Face it, they’re done.

They will cut the creative staff-which means less creativity and innovative solutions-and after a press conference like that, you could almost hear all the smart people in the background polishing their resume’s…

They have cut the bonuses and pay raises-which means the smart folks with a few years salary in the bank will leave to go where they’re appreciated-why stay and get the shaft?

They have killed the health care benefits for 65 and older retirees-which will certainly affect the long-counted-on sale of GM cars to retirees who will now need an extra $300-$500 a month for their health care-say goodbye to retiree sales!

They can’t import their good European car designs and expect to make any money, the exchange rate is just NOT in their favor…why do you think Audi, BMW, Mercedes, Fiat, Alfa and others are looking to build more plants here?!?!? So they will have to rely on domestic small cars or Daewoo products, and NO GMNA or GM-Korea small car can compete with the Fit, Civic, Corolla, Yaris, Mazda 3-they’re not even close (OK, maybe the Vibe, but that’s really a Toyota anyway-GM didn’t engineer much of that line) . The only things they have that make money are FS-Trucks and SUVs in NA….and they ain’t doing so well…

As for the Volt? uh-huh…if it’s over $40K, all bets are off as to it’s sales success and they keep hinting it will be over $40K…Not good.

As much as I do not want to see GM slip into Chapter 11, I really don’t think these actions are drastic enough and they will have to get tougher and smarter quick- and it’s RARE when the people who got you into trouble are the same people who can get you out-unless they make drastic changes with 3-6 months at the top, face it they’re done-if you listened closely to the press conference, they almost told you as much that they’re done- they listed for us all to hear and see the litany of issues that Robert et al have been telling us for years, and they finally seemed to own up to it-they’re down and now, even they know it.

Congress was “extremely hostile” to President Clinton because it wanted to spend LESS money than he did. Under those circumstances, it isn’t too hard to balance the federal budget. The tech boom, which set off a gusher of capital gains tax revenues, didn’t hurt, either.

In the 1980s, I don’t recall Congressional Democrats pushing for more spending cuts.

So the only people who are really personally involved are the employees, and they can’t do anything they haven’t already done.

http://moneycentral.msn.com/ownership?symbol=gm

Which was/is that GM would be able to sell vehicles in C11. The main reason to do so would be to generate some cash flow and get rid of all the brands/inventory it doesn’t need. And if you want to talk about seriously chopping overheads, C11 is the only way to go. The only way GM can go.

They still will lose a lot of money if they charge six to ten grand for a Buick LaCrosse. Heck, the costs to make a LaCrosse might be higher than to make a bare bones Silverado.

My point is that if sales drop by an additional 30-50% or so due to their filing bankruptcy (or prices drop by that much in an attempt to compensate, like you are suggesting), that loss of income from those sales will be more than any savings the bankruptcy will give them. So, they will never regain profitability, which means they will never exit Chapter 11.

Now, I could be wrong. I suppose it is possible for sales to not drop significantly once they enter bankruptcy. If that actually happened, then it might be a very good thing, allowing them to dump contracts that they otherwise couldn’t.

Cobalt XFE: Look at the numbers. EPA matches the Civic, but more horsepower and a lower sticker. Most people are too stupid to understand how much better the Civic is. After all, these are the people who bought SUVs as single-passenger daily commuters. The planned replacement will be a quantum leap better if they can keep the price below the Civic.

The Cobalt XFE is a paper vehicle. That is, it’s a vehicle that exists so GM can have bragging rights for something on paper (in this case, fuel economy), not one they actually intend to sell. It has a bunch of tweaks that make the car handle and ride worse (low resistance tires, etc.) but that give it better fuel economy. But the biggest tweak is the fact that it only comes with a manual transmission.

This is America, where 80%+ of all vehicles sold come with automatics. That’s what consumers want, and Toyota and Honda show that they can make vehicles with autos that get the same (or in some cases, better) fuel economy than ones with a manual. The fact that the XFE only comes with a manual shows that it is a paper vehicle.

I have a significant difference of opinion here. First, the goal of a Chapter 11 bankruptcy would be to regain profitability. They can’t do that if they can only charge six to ten grand for a Silverado.

Right you are. I left you with the wrong impression here. I’ve changed the example to a Buick LaCrosse to better illustrate my point.

Which was/is that GM would be able to sell vehicles in C11. The main reason to do so would be to generate some cash flow and get rid of all the brands/inventory it doesn’t need. And if you want to talk about seriously chopping overheads, C11 is the only way to go. The only way GM can go.

This is patently untrue. Everything sells at a price. How about a new Silverado for under ten grand? Seven? Six? And a GM C11 would NOT prevent GM (or some third party) from honoring its existing or future vehicle warrantees.

I have a significant difference of opinion here. First, the goal of a Chapter 11 bankruptcy would be to regain profitability. They can’t do that if they can only charge six to ten grand for a Silverado. Second, my complaint about warranties is not whether or not GM would honor them, it’s about whether or not consumers would believe that they would honor them. If customers don’t believe the warranties will be honored, even if they actually will be, those customers will look elsewhere. It’s like a bank run-if everybody believes that a bank is in trouble, everybody takes their money out of the bank and the bank is actually in trouble-even if the bank wasn’t isn’t in trouble originally, it is now.

I personally believe if a vehicle manufacturer goes into Chapter 11 they will never come out of it because the act of entering bankruptcy will cause sales to fall even further. No vehicle manufacturer has ever entered Chapter 11 to my knowledge, so there’s no history to show whether my theory or Mr. Farago’s is more likely to be correct. But that may change soon.

Or, one day pigs could fly. A man can dream, can’t he?

Lets get all this wishful thinking and daydreaming out of the way so we can cut to the chase.

The fact is all of these things are VERY unlikely to happen. While the US market will eventually rebound, gas prices will NOT go down. The other problem is, once the market rebounds, exactly WHAT high-margin vehicles will GM have for sale that consumers will be willing to buy?

Ronald Reagan
“Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

Now at the subsidize it stage.

That’s a great quote. Let me know when Zombie Reagan or any one of his progeny learns how to balance the federal budget. (Slick Willie managed it, and with an extremely hostile congress. Can’t be that hard.)

Necessary but not sufficient C11 can be used to solve balance sheet and contract problems. Unfortunately, it does not raise the IQ of management.

Actually, it’s worse than that: you’d need to sell 10 million cars at $100 profit per car to make a billion. But your point still holds, and indeed becomes much clearer: GM is in a fix! It seems that one solution–sell 100,000 Escalades at $10,000 profit per vehicle–is steadily getting more implausible.

I also think that people will be more sympathetic to giving money to an american manufacturer–even one that makes shoddy products–than they will be to paper pushers who are deemed largely responsible for the housing bubble.

If I recall correctly, Sloan did allow for very modest overlap, because he wanted there to be some pull among the various brands. A lower priced Oldsmobile would attract some strivers who wanted to move up from a Pontiac.

But those lower priced models weren’t allowed to become what the brand represented. By the mid-1970s, for example, Oldsmobile’s mainstay was the Cutlass, which was selling in what should have been Chevrolet’s territory. It was a nice-enough car, but it really wasn’t all that prestigious (if you could afford a brand-new car, you could afford a Cutlass). Meanwhile, the Supreme variant, along with the Grand Prix and Buick Regal, was competing with the Monte Carlo.

Katie,

No argument from me that Toyota has the better brand structure and approach to managing its brands for today.

Also, (as I pointed out yesterday) let’s look at two models:

Toyota’s brand encompasses small cars (Aygos and Yarises) to pick up trucks (Tundra and Hilux). Now in this downturn of gaz guzzlers, Toyota can simply shift production around to increase production of small cars whilst contracting the pick ups and SUV’s. The brand doesn’t get damaged whilst allowing it to still grow.

Now compare that to GM’s model. If GMC was their “pick up” brand, then it would receiving a right royal battering in this climate. Such a battering that the brand could cease due to poor sales. Now, if and when the market picks up, GMC might not be around to grab those increased sales.

Just a thought…..sorry, Bunter! ^_^

GM’s brand structure worked in a relatively simple market, where 99 percent of the customers bought largely the same kind of car. Once the market began fragmenting, as it did in the late 1950s, GM’s approach was doomed.

When you’re in a hole, the First Rule is, QUIT DIGGING.

GM just went out and showed the world their new Nuclear Shovel.

More SAAB’s?
More GMC’s?
More Pontiacs?
More Buicks?
Cadillac CTS WAGONS???
Cadillac BRX?

Perhaps GM could employ Andy Card as a lobbyist….?…..

-Impala: Ruler of the value-oriented, large FWD universe. That Malibu sales haven’t cannibalized Impala says a lot. The new Accord is potentially bad news, but I’d say the Accord still constitutes a completely different audience.

-Malibu: A class leader by any measure.

-Cobalt XFE: Look at the numbers. EPA matches the Civic, but more horsepower and a lower sticker. Most people are too stupid to understand how much better the Civic is. After all, these are the people who bought SUVs as single-passenger daily commuters. The planned replacement will be a quantum leap better if they can keep the price below the Civic.

-Aveo: The mission of a $12,000 car is simple: don’t fall apart. Mission accomplished. Aveos are flying (waddling?) off the lot. The planned replacement will yadda yadda…

If I’m GM, I C11, dump all other brands and associated liabilities, come out with Chevy/Cadillac. Throw a Malibu wagon into the mix. With all marketing resources going into an independent Chevy, they really could be something. Like, profitable.

Another cloud joins the “perfect” storm. That bailout fatigue seems very likely, but none of us has a crystal ball to see if it will actually be trillions. It might very well be trillions, but if that is the case, GM will be the furthest thing from anyone’s mind anyway, bailout fatigue or no.

It’s interesting how talking about potential GM NA Bankruptcy causes some of us to take a more critical look at our economy as a whole… I’m going up to the attic to inventory how many Bell/Mason jars are left over from when my mom used to can veggies.

@mellvar: Lutz says no Beat for US as it doesn’t meet safety/crash regulations and there isn’t enough money to get it ready in the next 2 years.##

That and the Cobalt and Cruze will be sold side by side. Its “too many products/too many brands” run amuck. Now they’re selling competing products under one brand.