General Motors Death Watch 94: Table Scraps

Robert Farago
by Robert Farago

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.

Robert Farago
Robert Farago

More by Robert Farago

Comments
Join the conversation
2 of 69 comments
  • CanadaCraig You can just imagine how quickly the tires are going to wear out on a 5,800 lbs AWD 2024 Dodge Charger.
  • Luke42 I tried FSD for a month in December 2022 on my Model Y and wasn’t impressed.The building-blocks were amazing but sum of the all of those amazing parts was about as useful as Honda Sensing in terms of reducing the driver’s workload.I have a list of fixes I need to see in Autopilot before I blow another $200 renting FSD. But I will try it for free for a month.I would love it if FSD v12 lived up to the hype and my mind were changed. But I have no reason to believe I might be wrong at this point, based on the reviews I’ve read so far. [shrug]. I’m sure I’ll have more to say about it once I get to test it.
  • FormerFF We bought three new and one used car last year, so we won't be visiting any showrooms this year unless a meteor hits one of them. Sorry to hear that Mini has terminated the manual transmission, a Mini could be a fun car to drive with a stick.It appears that 2025 is going to see a significant decrease in the number of models that can be had with a stick. The used car we bought is a Mk 7 GTI with a six speed manual, and my younger daughter and I are enjoying it quite a lot. We'll be hanging on to it for many years.
  • Oberkanone Where is the value here? Magna is assembling the vehicles. The IP is not novel. Just buy the IP at bankruptcy stage for next to nothing.
  • Jalop1991 what, no Turbo trim?
Next