By on August 19, 2012

This time on Ur-turn, reader Erikstrawn weighs in on an issue that kept TTAC busy for years: Will GM go bankrupt?  After all those years, Forbes woke up to the issue and wrote a long article on same.

While we are at it: Parts of the Forbes article was written with generous help from TTAC. What bedeviled the magazine to quote an article on Volkswagen’s Winterkorn checking a Hyundai at a motor show is anybody’s guess. While Forbes acknowledged TTAC as a source, the magazine did so without adding a link, which is considered both common and professional courtesy in the business. Also, the rather generous “quote” from a TTAC article was more generous than the formatting at Forbes made believe. Letters to Forbes were not returned. Both common and professional courtesy must run short at the magazine.

With that said, now it’s Ur-turn:

There’s a big argument online this last week over whether or not GM is really going bankrupt again, and it seems to have been started by a politically motivated piece on Forbes.com. I’ve been keeping an eye on GM’s situation, and I don’t think GM’s going bankrupt any time soon, but I think they eventually will if they don’t change what they’re doing.
GM’s stock price is almost 50% lower than during their IPO, and the government still owns about a quarter of it. GM is flush with cash, just issued a 5-year bond, and has made ready lines of credit. While that might make them feel more secure, being able to borrow lots of money and throw it around didn’t save them from bankruptcy the first time around. When Steve Rattner and the rest of the government salvage team got to GM, cash was being thrown at every problem with no accountability. Cash is the lifeblood of a company, but it’s not a foundation.

GM’s foundation should be built on a bread-and-butter car. If your best-selling car isn’t what you depend on to pay the bills, you’re in trouble. GM spent a lot of time and money to make the new Cadillac ATS competitive with the BMW 3-series and paid for a lot of press to proclaim it a BMW-beater, but they forgot that it’s a niche car with far fewer sales than their mid-sized family car, the Malibu. They cheaped out on the redesign of the Malibu by using an readily available global platform, which made it more cramped than the rest of the competition and positioned it too near the Cruze for the price. Then they botched the launch by releasing it 6 months early to avoid the launches of the new Accord and Fusion. If it were truly a great redesign, then why were they worried about the competition? They knew they’d cheaped out. To make matter worse, they didn’t have the new powertrain ready yet, so they threw in their old hybrid powertrain that gets worse gas mileage than the competitor’s non-hybrid powertrains. To throw even more fuel on the fire, they still had 6 months worth of 2012 Malibus to get rid of, so they discounted them, cutting their margins and slowing the launch of the new Malibu. This is their bread-and-butter car! As an automaker you have to get the bread-and-butter car right. Then you have the free cash to blow on a Cadillac ATS.

All of GM’s ”GM is not going bankrupt!” supporters keep pointing to the Cadillac ATS as a symbol of their capability to compete with BMW, the Chevy Corvette as a symbol of their capability to produce a world-class sports car on a budget, and the Chevy Volt as the most technologically advanced car in the world. The Cadillac ATS might be good, but it’s niche. The Corvette certainly lives up to the hype, but it’s niche. The Chevy Volt is well-hyped, but it’s not the most technologically advanced car in the world, it’s just well placed in the market, and it’s niche.

Tout all you want, but their money-maker isn’t a money-maker, and the stuff that is making money isn’t making enough to keep them afloat. The execs at GM know this, so they’re doing everything they can to keep up appearances and cover the losses. Fleet sales and rental car sales are up, which sounds good, but is detrimental to the brand image. GM is also under a lawsuit for packing dealer lots with profitable pickups and counting them as sales before they’re sold. If the trucks don’t sell, GM will have to discount them, cutting the profits on another bread-and-butter vehicle.
Which brings us to full-size trucks and SUVs. GM prides itself on being a leader in the full-size SUV market. in the pre-bankruptcy days, trucks and SUVs were a foundation of GM’s profitability. Then oil prices rose dramatically and crushed sales. Now the sales have returned and GM has once again built a leg of its foundation on the shifting sand of oil prices. Also, GM’s pickups are going through a redesign. If they botch the launch like they botched the Malibu it could spell disaster.

GM supporters also like to talk about how well GM is doing in China. GM is gaining market share in China, but not by selling American-market cars. Most of the market share there comes from a three-way venture, SAIC-GM-Wuling, making vehicles in China for the local market. The Chinese market is under heavy pressure right now, and although they hold a significant market share, they’re selling at a thin margin, and the American market cars that are selling are, again, niche vehicles.

Still, GM touts their rising market share in China. They struggle to maintain their market share in the US. They fire executives over losing market share in Europe. GM is still chasing market share over making profits, which is what drove them into bankruptcy the first time around. GM will only get a larger share of the market when they start making cars people want instead of making cars people will take if the discount is large enough.

The problem boils down to leadership. Dan Akerson is not a car guy, and he’s hiring and firing people, trying to find the right formula for leadership. When Opel Europe lost $100 million in a quarter, he fired their chief without having an adequate replacement. The losses in Europe were heavy, but they were heavy for every automaker except VW. Then there was the $600 million/6 year Manchester United marketing deal. GM fired its marketing director for arranging the deal, then signed the deal two days later. Compared with how GM was spending a total of around $500 million a year on marketing before the bankruptcy, you have to ask how could the marketing director arrange a $100 million per year marketing deal without the CEO knowing?

The buck stops with CEO Dan Ackerson. Does GM have anyone who would make a successful replacement, or will Ackerson himself finally study the competition?

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120 Comments on “Ur-turn: GM Not Going Bankrupt – For Now...”


  • avatar
    Polar Bear

    OK. So GM is chasing market share because they have huge fixed costs and must maintain cash flow. This is the curse of the car industry. Their fixed costs are so high that to pay the bills, they are tempted to cut quality and cheapen their cars. Which of course leads to market share falling even more. So they are stuck in a downwards spiral. Add to this bad habits and extra layers of fat accumulated in better times, when GM was an empire.

    Something similar is going on with the Japanese. The fuss about excessive cost cutting in the new Honda Civic must have something to do with the falling sales in the recession. Since Honda can’t cut cost enough to make up for the loss of revenue, and is facing price competition from the Koreans, Honda cuts quality. So far this has hurt secondary things like interior materials, sound dampening and handling, and maybe keeping old engines and transmissions longer than they should, but what if it starts hurting reliability too?

    I forget the source (maybe it was here on TTAC), but I read Toyota has a 43% market share in Japan and is still losing money there every year. Sounds GMish to me.

    It looks like in the car industry, getting too big can be a problem. I was mystified how GM could sell millions of cars and still go bankrupt, but fixed cost and a falling market share explains it.

    Which again means that if GM keeps losing market share, they can’t cut cost fast enough and will go belly-up again.

    • 0 avatar
      korvetkeith

      Is anyone else upgrading their Eagle Single to a Honeywell T53 after they take delivery of their V8 Bentley? Just me? I already have two T53′s in my custom 50′ catamaran and they are awesome! 1400hp!…..wakes up

    • 0 avatar
      bd2

      GM’s fixed costs are lower than Ford’s.

      Which is part of the reason that Ford’s stock price is trading at HALF of GM’s stock price (funny how there is no mention of that in this piece).

      And like GM stock, Ford’s stock has fallen to HALF its value from its high in 2011 (again, no mention of that) but that’s due from overreaction from investors regarding the world economy being in doldrums.

      Both GM and Ford are making a healthy profit, even with their losses in Europe (and unlike Ford, GM has China to help subsidize some of those losses, albeit the Chinese market is undergoing a price war).

      And GM isn’t cutting costs like, say Toyota or Honda. Head to head, Chevy products have the nicer interiors, the more compliant ride and less road noise.

      Evidently Erikstrawn isn’t a “car-guy” either, otherwise he wouldn’t be so dismissive of the ATS and realize that it is NOT a NICHE model, but rather a volume seller for the luxury segment.

      The ATS and 3G CTS are very important to GM’s bottom, more important than the Malibu.

      That political hack piece from Forbes (it’s a shame that auto related sites like TTAC gave that piece of garbage any attention) kept bringing up VW, but guess what?

      Audi brings the VW Group the vast amount of its profits, not VW.

      If the ATS and 3G CTS are successes not only in the US, but in the Asian market (and to a lesser extent Europe), they will add richly to GM’s bottom line (broaden Cadillac’s CUV lineup and the nos. will only increase); meanwhile Ford is still bringing us a half-hearted attempt with Lincoln.

      And yes, Akerson bungled the launch of the new Malibu by going ahead with the early launch of the Malibu Eco, but the new Malibu with its other powertrains will do just fine (the outgoing Malibu sold better than its predecessor), altho I don’t think it will challenge the Camry as the new Accord, Fusion and Altima will.

      The new Impala will be more of the game changer for GM within its segment.

      The highly profitable Lambda CUVs will soon be redone so that will be another boost to GM’s bottom line.

      Yes, GM still has issues (what automaker doesn’t have issues in this world economic climate?), but any talk about GM going bankrupt again is pure BS at this juncture.

      And GM wouldn’t have needed to go into bakruptcy in the 1st place (altho, it was the best thing for them to “slim down”) if the credit markets hadn’t completely frozen after the subprime/derivatives fiasco (Ford was fortunate with its timing).

      As for that hack piece from Forbes, this rebuttal does a much better job of the actual realities for GM –

      http://www.forbes.com/sites/joannmuller/2012/08/16/leadership-not-another-bailout-will-fix-general-motors/

      • 0 avatar
        Pch101

        “Which is part of the reason that Ford’s stock price is trading at HALF of GM’s stock price (funny how there is no mention of that in this piece).”

        Price per share comparisons between different companies don’t mean anything at all. A share of GM stock costs more than does a share of Ford because the GM stock represents a greater percentage of ownership in GM than does a share of Ford stock in Ford’s ownership.

        (You may as well argue that the yen is weaker than the pound, since it takes 125 yen to equal one pound.)

        If you compare market capitalization (the total value of their stock), then at this moment, GM and Ford are worth roughly about the same (GM at $34 billion, Ford at $36 billion.) If you compare that based upon units of sales or production, then Ford looks better still.

        For comparison’s sake, Toyota’s market cap is currently about $129 billion

      • 0 avatar
        bd2

        Yes, I’m aware of that, but I doubt people who keep harping on how GM’s shares have dropped do.

        And marketcap isn’t always a good indicator of the health of a company since investors often have a tendency to overreact one way or the other.

        Besides, the point is that Ford shares have seen the same drop as GM, and yet it’s all “doom and gloom” for GM while Ford escapes mention/scrutiny.

  • avatar
    Detroit-X

    Nice story. Some additional thoughts…

    GM is still only making money on trucks. Zero on cars. Nothing has changed. Thus the cheaping-out on some things. Money is tight for cars that don’t make money.

    GM has done endless studies on its competition, it has slept with Toyota in California. GM knows where the waste is, but its self-venerated executives refuse to jeopardize their career by making waves to change it. Simple.

    The Malibu fiasco is described dead-on. And, shall I mention, the GM interiors seem to all be boringly similar to each other lately?

    The Cadillac ATS hasn’t competed with anything yet, it’s new to the market. To say it competes with BMW at the moment is just another GM Excel-Powerpoint comparison. “Look, our car is the lightest, so it’s better.”

    Too many models for what is now ‘just another player’ in the global markets. Cruze, Verano, Malibu/old-Malibu-new, Impala-old, Impala-new, Regal, LaCrosse, ATS, … are all within inches of each other in interior space and cargo capacity. And add 3 trim levels to each. Luxury Cruze, or Verano, or Regal, hmmm… I give up.

    GM really benefits in total units sold by too many dealers. Convenience, like rebates, often trumps performance.

    • 0 avatar
      Doh

      The truck is the Main Stay for GM and Ford, Chrysler still has the Mini Van.

      Lets look at GM’s Truck, New Platform in 2007, Ford New in 2009, GM Engine New in 1999, Ford in 2011.

      Where is GM investing thier money for the money makers? ATS? came out soon after bankruptcy As did the Cruze (GM has stated for years they don’t make money on entry level cars) But where is the “Game Changing Silverado? Next year so I hear.

      If the New Silverado is a “True Game Changer” GM will survive, If it is just a “Catch Up” They will fail again.

      • 0 avatar
        carbiz

        But this is the other side of the coin: The “what have you done fort me lately” nagging of the press. The public has become so jaded. “Bigger, better, new & improved.” Aren’t you sick of hearing that?
        The 2012 Silverado is not running with the same drivetrain as 1999 – that’s disingenuous, at best. The 6 spd auto, which has already been in the Denali and the HD trucks for a year or more, will trickle down the rest of the truck line as production permits. In 2007, GM made significant changes to the vehicles, not all of which were immediately apparent; however, the tweaks resulted in improved fuel economy and other efficiencies. Just because Ford had to play catch up in 2011 does not mean that suddenly the ’07 Silverado is obsolete.
        It is very rare that Ford ever ‘leap frogs’ over GM, especially in the truck department. In 1999, GM’s changes were so dramatically ahead of the competition, that it took Ford several years to catch up.
        GM’s affiliations with Eaton, Allison and others gives GM trucks an automatic (no pun intended) leg up over Ford.
        Currently, Ford pickups may hold the ‘gee-whiz’ trophy as you climb up a ladder into the cab, but where they cut corners is not obvious until you live with one.
        I am not knocking Ford trucks: they do the big trucks decently well (although they still weld that 20″ piece onto the back of their full sized extended vans and that is just plain wrong, wrong, wrong!) but let’s not just assume that because the do more model changes they are better. Maybe they are just slower at copying the last generation C/K advances.

    • 0 avatar

      With $5 fuel here in Chicago, $8? on the rest of the planet, I just find it absurd that GM (and BMW, MB and others) just seem to NOT grasp the “concept” of FOUR cylinders in an up-market vehicle in THIS market/continent. There are 50 mpg Saab 93s and 95s(among many other offerings) driving around EU and UK…why they were never sold here, I cant fathom. Me thinks a few of the WRONG GM divisions survived.

      As always, I(we?) cant thank Bob Lutz enough for his “inspiration” at GM over these past decades.

      • 0 avatar
        28-Cars-Later

        I can only assume your referring to diesel, and if you are I agree with you. But a big part of the anti-diesel push is EPA and government basically oppose them, they prefer hybrids/EVs.

    • 0 avatar
      ABankThatMakesCars

      @Carbiz – What are you talking about? Ford doesn’t leapfrog GM trucks? How do you leapfrom when you are already ahead of them? GM still pawns that 4.3 V6 that dates back to 1984. It’s the old SBC 5.7 from the 1950′s that has 2 cylinders cut off.

    • 0 avatar
      ABankThatMakesCars

      @Carbiz – What are you talking about? Ford doesn’t leapfrog GM trucks? How do you leapfrog when you are already ahead of them? GM still pawns that 4.3 V6 that dates back to 1984. It’s the old SBC 5.7 from the 1950′s that has 2 cylinders cut off.

    • 0 avatar
      bd2

      GM is making $$ in cars; the Cruze and Sonic have higher ATPs than Corolla and Yaris.

      No other competitor to the 3 Series has gotten the reviews that the ATS has.

      Furthermore, ALG (which the industry uses when setting lease rates)projects the residuals for the ATS to be 65% after 36 months – that’s higher than for the C Class or A4 which are expected to hold 59% of their values.

      http://www.autonews.com/apps/pbcs.dll/article?AID=/20120813/RETAIL07/308139963/1142/healthy-ats-residual-to-boost-cadillac-leasing

      • 0 avatar
        jkross22

        “No other competitor to the 3 Series has gotten the reviews that the ATS has.”

        This is debatable, as every new car in this class (G35, A4, C-class, Acura TL) is compared to the 3 series. Let us know if the ATS can sell.

        You’re quoting resale value for a car not yet for sale. Cart before horse syndrome is strong with you.

      • 0 avatar
        bd2

        No – it is NOT debatable.

        The A4, C Class, etc. have not gotten the positive reviews that the ATS has gotten in comparison to the 3 Series.

        The closest has been the G35/37 – but it was not considered nearly as refined as the ATS and the interior in the G35 was considered chinzy.

        Yeah, these models are all in the segment where they are compared to the 3 Series (well, aside from the TL which is kinda neither here nor there) – duh!

        And as for the ALG predicted residuals – they tend to be pretty accurate (which is why the inudstry relies on them for setting lease rates); and at the very least, Cadillac can offer good lease deals like BMW which should help sales.

  • avatar
    ELnNH

    ” The fuss about excessive cost cutting in the new Honda Civic must have something to do with the falling sales in the recession” Polar Bear

    Honda is cheapening the Civic ?….I sure don’t understand the fuss…When were they ever anything other than cold to the touch echo chambers ? That’s what a low cost car for the commuter/blue collar/young/old buyer looks like. Nothing wrong with that…remember the beetle ..that sold pretty well eh…

  • avatar
    MarkP

    Surely you aren’t just now figuring out that Forbes is politically motivated? It’s nice to have your opinions confirmed by someone else, but you really should consider whether you want to cite someone whose judgement is well known not to be impartial. That brings your own judgement into question. You know, bird of a feather and all that.

  • avatar
    mike978

    Good article. The Malibu should be better, but that being said plenty of companies survive/succeed with just two good entries in the three key markets of compact sedan, mid-size dean and compact CUV. GM has two of those (Cruze and Equinox). Mazda and VW are in a similar position (6 and Tiguan are not competitive). GM then has a strong position in trucks (assuming the new one next year is good)and have done well with miscellaneous categories like sub-compacts.

    If the Malibu is bad it may sell 100,000 less units than if it was good (Camry will reign supreme), does that really imperil them?

    The ATS may make some money for them as the luxury market can be a highly profitable market, even with reduced volume compared to mainstream cars. But the market has not spoken as to the success (or otherwise) of the ATS yet.

    They are mis-managed compared to other large auto companies and if they are inconsistent with product development (Malibu vs ATS for example) then they will struggle but bankruptcy is at least a decade away as they are slated to make $6 billion plus this year and made that last year.

    At least the bankruptcy in 2009 got rid of some excess dealers and brands and reduced legacy healthcare costs. Was that enough, time will tell.

    • 0 avatar
      CJinSD

      It matters that GM’s pickups have been ‘value’ items for the past two years. Dealers having four month supplies on hand for as long as anyone can remember was bound to hurt transaction prices. I know that GM pickups were super cheap when my company was looking at them a few months ago. The funny thing is that the Chevrolet dealer we visited would give us a truck that we didn’t want, but tried to make it sound like one with the 8 foot bed that we did want wasn’t available at any price. Way to sell a Tundra, even if it was ten grand more than the Silverados wasting So Cal real estate. If the Malibu is as competitive as the Silverado, then that means that GM will be looking at 250,000 incentive heavy sales instead of 350,000 profitable ones. That is a big delta on the balance sheet, just as another crummy pickup will be.

      • 0 avatar
        mike978

        I agree they need to have a competitive pickup truck. We will know by this time next year if they have. Discounting is normal towards the end of a model’s run. Even the Accord is having a blow-out sale – $250 a month with no money down! But I agree continued incentives have a negative effect on the balance sheet (although that is already accounted for in the quarterly figures).
        The issue you had was with the dealer, not the manufacturer.

  • avatar

    From my South American perch what I can say is: GM seems to be getting it. Though I was doubtful at first, it seems like their Korean development team is getting things better than Opel. Here, we always got an assortment of German-developed cars with a sprinkling of American trucks. While the cars were always deemed ok, they were never at the forefront of their classes. Always hampered by one weak point or another.

    Come the 10s and the cars continued hampered by the oldest engines in the biz here. But the design has been well received, the cars have good content, and the pricing in no bargain basement, yet somehow they sell. Slowly but surely, even though the old fanboys have their knickers all tied up in knots, they are re-entering into buyers mindspace. Buyers who had not considered GM before. I for one. I had never, ever considered a GM. Always thought the competition offered more. Now, I’m comfortable recomending the Cobalt over the Siena or Versa, the Cruze over the Jetta or Corolla, even a Spin over a Livina.

    They still have huge holes, like Celta, Prisma, Classic. But those holes seem to be slowly filled in. If they continue on this path they might have a future.

    Once, back when the ex-GM Prez fired by Obama (forget his name) was head honcho in Brazil (before the world crises), he was famously quoted as saying that GM Brazil provided GM World 5% of its sales but 20% of its profits. What they’re doing here will surely help them keep afloat worldwide

  • avatar
    dwford

    And everyone wonders why Hyundai doesn’t want to build more plants to chase market share…

  • avatar
    Dave M.

    “In 1999, GM’s changes were so dramatically ahead of the competition, that it took Ford several years to catch up.”

    And yet Ford remains the #1 seller for how many years now?

    GM needs to remain the old Hyundai – damn decent cars for a discount price. No one aspires to a GM. They market several competitive cars – the Cruze, the Equinox, the ATS, the Corvette…but as noted, several are niche vehicles and not the bread-and-butter they need.

    Unless they can leapfrog the competition…and these days that’s impossible to do for so many reasons, GM has to remain satisfied with not being the biggest, and focus their efforts on competitive product and constant improvement.

  • avatar
    geozinger

    Not even getting into the whole mess about the Forbes article being politically motivated, it amusing to read some of the comments about some of the specific points in this posting. I’ll start with one that amuses me the most is the comments about people being fired for not performing well at their jobs. Isn’t that SUPPOSED to be the correct action for failing to do your job? For so long GM has been called out for having a culture of no blame, no responsibility, and yet when folks are being cut due to (at least the official line) lack of job performance, folks criticize GM doing for exactly what they should be doing… WTF?

    Granted, the situation with Ewanick may be something larger or it may be something as petty as he p*ssed off the boss. I personally believe there’s more to that story, but we won’t know for some time how it all plays out. As for Akerson, even though he’s been CEO for a while now, I think it’s too soon to judge him as good or bad in this role; there are too many moving targets right at the moment, i.e., the benchmarks used for previous CEOs don’t apply in this situation. I hate to use this trite saying but I think it apt: Time will tell. (FWIW, I believe the same thing about Mulally, too. I don’t think it’s possible to judge some of these guys in ‘real-time’.)

    Has anyone here actually driven the new Malibu Eco? I have. It’s a very nice car. If I had a serious commute again and needed a new car, this would be on my short list. Do you remember the Uglibu from several years back? This has a similar wheelbase as that car. Approximately 108 inches. I’m 6 foot plus, I never felt cramped in the back of that car. Most other competitors only have about 2 or so inches more of wheelbase. This is a global car, sold in more markets than just the US. More of what critics in the past have lamented about GM not doing. Now that they’re doing a global car(s), it’s bad…

    Could there have been a better launch for the Eco model? Possibly. OTOH, it’s out there now, making headlines. Remember the old adage: “there’s no such thing as bad publicity”? For all of the lamenting going on about the alleged channel stuffing, what did we find out about BMW this week, on this very blog?

    GM’s foundation and focus has shifted to cars. For so long critics wailed about the dependency on large trucks and SUVs for their profits. When GM cranks out a few better than average small cars and SUVs (Sonic, Cruze, Equinox), no recognition. You can hear the critics banging on the fact that the cars are Korean engineered. Which isn’t entirely true, either, as much of the base engineering was done by GME (along with the new Malibu). But let’s not let facts get in the way of 20,000 Daewoo rants. All of the post-bankruptcy releases have been better cars than their immediate predecessors, and have been more profitable for the Company. I think that the new full size trucks will follow in that same mold.

    If GM were to go into bankruptcy again, I don’t believe there’s any political will to bail them out. The situation in 2008 was unique to say the least. Even at that time I think there was little political will to assist. Had there been, I’m sure Bush would have not given the task of the restructuring over to Obama and his team.

    • 0 avatar
      Zackman

      Goe;

      OUTSTANDING!

      • 0 avatar
        geozinger

        Thanks Zackman. I’d like to see a little more balanced coverage of GM issues. You know it’s getting beyond the pale, when people who are not GM fans are calling for more reasonable posting on this issue.

        I don’t always agree with PCH 101 on everything, but his assessment of TTAC relevance on this issue is correct. It was a banner issue five years ago, but now it has become a metaphorical football, with the camps passing it back and forth.

        It’s time to retire the Pavlovian bell on this matter. GM is in no danger of going into BK in the near term future. This issue has made TTAC akin to a forum for dittoheads (in the best Rush Limbaugh style), contributing little to any kind of rational assessment of GM’s situation.

    • 0 avatar
      FromaBuick6

      Yawn. There’s plenty of blogs/forums on the web that are more sycophantic to GM. Feel free to read them.

      Lots of people have a lot of valid reasons to hate GM. GM’s certainly in better shape than it was in 2008 (having your debt wiped out will do that), but the bankruptcy didn’t fix anything – namely, the company is still run by clowns. Akerson seems to be using Roger Smith’s playbook; The Malibu launch is almost as dumb as when the Corsica was sold only to fleets for the first year. The Ewanick-Manchuster United debacle is reminiscent of the days when GM payed Ross Perot three quarters of a billion dollars just to get him off the board of directors. Or that two billion they paid to make Fiat go away. These are not the symptoms of a healthy, well-managed company. Good cars or not, it doesn’t bode well.

      I realize these pesky details get in the way of your W-body lovefest with Zackman, but that’s the world we all live in, deal with it. Perpetually whining that GM haters are Pavlovian “Dittoheads” is insulting and childish. Grow up.

  • avatar
    Pch101

    Prior to the bankruptcy, GM was a basketcase.

    Today, it’s a mediocre company. It has fair products, so-so brands and modest margins.

    There are numerous companies operating in the world today that are just as ho-hum as GM. They may not be star performers, but they aren’t operating at the brink of failure, either.

    Robert Farago was well ahead of the pack to see that (a) the GM bankruptcy was coming, and (b) GM’s problems were largely due to branding and product problems, not to costs. TTAC exists today because of that foresight.

    But that story is over. Mr. Farago was right — GM imploded, and only intervention from the state allowed it to continue. Thanks to that bankruptcy, GM has gone from being a complete wreck to a fair-to-middling company that is on a par with the average, but not the best. The patient may not be an Olympic athlete, but he isn’t going to die after the operation, either.

    The GM story appears to be a legacy cost to TTAC. The story was highly relevant in 2007-9. But as of 2012, it has been beaten to death, reaching the point that all that’s left of it is a lot of hand wringing and extremist rhetoric that is used to describe mundane issues. It’s as if Chicken Little decided to maintain a car blog.

    As the GM bankruptcy (should have) taught us, living in the past is not ideal for one who wants to live in the future. Move on already.

    • 0 avatar
      Polar Bear

      British Leyland comes to mind. Being saved by the government does not mean the rot is over. I think TTAC is right to watch GM closely.

      • 0 avatar
        Pch101

        “British Leyland comes to mind”

        If you know anything about either General Motors or British Leyland, then no, British Leyland does not come to mind.

        This is exactly the sort of rhetorical overkill that I’m talking about. You folks make comparisons that are totally off point.

        Meanwhile, your fixed cost assessment in your first post above illustrates that you don’t understand why GM failed. Ironically, it’s the belief that GM had a cost problem, rather than a revenue problem, that caused GM to implode in the first place. GM tried to cut its way to success, but as that doesn’t usually work in a business like this, that approach was doomed to fail. And it did.

      • 0 avatar
        Polar Bear

        We are going full circle here. GM tried to cut its way to success? Well, yes they did. And why? Because they had high fixed costs and had to keep the cash flowing by competing on price when they could not compete on quality, brand image or anything else.

        British Leyland was one of the three largest auto makers in the world. Just like GM is now.

        The tax money wasted on British Leyland left a sour taste in Britain, to the point where the British shouted “Don’t do it!” when Obama wanted to bail out GM. GM’s market share in the US has fallen from near 50% in the glory days to 18% now. That arrow keeps pointing down. Is there a reason to think GM suddenly has changed the dysfunctional company culture which made it fall behind the times? Obama can’t change it just by saying so. And then your tax billions will be wasted too.

      • 0 avatar
        Pch101

        “British Leyland was one of the three largest auto makers in the world. Just like GM is now.”

        I hate to break it to you, but being Toyota, VW and GM are the three largest automakers in the world, but none of them are like British Leyland. You need to work on your metaphors, because they aren’t very good.

      • 0 avatar
        28-Cars-Later

        I don’t know much about British Leyland, what were some of the characteristics of it?

      • 0 avatar
        Pch101

        “I don’t know much about British Leyland, what were some of the characteristics of it?”

        There are some distinct differences between British Leyland and GM:

        -GM was supported by one (OK, two) government cash infusions, with the goal of reprivatizing it and with no expectations of perpetual financial support. In contrast, British Leyland was supported by a series of loans throughout the years. GM won’t be getting any more of our money; if it was managed as was British Leyland, it very well might.

        -The GM restructure eliminated much of its pre-bankruptcy badge engineering in an effort to avoid redundancy and further damage to the brands. In contrast, British Leyland began by trying to use badge engineering as a method to increase efficiency. (Of course, this failed.) As you will note, these two approaches are exactly the opposite to each other.

        -The success of GM’s restructure was not predicated on achieving substantial increases in market share or in building a market for exports from North America; the bankruptcy was used to reduce the size of the business. In contrast, British Leyland had unrealistic plans to expand its exports in order to justify maintaining many of its jobs, even though it had been losing share abroad for at least a decade.

        -GM circa 2009 was not looking forward to a massive shift in US import policy that had protected its market share. In contrast, the British auto industry had long been protected with trade barriers, but those protections began to be dismantled when the UK joined the EEC. (In other words, British Leyland had a lot to lose with a change in trade policies, while GM doesn’t have any such protections to lose.)

        The situations of the two companies are not particularly comparable.

      • 0 avatar

        @PCH: “-The success of GM’s restructure was not predicated on achieving substantial increases in market share or in building a market for exports from North America; the bankruptcy was used to reduce the size of the business.”

        Amen. I wish more people realize this. It was never in the plan to magically double sales or market share after bankruptcy. The plan has always been to cut the number of brands, models, plant capacity, salaried/hourly workforce, dealerships, and marketing costs. The plan was to align capacity with sales. The plan was to sell every car/truck for a profit and not chase volume. The plan was to get their north American operations to break even at an annual sales volume of 11 million units. It has mostly worked so far. More than $4B in operating profits in North America for the first 6 months of 2012 is proof it has.

    • 0 avatar
      George B

      I would argue that GM’s real core products are its full size pickup trucks and related SUVs. Ford and Chrysler have made a significant effort towards improving the fuel efficiency of their full size trucks. If chasing government money caused GM to throw its engineering resources toward the Volt instead of the next Silverado, then the 2007-2009 GM bankruptcy story is still relevant. However, if the next Silverado better than its competitors, then GM will generate the cash flow to do better with the next Malibu.

      • 0 avatar
        Pch101

        GM spent 22% more on R&D during 2011 than it had in 2006.

        Because of the automotive task force, that increased spending could be spread across fewer brands and nameplates. No more need to spread that money thin across lines of Hummers, Saabs, Pontiacs or Saturns.

        “If chasing government money caused GM to throw its engineering resources toward the Volt instead of the next Silverado, then the 2007-2009 GM bankruptcy story is still relevant”

        Given that much of the Volt’s development costs would have been incurred prior to the bankruptcy, this doesn’t seem likely.

    • 0 avatar
      200k-min

      “GM imploded, and only intervention from the state allowed it to continue.”

      America likes a winner. GM was not a winner. I’m sure EVERYONE here can name at least one person that refuses to buy another GM product because they were “bailed out.” How many have heard the term “Obama Motors?” Politics aside, in 2008 GM was in a lose/lose position. Where they are at today is remarkable all things considered.

      I wouldn’t say I’m anti-GM, but I am anti American bankruptcy law. Then again, what’s done is done and if GM had a best in class vehicle I’d buy it because I’m not stupid, I want the best my money can buy. I’m not a fanboy of anyone. That said, the Cruze is good but I find the Focus better. New Malibu? I’m waiting to drive the new Fusion and hold my judgement.

      • 0 avatar
        jkross22

        “That said, the Cruze is good but I find the Focus better. New Malibu? I’m waiting to drive the new Fusion and hold my judgement.”

        Or you could buy a AltCamCord, which is what the majority of consumers buying in that segment purchase. Consumers have not bought the ‘bu because the perception is that it’s not as good as the ACC. Resale value, buyer experience, reliability….

        GM’s products are still a reflection of the sick corporate culture where they originate. BK normally addresses that problem. In GM’s case, it was not allowed to do so.

      • 0 avatar
        FromaBuick6

        People’s political memories are often short; The “I’ll never buy another GM/Chrysler” anti-bailout crowd probably aren’t nearly as adamant now as they were in 2009, if at all.

        The Baby Boomers who swore GM off after being (sometimes repeatedly) burned by exceptionally bad cars? I’d be more worried about them. I sincerely doubt that my father will ever, even after nearly 30 years, buy another GM product after not one, not two, but three straight lemons. There’s millions more just like him.

        Then there’s the Xers and Yers who grew up in the ’80s-’00s era of GM cars as cheap, disposable, undesirable junk. There’s another years worth of customers you can completely write off. Ford and Chrysler at least had some innovative, well-styled and/or well-marketed cars in this era. GM had bupkis.

        GM’s post-bailout products are decent, but that’s it. They need to be a lot better than “decent” to combat three decades worth of well-earned negative stigma and make people actually care about GM cars again. With the current crop of management, I wouldn’t hold out much hope of that.

    • 0 avatar
      bd2

      According to a study done by the Korea Automotive Research Institute, GM’s operating margin of 5.2% is better than that for Toyota (4.2%); VW is at 6.7%.

      BMW (11.6%) narrowly edged out Hyundai (11.4%) for the highest operating margin.

  • avatar
    bucksnort

    There is barely a mention of the underlying problem. There was excess automobile manufacturing capacity on planet earth before and that same excess manufacturing capacity exists now. The estimates tend to cluster between 30% and 40%. We simply do not need all these companies, brand names, workers, and auto plants. The only reason the excesses continue is government intervention for political purposes.

    Until the underlying problem is resolved, nothing will change.

  • avatar
    ciddyguy

    I remember back in either 1990, or was it ’91, there were fears that GM then might go bankrupt, thankfully, it didn’t but we came close then, and I know Ford has suffered some close calls too, like in 2006.

    However, Ford redeemed itself and was able to right its sinking ship without much help, but GM, and Chrysler, both were too far down on their luck to do so on their own, Chrysler especially, but both were pretty bleak in 2008 when the whole bankruptcy was about to become a go.

    That said, I still see GM struggling a bit to find its way, but it DOES seem they are making strides in improving their wares by first improving their subcompacts to be more competitive. Now, I’ve not driven either the Spark, nor the Sonic, but I rather like their looks. They aren’t plain Jane’s like their bread and butter sedan offerings, like the Cruze, the ‘Bu etc. One area they need to work in it seems is the 2012 Impala. I haven’t seen any reviews on it but word is, it’s getting not so hot press.

    A fellow on YouTube who has a channel that is quite popular finally test drove is grandfather’s ’12 Imp, and found it wanting, a mere, Meh in his mind, and he loves big old sleds, and had recently bought a ’91 bubble classic Caprice wagon in very nice shape.

    His views on the Imp were thus, rides nice, but middling handling, steering nicely weighted, but lacking feedback, AC is weak and I can’t recall what else as it had the 3.6L V6 under the hood.

    His Grandfather bought it brand new to replace an older Lincoln Town Car, only to go out and replace it with a used ’10 Townie, that’s how bad he found the new Impala.

    This doesn’t bode well for anything that is meant to be a bread and butter, albeit, large, sedan on offer from GM.

    That said, I don’t see a consistent strategy here, they seem to be going at things without methodical planning, or that’s the impression I get.

    Still, will they survive is anyone’s guess, but this race to the bottom with market share may not be the best strategy here, even if they don’t make much on each model, due to massive incentives, botched launches etc so it appears much of old GM still exists, at least in come cases, but it’s clear that they have made some needed changes to survive, but is it enough?

    I’d even consider the new Spark/Sonic, but that’s about it though. Still, to rely mostly on trucks when their runaway sales may not last if gas continues to increase is foolhardy, for both GM and Ford (and Chrysler too for that matter).

    Better to have several models that bring in the bucks than to rely on a model or two, and big ones that don’t do as well on gas in this day and age isn’t going to cut it, for long.

    I do think that having too many models based on too similar cars/chassis makes it too easy for their impacts to be greatly diminished, and thus, not make them money where it counts.

    Incentives and cost cutting won’t cut it either but I agree, it may be still too early to really know if GM will survive long term, or not.

    • 0 avatar
      chicagoland

      The 2012 Impala is an old design on the way out, test drive a 2014 Impala before saying “that doesnt bode well…”

    • 0 avatar
      ajla

      The current Impala is GM’s oldest car, it sells only to fleets and dedicated fans of its platform (like the Panthers did at their end), it is being replaced by two new cars in early 2013, and the retail market for non-luxury large cars in NA is totally dead.

      And I don’t want to disparage this Youtube fellow, but B-body and Panther owners ripping on the w-body is nothing new. (Seriously, this guy complained about lack of steering feedback on an Impala? Sounds like he should work for Motortrend)

    • 0 avatar
      Zackman

      My 2012 Impala’s A/C works really well, thank you.

  • avatar
    highdesertcat

    Excellent article. Well written!

    And even if GM is going to need a bail out again at some point in the future, it is my contention that GM will be infused with ready cash no matter who resides in the White House or who runs Congress.

    That doesn’t make it right, but I believe that is what will happen because we, the people, are in for a penny…. and in for a pound. It started with Shrub, and continued with Obama when he doubled down to bail out the unions in gratitude for his being elected.

    The bailouts, handouts and special tax accommodations for GM and the UAW will continue into the future, ad infinitum.

    Now it is up to the taxpayers to decide to buy GM, or not.

  • avatar

    ten years ago I gave one of my many presentations to GM, they didn’t listen then, and still won’t. bankrupt? not yet financially but certainly morally (ie. Columbia labor situation) and institutionally (ie. departures, voluntary or otherwise).

    http://generalwatch.com/flash/GM03.html

    kinda funny how I called for Red Ink Rick’s resignation and was blackballed at the corporation. Rattner does it and is seen as a hero. go figure! it’s lonely being a visionary.

    • 0 avatar
      highdesertcat

      Yes, “it’s lonely being a visionary.”

      Sometimes people on the outside can see a lot clearer what needs mending, but since they are not in the arena, they cannot effect the changes needed. Only the decision makers can make the changes.

      I almost pulled stupid back in 2007. I almost didn’t listen to my financial advisor/broker. I was so intent on holding on to my stock in old GM that I was quite adamant about it with him.

      In retrospect, HE was the visionary and I was blinded by the light GM tried to shine in the nation’s eyes. I was one of the believers who could not fathom GM ever going bankrupt, yet he saw it coming almost two years before it happened.

      Lucky for me and mine I came to my senses and divested at the top during 2007/2008.

      And the words of my advisor seem so appropos now in your situation when my advisor told me, “I can only do what I can do”.

      In your case, you could only do what you could do. The rest was up to GM itself, and the players in the area.

    • 0 avatar
      Pch101

      “kinda funny how I called for Red Ink Rick’s resignation and was blackballed at the corporation. Rattner does it and is seen as a hero.”

      Rattner was willing to fix fundamental problems that your “Return to Greatness” plan ignored.

      The dealership network and a few marketing gimmicks were not going to save GM. The problems were much broader and deeper than that.

      • 0 avatar
        BrianL

        Thanks for saying that Pch101, it was really needed.

      • 0 avatar

        I laugh at your naive skepticism. I’ve delivered over 20,000 cars at retail and know more about General Motors than you’ll ever be exposed to. all that was announced is the first twenty steps of RTG. you lack the detailed depth and knowledge of your friendly Buickman so stay in the shallow end and keep pretending you know the score.

      • 0 avatar
        Pch101

        “I’ve delivered over 20,000 cars at retail”

        You probably ought to remember who wrote the incentive checks. Think of how your dealership would have fared had GM not provided rebates to help to sell those cars.

        And as I recall, you were at a dealership in Michigan. Selling domestic cars to Michiganders is a matter of catching fish in a barrel.

      • 0 avatar

        competing against hundreds of other salespeople within multitudes of other stores no less. bottom line, cream rises. besides that I sell and deliver nationwide, having done business with clients in almost every state. once again your naive lack of anything near a clue is glaringly obvious.

      • 0 avatar
        Pch101

        You really don’t want to admit that cash on the hood was helping you to sell cars.

        Put it another way — you might have been taking sales away from other Buick salesmen in a Buick-friendly state, but you weren’t keeping other buyers from choosing German and Asian imports and transplants.

        Your plan assumed that the pre-bankruptcy cars were fine, when they generally sucked. The new GM doesn’t seem to have done much about reliability, but at least they’ve improved perceived quality by using better interiors, which is a start.

      • 0 avatar

        I have to struggle to keep from laughing at you. it’s so funny how people as naive as yourself think they understand autos but are so far from the realm of reality.

      • 0 avatar
        Pch101

        “it’s so funny how people as naive as yourself think they understand autos but are so far from the realm of reality.”

        I find it naive to confuse what’s good for a salesman with what’s good for the manufacturer. That’s particularly true when it’s the manufacturer that is the one who writes checks to pay for the cars that don’t sell.

        If you think that home delivery and free destination charges are going to move people out of their Camrys, then I’d say that you’re in for a rude awakening. That’s especially true outside of the Michigan bubble, where there are far fewer people with loyalty to domestic brands.

      • 0 avatar

        you really haven’t a clue dude. this is no longer worth my time. have a nice day.

    • 0 avatar
      sunridge place

      Here are some more brillant Buickman! ideas circa 10 years ago:

      http://www.jdollinger.com/Buickman/columnApr2001.cfm

      A manual transmission Catera? Yep, that’s what was wrong with it.

      Corvette owners buy Corvettes because of things like Onstar? Sure.

      ‘Eliminate requiring an employee to retain a leased vehicle for 12 months’…Sounds like a policy suggestion from a salesman who did all his business with GM Employees and their family members. Too bad the whole country isn’t filled with GMS customers. Yep, GM would have been turned around by offering even more subvented leases to their employees.

      Home deliveries? Wow, that would have changed the whole US auto industry…FYI..what the hell stopped a dealership from offering to take a car to a customer’s home?

      Eliminate destination fees to gain customer goodwill? Why don’t you just say ‘drop the prices of our cars by $900′…its the same thing…that would have saved GM…yep…selling their cars at even lower prices….brillant plan.

      Pushing back the new model year to the fall and trying to relive the 1950′s and 1960′s? Ooookay…maybe the dealership could put up big curtains around the models and then all pull the curtains back on the same day…that sounds like a good turnaround plan.

    • 0 avatar
      el scotto

      Buickman – How do you handle people who are eligible for the GM discounts and don’t buy GM? Those are the people GM really needs to win back.

      • 0 avatar
        sunridge place

        More discounted sales?…yep…that’s just what GM needs.

      • 0 avatar

        it’s an image thing, eligible or not. buying GM isn’t cool or desirable. most people drive GM because it’s cheap, not aspirational.

      • 0 avatar
        sunridge place

        ‘it’s an image thing, eligible or not. buying GM isn’t cool or desirable. most people drive GM because it’s cheap, not aspirational’…

        says the guy who recommended a year round AARP discount as one of his pillars of a ‘Return to Greatness’

        Cuz when I think AARP…I think cool!

        Today’s GM vehicles are far from perfect, but they aren’t on the cheap end of the market either.

        All those Camaro sales…because they’re cheap right?

        Equinox/Terrain leading in sales and at the top of transaction price for the segment…cheap right?

        Traverse/Acadia/Enclave leading in large crossover sales…yep, those are real cheap rides!

        Cruze/Sonic are at the top of their segments in price…they are cheaper cars in general because of the segment..but GM’s offerings aren’t selling because they are cheap.

      • 0 avatar
        highdesertcat

        el scotto, that has been a problem for all the domestic automakers since the mass exodus to the foreigners began back in the nineteen eighties. Once that former customer leaves the fold it’s pretty much impossible to get them to buy your product again.

        I remember reading a comment somewhere from a guy who addressed this exact dilemma by asking the question, “If you got ptomaine poisoning at a restaurant where you ate, why would you want to eat there again?”

        And the same guy may also have written, “If you had a bad ownership experience with an automaker, why would you want to reward them for their bad past performance by buying another product from them?”

        I thought those comments were pretty much to the point and I saved them in my quotable quotes file.

        When Alan Mulally took over Ford he made some unpopular changes within the organization. GM knows what changes it needs to make but is just unwilling to do so in order not to upset the status quo, Obama or the UAW.

        I wouldn’t worry about GM going belly up (again). It’s not going to happen. Uncle Sugar and the taxpayer will bail GM out whenever it needs bailing out, again and again and again, ad infinitum.

      • 0 avatar
        Polar Bear

        If/when GM goes belly-up again their US market share could be down to 10% or so. That is not too far-fetched considering how that share has been falling steadily for nearly 50 years. By then GM is not the pillar of the US economy it used to be, and the urgency to save it will be less.

      • 0 avatar
        highdesertcat

        Polar Bear, if there ever was a time to cut the losses it would have been in 2009. We cut our losses with Chrysler and dumped them on Fiat for a paltry $1.3B in bribe money to take it off our hands.

        GM was not allowed to fail, nor was it pimped to anyone like Chrysler was, but instead the decision was made to bail GM out. When GM needs more money to keep it from going under again, the same decision will be made to bail them out again.

        No politician can run for election on the premise that GM was bailed out one time and allowed to fail the next.

      • 0 avatar
        jkross22

        “Today’s GM vehicles are far from perfect, but they aren’t on the cheap end of the market either.”

        LOL! Of course they are.

    • 0 avatar
      Zackman

      @Buickman:

      I read that slide show you posted the link to. Very uncomfortable data. Unfortunately, I don’t see how GM can get back to where it should be – at the top. Seems everything’s going down the tube…

  • avatar
    BrianL

    So, which car is more important, a Cruze that is sold in every market GM is in or a US specific model called the Malibu? I think I would call the Cruze bread and butter.

    These bankruptcy articles are ridiculous. People don’t like the back seat of the Malibu and are predicting bankruptcy for the company… really? On bad model and the company is going bankrupt?

    The Malibu isn’t going to win in the market place. But, I also think that world wide the Cruze is going to pay more bills than the Malibu.

    GM is much much healthier than it was in 2008. For all of those people saying GM would be back in 5 years looking at bankruptcy, right now, it is wishful thinking and nothing to do with facts.

    • 0 avatar
      sunridge place

      Not sure where you got the idea that the new Malibu is a ‘US specific’ model.

      Its already for sale in China and Korea and is going to be offered in over 70 countries.

      I’m not discounting the importance of the Cruze globally nor your opinion on the ridiculous nature of these bankruptcy stories…but this generation Malibu is global…not US only…and its off to a decent start in China.

    • 0 avatar
      jkross22

      Repeated mis-steps in critical product launches and quality issues equals small back seats?

      Interesting but inaccurate read of history.

  • avatar
    CliffG

    I’m stunned that one could write an article about pre-bailout GM without ever mentioning GMAC. Seriously, go back and examine their financial reports from ’96 to ’06. GM had become a credit company that happened to sell cars and trucks on the side. Those of us who wanted a full blown bandruptcy were fairly sure that without one the radical restructuring of its’ retail sales end could not occur. Gee, guess what hasn’t occurred? There is a chance they may muddle through all of this, but if economic growth in the US and EU is going to continue at less than 2%, and China’s situation is not what the its’ official numbers suggest (a reasonable assumption) than somewhere, somehow the world’s auto mfr.s are going to have to eat a minimum 10-15% reduction in volume. Whose hide is this going to come out of? The depressing fact about GM over the last 20 years is that haven’t made any money off of a car*, and they still don’t. *as opposed to truck/SUV

    • 0 avatar
      sunridge place

      Just curious, what makes you think that GM doesn’t make money selling cars (vs trucks/suv’s) today…post bankruptcy?

    • 0 avatar
      360joules

      51% of GMAC was sold to Cerebus in 07 or 08 ish. Not sure when GMAC morphed into Ally Bank. I am a healthcare worker managing a personal portfolio and an estate portfolio trustee. Both pots of money had big big GM stakes back then thanks to inhereted wealth. I was/am just a guy with a job who was/is crazy about cars. TTAC wasn’t on my radar at the time, but as a retail investor reading Business Week, The Economist, and the pre-Murdoch Wall Street Journal, when GM spun of what had become their true core business (finance) I headed to the exit. I had a loud argument with the trusts and estates manager at the bank about my desire to dump all things GM. Looking at the outside of the car industry today, it seems Ford & Chrysler/Fiat are still close enough to the precipice of inhilation to be hungry and fearful of the knife. The knife isn’t always bad, desparation in business provokes panic but somtimes creates a clarity of thought in organizations that results in survival (K-car ?). GM still hasn’t reached that moment of desperation because of the bailout. And that is why I will buy a GM vehicle soon but not touch them as an investor.

    • 0 avatar
      bd2

      And Ford Credit got more in bailout $$ than what GMAC received.

  • avatar
    Erikstrawn

    Thanks to all of you who’ve complimented my article, it’s nice to hear positive feedback. To those of you who are arguing, thanks, because you read it and it made you think. It’s also nice to get some feedback on points I missed. Op-eds don’t give a lot of solid info, and I can’t sift through all those public releases to find it myself.

    > They market several competitive cars – the Cruze, the Equinox, the ATS, the Corvette…
    I don’t follow GM’s day-to-day models as well as I follow all the juicy tidbits about their latest troubles. Here’s what I could find about their other bread-and-butter cars, for better or worse (couldn’t find much about how the Sonic’s been doing lately).

    It sounds like they’re taking the right approach by not lowering the price on their Cruzes to gain market share, but they still have to move the metal, and I think it does boil down to how they market the newest and hottest and leave hanging fruit unsold.
    http://www.cleveland.com/business/index.ssf/2012/08/chevrolet_cruze_sales_plummet.html

    Equinox/Terrain is doing well, but they need more than one bread-and-butter platform.
    http://rumors.automobilemag.com/ford-escape-beats-chevy-equinox-honda-cr-v-in-july-compact-crossover-sales-160691.html

    > I’ll start with one that amuses me the most is the comments about people being fired for not performing well at their jobs. Isn’t that SUPPOSED to be the correct action for failing to do your job?
    True, but when people like Ewanick are being fired with explanations that don’t pan out, it’s worrisome. If you fire someone like Stracke for underperforming, you better have someone more capable waiting to replace him. It sounds like Ackerman is tossing other executives into the volcano to appease the shareholder gods.

    Yes, GM has fixed costs, and yes a lot of them are labor costs. GM has a massive debt load to their retirees, as do many of the companies that raided their pension funds in the ’80s. I personally believe GM is paying noticably higher, but not significantly higher costs than non-UAW manufacturers. I’ve toured Nissan’s Smyrna, TN plant and heard how the UAW tried to unionize them, but Nissan treats their employees well enough that there’s no traction. However, GM still has to sell cars at a profit to pay their bills. Pick your labor costs as per your political bent:
    https://www.google.com/#hl=en&sclient=psy-ab&q=gm+labor+costs+vs+toyota&oq=gm+labor+costs&gs_l=hp.3.1.0j0i30l3.0.0.3.67.0.0.0.0.0.0.0.0..0.0.les%3B..0.0…1c.ZYAzzEU6XVQ&pbx=1&bav=on.2,or.r_gc.r_pw.r_qf.&fp=70a11e965711397&biw=1920&bih=908

    > Seriously, go back and examine their financial reports from ’96 to ’06. GM had become a credit company that happened to sell cars and trucks on the side.
    That’s a nail on the head. The accountants were running GM, and they knew the money side better than the car side. Hence, GM became a bank that pumped out some cars to keep the capital flowing. Money may be the lifeblood, but it’s not the foundation. When the credit markets crashed, the blood stopped pumping.

    Again, thanks for reading!

  • avatar
    vent-L-8

    i approve of how Ford seems to be concentrating on their high volume models even at the expense of Lincoln. I would so love an all new high sexy long black Continental and I believe that once the rest of the Ford ship is fully righted they will deliver just that car. (oh please, oh please, oh please)

    • 0 avatar
      DeadWeight

      Ford is the automaker that will lose the most market share, consequently suffering the most, among the current 5 largest global manufacturers, over the next 5 to 10 years.

      Ford delayed, and did not dodge, a bullet in 2008. They used the pre-packaged bankruptcies of GM & Chrysler to get rid of many white collar staff AND get blue collar (i.e. union) employees to take buyouts that never would have been possible absent the industry turmoil.

      Now, Ford has implemented a business model that’s nearly the opposite of Volkswagen and Toyota, and the folly of that choice will be evident very soon, in what is a rapidly deleveraging global economy that’s only begun to pick up speed.

      We will all soon witness the price point intersection of Toyota Camry L / Volkswagen Passat S / Ford Focus SE.

      Ford is on the path to becoming the equivalent of circa-2004 Volkswagen in terms of ‘value,’ ‘price,’ and comparative advantage relative to the competition.

      Buckle up, FoMoCo buttercups.

      • 0 avatar
        Polar Bear

        Could you elaborate on why you think Ford’s new business model is folly? Do you mean shredding so many brands or the one-size-fits-all global car thing?

      • 0 avatar
        Athos Nobile

        I don’t know the US, but Ford has slid from 3rd to 5th place in the ranking in the last 6-7 months.

        I can see part of what Deadweight is trying to say, but since I don’t see the other parts of the picture I can’t say much.

      • 0 avatar
        D in the D

        I agree with this as well. Explain the wisdom of the Edge, Flex, and Explorer to me. They compete with each other more than any Ford vehicles ever did in the past. Do they really need 3 vehicles here??? I see failure here.

        The new Focus and Escape look great, but Escape’s already had a couple of big recalls. Do they not realize this is a major launch for their future success? I think Mulally’s free pass has expired, and we will see in the next couple of years what the “truth about Ford” really is.

      • 0 avatar
        200k-min

        “Ford is on the path to becoming the equivalent of circa-2004 Volkswagen in terms of ‘value,’ ‘price,’ and comparative advantage relative to the competition.”

        If you saying that Toyota/VW will sell more volume on lower priced and more decontented vehicles than Ford, then yes, I agree. That said, I don’t think the Ford strategy is pure volume. Aren’t they trying to rid themselves of fleet sales, etc.? Toyota has a reputation based on their past vehicles. How often do we hear about the Camry of the early 90′s? If Ford can re-create that type of success I think they have by far the better long term strategy. I’m waiting for the ’13 Fusion which I fully expect to be class leading vs. the Camry or Passat. That is worth more $$$ to me. Driving the same vehicle as 400,000 other people in the country isn’t really a motivating factor in my purchases. It’s a thin line Ford is walking and they have to get many things right, but I applaud their strategy over that of VW/Toyota. They are doing things that I want to see in the industry (making vehicles richer, not cheaper) and they are very close to getting this import driver of nearly 20 years to switch to them. Toyota/VW…not so much.

      • 0 avatar
        DeadWeight

        Ford needs volume. They’re not a prestige or aspirational brand now, and never will be (and the true test of whether there’s a baked-in and forever ‘free rider’ affect of being a prestige brand may still lay ahead).

        Without maintaining, and I’d argue increasing, market share, Ford gets into trouble that is the consequence as a function of non-aspirational brands requiring large economies of scale to maintain profitability.

        Ford doesn’t have the option of slashing production in order to maintain pricing power and margins in an era of what’s going to be ruthless cost cutting among the industry heavyweights, as it can’t undergo a full transformation into becoming a boutique brand, with an aspirational and badge-pedigree model lineup.

        With every divergent and relative uptick in the pricing of Ford’s vehicles vis-a-vis Toyota’s or Volkswagen’s (or Hyundai’s or General Motor’s, for that matter), Ford digs a deeper future hole for itself.

        Ford doesn’t play in the BMW space and won’t ever.

        Ford, no matter how good (or mediocre) one views its cars, plays in the appliance space that Toyota does.

  • avatar
    CliffG

    It is simply a question of margins, in their post bailout world they have dropped a fair amount of expenses that need to be apportioned in some manner throughout their model lines, so there is a chance that some money is actually being made there. My question on how that is working reflects their increasing reliance on sub prime loans and the fleet quotient. This suggests that volume for the sake of volume is still strongly manifested in their approach to the business. Frankly I hope your question is apt and my supposition is wrong. I will frankly admit I have not poured over their recent financials as I did in the past, but they are not doing a very good job of passing the sniff test. I am a little annoyed that as a taxpayer I am long the stock. But frankly, given our exposure to Fannie Mae and Freddie Mac, it’s peanuts, so who cares?

  • avatar
    Joss

    1975 British Leyland nationalized by a labour government. 1988 the remnant Rover Group sold off by Thatcher Tories.

    GM likely gone by 2022 under some Republican admin.

    • 0 avatar
      Mark MacInnis

      The error in your assumption is that there will ever BE another GOP administration….

      (And I’m a Tea Party member. But just not sanguine about the prospects for my party, because we have a voting populace who spends more time thinking about who’s going to win American Idol than they do about things government and economic….)

      • 0 avatar
        mike978

        There will be a GOP administration sometime in the future. Things always go in cycles. I remember the Democrats being worried, after 12 years out of the White House (1980-1992), about ever getting back in. I suspect it is more likely in 2016 than now, having an uninspiring candidate doesn`t help (just ask the Dems back in 2004).

  • avatar
    bomberpete

    I’m with you, PCH. I’ve read RTG and had several good laughs. Dollinger is a self-aggrandizing joke. He would be nowhere if he had to sell Buicks in metro markets like LA, Chicago, Dallas or New York.

    As bad as GM’s execs have been, they were right to ignore RTG; there’s nothing of significant or original there. Crying that “it’s better than doing nothing” isn’t a good enough answer, Jimmy.

    • 0 avatar

      you’re entitled to your opinion, as are these fellas…

      “I can’t thank you enough for sending The Plan. It is clear and logical. Implementation would be relatively easy and I have little doubt, based on our customer surveys, that such a program would be effective.” Art Spinella, CNWMR

      “Frankly, your twenty points could not have made any more sense.” Gitas Jamekis, John Crane Inc.

      “Wow, Jim, this is amazing. Some of these ideas might just work, by God. And Mark LaNeve dismissed this? I have looked at the website, and there is a ton of interesting stuff in there.” Dan Neil, Los Angeles Times

      “Everything makes perfect sense in its appropriateness and simplicity.” Ed Garsten, Detroit News

      “So, the legend grows.” Ed Lapham, Automotive News

      “I think you hit the nail on the head.” Ed Wright, GM Plant Manager, retired.

      “It is a blessing to hear your thoughts about GM. Being a Nissan dealer, I have watched the company do a 180 turnaround because of vision and dynamic leadership.” Ben Keras

      “You remind me a little of the legendary Ed Cole.” Robert Harless, Preferred Media

      “First of all, let me say that I think you’re doing everyone a great service.” Jason Stoddard, Centric

      “Jim, just read your plan to return GM to Greatness. It all makes sense but how do we get the brass at GM to pay attention?” David Bruckman, Clay Matthews Auto Group

      “I will gladly put your name on my proxy.” GMAC Branch Manager

      “I think it is the best thing to have happen to GM.” Anonymous, Bellagio Resort

      “Buickman – Who knows more about selling cars than just about anybody.” Jerry Flint, Forbes Magazine

    • 0 avatar
      Pch101

      “As bad as GM’s execs have been, they were right to ignore RTG”

      It has been awhile since I’ve read it, but I don’t recall Mr. Dollinger’s plan to be all that bad. Implementing aspects of it may have been a good idea.

      But the idea that it could save the company is hopelessly naive. The plan fails to acknowledge that GM had a fundamental product problem that was noticeable to consumers outside of Michigan, and that the product problem was not just a matter of exterior styling.

      The idea of the return of the model year is somewhat interesting. Unfortunately, it’s another example of retro thinking, which could work when GM owned the market, when model volume sales were high and when safety testing did not exist but could not possibly work today. Unless the changes were limited to minor cosmetics, this would be impossible to implement, and it would certainly not be cost effective for the manufacturer.

      (But of course, Mr. Dollinger isn’t concerned about those costs to the manufacturer, since he’s accustomed to being at a dealership that wouldn’t have to pay for them.)

      • 0 avatar

        what you aren’t considering is that I only disclosed the first 20 steps. there is much more beyond those, including how to bring GM past the Government Motors negativity and the gross negligence of closing franchise locations.

        the constant restructurings, closings, etc are not solutions. figuring out how to sell more cars is, and has been. that is my specialty.

      • 0 avatar
        Pch101

        “including how to bring GM past the Government Motors negativity and the gross negligence of closing franchise locations.”

        As I keep pointing out, you look at these things only from the selfish perspective of a dealer that is used to getting holdbacks, incentives and floor plan financing from the manufacturer. You don’t look at things from the other side of the table.

        GM had too many dealerships before the bankruptcy. It probably still has too many now, even though some were closed.

        Dealers don’t just sell cars, they also borrow the automaker’s money. Lots of money. Manufacturers have to carry dealerships by providing them with debt, and with incentives when the cars don’t sell.

        Too many dealers created a burden on the manufacturer, since they impose a credit risk on the producer. If you bought inventory for cash and didn’t collect incentives, then there would be no problem for the automaker. But since the automakers need to carry you with debt and are stuck with paying you for the dogs, there is a big problem.

      • 0 avatar

        that is incorrect. the cars carry the incentive. fewer dealers doesn’t change the expense ledger as the costs still apply on a per unit basis.

        furthermore, you have no clue as to the breadth and depth of my knowledge and are basing an argument on false presumptions.

        lastly I will apologize for responding previously in an aggressive tone. a couple glasses of wine can loosen one’s tongue. you are one of the B&B here which warrants respect even in disagreement.

      • 0 avatar
        Pch101

        “the cars carry the incentive”

        The cars are sold to the dealers on credit. I’m sure that you are familiar with floor plan and holdback.

        And the amount of excess inventory determines the level of incentive. The more dealers that there are, the more inventory that has to be produced in order to provide each of them with stock. That feeds the downward spiral of overbuilding, which leads to incentives, which damages the brand, which reduces pricing power, which reduces market share and demand, which creates excess capacity…

      • 0 avatar

        the dealers are the factory’s customers. fewer dealers means fewer orders which equals lessened market share and further factory closings, lower stock price and eventually another BK. simply selling more cars cures all headaches and should be the focus and concern going forward. now how to do just that?

        it all starts with changing perceptions and driving traffic into showrooms. this is what GM fails to understand and why they continue to decline. at the beginning of the year I predicted 15% market share by year end. let’s see just how wrong I am.

      • 0 avatar
        Pch101

        “the dealers are the factory’s customers”

        For a company that has trouble selling product, dealers aren’t really customers, so much as they are debtors.

        Dealers borrow lots of money from the manufacturers. You refuse to understand the implications of what this means.

        “fewer dealers means fewer orders”

        No, fewer dealers means more orders per dealership for the remaining dealerships. Increasing the number of dealerships does not increase volumes.

        If you were correct, then Toyota would have failed while GM was on easy street. As you will notice, the reality is completely different.

      • 0 avatar

        may I humbly request you watch this video. your opinion thereafter is sought and will likely become worthy of engagement.

        http://www.autoline.tv/show/1317

    • 0 avatar
      sunridge place

      This is where you are partially incorrect….and your Michigan bubble experience taints your viewpoint.

      Lets say there are 3 Buick Dealerships in an area and each dealership needs to have around 30 Enclaves in their inventory to meet a customer’s expectations.

      That’s 90 Enclaves in your area….but, lets say the demand for Enclaves isn’t that high and the Enclaves start to stack up and your dealerships don’t order more because they are spending all their time fighting amongst each other for the Enclave sales in their area. That’s when the cash starts to appear of the hood. So, GM then offers 3k rebate or 0% for 72 months to help move some units.

      It would be better to have two dealerships perhaps instead of three. Perhaps the proper level of production and sales for your area is about 30 sales per month….and a total of 60 Enclaves is needed (a 60 day supply)

      The two surviving dealerships will be healthier…they will have more unit sales per month…a busier service department. Instead of carving up those 30 sales into three stores it will be split between two. The dealerships will have more $$ for local advertising…spend less time fighting each other and more time working conquest sales etc. Away from the ‘set price’ fantasy world of GMS, they might even be able to offer better pricing to a true retail customer given a higher volume of sales. Maybe they can afford to ‘give away’ a service package to close a sale with better margins.

      Your point of view is that there is no such thing as too much inventory..that you can just ‘sell’ your way to success and you’ll just outwork your competition and make the sale. That was probably true for you selling Buicks in a town nicknamed ‘Buicktown.’ That’s not reality.

      Step outside the Employee Discount world where everyone and their grandmother (literally) is eligible for a set price and its a different world. Too many dealers can create too much local inventory which creates the need for expensive rebates.

      That’s not even to mention the capital tied up in floorplan $$.

    • 0 avatar
      sunridge place

      Let’s use basic numbers to keep things simple…. $35,000 average invoice price for an Enclave and lets assume a $4000 margin for GM.

      Scenario 1: Two dealerships in a market properly supplied
      60 sales x $35,000= $2.1 million revenue for Buick and $240,000 in profit.

      No rebates needed as the market is properly supplied.

      Scenario 2: Three dealerships carrying more local inventory than needed. I’ll even give you a few incremental sales with three stores instead of two.

      65 sales x $35,000= $2.28 million revenue for Buick and $260,000 in profit.

      But, because of oversupply, there is a 3k rebate needed.

      65 sales x $3000= $195,000 in incentive cost for Buick.

      Scenario 1= $240,000 in profit
      Scenario 2= $260,000 in profit choked by $195,000 in incentive cost= $65,000 in profit

      Now, scale this small example up and you’re talking real money.

      Market share isn’t everything. You have the ‘If you Build It, They Will Come’ strategy. You also say you have a plan to increase foot traffic and consideration and it ‘won’t cost a penny’

      I say GM should focus on building vehicles to demand and work on being profitable within a 15%-18% market share before building a bunch of vehicles they don’t need. Look for new segments to try to gain market share (like ATS) Strengthen their offerings in segments with weak product to help with profitability.

      You can make a lot of money at 15% market share in this country if you have the right manufacturing and dealership footprint. Ask Toyota.

      • 0 avatar

        dealers these days are sharp enough to align their inventory with their level of deliveries. whether GM has 3,4, or 5,000 franchises isn’t the trouble. the answer my friend is selling more cars. those who over emphasize insignificant aspects fail to grasp the critical issue, namely how to stimulate and create demand. the case you make and numbers you provide are inconsequential and irrelevant. sorry bud but you aren’t there yet. please consider applying your sincere effort and energy toward what will make a difference and change course and direction at GM. just sayin’…

      • 0 avatar
        KixStart

        A few pages back, you said you sell into other states.

        Why? I’m quite sure there aren’t any states that lack Buick dealers. Why don’t these buyers just go up the street? You certainly can’t be servicing their cars and it seems you’d be unlikely to be showing them how to use the advanced tech features of the entertainment systems.

      • 0 avatar

        Kix, that is a valid question. the answer lies within word of mouth recommendation and personal service. I deliver nationwide so logistics are not pertinent. once the discussion occurs the delivery is usually forthcoming. talk to me and the odds are you’re signing your name soon.

    • 0 avatar
      sunridge place

      This comment probably won’t end up in the right place and this thread is probably dead but I did watch the link.

      Not knocking you here too much Buickman. But, you kind of dodged the same questions about ‘too many dealers’ in this inverview too. Not a lot of new ground covered in the link versus what is on here. Questions from the group about ‘life outside of Michigan’ kind of ignored by you as well.

      Also, you recommended Jerry York at the time of the interview as CEO. Interesting comment. Here are some of the late Jerry York comments from around 2006 about GM.

      http://www.drivingthenation.com/?p=395

      On a high level, Mr. York said this about GM in 2006:

      ‘Be realistic about market share and revenue expectations, and gear the cost and expense structure accordingly’

      In more detail he said:

      ‘Like that conversation I had with analysts at IBM in mid-1993, I think we have to give GM a lot of credit for their recently announced capacity reduction plan. Will it be enough? None of us know for sure. Is it a good start? Yes, for sure. Knocking a million units out of GM’s North American capacity is at least a very good start, and hopefully will be the event that finally gets the company “ahead of the curve.” And importantly, it will enable GM to better manage the profitability of its sales mix, meaning further reducing its lower margin fleet sales.

      Next, we think GM needs to “Cull out the product offerings. Offer fewer, better products. Each car and truck division should have a more focused image.”

      Well, it is not entirely clear what is going on in this area, but as I indicated earlier, we feel very good that progress is being made in the area of better products, and as we all know, at the end of the day that is the single most important aspect of the automotive business.

      And given the state franchise law restrictions, we like the plan to consolidate Pontiac, Buick and GMC stores. Our hope here is that the model offerings in the Pontiac and Buick lines will be limited, with zero overlap between the two’

      Mr. York and others were right about a lot of things back then. If you read the whole speech, they missed a few things too.

      I’ll repeat his main point:

      ‘Be realistic about market share and revenue expectations, and gear the cost and expense structure accordingly’

      On a side note, as Mr. York was on the Apple Board way back in the 90′s until his death a few years ago…and seeing Steve Jobs comments upon his death I assume he (York) had an influence on Jobs and Apple about focusing on a few products that they do well and not trying to please everyone. Building and selling cars is a hell of a lot harder than hand held devices…but York was kind of saying…cut your brands down, size your company to demand and get profitable before you try and take on every segment in every place.

      • 0 avatar

        Jerry York was a close friend. the last email I got from him was 2-18-10 regarding our next lunch date. in closing…

        “I appreciate your friendship, and kick my own ass all over the room for not contacting you years sooner.”

        Jerry

  • avatar
    JK43123

    Remember, at GM we don’t make cars, we make money. Except when we don’t.

    Meet the new GM, same as the old GM. I predict bailout in 2017.

    John

    • 0 avatar
      bd2

      GM has made $2.5 billion in net income thus far for the year, even with its European losses.

      By 2017, chances are, the Euro market will have recovered – so if anything, GM should be making more $$ by 2017, esp. with Cadillac finally having its 1st competitive sedan lineup by then (the ATS, 3G CTS and the Omega flagship should handsomely add to GM’s bottom line).

      Also, GM has the equivalent of cash reserves of $25 billion, so even if they were losing $$, it would take some time to burn thru all of that.

      • 0 avatar
        jkross22

        “Also, GM has the equivalent of cash reserves of $25 billion, so even if they were losing $$, it would take some time to burn thru all of that.”

        When do the carry forward tax abatements from the ‘bk’ expire?

        As I’ve said before, if the government paid off my house, my student loan debt, my kids’ tuition, my monthly balance on credit cards AND LET ME CARRY FORWARD MONIES PAID FOR MORTGAGE INTEREST I DIDN’T PAY, I’d have plenty of cash, too.

        That’s where GM is.

    • 0 avatar
      KixStart

      In 2009, there were special circumstances.

      By 2017, GM will have fixed most of its pension problems (or so we hope) and, if we are lucky, we won’t be in a recession. If GM needs to go under at that time, there will be no reason for the US as a whole to support a 2nd bailout.

      • 0 avatar
        jkross22

        “there will be no reason for the US as a whole to support a 2nd bailout.”

        Except that GM’s political donations will skew this.

        http://www.opensecrets.org/orgs/summary.php?id=D000000155

    • 0 avatar
      highdesertcat

      It’s always about “the future”, isn’t it?

      In 2008/2009 it was, “If GM could only get a bailout to keep the lights on and the doors open and the UAW working, then GM will bounce back in no time at all.”

      At the next Congressional hearing about bailing out GM it will be, “If GM could only get a bailout to keep the lights on and the doors open and the UAW working, then GM will weather the storm in Europe and bounce back in no time at all.”

      We should have dropped GM in 2009 like we dropped Chrysler when they both went under. We didn’t drop GM then, and we won’t in the future either. We’ll bail GM out again, and again, and again.

      Most Americans were against the bailouts in 2008 and 2009. Most Americans will be against future bailouts. But that doesn’t mean that they won’t happen, no matter how many prudent reasons there are to let businesses like GM fail based on their own lack of merits.

      I agree that we should not bail anyone out, OR we should bail out ALL failing businesses. The government selectively deciding who lives and who dies in business is autocracy, and that’s where we’re at in America today.

      So it all boils down to which end a person is at. If a person is on the receiving end of the bailout, like GM and the UAW, then, yeah, life is good, don’t worry, be happy!

      But if a person is on the paying end of all this largesse, then life ain’t all that good since you’re working and paying taxes to keep someone else living the good life, living large on your money.

  • avatar

    The 2013 Malibu is far from class leading and will end up in the bottom 25% of every comparison. This shouldn’t be a cause for concern though. Car buying is mostly an emotional one. A 1 – 3 MPG lag from the competition will not mean death to a model. The Civic and Corolla still lag every competitor in their segment wrt to technology, MPG or design. Toyota and Honda have no problems selling boatloads of them. The Malibu will do well between Chevy’s vast dealer network, and unique styling compared to the similarly shaped/styled Camry, Accord, Sonata and Altima. Too much is talked about rear legroom even though it is a full 2.2 inches more than the Sonata, 0.8 Inches more than the new Altima and only 0.4 inches less than the current Accord, which has the most rear legroom in its class. The Malibu is the quietest in its class, looks very upscale and aggressive with the right choice of wheels. Its not Fusion attractive, but I would def pick this over a Camry, Sonata or Altima.

    http://www.thetorquereport.com/assets_c/2011/10/Chevy_Malibu_Production_Korea-15674.html
    http://www.youtube.com/watch?v=mBQziLWsf-A

    Chevy needs to market it properly highlighting the Camaro styling elements. Bringing the ECO version out with lame a** wheels was definitely a misstep, hopefully one they can recover from. With the 2012 models $6000 cheaper than the eco versions, its no surprise eco sales are in the toilet given that there is barely any improvement in MPG.

    This one car is not going to lead GM into bankruptcy. What will get them there is continuing to screw up European operations, mess up the Silverado/Sierra redesign and gas prices going up dramatically. GM’s offerings are still perceived to be the least fuel efficient even though some models are class leading in their respective segments.

    I don’t see GM begging for a bailout at capitol hill if they can remain profitable every consecutive quarter. Get your european operations inline asap, improve margins, and reduce redundancy in platforms, engine choices and trim levels.

  • avatar
    el scotto

    Real world question here. I’m 5’9 with stubby legs. It’s a hillbilly thing. Does GM styling still go by the bigger car gets bigger seats design philosophy? My grandparents Le Sabre is a PITA to drive because the seat bottoms are too long. Not everyone is 6’4 with long legs and I think that’s GM design target.

  • avatar
    Robert Schwartz

    “Running the numbers through 30 June 2012, we find that GM’s Altman-Z score is 0.66. The company’s financial situation has not improved since the end of 2011 and it remains well in the danger zone for facing future bankruptcy, as the company’s post-bailout reorganization appears to have been inadequate to really restore the company to good health.

    “While that doesn’t suggest that the company will be filing for bankruptcy in the immediate days ahead, it does confirm that more reorganization and cost reduction efforts lie ahead for the company in the short term.”

    http://politicalcalculations.blogspot.com/2012/08/is-gm-headed-back-to-bankruptcy.html


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