General Motors Death Watch 26: Question Time

As I write, a group of Wall Street analysts are bunkering in GM's corporate HQ for an update on The General's recovery plans. The morning session will feature a PowerPoint pummeling entitled 'The Solstice Will Come out Tomorrow'. The post-prandial spin session will address the big issue: how GM plans to stem the torrent of red ink spewing from every corporate vein, artery and orifice. As TTAC was denied admission to the confab, we thought we'd Blackberry a few questions to our secret admirers…

1. When is GM going to cut UAW benefits?

Early this summer, Rabid Rick Wagoner stood in front of GM shareholders and solemnly swore to cut the automaker's 'legacy costs' (the communist era health care and retirement benefits enjoyed by current and former United Auto Workers' employees). The UAW responded by hiring an accounting firm to justify their intransigence, nickel-and-dimed dozens of hapless GM negotiators to the brink of insanity by 'exploring cost cutting moves within the existing contract', issued a press release expressing concern about the effects of high gas prices on GM truck sales and bought a Ford Escape Hybrid for their President.

For its part, GM has done… nothing. In fact, the company recently confirmed the status quo with a new contract at its Vibe-making California plant. All Rabid Rick's dark hints about unilateral action (emboldened by independent assertions that GM would win the inevitable court battle) have turned out to be nothing more than feeble posturing. Clearly, Wagoner does not want to trigger a company-crippling UAW strike. Clearly, he must.

2. When is GM going to cut its executives' salary?

While it's not a crime to draw a multi-million dollar salary when your company's swirling around the toilet bowl, the annual compensation paid to GM's top brass (Wagoner, Devine, Briggs, Cowger, Burns, Lutz, LaNeve, et al) gives the UAW the moral high ground. When push comes to shove, when the barricades are manned, the execs' high life will not play well in Peoria. GM's top brass should shred the class warfare card NOW, before the UAW can play it.

3. When is GM going to downsize?

With eight divisions deploying over 70 models, The General is still relying on the sheer weight of numbers to overcome its enemies' tightly-focused, niche-driven insurgencies (e.g. Toyota's Prius and Scion). While the sales chart proves that GM is winning battles, the company's continually decreasing market share and non-existent profits show that it's losing the war.

It's well past time for GM to cut the deadwood. Buick, Saturn, Pontiac, Saab– one or all must go, no matter what the cost in dealer lawsuits and/or UAW retaliation. Failing that, each GM division should be wrenched from the corporate tit; freed from administrative tyranny, corruption and waste. Each division's troops must learn to operate quickly, efficiently and, most importantly of all, independently. Platform sharing yes. Inter-divisional pencil pushing, no.

4. When is GM going to commit to no-haggle pricing?

The "Employee Discount for Everyone" program proved beyond a shadow of a debt that customers prefer pricing clarity to marketing spizzarkle. And yet The General is committed to returning to a bewildering combination of incentives, equipment packages and finance deals, now called "value pricing". While the promise pleases GM's profit-squeezed dealers, it will piss away the one thing that money can't buy: customers' good will.

5. When will GM make a car with a decent interior?

There's no question that many GM products now offer class-competitive build quality. There's even evidence that the company is beginning to understand what makes a visually compelling vehicle. But The General's complete inability to create a car, truck or SUV with an aesthetically attractive interior made from high-quality materials– from the Aveo all the way to the Cadillac STS– is symptomatic of its structural problems.

GM's ergonomic engineers are no worse than Audi's. They're just hamstrung by a monolithic bureaucracy that rewards penny pinching over design excellence. A car's interior is inextricably linked to perceived quality; get that right, and people will believe the company's 'best built' mantra. Car Czar Maximum Bob Lutz knows the drill, and was supposed to sort this shit out. He hasn't.

6. When will GM clean up its act?

GM is stuck in a vicious circle. Its leaders refuse to publicly acknowledge or confront its problems, which creates delusional behavior, which alienates customers and employees, which increase its problems. In other words, GM is lost in a forest of fundamental dishonesty.

For example, the Pontiac Solstice's launch is delayed. No one will tell the media why the delay occurred or commit to a new delivery date. Maximum Bob recently announced that Solstice production has finally started and handed over the keys to a couple of hundred buyers. Only customer deliveries haven't started, really. Dealers don't even have demonstrators. When will that happen? When will GM tell the whole truth about this, and their other challenges? About the same time Mr. Wagoner's mob finally finds its nerve– or unfurl their golden parachutes.