People do the right thing, unless money and power is involved. From the highest paid executives to the lowest ranking newbie, money and power is a motivator. Those in positions of accountability are held to a higher standard, and post-bailout Detroit is not immune to criticism. But in an act of corporate cheerleading, Pete Mateja’s Internet flamebait at Automotive News [sub] titled “Detroit had lousy management — and other myths that need debunking” shows how the “experts” got it wrong.
Category: Between the Lines
First of all, I don’t have the embed code for this ad. For some reason, GM hasn’t sent it to TTAC and it’s not on YouTube. To see the ad, click over to Autoblog. Second, New GM Chairman of the Board Ed Whitacre should never have done this ad. GM’s single biggest problem, the one that trumps everything: their insular culture. By fronting this spot, Whitacre has become part of the problem. He’s crossed the line from gamekeeper to poacher. He’s lost his independent observer/taxpayers’ guardian status; he can no longer distance himself from the Lutzes and yutzes who animate the GM zombie. Whitacre’s now “one of the boys.” Third, the actual text of this ad [parsed after the jump] misses the boat.
“I’m Ed Whitacre, the Chairman of General Motors.”
What? No hello? Not very friendly, is it? First impressions count. Whitacre looks like a prison warden walking through The Big House. But is that rank-pulling exercise a good thing? GM has four brands left: Buick, Cadillac, Chevrolet and GMC. The whole chairman thing squares with Cadillac’s core clientele, maybe Buick. But Chevy and GMC? Those are supposedly working-class brands. Their average buyer is more in tune with the word “boss.” And not in a good way.
Yes, I know: Lee Iaccoca was Chrysler’s Chairman. But his famous 1984 ad didn’t start with him saying, “I’m Lee Iaccoca, Chairman of Chrysler.” (A subtitle provided the ID.) Lee’s opening line: “A lot of people think America can’t cut the mustard anymore.” That’s the way you do it. Grab ’em by the lapels and don’t let ’em go.
“Before I started this job I admit I had some doubts. [pause] Probably a lot like you.”
What doubts? Did you think GM cars were crap? Crap how? Unreliable? Uncomfortable? Badly built? What? And why “probably”? That’s an admission wrapped in a denial shrouded in mystery. Whitacre’s vague statement is so Old GM: wishy-washy and vague whilst trying (and failing) to be genuine and sincere.
“But I like what I found. I think you will too.”
What did he find? See: above. Except this time the ad’s trotting out GM’s secret weapon in its own self-destruction: the perception gap. Clearly, Eddy’s saying “I was wrong about GM—and so are you.” Which is another way of A) calling himself a close-minded ignoramus and B) calling GM customers close-minded ignorami. Idiots. Fools. It wasn’t OK for Old GM to insult its customers. It’s not right for New GM, either.
While we’re at it, “like” is not the kind of word that convinces people to risk their hard-earned money on a car from a company with a history of building crap (both relatively and absolutely). “Buy a Buick. You won’t love it. But you will like it.” That’s not going to cut the mustard, and he didn’t even say it. Clearly, GM doesn’t know the power of the specific. Or does it?
“Car for car, when compared to the competition, we win.”
What’s with the strange sentence construction? It’s no small thing: people listen to TV ads—if they listen—with one ear. Anything that makes it hard for them to understand what’s being said (let’s not even talk about Ed’s accent yet) dilutes the message.
Ed’s assertion sounds like it’s designed by lawyers. What does “car for car” mean? I know YOU know what it means. But again, what about people who aren’t really paying too much attention? Whitacre should have said “car vs. car.” Or something else entirely, that follows on from the previous statement.
And then there’s “we win.” HUH? By what metric? As the Chairman doesn’t cite an authoritative source for this declaration of victory, the ad asks viewers to take Mr. Clicky Shoes’ word for it. Yes, well, who the hell is Ed Whitacre? [Note: Ed’s the guy who said, “I know nothing about cars,” the day his appointment was announced.] And if Ed was so stupid as to have doubts about GM products he shouldn’t have had, why should we think he knows shit from shinola now?
“It’s as simple as that.”
Who would’ve thought it could get worse? But it does. “It’s as simple as that” is the same as saying “I know more than you do.” Or “I’m not going to debate this with you.” Or “STFU and buy a car from us.” Yeah, that’ll work.
“I just know if you get into one of our cars you’re going to like what you see.”
So, Ed you feel it in your water, eh? Not good enough. Taken literally, “you’ll like what you see” makes no sense; people don’t buy a car based on whether or not or how much they like the way the interior looks. Taken on a more metaphorical level, it’s a meaningless statement—that depends on Ed’s credibility. Again, he doesn’t have any. For 99.78% of the general population, Whitacre’s a completely unknown quantity. Judging him as a salesman, I don’t like what I see; Whitacre doesn’t have one tenth of Iaccoca’s star power.
“So we’re putting our money where our mouth is.”
The switch to the royal “we” is jarring and completely inappropriate. A personal message has instantly become just another example of a corporate shill mouthing off.
“Buy a new Chevy, GMC, Buick or Cadillac and if you’re not a hundred percent happy return it.”
Anyone else catch that momentary hitch between Chevy and Buick? Seriously; Whitacre is trying to remember the list. He’s mastered it, but it’s not quite there. By the same token, look at his finger point. It’s out of sync with what he’s saying. That’s what psychologist calls cognitive dissonance. Or what normal people call B.S.
In any case, the 60-day guarantee concept is deeply flawed. Buying a car is not like buying a packet of gum in a flavor you’ve never tried before. People hate car dealers. The only thing worse than the thought of buying a car is the thought of returning it. The customer is thinking, rightly, hassle, more hassle and more hassle, ad infinitum.
“We’ll take it back.”
How nice of you. But it’s not “We’ll give you every penny back, plus give you a toaster for your time.” Sigh.
“That’s our new, 60-day satisfaction guarantee.”
Think like a moron for a moment. Ed’s saying that the guarantee will be in place for 60 days. OK, I’m being picky, but this isn’t as clear as it should be. All they had to do was add the 60-day bit to the return statement. Oh, and the usual “no questions asked” caveat, that’s been around since 34 A.D. Like this:
“. . . if you’re not a hundred percent happy after the first sixty days, return it to your GM dealer for a full, no-questions-asked refund. Plus a new toaster for your time.”
“And as always you’ll get our 100,000 mile five-year powertrain warranty on every vehicle.”
That’s “your” vehicle, not “every” vehicle. And sorry, it’s not vee-hickle. Whitacre’s accent just crossed the border from regional to quirky. And that’s opened him up for parody (check back with TTAC in future posts). Whitacre could have, should have said “car” instead. Anyway, what’s the point of mentioning this? Trying to remember two deals is not as easy as one.
“That’s how strongly we feel about our cars and how committed we are to you.”
See how that doesn’t work? By introducing the warranty thing, the connection between the 60-day guarantee and the commitment has been broken. Touchback.
“So put us to the test.”
Test? I’m not buying a car with confidence, I’m buying a car to see if GM’s any good? No thanks. Not with my money. As PCH101 says (below), people want to buy a car they can keep. Duh. And if the car was any good, why would Eddy even mention returning it?
That’s the problem with this type of come on, and there’s no getting around it. And the more expensive the item, the more risk the consumer assumes. The more risk, the less likely they are to buy. Even with a money-back guarantee.
“Put us up against anyone.”
Huh? They’re introducing a new concept—comparison shopping—in the last ten seconds? What’s that got to do with the 60-day guarantee? If I don’t like the car relative to the competition I can return it? Obviously not. But this “we’re better than the other guys” is a different idea that smacks of throwing stuff against the wall to see what sticks. Not that GM’s ever done that before . . .
“And may the best car win.”
This is a blatant attempt to echo “If you can find a better car, buy it.” But it’s totally different. Whitacre’s closing statement admits the possibility that the competition is better than GM’s products. How stupid can GM be? That stupid. And more. Watch this space.
I’ve been harping on about the media’s “Ford didn’t take bailout bucks” meme for some time. Commentators have slated me for slating the Blue Oval Boyz for claiming they avoided the taxpayer trough. In fact, Ford raided the public purse to the tune of $5.9 billion dollars. Yes, it’s a no-to-low-interest Department of Energy “retooling loan.” I repeat: the $5.9 billion loan from the Advanced Technology Vehicles Manufacturing (ATVM) program allows Mulally’s minions to spend $5.9 billion dollars on something else. It’s a bailout. Question: if you’re an industry writer, how do you push Ford’s mega-suckle to one side to keep the “pure as driven snow” show alive? You draw a distinction between “emergency tax dollars” and ATVM loans, while, at the same time, not mentioning the loans. Sarah Webster’s “Ford, Toyota in a close race to No. 1” does that and more, taking Motown’s hometown cheerleading to the next level.
As Webster embarks on a frenetic Ford canonization campaign, she takes the time to dance on Toyota’s grave. Although, you know, they’re not “dead” in the GM or Chrysler sense of the word. Or, in fact, any other sense.
For years, we’ve all watched and wondered when Toyota would surpass GM as the world’s largest automaker. That moment came and went earlier this year.
In the meantime, the world got stuck in economic quicksand, forcing GM, Chrysler and dozens of suppliers into bankruptcy.
The auto industry now emerging from that mess is, in many ways, an unfamiliar one — especially considering how Ford’s star is rising while Toyota’s is falling.
Ah yes, GM and Chrysler didn’t go bankrupt by their own hand. They were unwitting victims (and how) of the global economic meltdown. How long has it been since we’ve heard that bogus excuse for the domestic automakers’ epic failure? Not long enough.
The “Toyota’s on the rocks” story never really caught fire in the mainstream media. Especially as Toyota’s made some bold moves and very public mea culpas to sort its shit out. Still, the “See? See? They’re in trouble too!” story line helps keep Detroit’s chin up. So the kid stays in the picture.
Make no mistake, there’s trouble in Toyota City. The Japanese automaker has lost more than $4.8 billion over the past year. Toyota’s critical U.S. sales are down 34% — worse than the industry’s 32% decline. As such, Toyota has lost a half point of market share this year, selling 16.3% of the new cars and trucks in America.
Whoa! Half a point! Anyone want to tell Ms. Webster how much market share Chrysler, Ford and GM have shed in the last ten years? Don’t bother. She knows the stat and chooses to ignore it. As well as Toyota’s recent ascension to the top of the Cash for Clunkers new car league table.
By contrast, Ford already has endured years of cost-cutting and soul-searching, and it’s starting to stand tall again. All without emergency tax dollars.
Ford’s U.S. sales are down by 28.5% this year, but that better-than-industry performance helped it pick up nearly a point of U.S. market share this year, for 15.5% of all sales. The truck leader is turning out passenger cars that are tops not just in quality but in styling and innovation, too.
Whenever a Motown cheerleader runs out of chants, chances are they’ll start yelling about how great Detroit’s cars are, or will be, despite sales figures. Automotive News sales stats, Consumer Reports black dots, J.D. Power and TrueDelta rankings be damned. It gets woolier.
Ford’s performance led it to post a profit of $2.3 billion in the second quarter, albeit mostly because of onetime accounting gains. But Ford is now in the black, earning $834 million through the first half.
And unlike Toyota, which has lost top executives in recent years, the psychic momentum at Ford seems to be on the rise. While Ford isn’t ready to celebrate, there’s optimism in Dearborn, and more importantly, traffic in Ford’s showrooms.
Stripped of obfuscation, that’s a $424 million Q2 loss. And what the hell’s “psychic momentum”—if not another attempt to shore up a thesis without a strong foundation? Once upon a time, Detroit’s media accomplished this task by comparing the domestics to each other, rather than the barbarians at the gate [note to Webster: they’re heeeeeere.] Clearly, Webster’s Old School.
Globally, Ford (5.5 million) has a longer way to go to catch up with Toyota (8.97 million), where Volkswagen (6.2 million) is also a major player.
But more than any other American brand, Ford has the promise to be a world leader. No single GM or Chrysler brand has the global cachet that Ford brings to the showroom.
Yeah, I’ll have that Taurus ’cause Ford rocks in China! Anyway, heading for the conclusion, Webster still has to deal with the 800-pound Toyota in the room. Just ’cause.
The Toyota brand has long promised quality, but that promise means less when the number of problems per vehicle has leveled out among rivals.
Does Webster mean initial quality? Or long term reliability? Either way, Toyota’s rep for quality may mean less, but it doesn’t mean nothing. In fact, it means a great deal. Still.
Since the industry meltdown took its toll, and before, Toyota’s made it clear they’re not about to surrender/ignore/neglect their dedication to producing quality products. Besides, how can Webster single-out Ford’s global prospects relative to its cross-town rivals yet happily dismisses the importance of relative vehicle quality across the entire automotive spectrum? Practice.
God help Ford if they’re as flippant as Webster about absolute and relative vehicle quality. Meanwhile, the coupe de grace. Ish.
Ford today seems to stand for what Toyota and other automakers are hoping for: A comeback.
Seems? That’s like dropping a pom-pom. Only worse. Anyway, if Ford is the poster boy for the auto industry’s eventual rebound, what does that make Lincoln? Just askin’.
[Thanks to Cammy Corrigan for the link.]
I once asked a priest about confession. What was the point? I knew Catholics who’d sin, confess, sin, confess, wash, rinse, repeat. “It’s not a ‘get out of hell free’ card,” he insisted. “Confession means you fully acknowledge your sin, pledge to atone for the harm you’ve caused, promise God that you’ve learned from your mistakes and change your behavior.” Let’s say you do all that and commit the same sin. What good’s an unrealized promise? “None,” he said. “I have refused absolution to repeat sinners because I didn’t believe that they were ready, willing or able to abandon their sins.” And there you have it: New GM’s recipe for disaster. Let us turn to the first sentence of New GM’s first press release.
The new General Motors Company began operations today with a new corporate structure, a stronger balance sheet, and a renewed commitment to make the customer the center of everything the new GM does.
Leaving aside the fact that GM’s opening proclamation makes no mention of its bankruptcy, or what led to its bankruptcy, how can New GM claim it has a new corporate structure? Fritz Henderson was the CEO of Old GM. Fritz Henderson is the CEO of New GM. Mark LaNeve was Old GM’s VP of sales and marketing for North America. Mark LaNeve is New GM’s VP of sales and marketing for North America. Old GM’s ex-Car Czar Bob Lutz has been reinstated as New GM Car Czar. Meet the new boss . . .
Actually, GM is now run by the federal government, under the watchful eye of a twenty-five member, politically-appointed “Presidential Task Force on Automobiles.” As much as Old GM’s management needed a right royal arse kicking—which, as stated above, this isn’t—I still can’t see GM nationalization as something worth celebrating.
Sure, GM’s balance sheet is stronger than it was before the government assumed control. And yes, New GM is “only” carrying $11 billion worth of debt. But any realistic appraisal of its balance sheet must consider cash flow, current assets and future prospects.
New GM’s brands and product plans are in complete disarray. With the exception of its pickup truck, GM’s products are class-trailing. Incentives are high and getting higher (i.e. margins are low and getting lower). GM’s killer apps are, as always, on the horizon.
Meanwhile, when exactly was GM last committed to its customers? Before they allowed [now-bankrupt] Bill Heard Chevrolet to screw every single person that darkened the dealership’s doors because the man moved mountains of metal? Never mind because . . .
“Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers,” said Fritz Henderson, president and CEO.
Somewhere in the back of my mind, I hear Elton John’s “I’m Still standing.” But if New GM’s so new, why are we getting the same old song and dance from its old—I mean, previous and current, CEO?
“One thing we have learned from the last 100 days is that GM can move quickly and decisively,” said Henderson. “Today, we take the intensity, decisiveness and speed of the past several months and transfer it from the triage of the bankruptcy process to the creation and operation of a new General Motors.”
Here we are again: faster, deeper, harder, oh baby! Anyone remember Chrysler’s contention that speed was the primary advantage of private equity ownership? That didn’t turn out so well. Besides, does anyone really believe that a government-owned General Motors (with the aforementioned twenty-five member oversight team) will be faster than Ye Olde GM?
As I’ve said before, GM’s problem is not speed. It’s direction. GM still doesn’t have a coherent plan for their brands or the models within. Or do they?
“Our goal is to build more of the cars, trucks, and crossovers that customers want, and to get them to market faster than ever before.”
More, faster. See how that works? Or, in fact, doesn’t?
“The success of our recent launches and the exciting new vehicles and technologies we have in the pipeline are evidence of our ongoing commitment to excel at everything we do,” said Henderson. “Our goal is to make each and every General Motors car, truck and crossover the best-in-class.”
According to Fritz’s previous pronouncements, GM’s whittling itself down to 39 nameplates. What are the odds that all of them will be best-in-class? But hey, Fritz feels me.
“Beginning next week, we will launch a ‘Tell Fritz’ website where customers, or anyone else, can share ideas, concerns, and suggestions directly with senior management. I will personally review and respond to some of these communications every day.”
Glasnost at GM? Sounds good! But then, confession is good for the soul. As long as it’s genuine . . .
[NB: Fritz is having a webchat on the FastLane at 4pm EST]
Well, the worm has turned properly on government intervention in the auto industry, as General Motors now seems to fear a government takeover more than bankruptcy. Too bad the choice isn’t either-or. Recent 10-Q filings with the SEC indicate that GM accepts the inevitability of a Chapter 11 filing, but describes the ramifications of a possible government ownership stake with fear and horror. “In the future we may also become subject to new and additional government regulations regarding various aspects of our business as a result of the U.S. government’s ownership in (and financing of) our business. These regulations could make it more difficult for us to compete with other companies that are not subject to similar regulations,” figure GM’s professional worrywarts. These still waters of paranoia run deep.
Even the most even-handed comparison tests reflect a specific set of specifically weighted criteria. Then there are those that aren’t even-handed. Car comparison tests don’t come much more tilted than the “Camaro vs. Genesis” comparison test in the June 2009 Car and Driver.
Let’s begin with the cover, which shows the Camaro nosing ahead of the Hyundai on a track and includes three bits of information on each car. The first, base prices: $23K for the Chevrolet Camaro, $26K for the Hyundai Genesis Coupe. Open the magazine and you’ll find that C&D rejected a Camaro LS for its awful upholstery and mediocre tires. Upgrade to the LT, like they did, and two-thirds of the Camaro’s price advantage goes away. Adjust for remaining feature differences, and the cars’ prices are generally only a few hundred dollars apart.
Next on the cover, fuel economy: 29 MPG for the Camaro, 26 MPG for the Hyundai. EPA highway figures, of course. The city figures are an identical 17. In C&D’s testing, the Hyundai went slightly farther on a gallon of gas.
The third bit of information, horsepower: 304 for the Camaro, 306 for the Genesis Coupe. Not as potentially misleading as the other two bits. And yet, unsaid on the cover: the Camaro is over 300 pounds heavier. The Hyundai has a significantly better power-to-weight ratio.
In the actual comparo, the Camaro wins (as suggested by the cover photo). By a single point. Actually check the details, and you’ll find that, despite the connotations of that cover photo, the Camaro trailed the Genesis Coupe in every track test—acceleration, handling and braking—sometimes by a substantial margin. Moving to the subjective scoring, C&D rated the Genesis Coupe more “fun to drive” by a not insignificant two points. They note a few times that the Camaro feels too big because of its size, mass, and small windows, and that it doesn’t invite precise steering inputs.
So how did the Genesis Coupe lose? First, ride quality—affected by the optional Track Package on the car C&D tested. The buff book notes that they cycled through three Camaro test vehicles before settling on the one they liked best for the test. Why, then, didn’t they also evaluate the Genesis Coupe without the Track Package?
Even the four point spread in ride quality––a huge difference as scoring in these tests tends to go––wasn’t enough to fully erase the Hyundai’s lead in nearly every other category. To give the Camaro a one-point victory, C&D resorted to the score of last resort: “gotta have it.” The reviewers gave the new Chevrolet Camaro a monstrous six-point advantage. That’s 22 vs. 16, out of 25 in a 110% subjective category.
To put it bluntly, the Camaro won this comparison test because, in C&D’s estimation, people want it more. Chalk one up to the power of a name and an effective PR campaign. [ED: Or ad revenue.]
Even if we grant that “gotta have it” belongs in the scoring table at all––and I don’t, since I’d rather a test compare what the cars are like to look at, sit in, and drive and not the model name or the PR––the Hyundai’s 16 is crazy low for a car that offers so much performance for a price in the mid-$20s.
The issue includes one other comparison test, between the BMW 328i, Infiniti G37, Audi A4 2.0T and Acura TL. The TL, the least “gotta have” car in that test, with far more faults than strengths, received a 16. The Infiniti and Audi both received 20s. In the context of these scores, the Genesis Coupe’s 16 doesn’t hold water.
And the Camaro V6’s 22? Yes, there’s a lot of interest in the new Camaro, but generally for the V8. Maybe that’s why they couldn’t go all the way to 25, and so had to dock the Genesis Coupe’s “gotta have it” score to carve out the desired margin?
No disrespect meant to the Camaro. If it handles anything like the Pontiac G8 with which it shares a platform, it’s a fun car, and it looks great. I’ve driven neither car yet myself and have no predisposition in favor of either. In other words, I’m no fanboy or hater.
My focus here has been strictly on the fairness of the test. And this is the most tilted comparison test I’ve come across in a long time. In the end, “gotta have it” is like the “reviewer’s tilt” score used by gamespot.com when reviewing games. It’s being used to ensure that the car the reviewers want to win actually wins, despite what the other scores happen to be.
Props to automotive consultant Maryann Keller for calling for GM to get its shit together, I mean “create a sense of urgency” since 1875, or thereabouts. Kudos for Keller’s willingness to predict a GM C11 early and often. And praise be for loaning TTAC the writing talents of Mr. Ken Elias. OK, so. . . Keller’s column in Automotive News [sub] is suffused with Annie-like optimism for a post-C11 GM. With one a catch. Chevillac’s success depends on the “smaller, leaner and cost-competitive company‘s” ability to secure a champion who can administer strong medicine to GM’s poisonous corporate culture. Before we deal with Ms. Keller’s “if you build it, he will come” theory, here’s a taste of her sunwillcomeouttomorrowism:
Let’s face it: Much of the success of the Japanese auto companies in the United States came about as a result of Detroit’s failures. GM, Ford Motor Co. and Chrysler made it easy for the competition by not matching them in quality, not renewing their product lineups on a timely basis, virtually ignoring the sedan buyer and diverting resources away from North America and even away from auto assembly.
If GM restructures quickly, it can emerge as the low-cost producer in North America and use that position to gain market share quickly.
I don’t see how Chevrolet or Cadillac can become low-cost producers in North America. Does anyone seriously expect Chevillac’s UAW employees to labor for lower wages than their non-union American counterparts? Or, for that matter, Korean or Chinese workers? So where’s the competitive cost advantage going to come from? More efficient factories? Streamlined management? Better marketing? What?
Even if Chevy could undercut its competitors’ costs, gaining marketshare, never mind gaining market share quickly, is so far from a done deal it may not even be possible, never mind likely.
Chevrolet is not a viable automaker. Aside from pickups and a superabundance of dealerships, they ain’t got game. The Volt is an inside joke.The Malibu isn’t stealing significant sales from Toyonidssan. The new Camaro is a niche product. Ditto the Corvette, only more so. The Aveo is a piece of crap. The Traverse surmounts nada. Etc.
In fact, rebuilding Chevy isn’t simply a matter of throwing billions at existing products, or spending billions on creating new ones. It would take at least decade to do something about the brand itself, which is both damaged and virtually meaningless.
In contrast, Cadillac doesn’t need cost savings; it need vehicles that are significantly better than those made by Lexus, Audi, BMW and Mercedes. Cadillac also needs a stronger brand than its German or Japanes competitors. This for the automaker hell bent on building a station wagon, a rebadged SUV-lite, a blinged-out Tahoe and a lower-priced sedan than the CTS.
While MAK’s right that the transplants built their initial success on Detroit’s failures, there’s no reason to think the “usurpers” will now drop the ball. Though MAK tries to make the case:
Ironically, some of GM’s competitors aren’t looking invincible anymore. At ¥100 to the dollar, imports from Japan aren’t profitable. Nissan Motor Co. will lose money this year; and, despite Carlos Ghosn’s magic, it has yet to demonstrate consistent product strength.
Toyota Motor Corp.’s quality is not rock-solid anymore. The residual values of its vehicles are falling, and product proliferation is confusing buyers and dealers. The blind quest to be No. 1 left Toyota with global excess capacity.
Sorry, but Toyota and Nissan are hardly standing still. They’re rectifying their mistakes, readying themselves to keep kicking Motown’s ass. And what of Honda? Hyundai? Ford? Fiat? Just joking.
Anyway, MAK thinks Chevillac’s future comes down to people. True, but what are GM’s chances of finding someone to lead Chevillac to victory?
The GM board of directors bears responsibility for the company’s fate. The most important responsibility of the board is naming and firing the CEO. . .
The GM board deserves a failing grade, and the new GM deserves directors who will be fully engaged. The new board has to ensure that the vitality of the new company isn’t squandered as soon as there is evidence of a comeback.
This would be a good time to mention the fact that a federal committee is in complete control of GM’s Board of Directors. They just fired GM’s CEO, and installed his clone at the helm. How confident does that make you feel?
Not that I’m suggesting that an unelected federal quango made up of bankers and non-auto industry types is incapable of choosing a kick-ass BOD for GM, who would choose the right CEO for the job. I’m saying it.
I never owned a share of General Motors during my 28 years on Wall Street and in the 10 years since. But if bankruptcy delivers a low-cost, competitive company, I’m ready to buy.
And if there’s a clean, low-mileage 2007 Ferrari F360 going for $20k, I’m in. Meanwhile, not.
Motown’s top suits are [still] insulated from “the ownership experience.” They drive carefully selected and prepped examples of their own products lovingly serviced by the company’s top wenches. I mean wrenches. The company replaces these perkmobiles before they can prove the old adage that getting older is not for sissies. The execs don’t experience the slings and arrows of outrageous service departments, nor, for that matter, their competitors’ products. They are the bubble boys, accompanied by buff book writers. In this month’s Motor Trend, the chronically undercapitalized arthur st. antoine offers this: “Full disclosure: At the moment, I don’t own an automobile. There are too many test cars, too little time.” So the st receives a new, carefully selected, meticulously prepped and thoroughly maintained press car EVERY WEEK. A full tank of gas, no insurance, no trips to the dealer (ever). None of the hassles of car ownership AND the unexpressed danger that writing something that takes him off the press car gravy train would costs him thousands of dollars per year. Now, about this month’s column . . .
Despite fessing-up to the fact that he doesn’t spend bupkis on personal transportation, st. antoine trots out a mental list of the cars he would buy—you know, if he had to. This for the benefit of party-goers who annoy him with regular requests for the car that he owns, and car makers, who should let his taste inform their manufacturing choices.
Volkswagen GTI – Our own Justin Berkowitz actually spent his own money on a [non press] GTI, and reported the familiar over-familiarity with his Volkswagen dealer’s service department. To say VW has something of a rep for unreliability and no-fun stealerships would be like saying that there are better places to have a steak dinner than The International House of Pancakes. But such considerations are but nothing to MT’s man, who calls the GTI a “no-brainer.” st. antoine warns that the car . . . isn’t the quickest in its class. “Who cares? Not me whenever I have a GTI for a weekend mountain fling.” Lucky you, then.
Jeep Wrangler Rubicon – Another car with a rep for unreliability. Not that we worship J.D. Powers’ mob, but the Wrangler notched up a four out of 10 for reliability. Safety is also an issue—for some. Not antoine. “I’d stretch to get a Rubicon ($29,315 base) with all the off-roading can-do, then wrestle with the choice of four doors (the roomy Unlimited makes more sense) or two (looks and feels more authentic to me).” Would it be a stretch to mention the gas the Jeep sucks in the name of slow forward progress?
BMW 335i sedan – Not that he’d gamble his own money on the ownership proposition, but st. antoine reminds us that the “Bahaus sledgehammer scores impressively on those depreciation charts used by accountants charging you $200 an hour to show you how much money you can save. So it actually makes some financial sense.” It must be asked: how much sense and what does HE know about it?
Ford Mustang GT Premium – File this one under TMI: “True, the Camaro likely has the edge in handling and modernity [how’s next Thursday for the loan guys?], but the Mustang is just more ‘me’ (feel free to inject ‘rough around the edges’ here). Where’d I put my Ray-Bans?” No offense to Ray-Bans [note to self: test driving glasses], but Ray-Bans?
Lotus Elise – I’m confused. Does the Elise cap st. antoine’s list of cars he’d own if he had to buy it with his current salary, or if he won the lottery? Is he suggesting that it’s a suitable car if he could STILL have access to all those press cars AND had to spend his own money on Lotus’s motorized tea-tray? No matter how you slice it, the Elise is the love that dare not speak its name—except to Motor Trend’s readers. “The cocktail-partiers don’t get this one. They always expect me to make sense.” Well that confirms it: not only does st. antoine not identify with his readers, he doesn’t hang with them either.
Insider gold, indeed. The cozy relationship between the automotive press and automotive manufacturers is a disgrace to both. The car makers don’t get genuine feedback on their cars (which would help them build more competitive cars), and the press don’t give their readers the truth about cars (which would help them buy better cars). Perhaps the upcoming motown meltdown will create a paradigm shift in the autoblogosphere, freeing both maker and critic to realize that honesty is the best policy.
As rumors filter in about GM’s Volt battery program, the faithful must be experiencing a certain amount of restless discomfort. After all, it’s not like this couldn’t be seen coming. Let’s just say that when I asked at SEMA last October the guys from A123 Systems (then bidding on the project) about the Volt battery development program, they took full advantage of the fact that SEC silent periods don’t forbid eye-rolling. Though non-verbal communication can (and in this case, did) speak volumes, we like to get our facts in writing. Which, thanks to the truth-proof wall surrounding the Volt’s development, usually means going through GM’s PR-exercise interviews with reliable Volt boosters and mining them for some kind of meaning. And hey, there’s an interview at Volt cheerleader HQ gm-volt.com which suggests that the Volt’s battery development is being rushed. And engineers are complaining to blogs? Fancy that!
GM-volt.com’s Lyle Dennis sat down with GM’s head Volt honcho Frank Weber for a sanitized-for-your-protection update on General’s moon-shot gambit. So what is happening right now, according to Weber?
We have been using the winter for winter tests . . . Now what’s happening is the true development work that you say OK this is the temperature of the battery, and this is the temperature of the system, and this is what happens when you are plugged in, etc. There are parameters that we call calibration, you have the basic software functionality on those cars defined, and then we start to calibrate it looking at the temperature and when to we start it, what is the true power of the battery at a certain temperature, etc.”
Any of this sounding intelligible or reassuring yet? This is supposed to be GM’s chance to thrill the credulous faithful, and the best Weber can come up with is “start to calibrate?” Don’t worry, it gets worse.
“What you know is what the behavior is for the cars that we are testing, and then you make an assumption for how a component will behave over time and how it will behave under the same situation in several years. This is what we call accelerated testing. This gives you some indication of durability. The piece that is tricky and interesting about the battery is to do a really accurate extrapolation of the true behavior. For a mechanical part this is very simple. For a mechanical part you can replicate its lifetime and find out when it will break. The battery is electrochemical and its more difficult to make those extrapolations. This is part of the learning we have to do, battery learning between the battery supplier LG and us. By the way this is still the element of risk. This is also why we are unable to get the car out any sooner. It is those things that have to be developed now with the components that are representative of the production vehicle. There is no way to do this any faster.”
If GM would just admit that the “late 2010″ launch date is toast, this wouldn’t even qualify as spin. But then we don’t exactly live in a world where you can just say “it’s complicated, we don’t know when it will actually be done, now where’s my NSFWing bailout” is it? Or is it? I digress.
In a separate post, Lyle Dennis predicts public test drives this summer, putting faith first in spite of more damningly ambiguous talk, this time from GM’s John Lauckner. Saying “we need an experience where people say ‘Wow’ this is really something special,” Lauckner reveals that GM has “laid out all of the concepts that we want to use and written a lot of the preliminary code,” for the Volt’s “software-driven” driving experience.” Concepts. Preliminary. Wow. Lauckner continues:
“I would say that conceptually we’re most of the way there if not all of the way there, but there’s a lot of work to be done still to make sure that the whole thing operates seamlessly. [GM has to] love this thing a little bit to make sure that you not only get it that it actually works but you get it working in such a way that its completely intuitive. We need the time with the car and we need the time over a wide variety of conditions to simulate certain things, so that we can see just exactly how the car is going to behave and what sort of information the driver is going to get to make sure everything works in as seamless a way as we can possibly make it.”
Love your own product? Really? You’re only going to be asking $40 grand for the thing. And though both executives note its importance, time is the one thing GM doesn’t have. Weber reveals that the engineering freeze on the first true Volt prototypes or integration cars will occur “within days,” and that these integration models will be built and tested sometime later this year. If GM could simply let its executives just say what they hint at (conceptual, preliminary, this thing takes time) and let the “late 2010″ date slip, their troops on the ground might not be grousing that the battery system is an “epic fail.” Instead it’s being rammed through and damn the torpedoes. This won’t end well.
Automotive News [AN, sub] does an excellent job covering the industry. Most of the time, AN is an unbiased if largely toothless conduit of autoblogospherical fodder. In other words, they report, we decide. But today’s column by Editor David Sedgwick is, well, appalling. No, really. I am shocked at the depths of disinformation, dissembling and, yes, dishonor to which AN and Sedgwick have sunk. “GMAC’s chief has a chance to earn his millions” begins by asking “Is Al de Molina worth $11.6 million?” The obvious answer has Will Smith written all over it: oh, HELL no. Unless, of course, you’re one of the Cerberus insiders who benefited from the Fed’s last minute rule change. You know, the one allowing GMAC to become a bank when it didn’t qualify for bank status. Oh, and then there’s Uncle Sam’s $6B GMAC bailout. So yes, I guess Al de Molina is worth the big bucks to someone. Sedgwick’s column, on the other hand, isn’t worth the paper it’s printed on.