General Motors Death Watch 102: Cut the BLS

Robert Farago
by Robert Farago

I recently received a review of the Cadillac BLS by a South African scribe. While the writer responded to my revisions by retreating to the pub, I couldn’t stop thinking about the obscure object of his ire. The execrable BLS– a Saab 9-3 reskin with neither style nor grace– was born in the middle of GM’s so-called product renaissance. BLS sales projections started at 20k units per year, then fell to 10, then seven. And now I learn that instead of killing this poor-selling, po-faced, brand-defiling half-breed, GM has appointed one Wolfgang Schubert to “save” the BLS.

In case you thought GM might send in a car guy to make the BLS more competitive, please note that Schubert hails from GM's Brussels office, where he “coordinated European Union affairs.” According to The General, increasing the BLS’ fleet and leasing sales is the red tape wrestler’s main task. James Vurpillat, Cadillac's director for international marketing and brand development, confidently predicted that Caddy will sell 3k BLS’ to the fleet market– roughly twice the number of mock-Caddies Trollhatten will produce this year.

Many of the GM faithful will read this sad tale of misbegotten motorcars and misplaced marketing and condemn me as an eternal pessimist, blinded by a relentless search for the dark clouds inside The General’s silver lining. Why focus on one crap car [not] sold to Europeans and South Africans when there’s so much good news flying through the media ether? For example, GM has finally sold 51% of its GMAC financing unit, adding $14 billion to the corporate coffers over the next three years. The cash ought to give GM CEO Rick Wagoner’s turnaround some much-needed breathing room.

OK, Generous Motors’ current cash burn is producing neither heat nor light, the last piece of furniture has just been thrown in the fire and the temperature (i.e. market share) is still dropping. But hey, November sales are up six percent! We’re talking double digit increases in the sales of GM’s high profits trucks and SUV’s! OK, that’s compared to a cataclysmic ’05 and Toyota pulled further ahead with a 22.8% sales increase. But hey, the new Lambda-based crossovers are coming! OK, GM’s chances of conquesting a transplant customer with their me-too, late-to-the-party CUV’s are smaller than the decreased margins vis-à-vis GM’s full-sized SUV’s.

But hey, costs are coming down! Workers are leaving! Oh right, so is Kirk. Yes, there is that. When GM’s largest private investor says screw it, I’m out of here– banking a mere $100m to [partially] cover his lawyer’s fees– you’d be forgiven for thinking GM is a lost cause. Lest we forget, Kirk Kerkorian had his main man Jerry York on GM’s Board of Bystanders, snuffling through the books. Oh, and about those books… GM is still the focus of seven SEC investigations.

And what about that Delphi thing? You know; the bankrupt former GM subsidiary and current parts supplier that’s determined to suckle on GM’s tit even if it kills them, GM and the UAW. Despite enough legal extensions to add a couple of chapters to Kafka’s The Trial, it’s still not sorted. Experts reckon that if Delphi goes off-line for a month, the corporate mothership will founder. At the same time, a sharp up-tick in domestic gas prices would strangle demand for GM’s mission critical cash cows. But hey, GM’s products are getting better! Better interiors, better mileage, better design!

And where are these mainstream products that will kick the transplants’ collective ass and save GM? Coming. Now it’s dual-mode hybrids. Or was that plug-in hybrids? Hydrogen fuel cells? Flex fuel? Diesels? (No, not diesels.) Anyway, when the good stuff arrives, will it be better than the competition, or somewhere closer to just about as good? The truth is GM needs a series of grand slam home runs, and the hits ain’t happening.

You don’t need to drive a BLS to know that GM isn’t keeping up. In fact, Rick Wagoner’s administration has consistently bet on the wrong horses– from ill-advised foreign alliances, to poo-pooing hybrid technology, to putting all its eggs in an SUV-shaped basket, to gently refreshing rather than boldly re-imagining its products. While Wagoner is right to attack GM’s unsustainable cost base, all his company’s structural problems flow from product-related failures.

Maybe I am a pessimist. But the GM faithful need to read the following exchange and ask themselves a simple question: if GM’s turnaround is doing so well, why can’t the man at the helm spread a little love?

Automotive News: When would you realistically like to see North America return to profitability?

Wagoner: As soon as possible.

Automotive News: Do you have any kind of target that you'd like to share?

Wagoner: Not that I'd like to share.

Robert Farago
Robert Farago

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  • CSJohnston CSJohnston on Dec 08, 2006

    Can someone please educate us on hybrid sales on the Highlander and RX-H? Are they making up a significant percentage of sales? Are they growing in popularity? Are they moving faster than regular powered Toyota CUV's? If the answers are to the postive, then one could say that the Enclave (and indeed all competing SUV's) is indeed at a competitive disadvantage. If not, then GM should not squander its limted R&D budget on another niche. Is Toyota going to Hybrid the RAV?

  • Johnson Johnson on Dec 08, 2006

    Rav 4 (at least the current gen) will not get a hybrid. Besides, it already has class leading fuel efficiency. From Toyota's November sales: The Camry Hybrid sold 3100 units, the Prius sold 8008 units, Highlander Hybrid had sales of 1667 units, and RX Hybrid sales were 1327. I provided Camry and Prius numbers just as perspective. The Highlander and RX hybrids are the most expensive Toyota hybrids (not including the limited production GS450h). While their sales are not a huge percentage of overall model sales, they do make up a sizable percentage. Overall year-to-date hybrid sales for the industry continue to go up, and as next generation systems come out and economies of scale drive prices down, hybrids will only get more popular.

  • Bd2 Jaguar's problem was chasing the Germans into the mid size and then entry-level/compact segments for volume, and cheapening their interiors while at it.
  • 3-On-The-Tree Aja8888 I expected that issue with my F150 starting at 52,000mi. luckily I had an extended warranty and it saved me almost $8,000. No more Fords for me, only Toyota.
  • Lou_BC I saw a news article on this got a different read on it. Ford wants to increase production of HD trucks AND develop hybrid and EV variants of the SuperDuty. They aren't scaling back EV production. Just building more HD's and EV variants of HD's .
  • Lou_BC Backing up accidents are one of the most common causes of low speed accidents. You'd think sensors and cameras would help.
  • Jpolicke Jaguar started making cars that were dead ringers for Kia Optimas, but less reliable. They now look like everything and nothing; certainly nothing to aspire to.