By Robert Farago
August 20, 2008 -
GM's Chief Operating Officer has fired off a missive to The Wall Street Journal, taking the paper to task for its Op Ed "Can America's Auto Makers Survive?" Fritz is feisty– and full of it. "Contrary to Mr. Ingrassia's notion that U.S. auto makers did not anticipate the risk of rising fuel prices, GM has been preparing for the shift for several years toward more fuel-efficient models and developing diverse alternative fuel solutions that will redefine the industry." Hang on; isn't this the same company that said "no one" could have anticipated the recent gas price surge? "In fact, 11 of our last 13 U.S. launches have been cars or crossovers, as will 18 of the next 19. We have 17 models that get 30 mpg or better, and offer six hybrid models" All of GM's eight brands are losing sales and share. The hybrids are a drug on the market. But Fritz' last 'graph is far, far more worrying. It is nothing more or less than a pitch for a federal bailout. "The future of the auto business is important to America, and we are dedicated to seeing that GM continues to be a significant part of the American landscape for decades to come." Taxpayers, grab you wallets and ready those emails! Your money is at hand!
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POWERED
August 20th, 2008 at 8:56 pm
What’s good for GM is good for the US. There comes a time though when what’s best is euthanasia. I say give the money that would go to bailing out GM the corporation to the GM and supplier workers. As for subsidies, I might could go for a little subsidy of the dim witted stockholders getting some legal guidance in suing the asses off the bystanders. On the other hand, is it legit to sue somebody for being asleep when you were sleeping too? Let the courts decide.
August 20th, 2008 at 9:07 pm
“But the Detroit Three stuck with a business model based on leasing SUVs for way too long. The two things wrong with that model were, well, leasing and SUVs.”
hahahah
August 20th, 2008 at 9:07 pm
Selected Portions of Fritz’s Letter to the WSJ Translated to English
apologies to John Gruber
I am high as a kite.
Put your boots on.
Where by “preparing” we mean gorging at the SUV trough. We’re completely fucked. Let me show you my crack.
Where by ‘launches’ we mean ‘nails in the coffin.’ We still have the worst car lineup this side of Chrysler or Kia. The Volt is our Hail Mary play. Whoo! Acid flashback!
If we go down, we’re taking the rest of you with us. Mwahahahaha!
August 20th, 2008 at 9:16 pm
That’s why it will become smaller before it fails.
August 20th, 2008 at 9:31 pm
“GM’s Chief Executive Officer has fired off a missive to The Wall Street Journal”
The article was signed:
Fritz Henderson
GM President and COO
You scared me. I thought Rabid Rick might have lost his job.
August 20th, 2008 at 9:37 pm
Robert Schwartz :
D’oh! text amended. And now I’m going to make friends with a glass of Coppola chardonnay.
August 20th, 2008 at 9:40 pm
I got a chuckle out of the ironic headline, “GM Too Big To Fail.”
August 20th, 2008 at 9:50 pm
He’s just towing the company line.
August 20th, 2008 at 10:17 pm
If GM is too big to fail, then perhaps we need a new category of treason with appropriate punishment for those executives that allow it to fail
August 20th, 2008 at 10:18 pm
Yep, he’s also knee deep in the unique substance that GM is in.
August 20th, 2008 at 10:19 pm
I read the letter in the WSJ this morning and this guy has no concept of history. There have been other, bigger companies that have disappeared over the last hundred years, their valuable parts sold off to other companies.
I’ll state this about the SUV boom:
I learned a long time ago that lazy management goes where the competition is weak and profits are fat, avoiding a fight if they can. You can make money hand over fist until your competition finds you. Then you had better be ready to grab your ankles.
August 21st, 2008 at 12:52 am
In all fairness, GM is probably too big to let fail. The cost of bailing out the smoking wreckage of the upper midwest would be considerably higher than the cost of a bailout. We’re talking a whole region becoming a near ghost town overnight.
Think Flint, Michigan times a hundred.
August 21st, 2008 at 1:53 am
faster_than_rabbit: Okay, that was funny, very funny and unfortunately spot on accurate
August 21st, 2008 at 1:54 am
“Too Big to Fail” and there was once a famous ship that was “unsinkable”
August 21st, 2008 at 1:55 am
Sitting here wtaching the Olympics and the GM commercial just aired, with the Volt front and center. Dealers will be swamped with orders tomorrow morning.
August 21st, 2008 at 8:32 am
[...] in Economics, Four Wheels at 8:25 am by Stacy McMahon Ok, you know what? Nobody is too big to fail. If GM can’t keep itself going in spite of all its advantages, then let it go. Let the [...]
August 21st, 2008 at 8:37 am
When he talks about 11 of the last 13, or 18 of the last 19 being cars or crossovers, I’m assuming he is counting the Lambda quadruplets in there.
So, “GM has been preparing for the shift for several years toward more fuel-efficient models” , by developing 4 versions of a vehicle that gets 16 MPG in the city?
In addition, some of the other launches included in GM’s preparation for more fuel efficient vehicles are the “fuel-sipping” CTS and Camaro.
August 21st, 2008 at 8:58 am
And to think these guys get paid so handsomely for publicly airing their total incompetence.
GM isn’t big: it’s irrelevant. Fail it will; disappear it won’t. The leadership at GM is totally failed, they have long since failed. One look at GM’s lack of effort validates that. At least Mulally has tried, though he has/will fail he still has tried. GM hasn’t even tried to succeed-therefore they have failed from the starting blocks.
Standing back and looking at the US automotive landscape from a birds eye view: The US auto industry has been operating in a failed mode for many years. Failure does not say when it will surface, but it will surface.
Failure generally is something that must be worked at/created. GM has worked hard at it and are now rewarded for their great efforts. Well at least the clowns At GM give us a laugh now and then.
August 21st, 2008 at 9:30 am
Too big to fail is now a well established principle of American capitalism. It fits nicely into the socialism for the rich and capitalism for the poor idea popular with the powers that be. Amazingly a majority of the citizenry like it too and keep voting them back into office.
The main reason a bail out will happen is that it is cheaper from the government’s point of view than the consequences of bankruptcy with the lost jobs and tax revenue.
After Chrysler in the early 80’s and Bear Stearns recently along with Fannie and Freddie does anyone doubt that there will be a GM bailout? Hopefully part of the bailout will be a replacement of management or at least some kind of supervision of how the money is spent.
Don’t bet on it though.
August 21st, 2008 at 12:41 pm
How ironic that this latest news is followed directly by the Lehman Brothers missive.
August 21st, 2008 at 1:55 pm
I just don’t understand this. This line about being too big to fail. Fuck you!
Maybe if your company had better leaders you wouldn’t be in this tailspin you’re in. The temerity to expect a bailout is absolutely sickening to me. GM is the old stereotypical welfare recipient who sits on their ass and pops out kids, expecting those working to pay for their laziness.
How ’bout this: Let’s take the BILLIONS we would spend on keeping the rotting corpse of GM from rotting further and spend it on SBA loans and/or retraining programs for those most hurt by this - the employees of GM and employees of GM suppliers. This would be a much better investment as there would actually be an ROI for the taxpayer!!
What an idea!