail than the United States. I seem to recall stories about mass executions of criminals a few years ago. That is certainly one way to reduce the number of prisoners.

        And GM was the victim of “unfair competition?’ Yes, building superior products for less money is really unfair! Boo-hoo-hoo.

        Never mind that the techniques used by the competition to achieve this goal – Toyota and Honda in particular – were known to all and could have been adopted by GM. The problem was arrogant management and, to lesser extent, a stubborn union. They shot themselves in the foot.

    • 0 avatar
      rpol35

      “The Chinese government will do all the great things in the world and America will fade into becoming a backwater like the UK.”

      Yeah, like censor what you think, read, hear, see, do; things like this very TTAC platform. So, ah when are you moving? I understand the Apple plant is looking for under-stressed workers that won’t permanently check themselves out at the end of their shift.

    • 0 avatar
      Zackman

      The Chinese will invent all the new stuff? I don’t think so, but they may well manufacture it for us…

      Credit where credit is due: The Chinese invented firecrackers!

  • avatar
    ABankThatMakesCars

    I’m convinced that Farago was threatened to stop writing for this site by the gov’t or GM. He will never admit it.

  • avatar
    areader

    “Forbes has proven that politics is extremely important to him by actually running for office.”

    I’d change that to “Forbes has proven that his ego is beyond control so he runs for office without a snowball’s chance in hell of getting any significant support”. If he looks like a nut, sounds like a nut and acts like a nut, maybe he’s a nut. But his daddy left him barrels of money so he can be a nut in public. Oh for some reality TV of his sycophants telling him that he has support and he’ll make a difference. Ditto for Herman Cain, Newt, Perry, Edwards, etc.

    • 0 avatar
      FreedMike

      I think it’s pretty hard to compare Steve Forbes to any of those candidates – I’d say he was quite rational. His main problem was that he hung his candidacy on his flat tax concept, and that never really caught on with his party.

  • avatar
    racingmaniac

    Interesting that GM gets lambasted regardless what they do on TTAC. Recent piece by Jack reviewing the rental Cruze against the rental Impala(305hp V6 model) has him criticizing their new direction. Recent article also sees him complaining about ATS isn’t a car Cadillac needs to built to compete in the market place. Impling that the old GM is somehow better? I drove an Impala recently and it was categorically awful. I am glad they don’t make cars like that anymore…So if their old cars are shit for the market(except maybe TTAC people), and their new cars are shit for the TTAC/critics(which I believe the new “cheap” VWs are also, and we know how “poorly” those sells). What else should they do? No argument on the Malibu launch was handled poorly. A really unfinished model line led with a poor first model is never good news. But the rest of their new product seems to be doing quite well, and when the more mainstream version of the Malibu comes out, whose to say it would not be competitive….

  • avatar
    schmitt trigger

    What happened to Charles E Wilson’s famous: “what is good for GM is good for America” ?

    • 0 avatar
      Zackman

      ““what is good for GM is good for America” ?”

      Heh, heh…look around and see what’s happened in the last 30 years!

    • 0 avatar
      Dan

      At that time GM was the largest and most successful company in the US (and the world, needless to say) with around 600,000 direct employees and another 3 million in their suppliers and dealers.

      What’s good for America was good for America’s strongest and most successful businesses. Was, still is, will continue to be.

      What happened is GM crossed themselves of that list of successful businesses. One awful car at a time.

  • avatar
    GM1963

    Being a long time reader of TAC and having read every single GM Deathwatch published by TAC and having worked in a GM plant in Detroit for 22 years and then going on the staff of the UAW assigned to the GM department for 16 years working with GM executives at all levels ,short of the CEO.I would say another GM bankruptcy ,from any perspective is a big deal.But it is a well traveled path(no pioneering required).There is very little happening in GM today that was not happening as far back as 2003 at GMIf Jack Barth is to take on the task,or whoever then that person MUST read all of the first Death watch posting sand help EVERYONE to understand what is going on.What is different this time around is the political system of our society has become an out side self serving force in GM that cannot and will not be denied .If all this second Deathwatch is to be (as it appears) is a thoughtless posting of newspaper articles that one can find in a GOOGLE search,why bother.

  • avatar
    Robert Schwartz

    I started calling for a new Deathwatch several weeks ago when Akerson first went off on the marketing guy.

  • avatar
    Dimwit

    This article is a rather convenient piece of tripe that has come at the right time. I wager that there will be a few more as GM gears up for negotiations with CAW. Perfect spin doctoring that will subside magically after the new contract is settled.

    The NHL Owners Assoc. should be taking notes.

  • avatar
    chicagoland

    GM can just change name to the “Buick Motor Co”, like Chrysler/Ford are named. Buick was the 1st GM brand, anyway, and the GM name has negative cannotations. Or “Chevrolet” or “Cadillac” Motors.

    Also, there are still uninformed people who think GM means “all of Detroit’s cars”.

  • avatar
    50merc

    Criminy, there’s that misquote again. From Wikipedia:
    “Wilson’s nomination [as SecDef] sparked a major controversy during his confirmation hearings before the Senate Armed Services Committee, specifically over his large stockholdings in General Motors. Reluctant to sell the stock, valued at more than $2.5 million, Wilson agreed to do so under committee pressure. During the hearings, when asked if as Secretary of Defense he could make a decision adverse to the interests of General Motors, Wilson answered affirmatively. But he added that he could not conceive of such a situation “because for years I thought what was good for the country was good for General Motors and vice versa.” This statement has been misquoted endlessly in the inverted form of “What’s good for General Motors is good for the country” as an example of the self-centered business attitude.”
    Note: in order to serve his country, Engine Charley agreed to sell his GM stock! At 1953 tax rates he would have paid something like 40% of the capital gain in taxes. Quite a sacrifice, and on top of the loss of income while in Washington. But it seems only Geeber and I are impressed by such things.

  • avatar
    oldyak

    Dan Akerson has gotta go!!!

  • avatar
    nrd515

    I think GM will be OK, in the short (five years or so) term if they do a good job on the new Silverado/Sierra. A friend of mine is truck shopping now and isn’t even considering the present trucks. He drove one a few weeks ago and said he liked his 2001 Sierra better, and it was 11 years old! It’s down to a Ram or F150, with the F150 the probable winner, mostly because his wife’s brother is the sales manager at a Ford dealer in Michigan.

  • avatar
    Volts On Fire

    Love it. Love it. LOVE IT.

    Anything that pounds home the message that GM is close to failure is a beautiful thing. This is war.

  • avatar
    Lynn E.

    History. When did the old GM last earn a profit? Was it in the 80′s or 90′s? GM started to loose market share when VW came in the 60′s and really lost share when Toyota came in the 70′s. GM’s market share has never recovered, they are just another car company in a market with probably 2x too many car companies.

    With their present management, with their hubris, lack of any market niche, lack of a broad range of products like Mercedes or Toyota, awful sales people, and ill will from previous owners new GM’s chances are dismal.

    If I was in charge I would immediately sell every part of GM possible, run away from toxic sites like the old GM did, invest in water distribution projects, and support beautiful women who think they can be movie stars.

  • avatar
    ZoomZoom

    GM is dead to me because they unapologetically made awful and even dangerous products for decaces, and then they took the bailout. I will never buy another GM car.

    I believe Obama would bail them out again. And again. And again. It is just part of his philosophy that we cannot take care of ourselves. And there are many willing participants in this philosophy, from the mainstream media to union leaders to congress to school teachers who teach our next generation.

    This is a losing battle and we are not yet willing to turn it around. Until we do, we’re just whizzing into a headwind here.

    • 0 avatar
      highdesertcat

      Some would say that America has evolved from what it was to what it is today. So it depends on whether a person is on the receiving end of the benefits or on the end that’s paying for those benefits others can live large on.

      Those who can, have totally detached themselves from contributing to the current system.

  • avatar
    ihatetrees

    I’m no fan of GM or the bailout. That said, the company looks financially ok for the next few years.

    Regarding bankruptcy, there are a lot auto firms / brands worse off than GM. Small-ish firms/brands do not look good.

    Fiatsler is in trouble given the Euro issues. Mitsubishi in the US is withering away. I like Mazda, but without a partner, they don’t look good.

  • avatar
    islander800

    If it should come to it again, don’t doubt for a moment that GM will be bailed again.

    A while back, during the first bailout crisis, there was an illuminating discussion on Autoline Detroit’s “Autoline Afterhours”, where host John MacElroy interviewed a guest knowledgeable about the supply chain in the industry. The point was that second and third tier suppliers, many of them independent specialty machine shops, also are intergral to the supply chain of military contractors and sub-contractors. Seems that for many of them, upwards of 40% of their business comes from defence work. If their auto industry contracts disappeared, they’d go under. That would put defence contracts to DOD in danger. A little known fact (because the MSM decided to cover the Kardashians instead) is that the White House and auto bailout team were identifying and helping the most critical of these suppliers out at the same time as GM and Chrysler, to avoid a supply chain meltdown that would directly impact mational security.

    I don’t care how much howling you hear from Tea Baggers and their misguided, blinkered fellow travellers: when push comes to shove again, GM will be bailed out – again – because not to do so would risk national security.

    Seems things really are interconnected in our complex world.

  • avatar

    Bailing out GM was not the worst thing this buffoon in White House did during his first 4 years. Horrible healthcare reform, late and unrealistic unrealistic budgets, wasteful and useless stimulus packages, inability to decide with tax code until New Years eve, wasting trillions on implementing European style socialism and same time cutting budgets in areas critical to National security like fundamental scientific and technical projects, nuclear energy and NASA – all it much more damaging to future of United States than bailing out GM. His reforms are basically relegating US to third world banana republic status. Four years of more of him? Yeah right – watch “2016: Obama’s America” in theaters near you http://en.wikipedia.org/wiki/2016:_Obama%27s_America.

    Regarding Forbes – it became Fox news outlet so they will bash GM no matter what only because of Obama’s involvement. Many things he write in article do not make sense. He bashes Malibu for wrong reasons. First nobody is going to buy Malibu Eco and Malibu with more modern 2.5 engine is not out yet. Second Malibu is made on smaller short base for reason – it is smaller than Passat and Accord. There is a Malibu with longer wheelbase and it is called Impala. Passat and Accord are pretty big cars – the same size as Impala. And new malibu is worse than previous Malibu. Seriously? Did he even drove Malibu. I drove Buick Regal and it is excellent car and BTW the European car of year which Passat is not. Appliances like Honda Accord or Camry better than Buick Regal – are you kidding?


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Authors

  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Matthias Gasnier, Australia
  • J & J Sutherland, Canada
  • Tycho de Feyter, China
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Faisal Ali Khan, India