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...