Many of the workers scoffed and laughed at the TV people, stating “Studebaker is going to be here when both you and I are dead.”

Wrong.

The number of brands is absolutely a problem for GM, because the higher quantity increases the sprawl of the management bureaucracy, encourages corporate fiefdoms and feeds badge engineering and cannibalization.

It’s a bad business model for a mainstream car maker. It can work for soap and cereal and toothpaste and other consumer products where finely honed niching is possible, but for cars, it is ultimately a losing proposition. You can tightly niche the very high end, but not the bottom and the middle where most of the market is.

Manufacturing, labor, and legacy costs have placed a huge burden on GM, one any execs would have had trouble dealing with. Wagoner is still running things because more headway has been made against these costs than many people thought was possible.

New product development has been another weakness. They’ve made much headway here as well. But the factors I wrote about in my Ph.D. thesis probably continue to hinder them.

http://www.truedelta.com/exec_sum.php

All that time my best buddy worked at a GM plant as an assembler, he is quite proud of how little he managed to do, how he could tell his supervisor were to go, and how his Union Membership card entitled him to do what ever he wanted. I always thought it was just some kind of macho chest pounding on his part until I actually worked there for a year. The waste of time and materials, the energy upper management put into padding there expense reports and performance reports, would have put a man on Mars by now.

My father had his own business, a maintenance business and he put in long hours, was honest and disciplined with a good business sense. He did what needed to be done, paid his taxes and managed to scratch out a living. I always realized though that he was just one bad judgment or a lazy few weeks away from disaster.

Perhaps that is why I have had a 40 year battle with my GM buddy. I keep telling him that no matter how big a company is; eventually waste and mismanagement will win. Even now my buddy is certain that the bad numbers and losses coming out of GM are just accounting tricks, and all in their plan, he just can’t believe they could fail, they are just to big and nobody really knows just how big they are. He is staking his pension and lively hood on the fact that he never trusted them as long as he worked there, so he is sure that the bad numbers can not be trusted now. How is that for convoluted thinking?

I guess my sense of slight anticipation that GM is going to bite the dust is no more than winning a bet with a buddy. How is that for convoluted thinking?

…you would think the dividend would provide a floor for the stock, but I think investors aren’t valuing that since there is a high risk it will be discontinued..,

Are you crazy?? Do you know how much it costs to close dealerships?? Do you know how little it costs to make a Pontiac G6 that sells more than 15k/month off the same platform as the Malibu? Or how little it costs to “convert” a Chevy Silverado into a GMC Sierra?? GM would be crazy to give up on those sales especially when they cant just layoff workers (as in no pay) and close plants and dealerships.

There is always room for a new story, a new perspective, a different outlook…to the same old story.

The best one is when the market changes direction and the folks in Detroit including GM were presumably caught by surprise.

“Lets leave them the truck and full size SUV segment with the big profits, lets hope they get in a stupor and keep on getting higher…once the market shifts and it will…they will fall on their own swords…it will be interesting to see the various spins it will take…in the meantime lets make sure we have enough “market desirable” product in the pipeline”

Now that’s funny, right there.

He’s been “slurping at the trough”, going down the “long sad road” for a long time now. Known it, and spinning it.

“…BY being stupid…”

NOT

“…my being stupid…”

The other option is to keep all the brands, but to stop badge engineering: Make each brand truly what it’s intended to represent. This, of course, would have meant making the Chevy Volt a Saturn Volt, for instance.

You actually found the one problem that cannot be laid at the doorstep of bad management. Employment is a two way street. Lifetime employment was dead twenty years ago. Anyone left should have known better.

This whole idea that 60k plus factory workers are going to be unemployable if they lose their union/gm job is primarily crap, and if it were true, it would be the union at fault for not telling them to be prepared for the possibility. No management ever promised them lifetime employment, and it was supposed to be the union looking out for the workers. If GM was looking out for the workers, what is the union’s role?

You are WAY off base. Any of them willing to relocate and take a market wage for their experience level will be just fine.

There were some GM executives on the stage and they looked worried.

They told us that GM had come within an eyelash of failing to meet their payroll. The bankruptcy of GM had been discussed. At the last second some ffinancing had come through for them.

Shortly after, Robert Stempel was let go. The rumour was that he refused to dump workers, so the board terminated him.

Shortly after, the union negotiated many concessions. We lost 9 personal holidays and had our wages frozen, among other things.

People forget, or don’t know how, close GM came to bankruptcy back then.

If their financial condition is worse today, than it was then, the odds are heavy that GM won’t survive.

I am sorry to say that too. GM was an excellent employer for my career. It truly was like working for the GM Family.

I worry, not only about my fellow GM employees, but the hundreds of thousands of regular people who depend on GM plants for their living as well.

The parts suppliers, dealers, cafeteria workers, and the people who own shops in the factory towns.

All will suffer.

We grew up with GM for goodness sakes.

There was always mom, apple pie, and GM.

It would be like losing an old friend.

Even if they idle the plants, they’ll still be losing money on the plants and the unionized employees that work at them. Granted, its nowhere near the same amount as what they lose at plants that produce what isn’t selling. The only way for them to close a plant and not lose money is to sell the property and reassign the workers.

What they need to do at the truck/suv plants is idle them for at least 9 weeks (similar to Chrysler and Ford) and let the supply decrease to reasonable levels. Then they need to emulate Toyota’s ‘just in time’ philosophy to ensure that there is never an oversupply of trucks on dealer lots.

As for GM;
I don’t buy the $1 billion a month cash burn, since that was during an especially heavy buyout period (e.g. not regular business expenses), but they’re still in trouble. I understand why they’re hesitant to shutter brands, since it cost them over $1 billion dollars just to shutter oldsmobile, and they would have to shutter at least 4 brands and can’t really afford an additional $4-5 billion dollars to do it.

Even though Wagoner has failed thus far, his real test will be coming soon. He needs to make the hard choice of shuttering Saturn, Pontiac, GMC, Hummer, and Saab. The only way GM is going to survive is if they cut out the fat, like Ford has done, and focus on their core brands, which should be Chevy, Cadillac, and Buick. It’ll hurt, and will certainly cause them to lose more market share and their #1 spot, but unless they do it, GM is doomed.

Armchair CEO’s would be better, but it still doesn’t quite ring true. Hell, everyone saw it coming, and no one did squat about it.

Or call Kerkorian up for some help?

Convert existing models to electric and sell a desired product that is currently for the most part, unavailable.

I am in the minority holding Wagoner in the highest esteem, but there is no doubt that there is ugly work to be done in the future in terms of repeating the Olds experience.

The (weak and generally unimpressive) Board will never act against Rick, but you have to wonder if he’ll want to go down the long and sad road of closing down pieces of American history. My guess is that he’ll leave that to someone else, most likely an industry outsider.

Or Jimmy Hoffa.

“In May, GM sold only 268,892 vehicles in the U.S., leaving it just a smidgen ahead of Toyota (TM), which sold 257,404. June could see Toyota beating GM out for the title of the number one auto company in the U.S.”