The Truth About Cars » GM Death Watch

Editorial: General Motors Death Watch 260: The End

Robert Farago — Tue, 02 Jun 2009 02:36:36 +0000

GM filed for bankruptcy today. From now on, TTAC will chronicle GM's fortunes under the series name bestowed upon post-C11 Chrysler: Zombie Watch. For there's no doubt in my mind that GM will not recover from its federal stewardship to emerge, as Dan Neil puts it, "smaller, leaner, smarter and hungrier." Sure, I'll spot Dan smaller (obviously). Leaner? An efficient government-funded company is an oxymoron to rival military intelligence. Speaking of which, smarter? GM is as far from smart as Steven Hawking is from professional wresting. In fact, listening to GM CEO Fritz Henderson bleat to the press today, it struck me that the automaker is pulling a Mark Mothersbaugh: it's de-evolving. Less obscurely, the company is actually getting stupider.

Editorial: General Motors Death Watch 258: Stein X. Leikanger’s “GM Politburo”

Stein X Leikanger — Mon, 01 Jun 2009 15:28:37 +0000

GM was a politburo building cars. GM died for the same reasons that the Soviet Union died: because it killed initiative and proved unable to manage its resources at a pace that matched competing economies. Just as the Soviet politburo promoted the party faithful, demanding adherence to the party line, GM management brooked no discontent, and would get rid of any dissenting voices, banishing them to the corporate equivalent of Siberia: away from RenCen. The Soviet Union destroyed itself because of its unwillingness to accept reality. Spending untold billions on a show military force, it starved all other facets of its economic life. The Soviet leadership also accepted incredible inefficiencies in its production apparatus, and failed to exploit its vast reservoir of natural resources. Ditto GM.

Editorial: General Motors Death Watch 257: Paul Niedermeyer’s GM Obit

Paul Niedermeyer — Mon, 01 Jun 2009 13:28:53 +0000

How do you write an obituary for an entity that’s been dead for seventeen years? Like that high-school biology frog-leg experiment, GM’s twitching since 1992 was due to externally administered stimuli. Yes, I would have much preferred to write GM’s obit in ‘92. Back then, the guilty party was merely GM’s brain-dead management. It would have been easy just to rag on about all the lame cars they built. But it’s become a lot more complicated and uglier. Now we all have blood (and red ink) on our hands. And it’s not going to wash out easily.

Editorial: General Motors Death Watch 254: All That You Dream

Robert Farago — Thu, 28 May 2009 02:59:53 +0000

The Associated Press called it: GM is set to enter popular parlance as "Government Motors." When the automaker files for Chapter 11, the nickname will stick, as the debate over GM's future centers on whether or not the United States government should own a commercial enterprise. To which the only possible answer is no. It was no back when President Bush over-ruled Congress and authorized the first multi-billion dollar "loan." It's no now, as the feds prepare to stump-up another $20 billion dollars to keep GM in business. There are lots of reasons why "new" GM is a bad idea. But here's the most important impediment: Government Motors doesn't have the vehicles it needs to survive.

Editorial: General Motors Death Watch 253: Life During Wartime

Robert Farago — Sat, 23 May 2009 15:27:04 +0000

The Detroit News headline: "Obama Auto Bailout Draws Fire." Suddenly, without warning, Motown's hometown newspaper has changed sides. What was "their" bailout has become "Obama's." The altered allegiance comes hot on the heels Chrysler and GM's decision to terminate around a thousand dealers apiece. This is not music to the domestic supporters' ears; the dealer cull represents the complete, final and unavoidable end of Motor City's domination of the American car industry. The fact that the domestics' supporters are suddenly behind the franchisee push back---which could scupper both automakers' future---shows the depth of Detroit's denial. While the bailout boosters gave The Presidential Task Force on Automobiles (PTFOA) props for shit-canning GM CEO Rick Wagoner, you can file this one under no good deed goes unpunished.

Editorial: General Motors Death Watch 252: The Truth About the Pontiac G8 GT

Ken Elias — Wed, 20 May 2009 13:06:34 +0000

I've just purchased a Pontiac G8 GT. Sport red metallic with every option. I paid too much (even though it was a below-invoice deal). The car just begged me to buy it. Yep, car guys make the dumbest deals when it comes to their own personal transportation. And I love it. I will drive the wheels off this car, and enjoy every torque-rich moment. But enough about me. Now about Pontiac, and GM. With less than 11 days to go before what was once the largest corporation in the world files for bankruptcy, with the Pontiac brand disappearing (what exactly is a “niche” brand anyways?), the G8 GT is a reminder of what could have and should have been. But is it also an indication of what will be? And is that a good thing or a bad thing?

General Motors Death Watch 251: Putsch Your Money Where Your Mouth Is

Robert Farago — Mon, 04 May 2009 04:08:03 +0000

“G.M. is very different than Chrysler,” said Rahm Emanuel, President Obama’s chief of staff. “But I suppose the one lesson for G.M., and all the other players, is that this is a moment when a Democratic president said, ‘I am really willing to let a company dissolve, and there’s not going to be an open checkbook.’ There’s got to be real viability.” Huh? I was under the impression that this was the moment when a Democratic president said "I am NOT really willing to let a failed automaker dissolve. Uncle Sam's checkbook is as open as a hooker's gams. For the sake of political expediency, there's got to be pretend viability." Of course, it's much worse than that. The White House has caught Detroit disease, where stupid decisions vie with no decisions for supremacy, leaving the status quo bruised and battered, but triumphant.

General Motors Death Watch 250: Interview with a GM Bondholder

Ronnie Schreiber — Fri, 01 May 2009 19:43:54 +0000

GM's investors and bondholders have taken their lumps. The value of their investments have plummeted and they've been blamed for enabling GM's mismanagement. Hedge fund managers and institutional investors are not the most popular people in the wake of the financial meltdown so it's easy to forget that many investors are not Wall Street wheeler dealers, but regular folks with investments.

Editorial: General Motors Death Watch 249: Cadillac Descending

Michael Karesh — Fri, 01 May 2009 16:40:55 +0000

It doesn't seem that long ago that General Motors was pouring billions of dollars into Cadillac in a bid to create a line of world-class luxury cars. American enthusiasts rejoiced. Now, with GM on the verge of bankruptcy, all signs point to a full-scale retreat. Assuming GM pulls through, within the next five years it will kill Buick outside China--or at least kill its Lexian aspirations--and shift Cadillac downmarket into a "near luxury" position.

General Motors Death Watch 248: The Chevy Volt Must Die

Robert Farago — Wed, 29 Apr 2009 03:58:18 +0000

This is not what I expected. Sure, I got the bankruptcy bit right. Big deal. Better analysts than I were making that call back when I was playing with Corgi toys (another car company destined for the scrap heap). But I never thought Uncle Sam would nationalize GM. Ace commentator PCH101 will tell you it's all in good fun: a temporary government intervention that gives taxpayers a shot at recovering some of the tens of billions [we shouldn't have] spent keeping the zombie automaker alive. Or at least postpones GM's inevitable dissolution for a less financially fraught finale. But I reckon politics will rear its ugly head, create a distortion field around GM's carmaking business and kill any hope of GM surviving in any way, shape or form. The acid test: the Chevy Volt.

Editorial: General Motors Death Watch 247: Brandicide Won’t Save GM

Michael Karesh — Mon, 27 Apr 2009 16:08:01 +0000

Time's up! GM has announced that 2010 will be Pontiac’s final year. No surprise to anyone who's been reading the writing on the wall. But nevertheless a sign that those in charge of GM's destiny are more interested in appearing to be doing something than in actually addressing the core weaknesses of the car manufacturer. Why is so much attention focused on GM's brands? Because, like the CEO, they're what outsiders can see and at least superficially understand. The real problems are both less visible and less easily comprehensible.

Editorial: General Motors Death Watch 246: Pontiac R.I.P.

Paul Niedermeyer — Mon, 27 Apr 2009 15:43:56 +0000

Excitement is an ephemeral phenomenon. As was Pontiac. It had its glorious day in the sunshine of the exciting sixties. Pontiac was like the polite, quiet middle child who ran away to California in the early sixties, became a huge star, crashed in 1970, and played the county fair nostalgia circuit ever since. In between repeated bouts in rehab. And now we’re here to pay our last respects.

Editorial: General Motors Death Watch 245: Core Competency

Robert Farago — Thu, 23 Apr 2009 13:30:10 +0000

As GM's journey to bankruptcy nears its conclusion, the punditocracy is busy contemplating the company's afterlife. The current line of thinking: the feds will cleave General Motors in two. Bad GM gets Buick, GMC, HUMMER, Pontiac, Saab and Saturn. Good GM "buys" Chevrolet and Cadillac. It emerges from Chapter 11 unencumbered by outdated production facilities, warring management, befuddled marketing, over-priced labor, restrictive union work rules, astronomical pensions and onerous health care obligations. Chevillac rises from the ashes to steal share from both mainstream and luxury brands, repay its debts and thumb its nose at Bailout Nation's critics. But here's the thing: good GM is "saving" the wrong brands.

Editorial: General Motors Death Watch 244: Let There Be Light

Robert Farago — Thu, 16 Apr 2009 14:26:59 +0000

As TTAC's Bailout Watch series heads for the initially improbable half century mark, it looks like the GM C11 nay-sayers are just about all nayed out. In his column, Detroit News Auto Editor Manny Lopez finally admits that a Chrysler/GM bankruptcy is. . . an option. Meanwhile, the self-styled AutoExtremist has thrown in the towel. In fact, Peter DeLorenzo now reckons GM is damaged beyond repair. A PR/marketing guy to the end, DeLorenzo has a solution: change GM's name. "One hundred years of accomplishment and historic value to the American industrial fabric has been decimated in a matter of months. Once one of America’s corporate icons, GM has now been reduced to being a punchline for a running national joke, and this new car company will have to be unburdened of the GM name, pronto." A matter of months? Clearly, DeLorenzo hasn't been paying attention for the last decade or three.

Editorial: General Motors Death Watch 243: What’s Old is New

Robert Farago — Tue, 14 Apr 2009 17:27:51 +0000

The New York Times reports that hecklers are verbally assaulting GM's booth babes at the New York Auto Show. Worse, the glamor girls are wearing last year's dresses. Literally. This is not what you'd call death with dignity. This is GM on federal life support, drooling and soiling itself uncontrollably as it waits and waits and waits for someone somewhere to pull the damn plug, already. As I've asserted in the past few episodes of this series, I no longer believe GM can be revived. The company is brain dead. No matter what cancerous parts of The General's terminally ill body Uncle Sam's surgeons separate from the corporate body, GM can't function as an independent entity. Chevrolet and Cadillac? Building what? For whom? At what profit? Both of those brands are money losers losing market share right now. They may have volume, but they ain't got game. Of course, that's not going to stop the feds from trying to revive GM. And boy, are they---I mean "we" going to piss away a LOT of money.

Editorial: General Motors Death Watch 242: The Straw Man Speaks

Robert Farago — Mon, 06 Apr 2009 19:41:36 +0000

GM's new CEO took to the airwaves on Sunday. If industry watchers had any doubts that Fritz Henderson is cut from the same cloth as his discredited, defenestrated predecessor, Henderson's appearance on Meet The Press removed them. Like Rick Wagoner before him, Henderson's facile, vague and evasive responses---re: the epic train wreck known as General Motors---revealed the full genius of the Talking Heads' lyricists. "You're talking a lot, but you're not saying anything," David Gregory forgot to interject. Alternatively, we could make this Churchillian: Never have so few said so little about so much. Even so, OMG.

Editorial: General Motors Death Watch 241: The Good, The Bad and The Ugly

Robert Farago — Sat, 04 Apr 2009 03:33:22 +0000

I view the government's intervention in GM's business (or lack thereof) as automotive ebola. But we can all agree on one thing: the president's decision to fire GM CEO Rick Wagoner was a no-brainer. Giving the Harvard MBA and GM lifer millions of dollars to guide GM to viability was like letting Al Qaeda run a liberal arts university. Now that Wagoner's gone, his supporters are notable by their absence. That's because deep-sixing Red Ink Rick was the right thing to do. It was also the easy thing to do. While the MSM is lionizing Steve Rattner, the head of the presidential quango that defenestrated the GM CEO, the Obama administration's wallow in the GM quagmire is just beginning.

General Motors Death Watch 240: 59 Days to C11

Robert Farago — Wed, 01 Apr 2009 02:43:10 +0000

Most auto industry observers have lauded President Obama's decision to defenestrate GM CEO Rick Wagoner and his Board of Bystanders. Their logic is as simple as one, two, three. One: U.S. taxpayers have "loaned" The General billions of dollars. Two: GM's management failed to provide a viable viability plan to return the money. Three: the presidential putsch protects America's "investment" in General Motors. Yes, well, protect THIS. When GM files for bankruptcy 59 days hence, $17.4b to $19.5b worth of taxpayer money will disappear down a rathole, never to return. That's a conservative estimate of the total amount of federal "loans" and grants and God knows what that will be wiped out the moment the judge signs GM's C11 papers. Oh, and after we kiss that cash goodbye, U.S. taxpayers will provide the cratered carmaker with debtor-in-possession financing. In other words, more money. And who's to say that money will ever be repaid? What's the end game? Is there one?

Editorial: General Motors Death Watch 239: Rick Wagoner’s Resignation

Robert Farago — Sun, 29 Mar 2009 22:30:17 +0000

General Motors CEO Rick Wagoner is set to resign his position tomorrow. The timing of Wagoner's departure is clearly symbolic. It's meant to signal the nation that it's OK throw bailout billions GM's way because it's a new day. Well, there's a new guy at the top, anyway. Which may or may not be true, depending on whether or not Wagoner's hand-picked successor and virtual clone Fritz Henderson inherits the job. If Henderson gets the nod, the symbolism of Wagoner's defenestration will be far richer than its architects intended. For it will confirm the growing suspicion that the president's mantra of hope and change is heavy on the hope and light on the change. And while that plays out, Wagoner's resignation will eventually be seen as a way point on a journey of self-destruction, rather than a turning point on a bridge to... nowhere.

General Motors Death Watch 238: No, No, Nadir

Charles Dagastino — Thu, 26 Mar 2009 11:53:20 +0000

You knew this would happen. Whenever things go wrong or come to an end we can't help but look back and try to figure out why. To look for that one pivotal event that changed the course of events forever. So what did it for GM? When did it happen? After careful analysis I pinpoint their demise to the 3.8L V6 (a.k.a the 231) of the 1970s.

Editorial: General Motors Death Watch 237: The Dog Ate It

Robert Farago — Sun, 15 Mar 2009 17:08:21 +0000

I've been been having a "difference of opinion" with my step-daughter's fifth-grade teachers. For some reason, they decided to give Sasha homework deadlines and let her sort out her own schedule. Unfortunately, no one taught her self-directed, off-site time management. Not surprisingly, except for the deadline itself, Sasha's "planner" was empty. She had no idea how long each assignments would take. She couldn't prioritize her work, or organize her home life. Mind you, she had goals: finish her homework, get good grades, make it to middle school. But she didn't have a workable plan. Remind you of anyone?

Editorial: General Motors Death Watch 236: The MSM Wakes Up to GM C11. Then Goes Back to Sleep.

Robert Farago — Fri, 06 Mar 2009 16:18:01 +0000

Despite General Motors' epic slide into Chapter 11, or perhaps because of it, its defenders are busy re-writing history. It's the Poseidon Adventure redux: a huge, well-run ship overwhelmed by a sudden, terrible force of nature. Except this ship will eventually right itself. In truth, GM really is the Titanic: a badly built vessel helmed by men blinded by short-term greed and long-term hubris headed for Davey Jones' locker. Make no mistake: GM CEO Rick Wagoner had the chance to return GM to dry dock, repair the company's flaws, and make it across turbulent seas. But then Wagoner is a GM lifer---his cowardice is both genetic and institutional. What's the mainstream media's excuse?

Editorial: General Motors Death Watch 235: Where’s Marion Robert Morrison When You Need Him?

Robert Farago — Wed, 04 Mar 2009 12:18:01 +0000

Moral relativism is inherently childish, as demonstrated by my eleven-year-old. "You don't make Lola take her plate into the kitchen." Any assertion that her sister's age removes her from the obligation meets with a derisive snort. In fact, Sasha reckons she's a victim of a cruel, capricious system. "It's not fair!" she cries, storming off-- until I threaten to yank her poker chip pay. Then, grudgingly, she does what needs doing. All of which reminds me of GM's PR "narrative." As their sales dip by half, they cry "Everyone's sales numbers are a disaster! You can't blame US for this mess." And then they walk off and we clean up (i.e. pay for) their mess.

Editorial: General Motors Death Watch 234: When?

Robert Farago — Thu, 26 Feb 2009 01:15:18 +0000

It's not a question of if GM will file for C11. GM blew past "if" a long time ago. By the turn of the century, the artist formerly known as the world's largest automaker was doomed. Still, if they had greeted Y2K by mortgaging everything (a la Ford) and used the cash to buy out dealers and kill brands and ditch models and pay off the UAW and... nah. By the time The General re-launched their refreshed GMT900 SUVs in May 2005, the gig was up. By that point, GM should have been in C11. In this alternate universe, GM might have had enough cash-- their cash not our cash-- to make it out of bankruptcy. Now, I'm not optimistic. But one thing's for sure: this Death Watch series is, like GM, on its last legs.

General Motors Death Watch 233: Rick Wagoner is a Secret Alien

Robert Farago — Wed, 18 Feb 2009 03:01:07 +0000

I once attended a seminar on alien abduction hypnotherapy. When we got to the Q&A bit, I was flabbergasted by the audience's enquiries. "What do you do if the alien has been in contact with a departed spirit who knew the victim, and used their influence to prevent hypnosis?" "I'd hypnotize the spirit first," the therapist responded, without batting an eye. Suddenly, I felt very, very alone. Surely, I wasn't the only person amongst hundreds who thought the whole thing was a patently ridiculous scam. I got that same queasy feeling today, watching my so-called colleagues questioning GM CEO Rick Wagoner about the company's viability plan. Surely someone would point out that the whole thing is nothing but a patently ridiculous scam. Sigh. Right, let's get to it then...

Editorial: General Motors Death Watch 232: The Chevy Corvette Must Die

Robert Farago — Sat, 14 Feb 2009 15:24:33 +0000

A mainstream carmaker has no business building niche products. Literally. For one thing, they're hardly ever profitable. For another, even when they are, their profits are relatively insignificant. And most importantly, "halo cars" are four-wheeled glass and steel versions of Dumbo's magic feather. They lead manufacturers to mistake cause with effect: if we build this, we must be good. In fact, any automaker that focuses its creative, financial and corporate resources on a halo car risks forgetting how to do what it did to get those resources in the first place-- and an eventual plummet towards the circus floor. The Chevrolet Corvette may be only one of GM's magic feathers, but it's the most famous and, therefore, visible. GM should kill it, STAT.

GM Death Watch 231: A Tale Of Two Chevys

Edward Niedermeyer — Tue, 10 Feb 2009 20:45:35 +0000

As the maximum era draws to an end at GM, there's no shortage of praise for the Bob Lutz-led product turnaround. Cars like the CTS, Lambda CUVs and the Chevy Malibu are said to represent a new day in quality and design for the General. And without a doubt, they are all consistently better cars than GM has made for years. But for all their accolades and fawning reviews, these vehicles actually represent a relatively small fraction of GM's offerings. Though marketing executives wail from the Renaissance Center that consumers aren't understanding the alleged sea change in GM products, there are still more GM vehicles you can ignore (to borrow GM's marketing phrase) than you can't. Automotive atavisms occupy GM's entire lineup, but the contrast between Chevrolet's D-segment offerings, the Malibu and Impala tells the whole story. And it isn't pretty.

Editorial: General Motors Death Watch 230: How Bob Lutz Destroyed GM

Robert Farago — Tue, 10 Feb 2009 02:02:22 +0000

Bob Lutz was not the worst thing to happen to General Motors. He was the second worst thing, right after CEO Rick Wagoner. Lutz' legacy will not be the critically acclaimed vehicles attached to his name: the Cadillac CTS, Buick Enclave, Chevrolet Malibu or Pontiac G8. It will be the fact that GM's vice chairman of global product development annihilated whatever remained of GM's brand-related equity. Bob Lutz ran General Motors into the ground.

Editorial: GM Deathwatch 229: Opel For Opel’s Sake

Edward Niedermeyer — Thu, 29 Jan 2009 19:26:33 +0000

Motorauthority reports that the long-rumored Buick C-segment sedan will probably be built at Opel's Rüsselsheim plant. The Delta II-based entry-level Buick will utilize production capacity freed by plans to produce the Delta II-based Saab 9-3 at Saab's Trollhättan plant. Since the American Astra experiment has gone so badly, GM needs a higher-margin Delta II vehicle to justify expensive tooling efforts at Rüsselsheim. Hence the Buick plan. But the whole scheme is based on the misguided effort to leverage Buick's Chinese revival into a global phenomenon. With the future of Saturn, Buick, Pontiac and Saab up in the air, with HUMMER on death row, GM is trying to chart a course based on constantly-changing assumptions. And a raft of unneeded brands. Once again, The General seems to believe that simplification is not an option.

Editorial: General Motors Death Watch 228: Good Money After Bad

Ken Elias — Sat, 17 Jan 2009 19:39:11 +0000

Last Thursday in Detroit, General Motors presented its rescue case to the Society of Automotive Analysts, a group of Wall Street securities analysts. [pdf here] The story was chock full of "not good." In fact, the company presented enough information to make the case that bankruptcy is inevitable. But I'm still waiting for a single report from Wall Street telling everyone what we've known at TTAC for at least three years. GM is bankrupt and putting another dime of government money into this car wreck is merely good money after bad.

General Motors Death Watch 227: The Elephant In the Room

Ken Elias — Tue, 13 Jan 2009 17:04:06 +0000

GM can fix its own problems. Really. They don't need a miracle cure or a piece of technology fabricated at MIT’s advanced labs. They don't need a new financing scheme developed by the alchemists on Wall Street. Nor do they need Nancy Pelosi & Co. to fashion tnier future. What they need to survive can be summed-up in two words: truth and honesty. If GM would be honest about its products, finances, dealers, marketing, reliability, (lack of) executive talent, and on and on-- it could begin to resurrect itself. Until and unless GM gets glasnost, the automaker will remain forever stuck in the quagmire of its own making, relegated to the support of the taxpayers, always looking for its next fix. To understand the possibilities, compare and contrast GM's perfidy with "One Ford"....

Editorial: General Motors Death Watch 226: First to Blink

Ken Elias — Thu, 08 Jan 2009 20:44:54 +0000

First to blink, first to lose. That’s what GM’s creditors know. As does Ron Gettelfinger, the United Auto Workers (UAW) boss. And that’s why there isn’t enough time between now and February 17th-- the congressional deadline for the next federal loan installment for GM-- for General Motors to craft a workable deal to save this company. No one is going to blink. So no one will cave, and nothing gets done. Then what?

Editorial: General Motors Death Watch 225: Surprised?

Robert Farago — Fri, 26 Dec 2008 20:35:36 +0000

A recent TV ad extols the wonders of the Cadillac CTS. Suddenly, the image zooms backwards and flips around to become a sparkling GM logo. "The CTS is made by General Motors," the narrator intones. "Surprised?" I sure was. I mean, I understand the intended subtext: See? We're not a total basket case. But as my father would say, if you're so smart how come you're not rich? Students of this series know that GM has plenty of answers to that question. The only thing neophytes should clock: none of these answers involve the phrase "we fucked up." That and the fact that GM wants you to believe that their turnaround depends on building more cars like the Cadillac CTS. Uh-oh.

Editorial: General Motors Death Watch 224: Catch You On The Flip Side

Robert Farago — Sun, 21 Dec 2008 18:31:04 +0000

Last week. President Bush sacrificed his free market principles on the altar of expediency. Apparently, under "ordinary circumstances," the Commander-in-Chief wouldn't have expropriated $17.4b of taxpayers' money to bailout General Motors and Chrysler. But someone somewhere screwed-up the U.S. economy; leaving him without the option that cannot be named (a.k.a. doing nothing). I guess Bush was channeling Flip Wilson: "The Devil made me do it!" Actually, that would have been a welcome excuse. The pretext Bush deployed is deeply worrying: "My economic advisors believe that bankruptcy could now lead to its disorderly collapse." So we're propping-up two dead dinosaurs walking because we fear "disorder?" When did the United States become Germany?

GM Death Watch 223: I Know Why the Caged Bird Sings

Robert Farago — Mon, 15 Dec 2008 00:54:03 +0000

When I was growing up in Rhode Island, the state was run by the mafia. Politicians, police, priests, judges, juries, firemen, trash collectors, teachers, unions-- anyone who had power owed that power to Raymond L.S. Patriarca. Period. In the last forty years, the mob's stranglehold on the Ocean State has dissipated-- even if the stench of corruption remains. But it's too late. The mob-controlled unions and their corrupt enablers destroyed Little Rhody's industrial base. The state will never be a locus of, well, anything. And yet people call talk radio and wax lyrical about "the good old days." Justice was for sale. Racism endemic. Violence systemic. Priests buggered little boys with impunity. "But at least you could walk the streets without fear." This, Detroit, is your future. And you can thank your godfather, GM.

Editorial: General Motors Death Watch 222: The Truth Will Out

Ken Elias — Tue, 02 Dec 2008 13:30:28 +0000

If you need proof that GM's management hasn’t changed, consider the fact that the company is preparing not one but two rescue plans for Congress, The automaker claims it needs both a public plan and a top secret "for their eyes only" brief because sharing “proprietary information” in a public forum could be "problematic." Total hogwash. There is only one reason GM won't let the public view detailed information about its future-- it doesn't have one. With or without a look at the fine print, the truth remains: GM’s restructuring plan as presented to Congress will never work.

Editorial: General Motors Death Watch 221: Why GM Should Stop Worrying And Learn to Love C11

Richard N. Tilton — Sun, 30 Nov 2008 03:20:14 +0000

Speculation is rife that GM plans on shutting down or selling Saab, Pontiac and/or another brand as a prelude to a federal bailout. Common sense and recent history suggest that any such move will create a raft of breach of contract claims by jilted dealers and suppliers. As Oldsmobile's demise proves, there's only one possible resolution to the resulting feeding frenzy: cash termination payments. If, however, GM filed for Chapter 11 bankruptcy, these breach of contract claims would become nothing more than unsecured claims-- which are resolved within the debtor's C11 reorganization. The claimants would be legally barred from costly state court litigation. In a stroke, GM would be transformed. How great is that? But wait, there's more!

Editorial: General Motors Death Watch 220: My Kingdom For Your Debt

Ken Elias — Sat, 29 Nov 2008 16:42:32 +0000

Rick Wagoner lost control of General Motors this week. Forget about his title; game over for the embattled former Duke basketball wannabe. There's a new sheriff at GM - and it's a bunch of Wall Street guys that few on Main Street can name. It's the hedge funds that have been acquiring GM's bonds. So here's how these guys will play The General to make a killing on the pending government bailout:

Editorial: General Motors Death Watch 219: Rrrrrrescue Pack!

Richard N. Tilton — Wed, 26 Nov 2008 03:52:57 +0000

In recent congressional testimony, GM admitted that its experts are "exploring" Chapter 11 reorganization. At the same time, GM continues to argue that a bankruptcy filing is the nuclear option-- it would vaporize jobs and inflict cataclysmic damage on the overall U.S. economy. While acknowledging the danger, many argue that reorganization is both necessary and unavoidable. They suggest that GM's recreation should somehow take place outside of the time-tested legal process known as Chapter 11. Sentiment is growing that a taxpayer-finnaced “prepackaged” Chapter 11 is the best way to solve both GM's business and financial problems, and perhaps of other automakers. Maybe so. Let's have a look...

Editorial: General Motors Death Watch 218: Disconnect and Die

Robert Farago — Mon, 24 Nov 2008 16:10:24 +0000

When I moved to the UK, I was shocked by the price of petrol. “Britain’s an oil PRODUCING nation,” I kvetched to my accountant. “How could the populace allow their government to tax their petrol to the point where it’s the most expensive gas in Europe?” “Do you have any idea how much income tax you’re paying?” my personal pencil pusher asked. “If I were you, I wouldn’t worry about it.” In the same sense, I wouldn’t worry about GM CEO Rick Wagoner’s Gulfstream. It’s as nothing compared to the amount of money he’s pissed away on, well, everything else. Of course, it’s not the money, it’s the principle.

Editorial: General Motors Death Watch 217: Let The Run Begin

Ken Elias — Thu, 20 Nov 2008 21:47:58 +0000

A run on the bank. That’s what will happen as soon as Congress adjourns without a bailout plan for the Detroit 3. Hard-pressed suppliers and creditors will force GM to do what must be done: Chapter 11. I guarantee it. GM and Chrysler will sink into bankruptcy before they even think about the annual Holiday shutdown. A few Senators and hundreds of thousands of workers within America's automotive industry don’t want to see that sad day arrive. But arrive it will. And as the Capitol Hill hearings proved beyond a shadow of a doubt, Detroit needs a thorough cleansing.

General Motors Death Watch 215: Man Up!

Ken Elias — Tue, 18 Nov 2008 15:13:54 +0000

GM’s at the cliff’s edge looking deep into the chasm and sees…nothing. How pathetic. Here's a company with $150b in annual revenues and all they can say is “give us the money or else.” How lame is that? Frankly, it speaks to the complete lack of leadership and direction at this company. GM has not advanced one shred of evidence that it knows what to do if it goes onto the government welfare roles. In fact, all we’ve heard is “more of the same” restructuring and downsizing that’s been completely ineffective to date in stemming the tide. That dog just won’t hunt. But if GM’s Board of Directors and executive managers had a clue, this is what they would do heading into the showdown with Congress...

Editorial: General Motors Death Watch 214: Whose Car Company is This Anyway?

Robert Farago — Mon, 17 Nov 2008 16:59:32 +0000

In the legend of Faust, the protagonist sells his soul to the Devil in exchange for knowledge and power. Needless to say, things end badly for one member of the transaction (hint: it’s not the guy with the horns on his head). A “Faustian bargain” has come to mean a deal where you surrender what’s truly important to achieve an ultimately worthless goal. Yes, I’m talking about GM. If the artist once known as the world’s largest automaker avoids Chapter 11 via a bailout deal with Washington (a.k.a. Mephistopheles), the contract will ensure its final, irretrievable doom.

Editorial: Bailout Watch, German Edition, Drei: Opel, Heim Ins Reich?

Bertel Schmitt — Sat, 15 Nov 2008 09:48:24 +0000

Leave it to the B&B to really transcend the as-good-as-defeated General's Battle of the Deficit-Bulge, aimed right at the German taxpayer's money, a.k.a. Government loan guarantees for Opel. Tireguy typed: "The imminent bankruptcy of GM could endanger seriously Opel, although Opel is still profitable." Deutschland appears to agree. As we shall soon see, some may have a slightly less philanthropic angle. Let's get right to the point: Opel, Heim ins Reich, anyone? Indeed, some in Germany seem to be itching for a re-match of the Ardennenoffensive. Opel is GM's heavy artillery in the bastion Europe. Some 75 percent of GM's European business comes from Opel. If the not-so-secret plan survives, the offensive against General "Nuts" Wagoner will be fought partially in Brussels, coincidentally not far from Bastogne. The broken record called history repeats, again and again. Executive summary of the order of battle follows. Right this way, please!

Editorial: General Motors Death Watch 213: Blueprint for a Taxpayer-Funded GM C11

Robert Farago — Tue, 11 Nov 2008 19:00:00 +0000

[Once again, our anonymous bankruptcy lawyer has put his skills to use on our behalf. His C11 plan's a bit technical, and it sounds crazy, but it just might work.] The process kicks off with a GM Chapter 11 filing. The U.S. Treasury then gives GM a secured debtor-in possession line of credit for $40b. The line of credit is secured by a first security interest on all GM assets, being junior only to the existing secured line of credit. The fed's $10b of the line of credit is used to support essential suppliers through loans and pre-payments, perhaps tracking the existing GM model for financing its suppliers.

Editorial: General Motors Death Watch 212: An Open Letter to President-Elect Barack Obama

Ken Elias — Mon, 10 Nov 2008 17:11:23 +0000

Dear President-elect Obama, Upon taking office, you will immediately face some tough decisions about the future of the government’s role in "saving" Ford, GM and Chrysler. As you know, the Detroit-based automotive industry has already bent the ears of your political colleagues, particularly Speaker Pelosi and Senate Majority leader Reid. These Democratic leaders in Congress seek membership approval to provide taxpayer dollars to prevent these automakers from impending collapse. While we respect the efforts of Congressional leadership, and we share their desire to enhance and protect America's industrial base and employment therein, we ask that you spare a moment to listen to the opinions of people who do not share their belief that massive federal funding will achieve these goals. First, our qualifications.

Editorial: General Motors Death Watch 211: For Whom the Bell Tolls

Robert Farago — Sat, 08 Nov 2008 14:41:26 +0000

It’s the morning after the day of. The day General Motors admitted to the world that they don’t have enough cash to last until the end of the year. And for once, GM’s standard-issue PR ploy-- leave the bad news until Friday afternoon, reveal some corrective action (axing 7k jobs) and downplay its significance-- worked against the General's generals. GM’s impending bankruptcy was buried beneath and within President-elect Barack Obama’s first press conference. The story was denied bailout-fueling urgency. It’s the ultimate condemnation of GM CEO Rick Wagoner’s administration: they can’t even exploit their own incompetence for the company’s survival.

Editorial: General Motors Death Watch 210: Abandon Ship

Robert Farago — Fri, 07 Nov 2008 18:21:47 +0000

With a bit of luck, I’ll finish this editorial before House Speaker Nancy Pelosi tells America how Washington will save Detroit by spending your tax money on a domestic automobile industry beyond salvation. I doubt it. As we’ve previously reported, our duly elected representatives have already met with the titanic captains of Ford, GM, Chrysler and the U.A.W. in a closed-door session. I'm sure they got their ducks— and our bucks— in a row. Nancy will sing an ode to the working man and pen a paean to the importance of American heavy industry. Grim faces will then face a grim task: figuring out the fastest way to put Ford, GM and Chrysler on federally-funded life support.

Editorial: American Leyland: The GM – Chrysler Bailout That’s Guaranteed To Fail

Justin Berkowitz — Wed, 29 Oct 2008 14:34:49 +0000

After the initial media support for a potential GM-Chrysler hookup (e.g. Jalopnik.com's Ray Wert), the bandwagon began to roll like a snowball down the proverbial mixed metaphor hill, and everybody soured on the deal. We even charted how individual commentators changed their positions and eventually "threw Chrysler to the Wolves." In Monday's New York Times, Andrew Ross Sorkin said that GM CEO Rick Wagoner's continued employment is a "minor miracle." But the commentatorati are still behind the curve re: the government's rumored $10b "intervention" in the GM - Chrysler merger. In the main, they have't even acknowledged that the bailout is happening. That, and the critical fact that it's structurally designed to fail.

General Motors Death Watch 209: Reality is the New Perception

Robert Farago — Tue, 28 Oct 2008 13:49:32 +0000

The average American has no idea that GM is run by a bunch of nimrods. And even if they knew about the Machiavellian machinations behind the automakers’ recent struggle for survival-- including hiring a raft of ex-treasury officials to lobby their former employer for tens of billions of GM bailout bucks-- they wouldn’t care. That’s all Inside Baseball stuff. Joe the Public has enough on their proverbial plate just running the kids to school, keeping food on the table and putting a roof overhead. But when it comes to buying a new car, well, that’s a horsepower of a different color.

General Motors Death Watch 208: Autopilot

Ken Elias — Mon, 27 Oct 2008 12:53:43 +0000

Well, it’s official. The Wall Street Journal reports that GM pleaded its case to U.S. Treasury Secretary Henry Paulson. The General's looking for a mere $10b in “continuation” money to fund its Chrysler “absorption.” That’s a nice cover story for saying that GM cannot muster any other spin on “crying uncle.” Regardless of what Hank “the Hammer” Paulson answers, it's a safe bet that we’ll be seeing an epic amount of taxpayer money flow into the RenCen’s silos of despondency in the near future. Mark my words: at the end of this, we'll be saying that never have so many paid so much to so few for so little.

General Motors Death Watch 207: Saving General Motors

Ken Elias — Fri, 24 Oct 2008 15:57:27 +0000

General Motors will soon be a ward of the United States federal government. Make no mistake about it. Without some kind of massive financial injection-- not a mere few billion dollars but tens of billions-- there’s no real solution to the problems of GM’s legacy of epic, chronic mismanagement. We know that day of a government bailout will come-– and much sooner than even Wall Street wants to believe. In fact, it’s almost upon us.

Editorial: General Motors Death Watch 206: Antinomianism

Ken Elias — Tue, 21 Oct 2008 20:40:10 +0000

Ford CEO Alan Mulally goes to bed every night and prays that GM does a deal for Chrysler. In the morning, Big Al digests his corporate PR brief looking for missives from automotive and Wall Street scribes praising the combination of dumb and dumber. Every afternoon, he reviews Ford’s daily sales figures and wonders when the pain will stop. And soon, he’ll be rewarded with news he wants: his two Motown rivals will be bedding down together. “Thank you God, baby Jesus, and Fritz Henderson,” he’ll whisper to his wife. “Redemption is mine.”

Editorial: General Motors Death Watch 205: The World According to TARP

Robert Farago — Sat, 18 Oct 2008 12:39:53 +0000

A Chrysler – GM merger is a mind-boggling prospect on many levels. But the over-arching question is simple enough. Why? Why in the world would General Motors want to combine with Chrysler? Given their respective balance sheets and future prospects, the analogies pretty much suggest themselves. My favorite: the Titanic rescuing the Lusitania. But if you want to understand the logic behind this merger deal, such as it is, we’ve got to explore a different metaphor: “changing horses mid-stream.”

Editorial: General Motors Death Watch 204: GM Will “Absorb” Chrysler

Ken Elias — Fri, 17 Oct 2008 11:14:32 +0000

General Motors is on the brink of a financial disaster. It’s managed to keep out of the abyss through asset sales, hocking the company store, and yes, cost cutting. CEO Rick Wagoner’s “plan” might have worked had the economic winds blown more favorably. But they didn’t. The automaker is months away from a liquidity meltdown. Everyone who supplies GM knows it. The rating agencies know it. And yes, Rick Wagoner knows it. GM has to secure new funding or face a bankruptcy judge in Lower Manhattan. So now let’s talk about Chrysler…

Editorial: General Motors Death Watch 203: GMAC Headed for Bankruptcy

Ken Elias — Thu, 16 Oct 2008 14:26:58 +0000

GMAC will go bankrupt. The U.S lending giant is cut off from all lending sources. Smart depositors will flee its small bank (relative to GMAC itself). And its majority owner, Cerberus, won’t save it. It’s a pure liquidation play now-- with the bank going into FDIC receivership, maybe as soon as this Friday. Whether or not all Hell will break loose is an open question, with many answers...

General Motors Death Watch 202: Carmegeddon Pt. 2

Ken Elias — Fri, 03 Oct 2008 17:38:38 +0000

Consumers will not buy a new vehicle from a bankrupt carmaker. That’s the over-arching fear preventing GM from filing for a court-managed rescue: a total collapse of consumer confidence in the company’s products. History suggests that a GM C11 would indeed trigger carmegeddon. Ask an automotive historian to name an American automaker that filed for bankruptcy, survived, emerged and thrived and you get a doughnut-hole shaped answer. But I submit that GM will reorganize successfully. C11 will be a new beginning for GM, its suppliers, dealers, workers and, yes, customers-- not the end of everything. But let’s start from the corporate perspective…

General Motors Death Watch 201: Carmegeddon Pt. 1

Ken Elias — Tue, 30 Sep 2008 11:32:16 +0000

When a company doesn’t have enough money to pay creditors what they’re owed, it’s considered insolvent. By this definition, GM is insolvent. The American automaker’s working capital stands at negative $20b. Cash outflow for the half year through June 30 remains negative, at over seven billion dollars. And it’s getting worse, as cash calls arrive on a regular-- and irregular-- basis. There’s no more credit to tap, and GM has few assets of meaningful value left to sell. Oh yeah, GM’s gonna file for bankruptcy. Then what?

General Motors Death Watch 200: Granted

Andrew Dederer — Thu, 25 Sep 2008 14:45:36 +0000

During the Civil War, General George McClellan headed the largest army in the North. McClellan was an astounding capable soldier-- except for the part about fighting and winning a war. He was also insubordinate, rude and a potential political rival for President Lincoln. The president’s Cabinet recommended McClellan’s dismissal. “Who should replace him?” Lincoln asked. “Anybody!” they replied. “I can’t give the job to ‘anybody,’” Lincoln argued. “It will have to be a “somebody.” In the same sense, who can replace GM CEO Rick Wagoner?

General Motors Death Watch 199: Credit Where Credit’s Due

Robert Farago — Fri, 19 Sep 2008 14:56:04 +0000

As our airplane began its final approach into Atlanta’s Hartsfield airport, we flew over the muddy outlines of an enormous new housing development. Phase I was attached. There wasn’t a single construction worker, car or human to be seen. Later, driving through the city’s outskirts, we passed dozens of these brand new ghost ‘burbs. It looked as if someone had detonated a neutron bomb, or unleashed a killer virus. Of course, someone had. Easy credit. And anyone who thinks the new car market is headed for a recovery simply isn’t paying attention.

General Motors Death Watch 198: History is Bunk

Robert Farago — Tue, 16 Sep 2008 11:15:20 +0000

Today is General Motors’ one hundredth anniversary. Ironically, GM reached the century mark in the same year that it ended its reign as the world’s largest automaker. More importantly, the American automaker’s status as the world’s most profitable private enterprise has long been consigned to the scrapheap of history. The former economic powerhouse is now worth less than it owes, as it slouches towards bankruptcy. While The General’s camp followers may wish to set aide this day to bask in past glories, it’s the perfect time for the ailing American automaker to draw a line under the past and face the future.

General Motors Death Watch 196: Fact Vs. Fiction

Frank Williams — Mon, 08 Sep 2008 13:47:38 +0000

Discovery Channel’s “Mythbusters” takes on urban myths that have been circulating through the culture. The show's producers go to great extremes to prove or disprove the stories, and establish a coherent, no-nonsense scientific basis for their conclusions. Although copyright prevents them from using the term, GM has decided to play Mythbusters. Their new “GM Facts and Fiction” website claims its rectifying analysts and commentators (including this site) who have been trash talking The General and its wonderful products. Unfortunately, their “busting” consists of a lot of hyperbole. Their responses are short on facts, and constantly cherry-pick the stats they deploy in their defense. Let’s take a closer look, to separate fact from fiction.

General Motors Death Watch 195: The Oncoming Train

Robert Farago — Thu, 04 Sep 2008 02:01:32 +0000

Ten weeks before the Tet Offensive fatally undermined American support for the Vietnam War, General William Westmoreland embarked on a publicity tour to “sell” the ongoing military campaign. In a televised news conference, Westmoreland famously declared that he could see "the light at the end of the tunnel.” In the same sense, GM’s executives continue to express their faith in the automaker’s “turnaround.” This much is to be expected-- especially when The General is lobbying for tens of billions of dollars in public funds. But the mainstream automotive media’s complicity is unconscionable.

General Motors Death Watch 194: Good Money After Bad

Robert Farago — Sat, 30 Aug 2008 20:37:10 +0000

Of all the failures that have led GM to the brink of bankruptcy, the automaker's failure of imagination is the most profound. Never mind the plug-in electric - gas hybrid Chevy Volt. How about conjuring a vision of a company with two or three tightly-focused brands that each produce a handful of distinctive, class-leading and profitable vehicles, that markets them with relentless focus, and stands behind them with a national network of honest, efficient and courteous salesmen and mechanics? Whatever else Car Czar Bob Lutz can say about GM's product strategy, that ain't it. Which begs the question: what does The General want to do with U.S. taxpayer’s money?

General Motors Death Watch 193: Rough Seas

Ken Elias — Wed, 20 Aug 2008 16:31:16 +0000

GM’s North American Operations will go bankrupt. This statement will not come as a “revelation” to many TTAC readers. Of course, there are still some who will continue to claim that this website is “crying wolf” regarding The General's descent into ignominy. But to challenge any outcome other than a Chapter 11 filing borders on lunacy. As its centennial mark approaches, the vertex of the perfect storm now engulfs The General. Like it or not, believe it nor not, it's a tempest that will engulf the ship and send it to a rocky bottom.

General Motors Death Watch 192: Only The Good Die Young

Robert Farago — Fri, 15 Aug 2008 22:56:54 +0000

Earlier today, GM’s purchasing chief warned his light truck parts suppliers that he’s looking to halve their number. No surprise there. GM’s SUV and pickup truck sales (and margins) have fallen like a stone thrown in a deep, dark well. But here’s the strange thing: Bo Anderson wants credit for his forward thinking. “The effort is proactive," he told the Traverse City management seminar. "To be sure that we get the best suppliers." Bo’s boast is based on GM’s faith that it will persevere through the current unpleasantness because yes, Virginia, you CAN cut your way to prosperity. Only no, Bo, you can’t. But hey, it’s something to do.

General Motors Death Watch 191: On the Fritz

Robert Farago — Sat, 02 Aug 2008 15:54:49 +0000

Journalism professors counsel aspiring scribes to avoid deploying numbers in the first paragraph. It’s a sensible prohibition. Although statistics (a.k.a. facts) give journos the imprimatur of authority, nothing’s more narcoleptic than naked numerology. Which is just as well. My math skills are only slightly better than my ability to pilot a Gulfstream IV. But I know a man who regularly rides in the back of one of these airborne ego-carriers, and he’s an accountant. And the CEO of GM. For the weekend, anyway. The question is, who’s next?

General Motors Death Watch 190: Kill Everything but Chevrolet and Cadillac

Ken Elias — Mon, 21 Jul 2008 15:24:35 +0000

BMW doesn’t need to advertise their “ultimate driving machines.” After decades building and selling vehicles offering sporting luxury, BMW has trained its customers to intuitively understand their products' appeal. Brands take years if not decades to develop, millions to billions of dollars to engender, and require careful stewardship to sustain. Contrary to much of this website’s commentary, GM’s management is not stupid. They know that Buick, GMC, Pontiac, Saab and Saturn are “damaged brands” in North America. But unless General Motors’ execs follow Bimmer's lead, and soon, the company will fail.

General Motors Death Watch 189: Name and Form

Paul Niedermeyer — Thu, 17 Jul 2008 16:01:37 +0000

In the ancient Buddhist text Visuddhi-Magga, "name" and "form" are described as powerless in their respective isolation. But when they propitiously combine and mutually support one another, they attain power and "spring up and go forth." GM's announcement that the 2010 Chevy Cruze would [eventually] replace the Cobalt marks a dubious milestone in its continuing struggle to establish a lasting presence in the all-important compact car market. The Cruze will be the recipient of the eightieth name that GM has used on one of its mid-sized or smaller sedans since 1968.

General Motors Death Watch 188: The Bottom Line

Justin Berkowitz — Tue, 15 Jul 2008 16:53:29 +0000

If there's one thing Wall Street’s wizards are taking away from Rick Wagoner's morning press conference, it's that money's too tight to mention. Meanwhile product is, was and always will be the real meat of the matter. On this score, Wagoner doesn't. "Eighteen of the next 19 products will be cars or crossovers." Sounds good-- provided you don't ask "what are they?" The answer to that question flags the fact that General Motors still doesn't realize that they're in a business of building cars and convincing people to exchange their money for those cars.

General Motors Death Watch 187: Feel the Burn

Robert Farago — Tue, 15 Jul 2008 14:44:11 +0000

Earlier this morning, GM CEO Rick Wagoner announced a cost-cutting package designed to "better align the business to the current market condition." He's cutting bonuses, pushing salarymen out the door, disappearing the dividend, postponing the union's health care payment, putting truck development on ice, yada yada yada. While the media focuses on the scope and scale of Rick's "right-sizing," the money shot arrives in the last six words of the official press release. Apparently, GM has "an ever stronger and competitive product line-up." Nonsense. And until that's true, GM's doomed. Which means GM's doomed.

General Motors Deathwatch 186 – The Return of the Cannibals

Justin Berkowitz — Thu, 10 Jul 2008 13:13:42 +0000

The Wall Street Journal put itself in the headlines this week. The august paper reported that General Motors may be considering (i.e. thinking about thinking about) shedding brands. While some of us have been saying-- for years-- that GM should refine, resell and/or retire it's octo-branded U.S. portfolio, this is the first time the mainstream media covered the issue since Oldsmobile was bricked-over in 2002. Not surprisingly, GM issued a flat-out denial, followed by a little deal hand-holding. Apparently, The General won’t shutter brands, only “reduce overlapping models.” Yes, it's the same old song, with a different Beat since you've been gone.

General Motors Death Watch 185: Plan 9 From Outer Space

Robert Farago — Mon, 07 Jul 2008 14:32:19 +0000

Now that GM's staring down the barrel of bankruptcy, the artist formerly known as the world’s largest automaker has launched a fresh offensive. Not a product offensive, of course. That would have required forward planning. We’re talking about a PR offensive. Hope for the hopeless. Alternatively, weasel words for the unwary. Here’s the headline, courtesy of unnamed sources, via the Wall Street Journal: a return to profitability by 2010. And here’s the kicker: the target date is “unofficial.” Does it get any more fantastic than that? Yes, it does.

General Motors Death Watch 184: Resignation

Robert Farago — Thu, 03 Jul 2008 15:36:03 +0000

Rick Wagoner is a lame duck. No matter how you look at it, it's clear that the failing, flailing CEO must go. Next week, The General's Board of Bystanders will meet to "discuss" the crisis. GM's dividend will disappear, triggering fresh anxiety (and some atta boys) from the financial markets and the media. The Bystanders should push Rick out of the RenCen penthouse, to glide to Aruba on his golden parachute. But they won't. They can't. Wagoner walking would be the final straw: an admission that GM's forked. And before he goes, Wagoner's got one more job to do...

General Motors Death Watch 183: Credit Where Credit’s Due. Or Not.

Robert Farago — Fri, 27 Jun 2008 00:21:49 +0000

Earlier today, GM CEO Rick Wagoner told the world that the automaker has “adequate liquidity” until the end of the year. So I guess no one believed him the first time. Ipso facto. Wagoner’s reassurance came on the same day GM’s stock price sank to a forty-year low. The same day Goldman Sachs recommended that investors run for the hills. No surprise, then, that Wagoner felt compelled to go beyond his previous “we’re good” guarantee. "We have a lot of options to fund beyond that," Wagoner soothed. Unless they don’t. In which case, it’s fork sticking time.

General Motors Death Watch 182: He Who Owns the Gold

Robert Farago — Tue, 24 Jun 2008 02:23:35 +0000

Earlier today, General Motors announced a "temporary" return to zero percent financing. It’s a clear, unavoidable sign that the automaker’s June sales slump is, as predicted, cataclysmic. Staring down the black hole begun on Black Tuesday, GM had to do something, anything to move the metal. And yet, at the same time, GM also revealed it’s raising its prices by 3.5 percent across the board. This second piece of news is equal parts bizarre and revealing. In essence, in the final hand of the poker game for its existence, GM has just doubled down. And now it’s Toyota’s bet. Here’s the thinking…

General Motors Death Watch 181: Bankruptcy

Robert Farago — Fri, 20 Jun 2008 21:34:51 +0000

TTAC’s Deep Throat and I have been talking about GM’s decline and fall for well over two years. My man’s mantra: “follow the cash burn.” And so we have, through foreign misadventures, asset fire sales, union payoffs, supplier bailouts and more. We’ve watched GM CEO Rick Wagoner mortgage the American automaker’s future to conflate the company’s bottom line— to little avail. Throughout this firestorm, we’ve wondered how the automotive and financial press could miss the simple fact that GM’s been taking in less than it spends for a long, long time. And now, suddenly, they’ve noticed. And now the end is near. Here’s how DT sees it going down…

GM Death Watch 180: Bail!

Robert Farago — Thu, 12 Jun 2008 20:31:20 +0000

Detroit's not flying the white flag just yet, but you can hear the unmistakable sounds of unfurling. Post Black Tuesday, GM CEO Rick Wagoner set about painting General Motors as a victim of unforeseeable circumstances; the switch from truck to car sales was faster than "anyone" could imagine. Chrysler CEO Bob Nardelli simply said everything's fine-- a sure sign that nothing is. And earlier today, Ford President Mark Fields pleaded for government intervention to protect/create a domestic electric vehicle battery industry. Clearly, finally, The Big 2.8 are thinking ahead. To government bailouts.

General Motors Death Watch 179: Black Tuesday

Robert Farago — Tue, 03 Jun 2008 18:58:04 +0000

In July's Car and Driver, Csabe Csere takes the Secretary of Transportation to task for her ignorance about auto industry lead times. How can Mary E. Peters' department mandate a big increase in fuel economy standards for 2011 when Detroit’s already signed off on those products? Despite the obvious irony-- the buff book’s hobbled by their two-month lead time-- Csere makes a good point. The corollary: unless GM planned to switch from gas-guzzling light trucks to fuel-efficient cars in 2003, they’re insert F-bomb here. As May’s sales numbers indicate, indeed they are.

General Motors Death Watch 178: Failure is Possible

Robert Farago — Wed, 28 May 2008 19:20:24 +0000

“Rich people don’t care [about high gas prices].” Bob Lutz’ statement-- made during the launch of GM’s new SUV’s in August 2005-- encapsulates the automaker’s history of arrogance, ignorance and self-delusion. Then again, what else could GM’s Car Czar have said? Whether or not GM should have seen the gas crunch coming, the die was cast. Now, as gas prices crest $4 a gallon, as Delphi and GMAC teeter on the abyss, as GM’s stock price hits a historic low, GM’s slide into Chapter 11 is beginning to assume the mantle of inevitability. And why not? There is no Plan B.

General Motors Death Watch 177: The World is Not Enough

Paul Niedermeyer — Thu, 15 May 2008 11:53:56 +0000

According to perceived wisdom, GM's overseas ops will keep the corporate mothership afloat. Some 64 percent of first quarter sales came from outside our borders, as well as ALL of GM’s profits. The General claims that foreign markets will account for 75 percent of its profit by decade’s end. So why not just shut down the NA operations and firewall the rest as “Global Motors?” A closer look at GM’s three international units tells the tale.

General Motors Death Watch 176: Oh they built the ship Titanic…

Robert Farago — Thu, 08 May 2008 18:02:00 +0000

Once upon a time, the myth of Icarus personified the warning that pride goeth before a fall (literally). These days, the RMS Titanic’s death by iceberg-- on its maiden voyage no less-- illustrates the dangers of hubris. That’s because the public considers the concept of an unsinkable ship patently ridiculous. In fact, the Titanic should have been unsinkable (save tsunami, torpedo or ballistic attack). The reasons the ocean liner eventually slipped into the depths have much to tell us about the ship’s corporate equivalent, General Motors.

General Motors Death Watch 175: Phone Calls From the Dead

Robert Farago — Wed, 30 Apr 2008 16:16:50 +0000

Dean Radin believes some people are psychic. No surprise there; investigating psychic phenomena is what Radin does for a living. And yet, when author Mary Roach asked the electrical engineer if there's a middle ground between believing that the dead contact the living through electromechanical devices and viewing the whole thing a hoax, Radin said "The middle ground between genuinely true and outright faking is unconscious delusion." Welcome to GM's world.

General Motors Death Watch 174: Gravity Sucks

William C Montgomery — Tue, 22 Apr 2008 18:21:41 +0000

As a child I loved to play on swings. Leaning back and kicking my legs forward, I could propel myself into momentary weightlessness. Of course, every good swing ended with an acrobatic dismount. At the point of greatest forward momentum, I would let go of the chains and launch myself off the seat. For a brief moment I would be flying. Like an astronaut on NASA’s vomit comet, I would arc across the back yard. The sensation was thrilling. But I wasn’t a bird. Gravity’s hand never failed to pull me back to earth. And so it is with General Motors.

General Motors Death Watch 173: Eight into Four Does Not Go

Robert Farago — Thu, 17 Apr 2008 20:32:24 +0000

GM is re-organizing its corporate structure. It’s putting its eight brands into four divisions under four car czarettes, in a three-three-one-one configuration. For those of you who can’t guess which GM brand will go with which (as there’s no neat, logical way to make these groupings), it’s Cadillac, Hummer and Saab; Buick, Pontiac and GMC; and Saturn and Chevy on their lonesome. “We are further streamlining the organization,” GM’s President of North America announced. “To reduce complexity, align resources to improve the consumer experience and improve bottom line business results." It’s a deeply misguided maneuver.

GM Death Watch 172: Buick’s Enclave

Adrian Imonti — Tue, 15 Apr 2008 11:17:10 +0000

In 280 BC, King Pyrrhus took on the might of the Roman Army-- and won. In one of history’s most insightful strategic assessments, the King surveyed the corpse-littered battlefield and concluded, “one more such victory shall undo us.” Since then, the term “Pyrrhic victory” describes a conflict in which a force expends so much energy winning a battle that it loses the war. It’s a lesson General Motors seems determined not to learn. The latest chapter in this continuing saga of self-delusion: the Buick Enclave. The Enclave is a false promise that illuminates GM’s strategic poverty, and its resulting weakness.

GM Death Watch 171: Focus!

Robert Farago — Thu, 03 Apr 2008 15:39:15 +0000

Last Thursday, GM asked the California Air Resources Board (CARB) for "extra credit." Despite the fact that Chevy's gas-electric plug-in hybrid isn't in production, the General's generals wanted the rules modified so the Volt could more fully satisfy the Golden State's Zero Emissions Vehicle requirements. Done. And then, today, GM announced it will build 1000 hydrogen fuel cell vehicles for the same purpose. Only it wants someone else (i.e. taxpayers) to fund 40 hydrogen refueling stations. Once again, GM's reveals its core weakness: ADD.

General Motors Death Watch 170: Executive Outlook Express

Robert Farago — Mon, 31 Mar 2008 12:55:09 +0000

General Motors is about to report a massive sales decline for the month of March. GM’s management will acknowledge the loss, blame it on the general downturn in the U.S. new car market, point to a few successful models and move on. Later, the American automaker will report it’s burned over a billion dollars in the last financial quarter. GM’s management will blame the market downturn (again) and the strike at American Axle. The top brass will admit that GM’s turnaround is… delayed. But at no point will they accept responsibility for their plight. Well, why would they?

General Motors Death Watch 169: Those Who Do Not Learn From History Try to Rewrite It

Paul Niedermeyer — Mon, 24 Mar 2008 11:45:55 +0000

“Not making a car like the Prius was a mistake.” In recent days, GM’s Car Czar has amped-up his pro-hybrid rhetoric, including this mea culpa. Clearly, Vice Chair Bob Lutz’s enthusiasm for gas - electric products has undergone a volte face, inspired by his fatalistic conclusion that only alt power can satisfy federal regulators’ mandates for increased fuel efficiency. But in his newfound zeal, Maximum Bob is rewriting history. In the interests of truth, let’s set the record straight.

General Motors Death Watch 168: Straight from the Horse’s Mouth

Robert Farago — Thu, 20 Mar 2008 13:28:59 +0000

Yesterday, Justin and I caught wind of GM Car Czar Bob Lutz' private pow-wow with bloggers attending the New York Auto Show on GM's dime. Christopher Barger, GM's Director of Global Communications Technology, barred our way. "It's invitation only," Barger announced. "Thirty-five is the limit." I asked Barger if he was TTAC-aware. "Sure, you guys hate us." So I waited in the hallway and collared Maximum Bob. I introduced myself and asked permission to attend. "Do we know these people?" Lutz asked. "Do we like them?" "It's up to you," a stunned Barger replied. We were in.

General Motors Death Watch 167: The Not So Gr8 Pontiac G8

Robert Farago — Sun, 16 Mar 2008 15:45:02 +0000

Media-wise, the new Pontiac G8 is a hit. Obviously. The Aussie four door conforms to the pistonhead paradigm: a powerful, rear-wheel-drive sports sedan. According to the jobbing journos flown to a first-class California hotel to test the new machine on local roads, the G8 GT isn't aesthetically offensive, goes like stink and handles well. While hooning hacks are celebrating the return of the [imported] American muscle car, they seem to have forgotten the fact that the muscle car is dead. As is Pontiac. And, by extension, GM.

General Motors Death Watch 166: The Unaccountable Accountant

Robert Farago — Fri, 07 Mar 2008 11:46:32 +0000

In 1968, a book called The Peter Principle argued that large organizations promote employees past their proven abilities, until they reach their natural “level of incompetence.” As a remedy, Dr. Laurence J. Peter suggested a rigid corporate caste system. For example, a talented accountant could rise within his field to become the company’s The Chief Financial Officer (CFO). And that’s it. Promoting the successful beancounter to the head of the company risks evoking The Peter Principle, and threatens disaster. Or, in the case, of GM, creates it.

General Motors Death Watch 2752: The Story So Far

Paul Niedermeyer — Tue, 26 Feb 2008 15:01:56 +0000

In the comments section below the most recent General Motors Death Watch, natredde asserted that the series' longevity argues against its existence. “Calling it a Death Watch after having the time to write 165 articles is silly... Somehow I think being on GM Death Watch 2752 wouldn’t necessarily add a lot of legitimacy.” As a student of GM history, I’ve been keeping my own private GM Death Watch for decades. It was suspended (at number 2751) when I discovered and joined TTAC. But the challenge of adding legitimacy to number 2752 was simply too great to resist.

General Motors Death Watch 165: The VEBA Fiasco

Robert Farago — Sat, 23 Feb 2008 17:39:30 +0000

As GM's fortunes head for their inevitable denouement, it's time to pause and reflect on the deal that revolutionized the American automaker's labor relations. I speak here of the multi-billion dollar bribe paid to the United Auto Workers (UAW) to cut their sky-high wages and benefits down to size. In exchange for a new Voluntary Employees Beneficiary Association (VEBA) health care trust, the union accepted a two-tier wage system. At a stroke, Motown became competitive with the transplants, while the UAW protected its members' health care benefits for all time. In theory.

General Motors Death Watch 164: Two-Mode Hybrid RIP?

Edward Niedermeyer — Fri, 22 Feb 2008 11:57:03 +0000

In the world of hybrid-drive technology, far-sighted development can pay huge dividends. Just ask Toyota, whose sales of Hybrid Synergy Drive-powered vehicles passed the global million-unit mark last year. While Nissan is licensing Toyota's Synergy Drive for its Altima Hybrid, GM has passed on proven success in its pursuit of two-mode hybrid technology with BMW, Mercedes and Chrysler at their joint Hybrid Development Center in Troy, Michigan. Smooth move or just another example of GM throwing good money after bad? Yup, you guessed it.

GM Death Watch 163: What doth it profit a man?

Robert Farago — Mon, 18 Feb 2008 11:52:59 +0000

"Managing expectations." It's a term near and dear to the hearts of the people who pull our politicians' strings. Increasingly, it's the rhetorical weapon of choice for executives seeking to maintain their grip on America's large corporations. While there's nothing wrong with casting your company's efforts in a positive light, the danger is both simple and lethal. When a company's culture becomes based on hype, it loses its ability to react to reality-- both good and bad. It becomes lost in the fog of war. One such company is GM.

General Motors Death Watch 162: Cannibals

Andrew Dederer — Tue, 29 Jan 2008 11:55:06 +0000

Back in the eighties, a GM executive congratulated a colleague who worked for the Cadillac brand. “Well done for reaching 300k sales.” The Caddy man was having none of it. “We didn’t sell three hundred thousand Cadillacs; we sold three hundred thousand Buicks.” The remark was prescient in two ways. First, it acknowledged Cadillac’s ruinous move “down market.” Second, more importantly, it reflected the fact that Caddy’s success was Buick’s failure. GM was already descending from a well-ordered familial hierarchy into the madness and chaos of cannibalism.

General Motors Death Watch 161: The Emperor’s New Clothes

Robert Farago — Sat, 19 Jan 2008 16:05:57 +0000

In the old fairy story, con men convince a naked sovereign that he’s wearing fine clothes. Applying that cautionary tale to General Motors is not as straightforward as it seems. Is GM CEO Rick Wagoner aware that the enormous automaker is tumbling towards bankruptcy? Or is he living in a dream world, demanding that his "kingdom" admire his invisible finery? Whether Wagoner’s deluded or deluding, his ”GM Statement on Turnaround Plan” indicates that GM is still buck naked.

General Motors Death Watch 160: Promises Promises / Volt Birth Watch 24: Fly Me to the Moon

Frank Williams — Wed, 16 Jan 2008 14:56:19 +0000

In 1962, President John F. Kennedy made a pronouncement that made a lot of people think he'd lost his mind: "We choose to go to the moon in this decade." According to GM's Vice Chairman of Global Product Development, Chevrolet's gas-electric plug-in electric hybrid is GM's moon shot. Wired magazine recently sat down with Bob Lutz and asked the Car Czar what would happen if the Volt doesn't succeed. "What if Kennedy hadn't pulled off the moon shot?" Bob wondered aloud. "If it doesn't work, it's not fatal. But if it does work, it will be sensational and it will have the same sort of symbolism." The U.S. put a man on the moon by the end of the decade, as promised. What are the chances the Volt will appear in a Chevy showroom by 2010?

General Motors Death Watch 159: What’s GMNext? Panic!

Robert Farago — Sat, 05 Jan 2008 16:23:05 +0000

Contrary to popular belief, panic is a logical reaction to an external threat. When a cornered animal’s fight or flight responses are unavailable or exhausted, acting erratically is its only hope. GM has been showing signs of panic for some time: on-again off-again product plans, vainglorious boasts, mistimed marketing, ill-advised divestiture and more. Recent events indicate that the domestic automaker’s aberrant behavior is escalating; leading, I’m afraid, to extinction. But let’s start with the meta-weirdness and work our way back to specific inexplicability.