General Motors Death Watch 94: Table Scraps
GM’s September sales figures are out. Despite generous Labor Day incentives, zero per cent financing to anyone with a pulse and an easy year-on-year comparison (GM was in the post-Fire Sale mode last September), vehicle sales are down seven percent. Given GM’s upcoming production cutbacks, there’s only one way sales can go from here: down, taking GM’s declining market share with it. Never mind. According to GM Exec Maximum Bob Lutz, "Whatever our market share stabilizes at in the US— 22, 23, 24 percent— I don’t really care. The idea that GM… has got to get back to 30 percent is a wacky notion with all this global competition we’ve got."
Obviously, Mr. What Me Worry? is a whack job. The fact that the septugenarian ex-Marine has any power whatsoever within GM– never mind his multi-million dollar annual salary, huge pension and Gulfstream perks– tells you all you need to know about GM’s ability to manage itself. At the risk of stating the obvious, shouldn’t the guy who calls [at least some of] the shots for the world’s largest automaker understand that the faster GM’s domestic market share shrinks, the closer The General gets to the tipping point of no return? Call me a weenie (SIR!), but I’d expect an ex-Marine to know when he’s fighting a rear-guard action.
By the same token, you’d kinda hope that GM’s so-called “car czar” would know that The General’s inability to find new homes for their cash cows is putting his employer in a world of hurt. Pardon me for not being a goldfish, but I distinctly remember Mr. Lutz standing on the running board of a new[ish] Tahoe telling the world that GM’s GMT-900’s would take the [declining] market by storm and save GM’s bacon. Well they haven’t. Yukon, Tahoe and Suburban sales are soft, and getting softer. Surely the opposite of success is failure, and the logical response to failure is to acknowledge the damage and formulate a new plan– rather than obfuscation, prevarication and denial.
Top execs like GM marketing maven Mark LaNeve may be happy spinning the dismal parade of declining numbers– claiming that rental fleet sales and limited production are clouding an otherwise bright picture– but the numbers don’t lie. GM is in a death spiral that no amount of “missing” Chevrolet Aveos, Cobalts and Malibus can cure. GM claims its GMT900 pickups are the next next big thing, but they simply can’t create enough cash flow to sustain The General’s distended product portfolio.
In fact, Maximum Bob put his finger on the nub of GM’s problem: the company has lost its ability to fight import owned competition. GM’s September sales results are bad enough, but Toyota’s are far worse– for GM. The Japanese automaker’s sales climbed a staggering 25%. And it wasn’t just parsimonious econoboxes fueling the company’s financial combustion chamber. Year-on-year sales were up for the Sequoia (37.7%), Land Cruiser (1.7%), 4Runner (8.9%), Highlander (16.1%) and RAV4 (93.4%). Bottom line: Toyota’s September SUV sales rose by an average of 54.8%.
The numbers are alarming in extremis. GM's new[ish] GMT900’s have not only failed to sell in absolute terms, they’ve also failed to stem the growing tide of customers abandoning domestic products for import-owned vehicles– on GM's home turf. As for cars… fuhgeddaboutit. “All this global competition” has left The General in a corner, fighting Ford and Chrysler for a dwindling supply of hard core domestic-buying consumers.Unless Ford goes belly-up first, unless GM's new products beat-back Toyota, Honda, Hyundai and the rest of the “newcomers;” the market share stability GM’s Car Czar seeks is almost impossible to imagine.
Meanwhile, reports are filtering in that GM CEO Rabid Rick Wagoner has finally called off the Nissan – Renault alliance talks. This may have a little something to do with new rules enacted yesterday by GM’s Board of Bystanders. The language is a bit convoluted, but the rules make it easier for the Board to remove pro-Renault investor Kirk Kerkorian’s man Jerry York, and prevent Captain Kirk from adding new members. So Rabid Rick’s covered his ass and told Kirk to take a flying leap. As we predicted, things are getting ugly over at RenCen.
The battle for control of GM is just beginning. Kirk is sure to retaliate against GM’s CEO, and The Lion of Las Vegas is nothing if not resourceful. Regardless who ends-up the last man grandstanding, the war's already been lost. GM’s products are falling further and further behind the competition in the sales charts. The recent cuts to the automaker's production and staff will help the bottom line, but they indicate that GM's is fighting harder and harder for less and less. At some point, the company will starve to death.
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- Tassos "Fools Cells" are 20 years into the future.THe problem is, the clowns who cheerlead for them have been saying this for the last 20 years, and before that they claimed they are only TEN years into the future (in 1990. so they would dominate by... 2000). Toyota Shareholders and workers will suffer because of the EGO of those damned fools execs who wasted TEN YEARS, letting TESLA dominate the BEV industry (of the FREE WORLD, China excluded).
- Urlik You’d think VW would have learned from Honda and Cadillac making the same mistake to varying degrees.
- EBFlex This will be the end of the Dodge brand. They are going from making vehicles people actually want to little pieces of garbage like the hornet and government cars (EVs).
- ChristianWimmer Markus Duesmann is an idiot. Here in Germany he is in favor of speed limits on the Autobahn and for car-free Sundays. Show me a butcher who encourages his clients to become vegan and eat meat-free…
- VoGhost Your argument for names is the Cougar XR-7 GT? How much are those at the local Mercury dealer these days?
this just in: http://www.bloggingstocks.com/2006/10/09/could-toyotas-growth-challenges-bring-a-ray-of-hope-for-gm/
The clock is ticking, ticking, ticking for Delphi and thus, for GM. Will the clock simply stop? Have a peek at the article here http://www.detnews.com/apps/pbcs.dll/article?AID=/20061011/AUTO01/610110404/1148 Then, this article just goes to show that the UAW leadership are totally out of touch and quite obviously part of the reason for the big 3's imminent demise or partial demise. DEMANDING that GM keep the "jobs bank" where "workers" (used in the looses possible way possible) sit around in empty plants and play cards and get paid? Yeah, that's what the UAW wants to continue in the 2007 UAW contracts with GM. Read it for yourself. That is, assuming there IS a GM in 2007. http://www.freep.com/apps/pbcs.dll/article?AID=/20061011/BUSINESS01/610110421/1014